|
AUGUST 31, 2023 |
2023 Annual Report |
iShares, Inc.
· |
iShares MSCI Hong Kong ETF | EWH | NYSE Arca |
· |
iShares MSCI Japan Small-Cap ETF | SCJ | NYSE Arca |
· |
iShares MSCI Malaysia ETF | EWM | NYSE Arca |
· |
iShares MSCI Pacific ex Japan ETF | EPP | NYSE Arca |
· |
iShares MSCI Singapore ETF | EWS | NYSE Arca |
· |
iShares MSCI Taiwan ETF | EWT | NYSE Arca |
· |
iShares MSCI Thailand ETF | THD | NYSE Arca |
Dear Shareholder,
Despite an uncertain economic landscape during the 12-month reporting period ended August 31, 2023, the resilience of the U.S. economy in the face of ever tighter financial conditions provided an encouraging backdrop for investors. While inflation was near multi-decade highs at the beginning of the period, it declined precipitously as commodity prices dropped. Labor shortages also moderated, although wages continued to grow and unemployment rates reached the lowest levels in decades. This robust labor market powered further growth in consumer spending, backstopping the economy.
Equity returns were solid, as the durability of consumer sentiment eased investors’ concerns about the economy’s trajectory. The U.S. economy resumed growth in the third quarter of 2022 and continued to expand thereafter. Most major classes of equities rose, as large-capitalization U.S. stocks and developed market equities advanced strongly. However, small-capitalization U.S. stocks and emerging market equities posted more modest gains.
The 10-year U.S. Treasury yield rose during the reporting period, driving its price down, as investors reacted to elevated inflation and attempted to anticipate future interest rate changes. The corporate bond market also faced inflationary headwinds, although high-yield corporate bond prices fared significantly better than investment-grade bonds as demand from yield-seeking investors remained strong.
The U.S. Federal Reserve (the “Fed”), acknowledging that inflation has been more persistent than expected, raised interest rates seven times during the 12-month period. Furthermore, the Fed wound down its bond-buying programs and incrementally reduced its balance sheet by not replacing securities that reach maturity. However, the Fed declined to raise interest rates at its June 2023 meeting, the first time it paused its tightening in the current cycle, before again raising rates in July 2023.
Supply constraints appear to have become an embedded feature of the new macroeconomic environment, making it difficult for developed economies to increase production without sparking higher inflation. Geopolitical fragmentation and an aging population risk further exacerbating these constraints, keeping the labor market tight and wage growth high. Although the Fed has decelerated the pace of interest rate hikes and recently opted for two pauses, we believe that the new economic regime means that the Fed will need to maintain high rates for an extended period to keep inflation under control. Furthermore, ongoing structural changes may mean that the Fed will be hesitant to cut interest rates in the event of faltering economic activity lest inflation accelerate again. We believe investors should expect a period of higher volatility as markets adjust to the new economic reality and policymakers attempt to adapt.
While we favor an overweight position to developed market equities in the long term, we prefer an underweight stance in the near term. Expectations for corporate earnings remain elevated, which seems inconsistent with macroeconomic constraints. Nevertheless, we are overweight on emerging market stocks in the near term as growth trends for emerging markets appear brighter. We also believe that stocks with an AI tilt should benefit from an investment cycle that is set to support revenues and margins. In credit, there are selective opportunities in the near term despite tightening credit and financial conditions. For fixed income investing with a six- to twelve-month horizon, we see the most attractive investments in short-term U.S. Treasuries, U.S. inflation-linked bonds, U.S. mortgage-backed securities, and hard-currency emerging market bonds.
Overall, our view is that investors need to think globally, position themselves to be prepared for a decarbonizing economy, 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.
Rob Kapito
President, BlackRock, Inc.
Rob Kapito
President, BlackRock, Inc.
Total Returns as of August 31, 2023
| ||||
6-Month
|
12-Month
| |||
U.S.
large cap equities
|
14.50% | 15.94% | ||
U.S.
small cap equities
|
0.99 | 4.65 | ||
International
equities
|
4.75 | 17.92 | ||
Emerging
market equities
|
3.62 | 1.25 | ||
3-month Treasury bills
|
2.47 | 4.25 | ||
U.S.
Treasury securities
|
0.11 | (4.71) | ||
U.S.
investment grade bonds
|
0.95 | (1.19) | ||
Tax-exempt municipal
bonds
|
1.04 | 1.70 | ||
U.S.
high yield bonds
|
4.55 | 7.19 | ||
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
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Annual Report: |
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4 | ||||
5 | ||||
19 | ||||
19 | ||||
20 | ||||
Financial Statements |
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51 | ||||
53 | ||||
55 | ||||
59 | ||||
66 | ||||
78 | ||||
79 | ||||
80 | ||||
90 | ||||
92 | ||||
94 | ||||
95 |
iShares, Inc.
Global Market Overview
Global equity markets advanced during the 12 months ended August 31, 2023 (“reporting period”), supported by continued economic growth and moderating inflation. The MSCI ACWI, a broad global equity index that includes both developed and emerging markets, returned 13.95% in U.S. dollar terms for the reporting period. Despite concerns about the impact of higher interest rates and rising prices, the global economy continued to grow, albeit at a slower pace than during the initial post-coronavirus pandemic recovery. Inflation began to subside in most regions of the world, and lower energy prices reduced pressure on consumers, leading consumer and business sentiment to improve. While the Russian invasion of Ukraine continued to disrupt trade in Europe and elsewhere, market adaptation lessened the economic impact of the ongoing war. The prices of several key commodities, including oil, natural gas, and wheat, either stabilized or declined during the reporting period, easing pressure on the world’s economies.
The U.S. Federal Reserve (“Fed”) tightened monetary policy rapidly, raising short-term interest rates seven times over the course of the reporting period. The pace of tightening decelerated as the Fed twice lowered the increment of increase before pausing entirely in June 2023, the first time it declined to take action since the tightening cycle began. However, the Fed then raised interest rates again at its July 2023 meeting and stated that it would continue to monitor economic data. The Fed also continued to decrease the size of its balance sheet by reducing the store of U.S. Treasuries it had accumulated to stabilize markets in the early phases of the pandemic.
Despite the tightening financial conditions, the U.S. economy demonstrated continued strength, and U.S. equities advanced. The economy returned to growth in the third quarter of 2022 and showed robust, if slightly slower, growth thereafter. Consumers powered the economy, increasing their spending in both nominal and inflation-adjusted terms. A strong labor market bolstered spending, as unemployment remained low, and the number of employed persons reached an all-time high. Tightness in the labor market drove higher wages, although wage growth slowed as the reporting period continued.
European stocks outpaced their counterparts in most other regions of the globe, advancing strongly for the reporting period despite modest economic growth. European stocks benefited from a solid recovery following the early phases of the war in Ukraine. While the conflict disrupted critical natural gas supplies, new sources were secured and prices declined, while a warm winter helped moderate consumption. The European Central Bank (“ECB”) responded to the highest inflation since the introduction of the euro by raising interest rates eight times and beginning to reduce the size of its debt holdings.
Stocks in the Asia-Pacific region gained, albeit at a slower pace than other regions of the world. Japan returned to growth in the fourth quarter of 2022 and first half of 2023, as strong business investment and exports helped boost the economy and support Japanese equities. However, Chinese stocks were negatively impacted by slowing economic growth. While investors were initially optimistic following China’s lifting of several pandemic-related lockdowns in December 2022, subsequent performance disappointed, and tensions with the U.S. increased. Emerging market stocks advanced modestly, as the resilient global economic environment reassured investors. The declining value of the U.S. dollar relative to many other currencies and the slowing pace of the Fed’s interest rate increases also supported emerging market stocks.
4 |
2 0 2 3 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 August 31, 2023 | iShares® MSCI Hong Kong ETF |
Investment Objective
The iShares MSCI Hong Kong ETF (the “Fund”) seeks to track the investment results of an index composed of Hong Kong equities, as represented by the MSCI Hong Kong 25/50 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 |
(8.56 | )% | (2.94 | )% | 2.59 | % | (8.56 | )% | (13.87 | )% | 29.14 | % | ||||||||||||||||
Fund Market |
(8.59 | ) | (2.95 | ) | 2.62 | (8.59 | ) | (13.92 | ) | 29.56 | ||||||||||||||||||
Index |
(8.26 | ) | (2.39 | ) | 3.17 | (8.26 | ) | (11.41 | ) | 36.57 | ||||||||||||||||||
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Index performance through August 31, 2020 reflects the performance of the MSCI Hong Kong Index. Index performance beginning on September 1, 2020 reflects the performance of the MSCI Hong Kong 25/50 Index.
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 (03/01/23) |
|
|
Ending Account Value (08/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Beginning Account Value (03/01/23) |
|
|
Ending Account Value (08/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Annualized Expense Ratio |
| ||||||||||
$ 1,000.00 | $ 902.80 | $ 2.40 | $ 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. |
F U N D S U M M A R Y |
5 |
Fund Summary as of August 31, 2023 (continued) | iShares® MSCI Hong Kong ETF |
Portfolio Management Commentary
Stocks in Hong Kong declined for the reporting period, mirroring ongoing economic and geopolitical challenges in mainland China, Hong Kong’s lead trading partner. As Hong Kong’s economy contracted in late 2022 and exports dropped by the largest amount in 70 years, U.S. President Joe Biden’s trip to China created optimism for improved relations between the U.S. and China. Economic growth resumed in early 2023 after China’s removal of tight coronavirus-related restrictions. However, China’s rebound wavered from property distress and weak demand. Manufacturing and services growth in Hong Kong contracted again late in the reporting period as exports weakened. Meanwhile, U.S.-China relations remained strained, and foreign investors increasingly withdrew from China.
The real estate sector detracted the most from the Index’s return, led by the real estate management and development industry. Property transaction volumes in 2022 reached the lowest level in decades. Rising interest rates and China’s coronavirus-related restrictions decreased investment values and led to financial losses for some property managers and developers. Property values declined, and tourism remained below pre-pandemic levels. Office rents decreased and office vacancy rates, which rose dramatically during the pandemic, reached an all-time high amid an uneven recovery in an oversupplied market.
The industrials sector also detracted from the Index’s performance. A leading machinery stock declined amid allegations of improperly inflated earnings, and a leading industrial conglomerate fell as high interest rates and weak growth reduced earnings.
The financials sector likewise detracted as banks’ loan volumes and earnings fell amid credit downgrades, reflecting exposure to local Chinese government debt. In addition, the insurance industry declined as new business volume decreased. On the upside, the consumer discretionary sector contributed to the Index’s return, led by significantly higher revenue supporting the hotels, restaurants, and leisure industry in Macau.
Portfolio Information
SECTOR ALLOCATION
Sector | |
Percent
of Total Investments |
(a) | |
Financials |
42.8 | % | ||
Real Estate |
22.8 | |||
Industrials |
14.3 | |||
Utilities |
9.4 | |||
Consumer Discretionary |
6.8 | |||
Consumer Staples |
2.6 | |||
Communication Services
|
|
1.3
|
|
TEN LARGEST HOLDINGS
Security | |
Percent
of Total Investments |
(a) | |
AIA Group Ltd. |
22.8 | % | ||
Hong Kong Exchanges & Clearing Ltd. |
12.9 | |||
Sun Hung Kai Properties Ltd. |
4.6 | |||
Galaxy Entertainment Group Ltd. |
4.2 | |||
CK Hutchison Holdings Ltd. |
4.2 | |||
Techtronic Industries Co. Ltd. |
4.0 | |||
CLP Holdings Ltd. |
3.8 | |||
Link REIT |
3.7 | |||
CK Asset Holdings Ltd. |
3.2 | |||
BOC Hong Kong Holdings Ltd.
|
|
3.0
|
|
(a) |
Excludes money market funds. |
6 |
2 0 2 3 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 August 31, 2023 | iShares® MSCI Japan Small-Cap ETF |
Investment Objective
The iShares MSCI Japan Small-Cap ETF (the “Fund”) seeks to track the investment results of an index composed of small-capitalization Japanese equities, as represented by the MSCI Japan 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 |
13.37 | % | 0.18 | % | 5.68 | % | 13.37 | % | 0.91 | % | 73.79 | % | ||||||||||||||||
Fund Market |
13.74 | 0.31 | 5.78 | 13.74 | 1.56 | 75.37 | ||||||||||||||||||||||
Index |
12.88 | 0.50 | 6.04 | 12.88 | 2.50 | 79.71 | ||||||||||||||||||||||
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
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 (03/01/23) |
|
|
Ending Account Value (08/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Beginning Account Value (03/01/23) |
|
|
Ending Account Value (08/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Annualized Expense Ratio |
| ||||||||||
$ 1,000.00 | $ 1,076.60 | $ 2.62 | $ 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. |
F U N D S U M M A R Y |
7 |
Fund Summary as of August 31, 2023 (continued) | iShares® MSCI Japan Small-Cap ETF |
Portfolio Management Commentary
Japanese small-capitalization stocks advanced for the reporting period, as the economy grew at its fastest pace in three years. The Japanese economy, after struggling with weak growth and deflation, or falling prices, in recent decades, returned to growth while logging its highest inflation rate in more than 30 years. Foreign demand for automotive products and tourism drove stronger economic growth. Domestic consumption lagged as household spending contracted, and the country’s notoriously high savings rates remained elevated for the reporting period, leading to concerns about the sustainability of recent economic growth. Nevertheless, investor optimism that Japan would sustain accommodative monetary policy to stimulate growth and inflation, as well as other policy shifts, such as limiting government intervention in bond markets and corporate governance reforms, ultimately drove strong flows into the Japanese equity market.
The consumer discretionary sector contributed the most to the Index’s return amid strong sales by global Japanese brands, including running sneakers, video games, lumber products, and sushi. Strong demand for running shoes as in-person sporting events resumed and growth in popular videogame franchises drove growth in the consumer durables industry. Retail sales grew as the return of tourists drove gains in the broadline retail industry. A small Japanese maker of lumber products used in the U.S. homebuilding industry also posted strong gains, as a recovery in building activity and a large undersupply of homes drove demand for its products. Strong global demand for sushi restaurants and acquisitions of sushi chains in North America and the U.K. also drove growth in the consumer services industry.
The industrials and financials sectors also contributed to the Index’s performance amid strong economic growth. Solid demand for industrial pumps, metal working products, and infrastructure services drove strong advances in the capital goods industry. Japanese regional banks sidestepped contagion from the U.S.’s regional banking crisis despite a heavy concentration in lending activity in the U.S., reflecting their relatively large capital reserves and risk management.
Portfolio Information
SECTOR ALLOCATION
Sector | |
Percent
of Total Investments |
(a) | |
Industrials |
23.2 | % | ||
Consumer Discretionary |
17.1 | |||
Information Technology |
10.9 | |||
Materials |
10.7 | |||
Consumer Staples |
9.9 | |||
Real Estate |
9.3 | |||
Financials |
7.7 | |||
Health Care |
5.8 | |||
Communication Services |
2.3 | |||
Utilities |
2.2 | |||
Energy
|
|
0.9
|
|
(a) |
Excludes money market funds. |
TEN LARGEST HOLDINGS
Security | |
Percent
of Total Investments |
(a) | |
Asics Corp. |
0.7 | % | ||
Sojitz Corp. |
0.6 | |||
Rohto Pharmaceutical Co. Ltd. |
0.6 | |||
Ebara Corp. |
0.6 | |||
Socionext Inc. |
0.5 | |||
Kobe Steel Ltd. |
0.5 | |||
Sumitomo Forestry Co. Ltd. |
0.5 | |||
SCREEN Holdings Co. Ltd. |
0.5 | |||
Kawasaki Heavy Industries Ltd. |
0.5 | |||
Isetan Mitsukoshi Holdings Ltd.
|
|
0.5
|
|
8 |
2 0 2 3 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 August 31, 2023 | iShares® MSCI Malaysia ETF |
Investment Objective
The iShares MSCI Malaysia ETF (the “Fund”) seeks to track the investment results of an index composed of Malaysian equities, as represented by the MSCI Malaysia 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 |
(3.56 | )% | (5.15 | )% | (3.21 | )% | (3.56 | )% | (23.25 | )% | (27.81 | )% | ||||||||||||||||
Fund Market |
(2.92 | ) | (4.97 | ) | (3.24 | ) | (2.92 | ) | (22.49 | ) | (28.04 | ) | ||||||||||||||||
Index |
(3.33 | ) | (4.81 | ) | (2.91 | ) | (3.33 | ) | (21.86 | ) | (25.53 | ) | ||||||||||||||||
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
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 (03/01/23) |
|
|
Ending Account Value (08/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Beginning Account Value (03/01/23) |
|
|
Ending Account Value (08/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Annualized Expense Ratio |
| ||||||||||
$ 1,000.00 | $ 982.20 | $ 2.50 | $ 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. |
F U N D S U M M A R Y |
9 |
Fund Summary as of August 31, 2023 (continued) | iShares® MSCI Malaysia ETF |
Portfolio Management Commentary
Stocks in Malaysia declined modestly for the reporting period, as economic growth slowed. Malaysia’s central bank increased its overnight policy rate three times to the highest level since before the coronavirus pandemic. Higher interest rates helped reduce inflation by more than half to 2%. However, as interest rates rose, manufacturing production contracted and factories decreased their workforces. Stocks increased in late 2022 in anticipation of China’s reopening from coronavirus restrictions, but demand for Malaysia’s goods did not materialize as expected. Instead, exports and domestic consumption both declined. The low orders in part reflected a global slump in demand for semiconductors and other electronic equipment, which account for more than a third of the nation’s exports.
The financials sector detracted the most from the Index’s return. Throughout Malaysia’s banking industry, business and household credit growth slowed, as did growth in outstanding business loans. Increased competition for deposits and the higher cost of funds pressured banks’ net interest income margins – the difference between the interest banks receive on loans and what they pay on deposits.
The materials sector also detracted from the Index’s performance. The commodity chemicals industry declined as profits fell. Rising input and production costs, along with intense competition, reduced the profit margins on petrochemical products. Demand also decreased as consumption slowed.
In addition, the consumer discretionary sector weighed on performance, led by the casinos and gaming and home improvement retail industries. Increased living expenses, rising borrowing costs, and the declining impact of special pandemic-related early pension withdrawals, which ended in 2022, all reduced consumer spending growth.
On the upside, the utilities sector contributed the most to the Index’s return. The electrical utilities industry benefited from lower input prices for power generation and anticipated demand growth from large data centers.
Portfolio Information
SECTOR ALLOCATION
Sector | |
Percent
of Total Investments |
(a) | |
Financials |
41.1 | % | ||
Consumer Staples |
12.7 | |||
Utilities |
9.0 | |||
Materials |
8.7 | |||
Communication Services |
8.6 | |||
Industrials |
7.0 | |||
Consumer Discretionary |
4.9 | |||
Energy |
3.1 | |||
Health Care |
3.0 | |||
Information Technology
|
|
1.9
|
|
(a) |
Excludes money market funds. |
TEN LARGEST HOLDINGS
Security | |
Percent
of Total Investments |
(a) | |
Public Bank Bhd |
14.2 | % | ||
Malayan Banking Bhd |
11.4 | |||
CIMB Group Holdings Bhd |
8.3 | |||
Tenaga Nasional Bhd |
5.9 | |||
Petronas Chemicals Group Bhd |
4.6 | |||
Press Metal Aluminium Holdings Bhd |
4.1 | |||
DiGi.Com Bhd |
3.6 | |||
Petronas Gas Bhd |
3.1 | |||
IHH Healthcare Bhd |
3.0 | |||
Hong Leong Bank Bhd
|
|
3.0
|
|
10 |
2 0 2 3 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 August 31, 2023 | iShares® MSCI Pacific ex Japan ETF |
Investment Objective
The iShares MSCI Pacific ex Japan ETF (the “Fund”) seeks to track the investment results of an index composed of Pacific region developed market equities, excluding Japan, as represented by the MSCI Pacific ex Japan 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 |
2.00 | % | 1.78 | % | 3.36 | % | 2.00 | % | 9.23 | % | 39.13 | % | ||||||||||||||||
Fund Market |
2.23 | 1.77 | 3.41 | 2.23 | 9.18 | 39.80 | ||||||||||||||||||||||
Index |
1.94 | 2.28 | 3.83 | 1.94 | 11.94 | 45.60 | ||||||||||||||||||||||
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
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 (03/01/23) |
|
|
Ending Account Value (08/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Beginning Account Value (03/01/23) |
|
|
Ending Account Value (08/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Annualized Expense Ratio |
| ||||||||||
$ 1,000.00 | $ 967.60 | $ 2.38 | $ 1,000.00 | $ 1,022.80 | $ 2.45 | 0.48% |
(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. |
F U N D S U M M A R Y |
11 |
Fund Summary as of August 31, 2023 (continued) | iShares® MSCI Pacific ex Japan ETF |
Portfolio Management Commentary
Stocks in Pacific region developed markets excluding Japan advanced modestly for the reporting period. Slower economic growth in China dampened regional economic growth, but most Asian economies avoided recession.
The Australian materials sector contributed the most to the Index’s return, led by the metals and mining industry. Australian producers of iron ore, aluminum, copper, and precious metals advanced, as prices for many metals increased during the reporting period. China, the world’s largest refiner, ended coronavirus-related lockdowns and businesses restarted production, sparking a surge in commodities demand. Amid rising interest rates and inflation, more investors turned to gold, pushing prices higher. Iron ore prices also rose toward the end of 2022, reflecting rising demand from China. With prices and demand rising, production increased, helping boost cash flow in some segments of the industry. However, higher costs weighed on earnings, and commodities prices retreated as economic growth slowed. Australian financials stocks also contributed. Bank stocks rose as profits grew, benefiting from loan growth and increased deposits. In the insurance industry, rising premiums drove profits significantly higher.
The financials sector in Singapore, which is a trade and financing hub for the Asia Pacific region, also contributed to the Index’s performance, as many Asian economies continued to post modest growth despite economic weakness in China. Singapore’s banks, which have some of the strongest capital positions in the world, reported record-high earnings amid rebounding business momentum as the coronavirus pandemic faded and rising net interest income — the difference between interest banks receive on loans and interest they pay on deposits.
The Hong Kong real estate sector detracted the most from the Index’s return, led by the real estate management and development industry. Property transaction volumes in 2022 reached the lowest level in decades. Rising interest rates and China’s coronavirus-related restrictions decreased investment values and led to financial losses for some property managers and developers. Property values declined, and tourism remained below pre-pandemic levels. Office rents decreased and office vacancy rates, which rose dramatically during the pandemic, reached an all-time high amid an uneven recovery in an oversupplied market.
Portfolio Information
SECTOR ALLOCATION
Sector | |
Percent
of Total Investments |
(a) | |
Financials |
37.4 | % | ||
Materials |
15.9 | |||
Real Estate |
10.0 | |||
Industrials |
8.5 | |||
Health Care |
7.1 | |||
Consumer Discretionary |
5.4 | |||
Consumer Staples |
3.9 | |||
Energy |
3.9 | |||
Communication Services |
3.4 | |||
Utilities |
3.4 | |||
Information Technology
|
|
1.1
|
|
(a) |
Excludes money market funds. |
GEOGRAPHIC ALLOCATION
Country/Geographic Region | |
Percent
of Total Investments |
| |
Australia |
64.9 | % | ||
Hong Kong |
20.9 | |||
Singapore |
12.5 | |||
New Zealand
|
|
1.7
|
|
12 |
2 0 2 3 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 August 31, 2023 | iShares® MSCI Singapore ETF |
Investment Objective
The iShares MSCI Singapore ETF (the “Fund”) seeks to track the investment results of an index composed of Singaporean equities, as represented by the MSCI Singapore 25/50 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 |
6.84 | % | (0.69 | )% | 1.04 | % | 6.84 | % | (3.40 | )% | 10.94 | % | ||||||||||||||||
Fund Market |
7.22 | (0.64 | ) | 1.12 | 7.22 | (3.14 | ) | 11.79 | ||||||||||||||||||||
Index |
7.27 | (0.16 | ) | 1.49 | 7.27 | (0.81 | ) | 15.94 | ||||||||||||||||||||
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Index performance through November 30, 2016 reflects the performance of the MSCI Singapore Index. Index performance beginning on December 1, 2016 reflects the performance of the MSCI Singapore 25/50 Index.
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 (03/01/23) |
|
|
Ending Account Value (08/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Beginning Account Value (03/01/23) |
|
|
Ending Account Value (08/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Annualized Expense Ratio |
| ||||||||||
$ 1,000.00 | $ 1,005.50 | $ 2.53 | $ 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. |
F U N D S U M M A R Y |
13 |
Fund Summary as of August 31, 2023 (continued) | iShares® MSCI Singapore ETF |
Portfolio Management Commentary
Stocks in Singapore advanced for the reporting period as the country’s exports, which account for virtually all its economic output, increased in 2022 and optimism grew as China ended strict coronavirus limitations on its economy. Singapore’s largest trade partners, China and Hong Kong, account for almost a quarter of its exports. As China reopened in early 2023, Singapore’s manufacturing sector resumed expansion at an increasingly rapid growth rate. Exports declined, however, late in the reporting period, as China’s economy encountered numerous challenges, and Singapore’s industrial production weakened. Nevertheless, broader economic growth resumed as inflation moderated and interest rates stabilized. Stocks rallied late in the period amid stronger-than-expected corporate earnings.
Singapore’s industrials sector contributed the most to the Index’s return. A leading industrial conglomerate reported strong profit growth, as it sold parts of its business to further its focus on investment management. The passenger airlines industry benefited amid a recovery in post-pandemic travel demand that boosted earnings. In addition, ride-hailing and food delivery services in the ground transportation industry benefited from strong demand and cost rationalization.
The financials sector also contributed to the Index’s performance. Singapore’s banks, with some of the strongest capital positions in the world, reported record-high earnings amid rebounding business momentum, as the pandemic faded, and rising net interest income — the difference between interest banks receive on loans and interest they pay on deposits.
On the downside, the communication services sector detracted from the Index’s return, led by the entertainment industry. Stock in a leading online e-commerce and digital entertainment firm declined, as it prioritized growth instead of profits amid efforts to maintain market share.
Portfolio Information
SECTOR ALLOCATION
Sector | |
Percent
of Total Investments |
(a) | |
Financials |
48.4 | % | ||
Industrials |
19.3 | |||
Real Estate |
16.5 | |||
Communication Services |
8.7 | |||
Consumer Staples |
3.1 | |||
Consumer Discretionary |
2.4 | |||
Utilities
|
|
1.6
|
|
TEN LARGEST HOLDINGS
Security | |
Percent
of Total Investments |
(a) | |
DBS Group Holdings Ltd. |
19.8 | % | ||
Oversea-Chinese Banking Corp. Ltd. |
13.7 | |||
United Overseas Bank Ltd. |
11.5 | |||
Singapore Telecommunications Ltd. |
4.5 | |||
Sea Ltd. |
4.3 | |||
CapitaLand Ascendas REIT |
4.1 | |||
Singapore Airlines Ltd. |
4.1 | |||
Keppel Corp. Ltd. |
4.1 | |||
Grab Holdings Ltd., Class A |
3.9 | |||
Singapore Exchange Ltd.
|
|
3.4
|
|
(a) |
Excludes money market funds. |
14 |
2 0 2 3 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 August 31, 2023 | iShares® MSCI Taiwan ETF |
Investment Objective
The iShares MSCI Taiwan ETF (the “Fund”) seeks to track the investment results of an index composed of Taiwanese equities, as represented by the MSCI Taiwan 25/50 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 |
7.17 | % | 9.58 | % | 9.53 | % | 7.17 | % | 58.01 | % | 148.52 | % | ||||||||||||||||
Fund Market |
7.14 | 9.48 | 9.56 | 7.14 | 57.28 | 149.26 | ||||||||||||||||||||||
Index |
7.10 | 10.25 | 10.23 | 7.10 | 62.90 | 164.91 | ||||||||||||||||||||||
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Index performance through November 30, 2016 reflects the performance of the MSCI Taiwan Index. Index performance beginning on December 1, 2016 reflects the performance of the MSCI Taiwan 25/50 Index.
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 (03/01/23) |
|
|
Ending Account Value (08/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Beginning Account Value (03/01/23) |
|
|
Ending Account Value (08/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Annualized Expense Ratio |
| ||||||||||
$ 1,000.00 | $ 1,041.80 | $ 3.04 | $ 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. |
F U N D S U M M A R Y |
15 |
Fund Summary as of August 31, 2023 (continued) | iShares® MSCI Taiwan ETF |
Portfolio Management Commentary
Taiwanese stocks advanced for the reporting period, as the Taiwanese economy returned to growth in the second quarter of 2023 and unemployment fell to the lowest level in 23 years. While a trade dispute that led to a Chinese investigation of thousands of Taiwanese goods pressured exports, the Taiwanese government moved to diversify its export markets, and its exports of microchips to the U.S. continued to increase. The 2022 CHIPS and Science Act in the U.S. encouraged Taiwanese investment in U.S. semiconductor manufacturing facilities, and continued tension between China and the U.S. and its allies led companies to invest in alternate Asian suppliers, including Taiwan.
The Taiwanese information technology sector contributed the most to the Index’s performance, as companies in its technology hardware, storage, and peripherals industry were buoyed by growing investor interest in technologies related to artificial intelligence (“AI”). In this environment, companies involved in AI-related activities, such as manufacturing AI servers and producing chips for AI applications, posted strong gains. Continued strong data center growth fueled robust sales of high-end power units used in their construction, bolstering profits in the industry. A slowdown in the U.S. inflation rate also provided a tailwind to Taiwanese information technology stocks, as investors grew optimistic that the monetary tightening cycle was nearing an end.
On the downside, the materials sector detracted from the Index’s performance, particularly the chemicals industry. The U.S. subsidiary of a Taiwanese chemicals company agreed to settle a price-fixing lawsuit, and parent company profits declined substantially amid lower product prices and sales volumes. Stocks in the industrials sector also declined, as lower prices for ocean freight shipping pressured revenues in the marine transportation industry.
Portfolio Information
SECTOR ALLOCATION
Sector | |
Percent
of Total Investments |
(a) | |
Information Technology |
61.8 | % | ||
Financials |
18.3 | |||
Materials |
5.9 | |||
Consumer Discretionary |
3.9 | |||
Industrials |
3.8 | |||
Communication Services |
3.0 | |||
Consumer Staples |
2.1 | |||
Other (each representing less than 1%)
|
|
1.2
|
|
TEN LARGEST HOLDINGS
Security | |
Percent
of Total Investments |
(a) | |
Taiwan Semiconductor Manufacturing Co. Ltd. |
22.7 | % | ||
Hon Hai Precision Industry Co. Ltd. |
4.5 | |||
MediaTek Inc. |
3.6 | |||
Quanta Computer Inc. |
2.6 | |||
Delta Electronics Inc. |
2.5 | |||
United Microelectronics Corp. |
1.9 | |||
Fubon Financial Holding Co. Ltd. |
1.8 | |||
Chunghwa Telecom Co. Ltd. |
1.7 | |||
CTBC Financial Holding Co. Ltd. |
1.6 | |||
Mega Financial Holding Co. Ltd.
|
|
1.6
|
|
(a) |
Excludes money market funds. |
16 |
2 0 2 3 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 August 31, 2023 | iShares® MSCI Thailand ETF |
Investment Objective
The iShares MSCI Thailand ETF (the “Fund”) seeks to track the investment results of a broad-based index composed of Thai equities, as represented by the MSCI Thailand IMI 25/50 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 |
0.86 | % | (2.82 | )% | 2.84 | % | 0.86 | % | (13.31 | )% | 32.37 | % | ||||||||||||||||
Fund Market |
1.40 | (2.77 | ) | 2.94 | 1.40 | (13.11 | ) | 33.67 | ||||||||||||||||||||
Index |
0.79 | (2.58 | ) | 3.05 | 0.79 | (12.26 | ) | 35.01 | ||||||||||||||||||||
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
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 (03/01/23) |
|
|
Ending Account Value (08/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Beginning Account Value (03/01/23) |
|
|
Ending Account Value (08/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Annualized Expense Ratio |
| ||||||||||
$ 1,000.00 | $ 991.20 | $ 2.96 | $ 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. |
F U N D S U M M A R Y |
17 |
Fund Summary as of August 31, 2023 (continued) | iShares® MSCI Thailand ETF |
Portfolio Management Commentary
Stocks in Thailand advanced marginally for the reporting period amid inconsistent economic growth and falling inflation. Thailand’s stocks rose in anticipation of a rebound in tourism and the reopening of China, the country’s second-largest export market, from tight coronavirus restrictions in late 2022. Aided by demand from the U.S., exports rose after the reopening but remained down on a year-to-year basis amid political uncertainty, as Thai business leaders awaited the formation of a new government after May 2023 elections. Inflation moderated considerably, as the central bank of Thailand raised its benchmark interest rate more than fourfold. Manufacturing output decreased significantly, contracting in August 2023 for the first time in 19 months. The nation’s parliament selected a new prime minister near the conclusion of the reporting period.
The information technology sector contributed the most to the Index’s return. The electronic components industry advanced, driven by demand for server applications, cloud-storage operations, and electric vehicle components, including charging stations. Strong sales and earnings drove the stock of a leading electronics firm sharply higher, propelling the company past two state-owned enterprises to become Thailand’s largest firm in terms of market value. The real estate sector also contributed to performance, led by the real estate and development industry, which advanced along with residential property prices.
On the downside, the materials sector detracted from the Index’s return, led by the chemicals industry, which reported dramatically lower profits amid volatile energy costs and customers reducing excess inventories. Independent power and renewable electricity producers in the utilities sector declined amid contentious tariff increases by the government. In addition, the financials sector detracted. Consumer finance firms faced headwinds from rising interest rates and the weak economy as expenses and credit losses increased.
Portfolio Information
SECTOR ALLOCATION
Sector | |
Percent
of Total Investments |
(a) | |
Energy |
13.1 | % | ||
Consumer Staples |
12.8 | |||
Financials |
9.7 | |||
Health Care |
9.4 | |||
Industrials |
9.1 | |||
Consumer Discretionary |
8.1 | |||
Materials |
7.9 | |||
Utilities |
7.8 | |||
Communication Services |
7.7 | |||
Information Technology |
7.5 | |||
Real Estate
|
|
6.9
|
|
(a) |
Excludes money market funds. |
TEN LARGEST HOLDINGS
Security | |
Percent
of Total Investments |
(a) | |
CP ALL PCL |
6.2 | % | ||
PTT Public Company Ltd. |
5.7 | |||
Delta Electronics Thailand PCL |
5.5 | |||
Bangkok Dusit Medical Services PCL |
5.1 | |||
Airports of Thailand PCL |
5.1 | |||
Advanced Info Service PCL |
4.2 | |||
Siam Cement PCL (The) |
4.0 | |||
PTT Exploration & Production PCL |
3.6 | |||
Bumrungrad Hospital PCL |
2.5 | |||
Gulf Energy Development PCL
|
|
2.3
|
|
18 |
2 0 2 3 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 |
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. 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.
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.
A B O U T F U N D P E R F O R M A N C E / D I S C L O S U R E O F E X P E N S E S |
19 |
August 31, 2023 |
iShares® MSCI Hong Kong ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Banks — 5.9% | ||||||||
BOC Hong Kong Holdings Ltd.(a) |
6,821,000 | $ | 18,950,709 | |||||
Hang Seng Bank Ltd. |
1,415,900 | 18,044,391 | ||||||
|
|
|||||||
36,995,100 | ||||||||
Beverages — 1.2% | ||||||||
Budweiser Brewing Co. APAC Ltd.(b) |
3,505,900 | 7,591,844 | ||||||
|
|
|||||||
Building Products — 0.9% |
||||||||
Xinyi Glass Holdings Ltd. |
3,900,000 | 5,753,268 | ||||||
|
|
|||||||
Capital Markets — 14.0% |
||||||||
Futu Holdings Ltd., ADR(a)(c) |
125,598 | 7,485,641 | ||||||
Hong Kong Exchanges & Clearing Ltd. |
2,067,626 | 80,137,447 | ||||||
|
|
|||||||
87,623,088 | ||||||||
Diversified Telecommunication Services — 1.3% | ||||||||
HKT Trust & HKT Ltd., Class SS |
7,726,500 | 8,233,867 | ||||||
|
|
|||||||
Electric Utilities — 6.9% |
||||||||
CK Infrastructure Holdings Ltd. |
1,252,500 | 6,330,904 | ||||||
CLP Holdings Ltd. |
3,033,200 | 23,784,921 | ||||||
Power Assets Holdings Ltd. |
2,674,000 | 13,162,844 | ||||||
|
|
|||||||
43,278,669 | ||||||||
Food Products — 1.4% | ||||||||
WH Group Ltd.(b) |
17,069,000 | 8,790,449 | ||||||
|
|
|||||||
Gas Utilities — 2.4% |
||||||||
Hong Kong & China Gas Co. Ltd. |
20,865,495 | 15,335,351 | ||||||
|
|
|||||||
Ground Transportation — 2.0% |
||||||||
MTR Corp. Ltd. |
2,983,083 | 12,446,798 | ||||||
|
|
|||||||
Hotels, Restaurants & Leisure — 6.7% |
||||||||
Galaxy Entertainment Group Ltd.(c) |
3,980,000 | 26,306,611 | ||||||
Sands China Ltd.(c) |
4,646,400 | 15,717,372 | ||||||
|
|
|||||||
42,023,983 | ||||||||
Industrial Conglomerates — 6.5% | ||||||||
CK Hutchison Holdings Ltd. |
4,767,267 | 25,981,580 | ||||||
Jardine Matheson Holdings Ltd. |
308,300 | 14,657,572 | ||||||
|
|
|||||||
40,639,152 | ||||||||
Insurance — 22.6% | ||||||||
AIA Group Ltd. |
15,670,400 | 141,789,724 | ||||||
|
|
|||||||
Machinery — 3.9% |
||||||||
Techtronic Industries Co. Ltd. |
2,501,147 | 24,668,025 | ||||||
|
|
|||||||
Marine Transportation — 0.9% |
||||||||
SITC International Holdings Co. Ltd. |
3,105,000 | 5,791,165 | ||||||
|
|
Security | Shares | Value | ||||||
Real Estate Management & Development — 18.9% | ||||||||
CK Asset Holdings Ltd. |
3,650,267 | $ | 20,141,315 | |||||
ESR Group Ltd.(b) |
4,338,600 | 6,510,184 | ||||||
Hang Lung Properties Ltd. |
4,255,000 | 5,667,075 | ||||||
Henderson Land Development Co. Ltd. |
2,963,762 | 8,138,912 | ||||||
Hongkong Land Holdings Ltd. |
2,262,400 | 8,026,018 | ||||||
New World Development Co. Ltd. |
3,166,266 | 6,723,178 | ||||||
Sino Land Co. Ltd. |
7,358,000 | 8,428,427 | ||||||
Sun Hung Kai Properties Ltd. |
2,566,500 | 28,890,235 | ||||||
Swire Pacific Ltd., Class A |
927,500 | 7,647,593 | ||||||
Swire Properties Ltd. |
2,631,600 | 5,499,436 | ||||||
Wharf Real Estate Investment Co. Ltd. |
3,149,150 | 13,124,333 | ||||||
|
|
|||||||
118,796,706 | ||||||||
Retail REITs — 3.6% | ||||||||
Link REIT |
4,613,300 | 22,872,905 | ||||||
|
|
|||||||
Total
Long-Term Investments — 99.1% |
622,630,094 | |||||||
|
|
|||||||
Short-Term Securities |
||||||||
Money Market Funds — 1.3% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.52%(d)(e)(f) |
7,693,275 | 7,695,583 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 5.31%(d)(e) |
690,000 | 690,000 | ||||||
|
|
|||||||
Total
Short-Term Securities — 1.3% |
|
8,385,583 | ||||||
|
|
|||||||
Total
Investments — 100.4% |
|
631,015,677 | ||||||
Liabilities in Excess of Other Assets — (0.4)% |
|
(2,683,858 | ) | |||||
|
|
|||||||
Net Assets — 100.0% |
|
$ | 628,331,819 | |||||
|
|
(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) |
Non-income producing security. |
(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. |
20 |
2 0 2 3 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) August 31, 2023 |
iShares® MSCI Hong Kong ETF
|
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the year ended August 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | Value at 08/31/22 |
Purchases at Cost |
Proceeds from Sale |
Net Realized Gain (Loss) |
Change
in Unrealized Appreciation (Depreciation) |
Value at 08/31/23 |
Shares Held at 08/31/23 |
Income |
Capital from |
|||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares |
$ | — | $ | 7,693,008 | (a) | $ | — | $ | 2,575 | $ | — | $ | 7,695,583 | 7,693,275 | $ | 21,579 | (b) | $ | — | |||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares |
1,540,000 | — | (850,000 | )(a) | — | — | 690,000 | 690,000 | 57,061 | 1 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | 2,575 | $ | — | $ | 8,385,583 | $ | 78,640 | $ | 1 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(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. |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
|
||||||||||||||||
Description | Number of Contracts |
Expiration Date |
Notional (000) |
Value/ Unrealized (Depreciation) |
||||||||||||
Long Contracts |
||||||||||||||||
MSCI Hong Kong Index |
78 | 09/15/23 | $ | 4,493 | $ | (60,670 | ) | |||||||||
|
|
OTC Total Return Swaps
|
||||||||||||||||||||||||||||
Reference Entity |
Payment Frequency |
Counterparty(a) |
Termination Date |
Net Notional |
Accrued Unrealized Appreciation (Depreciation) |
Net Value of Reference Entity |
Gross Notional Amount Net Asset Percentage |
|||||||||||||||||||||
Equity Securities Long |
Monthly | HSBC Bank PLC | (b) | 02/10/28 | $ | 1,084,654 | $ | (19,583 | )(c) | $ | 1,065,139 | 0.2 | % | |||||||||||||||
Monthly | JPMorgan Chase Bank NA | (d) | 02/08/24 | 59,812 | (736 | )(e) | 58,350 | 0.0 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
$ | (20,319 | ) | $ | 1,123,489 | ||||||||||||||||||||||||
|
|
|
|
(a) |
The Fund receives the total return on a portfolio of long positions underlying the total return swap. The Fund pays the total return on a portfolio of short positions underlying the total return swap. In addition, the Fund pays or receives a variable rate of interest, based on a specified benchmark. The benchmark and spread are determined based upon the country and/or currency of the individual underlying positions. |
(c) |
Amount includes $(68) of net dividends, payable for referenced securities purchased and financing fees. |
(e) |
Amount includes $726 of net dividends, payable for referenced securities purchased and financing fees. |
The following are the specified benchmarks (plus or minus a range) used in determining the variable rate of interest:
(b) | (d) | |||
Range: |
0 basis points | 55 basis points | ||
Benchmarks: |
HKD - Overnight Index Average (HONIA) | HKD - Overnight Index Average (HONIA) |
S C H E D U L E O F I N V E S T M E N T S |
21 |
Schedule of Investments (continued) August 31, 2023 |
iShares® MSCI Hong Kong ETF
|
The following table represents the individual long positions and related values of equity securities underlying the total return swap with HSBC Bank PLC as of period end, termination date February 10, 2028.
Shares | Value |
% of Basket Value |
||||||||||
Reference Entity — Long |
||||||||||||
Common Stocks | ||||||||||||
Capital Markets | ||||||||||||
Hong Kong Exchanges & Clearing Ltd. |
27,500 | $ | 1,065,139 | 100.0% | ||||||||
|
|
|||||||||||
Net Value of Reference Entity — HSBC Bank PLC |
|
$ | 1,065,139 | |||||||||
|
|
The following table represents the individual long positions and related values of equity securities underlying the total return swap with JPMorgan Chase Bank NA as of period end, termination date February 8, 2024.
Shares | Value | %of Basket Value |
||||||||||
Reference Entity — Long |
||||||||||||
Common Stocks | ||||||||||||
Capital Markets | ||||||||||||
Hong Kong Exchanges & Clearing Ltd. |
1,500 | $ | 58,350 | 100.0% | ||||||||
|
|
|||||||||||
Net Value of Reference Entity — JPMorgan Chase Bank NA |
|
$ | 58,350 | |||||||||
|
|
Balances Reported in the Statements of Assets and Liabilities for Total Return Swaps
Description | Swap Premiums Paid |
Swap Premiums Received |
Unrealized Appreciation |
Unrealized Depreciation |
||||||||||||
Total Return Swaps |
$ | — | $ | — | $ | — | $ | (20,319 | ) |
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) |
$ | — | $ | — | $ | 60,670 | $ | — | $ | — | $ | — | $ | 60,670 | ||||||||||||||
Swaps — OTC |
||||||||||||||||||||||||||||
Unrealized depreciation on OTC swaps; Swap premiums received |
$ | — | $ | — | $ | 20,319 | $ | — | $ | — | $ | — | $ | 20,319 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | — | $ | — | $ | 80,989 | $ | — | $ | — | $ | 1— | $ | 80,989 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, 2023, 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 |
$ | — | $ | — | $ | (334,439 | ) | $ | — | $ | — | $ | — | $ | (334,439 | ) | ||||||||||||
Swaps |
— | — | 1,172,830 | — | — | — | 1,172,830 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | — | $ | — | $ | 838,391 | $ | — | $ | — | $ | — | $ | 838,391 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | 52,282 | $ | — | $ | — | $ | — | $ | 52,282 | ||||||||||||||
Swaps |
— | — | (20,319 | ) | — | — | — | (20,319 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | — | $ | — | $ | 31,963 | $ | — | $ | — | $ | — | $ | 31,963 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
||||
Average notional value of contracts — long |
$ | 3,935,259 | ||
Total return swaps: |
||||
Average notional value |
$ | 1,936,081 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
22 |
2 0 2 3 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) August 31, 2023 |
iShares® MSCI Hong Kong ETF
|
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: |
||||||||
Futures contracts |
$ | — | $ | 60,670 | ||||
Swaps - OTC |
— | 20,319 | ||||||
|
|
|
|
|||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities |
— | 80,989 | ||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) |
— | (60,670 | ) | |||||
|
|
|
|
|||||
Total derivative assets and liabilities subject to an MNA |
— | 20,319 | ||||||
|
|
|
|
The following table presents the Fund’s derivative liabilities by counterparty net of amounts available for offset under an MNA and net of the related collateral pledged by the Fund:
Counterparty |
Derivative Liabilities Subject to an MNA by Counterparty |
Derivatives Available for Offset |
Non-Cash Collateral Pledged |
Cash Collateral Pledged |
Net Amount of Derivative Liabilities |
|||||||||||||||||||
HSBC Bank PLC |
$ | 19,583 | $ | — | $ | — | $ | — | $ | 19,583 | ||||||||||||||
JPMorgan Chase Bank NA |
736 | — | — | — | 736 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | 20,319 | $ | — | $ | — | $ | — | $ | 20,319 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
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 | |||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 7,485,641 | $ | 615,144,453 | $ | — | $ | 622,630,094 | ||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
8,385,583 | — | — | 8,385,583 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 15,871,224 | $ | 615,144,453 | $ | — | $ | 631,015,677 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative Financial Instruments(a) |
||||||||||||||||
Liabilities |
||||||||||||||||
Equity Contracts |
$ | — | $ | (80,989 | ) | $ | — | $ | (80,989 | ) | ||||||
|
|
|
|
|
|
|
|
(a) |
Derivative financial instruments are swaps and futures contracts. Swaps and futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S |
23 |
Schedule of Investments August 31, 2023 |
iShares® MSCI Japan Small-Cap ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Aerospace & Defense — 0.0% | ||||||||
Ispace Inc., NVS |
2,800 | $ | 29,887 | |||||
|
|
|||||||
Air Freight & Logistics — 0.6% | ||||||||
AZ-COM MARUWA Holdings Inc. |
5,100 | 79,466 | ||||||
Hamakyorex Co. Ltd. |
1,700 | 48,878 | ||||||
Konoike Transport Co. Ltd. |
3,400 | 47,603 | ||||||
Mitsui-Soko Holdings Co. Ltd. |
3,400 | 96,901 | ||||||
Sankyu Inc. |
6,800 | 237,086 | ||||||
SBS Holdings Inc. |
1,700 | 35,693 | ||||||
Senko Group Holdings Co. Ltd. |
15,300 | 107,116 | ||||||
Trancom Co. Ltd. |
1,700 | 87,849 | ||||||
|
|
|||||||
740,592 | ||||||||
Automobile Components — 3.6% | ||||||||
Eagle Industry Co. Ltd. |
3,400 | 39,212 | ||||||
Exedy Corp. |
5,100 | 92,291 | ||||||
FCC Co. Ltd. |
5,100 | 67,297 | ||||||
G-Tekt Corp. |
3,400 | 43,033 | ||||||
JTEKT Corp. |
30,600 | 276,543 | ||||||
KYB Corp. |
1,700 | 55,420 | ||||||
Musashi Seimitsu Industry Co. Ltd. |
6,800 | 80,821 | ||||||
NHK Spring Co. Ltd. |
28,900 | 224,065 | ||||||
Nifco Inc./Japan |
11,900 | 350,762 | ||||||
Nippon Seiki Co. Ltd. |
6,800 | 51,149 | ||||||
Niterra Co. Ltd. |
22,100 | 512,866 | ||||||
NOK Corp. |
11,900 | 166,743 | ||||||
Pacific Industrial Co. Ltd. |
5,100 | 49,909 | ||||||
Piolax Inc. |
3,400 | 54,470 | ||||||
Seiren Co. Ltd. |
6,800 | 112,124 | ||||||
Shoei Co. Ltd. |
6,800 | 115,122 | ||||||
Stanley Electric Co. Ltd. |
18,700 | 328,052 | ||||||
Sumitomo Riko Co. Ltd. |
5,100 | 37,927 | ||||||
Sumitomo Rubber Industries Ltd. |
25,500 | 268,737 | ||||||
Tokai Rika Co. Ltd. |
6,800 | 106,313 | ||||||
Topre Corp. |
5,100 | 60,676 | ||||||
Toyo Tire Corp. |
17,000 | 255,940 | ||||||
Toyoda Gosei Co. Ltd. |
8,500 | 183,352 | ||||||
Toyota Boshoku Corp. |
11,900 | 224,891 | ||||||
TS Tech Co. Ltd. |
13,600 | 160,869 | ||||||
Yokohama Rubber Co. Ltd. (The) |
17,000 | 345,424 | ||||||
|
|
|||||||
4,264,008 | ||||||||
Automobiles — 0.4% | ||||||||
Mitsubishi Motors Corp. |
96,900 | 379,028 | ||||||
Nissan Shatai Co. Ltd. |
8,500 | 52,828 | ||||||
|
|
|||||||
431,856 | ||||||||
Banks — 5.0% | ||||||||
77 Bank Ltd. (The) |
8,500 | 183,457 | ||||||
Aichi Financial Group Inc., NVS |
6,800 | 113,663 | ||||||
Aozora Bank Ltd.(a) |
15,300 | 300,405 | ||||||
Awa Bank Ltd. (The) |
5,100 | 79,235 | ||||||
Bank of Kyoto Ltd. (The) |
8,500 | 490,709 | ||||||
Chugin Financial Group Inc., NVS |
20,400 | 135,420 | ||||||
Daishi Hokuetsu Financial Group Inc. |
5,100 | 127,778 | ||||||
Fukuoka Financial Group Inc. |
23,800 | 562,044 | ||||||
Gunma Bank Ltd. (The) |
49,300 | 227,025 | ||||||
Hachijuni Bank Ltd. (The) |
52,700 | 283,735 | ||||||
Hirogin Holdings Inc. |
35,700 | 222,840 | ||||||
Hokkoku Financial Holdings Inc. |
3,400 | 114,712 | ||||||
Hokuhoku Financial Group Inc. |
15,300 | 138,403 |
Security | Shares | Value | ||||||
Banks (continued) | ||||||||
Hyakugo Bank Ltd. (The) |
28,900 | $ | 100,273 | |||||
Iyogin Holdings Inc., NVS |
39,100 | 271,245 | ||||||
Juroku Financial Group Inc. |
5,100 | 128,228 | ||||||
Keiyo Bank Ltd. (The) |
13,600 | 55,571 | ||||||
Kiyo Bank Ltd. (The) |
8,500 | 88,075 | ||||||
Kyushu Financial Group Inc. |
47,600 | 232,885 | ||||||
Mebuki Financial Group Inc. |
142,800 | 394,757 | ||||||
Musashino Bank Ltd. (The) |
3,400 | 61,619 | ||||||
Nanto Bank Ltd. (The) |
3,400 | 61,932 | ||||||
Nishi-Nippon Financial Holdings Inc. |
17,000 | 175,921 | ||||||
North Pacific Bank Ltd. |
37,400 | 78,688 | ||||||
Ogaki Kyoritsu Bank Ltd. (The) |
5,100 | 70,377 | ||||||
Okinawa Financial Group Inc. |
3,400 | 52,578 | ||||||
Rakuten Bank Ltd., NVS(b) |
10,200 | 132,149 | ||||||
San-in Godo Bank Ltd. (The) |
18,700 | 117,706 | ||||||
SBI Sumishin Net Bank Ltd., NVS |
6,800 | 71,461 | ||||||
Seven Bank Ltd. |
85,000 | 180,785 | ||||||
Shiga Bank Ltd. (The) |
5,100 | 114,006 | ||||||
Shinsei Bank Ltd. |
6,800 | 131,778 | ||||||
Suruga Bank Ltd. |
23,800 | 99,083 | ||||||
Toho Bank Ltd. (The) |
27,200 | 51,708 | ||||||
Tokyo Kiraboshi Financial Group Inc. |
3,400 | 89,681 | ||||||
TOMONY Holdings Inc. |
20,400 | 57,767 | ||||||
Yamaguchi Financial Group Inc. |
25,500 | 202,315 | ||||||
|
|
|||||||
6,000,014 | ||||||||
Beverages — 0.7% | ||||||||
Coca-Cola Bottlers Japan Holdings Inc. |
18,700 | 243,559 | ||||||
Ito En Ltd. |
6,800 | 200,949 | ||||||
Sapporo Holdings Ltd.(a) |
8,500 | 260,241 | ||||||
Takara Holdings Inc. |
20,400 | 175,891 | ||||||
|
|
|||||||
880,640 | ||||||||
Biotechnology — 0.3% | ||||||||
GNI Group Ltd.(a)(b) |
6,097 | 89,499 | ||||||
PeptiDream Inc.(b) |
13,600 | 174,599 | ||||||
Pharma Foods International Co. Ltd. |
3,400 | 38,350 | ||||||
SanBio Co. Ltd.(a)(b) |
6,800 | 26,313 | ||||||
StemRIM Inc.(b) |
3,400 | 19,595 | ||||||
Takara Bio Inc. |
6,800 | 66,595 | ||||||
|
|
|||||||
414,951 | ||||||||
Broadline Retail — 2.1% | ||||||||
ASKUL Corp. |
5,100 | 68,791 | ||||||
Belluna Co. Ltd. |
6,800 | 33,935 | ||||||
Isetan Mitsukoshi Holdings Ltd. |
49,300 | 565,200 | ||||||
Izumi Co. Ltd. |
5,100 | 133,004 | ||||||
J Front Retailing Co. Ltd. |
35,700 | 375,971 | ||||||
Kintetsu Department Store Co. Ltd. |
1,700 | 33,496 | ||||||
Mercari Inc.(a)(b) |
17,000 | 386,601 | ||||||
Ryohin Keikaku Co. Ltd. |
35,700 | 460,255 | ||||||
Seria Co. Ltd. |
6,800 | 107,385 | ||||||
Takashimaya Co. Ltd. |
20,400 | 306,271 | ||||||
|
|
|||||||
2,470,909 | ||||||||
Building Products — 1.0% | ||||||||
Bunka Shutter Co. Ltd. |
6,800 | 50,856 | ||||||
Central Glass Co. Ltd. |
3,400 | 68,425 | ||||||
Nichias Corp. |
6,800 | 142,223 | ||||||
Nichiha Corp. |
3,400 | 72,857 | ||||||
Nitto Boseki Co. Ltd. |
3,400 | 93,385 | ||||||
Noritz Corp. |
3,400 | 37,324 | ||||||
Sanwa Holdings Corp. |
27,200 | 413,887 |
24 |
2 0 2 3 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) August 31, 2023 |
iShares® MSCI Japan Small-Cap ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Building Products (continued) |
| |||||||
Sekisui Jushi Corp. |
3,400 | $ | 58,695 | |||||
Takara Standard Co. Ltd. |
5,100 | 67,964 | ||||||
Takasago Thermal Engineering Co. Ltd. |
6,800 | 136,773 | ||||||
|
|
|||||||
1,142,389 | ||||||||
Capital Markets — 0.6% | ||||||||
GMO Financial Holdings Inc. |
5,100 | 25,448 | ||||||
JAFCO Group Co. Ltd. |
6,800 | 87,176 | ||||||
M&A Capital Partners Co. Ltd.(b) |
1,700 | 32,901 | ||||||
M&A Research Institute Inc., NVS(b) |
3,700 | 90,092 | ||||||
Matsui Securities Co. Ltd. |
17,000 | 93,498 | ||||||
Monex Group Inc. |
25,500 | 91,376 | ||||||
Okasan Securities Group Inc. |
22,100 | 87,322 | ||||||
SPARX Group Co. Ltd. |
3,400 | 35,038 | ||||||
Strike Co. Ltd. |
1,700 | 37,281 | ||||||
Tokai Tokyo Financial Holdings Inc. |
27,200 | 83,802 | ||||||
WealthNavi Inc.(b) |
5,100 | 42,656 | ||||||
|
|
|||||||
706,590 | ||||||||
Chemicals — 6.8% | ||||||||
ADEKA Corp. |
11,900 | 228,622 | ||||||
Aica Kogyo Co. Ltd. |
6,800 | 161,244 | ||||||
Air Water Inc. |
27,200 | 342,138 | ||||||
Asahi Yukizai Corp. |
1,700 | 47,263 | ||||||
C Uyemura & Co. Ltd. |
1,700 | 111,171 | ||||||
C.I. Takiron Corp. |
6,800 | 28,057 | ||||||
Chugoku Marine Paints Ltd. |
5,100 | 49,919 | ||||||
Daicel Corp. |
34,000 | 283,827 | ||||||
Denka Co. Ltd. |
10,200 | 192,269 | ||||||
DIC Corp. |
11,900 | 205,029 | ||||||
Fujimi Inc. |
7,100 | 164,029 | ||||||
Fujimori Kogyo Co. Ltd. |
1,700 | 43,772 | ||||||
Fuso Chemical Co. Ltd. |
3,400 | 99,632 | ||||||
JCU Corp. |
3,400 | 78,732 | ||||||
Kaneka Corp. |
6,800 | 190,863 | ||||||
Kansai Paint Co. Ltd. |
25,500 | 418,107 | ||||||
Kanto Denka Kogyo Co. Ltd. |
5,100 | 29,163 | ||||||
KeePer Technical Laboratory Co. Ltd. |
1,700 | 79,162 | ||||||
KH Neochem Co. Ltd. |
5,100 | 79,414 | ||||||
Konishi Co. Ltd. |
3,400 | 58,087 | ||||||
Kumiai Chemical Industry Co. Ltd. |
10,249 | 79,075 | ||||||
Kuraray Co. Ltd. |
40,800 | 463,444 | ||||||
Kureha Corp. |
2,100 | 123,312 | ||||||
Lintec Corp. |
5,100 | 84,074 | ||||||
Mitsubishi Gas Chemical Co. Inc. |
22,100 | 301,014 | ||||||
Nihon Parkerizing Co. Ltd. |
11,900 | 94,879 | ||||||
Nippon Kayaku Co. Ltd. |
18,700 | 167,457 | ||||||
Nippon Pillar Packing Co. Ltd. |
1,700 | 49,002 | ||||||
Nippon Shokubai Co. Ltd. |
3,400 | 129,386 | ||||||
Nippon Soda Co. Ltd. |
3,400 | 125,749 | ||||||
NOF Corp. |
10,200 | 460,088 | ||||||
Okamoto Industries Inc. |
1,700 | 54,536 | ||||||
Osaka Organic Chemical Industry Ltd. |
1,700 | 30,155 | ||||||
Osaka Soda Co. Ltd. |
1,700 | 81,445 | ||||||
Sakata INX Corp. |
5,100 | 47,795 | ||||||
Sanyo Chemical Industries Ltd. |
1,700 | 48,308 | ||||||
Shikoku Chemicals Corp. |
5,100 | 51,031 | ||||||
Shin-Etsu Polymer Co. Ltd. |
6,800 | 64,010 | ||||||
Showa Denko KK |
25,500 | 414,424 | ||||||
Sumitomo Bakelite Co. Ltd. |
5,100 | 240,974 | ||||||
T Hasegawa Co. Ltd. |
5,100 | 122,330 | ||||||
Taiyo Holdings Co. Ltd. |
5,100 | 91,940 |
Security | Shares | Value | ||||||
Chemicals (continued) |
| |||||||
Takasago International Corp. |
1,700 | $ | 33,534 | |||||
Teijin Ltd. |
25,500 | 258,928 | ||||||
Tenma Corp. |
1,700 | 29,956 | ||||||
Toagosei Co. Ltd. |
13,600 | 129,569 | ||||||
Tokai Carbon Co. Ltd. |
28,900 | 228,259 | ||||||
Tokuyama Corp. |
8,500 | 135,582 | ||||||
Tokyo Ohka Kogyo Co. Ltd. |
5,100 | 344,733 | ||||||
Toyo Gosei Co. Ltd.(a) |
400 | 20,379 | ||||||
Toyo Ink SC Holdings Co. Ltd. |
5,100 | 79,438 | ||||||
Toyobo Co. Ltd. |
11,900 | 86,364 | ||||||
UBE Corp. |
13,600 | 229,404 | ||||||
W-Scope Corp.(a)(b) |
6,800 | 55,577 | ||||||
Zeon Corp. |
20,400 | 224,613 | ||||||
|
|
|||||||
8,071,264 | ||||||||
Commercial Services & Supplies — 1.8% | ||||||||
Aeon Delight Co. Ltd. |
3,400 | 74,588 | ||||||
Daiei Kankyo Co. Ltd. |
5,100 | 80,875 | ||||||
Daiseki Co. Ltd. |
5,112 | 154,751 | ||||||
Duskin Co. Ltd. |
6,800 | 153,140 | ||||||
Japan Elevator Service Holdings Co. Ltd. |
10,200 | 169,541 | ||||||
Kokuyo Co. Ltd. |
11,900 | 184,904 | ||||||
Kosaido Holdings Co. Ltd. |
1,700 | 32,772 | ||||||
Matsuda Sangyo Co. Ltd. |
1,760 | 27,151 | ||||||
Mitsubishi Pencil Co. Ltd. |
3,400 | 45,009 | ||||||
Nippon Kanzai Holdings Co. Ltd. |
3,400 | 62,220 | ||||||
Nippon Parking Development Co. Ltd. |
27,200 | 40,887 | ||||||
Okamura Corp. |
8,500 | 126,711 | ||||||
Park24 Co. Ltd.(b) |
18,700 | 263,746 | ||||||
Pilot Corp. |
3,400 | 109,449 | ||||||
Prestige International Inc. |
13,600 | 54,827 | ||||||
Raksul Inc.(b) |
6,800 | 65,675 | ||||||
Sato Holdings Corp. |
3,400 | 49,258 | ||||||
Sohgo Security Services Co. Ltd. |
56,100 | 357,727 | ||||||
TRE Holdings Corp. |
6,800 | 54,819 | ||||||
|
|
|||||||
2,108,050 | ||||||||
Construction & Engineering — 3.6% | ||||||||
Chiyoda Corp.(b) |
22,100 | 56,258 | ||||||
Chudenko Corp. |
3,400 | 55,795 | ||||||
COMSYS Holdings Corp. |
17,000 | 362,077 | ||||||
EXEO Group Inc. |
13,600 | 289,345 | ||||||
Hazama Ando Corp. |
20,400 | 166,196 | ||||||
INFRONEER Holdings Inc. |
25,540 | 266,743 | ||||||
JDC Corp. |
6,800 | 28,630 | ||||||
JGC Holdings Corp. |
32,300 | 431,224 | ||||||
Kandenko Co. Ltd. |
17,000 | 155,741 | ||||||
Kinden Corp. |
18,700 | 256,997 | ||||||
Kumagai Gumi Co. Ltd. |
5,100 | 113,983 | ||||||
Kyudenko Corp. |
6,800 | 209,241 | ||||||
MIRAIT ONE corp. |
13,600 | 180,129 | ||||||
Nippon Densetsu Kogyo Co. Ltd. |
5,100 | 74,689 | ||||||
Nippon Road Co. Ltd. (The) |
400 | 26,461 | ||||||
Nishimatsu Construction Co. Ltd. |
5,100 | 129,357 | ||||||
Okumura Corp. |
3,400 | 106,296 | ||||||
Penta-Ocean Construction Co. Ltd. |
39,100 | 232,384 | ||||||
Raito Kogyo Co. Ltd. |
5,100 | 71,249 | ||||||
Raiznext Corp. |
3,400 | 32,907 | ||||||
Sanki Engineering Co. Ltd. |
5,100 | 56,431 | ||||||
SHO-BOND Holdings Co. Ltd. |
5,100 | 205,430 | ||||||
Sumitomo Densetsu Co. Ltd. |
1,700 | 33,814 | ||||||
Sumitomo Mitsui Construction Co. Ltd. |
18,700 | 51,990 |
S C H E D U L E O F I N V E S T M E N T S |
25 |
Schedule of Investments (continued) August 31, 2023 |
iShares® MSCI Japan Small-Cap ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Construction & Engineering (continued) |
| |||||||
Taihei Dengyo Kaisha Ltd. |
1,700 | $ | 45,615 | |||||
Taikisha Ltd. |
3,400 | 106,838 | ||||||
Takamatsu Construction Group Co. Ltd. |
1,700 | 30,455 | ||||||
Toa Corp./Tokyo |
1,700 | 42,076 | ||||||
Toda Corp. |
32,300 | 181,683 | ||||||
Toenec Corp. |
1,700 | 47,258 | ||||||
Tokyu Construction Co. Ltd. |
11,940 | 62,949 | ||||||
Totetsu Kogyo Co. Ltd. |
3,400 | 64,113 | ||||||
Toyo Construction Co. Ltd. |
6,800 | 51,771 | ||||||
Yokogawa Bridge Holdings Corp. |
5,100 | 96,631 | ||||||
Yurtec Corp. |
5,100 | 32,285 | ||||||
|
|
|||||||
4,355,041 | ||||||||
Construction Materials — 0.5% | ||||||||
Maeda Kosen Co. Ltd. |
3,400 | 73,004 | ||||||
Mitani Sekisan Co. Ltd. |
1,700 | 59,325 | ||||||
Sumitomo Osaka Cement Co. Ltd. |
3,400 | 93,440 | ||||||
Taiheiyo Cement Corp. |
17,000 | 325,948 | ||||||
|
|
|||||||
551,717 | ||||||||
Consumer Finance — 1.0% | ||||||||
AEON Financial Service Co. Ltd. |
15,300 | 133,400 | ||||||
Aiful Corp. |
45,900 | 108,994 | ||||||
Credit Saison Co. Ltd. |
22,100 | 345,420 | ||||||
J Trust Co. Ltd. |
10,200 | 32,363 | ||||||
Jaccs Co. Ltd. |
3,400 | 118,249 | ||||||
Marui Group Co. Ltd. |
25,500 | 441,374 | ||||||
Orient Corp. |
7,100 | 53,865 | ||||||
|
|
|||||||
1,233,665 | ||||||||
Consumer Staples Distribution & Retail — 3.0% | ||||||||
Aeon Hokkaido Corp. |
5,100 | 30,111 | ||||||
Ain Holdings Inc. |
3,400 | 121,369 | ||||||
Arcs Co. Ltd. |
5,100 | 90,482 | ||||||
Axial Retailing Inc. |
1,700 | 43,865 | ||||||
Belc Co. Ltd. |
1,700 | 79,194 | ||||||
Cawachi Ltd. |
1,700 | 26,686 | ||||||
Cosmos Pharmaceutical Corp. |
3,400 | 399,750 | ||||||
Create SD Holdings Co. Ltd. |
3,400 | 87,057 | ||||||
Daikokutenbussan Co. Ltd. |
500 | 22,634 | ||||||
Fuji Co. Ltd./Ehime |
5,100 | 63,958 | ||||||
G-7 Holdings Inc. |
3,400 | 29,201 | ||||||
Genky DrugStores Co. Ltd. |
1,700 | 60,701 | ||||||
H2O Retailing Corp. |
13,635 | 164,100 | ||||||
Halows Co. Ltd. |
1,700 | 47,660 | ||||||
Heiwado Co. Ltd. |
3,400 | 55,994 | ||||||
Inageya Co. Ltd. |
3,400 | 35,258 | ||||||
Kato Sangyo Co. Ltd. |
3,400 | 97,811 | ||||||
Kusuri no Aoki Holdings Co. Ltd. |
2,100 | 131,321 | ||||||
Lawson Inc. |
6,800 | 324,571 | ||||||
Life Corp. |
3,400 | 84,772 | ||||||
Maxvalu Tokai Co. Ltd. |
1,700 | 32,595 | ||||||
Mitsubishi Shokuhin Co. Ltd. |
1,700 | 46,547 | ||||||
Oisix ra daichi Inc.(a)(b) |
3,400 | 38,890 | ||||||
Retail Partners Co. Ltd. |
3,400 | 37,590 | ||||||
San-A Co. Ltd. |
3,400 | 114,688 | ||||||
Shoei Foods Corp. |
1,700 | 53,036 | ||||||
Sugi Holdings Co. Ltd. |
5,100 | 228,886 | ||||||
Sundrug Co. Ltd. |
10,200 | 301,510 | ||||||
Tsuruha Holdings Inc. |
5,100 | 373,125 | ||||||
United Super Markets Holdings Inc.(a) |
8,500 | 65,294 | ||||||
Valor Holdings Co. Ltd. |
5,100 | 76,062 |
Security | Shares | Value | ||||||
Consumer Staples Distribution & Retail (continued) |
| |||||||
Yaoko Co. Ltd. |
3,400 | $ | 179,210 | |||||
Yokorei Co. Ltd. |
6,800 | 61,648 | ||||||
|
|
|||||||
3,605,576 | ||||||||
Containers & Packaging — 0.6% | ||||||||
FP Corp. |
6,900 | 132,543 | ||||||
Fuji Seal International Inc. |
5,100 | 61,147 | ||||||
Rengo Co. Ltd. |
27,200 | 184,824 | ||||||
Toyo Seikan Group Holdings Ltd. |
18,700 | 338,441 | ||||||
|
|
|||||||
716,955 | ||||||||
Distributors — 0.2% | ||||||||
Arata Corp. |
1,700 | 63,099 | ||||||
Doshisha Co. Ltd. |
3,400 | 55,296 | ||||||
PALTAC Corp. |
3,400 | 111,992 | ||||||
|
|
|||||||
230,387 | ||||||||
Diversified Consumer Services — 0.2% | ||||||||
Benesse Holdings Inc. |
10,200 | 129,912 | ||||||
LITALICO Inc. |
3,400 | 51,149 | ||||||
Riso Kyoiku Co. Ltd. |
15,300 | 26,064 | ||||||
|
|
|||||||
207,125 | ||||||||
Diversified REITs — 2.0% | ||||||||
Activia Properties Inc. |
102 | 285,792 | ||||||
Hankyu Hanshin REIT Inc. |
85 | 83,657 | ||||||
Heiwa Real Estate REIT Inc. |
136 | 135,718 | ||||||
Hulic Reit Inc. |
187 | 208,598 | ||||||
Mori Trust Reit Inc. |
362 | 183,046 | ||||||
NIPPON REIT Investment Corp. |
68 | 162,502 | ||||||
NTT UD REIT Investment Corp. |
204 | 194,240 | ||||||
Sekisui House Reit Inc. |
612 | 353,540 | ||||||
Star Asia Investment Corp. |
323 | 128,483 | ||||||
Takara Leben Real Estate Investment Corp. |
102 | 67,398 | ||||||
Tokyu REIT Inc. |
136 | 174,251 | ||||||
United Urban Investment Corp. |
408 | 438,565 | ||||||
|
|
|||||||
2,415,790 | ||||||||
Diversified Telecommunication Services — 0.4% | ||||||||
Internet Initiative Japan Inc. |
15,300 | 265,918 | ||||||
JTOWER Inc.(a)(b) |
1,700 | 79,743 | ||||||
Usen-Next Holdings Co. Ltd. |
3,400 | 81,649 | ||||||
Vision Inc./Tokyo Japan(b) |
5,100 | 58,811 | ||||||
|
|
|||||||
486,121 | ||||||||
Electric Utilities — 1.3% | ||||||||
Chugoku Electric Power Co. Inc. (The)(b) |
42,500 | 279,641 | ||||||
Hokkaido Electric Power Co. Inc.(b) |
23,800 | 109,332 | ||||||
Hokuriku Electric Power Co.(b) |
23,800 | 138,460 | ||||||
Kyushu Electric Power Co. Inc.(b) |
57,800 | 380,869 | ||||||
Okinawa Electric Power Co. Inc. (The)(b) |
6,892 | 54,136 | ||||||
Shikoku Electric Power Co. Inc.(b) |
20,400 | 146,908 | ||||||
Tohoku Electric Power Co. Inc.(b) |
66,300 | 462,552 | ||||||
|
|
|||||||
1,571,898 | ||||||||
Electrical Equipment — 1.3% | ||||||||
Abalance Corp.(a) |
1,700 | 47,847 | ||||||
Daihen Corp. |
3,400 | 124,289 | ||||||
Fujikura Ltd. |
34,000 | 281,260 | ||||||
Furukawa Electric Co. Ltd. |
10,200 | 175,205 | ||||||
GS Yuasa Corp. |
8,500 | 161,067 | ||||||
Idec Corp./Japan |
3,400 | 70,987 | ||||||
Mabuchi Motor Co. Ltd. |
6,800 | 208,116 | ||||||
Nippon Carbon Co. Ltd. |
1,700 | 51,765 | ||||||
Nitto Kogyo Corp. |
3,400 | 90,732 |
26 |
2 0 2 3 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) August 31, 2023 |
iShares® MSCI Japan Small-Cap ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Electrical Equipment (continued) |
| |||||||
Sanyo Denki Co. Ltd. |
1,700 | $ | 82,975 | |||||
Toyo Tanso Co. Ltd. |
1,700 | 69,446 | ||||||
Ushio Inc. |
13,600 | 171,408 | ||||||
|
|
|||||||
1,535,097 | ||||||||
Electronic Equipment, Instruments & Components — 3.9% | ||||||||
Ai Holdings Corp. |
5,100 | 82,826 | ||||||
Alps Alpine Co. Ltd. |
27,200 | 227,126 | ||||||
Amano Corp. |
6,800 | 148,225 | ||||||
Anritsu Corp. |
18,700 | 137,188 | ||||||
Canon Electronics Inc. |
1,700 | 21,618 | ||||||
Canon Marketing Japan Inc. |
6,800 | 178,410 | ||||||
Citizen Watch Co. Ltd. |
27,200 | 166,592 | ||||||
Daiwabo Holdings Co. Ltd. |
11,900 | 241,212 | ||||||
Dexerials Corp. |
8,500 | 210,256 | ||||||
Hakuto Co. Ltd. |
1,700 | 58,747 | ||||||
Hioki E.E. Corp |
1,700 | 89,899 | ||||||
Horiba Ltd. |
5,100 | 265,155 | ||||||
Hosiden Corp. |
5,100 | 63,428 | ||||||
Iriso Electronics Co. Ltd. |
3,400 | 100,910 | ||||||
Japan Aviation Electronics Industry Ltd. |
6,800 | 143,157 | ||||||
Japan Display Inc.(a)(b) |
78,200 | 20,904 | ||||||
Kaga Electronics Co. Ltd. |
1,700 | 77,150 | ||||||
Koa Corp. |
3,400 | 42,907 | ||||||
Macnica Holdings Inc. |
6,800 | 318,162 | ||||||
Maruwa Co. Ltd./Aichi |
1,500 | 279,044 | ||||||
Maxell Ltd. |
5,100 | 55,273 | ||||||
Meiko Electronics Co. Ltd. |
3,400 | 83,251 | ||||||
Nichicon Corp. |
5,100 | 49,213 | ||||||
Nippon Ceramic Co. Ltd. |
3,400 | 60,336 | ||||||
Nippon Electric Glass Co. Ltd. |
11,900 | 209,988 | ||||||
Nippon Signal Company Ltd. |
5,100 | 33,781 | ||||||
Nissha Co. Ltd. |
5,100 | 61,745 | ||||||
Nohmi Bosai Ltd. |
3,400 | 41,335 | ||||||
Oki Electric Industry Co. Ltd. |
11,900 | 73,724 | ||||||
Optex Group Co. Ltd. |
5,100 | 61,568 | ||||||
Restar Holdings Corp. |
3,400 | 56,352 | ||||||
Riken Keiki Co. Ltd. |
1,700 | 61,522 | ||||||
Ryosan Co. Ltd. |
2,000 | 58,143 | ||||||
Ryoyo Electro Corp. |
1,700 | 40,194 | ||||||
Siix Corp. |
3,400 | 36,734 | ||||||
Taiyo Yuden Co. Ltd. |
17,000 | 472,603 | ||||||
Tokyo Electron Device Ltd. |
1,700 | 116,851 | ||||||
Topcon Corp. |
13,600 | 163,698 | ||||||
Yokowo Co. Ltd. |
1,700 | 19,649 | ||||||
|
|
|||||||
4,628,876 | ||||||||
Energy Equipment & Services — 0.0% | ||||||||
Modec Inc.(b) |
3,400 | 38,630 | ||||||
|
|
|||||||
Entertainment — 0.9% | ||||||||
Anycolor Inc.(a)(b) |
3,400 | 78,817 | ||||||
Avex Inc. |
5,100 | 51,395 | ||||||
Bushiroad Inc. |
5,100 | 16,837 | ||||||
COLOPL Inc. |
8,500 | 37,217 | ||||||
Cover Corp.(b) |
1,700 | 26,862 | ||||||
Daiichikosho Co. Ltd. |
11,900 | 229,871 | ||||||
DeNA Co. Ltd. |
10,200 | 105,690 | ||||||
Gree Inc. |
8,500 | 36,173 | ||||||
GungHo Online Entertainment Inc. |
6,800 | 111,975 | ||||||
Mixi Inc. |
5,100 | 85,124 | ||||||
Shochiku Co. Ltd.(a) |
1,700 | 128,617 |
Security | Shares | Value | ||||||
Entertainment (continued) |
| |||||||
Toei Animation Co. Ltd. |
700 | $ | 58,989 | |||||
Toei Co. Ltd. |
500 | 59,478 | ||||||
|
|
|||||||
1,027,045 | ||||||||
Financial Services — 1.0% | ||||||||
eGuarantee Inc. |
5,100 | 67,993 | ||||||
Financial Products Group Co. Ltd. |
8,500 | 83,689 | ||||||
Fuyo General Lease Co. Ltd. |
2,200 | 181,818 | ||||||
Japan Securities Finance Co. Ltd. |
11,900 | 102,650 | ||||||
Mizuho Leasing Co. Ltd. |
3,400 | 112,173 | ||||||
Ricoh Leasing Co. Ltd. |
3,400 | 100,111 | ||||||
Tokyo Century Corp. |
5,100 | 195,734 | ||||||
Zenkoku Hosho Co. Ltd. |
8,500 | 294,491 | ||||||
|
|
|||||||
1,138,659 | ||||||||
Food Products — 4.4% | ||||||||
Ariake Japan Co. Ltd. |
3,400 | 123,888 | ||||||
Calbee Inc. |
11,900 | 237,399 | ||||||
DyDo Group Holdings Inc. |
1,700 | 67,801 | ||||||
Ezaki Glico Co. Ltd. |
6,800 | 179,293 | ||||||
Fuji Oil Holdings Inc. |
6,800 | 109,185 | ||||||
Fujicco Co. Ltd. |
1,700 | 22,664 | ||||||
Fujiya Co. Ltd. |
1,700 | 28,764 | ||||||
Hokuto Corp. |
3,400 | 42,718 | ||||||
House Foods Group Inc. |
8,500 | 183,466 | ||||||
Itoham Yonekyu Holdings Inc. |
18,700 | 103,970 | ||||||
J-Oil Mills Inc. |
1,700 | 21,230 | ||||||
Kagome Co. Ltd. |
10,200 | 237,864 | ||||||
Kameda Seika Co. Ltd. |
1,700 | 51,501 | ||||||
Kewpie Corp. |
13,600 | 226,628 | ||||||
Kotobuki Spirits Co. Ltd. |
3,400 | 266,597 | ||||||
Maruha Nichiro Corp. |
5,100 | 89,001 | ||||||
Megmilk Snow Brand Co. Ltd. |
6,800 | 111,247 | ||||||
Mitsui DM Sugar Holdings Co. Ltd. |
1,700 | 34,869 | ||||||
Morinaga & Co. Ltd./Japan |
5,100 | 185,346 | ||||||
Morinaga Milk Industry Co. Ltd. |
5,100 | 208,742 | ||||||
NH Foods Ltd. |
11,900 | 369,182 | ||||||
Nichirei Corp. |
15,300 | 361,983 | ||||||
Nippn Corp., New |
6,800 | 96,683 | ||||||
Nippon Suisan Kaisha Ltd. |
40,800 | 214,232 | ||||||
Nisshin Oillio Group Ltd. (The) |
3,400 | 97,533 | ||||||
Nisshin Seifun Group Inc. |
28,900 | 381,473 | ||||||
Prima Meat Packers Ltd. |
3,400 | 59,089 | ||||||
Riken Vitamin Co. Ltd. |
3,400 | 53,930 | ||||||
S Foods Inc. |
1,700 | 39,143 | ||||||
Sakata Seed Corp. |
3,400 | 98,208 | ||||||
Showa Sangyo Co. Ltd. |
3,400 | 69,872 | ||||||
Toyo Suisan Kaisha Ltd. |
13,600 | 560,750 | ||||||
Yamazaki Baking Co. Ltd. |
15,300 | 289,994 | ||||||
|
|
|||||||
5,224,245 | ||||||||
Gas Utilities — 0.4% | ||||||||
Nippon Gas Co. Ltd. |
15,300 | 238,156 | ||||||
Saibu Gas Holdings Co. Ltd. |
3,400 | 47,486 | ||||||
Shizuoka Gas Co. Ltd. |
5,100 | 35,805 | ||||||
Toho Gas Co. Ltd. |
10,200 | 182,285 | ||||||
|
|
|||||||
503,732 | ||||||||
Ground Transportation — 2.4% | ||||||||
Fukuyama Transporting Co. Ltd. |
3,400 | 84,491 | ||||||
Keikyu Corp. |
32,300 | 297,900 | ||||||
Kyushu Railway Co. |
18,700 | 407,391 | ||||||
Maruzen Showa Unyu Co. Ltd. |
1,700 | 46,189 |
S C H E D U L E O F I N V E S T M E N T S |
27 |
Schedule of Investments (continued) August 31, 2023 |
iShares® MSCI Japan Small-Cap ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Ground Transportation (continued) |
| |||||||
Nagoya Railroad Co. Ltd. |
27,200 | $ | 436,823 | |||||
Nankai Electric Railway Co. Ltd. |
15,300 | 321,430 | ||||||
Nikkon Holdings Co. Ltd. |
6,800 | 154,974 | ||||||
Nishi-Nippon Railroad Co. Ltd. |
8,500 | 158,692 | ||||||
Sakai Moving Service Co. Ltd. |
1,700 | 63,395 | ||||||
Seibu Holdings Inc. |
35,700 | 377,535 | ||||||
Seino Holdings Co. Ltd. |
17,000 | 247,643 | ||||||
Sotetsu Holdings Inc. |
11,900 | 232,564 | ||||||
|
|
|||||||
2,829,027 | ||||||||
Health Care Equipment & Supplies — 1.3% | ||||||||
CYBERDYNE Inc.(a)(b) |
15,300 | 30,433 | ||||||
Eiken Chemical Co. Ltd. |
5,100 | 48,934 | ||||||
Hogy Medical Co. Ltd. |
3,400 | 74,600 | ||||||
Japan Lifeline Co. Ltd. |
8,500 | 67,123 | ||||||
Jeol Ltd. |
6,800 | 216,631 | ||||||
Mani Inc. |
10,200 | 132,663 | ||||||
Menicon Co. Ltd. |
8,500 | 118,677 | ||||||
Nagaileben Co. Ltd. |
3,400 | 51,496 | ||||||
Nakanishi Inc. |
10,200 | 256,701 | ||||||
Nihon Kohden Corp. |
11,900 | 316,829 | ||||||
Nipro Corp. |
20,400 | 168,945 | ||||||
Paramount Bed Holdings Co. Ltd. |
5,100 | 82,604 | ||||||
PHC Holdings Corp. |
3,400 | 33,246 | ||||||
|
|
|||||||
1,598,882 | ||||||||
Health Care Providers & Services — 1.8% | ||||||||
Alfresa Holdings Corp. |
27,200 | 464,507 | ||||||
Amvis Holdings Inc. |
5,100 | 101,735 | ||||||
As One Corp. |
3,400 | 133,307 | ||||||
BML Inc. |
3,400 | 67,461 | ||||||
Elan Corp.(a) |
5,100 | 30,321 | ||||||
H.U. Group Holdings Inc. |
8,500 | 153,717 | ||||||
Medipal Holdings Corp. |
27,200 | 466,144 | ||||||
Ship Healthcare Holdings Inc. |
11,900 | 201,905 | ||||||
Solasto Corp. |
8,500 | 38,704 | ||||||
SUNWELS Co. Ltd. |
1,700 | 33,578 | ||||||
Suzuken Co. Ltd. |
8,500 | 251,957 | ||||||
Toho Holdings Co. Ltd. |
6,800 | 136,076 | ||||||
Tokai Corp./Gifu |
3,400 | 44,061 | ||||||
|
|
|||||||
2,123,473 | ||||||||
Health Care Technology — 0.3% | ||||||||
EM Systems Co. Ltd. |
5,100 | 26,060 | ||||||
JMDC Inc.(a) |
5,100 | 152,523 | ||||||
Medley Inc.(b) |
3,400 | 131,698 | ||||||
|
|
|||||||
310,281 | ||||||||
Hotel & Resort REITs — 0.7% | ||||||||
Hoshino Resorts REIT Inc. |
34 | 146,413 | ||||||
Invincible Investment Corp. |
986 | 409,618 | ||||||
Japan Hotel REIT Investment Corp. |
646 | 327,386 | ||||||
|
|
|||||||
883,417 | ||||||||
Hotels, Restaurants & Leisure — 3.2% | ||||||||
Airtrip Corp. |
1,700 | 27,322 | ||||||
Arcland Service Holdings Co. Ltd.(b) |
1,700 | 36,270 | ||||||
Atom Corp.(b) |
17,000 | 109,897 | ||||||
Colowide Co. Ltd. |
10,200 | 176,712 | ||||||
Create Restaurants Holdings Inc. |
17,000 | 139,684 | ||||||
Curves Holdings Co. Ltd. |
6,800 | 34,000 | ||||||
Demae-Can Co. Ltd.(a)(b) |
6,800 | 18,796 | ||||||
Doutor Nichires Holdings Co. Ltd. |
5,100 | 81,657 | ||||||
Food & Life Companies Ltd. |
15,300 | 290,600 |
Security | Shares | Value | ||||||
Hotels, Restaurants & Leisure (continued) |
| |||||||
Fuji Kyuko Co. Ltd. |
3,400 | $ | 123,897 | |||||
Fujio Food Group Inc.(a)(b) |
1,700 | 16,265 | ||||||
Heiwa Corp. |
8,516 | 129,985 | ||||||
Hiday Hidaka Corp. |
3,484 | 71,187 | ||||||
HIS Co. Ltd.(b) |
6,800 | 92,059 | ||||||
Ichibanya Co. Ltd. |
1,700 | 65,377 | ||||||
Kappa Create Co. Ltd.(b) |
3,400 | 38,127 | ||||||
KFC Holdings Japan Ltd. |
1,700 | 35,279 | ||||||
Kisoji Co. Ltd. |
3,400 | 61,448 | ||||||
KOMEDA Holdings Co. Ltd. |
6,800 | 133,259 | ||||||
Koshidaka Holdings Co. Ltd.(a) |
6,800 | 62,352 | ||||||
Kura Sushi Inc.(a) |
3,400 | 73,788 | ||||||
Kyoritsu Maintenance Co. Ltd. |
5,180 | 223,371 | ||||||
Matsuyafoods Holdings Co. Ltd. |
1,700 | 49,446 | ||||||
Monogatari Corp. (The) |
5,100 | 166,631 | ||||||
MOS Food Services Inc. |
3,400 | 79,639 | ||||||
Ohsho Food Service Corp. |
1,700 | 81,970 | ||||||
Resorttrust Inc. |
11,900 | 190,773 | ||||||
Ringer Hut Co. Ltd.(a) |
3,400 | 55,098 | ||||||
Round One Corp. |
28,900 | 117,676 | ||||||
Royal Holdings Co. Ltd. |
5,100 | 93,087 | ||||||
Saizeriya Co. Ltd. |
3,400 | 106,907 | ||||||
Skylark Holdings Co. Ltd.(b) |
32,300 | 452,027 | ||||||
Tokyotokeiba Co. Ltd. |
1,700 | 45,911 | ||||||
Toridoll Holdings Corp. |
6,800 | 185,789 | ||||||
Yoshinoya Holdings Co. Ltd. |
8,500 | 166,053 | ||||||
|
|
|||||||
3,832,339 | ||||||||
Household Durables — 2.4% | ||||||||
Casio Computer Co. Ltd. |
27,200 | 240,995 | ||||||
Chofu Seisakusho Co. Ltd. |
1,700 | 25,120 | ||||||
ES-Con Japan Ltd. |
5,100 | 30,304 | ||||||
Fujitsu General Ltd. |
8,500 | 164,050 | ||||||
Haseko Corp. |
34,000 | 422,138 | ||||||
Ki-Star Real Estate Co. Ltd. |
1,700 | 55,324 | ||||||
Nagawa Co. Ltd. |
1,700 | 82,965 | ||||||
Nikon Corp. |
42,500 | 458,369 | ||||||
Pressance Corp. |
3,400 | 44,608 | ||||||
Rinnai Corp. |
15,300 | 296,289 | ||||||
Sangetsu Corp. |
6,800 | 140,944 | ||||||
Sumitomo Forestry Co. Ltd. |
22,100 | 621,919 | ||||||
Tama Home Co. Ltd. |
1,700 | 41,425 | ||||||
Tamron Co. Ltd. |
1,700 | 52,488 | ||||||
Token Corp. |
1,700 | 89,481 | ||||||
Zojirushi Corp. |
5,100 | 62,787 | ||||||
|
|
|||||||
2,829,206 | ||||||||
Household Products — 0.5% | ||||||||
Earth Corp. |
1,700 | 57,816 | ||||||
Lion Corp. |
34,000 | 370,187 | ||||||
Pigeon Corp. |
17,000 | 197,059 | ||||||
|
|
|||||||
625,062 | ||||||||
Independent Power and Renewable Electricity Producers — 0.4% | ||||||||
Electric Power Development Co. Ltd. |
22,100 | 344,208 | ||||||
eRex Co. Ltd. |
5,100 | 32,694 | ||||||
RENOVA Inc.(b) |
5,100 | 48,195 | ||||||
West Holdings Corp. |
3,480 | 67,603 | ||||||
|
|
|||||||
492,700 | ||||||||
Industrial Conglomerates — 0.7% | ||||||||
Katakura Industries Co. Ltd. |
1,700 | 19,114 | ||||||
Keihan Holdings Co. Ltd. |
15,300 | 436,511 |
28 |
2 0 2 3 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) August 31, 2023 |
iShares® MSCI Japan Small-Cap ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Industrial Conglomerates (continued) |
| |||||||
Mie Kotsu Group Holdings Inc. |
6,800 | $ | 28,056 | |||||
Nisshinbo Holdings Inc. |
18,700 | 138,891 | ||||||
Noritsu Koki Co. Ltd. |
3,400 | 68,816 | ||||||
TOKAI Holdings Corp. |
13,600 | 88,267 | ||||||
|
|
|||||||
779,655 | ||||||||
Industrial REITs — 1.3% | ||||||||
Advance Logistics Investment Corp. |
85 | 76,841 | ||||||
CRE Logistics REIT Inc. |
85 | 98,683 | ||||||
Industrial & Infrastructure Fund Investment Corp. |
306 | 306,787 | ||||||
Japan Logistics Fund Inc. |
136 | 284,881 | ||||||
LaSalle Logiport REIT |
272 | 277,805 | ||||||
Mitsubishi Estate Logistics REIT Investment Corp. |
68 | 184,018 | ||||||
Mitsui Fudosan Logistics Park Inc. |
85 | 289,240 | ||||||
SOSiLA Logistics REIT Inc. |
102 | 89,799 | ||||||
|
|
|||||||
1,608,054 | ||||||||
Insurance — 0.1% | ||||||||
Anicom Holdings Inc. |
10,200 | 45,241 | ||||||
FP Partner Inc.(b) |
1,700 | 44,283 | ||||||
LIFENET INSURANCE Co.(b) |
8,500 | 59,337 | ||||||
|
|
|||||||
148,861 | ||||||||
Interactive Media & Services — 0.3% | ||||||||
Bengo4.com Inc.(a)(b) |
1,700 | 59,012 | ||||||
Infocom Corp. |
3,400 | 66,177 | ||||||
Kakaku.com Inc. |
18,700 | 222,579 | ||||||
ZIGExN Co. Ltd. |
6,800 | 27,014 | ||||||
|
|
|||||||
374,782 | ||||||||
IT Services — 2.1% | ||||||||
Argo Graphics Inc. |
1,700 | 39,213 | ||||||
Base Co. Ltd. |
1,700 | 50,855 | ||||||
BIPROGY Inc. |
11,900 | 307,989 | ||||||
Change Holdings Inc. |
6,800 | 96,060 | ||||||
Comture Corp. |
3,400 | 56,922 | ||||||
Digital Garage Inc. |
5,100 | 131,168 | ||||||
DTS Corp. |
5,100 | 112,921 | ||||||
Future Corp. |
6,800 | 72,574 | ||||||
GMO internet group Inc. |
10,200 | 164,959 | ||||||
Information Services International-Dentsu Ltd. |
3,400 | 135,988 | ||||||
Mitsubishi Research Institute Inc. |
1,700 | 58,562 | ||||||
NEC Networks & System Integration Corp. |
10,200 | 136,011 | ||||||
NET One Systems Co. Ltd. |
11,900 | 233,168 | ||||||
NS Solutions Corp. |
5,100 | 138,241 | ||||||
NSD Co. Ltd. |
10,200 | 179,020 | ||||||
SB Technology Corp. |
1,700 | 27,889 | ||||||
SHIFT Inc.(b) |
1,700 | 349,587 | ||||||
Simplex Holdings Inc. |
3,400 | 67,053 | ||||||
TechMatrix Corp. |
5,100 | 57,515 | ||||||
Zuken Inc. |
1,700 | 49,603 | ||||||
|
|
|||||||
2,465,298 | ||||||||
Leisure Products — 1.1% | ||||||||
Fields Corp. |
5,100 | 91,294 | ||||||
GLOBERIDE Inc. |
1,700 | 22,645 | ||||||
Mizuno Corp. |
3,400 | 108,432 | ||||||
Roland Corp. |
1,700 | 45,466 | ||||||
Sankyo Co. Ltd. |
5,100 | 222,094 | ||||||
Sega Sammy Holdings Inc. |
22,100 | 441,045 | ||||||
Snow Peak Inc.(a) |
3,400 | 36,850 | ||||||
Tomy Co. Ltd. |
11,900 | 193,091 | ||||||
Universal Entertainment Corp. |
3,400 | 55,501 |
Security | Shares | Value | ||||||
Leisure Products (continued) |
| |||||||
Yonex Co. Ltd. |
8,500 | $ | 82,074 | |||||
|
|
|||||||
1,298,492 | ||||||||
Life Sciences Tools & Services — 0.0% | ||||||||
Shin Nippon Biomedical Laboratories Ltd.(a) |
3,400 | 52,642 | ||||||
|
|
|||||||
Machinery — 6.9% |
||||||||
Aichi Corp. |
3,400 | 22,256 | ||||||
Aida Engineering Ltd. |
5,100 | 35,538 | ||||||
Amada Co. Ltd. |
49,300 | 521,764 | ||||||
CKD Corp. |
6,800 | 93,832 | ||||||
Daiwa Industries Ltd. |
3,400 | 32,972 | ||||||
DMG Mori Co. Ltd. |
17,000 | 309,762 | ||||||
Ebara Corp. |
13,600 | 676,182 | ||||||
Fuji Corp./Aichi. |
10,200 | 168,141 | ||||||
Fujitec Co. Ltd. |
8,500 | 217,148 | ||||||
Fukushima Galilei Co. Ltd. |
1,700 | 60,383 | ||||||
Furukawa Co. Ltd. |
3,400 | 41,374 | ||||||
Giken Ltd. |
1,700 | 23,646 | ||||||
Glory Ltd. |
6,800 | 143,539 | ||||||
Harmonic Drive Systems Inc. |
6,800 | 178,736 | ||||||
Hino Motors Ltd.(b) |
40,800 | 159,615 | ||||||
Hirata Corp. |
1,700 | 90,992 | ||||||
Hitachi Zosen Corp. |
23,800 | 140,736 | ||||||
IHI Corp. |
20,400 | 507,741 | ||||||
Japan Steel Works Ltd. (The) |
8,500 | 171,748 | ||||||
Kawasaki Heavy Industries Ltd. |
22,100 | 566,216 | ||||||
Kitz Corp. |
8,500 | 61,480 | ||||||
Kyokuto Kaihatsu Kogyo Co. Ltd. |
3,400 | 42,293 | ||||||
Makino Milling Machine Co. Ltd. |
3,400 | 162,397 | ||||||
Max Co. Ltd. |
3,400 | 63,875 | ||||||
Meidensha Corp. |
5,100 | 76,462 | ||||||
METAWATER Co. Ltd. |
3,400 | 44,803 | ||||||
Mitsubishi Logisnext Co. Ltd. |
5,100 | 47,829 | ||||||
Mitsuboshi Belting Ltd. |
3,400 | 112,380 | ||||||
Miura Co. Ltd. |
11,900 | 274,517 | ||||||
Morita Holdings Corp. |
5,100 | 57,347 | ||||||
Nabtesco Corp. |
15,300 | 289,287 | ||||||
Nachi-Fujikoshi Corp. |
1,700 | 46,786 | ||||||
Nikkiso Co. Ltd. |
6,800 | 46,990 | ||||||
Nitta Corp. |
3,400 | 77,213 | ||||||
Noritake Co. Ltd./Nagoya Japan |
1,700 | 70,333 | ||||||
NSK Ltd. |
56,100 | 326,577 | ||||||
NTN Corp. |
57,800 | 114,731 | ||||||
Obara Group Inc. |
1,700 | 46,186 | ||||||
Oiles Corp. |
3,496 | 49,593 | ||||||
OKUMA Corp. |
3,400 | 159,263 | ||||||
Organo Corp. |
3,400 | 94,365 | ||||||
OSG Corp. |
11,900 | 149,952 | ||||||
Shibaura Machine Co. Ltd. |
3,400 | 98,381 | ||||||
Shibuya Corp. |
1,700 | 30,361 | ||||||
Shima Seiki Manufacturing Ltd. |
3,400 | 46,302 | ||||||
Shinmaywa Industries Ltd. |
6,800 | 65,849 | ||||||
Star Micronics Co. Ltd. |
5,100 | 65,809 | ||||||
Sumitomo Heavy Industries Ltd. |
15,300 | 382,947 | ||||||
Tadano Ltd. |
13,600 | 110,242 | ||||||
Takeuchi Manufacturing Co. Ltd. |
5,100 | 161,950 | ||||||
Takuma Co. Ltd. |
8,500 | 94,073 | ||||||
THK Co. Ltd. |
17,000 | 310,458 | ||||||
Tocalo Co. Ltd. |
8,500 | 83,420 | ||||||
Tsubakimoto Chain Co. |
3,400 | 89,749 |
S C H E D U L E O F I N V E S T M E N T S |
29 |
Schedule of Investments (continued) August 31, 2023 |
iShares® MSCI Japan Small-Cap ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Machinery (continued) | ||||||||
Tsugami Corp. |
5,100 | $ | 41,147 | |||||
Union Tool Co. |
1,700 | 44,322 | ||||||
YAMABIKO Corp. |
5,100 | 51,545 | ||||||
|
|
|||||||
8,253,535 | ||||||||
Marine Transportation — 0.1% | ||||||||
Iino Kaiun Kaisha Ltd. |
10,200 | 73,027 | ||||||
NS United Kaiun Kaisha Ltd. |
1,700 | 47,448 | ||||||
|
|
|||||||
120,475 | ||||||||
Media — 0.7% | ||||||||
Fuji Media Holdings Inc. |
6,800 | 70,990 | ||||||
Kadokawa Corp. |
13,616 | 319,968 | ||||||
Nippon Television Holdings Inc. |
8,500 | 79,193 | ||||||
Septeni Holdings Co. Ltd.(a) |
10,200 | 29,653 | ||||||
SKY Perfect JSAT Holdings Inc. |
22,100 | 100,467 | ||||||
TBS Holdings Inc. |
5,100 | 90,153 | ||||||
TV Asahi Holdings Corp. |
3,400 | 38,667 | ||||||
ValueCommerce Co. Ltd. |
1,700 | 14,987 | ||||||
Vector Inc. |
3,400 | 31,326 | ||||||
Zenrin Co. Ltd. |
5,100 | 31,849 | ||||||
|
|
|||||||
807,253 | ||||||||
Metals & Mining — 2.5% | ||||||||
ARE Holdings Inc. |
10,200 | 132,351 | ||||||
Daido Steel Co. Ltd. |
3,400 | 140,544 | ||||||
Daiki Aluminium Industry Co. Ltd. |
3,400 | 33,567 | ||||||
Dowa Holdings Co. Ltd. |
8,500 | 273,052 | ||||||
Kobe Steel Ltd. |
51,000 | 639,749 | ||||||
Kyoei Steel Ltd. |
3,400 | 45,256 | ||||||
Maruichi Steel Tube Ltd. |
8,500 | 220,891 | ||||||
Mitsubishi Materials Corp. |
18,700 | 313,900 | ||||||
Mitsui Mining & Smelting Co. Ltd. |
8,500 | 217,130 | ||||||
Nippon Light Metal Holdings Co. Ltd. |
8,500 | 90,502 | ||||||
Nittetsu Mining Co. Ltd. |
1,700 | 59,554 | ||||||
OSAKA Titanium Technologies Co. Ltd. |
5,100 | 116,495 | ||||||
Sanyo Special Steel Co. Ltd. |
3,400 | 64,918 | ||||||
Toho Titanium Co. Ltd.(a) |
5,100 | 69,065 | ||||||
Tokyo Steel Manufacturing Co. Ltd. |
8,500 | 95,456 | ||||||
UACJ Corp. |
5,114 | 109,876 | ||||||
Yamato Kogyo Co. Ltd. |
5,100 | 245,834 | ||||||
Yodogawa Steel Works Ltd. |
3,400 | 79,526 | ||||||
|
|
|||||||
2,947,666 | ||||||||
Office REITs — 1.6% | ||||||||
Daiwa Office Investment Corp. |
34 | 159,725 | ||||||
Global One Real Estate Investment Corp. |
153 | 122,161 | ||||||
Ichigo Office REIT Investment Corp. |
170 | 104,535 | ||||||
Japan Excellent Inc. |
170 | 154,933 | ||||||
Japan Prime Realty Investment Corp. |
119 | 301,551 | ||||||
Kenedix Office Investment Corp. |
119 | 281,028 | ||||||
Mirai Corp. |
255 | 82,566 | ||||||
Mori Hills REIT Investment Corp. |
221 | 222,603 | ||||||
One REIT Inc. |
34 | 59,548 | ||||||
Orix JREIT Inc. |
374 | 465,219 | ||||||
|
|
|||||||
1,953,869 | ||||||||
Oil, Gas & Consumable Fuels — 0.8% | ||||||||
Cosmo Energy Holdings Co. Ltd. |
8,500 | 306,132 | ||||||
Itochu Enex Co. Ltd. |
6,800 | 68,813 | ||||||
Iwatani Corp. |
6,800 | 357,593 | ||||||
Japan Petroleum Exploration Co. Ltd. |
5,100 | 167,725 | ||||||
Mitsuuroko Group Holdings Co. Ltd. |
3,400 | 30,662 |
Security | Shares | Value | ||||||
Oil, Gas & Consumable Fuels (continued) | ||||||||
San-Ai Obbli Co. Ltd. |
6,800 | $ | 78,200 | |||||
|
|
|||||||
1,009,125 | ||||||||
Paper & Forest Products — 0.3% | ||||||||
Daiken Corp. |
1,700 | 35,480 | ||||||
Daio Paper Corp. |
11,900 | 101,392 | ||||||
Hokuetsu Corp. |
17,000 | 105,533 | ||||||
Nippon Paper Industries Co. Ltd.(b) |
13,600 | 121,639 | ||||||
Tokushu Tokai Paper Co. Ltd. |
1,700 | 37,822 | ||||||
|
|
|||||||
401,866 | ||||||||
Personal Care Products — 1.2% | ||||||||
Euglena Co. Ltd.(a)(b) |
13,600 | 75,188 | ||||||
Fancl Corp. |
11,900 | 208,473 | ||||||
Mandom Corp. |
5,100 | 50,292 | ||||||
Milbon Co. Ltd. |
3,400 | 105,153 | ||||||
Noevir Holdings Co. Ltd. |
1,700 | 66,395 | ||||||
Pola Orbis Holdings Inc. |
13,600 | 175,547 | ||||||
Rohto Pharmaceutical Co. Ltd. |
27,200 | 707,647 | ||||||
YA-MAN Ltd.(a) |
3,400 | 24,123 | ||||||
|
|
|||||||
1,412,818 | ||||||||
Pharmaceuticals — 2.0% | ||||||||
Hisamitsu Pharmaceutical Co. Inc. |
6,800 | 230,341 | ||||||
JCR Pharmaceuticals Co. Ltd. |
10,200 | 89,082 | ||||||
Kaken Pharmaceutical Co. Ltd. |
5,100 | 125,061 | ||||||
Kissei Pharmaceutical Co. Ltd. |
3,400 | 79,402 | ||||||
Kyorin Pharmaceutical Co. Ltd. |
5,100 | 62,055 | ||||||
Mochida Pharmaceutical Co. Ltd. |
3,400 | 78,601 | ||||||
Nippon Shinyaku Co. Ltd. |
6,800 | 299,070 | ||||||
Santen Pharmaceutical Co. Ltd. |
49,300 | 457,543 | ||||||
Sawai Group Holdings Co. Ltd. |
5,100 | 163,427 | ||||||
Sosei Group Corp.(b) |
10,200 | 116,131 | ||||||
Sumitomo Pharma Co., Ltd. |
25,500 | 88,803 | ||||||
Taisho Pharmaceutical Holdings Co. Ltd. |
6,800 | 280,907 | ||||||
Torii Pharmaceutical Co. Ltd. |
1,700 | 43,768 | ||||||
Towa Pharmaceutical Co. Ltd. |
3,400 | 64,807 | ||||||
Tsumura & Co. |
8,500 | 160,170 | ||||||
ZERIA Pharmaceutical Co. Ltd. |
3,400 | 56,290 | ||||||
|
|
|||||||
2,395,458 | ||||||||
Professional Services — 2.1% | ||||||||
Bell System24 Holdings Inc. |
5,100 | 53,275 | ||||||
Benefit One Inc. |
11,900 | 103,156 | ||||||
BeNext-Yumeshin Group Co. |
6,816 | 93,923 | ||||||
Dip Corp. |
5,100 | 122,572 | ||||||
en Japan Inc. |
5,100 | 89,125 | ||||||
Fullcast Holdings Co. Ltd. |
3,400 | 48,463 | ||||||
Funai Soken Holdings Inc. |
5,100 | 94,420 | ||||||
Infomart Corp. |
28,900 | 92,649 | ||||||
Insource Co. Ltd. |
6,800 | 51,297 | ||||||
JAC Recruitment Co. Ltd. |
1,700 | 31,407 | ||||||
Link And Motivation Inc. |
6,800 | 21,532 | ||||||
Management Solutions Co. Ltd. |
1,700 | 44,970 | ||||||
Meitec Corp. |
10,200 | 178,564 | ||||||
Nihon M&A Center Holdings Inc. |
44,200 | 245,523 | ||||||
Nomura Co. Ltd. |
11,900 | 69,753 | ||||||
Outsourcing Inc. |
17,000 | 133,088 | ||||||
Pasona Group Inc. |
3,400 | 38,115 | ||||||
SMS Co. Ltd. |
10,200 | 196,435 | ||||||
S-Pool Inc. |
10,200 | 34,004 | ||||||
TechnoPro Holdings Inc. |
15,300 | 375,240 | ||||||
TKC Corp. |
3,400 | 85,831 |
30 |
2 0 2 3 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) August 31, 2023 |
iShares® MSCI Japan Small-Cap ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Professional Services (continued) | ||||||||
Transcosmos Inc. |
3,400 | $ | 74,422 | |||||
UT Group Co. Ltd.(b) |
3,400 | 56,531 | ||||||
Visional Inc.(a)(b) |
3,400 | 178,630 | ||||||
WDB Holdings Co. Ltd. |
1,700 | 24,287 | ||||||
|
|
|||||||
2,537,212 | ||||||||
Real Estate Management & Development — 1.7% | ||||||||
Aeon Mall Co. Ltd. |
13,600 | 162,980 | ||||||
Goldcrest Co. Ltd. |
1,700 | 22,757 | ||||||
Heiwa Real Estate Co. Ltd. |
3,400 | 91,206 | ||||||
Ichigo Inc. |
37,400 | 80,249 | ||||||
Katitas Co. Ltd. |
6,800 | 108,533 | ||||||
Keihanshin Building Co. Ltd. |
5,100 | 44,643 | ||||||
Leopalace21 Corp.(b) |
27,200 | 68,248 | ||||||
Relo Group Inc. |
15,300 | 179,209 | ||||||
SAMTY Co. Ltd. |
3,400 | 54,093 | ||||||
SRE Holdings Corp.(a)(b) |
1,700 | 40,189 | ||||||
Starts Corp. Inc. |
5,100 | 107,022 | ||||||
Sun Frontier Fudousan Co. Ltd. |
3,400 | 33,675 | ||||||
TKP Corp.(b) |
1,700 | 31,478 | ||||||
Tokyo Tatemono Co. Ltd. |
27,200 | 357,094 | ||||||
Tokyu Fudosan Holdings Corp. |
88,400 | 549,491 | ||||||
Tosei Corp. |
3,400 | 42,778 | ||||||
|
|
|||||||
1,973,645 | ||||||||
Residential REITs — 1.3% | ||||||||
Advance Residence Investment Corp. |
187 | 450,243 | ||||||
Comforia Residential REIT Inc. |
102 | 238,577 | ||||||
Daiwa Securities Living Investments Corp. |
272 | 208,305 | ||||||
Kenedix Residential Next Investment Corp. |
153 | 237,435 | ||||||
Nippon Accommodations Fund Inc. |
71 | 320,458 | ||||||
Samty Residential Investment Corp. |
51 | 40,679 | ||||||
Starts Proceed Investment Corp. |
34 | 50,462 | ||||||
|
|
|||||||
1,546,159 | ||||||||
Retail REITs — 0.6% | ||||||||
AEON REIT Investment Corp. |
255 | 258,035 | ||||||
Frontier Real Estate Investment Corp. |
68 | 219,799 | ||||||
Fukuoka REIT Corp. |
85 | 94,647 | ||||||
Kenedix Retail REIT Corp. |
85 | 168,262 | ||||||
|
|
|||||||
740,743 | ||||||||
Semiconductors & Semiconductor Equipment — 2.9% | ||||||||
Ferrotec Holdings Corp. |
6,800 | 141,332 | ||||||
Japan Material Co. Ltd. |
8,500 | 155,346 | ||||||
Megachips Corp. |
1,700 | 48,979 | ||||||
Micronics Japan Co. Ltd. |
3,400 | 50,785 | ||||||
Mimasu Semiconductor Industry Co. Ltd. |
1,700 | 33,494 | ||||||
Mitsui High-Tec Inc. |
3,400 | 230,715 | ||||||
Optorun Co. Ltd. |
5,100 | 68,296 | ||||||
Rorze Corp. |
1,700 | 135,351 | ||||||
RS Technologies Co. Ltd. |
1,700 | 32,386 | ||||||
Sanken Electric Co. Ltd. |
3,400 | 259,473 | ||||||
SCREEN Holdings Co. Ltd. |
5,708 | 581,141 | ||||||
Shibaura Mechatronics Corp.(a) |
400 | 70,441 | ||||||
Shinko Electric Industries Co. Ltd. |
10,200 | 417,396 | ||||||
Socionext Inc. |
5,200 | 643,395 | ||||||
Tokyo Seimitsu Co. Ltd. |
5,100 | 280,878 | ||||||
Tri Chemical Laboratories Inc. |
3,400 | 64,099 | ||||||
Ulvac Inc. |
6,800 | 263,509 | ||||||
|
|
|||||||
3,477,016 | ||||||||
Software — 1.4% | ||||||||
Alpha Systems Inc. |
1,700 | 35,542 |
Security | Shares | Value | ||||||
Software (continued) | ||||||||
Appier Group Inc.(b) |
8,500 | $ | 103,155 | |||||
Cybozu Inc. |
3,400 | 50,595 | ||||||
Digital Arts Inc. |
1,700 | 56,294 | ||||||
Freee KK(a)(b) |
5,100 | 106,237 | ||||||
Fuji Soft Inc. |
6,800 | 205,286 | ||||||
Fukui Computer Holdings Inc. |
1,700 | 30,985 | ||||||
Justsystems Corp. |
5,100 | 105,521 | ||||||
Money Forward Inc.(b) |
6,800 | 255,639 | ||||||
OBIC Business Consultants Co. Ltd. |
5,100 | 218,752 | ||||||
PKSHA Technology Inc.(a)(b) |
1,700 | 29,330 | ||||||
Plus Alpha Consulting Co. Ltd. |
3,400 | 66,443 | ||||||
Rakus Co. Ltd. |
11,900 | 193,409 | ||||||
Sansan Inc.(b) |
10,200 | 101,624 | ||||||
Systena Corp. |
39,100 | 72,377 | ||||||
WingArc1st Inc. |
3,400 | 58,206 | ||||||
|
|
|||||||
1,689,395 | ||||||||
Specialty Retail — 2.7% | ||||||||
ABC-Mart Inc. |
15,300 | 278,347 | ||||||
Adastria Co. Ltd. |
3,400 | 67,926 | ||||||
Alpen Co. Ltd. |
1,700 | 22,302 | ||||||
AOKI Holdings Inc. |
5,100 | 36,543 | ||||||
ARCLANDS Corp. |
3,400 | 38,769 | ||||||
Autobacs Seven Co. Ltd. |
10,200 | 113,521 | ||||||
Bic Camera Inc.(a) |
13,600 | 101,028 | ||||||
DCM Holdings Co. Ltd. |
15,300 | 127,881 | ||||||
EDION Corp. |
10,200 | 102,607 | ||||||
Geo Holdings Corp. |
3,400 | 61,188 | ||||||
IDOM Inc. |
8,500 | 45,749 | ||||||
JINS Holdings Inc. |
1,700 | 40,141 | ||||||
Joshin Denki Co. Ltd. |
1,700 | 25,958 | ||||||
Joyful Honda Co. Ltd. |
6,800 | 80,091 | ||||||
Keiyo Co. Ltd. |
5,100 | 29,755 | ||||||
Kohnan Shoji Co. Ltd. |
3,400 | 82,963 | ||||||
Komeri Co. Ltd. |
5,100 | 107,686 | ||||||
K’s Holdings Corp. |
20,400 | 188,048 | ||||||
Nafco Co. Ltd. |
1,700 | 22,308 | ||||||
Nextage Co. Ltd. |
6,800 | 153,071 | ||||||
Nishimatsuya Chain Co. Ltd. |
5,100 | 58,866 | ||||||
Nojima Corp. |
8,500 | 74,610 | ||||||
PAL GROUP Holdings Co. Ltd. |
6,800 | 95,906 | ||||||
Sanrio Co. Ltd. |
6,800 | 354,362 | ||||||
Shimamura Co. Ltd. |
3,400 | 350,451 | ||||||
T-Gaia Corp. |
1,700 | 20,439 | ||||||
United Arrows Ltd. |
3,400 | 50,402 | ||||||
VT Holdings Co. Ltd. |
10,200 | 35,828 | ||||||
Workman Co. Ltd.(a) |
3,400 | 122,918 | ||||||
Yamada Holdings Co. Ltd. |
85,000 | 267,386 | ||||||
Yellow Hat Ltd. |
5,100 | 66,076 | ||||||
|
|
|||||||
3,223,126 | ||||||||
Technology Hardware, Storage & Peripherals — 0.6% | ||||||||
Eizo Corp. |
1,700 | 58,697 | ||||||
Elecom Co. Ltd. |
5,100 | 61,284 | ||||||
Konica Minolta Inc. |
66,300 | 204,695 | ||||||
MCJ Co. Ltd. |
10,200 | 83,341 | ||||||
Melco Holdings Inc. |
1,700 | 37,495 | ||||||
Riso Kagaku Corp. |
3,400 | 53,189 | ||||||
Toshiba TEC Corp. |
3,400 | 82,673 | ||||||
Wacom Co. Ltd. |
20,400 | 83,925 | ||||||
|
|
|||||||
665,299 |
S C H E D U L E O F I N V E S T M E N T S |
31 |
Schedule of Investments (continued) August 31, 2023 |
iShares® MSCI Japan Small-Cap ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Textiles, Apparel & Luxury Goods — 1.3% | ||||||||
Asics Corp. |
23,800 | $ | 866,221 | |||||
Descente Ltd. |
5,100 | 129,475 | ||||||
Goldwin Inc. |
3,400 | 242,891 | ||||||
Gunze Ltd. |
1,700 | 53,494 | ||||||
Japan Wool Textile Co. Ltd. (The) |
6,800 | 58,482 | ||||||
Onward Holdings Co. Ltd. |
15,300 | 54,788 | ||||||
Seiko Group Corp. |
3,400 | 62,685 | ||||||
Wacoal Holdings Corp. |
5,100 | 112,162 | ||||||
|
|
|||||||
1,580,198 | ||||||||
Trading Companies & Distributors — 1.8% | ||||||||
Hanwa Co. Ltd. |
5,100 | 162,229 | ||||||
Inaba Denki Sangyo Co. Ltd. |
6,800 | 147,152 | ||||||
Inabata & Co. Ltd. |
5,100 | 110,868 | ||||||
Japan Pulp & Paper Co. Ltd. |
1,700 | 55,349 | ||||||
Kanamoto Co. Ltd. |
3,400 | 57,629 | ||||||
Kanematsu Corp. |
10,200 | 143,574 | ||||||
MARUKA FURUSATO Corp. |
3,400 | 66,133 | ||||||
Nagase & Co. Ltd. |
13,600 | 233,063 | ||||||
Nichiden Corp. |
1,700 | 29,360 | ||||||
Nishio Holdings Co. Ltd. |
3,400 | 82,908 | ||||||
Sojitz Corp. |
34,000 | 730,476 | ||||||
Trusco Nakayama Corp. |
6,800 | 119,848 | ||||||
Wakita & Co. Ltd. |
5,100 | 46,942 | ||||||
Yamazen Corp. |
6,800 | 53,296 | ||||||
Yuasa Trading Co. Ltd. |
1,700 | 49,895 | ||||||
|
|
|||||||
2,088,722 | ||||||||
Transportation Infrastructure — 0.9% | ||||||||
Japan Airport Terminal Co. Ltd. |
8,500 | 402,880 | ||||||
Kamigumi Co. Ltd. |
13,600 | 306,323 |
Security | Shares | Value | ||||||
Transportation Infrastructure (continued) | ||||||||
Mitsubishi Logistics Corp. |
8,500 | $ | 225,712 | |||||
Sumitomo Warehouse Co. Ltd. (The) |
6,800 | 116,562 | ||||||
|
|
|||||||
1,051,477 | ||||||||
Wireless Telecommunication Services — 0.1% | ||||||||
Okinawa Cellular Telephone Co. |
3,400 | 73,592 | ||||||
|
|
|||||||
Total
Long-Term Investments — 99.7% |
118,932,529 | |||||||
|
|
|||||||
Short-Term Securities |
| |||||||
Money Market Funds — 2.0% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.52%(c)(d)(e) |
2,381,579 | 2,382,293 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 5.31%(c)(d) |
50,000 | 50,000 | ||||||
|
|
|||||||
Total
Short-Term Securities — 2.0% |
2,432,293 | |||||||
|
|
|||||||
Total
Investments — 101.7% |
121,364,822 | |||||||
Liabilities in Excess of Other Assets — (1.7)% |
|
(2,031,831 | ) | |||||
|
|
|||||||
Net Assets — 100.0% |
$ | 119,332,991 | ||||||
|
|
(a) |
All or a portion of this security is on loan. |
(b) |
Non-income producing security. |
(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 August 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer |
Value at 08/31/22 |
Purchases at Cost |
Proceeds from Sale |
Net Realized Gain (Loss) |
Change in Unrealized Appreciation (Depreciation) |
Value at 08/31/23 |
Shares Held at 08/31/23 |
Income |
Capital Gain Distributions from Underlying Funds |
|||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares |
$ | — | $ | 2,382,538 | (a) | $ | — | $ | (138 | ) | $ | (107 | ) | $ | 2,382,293 | 2,381,579 | $ | 21,108 | (b) | $ | — | |||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares |
10,000 | 40,000 | (a) | — | — | — | 50,000 | 50,000 | 1,523 | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | (138 | ) | $ | (107 | ) | $ | 2,432,293 | $ | 22,631 | $ | — | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(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. |
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 |
||||||||||||||||
Mini TOPIX Index |
25 | 09/07/23 | $ | 399 | $ | 6,467 |
32 |
2 0 2 3 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) August 31, 2023 |
iShares® MSCI Japan Small-Cap 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 |
||||||||||||||||||||||||||||
Futures contracts |
||||||||||||||||||||||||||||
Unrealized appreciation on futures contracts(a) |
$ | — | $ | — | $ | 6,467 | $ | — | $ | — | $ | — | $ | 6,467 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, 2023, 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 |
$ | — | $ | — | $ | 138,546 | $ | — | $ | — | $ | — | $ | 138,546 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | 3,931 | $ | — | $ | — | $ | — | $ | 3,931 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
|
||||
Futures contracts: |
||||
Average notional value of contracts — long |
$ | 494,595 | ||
|
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 | |||||||||||||
|
||||||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 247,354 | $ | 118,685,175 | $ | — | $ | 118,932,529 | ||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
2,432,293 | — | — | 2,432,293 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 2,679,647 | $ | 118,685,175 | $ | — | $ | 121,364,822 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative Financial Instruments(a) |
||||||||||||||||
Assets |
||||||||||||||||
Equity Contracts |
$ | — | $ | 6,467 | $ | — | $ | 6,467 | ||||||||
|
|
|
|
|
|
|
|
(a) |
Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S |
33 |
Schedule of Investments August 31, 2023 |
iShares® MSCI Malaysia ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Banks — 41.1% | ||||||||
AMMB Holdings Bhd |
4,556,837 | $ | 3,665,883 | |||||
CIMB Group Holdings Bhd |
17,596,912 | 21,331,417 | ||||||
Hong Leong Bank Bhd |
1,788,340 | 7,694,876 | ||||||
Hong Leong Financial Group Bhd |
631,100 | 2,478,156 | ||||||
Malayan Banking Bhd |
14,916,481 | 29,280,740 | ||||||
Public Bank Bhd |
40,033,300 | 36,491,526 | ||||||
RHB Bank Bhd |
4,125,502 | 4,986,922 | ||||||
|
|
|||||||
105,929,520 | ||||||||
Chemicals — 4.6% | ||||||||
Petronas Chemicals Group Bhd |
7,699,800 | 11,816,379 | ||||||
|
|
|||||||
Construction & Engineering — 1.9% | ||||||||
Gamuda Bhd(a) |
5,125,100 | 4,975,548 | ||||||
|
|
|||||||
Diversified Telecommunication Services — 1.4% | ||||||||
Telekom Malaysia Bhd |
3,153,000 | 3,468,004 | ||||||
|
|
|||||||
Electric Utilities — 5.9% | ||||||||
Tenaga Nasional Bhd |
7,161,612 | 15,189,393 | ||||||
|
|
|||||||
Energy Equipment & Services — 1.6% | ||||||||
Dialog Group Bhd |
9,315,454 | 4,112,424 | ||||||
|
|
|||||||
Food Products — 12.6% | ||||||||
IOI Corp. Bhd |
6,913,530 | 6,006,758 | ||||||
Kuala Lumpur Kepong Bhd |
1,337,700 | 6,212,522 | ||||||
Nestle Malaysia Bhd |
193,500 | 5,442,188 | ||||||
PPB Group Bhd |
1,760,419 | 5,964,178 | ||||||
QL Resources Bhd |
3,011,550 | 3,504,821 | ||||||
Sime Darby Plantation Bhd |
5,705,255 | 5,414,063 | ||||||
|
|
|||||||
32,544,530 | ||||||||
Gas Utilities — 3.1% | ||||||||
Petronas Gas Bhd |
2,176,500 | 8,030,534 | ||||||
|
|
|||||||
Health Care Providers & Services — 3.0% | ||||||||
IHH Healthcare Bhd |
6,054,600 | 7,736,045 | ||||||
|
|
|||||||
Hotels, Restaurants & Leisure — 3.9% | ||||||||
Genting Bhd |
5,863,600 | 5,525,723 | ||||||
Genting Malaysia Bhd |
8,164,600 | 4,522,808 | ||||||
|
|
|||||||
10,048,531 | ||||||||
Industrial Conglomerates — 1.5% | ||||||||
Sime Darby Bhd |
7,496,955 | 3,711,409 | ||||||
|
|
|||||||
Marine Transportation — 2.2% | ||||||||
MISC Bhd |
3,682,520 | 5,708,627 | ||||||
|
|
Security | Shares | Value | ||||||
Metals & Mining — 4.1% | ||||||||
Press Metal Aluminium Holdings Bhd |
10,196,200 | $ | 10,658,250 | |||||
|
|
|||||||
Oil, Gas & Consumable Fuels — 1.5% | ||||||||
Petronas Dagangan Bhd |
819,600 | 3,921,362 | ||||||
|
|
|||||||
Semiconductors & Semiconductor Equipment — 1.9% | ||||||||
Inari Amertron Bhd |
7,185,700 | 4,888,032 | ||||||
|
|
|||||||
Specialty Retail — 1.0% | ||||||||
MR DIY Group M Bhd(a)(b) |
7,782,900 | 2,599,916 | ||||||
|
|
|||||||
Transportation Infrastructure — 1.4% | ||||||||
Malaysia Airports Holdings Bhd |
2,294,200 | 3,642,992 | ||||||
|
|
|||||||
Wireless Telecommunication Services — 7.2% | ||||||||
Axiata Group Bhd |
7,572,400 | 3,853,465 | ||||||
DiGi.Com Bhd |
9,678,200 | 9,139,039 | ||||||
Maxis Bhd(a) |
6,461,300 | 5,585,910 | ||||||
|
|
|||||||
18,578,414 | ||||||||
|
|
|||||||
Total
Long-Term Investments — 99.9% |
257,559,910 | |||||||
|
|
|||||||
Short-Term Securities |
||||||||
Money Market Funds — 0.3% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.52%(c)(d)(e) |
626,306 | 626,494 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 5.31%(c)(d) |
250,000 | 250,000 | ||||||
|
|
|||||||
Total
Short-Term Securities — 0.3% |
|
876,494 | ||||||
|
|
|||||||
Total
Investments — 100.2% |
|
258,436,404 | ||||||
Liabilities in Excess of Other Assets — (0.2)% | (595,050) | |||||||
|
|
|||||||
Net Assets — 100.0% | $ 257,841,354 | |||||||
|
|
(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. |
34 |
2 0 2 3 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) August 31, 2023 |
iShares® MSCI Malaysia ETF
|
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the year ended August 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | Value
at 08/31/22 |
Purchases at Cost |
Proceeds from Sale |
Net Realized Gain (Loss) |
Change
in Unrealized Appreciation (Depreciation) |
Value at 08/31/23 |
Shares Held at 08/31/23 |
Income | Capital Gain Distributions from Underlying Funds |
|||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares |
$ | — | $609,655 | (a) | $ | — | $ | 16,742 | $ | 97 | $ | 626,494 | 626,306 | $ | 67,012 | (b) | $ | — | ||||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares |
110,000 | 140,000 | (a) | — | — | — | 250,000 | 250,000 | 13,371 | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | 16,742 | $ | 97 | $ | 876,494 | $ | 80,383 | $ | — | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(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. |
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 |
||||||||||||||
MSCI Emerging Markets Index |
5 | 09/15/23 | $ | 245 | $ (6,778) | |||||||||
|
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) |
$ | — | $ | — | $ | 6,778 | $ | — | $ | — | $ | — | $ | 6,778 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, 2023, 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 |
$ | — | $ | — | $ | 25,649 | $ | — | $ | — | $ | — | $25,649 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on |
||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | (3,772 | ) | $ | — | $ | — | $ | — | $(3,772) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
||||
Average notional value of contracts — long |
$ | 376,571 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
S C H E D U L E O F I N V E S T M E N T S |
35 |
Schedule of Investments (continued) August 31, 2023 |
iShares® MSCI Malaysia 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 | |||||||||||||
|
||||||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 29,341,239 | $ | 228,218,671 | $ | — | $ | 257,559,910 | ||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
876,494 | — | — | 876,494 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 30,217,733 | $ | 228,218,671 | $ | — | $ | 258,436,404 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative Financial Instruments(a) |
||||||||||||||||
Liabilities |
||||||||||||||||
Equity Contracts |
$ | (6,778 | ) | $ | — | $ | — | $ | (6,778 | ) | ||||||
|
|
|
|
|
|
|
|
(a) |
Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
36 |
2 0 2 3 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 August 31, 2023 |
iShares® MSCI Pacific ex Japan ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Australia — 64.3% | ||||||||
Ampol Ltd. |
249,833 | $ | 5,690,950 | |||||
APA Group |
1,330,497 | 7,728,979 | ||||||
Aristocrat Leisure Ltd. |
621,659 | 16,410,611 | ||||||
ASX Ltd. |
204,777 | 7,620,842 | ||||||
Aurizon Holdings Ltd. |
1,958,140 | 4,615,248 | ||||||
Australia & New Zealand Banking Group Ltd. |
3,176,426 | 51,861,864 | ||||||
BHP Group Ltd. |
5,352,791 | 153,882,712 | ||||||
BlueScope Steel Ltd. |
483,170 | 6,532,235 | ||||||
Brambles Ltd. |
1,464,935 | 14,186,388 | ||||||
Cochlear Ltd. |
69,463 | 12,192,452 | ||||||
Coles Group Ltd. |
1,415,613 | 14,894,408 | ||||||
Commonwealth Bank of Australia |
1,770,949 | 116,664,962 | ||||||
Computershare Ltd. |
606,018 | 9,851,997 | ||||||
CSL Ltd. |
509,781 | 90,026,768 | ||||||
Dexus |
1,141,632 | 5,704,862 | ||||||
Endeavour Group Ltd./Australia |
1,519,901 | 5,405,713 | ||||||
Fortescue Metals Group Ltd. |
1,785,789 | 24,585,650 | ||||||
Goodman Group |
1,791,547 | 26,993,673 | ||||||
GPT Group (The) |
2,035,240 | 5,510,628 | ||||||
IDP Education Ltd. |
262,622 | 4,176,702 | ||||||
IGO Ltd. |
721,778 | 6,441,350 | ||||||
Insurance Australia Group Ltd. |
2,587,932 | 9,712,551 | ||||||
James Hardie Industries PLC(a) |
466,326 | 14,016,476 | ||||||
Lendlease Corp. Ltd. |
722,658 | 3,638,959 | ||||||
Lottery Corp. Ltd. (The) |
2,355,116 | 7,660,670 | ||||||
Macquarie Group Ltd. |
387,870 | 44,345,365 | ||||||
Medibank Pvt Ltd. |
2,919,472 | 6,906,590 | ||||||
Mineral Resources Ltd. |
184,971 | 8,490,538 | ||||||
Mirvac Group |
4,186,482 | 6,527,173 | ||||||
National Australia Bank Ltd. |
3,318,343 | 61,842,196 | ||||||
Newcrest Mining Ltd. |
945,901 | 15,764,996 | ||||||
Northern Star Resources Ltd. |
1,214,529 | 9,305,889 | ||||||
Orica Ltd. |
481,842 | 4,881,459 | ||||||
Origin Energy Ltd. |
1,819,352 | 10,231,232 | ||||||
Pilbara Minerals Ltd. |
2,850,698 | 8,546,444 | ||||||
Qantas Airways Ltd.(a) |
892,300 | 3,399,314 | ||||||
QBE Insurance Group Ltd. |
1,574,906 | 15,191,352 | ||||||
Ramsay Health Care Ltd. |
194,232 | 6,445,397 | ||||||
REA Group Ltd. |
55,410 | 5,907,691 | ||||||
Reece Ltd. |
237,036 | 3,118,264 | ||||||
Rio Tinto Ltd. |
392,171 | 28,403,536 | ||||||
Santos Ltd. |
3,430,927 | 16,976,340 | ||||||
Scentre Group |
5,483,822 | 9,720,399 | ||||||
SEEK Ltd. |
376,640 | 5,623,121 | ||||||
Sonic Healthcare Ltd. |
470,919 | 9,787,667 | ||||||
South32 Ltd. |
4,811,906 | 10,492,346 | ||||||
Stockland |
2,502,617 | 6,835,018 | ||||||
Suncorp Group Ltd. |
1,336,299 | 11,720,809 | ||||||
Telstra Corp. Ltd. |
4,265,506 | 11,065,219 | ||||||
Transurban Group |
3,253,782 | 27,858,165 | ||||||
Treasury Wine Estates Ltd. |
766,716 | 5,774,026 | ||||||
Vicinity Ltd. |
4,056,563 | 4,893,233 | ||||||
Washington H Soul Pattinson & Co. Ltd. |
245,983 | 5,240,375 | ||||||
Wesfarmers Ltd. |
1,199,484 | 41,747,319 | ||||||
Westpac Banking Corp. |
3,710,901 | 52,499,678 | ||||||
WiseTech Global Ltd. |
175,426 | 7,869,398 | ||||||
Woodside Energy Group Ltd. |
2,005,744 | 47,881,590 | ||||||
Woolworths Group Ltd. |
1,286,898 | 31,712,882 |
Security | Shares | Value | ||||||
Australia (continued) | ||||||||
Xero Ltd.(a) |
151,447 | $ | 12,258,666 | |||||
|
|
|||||||
1,185,271,337 | ||||||||
Hong Kong — 20.7% | ||||||||
AIA Group Ltd. |
12,204,014 | 110,424,991 | ||||||
BOC Hong Kong Holdings Ltd. |
3,906,000 | 10,851,997 | ||||||
Budweiser Brewing Co. APAC Ltd.(b) |
1,805,000 | 3,908,634 | ||||||
CK Asset Holdings Ltd. |
2,087,232 | 11,516,856 | ||||||
CK Hutchison Holdings Ltd. |
2,837,732 | 15,465,624 | ||||||
CK Infrastructure Holdings Ltd. |
664,208 | 3,357,315 | ||||||
CLP Holdings Ltd. |
1,733,000 | 13,589,367 | ||||||
ESR Group Ltd.(b) |
2,317,600 | 3,477,620 | ||||||
Futu Holdings Ltd., ADR(a)(c) |
58,859 | 3,507,996 | ||||||
Galaxy Entertainment Group Ltd.(a) |
2,305,000 | 15,235,362 | ||||||
Hang Lung Properties Ltd. |
1,885,736 | 2,511,541 | ||||||
Hang Seng Bank Ltd. |
807,100 | 10,285,774 | ||||||
Henderson Land Development Co. Ltd. |
1,524,442 | 4,186,335 | ||||||
HKT Trust & HKT Ltd., Class SS |
3,979,338 | 4,240,644 | ||||||
Hong Kong & China Gas Co. Ltd. |
11,832,253 | 8,696,259 | ||||||
Hong Kong Exchanges & Clearing Ltd. |
1,272,700 | 49,327,552 | ||||||
Hongkong Land Holdings Ltd.(c) |
1,182,100 | 4,193,580 | ||||||
Jardine Matheson Holdings Ltd. |
168,600 | 8,015,785 | ||||||
Link REIT |
2,678,263 | 13,278,923 | ||||||
MTR Corp. Ltd. |
1,644,286 | 6,860,719 | ||||||
New World Development Co. Ltd. |
1,588,480 | 3,372,943 | ||||||
Power Assets Holdings Ltd. |
1,469,500 | 7,233,657 | ||||||
Sands China Ltd.(a) |
2,567,600 | 8,685,418 | ||||||
Sino Land Co. Ltd. |
3,872,800 | 4,436,207 | ||||||
SITC International Holdings Co. Ltd. |
1,421,000 | 2,650,321 | ||||||
Sun Hung Kai Properties Ltd. |
1,533,500 | 17,262,098 | ||||||
Swire Pacific Ltd., Class A |
463,500 | 3,821,735 | ||||||
Swire Properties Ltd. |
1,226,800 | 2,563,729 | ||||||
Techtronic Industries Co. Ltd. |
1,453,707 | 14,337,454 | ||||||
WH Group Ltd.(b) |
8,887,500 | 4,577,018 | ||||||
Wharf Real Estate Investment Co. Ltd. |
1,773,600 | 7,391,619 | ||||||
Xinyi Glass Holdings Ltd. |
1,774,000 | 2,616,999 | ||||||
|
|
|||||||
381,882,072 | ||||||||
New Zealand — 1.7% | ||||||||
Auckland International Airport Ltd.(a) |
1,327,356 | 6,180,150 | ||||||
EBOS Group Ltd. |
160,691 | 3,636,059 | ||||||
Fisher & Paykel Healthcare Corp. Ltd. |
612,593 | 8,273,511 | ||||||
Mercury NZ Ltd. |
734,044 | 2,716,520 | ||||||
Meridian Energy Ltd. |
1,354,051 | 4,331,357 | ||||||
Spark New Zealand Ltd. |
1,949,008 | 5,896,351 | ||||||
|
|
|||||||
31,033,948 | ||||||||
Singapore — 12.4% | ||||||||
CapitaLand Ascendas REIT |
3,948,480 | 8,086,915 | ||||||
CapitaLand Integrated Commercial Trust |
5,628,238 | 7,950,385 | ||||||
Capitaland Investment Ltd/Singapore |
2,727,500 | 6,533,758 | ||||||
City Developments Ltd. |
535,900 | 2,647,561 | ||||||
DBS Group Holdings Ltd. |
1,914,000 | 47,110,504 | ||||||
Genting Singapore Ltd. |
6,446,400 | 4,170,811 | ||||||
Grab Holdings Ltd., Class A(a) |
1,980,197 | 7,465,343 | ||||||
Jardine Cycle & Carriage Ltd. |
106,400 | 2,629,002 | ||||||
Keppel Corp. Ltd. |
1,527,300 | 7,835,318 | ||||||
Mapletree Logistics Trust(c) |
3,659,984 | 4,547,339 | ||||||
Mapletree Pan Asia Commercial Trust(c) |
2,472,500 | 2,779,310 | ||||||
Oversea-Chinese Banking Corp. Ltd. |
3,570,724 | 33,130,276 | ||||||
Sea Ltd., ADR(a)(c) |
385,006 | 14,487,776 | ||||||
Seatrium Ltd.(a) |
46,919,396 | 5,029,570 |
S C H E D U L E O F I N V E S T M E N T S |
37 |
Schedule of Investments (continued) August 31, 2023 |
iShares® MSCI Pacific ex Japan ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Singapore (continued) | ||||||||
Sembcorp Industries Ltd. |
957,100 | $ | 3,788,882 | |||||
Singapore Airlines Ltd.(c) |
1,575,250 | 8,004,059 | ||||||
Singapore Exchange Ltd. |
918,000 | 6,535,153 | ||||||
Singapore Technologies Engineering Ltd. |
1,637,500 | 4,613,669 | ||||||
Singapore Telecommunications Ltd. |
8,739,928 | 15,356,386 | ||||||
United Overseas Bank Ltd. |
1,333,500 | 28,013,318 | ||||||
UOL Group Ltd. |
501,100 | 2,460,129 | ||||||
Wilmar International Ltd. |
2,041,400 | 5,706,304 | ||||||
|
|
|||||||
228,881,768 | ||||||||
|
|
|||||||
Total
Long-Term Investments — 99.1% |
|
1,827,069,125 | ||||||
|
|
|||||||
Short-Term Securities |
| |||||||
Money Market Funds — 0.6% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.52%(d)(e)(f) |
9,542,211 | 9,545,074 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 5.31%(d)(e) |
820,000 | 820,000 | ||||||
|
|
|||||||
Total
Short-Term Securities — 0.6% |
10,365,074 | |||||||
|
|
|||||||
Total
Investments — 99.7% |
1,837,434,199 | |||||||
Other Assets Less Liabilities — 0.3% |
5,233,475 | |||||||
|
|
|||||||
Net Assets — 100.0% |
$ | 1,842,667,674 | ||||||
|
|
(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) |
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 August 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer |
Value at 08/31/22 |
Purchases at Cost |
Proceeds from Sale |
Net Realized Gain (Loss) |
Change in Unrealized Appreciation (Depreciation) |
Value at 08/31/23 |
Shares Held at 08/31/23 |
Income |
Capital Gain Distributions from Underlying Funds |
|||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares |
$ | 34,033,387 | $ | — | $ | (24,498,808 | )(a) | $ | 20,522 | $ | (10,027 | ) | $ | 9,545,074 | 9,542,211 | $ | 65,015 | (b) | $ | — | ||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares |
910,000 | — | (90,000 | )(a) | — | — | 820,000 | 820,000 | 65,223 | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | 20,522 | $ | (10,027 | ) | $ | 10,365,074 | $ | 130,238 | $ | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(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. |
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 |
||||||||||||||||
SPI 200 Index |
95 | 09/21/23 | $ | 11,132 | $ | 109,158 |
38 |
2 0 2 3 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) August 31, 2023 |
iShares® MSCI Pacific ex Japan ETF
|
Futures Contracts (continued)
Description | Number of Contracts |
Expiration Date |
Notional Amount (000) |
Value/ Unrealized Appreciation (Depreciation) |
||||||||||||
MSCI Singapore Index |
228 | 09/28/23 | $ | 4,789 | $ | 36,027 | ||||||||||
|
|
|||||||||||||||
$ | 145,185 | |||||||||||||||
|
|
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 |
||||||||||||||||||||||||||||
Futures contracts |
||||||||||||||||||||||||||||
Unrealized appreciation on futures contracts(a) |
$ | — | $ | — | $ | 145,185 | $ | — | $ | — | $ | — | $ | 145,185 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, 2023, 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 |
$ | — | $ | — | $ | (1,600,536 | ) | $ | — | $ | — | $ | — | $ | (1,600,536 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | 255,673 | $ | — | $ | — | $ | — | $ | 255,673 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
||||
Average notional value of contracts — long |
$ | 13,507,974 |
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 | |||||||||||||
|
||||||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 25,461,115 | $ | 1,801,608,010 | $ | — | $ | 1,827,069,125 | ||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
10,365,074 | — | — | 10,365,074 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 35,826,189 | $ | 1,801,608,010 | $ | — | $ | 1,837,434,199 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative Financial Instruments(a) |
||||||||||||||||
Assets |
||||||||||||||||
Equity Contracts |
$ | — | $ | 145,185 | $ | — | $ | 145,185 | ||||||||
|
|
|
|
|
|
|
|
(a) |
Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S |
39 |
Schedule of Investments August 31, 2023 |
iShares® MSCI Singapore ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Aerospace & Defense — 2.6% | ||||||||
Singapore Technologies Engineering Ltd. |
4,543,000 | $ | 12,799,938 | |||||
|
|
|||||||
Banks — 44.7% | ||||||||
DBS Group Holdings Ltd. |
3,898,100 | 95,946,425 | ||||||
Oversea-Chinese Banking Corp. Ltd. |
7,166,050 | 66,488,817 | ||||||
United Overseas Bank Ltd. |
2,648,900 | 55,646,403 | ||||||
|
|
|||||||
218,081,645 | ||||||||
Capital Markets — 3.4% | ||||||||
Singapore Exchange Ltd. |
2,321,700 | 16,527,956 | ||||||
|
|
|||||||
Diversified Telecommunication Services — 4.4% | ||||||||
Singapore Telecommunications Ltd. |
12,308,968 | 21,627,324 | ||||||
|
|
|||||||
Entertainment — 4.2% | ||||||||
Sea Ltd., ADR(a)(b) |
548,625 | 20,644,759 | ||||||
|
|
|||||||
Food Products — 3.1% | ||||||||
Wilmar International Ltd. |
5,404,800 | 15,107,981 | ||||||
|
|
|||||||
Ground Transportation — 3.9% | ||||||||
Grab Holdings Ltd., Class A(a) |
5,084,115 | 19,167,114 | ||||||
|
|
|||||||
Hotels, Restaurants & Leisure — 2.4% | ||||||||
Genting Singapore Ltd. |
17,886,242 | 11,572,370 | ||||||
|
|
|||||||
Industrial Conglomerates — 5.8% | ||||||||
Jardine Cycle & Carriage Ltd. |
342,500 | 8,462,719 | ||||||
Keppel Corp. Ltd. |
3,849,600 | 19,749,127 | ||||||
|
|
|||||||
28,211,846 | ||||||||
Industrial REITs — 6.7% | ||||||||
CapitaLand Ascendas REIT |
9,814,194 | 20,100,532 | ||||||
Mapletree Logistics Trust |
10,160,613 | 12,624,031 | ||||||
|
|
|||||||
32,724,563 | ||||||||
Machinery — 2.8% | ||||||||
Seatrium Ltd.(a) |
128,772,215 | 13,803,863 | ||||||
|
|
|||||||
Multi-Utilities — 1.6% | ||||||||
Sembcorp Industries Ltd. |
1,924,800 | 7,619,727 | ||||||
|
|
Security | Shares | Value | ||||||
Passenger Airlines — 4.1% | ||||||||
Singapore Airlines Ltd.(b) |
3,905,167 | $ | 19,842,684 | |||||
|
|
|||||||
Real Estate Management & Development — 5.3% | ||||||||
Capitaland Investment Ltd/Singapore |
3,960,100 | 9,486,465 | ||||||
City Developments Ltd.(b) |
1,719,000 | 8,492,551 | ||||||
UOL Group Ltd. |
1,657,700 | 8,138,408 | ||||||
|
|
|||||||
26,117,424 | ||||||||
Retail REITs — 4.4% | ||||||||
CapitaLand Integrated Commercial Trust |
8,912,694 | 12,589,971 | ||||||
Mapletree Pan Asia Commercial Trust |
7,866,400 | 8,842,533 | ||||||
|
|
|||||||
21,432,504 | ||||||||
|
|
|||||||
Total
Long-Term Investments — 99.4% |
485,281,698 | |||||||
|
|
|||||||
Short-Term Securities |
| |||||||
Money Market Funds — 0.7% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.52%(c)(d)(e) |
2,784,337 | 2,785,173 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 5.31%(c)(d) |
420,000 | 420,000 | ||||||
|
|
|||||||
Total
Short-Term Securities — 0.7% |
3,205,173 | |||||||
|
|
|||||||
Total
Investments — 100.1% |
488,486,871 | |||||||
Liabilities in Excess of Other Assets — (0.1)% |
|
(447,286 | ) | |||||
|
|
|||||||
Net Assets — 100.0% |
$ | 488,039,585 | ||||||
|
|
(a) |
Non-income producing security. |
(b) |
All or a portion of this security is on loan. |
(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 August 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer |
Value at 08/31/22 |
Purchases at Cost |
Proceeds from Sale |
Net Realized Gain (Loss) |
Change in Unrealized Appreciation (Depreciation) |
Value at 08/31/23 |
Shares Held at 08/31/23 |
Income |
Capital Gain Distributions from Underlying Funds |
|||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares |
$ | 52,770,952 | $ | — | $ | (49,980,652 | )(a) | $ | 13,219 | $ | (18,346 | ) | $ | 2,785,173 | 2,784,337 | $ | 95,469 | (b) | $ | — | ||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares |
180,000 | 240,000 | (a) | — | — | — | 420,000 | 420,000 | 23,002 | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | 13,219 | $ | (18,346 | ) | $ | 3,205,173 | $ | 118,471 | $ | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(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. |
40 |
2 0 2 3 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) August 31, 2023 |
iShares® MSCI Singapore 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 |
||||||||||||||||
MSCI Singapore Index |
105 | 09/28/23 | $ | 2,206 | $ | 17,762 | ||||||||||
|
|
OTC Total Return Swaps
Reference Entity | Payment Frequency |
Counterparty(a) | Termination Date |
Net Notional |
Accrued (Depreciation) |
Net Value of Reference Entity |
Gross Notional Amount Net Asset Percentage | |||||||||||||||||||
Equity Securities Long |
Monthly | HSBC Bank PLC | (b) | 02/10/28 | $ | 112,400 | $ | (489 | )(c) | $ | 111,938 | 0.0% | ||||||||||||||
|
|
|
|
|||||||||||||||||||||||
$ | (489 | ) | $ | 111,938 | ||||||||||||||||||||||
|
|
|
|
(a) |
The Fund receives the total return on a portfolio of long positions underlying the total return swap. The Fund pays the total return on a portfolio of short positions underlying the total return swap. In addition, the Fund pays or receives a variable rate of interest, based on a specified benchmark. The benchmark and spread are determined based upon the country and/or currency of the individual underlying positions. |
(c) |
Amount includes $(27) of net dividends, payable for referenced securities purchased and financing fees. |
The following are the specified benchmarks (plus or minus a range) used in determining the variable rate of interest:
(b) | ||
Range: |
55 basis points | |
Benchmarks: |
SGD - Overnight Rate Average (SORA) |
S C H E D U L E O F I N V E S T M E N T S |
41 |
Schedule of Investments (continued) August 31, 2023 |
iShares® MSCI Singapore ETF
|
The following table represents the individual long positions and related values of equity securities underlying the total return swap with HSBC Bank PLC as of period end, termination date February 10, 2028.
Shares | Value | % of Basket Value |
||||||||||
Reference Entity — Long |
||||||||||||
Common Stocks |
||||||||||||
Capital Markets |
||||||||||||
Singapore Exchange Ltd. |
15,700 | $ | 111,938 | 100.0 | % | |||||||
|
|
|||||||||||
Net Value of Reference Entity — HSBC Bank PLC |
$ | 111,938 | ||||||||||
|
|
Balances Reported in the Statements of Assets and Liabilities for Total Return Swaps
Description | Swap Premiums Paid |
Swap Premiums Received |
Unrealized Appreciation |
Unrealized Depreciation |
||||||||||||
Total Return Swaps |
$ | — | $ | — | $ | — | $ | (489 | ) |
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 |
||||||||||||||||||||||||||||
Futures contracts |
||||||||||||||||||||||||||||
Unrealized appreciation on futures contracts(a) |
$ | — | $ | — | $ | 17,762 | $ | — | $ | — | $ | — | $ | 17,762 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Liabilities — Derivative Financial Instruments |
||||||||||||||||||||||||||||
Swaps — OTC |
||||||||||||||||||||||||||||
Unrealized depreciation on OTC swaps; Swap premiums received |
$ | — | $ | — | $ | 489 | $ | — | $ | — | $ | — | $ | 489 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, 2023, 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 |
$ | — | $ | — | $ | (649,848 | ) | $ | — | $ | — | $ | — | $ | (649,848 | ) | ||||||||||||
Swaps |
— | — | 597 | — | — | — | 597 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | — | $ | — | $ | (649,251 | ) | $ | — | $ | — | $ | — | $ | (649,251 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | 103,562 | $ | — | $ | — | $ | — | $ | 103,562 | ||||||||||||||
Swaps |
— | — | (489 | ) | — | — | — | (489 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | — | $ | — | $ | 103,073 | $ | — | $ | — | $ | — | $ | 103,073 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
||||
Average notional value of contracts — long |
$ | 2,230,861 | ||
Total return swaps: |
||||
Average notional value |
$ | 180,146 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements. |
42 |
2 0 2 3 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) August 31, 2023 |
iShares® MSCI Singapore ETF
|
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: |
||||||||
Futures contracts |
$ | 17,762 | $ | — | ||||
Swaps - OTC |
— | 489 | ||||||
|
|
|
|
|||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities |
17,762 | 489 | ||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) |
(17,762 | ) | — | |||||
|
|
|
|
|||||
Total derivative assets and liabilities subject to an MNA |
— | 489 | ||||||
|
|
|
|
The following table presents the Fund’s derivative liabilities by counterparty net of amounts available for offset under an MNA and net of the related collateral pledged by the Fund:
Counterparty |
Derivative Liabilities Subject to an MNA by Counterparty |
Derivatives Available for Offset |
Non-Cash Collateral Pledged |
Cash Collateral Pledged |
Net Amount of Derivative Liabilities |
|||||||||||||||||||||||||
HSBC Bank PLC |
$489 | $ — | $ — | $ — | $489 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
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 | |||||||||||||
|
||||||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 39,811,873 | $ | 445,469,825 | $ | — | $ | 485,281,698 | ||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
3,205,173 | — | — | 3,205,173 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 43,017,046 | $ | 445,469,825 | $ | — | $ | 488,486,871 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative Financial Instruments(a) |
||||||||||||||||
Assets |
||||||||||||||||
Equity Contracts |
$ | — | $ | 17,762 | $ | — | $ | 17,762 | ||||||||
Liabilities |
||||||||||||||||
Equity Contracts |
— | (489 | ) | — | (489 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | — | $ | 17,273 | $ | — | 17,273 | ||||||||||
|
|
|
|
|
|
|
|
(a) |
Derivative financial instruments are swaps and futures contracts. Swaps and futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S |
43 |
Schedule of Investments August 31, 2023 |
iShares® MSCI Taiwan ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Automobile Components — 0.5% | ||||||||
Cheng Shin Rubber Industry Co. Ltd. |
12,210,670 | $ | 15,168,822 | |||||
|
|
|||||||
Banks — 11.2% | ||||||||
Chang Hwa Commercial Bank Ltd. |
34,200,700 | 18,560,573 | ||||||
CTBC Financial Holding Co. Ltd. |
70,757,325 | 52,885,691 | ||||||
E.Sun Financial Holding Co. Ltd.(a) |
58,003,952 | 44,483,852 | ||||||
First Financial Holding Co. Ltd. |
47,614,076 | 39,296,862 | ||||||
Hua Nan Financial Holdings Co. Ltd. |
43,059,387 | 27,707,125 | ||||||
Mega Financial Holding Co. Ltd.(a) |
45,620,665 | 51,342,519 | ||||||
Shanghai Commercial & Savings Bank Ltd. (The) |
19,226,218 | 25,714,823 | ||||||
SinoPac Financial Holdings Co. Ltd. |
54,160,250 | 29,070,333 | ||||||
Taishin Financial Holding Co. Ltd.(a) |
55,928,619 | 31,224,890 | ||||||
Taiwan Business Bank |
20,399,104 | 8,535,895 | ||||||
Taiwan Cooperative Financial Holding Co. Ltd. |
45,756,829 | 37,707,594 | ||||||
|
|
|||||||
366,530,157 | ||||||||
Biotechnology — 0.3% | ||||||||
PharmaEssentia Corp.(a)(b) |
774,000 | 8,692,125 | ||||||
|
|
|||||||
Broadline Retail — 0.2% | ||||||||
momo.com Inc(a) |
291,180 | 4,749,352 | ||||||
|
|
|||||||
Chemicals — 3.3% | ||||||||
Formosa Chemicals & Fibre Corp.(a) |
14,677,610 | 28,564,510 | ||||||
Formosa Plastics Corp.(a) |
15,776,518 | 39,384,690 | ||||||
Nan Ya Plastics Corp.(a) |
19,365,938 | 40,191,800 | ||||||
|
|
|||||||
108,141,000 | ||||||||
Communications Equipment — 1.2% | ||||||||
Accton Technology Corp.(a) |
2,703,000 | 40,313,457 | ||||||
|
|
|||||||
Construction Materials — 1.3% | ||||||||
Asia Cement Corp. |
13,503,136 | 16,914,542 | ||||||
Taiwan Cement Corp.(a) |
24,202,645 | 26,533,799 | ||||||
|
|
|||||||
43,448,341 | ||||||||
Consumer Staples Distribution & Retail — 0.7% | ||||||||
President Chain Store Corp. |
2,892,215 | 24,252,830 | ||||||
|
|
|||||||
Diversified Telecommunication Services — 1.6% | ||||||||
Chunghwa Telecom Co. Ltd. |
14,740,648 | 53,742,178 | ||||||
|
|
|||||||
Electrical Equipment — 0.8% | ||||||||
Voltronic Power Technology Corp. |
263,000 | 11,936,920 | ||||||
Walsin Lihwa Corp.(a) |
10,424,178 | 12,397,505 | ||||||
Ya Hsin Industrial Co. Ltd.(c) |
6,845,461 | 2 | ||||||
|
|
|||||||
24,334,427 | ||||||||
Electronic Equipment, Instruments & Components — 13.1% | ||||||||
AUO Corp.(a) |
33,490,664 | 18,701,603 | ||||||
Delta Electronics Inc.(a) |
7,417,180 | 80,156,667 | ||||||
E Ink Holdings Inc. |
3,558,000 | 20,336,859 | ||||||
Hon Hai Precision Industry Co. Ltd. |
43,855,296 | 146,421,532 | ||||||
Innolux Corp. |
40,865,399 | 18,511,242 | ||||||
Largan Precision Co. Ltd. |
432,794 | 27,797,990 | ||||||
Nan Ya Printed Circuit Board Corp.(a) |
1,477,000 | 11,155,189 | ||||||
Pacific Electric Wire & Cable Co. Ltd.(c) |
197 | — | ||||||
Synnex Technology International Corp.(a) |
8,657,364 | 16,593,286 | ||||||
Unimicron Technology Corp.(a) |
5,677,000 | 32,848,706 | ||||||
WPG Holdings Ltd.(a) |
11,881,604 | 20,446,395 | ||||||
Yageo Corp.(a) |
1,643,767 | 24,970,892 | ||||||
Zhen Ding Technology Holding Ltd.(a) |
4,344,072 | 13,151,050 | ||||||
|
|
|||||||
431,091,411 |
Security | Shares | Value | ||||||
Financial Services — 2.1% |
||||||||
Chailease Holding Co. Ltd.(a) |
6,290,790 | $ | 35,067,430 | |||||
Yuanta Financial Holding Co. Ltd. |
45,929,490 | 35,144,008 | ||||||
|
|
|||||||
70,211,438 | ||||||||
Food Products — 1.3% | ||||||||
Uni-President Enterprises Corp. |
19,283,189 | 42,754,992 | ||||||
|
|
|||||||
Household Durables — 0.4% | ||||||||
Nien Made Enterprise Co. Ltd. |
1,305,000 | 12,230,656 | ||||||
|
|
|||||||
Industrial Conglomerates — 0.5% | ||||||||
Far Eastern New Century Corp.(a) |
19,645,843 | 17,342,336 | ||||||
|
|
|||||||
Insurance — 4.8% | ||||||||
Cathay Financial Holding Co. Ltd.(a) |
35,042,798 | 50,105,477 | ||||||
China Development Financial Holding Corp.(a)(b) |
72,073,587 | 26,777,280 | ||||||
Fubon Financial Holding Co. Ltd. |
29,511,823 | 58,851,356 | ||||||
Shin Kong Financial Holding Co. Ltd.(a)(b) |
77,037,273 | 22,880,226 | ||||||
|
|
|||||||
158,614,339 | ||||||||
Leisure Products — 0.4% | ||||||||
Giant Manufacturing Co. Ltd.(a) |
2,103,372 | 12,911,411 | ||||||
|
|
|||||||
Machinery — 0.7% | ||||||||
Airtac International Group |
763,826 | 22,003,045 | ||||||
|
|
|||||||
Marine Transportation — 0.8% | ||||||||
Evergreen Marine Corp. Taiwan Ltd.(a) |
4,353,013 | 14,537,010 | ||||||
Wan Hai Lines Ltd.(a) |
2,894,000 | 4,107,908 | ||||||
Yang Ming Marine Transport Corp.(a) |
6,504,000 | 8,614,811 | ||||||
|
|
|||||||
27,259,729 | ||||||||
Metals & Mining — 1.2% | ||||||||
China Steel Corp.(a) |
48,944,977 | 40,710,087 | ||||||
|
|
|||||||
Oil, Gas & Consumable Fuels — 0.5% | ||||||||
Formosa Petrochemical Corp.(a) |
6,654,950 | 16,575,431 | ||||||
|
|
|||||||
Passenger Airlines — 0.5% | ||||||||
China Airlines Ltd.(a) |
11,151,000 | 7,903,453 | ||||||
Eva Airways Corp.(a) |
9,614,000 | 9,488,067 | ||||||
|
|
|||||||
17,391,520 | ||||||||
Real Estate Management & Development — 0.4% | ||||||||
Ruentex Development Co. Ltd.(b) |
12,358,188 | 14,277,012 | ||||||
|
|
|||||||
Semiconductors & Semiconductor Equipment — 34.8% | ||||||||
ASE Technology Holding Co. Ltd. |
12,909,432 | 47,781,272 | ||||||
eMemory Technology Inc. |
289,000 | 16,371,787 | ||||||
Global Unichip Corp. |
109,000 | 4,960,907 | ||||||
Globalwafers Co. Ltd.(a) |
1,171,000 | 16,816,850 | ||||||
MediaTek Inc. |
5,368,175 | 118,386,785 | ||||||
Nanya Technology Corp.(a) |
7,892,000 | 16,444,319 | ||||||
Novatek Microelectronics Corp.(a) |
2,591,544 | 32,396,618 | ||||||
Parade Technologies Ltd.(a) |
293,000 | 8,226,120 | ||||||
Powerchip Semiconductor Manufacturing Corp.(a) |
10,712,000 | 9,342,178 | ||||||
Realtek Semiconductor Corp.(a) |
2,160,063 | 28,228,464 | ||||||
Silergy Corp.(a) |
1,436,000 | 12,837,763 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. |
43,018,882 | 739,191,340 | ||||||
United Microelectronics Corp.(a) |
43,254,501 | 61,756,541 | ||||||
Vanguard International Semiconductor Corp.(a) |
5,236,000 | 11,195,204 | ||||||
Winbond Electronics Corp.(a)(b) |
21,037,000 | 17,325,089 | ||||||
|
|
|||||||
1,141,261,237 | ||||||||
Specialty Retail — 0.9% | ||||||||
Hotai Motor Co. Ltd. |
1,430,500 | 30,427,502 | ||||||
|
|
44 |
2 0 2 3 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) August 31, 2023 |
iShares® MSCI Taiwan ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Technology Hardware, Storage & Peripherals — 12.1% | ||||||||
Acer Inc.(a) |
18,673,737 | $ | 21,410,921 | |||||
Advantech Co. Ltd. |
2,261,021 | 24,331,593 | ||||||
Asustek Computer Inc. |
3,206,857 | 40,403,159 | ||||||
Catcher Technology Co. Ltd.(a) |
3,591,743 | 20,321,905 | ||||||
Compal Electronics Inc.(a) |
24,776,554 | 24,738,038 | ||||||
Gigabyte Technology Co. Ltd. |
858,000 | 9,187,132 | ||||||
Inventec Corp.(a) |
17,484,868 | 30,802,212 | ||||||
Lite-On Technology Corp.(a) |
10,076,071 | 43,075,842 | ||||||
Micro-Star International Co. Ltd. |
4,238,000 | 21,192,359 | ||||||
Pegatron Corp. |
9,640,037 | 23,573,425 | ||||||
Quanta Computer Inc.(a) |
10,857,240 | 86,062,579 | ||||||
Wistron Corp.(a) |
6,552,000 | 23,953,147 | ||||||
Wiwynn Corp.(a) |
579,000 | 28,217,256 | ||||||
|
|
|||||||
397,269,568 | ||||||||
Textiles, Apparel & Luxury Goods — 1.6% | ||||||||
Eclat Textile Co. Ltd. |
1,274,601 | 20,306,653 | ||||||
Feng TAY Enterprise Co. Ltd. |
3,325,916 | 17,504,236 | ||||||
Pou Chen Corp. |
15,436,103 | 13,850,315 | ||||||
|
|
|||||||
51,661,204 | ||||||||
Transportation Infrastructure — 0.5% | ||||||||
Taiwan High Speed Rail Corp. |
15,781,000 | 14,726,193 | ||||||
|
|
|||||||
Wireless Telecommunication Services — 1.4% | ||||||||
Far EasTone Telecommunications Co. Ltd. |
9,140,259 | 20,273,371 | ||||||
Taiwan Mobile Co. Ltd. |
8,234,609 | 24,091,090 | ||||||
|
|
|||||||
44,364,461 | ||||||||
|
|
|||||||
Total
Long-Term Investments — 99.1% |
|
3,252,456,261 | ||||||
|
|
Security | Shares | Value | ||||||
Short-Term Securities |
| |||||||
Money Market Funds — 14.2% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.52%(d)(e)(f) |
460,726,758 | $ | 460,864,976 | |||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 5.31%(d)(e) |
4,050,000 | 4,050,000 | ||||||
|
|
|||||||
Total
Short-Term Securities — 14.2% |
|
464,914,976 | ||||||
|
|
|||||||
Total
Investments — 113.3% |
|
3,717,371,237 | ||||||
Liabilities in Excess of Other Assets — (13.3)% |
|
(435,379,676 | ) | |||||
|
|
|||||||
Net Assets — 100.0% |
$ | 3,281,991,561 | ||||||
|
|
(a) |
All or a portion of this security is on loan. |
(b) |
Non-income producing security. |
(c) |
Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
(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 August 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | Value at 08/31/22 |
Purchases at Cost |
Proceeds from Sale |
Net Realized Gain (Loss) |
Change
in Unrealized Appreciation (Depreciation) |
Value at 08/31/23 |
Shares Held at 08/31/23 |
Income | Capital Gain Distributions from Underlying Funds |
|||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares |
$ | 407,562,083 | $ | 53,260,110 | (a) | $ | — | $ | 135,548 | $ | (92,765 | ) | $ | 460,864,976 | 460,726,758 | $ | 5,594,885 | (b) | $ | — | ||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares |
3,220,000 | 830,000 | (a) | — | — | — | 4,050,000 | 4,050,000 | 402,396 | 4 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | 135,548 | $ | (92,765 | ) | $ | 464,914,976 | $ | 5,997,281 | $ | 4 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(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. |
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 Taiwan Index |
513 | 09/27/23 | $ | 29,323 | $ | 91,316 | ||||||||||
|
|
S C H E D U L E O F I N V E S T M E N T S |
45 |
Schedule of Investments (continued) August 31, 2023 |
iShares® MSCI Taiwan 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 |
||||||||||||||||||||||||||||
Futures contracts |
||||||||||||||||||||||||||||
Unrealized appreciation on futures contracts(a) |
$ | — | $ | — | $ | 91,316 | $ | — | $ | — | $ | — | $ | 91,316 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, 2023, 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 |
$ | — | $ | — | $ | 1,615,333 | $ | — | $ | — | $ | — | $ | 1,615,333 | ||||||||||||||
Forward foreign currency exchange contracts |
— | — | — | (428 | ) | — | — | (428 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | — | $ | — | $ | 1,615,333 | $ | (428 | ) | $ | — | $ | — | $ | 1,614,905 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | 587,081 | $ | — | $ | — | $ | — | $ | 587,081 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
||||
Average notional value of contracts — long |
$ | 13,499,692 |
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 | |||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | — | $ | 3,252,456,259 | $ | 2 | $ | 3,252,456,261 | ||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
464,914,976 | — | — | 464,914,976 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 464,914,976 | $ | 3,252,456,259 | $ | 2 | $ | 3,717,371,237 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative Financial Instruments(a) |
||||||||||||||||
Assets |
||||||||||||||||
Equity Contracts |
$ | — | $ | 91,316 | $ | — | $ | 91,316 | ||||||||
|
|
|
|
|
|
|
|
(a) |
Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
46 |
2 0 2 3 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 August 31, 2023 |
iShares® MSCI Thailand ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Air Freight & Logistics — 0.2% | ||||||||
JWD Infologistics PCL, NVDR(a) |
645,900 | $ | 289,432 | |||||
Kerry Express Thailand PCL, NVS(a)(b) |
764,500 | 182,169 | ||||||
|
|
|||||||
471,601 | ||||||||
Automobile Components — 0.2% | ||||||||
Sri Trang Agro-Industry PCL, NVDR |
1,578,545 | 657,771 | ||||||
|
|
|||||||
Banks — 5.1% |
||||||||
Kasikornbank PCL, NVDR |
1,041,300 | 3,878,984 | ||||||
Kiatnakin Phatra Bank PCL, NVDR |
377,473 | 646,492 | ||||||
Krung Thai Bank PCL, NVDR |
6,142,500 | 3,383,754 | ||||||
SCB X PCL, NVS |
1,479,900 | 4,984,101 | ||||||
Thanachart Capital PCL, NVDR |
460,900 | 671,153 | ||||||
TMBThanachart Bank PCL, NVDR |
42,572,900 | 2,078,951 | ||||||
|
|
|||||||
15,643,435 | ||||||||
Beverages — 1.2% | ||||||||
Carabao Group PCL, NVDR(a) |
615,300 | 1,510,902 | ||||||
Osotspa PCL, NVDR |
2,376,300 | 2,035,086 | ||||||
|
|
|||||||
3,545,988 | ||||||||
Broadline Retail — 1.2% | ||||||||
Central Retail Corp. PCL, NVDR |
3,180,834 | 3,741,957 | ||||||
|
|
|||||||
Building Products — 0.1% |
||||||||
Dynasty Ceramic PCL, NVDR |
7,208,340 | 411,699 | ||||||
|
|
|||||||
Capital Markets — 0.6% |
||||||||
Bangkok Commercial Asset Management PCL, NVDR |
3,125,100 | 1,061,018 | ||||||
Beyond Securities PC, NVDR(a)(b) |
2,987,900 | 780,028 | ||||||
|
|
|||||||
1,841,046 | ||||||||
Chemicals — 2.5% | ||||||||
Eastern Polymer Group PCL, NVDR |
1,492,200 | 304,630 | ||||||
Indorama Ventures PCL, NVDR |
2,961,110 | 2,450,666 | ||||||
PTT Global Chemical PCL, NVDR |
3,963,307 | 4,211,590 | ||||||
TOA Paint Thailand PCL, NVDR |
1,070,100 | 809,554 | ||||||
|
|
|||||||
7,776,440 | ||||||||
Construction & Engineering — 0.8% | ||||||||
CH Karnchang PCL, NVDR(a) |
1,935,600 | 1,270,946 | ||||||
PSG Corp. PCL, NVS(b) |
22,851,600 | 652,576 | ||||||
Sino-Thai Engineering & Construction PCL, NVDR(a) |
1,884,328 | 645,300 | ||||||
|
|
|||||||
2,568,822 | ||||||||
Construction Materials — 4.5% | ||||||||
Siam Cement PCL (The), NVDR |
1,371,300 | 12,250,936 | ||||||
Siam City Cement PCL, NVDR |
159,400 | 630,453 | ||||||
Tipco Asphalt PCL, NVDR |
1,118,300 | 549,290 | ||||||
TPI Polene PCL, NVDR |
10,129,100 | 439,526 | ||||||
|
|
|||||||
13,870,205 | ||||||||
Consumer Finance — 3.3% | ||||||||
AEON Thana Sinsap Thailand PCL, NVDR(a) |
153,500 | 766,764 | ||||||
Asia Sermkij Leasing PCL, NVDR(a) |
374,800 | 278,093 | ||||||
JMT Network Services PCL, NVDR(a) |
1,154,700 | 1,532,590 | ||||||
Krungthai Card PCL, NVDR |
1,813,100 | 2,509,764 | ||||||
Muangthai Capital PCL, NVDR |
1,304,500 | 1,516,143 | ||||||
Ngern Tid Lor PCL, NVDR(a) |
2,222,600 | 1,496,683 | ||||||
Ratchthani Leasing PCL, NVDR(a) |
3,534,227 | 342,911 | ||||||
Srisawad Corp. PCL, NVDR(a) |
1,207,060 | 1,756,027 | ||||||
|
|
|||||||
10,198,975 | ||||||||
Consumer Staples Distribution & Retail — 8.0% | ||||||||
Berli Jucker PCL, NVDR |
1,761,400 | 1,696,697 | ||||||
CP ALL PCL, NVDR |
10,265,100 | 19,114,700 |
Security | Shares | Value | ||||||
Consumer Staples Distribution & Retail (continued) | ||||||||
CP Axtra PCL(a) |
3,720,100 | $ | 3,847,754 | |||||
|
|
|||||||
24,659,151 | ||||||||
Containers & Packaging — 0.9% | ||||||||
SCG Packaging PCL, NVDR |
2,264,100 | 2,649,172 | ||||||
|
|
|||||||
Diversified Consumer Services — 0.1% |
||||||||
SISB PCL |
412,300 | 444,227 | ||||||
|
|
|||||||
Diversified Telecommunication Services — 1.4% |
| |||||||
Jasmine International PCL, NVDR(b) |
6,779,168 | 387,187 | ||||||
Thaicom PCL, NVDR(a) |
977,200 | 401,222 | ||||||
True Corp. PCL |
18,222,948 | 3,587,386 | ||||||
|
|
|||||||
4,375,795 | ||||||||
Electronic Equipment, Instruments & Components — 7.4% | ||||||||
Delta Electronics Thailand PCL, NVDR |
5,482,300 | 16,966,847 | ||||||
Ditto Thailand PCL, NVDR(a) |
290,360 | 275,570 | ||||||
Forth Corp. PCL, NVDR(a) |
411,100 | 410,558 | ||||||
Hana Microelectronics PCL, NVDR |
990,500 | 1,758,240 | ||||||
Jay Mart PCL, NVDR |
1,164,800 | 797,006 | ||||||
KCE Electronics PCL, NVDR(a) |
1,454,700 | 2,115,589 | ||||||
Nex Point Parts PCL, NVDR(a)(b) |
1,244,000 | 489,787 | ||||||
|
|
|||||||
22,813,597 | ||||||||
Entertainment — 0.3% | ||||||||
Major Cineplex Group PCL, NVDR(a) |
1,036,900 | 429,182 | ||||||
One Enterprise Public Co. Ltd. (The), NVDR |
1,465,200 | 206,517 | ||||||
RS PCL, NVDR(a) |
899,720 | 372,439 | ||||||
|
|
|||||||
1,008,138 | ||||||||
Financial Services — 0.1% | ||||||||
Sabuy Technology PCL, NVDR(a) |
1,295,200 | 299,544 | ||||||
|
|
|||||||
Food Products — 3.6% |
||||||||
Betagro PCL, NVS(a) |
1,189,200 | 849,004 | ||||||
Charoen Pokphand Foods PCL, NVDR(a) |
6,812,400 | 4,026,604 | ||||||
GFPT PCL, NVDR(a) |
772,600 | 240,467 | ||||||
Ichitan Group PCL, NVDR |
1,150,000 | 567,899 | ||||||
I-TAIL Corp. PCL, NVS |
1,315,700 | 777,754 | ||||||
Khon Kaen Sugar Industry PCL, NVDR(a) |
4,247,978 | 385,815 | ||||||
R&B Food Supply PCL, NVDR(a) |
879,600 | 286,232 | ||||||
Sappe PCL |
189,700 | 541,607 | ||||||
Srinanaporn Marketing PCL, NVDR(a) |
851,300 | 548,934 | ||||||
Thai Union Group PCL, NVDR |
5,033,400 | 2,054,941 | ||||||
Thai Vegetable Oil PCL, NVDR |
713,688 | 476,766 | ||||||
Thaifoods Group PCL, NVDR |
1,997,000 | 224,702 | ||||||
|
|
|||||||
10,980,725 | ||||||||
Ground Transportation — 0.9% | ||||||||
BTS Group Holdings PCL, NVDR |
13,889,400 | 2,913,856 | ||||||
|
|
|||||||
Health Care Equipment & Supplies — 0.1% |
| |||||||
Sri Trang Gloves Thailand PCL, NVDR(a) |
1,788,100 | 370,048 | ||||||
|
|
|||||||
Health Care Providers & Services — 9.0% |
| |||||||
Bangkok Chain Hospital PCL, NVDR |
2,192,025 | 1,207,274 | ||||||
Bangkok Dusit Medical Services PCL, NVDR |
19,556,900 | 15,632,666 | ||||||
Bumrungrad Hospital PCL, NVDR |
1,048,076 | 7,747,925 | ||||||
Chularat Hospital PCL, NVDR |
8,826,500 | 802,922 | ||||||
Ramkhamhaeng Hospital PCL, NVDR |
527,400 | 659,572 | ||||||
Thonburi Healthcare Group PCL, NVDR |
595,900 | 1,114,627 | ||||||
Vibhavadi Medical Center PCL, NVDR(a) |
8,473,100 | 556,525 | ||||||
|
|
|||||||
27,721,511 |
S C H E D U L E O F I N V E S T M E N T S |
47 |
Schedule of Investments (continued) August 31, 2023 |
iShares® MSCI Thailand ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Hotels, Restaurants & Leisure — 3.2% | ||||||||
Asset World Corp. PCL, NVDR |
14,065,200 | $ | 1,749,847 | |||||
Central Plaza Hotel PCL, NVDR(a)(b) |
830,700 | 1,132,383 | ||||||
Erawan Group PCL (The), NVDR(b) |
4,406,700 | 698,428 | ||||||
Minor International PCL, NVDR |
5,769,510 | 5,474,263 | ||||||
MK Restaurants Group PCL, NVDR |
492,600 | 668,032 | ||||||
|
|
|||||||
9,722,953 | ||||||||
Independent Power and Renewable Electricity Producers — 7.4% | ||||||||
Absolute Clean Energy PCL, NVDR(a)(b) |
4,598,700 | 232,171 | ||||||
B Grimm Power PCL, NVDR |
1,604,000 | 1,557,626 | ||||||
Banpu Power PCL, NVDR |
1,071,600 | 458,669 | ||||||
BCPG PCL, NVDR |
2,056,750 | 598,371 | ||||||
CK Power PCL, NVDR |
3,623,960 | 378,412 | ||||||
Electricity Generating PCL, NVDR |
416,500 | 1,586,197 | ||||||
Energy Absolute PCL, NVDR(a) |
2,950,800 | 5,328,115 | ||||||
Global Power Synergy PCL, NVDR |
1,239,300 | 1,864,774 | ||||||
Gulf Energy Development PCL, NVDR(a) |
5,156,800 | 7,065,871 | ||||||
Gunkul Engineering PCL, NVDR(a) |
7,012,022 | 719,853 | ||||||
Ratch Group PCL, NVDR |
1,911,800 | 1,938,125 | ||||||
SPCG PCL, NVDR |
843,000 | 305,736 | ||||||
Super Energy Corp. PCL, NVDR(b) |
26,332,250 | 383,420 | ||||||
TPI Polene Power PCL, NVDR(a) |
4,493,500 | 436,293 | ||||||
|
|
|||||||
22,853,633 | ||||||||
Industrial Conglomerates — 0.1% | ||||||||
Thoresen Thai Agencies PCL, NVDR(a) |
2,112,300 | 373,982 | ||||||
|
|
|||||||
Insurance — 0.5% |
||||||||
Bangkok Life Assurance PCL, NVDR(a) |
1,047,400 | 732,814 | ||||||
Dhipaya Group Holdings PCL, NVDR |
522,400 | 618,862 | ||||||
TQM Corp. PCL, NVDR |
369,200 | 321,347 | ||||||
|
|
|||||||
1,673,023 | ||||||||
Marine Transportation — 0.3% | ||||||||
Precious Shipping PCL, NVDR |
1,360,700 | 355,724 | ||||||
Regional Container Lines PCL, NVDR(a) |
665,000 | 409,956 | ||||||
|
|
|||||||
765,680 | ||||||||
Media — 0.6% | ||||||||
BEC World PCL, NVDR(a) |
1,426,500 | 356,347 | ||||||
Plan B Media PCL, NVDR |
3,385,460 | 903,669 | ||||||
VGI PCL, NVDR |
6,888,050 | 581,846 | ||||||
|
|
|||||||
1,841,862 | ||||||||
Oil, Gas & Consumable Fuels — 13.0% | ||||||||
Bangchak Corp. PCL, NVDR |
1,815,500 | 2,007,581 | ||||||
Banpu PCL, NVDR(a) |
13,376,300 | 3,282,776 | ||||||
Esso Thailand PCL, NVDR |
2,142,000 | 599,555 | ||||||
IRPC PCL, NVDR |
17,962,100 | 1,200,060 | ||||||
Prima Marine PCL, NVDR(a) |
1,783,100 | 323,071 | ||||||
PTT Exploration & Production PCL, NVDR(a) |
2,442,784 | 11,059,038 | ||||||
PTT Public Company Ltd., NVDR |
17,575,000 | 17,437,587 | ||||||
Siamgas & Petrochemicals PCL, NVDR |
980,700 | 235,344 | ||||||
Star Petroleum Refining PCL, NVDR |
3,044,600 | 795,677 | ||||||
Thai Oil PCL, NVDR |
2,159,900 | 3,176,690 | ||||||
|
|
|||||||
40,117,379 | ||||||||
Passenger Airlines — 0.4% | ||||||||
Asia Aviation PCL, NVDR(a)(b) |
6,507,147 | 534,946 | ||||||
Bangkok Airways PCL, NVDR(b) |
1,310,600 | 647,054 | ||||||
|
|
|||||||
1,182,000 | ||||||||
Pharmaceuticals — 0.3% | ||||||||
Mega Lifesciences PCL, NVDR |
621,900 | 776,978 | ||||||
|
|
Security | Shares | Value | ||||||
Real Estate Management & Development — 6.8% | ||||||||
Amata Corp. PCL, NVDR |
1,415,200 | $ | 1,029,910 | |||||
AP Thailand PCL, NVDR |
3,871,386 | 1,403,503 | ||||||
Bangkok Land PCL, NVDR(b) |
20,137,400 | 460,053 | ||||||
Central Pattana PCL, NVDR |
3,550,500 | 6,965,364 | ||||||
Land & Houses PCL, NVDR |
14,705,500 | 3,484,077 | ||||||
MBK PCL, NVDR |
1,548,900 | 818,016 | ||||||
Origin Property PCL, NVDR |
1,294,300 | 391,605 | ||||||
Pruksa Holding PCL, NVDR |
955,900 | 365,599 | ||||||
Quality Houses PCL, NVDR |
13,185,232 | 873,300 | ||||||
Sansiri PCL, NVDR |
22,617,937 | 1,316,745 | ||||||
SC Asset Corp. PCL, NVDR |
2,616,704 | 346,480 | ||||||
Singha Estate PCL, NVDR |
1,348,400 | 45,789 | ||||||
Supalai PCL, NVDR |
2,231,800 | 1,382,394 | ||||||
WHA Corp. PCL, NVDR |
14,452,240 | 2,144,638 | ||||||
|
|
|||||||
21,027,473 | ||||||||
Specialty Retail — 3.4% | ||||||||
Aurora Design PCL, NVDR |
703,600 | 347,842 | ||||||
Com7 PCL, NVDR |
1,898,700 | 1,748,642 | ||||||
Dohome PCL, NVDR(a) |
1,847,241 | 611,188 | ||||||
Home Product Center PCL, NVDR |
10,404,073 | 4,066,977 | ||||||
PTG Energy PCL, NVDR |
1,631,900 | 498,499 | ||||||
PTT Oil & Retail Business PCL, NVDR |
5,274,100 | 3,071,128 | ||||||
|
|
|||||||
10,344,276 | ||||||||
Transportation Infrastructure — 6.3% | ||||||||
Airports of Thailand PCL, NVDR(b) |
7,534,400 | 15,592,807 | ||||||
Bangkok Aviation Fuel Services PCL, NVDR(a) |
448,300 | 383,955 | ||||||
Bangkok Expressway & Metro PCL, NVDR |
13,435,653 | 3,318,392 | ||||||
|
|
|||||||
19,295,154 | ||||||||
Water Utilities — 0.3% | ||||||||
TTW PCL, NVDR(a) |
2,490,166 | 629,342 | ||||||
WHA Utilities and Power PCL, NVDR(a) |
2,021,600 | 228,615 | ||||||
|
|
|||||||
857,957 | ||||||||
Wireless Telecommunication Services — 5.3% | ||||||||
Advanced Info Service PCL, NVDR |
2,091,519 | 12,894,217 | ||||||
Intouch Holdings PCL, NVDR |
1,691,200 | 3,511,738 | ||||||
|
|
|||||||
16,405,955 | ||||||||
|
|
|||||||
Total
Long-Term Investments — 99.4% |
|
306,202,008 | ||||||
|
|
|||||||
Short-Term Securities |
| |||||||
Money Market Funds — 6.0% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.52%(c)(d)(e) |
17,589,507 | 17,594,784 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 5.31%(c)(d) |
900,000 | 900,000 | ||||||
|
|
|||||||
Total
Short-Term Securities — 6.0% |
18,494,784 | |||||||
|
|
|||||||
Total
Investments — 105.4% |
324,696,792 | |||||||
Liabilities in Excess of Other Assets — (5.4)% |
|
(16,609,755 | ) | |||||
|
|
|||||||
Net Assets — 100.0% |
$ | 308,087,037 | ||||||
|
|
(a) |
All or a portion of this security is on loan. |
(b) |
Non-income producing security. |
(c) |
Affiliate of the Fund. |
(d) |
Annualized 7-day yield as of period end. |
48 |
2 0 2 3 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) August 31, 2023 |
iShares® MSCI Thailand ETF
|
(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 August 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | Value at 08/31/22 |
Purchases at Cost |
Proceeds from Sale |
Net Realized Gain (Loss) |
Change
in Unrealized Appreciation (Depreciation) |
Value at 08/31/23 |
Shares Held at 08/31/23 |
Income |
Capital Gain Distributions from Underlying Funds |
|||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares |
$ | 26,494,555 | $ | — | $ | (8,899,344 | )(a) | $ | 6,820 | $ | (7,247 | ) | $ | 17,594,784 | 17,589,507 | $ | 1,897,927 | (b) | $ | — | ||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares |
600,000 | 300,000 | (a) | — | — | — | 900,000 | 900,000 | 20,562 | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | 6,820 | $ | (7,247 | ) | $ | 18,494,784 | $ | 1,918,489 | $ | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(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. |
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 |
||||||||||||||||
MSCI Emerging Markets Index |
30 | 09/15/23 | $ | 1,469 | $ | (9,712 | ) | |||||||||
|
|
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) |
$ | — | $ | — | $ | 9,712 | $ | — | $ | — | $ | — | $ | 9,712 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, 2023, 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 |
$ | — | $ | — | $ | (187,614 | ) | $ | — | $ | — | $ | — | $ | (187,614 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | 28,683 | $ | — | $ | — | $ | — | $ | 28,683 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
||||
Average notional value of contracts — long |
$ | 1,067,626 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
S C H E D U L E O F I N V E S T M E N T S |
49 |
Schedule of Investments (continued) August 31, 2023 |
iShares® MSCI Thailand 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 | |||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 11,499,347 | $ | 294,702,661 | $ | — | $ | 306,202,008 | ||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
18,494,784 | — | — | 18,494,784 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 29,994,131 | $ | 294,702,661 | $ | — | $ | 324,696,792 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative Financial Instruments(a) |
||||||||||||||||
Liabilities |
||||||||||||||||
Equity Contracts |
$ | (9,712 | ) | $ | — | $ | — | $ | (9,712 | ) | ||||||
|
|
|
|
|
|
|
|
(a) |
Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
50 |
2 0 2 3 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 Assets and Liabilities
August 31, 2023
iShares MSCI Hong Kong |
iShares MSCI Japan ETF |
iShares MSCI Malaysia ETF |
iShares MSCI Pacific ex Japan ETF |
|||||||||||||
|
||||||||||||||||
ASSETS |
||||||||||||||||
Investments, at value — unaffiliated(a)(b) |
$ | 622,630,094 | $ | 118,932,529 | $ | 257,559,910 | $ | 1,827,069,125 | ||||||||
Investments, at value — affiliated(c) |
8,385,583 | 2,432,293 | 876,494 | 10,365,074 | ||||||||||||
Cash |
9,039 | 4,077 | 3,778 | 256,744 | ||||||||||||
Cash pledged for futures contracts |
324,500 | — | 8,000 | — | ||||||||||||
Foreign currency collateral pledged for futures contracts(d) |
— | 11,829 | — | 1,137,350 | ||||||||||||
Foreign currency, at value(e) |
91,352 | 81,573 | 87,207 | 5,879,849 | ||||||||||||
Receivables: |
||||||||||||||||
Investments sold |
3,757,774 | 1,634,265 | 2,607,343 | 5,317,050 | ||||||||||||
Securities lending income — affiliated |
308 | 2,620 | 1,586 | 4,250 | ||||||||||||
Swaps |
144 | — | — | — | ||||||||||||
Capital shares sold |
7,868,879 | — | — | — | ||||||||||||
Dividends — unaffiliated |
3,812,768 | 291,811 | 134,299 | 10,830,653 | ||||||||||||
Dividends — affiliated |
3,903 | 156 | 1,062 | 2,245 | ||||||||||||
Tax reclaims |
— | 640 | — | — | ||||||||||||
Variation margin on futures contracts |
— | 2,823 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
646,884,344 | 123,394,616 | 261,279,679 | 1,860,862,340 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
LIABILITIES |
||||||||||||||||
Cash received for futures contracts |
— | — | — | 47,938 | ||||||||||||
Collateral on securities loaned, at value |
7,695,583 | 2,382,536 | 609,655 | 9,575,819 | ||||||||||||
Payables: |
||||||||||||||||
Investments purchased |
10,536,036 | 1,629,829 | 2,717,451 | 7,806,959 | ||||||||||||
Investment advisory fees |
264,419 | 49,260 | 107,939 | 757,012 | ||||||||||||
Variation margin on futures contracts |
36,168 | — | 3,280 | 6,938 | ||||||||||||
Unrealized depreciation on OTC swaps |
20,319 | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities |
18,552,525 | 4,061,625 | 3,438,325 | 18,194,666 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Commitments and contingent liabilities |
||||||||||||||||
NET ASSETS |
$ | 628,331,819 | $ | 119,332,991 | $ | 257,841,354 | $ | 1,842,667,674 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
NET ASSETS CONSIST OF |
||||||||||||||||
Paid-in capital |
$ | 1,401,721,482 | $ | 146,410,384 | $ | 330,744,772 | $ | 2,747,338,627 | ||||||||
Accumulated loss |
(773,389,663 | ) | (27,077,393 | ) | (72,903,418 | ) | (904,670,953 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
NET ASSETS |
$ | 628,331,819 | $ | 119,332,991 | $ | 257,841,354 | $ | 1,842,667,674 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
NET ASSET VALUE |
||||||||||||||||
Shares outstanding |
34,575,000 | 1,700,000 | 12,225,000 | 44,700,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net asset value |
$ | 18.17 | $ | 70.20 | $ | 21.09 | $ | 41.22 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Shares authorized |
375 million | 500 million | 300 million | 1 billion | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Par value |
$ | 0.001 | $ | 0.001 | $ | 0.001 | $ | 0.001 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(a) Investments, at cost — unaffiliated |
$ | 852,331,838 | $ | 129,332,744 | $ | 178,208,165 | $ | 2,020,208,820 | ||||||||
(b) Securities loaned, at value |
$ | 7,408,428 | $ | 2,269,042 | $ | 582,242 | $ | 9,225,809 | ||||||||
(c) Investments, at cost — affiliated |
$ | 8,385,583 | $ | 2,432,400 | $ | 876,397 | $ | 10,361,716 | ||||||||
(d) Foreign currency collateral pledged, at cost |
$ | — | $ | 12,026 | $ | — | $ | 1,155,994 | ||||||||
(e) Foreign currency, at cost |
$ | 91,833 | $ | 81,704 | $ | 87,642 | $ | 5,856,213 |
F I N A N C I A L S T A T E M E N T S |
51 |
Statements of Assets and Liabilities (continued)
August 31, 2023
iShares MSCI Singapore ETF |
iShares MSCI Taiwan ETF |
iShares MSCI Thailand ETF |
||||||||||
|
||||||||||||
ASSETS |
||||||||||||
Investments, at value — unaffiliated(a)(b) |
$ | 485,281,698 | $ | 3,252,456,261 | $ | 306,202,008 | ||||||
Investments, at value — affiliated(c) |
3,205,173 | 464,914,976 | 18,494,784 | |||||||||
Cash |
2,416 | 4,221 | 1,543 | |||||||||
Cash pledged for futures contracts |
— | 1,448,000 | 44,000 | |||||||||
Foreign currency collateral pledged for futures contracts(d) |
281,180 | — | — | |||||||||
Foreign currency, at value(e) |
4,338,685 | 17,477,314 | 285,265 | |||||||||
Receivables: |
||||||||||||
Investments sold |
36,033,907 | 28,595,789 | 5,739,217 | |||||||||
Securities lending income — affiliated |
783 | 531,707 | 114,868 | |||||||||
Dividends — unaffiliated |
1,084,134 | 12,140,286 | 910,884 | |||||||||
Dividends — affiliated |
1,368 | 18,076 | 2,076 | |||||||||
Variation margin on futures contracts |
40,431 | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total assets |
530,269,775 | 3,777,586,630 | 331,794,645 | |||||||||
|
|
|
|
|
|
|||||||
LIABILITIES |
||||||||||||
Collateral on securities loaned, at value |
2,776,399 | 461,025,285 | 17,599,630 | |||||||||
Payables: |
||||||||||||
Investments purchased |
39,244,671 | 31,643,039 | 5,937,904 | |||||||||
Foreign taxes |
— | 878,810 | — | |||||||||
Investment advisory fees |
208,631 | 1,763,874 | 150,424 | |||||||||
Variation margin on futures contracts |
— | 284,061 | 19,650 | |||||||||
Unrealized depreciation on OTC swaps |
489 | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
42,230,190 | 495,595,069 | 23,707,608 | |||||||||
|
|
|
|
|
|
|||||||
Commitments and contingent liabilities |
||||||||||||
NET ASSETS |
$ | 488,039,585 | $ | 3,281,991,561 | $ | 308,087,037 | ||||||
|
|
|
|
|
|
|||||||
NET ASSETS CONSIST OF |
||||||||||||
Paid-in capital |
$ | 843,263,089 | $ | 1,035,539,895 | $ | 532,588,678 | ||||||
Accumulated earnings (loss) |
(355,223,504 | ) | 2,246,451,666 | (224,501,641 | ) | |||||||
|
|
|
|
|
|
|||||||
NET ASSETS |
$ | 488,039,585 | $ | 3,281,991,561 | $ | 308,087,037 | ||||||
|
|
|
|
|
|
|||||||
NET ASSETVALUE |
||||||||||||
Shares outstanding |
26,300,000 | 71,700,000 | 4,450,000 | |||||||||
|
|
|
|
|
|
|||||||
Net asset value |
$ | 18.56 | $ | 45.77 | $ | 69.23 | ||||||
|
|
|
|
|
|
|||||||
Shares authorized |
300 million | 900 million | 200 million | |||||||||
|
|
|
|
|
|
|||||||
Par value |
$ | 0.001 | $ | 0.001 | $ | 0.001 | ||||||
|
|
|
|
|
|
|||||||
(a) Investments, at cost — unaffiliated |
$ | 493,244,780 | $ | 1,212,245,545 | $ | 388,401,536 | ||||||
(b) Securities loaned, at value |
$ | 2,673,175 | $ | 425,774,082 | $ | 13,985,559 | ||||||
(c) Investments, at cost — affiliated |
$ | 3,204,966 | $ | 464,881,697 | $ | 18,487,970 | ||||||
(d) Foreign currency collateral pledged, at cost |
$ | 284,335 | $ | — | $ | — | ||||||
(e) Foreign currency, at cost |
$ | 4,326,883 | $ | 17,459,048 | $ | 285,181 |
See notes to financial statements.
52 |
2 0 2 3 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 |
Year Ended August 31, 2023
iShares MSCI Hong Kong ETF |
iShares MSCI Japan ETF |
iShares MSCI Malaysia ETF |
iShares MSCI Pacific ex Japan ETF |
|||||||||||||
|
||||||||||||||||
INVESTMENT INCOME |
||||||||||||||||
Dividends — unaffiliated |
$ | 27,681,636 | $ | 1,919,174 | $ | 9,266,824 | $ | 99,380,936 | ||||||||
Dividends — affiliated |
57,061 | 1,523 | 13,371 | 65,223 | ||||||||||||
Securities lending income — affiliated — net |
21,579 | 21,108 | 67,012 | 65,015 | ||||||||||||
Foreign taxes withheld |
— | (191,414 | ) | — | (862,146 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total investment income |
27,760,276 | 1,750,391 | 9,347,207 | 98,649,028 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
EXPENSES |
||||||||||||||||
Investment advisory |
3,715,240 | 383,936 | 1,171,857 | 9,921,715 | ||||||||||||
Commitment costs |
— | — | 2,810 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total expenses |
3,715,240 | 383,936 | 1,174,667 | 9,921,715 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net investment income |
24,045,036 | 1,366,455 | 8,172,540 | 88,727,313 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||||||
Net realized gain (loss) from: |
||||||||||||||||
Investments — unaffiliated |
(55,931,750 | ) | (1,361,485 | ) | (5,820,114 | ) | (43,879,416 | ) | ||||||||
Investments — affiliated |
2,575 | (138 | ) | 16,742 | 20,522 | |||||||||||
Capital gain distributions from underlying funds — affiliated |
1 | — | — | — | ||||||||||||
Foreign currency transactions |
30,542 | (34,731 | ) | (120,008 | ) | (1,487,176 | ) | |||||||||
Futures contracts |
(334,439 | ) | 138,546 | 25,649 | (1,600,536 | ) | ||||||||||
In-kind redemptions — unaffiliated(a) |
5,090,129 | — | — | 79,658,804 | ||||||||||||
Swaps |
1,172,830 | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(49,970,112 | ) | (1,257,808 | ) | (5,897,731 | ) | 32,712,198 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||
Investments — unaffiliated |
(35,019,286 | ) | 9,911,639 | (10,152,348 | ) | (70,778,183 | ) | |||||||||
Investments — affiliated |
— | (107 | ) | 97 | (10,027 | ) | ||||||||||
Foreign currency translations |
(183 | ) | 1,784 | 4,111 | 159,414 | |||||||||||
Futures contracts |
52,282 | 3,931 | (3,772 | ) | 255,673 | |||||||||||
Swaps |
(20,319 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
(34,987,506 | ) | 9,917,247 | (10,151,912 | ) | (70,373,123 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net realized and unrealized gain (loss) |
(84,957,618 | ) | 8,659,439 | (16,049,643 | ) | (37,660,925 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
$ | (60,912,582 | ) | $ | 10,025,894 | $ | (7,877,103 | ) | $ | 51,066,388 | ||||||
|
|
|
|
|
|
|
|
(a) |
See Note 2 of the Notes to Financial Statements. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S |
53 |
Statements of Operations (continued)
Year Ended August 31, 2023
iShares MSCI Singapore ETF |
iShares MSCI Taiwan ETF |
iShares MSCI Thailand ETF |
||||||||||
|
||||||||||||
INVESTMENT INCOME |
||||||||||||
Dividends — unaffiliated |
$ | 24,843,704 | $ | 151,470,145 | $ | 9,298,149 | ||||||
Dividends — affiliated |
23,002 | 402,396 | 20,562 | |||||||||
Securities lending income — affiliated — net(a) |
95,469 | 5,594,885 | 1,897,927 | |||||||||
Foreign taxes withheld |
(223,096 | ) | (24,152,174 | ) | (914,411 | ) | ||||||
Other foreign taxes |
— | (1,925,353 | ) | — | ||||||||
|
|
|
|
|
|
|||||||
Total investment income |
24,739,079 | 131,389,899 | 10,302,227 | |||||||||
|
|
|
|
|
|
|||||||
EXPENSES |
||||||||||||
Investment advisory |
2,619,243 | 22,262,086 | 1,871,362 | |||||||||
Commitment costs |
— | 44,517 | — | |||||||||
|
|
|
|
|
|
|||||||
Total expenses |
2,619,243 | 22,306,603 | 1,871,362 | |||||||||
|
|
|
|
|
|
|||||||
Net investment income |
22,119,836 | 109,083,296 | 8,430,865 | |||||||||
|
|
|
|
|
|
|||||||
REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||
Net realized gain (loss) from: |
||||||||||||
Investments — unaffiliated |
(89,075,479 | ) | 331,884,553 | (16,900,258 | ) | |||||||
Investments — affiliated |
13,219 | 135,548 | 6,820 | |||||||||
Capital gain distributions from underlying funds — affiliated |
— | 4 | — | |||||||||
Forward foreign currency exchange contracts |
— | (428 | ) | — | ||||||||
Foreign currency transactions |
(42,333 | ) | (3,292,180 | ) | 26,814 | |||||||
Futures contracts |
(649,848 | ) | 1,615,333 | (187,614 | ) | |||||||
In-kind redemptions — unaffiliated(b) |
15,221,748 | — | (8,410,278 | ) | ||||||||
Swaps |
597 | — | — | |||||||||
|
|
|
|
|
|
|||||||
(74,532,096 | ) | 330,342,830 | (25,464,516 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net change in unrealized appreciation (depreciation) on: |
||||||||||||
Investments — unaffiliated |
88,744,336 | (157,993,648 | ) | 11,069,895 | ||||||||
Investments — affiliated |
(18,346 | ) | (92,765 | ) | (7,247 | ) | ||||||
Foreign currency translations |
42,076 | 298,694 | 26,766 | |||||||||
Futures contracts |
103,562 | 587,081 | 28,683 | |||||||||
Swaps |
(489 | ) | — | — | ||||||||
|
|
|
|
|
|
|||||||
88,871,139 | (157,200,638 | ) | 11,118,097 | |||||||||
|
|
|
|
|
|
|||||||
Net realized and unrealized gain (loss) |
14,339,043 | 173,142,192 | (14,346,419 | ) | ||||||||
|
|
|
|
|
|
|||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 36,458,879 | $ | 282,225,488 | $ | (5,915,554 | ) | |||||
|
|
|
|
|
|
|||||||
(a) Net of securities lending income tax paid of |
$ | — | $ | 1,367,655 | $ | — | ||||||
(b) See Note 2 of the Notes to Financial Statements. |
See notes to financial statements.
54 |
2 0 2 3 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 Changes in Net Assets
iShares MSCI Hong Kong ETF |
iShares MSCI Japan Small-Cap ETF |
|||||||||||||||||||
Year Ended 08/31/23 |
Year Ended 08/31/22 |
Year Ended 08/31/23 |
Year Ended 08/31/22 |
|||||||||||||||||
|
||||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||||||||||
OPERATIONS |
||||||||||||||||||||
Net investment income |
$ | 24,045,036 | $ | 23,509,272 | $ | 1,366,455 | $ | 1,326,492 | ||||||||||||
Net realized loss |
(49,970,112 | ) | (39,866,499 | ) | (1,257,808 | ) | (4,386,210 | ) | ||||||||||||
Net change in unrealized appreciation (depreciation) |
(34,987,506 | ) | (165,567,467 | ) | 9,917,247 | (15,017,720 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) in net assets resulting from operations |
(60,912,582 | ) | (181,924,694 | ) | 10,025,894 | (18,077,438 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) |
||||||||||||||||||||
Decrease in net assets resulting from distributions to shareholders |
(22,175,367 | ) | (22,238,487 | ) | (700,151 | ) | (1,582,668 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
CAPITAL SHARE TRANSACTIONS |
||||||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions |
(17,339,573 | ) | (90,850,529 | ) | 47,638,207 | 8,692,269 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
NET ASSETS |
||||||||||||||||||||
Total increase (decrease) in net assets |
(100,427,522 | ) | (295,013,710 | ) | 56,963,950 | (10,967,837 | ) | |||||||||||||
Beginning of year |
728,759,341 | 1,023,773,051 | 62,369,041 | 73,336,878 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
End of year |
$ | 628,331,819 | $ | 728,759,341 | $ | 119,332,991 | $ | 62,369,041 | ||||||||||||
|
|
|
|
|
|
|
|
(a) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S |
55 |
Statements of Changes in Net Assets (continued)
iShares MSCI Malaysia ETF |
iShares MSCI Pacific ex Japan ETF |
|||||||||||||||||||
Year Ended 08/31/23 |
Year Ended 08/31/22 |
Year Ended 08/31/23 |
Year Ended 08/31/22 |
|||||||||||||||||
|
||||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||||||||||
OPERATIONS |
||||||||||||||||||||
Net investment income |
$ | 8,172,540 | $ | 9,403,534 | $ | 88,727,313 | $ | 83,246,279 | ||||||||||||
Net realized gain (loss) |
(5,897,731 | ) | (18,111,963 | ) | 32,712,198 | (96,016,513 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) |
(10,151,912 | ) | (26,003,838 | ) | (70,373,123 | ) | (319,988,865 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) in net assets resulting from operations |
(7,877,103 | ) | (34,712,267 | ) | 51,066,388 | (332,759,099 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) |
||||||||||||||||||||
Decrease in net assets resulting from distributions to shareholders |
(6,188,831 | ) | (12,037,624 | ) | (73,694,870 | ) | (133,885,979 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
CAPITAL SHARE TRANSACTIONS |
||||||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions |
37,520,108 | 15,838,006 | (269,711,578 | ) | 160,889,087 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
NET ASSETS |
||||||||||||||||||||
Total increase (decrease) in net assets |
23,454,174 | (30,911,885 | ) | (292,340,060 | ) | (305,755,991 | ) | |||||||||||||
Beginning of year |
234,387,180 | 265,299,065 | 2,135,007,734 | 2,440,763,725 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
End of year |
$ | 257,841,354 | $ | 234,387,180 | $ | 1,842,667,674 | $ | 2,135,007,734 | ||||||||||||
|
|
|
|
|
|
|
|
(a) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
56 |
2 0 2 3 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 Changes in Net Assets (continued)
iShares MSCI Singapore ETF |
iShares MSCI Taiwan ETF |
|||||||||||||||
Year Ended 08/31/23 |
Year Ended 08/31/22 |
Year Ended 08/31/23 |
Year Ended 08/31/22 |
|||||||||||||
|
||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||||||
OPERATIONS |
||||||||||||||||
Net investment income |
$ | 22,119,836 | $ | 19,353,471 | $ | 109,083,296 | $ | 164,859,796 | ||||||||
Net realized gain (loss) |
(74,532,096 | ) | (4,063,733 | ) | 330,342,830 | 479,013,440 | ||||||||||
Net change in unrealized appreciation (depreciation) |
88,871,139 | (119,586,079 | ) | (157,200,638 | ) | (1,899,409,530 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase (decrease) in net assets resulting from operations |
36,458,879 | (104,296,341 | ) | 282,225,488 | (1,255,536,294 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) |
||||||||||||||||
Decrease in net assets resulting from distributions to shareholders |
(23,446,994 | ) | (34,423,217 | ) | (610,656,019 | ) | (190,635,508 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
CAPITAL SHARE TRANSACTIONS |
||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions |
(78,461,229 | ) | 73,970,467 | (139,729,366 | ) | (2,358,740,941 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
NET ASSETS |
||||||||||||||||
Total decrease in net assets |
(65,449,344 | ) | (64,749,091 | ) | (468,159,897 | ) | (3,804,912,743 | ) | ||||||||
Beginning of year |
553,488,929 | 618,238,020 | 3,750,151,458 | 7,555,064,201 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
End of year |
$ | 488,039,585 | $ | 553,488,929 | $ | 3,281,991,561 | $ | 3,750,151,458 | ||||||||
|
|
|
|
|
|
|
|
(a) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S |
57 |
Statements of Changes in Net Assets (continued)
iShares MSCI Thailand ETF |
||||||||
Year Ended 08/31/23 |
Year Ended 08/31/22 |
|||||||
|
||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||
OPERATIONS |
||||||||
Net investment income |
$ | 8,430,865 | $ | 10,505,169 | ||||
Net realized loss |
(25,464,516 | ) | (8,377,412 | ) | ||||
Net change in unrealized appreciation (depreciation) |
11,118,097 | (42,097,798 | ) | |||||
|
|
|
|
|||||
Net decrease in net assets resulting from operations |
(5,915,554 | ) | (39,970,041 | ) | ||||
|
|
|
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS(a) |
||||||||
Decrease in net assets resulting from distributions to shareholders |
(7,677,615 | ) | (12,119,104 | ) | ||||
|
|
|
|
|||||
CAPITAL SHARE TRANSACTIONS |
||||||||
Net decrease in net assets derived from capital share transactions |
(12,854,550 | ) | (25,114,292 | ) | ||||
|
|
|
|
|||||
NET ASSETS |
||||||||
Total decrease in net assets |
(26,447,719 | ) | (77,203,437 | ) | ||||
Beginning of year |
334,534,756 | 411,738,193 | ||||||
|
|
|
|
|||||
End of year |
$ | 308,087,037 | $ | 334,534,756 | ||||
|
|
|
|
(a) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
58 |
2 0 2 3 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 |
(For a share outstanding throughout each period)
iShares MSCI Hong Kong ETF | ||||||||||||||||||||
Year Ended 08/31/23 |
Year Ended 08/31/22 |
Year Ended 08/31/21 |
Year Ended 08/31/20 |
Year Ended 08/31/19 |
||||||||||||||||
|
||||||||||||||||||||
Net asset value, beginning of year |
$ | 20.46 | $ | 25.80 | $ | 22.91 | $ | 23.00 | $ | 24.18 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income(a) |
0.65 | 0.62 | 0.57 | 0.54 | 0.62 | |||||||||||||||
Net realized and unrealized gain (loss)(b) |
(2.35 | ) | (5.37 | ) | 2.92 | (0.01 | ) | (1.08 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) from investment operations |
(1.70 | ) | (4.75 | ) | 3.49 | 0.53 | (0.46 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Distributions from net investment income(c) |
(0.59 | ) | (0.59 | ) | (0.60 | ) | (0.62 | ) | (0.72 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net asset value, end of year |
$ | 18.17 | $ | 20.46 | $ | 25.80 | $ | 22.91 | $ | 23.00 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Return(d) |
||||||||||||||||||||
Based on net asset value |
(8.56 | )% | (18.61 | )% | 15.24 | % | 2.46 | % | (2.00 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ratios to Average Net Assets(e) |
||||||||||||||||||||
Total expenses |
0.50 | % | 0.50 | % | 0.50 | % | 0.51 | % | 0.49 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income |
3.25 | % | 2.70 | % | 2.26 | % | 2.37 | % | 2.52 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Supplemental Data |
||||||||||||||||||||
Net assets, end of year (000) |
$ | 628,332 | $ | 728,759 | $ | 1,023,773 | $ | 1,328,281 | $ | 1,424,663 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Portfolio turnover rate(f) |
20 | % | 8 | % | 21 | % | 16 | % | 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) |
Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(f) |
Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S |
59 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares MSCI Japan Small-Cap ETF | ||||||||||||||||||||
Year Ended 08/31/23 |
Year Ended 08/31/22 |
Year Ended 08/31/21 |
Year Ended 08/31/20 |
Year Ended 08/31/19 |
||||||||||||||||
|
||||||||||||||||||||
Net asset value, beginning of year |
$ | 62.37 | $ | 81.49 | $ | 69.91 | $ | 68.75 | $ | 77.00 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income(a) |
1.18 | 1.33 | 1.04 | 1.21 | 1.37 | |||||||||||||||
Net realized and unrealized gain (loss)(b) |
7.15 | (18.87 | ) | 11.13 | 2.78 | (7.90 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) from investment operations |
8.33 | (17.54 | ) | 12.17 | 3.99 | (6.53 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Distributions from net investment income(c) |
(0.50 | ) | (1.58 | ) | (0.59 | ) | (2.83 | ) | (1.72 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net asset value, end of year |
$ | 70.20 | $ | 62.37 | $ | 81.49 | $ | 69.91 | $ | 68.75 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Return(d) |
||||||||||||||||||||
Based on net asset value |
13.37 | % | (21.70 | )% | 17.41 | % | 5.72 | % | (8.42 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ratios to Average Net Assets(e) |
||||||||||||||||||||
Total expenses |
0.50 | % | 0.50 | % | 0.50 | % | 0.51 | % | 0.49 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income |
1.78 | % | 1.87 | % | 1.33 | % | 1.75 | % | 1.94 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Supplemental Data |
||||||||||||||||||||
Net assets, end of year (000) |
$ | 119,333 | $ | 62,369 | $ | 73,337 | $ | 62,921 | $ | 109,995 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Portfolio turnover rate(f) |
8 | % | 16 | % | 21 | % | 10 | % | 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) |
Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(f) |
Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
60 |
2 0 2 3 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 (continued)
(For a share outstanding throughout each period)
iShares MSCI Malaysia ETF | ||||||||||||||||||||||
|
Year Ended 08/31/23 |
|
|
Year Ended 08/31/22 |
|
|
Year Ended 08/31/21 |
|
|
Year Ended 08/31/20 |
|
|
Year Ended 08/31/19 |
| ||||||||
|
||||||||||||||||||||||
Net asset value, beginning of year |
$ | 22.48 | $ | 26.60 | $ | 26.51 | $ | 28.02 | $ | 32.87 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net investment income(a) |
0.76 | 0.90 | 0.98 | 0.76 | 1.03 | |||||||||||||||||
Net realized and unrealized loss(b) |
(1.57 | ) | (3.77 | ) | (0.05 | ) | (1.41 | ) | (4.85 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) from investment operations |
(0.81 | ) | (2.87 | ) | 0.93 | (0.65 | ) | (3.82 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Distributions from net investment income(c) |
(0.58 | ) | (1.25 | ) | (0.84 | ) | (0.86 | ) | (1.03 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net asset value, end of year |
$ | 21.09 | $ | 22.48 | $ | 26.60 | $ | 26.51 | $ | 28.02 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Return(d) |
||||||||||||||||||||||
Based on net asset value |
(3.56 | )% | (10.92 | )% | 3.51 | % | (2.27 | )% | (11.69 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ratios to Average Net Assets(e) |
||||||||||||||||||||||
Total expenses |
0.50 | % | 0.50 | % | 0.50 | % | 0.51 | % | 0.49 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net investment income |
3.50 | % | 3.68 | % | 3.62 | % | 2.86 | % | 3.41 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Supplemental Data |
||||||||||||||||||||||
Net assets, end of year (000) |
$ | 257,841 | $ | 234,387 | $ | 265,299 | $ | 341,922 | $ | 390,889 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Portfolio turnover rate(f) |
12 | %(g) | 48 | %(g) | 28 | %(g) | 58 | %(g) | 48 | %(g) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
||||||||||||||||||||||
(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) Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
| |||||||||||||||||||||
(f) Portfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash in U.S. dollars (“cash creations”). |
| |||||||||||||||||||||
(g) Portfolio turnover rate excluding cash creations was as follows: |
8 | % | 11 | % | 7 | % | 16 | % | 9 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S |
61 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares MSCI Pacific ex Japan ETF | ||||||||||||||||||||
Year Ended 08/31/23 |
Year Ended 08/31/22 |
Year Ended 08/31/21 |
Year Ended 08/31/20 |
Year Ended 08/31/19 |
||||||||||||||||
|
||||||||||||||||||||
Net asset value, beginning of year |
$ | 41.86 | $ | 51.17 | $ | 42.98 | $ | 44.17 | $ | 46.02 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income(a) |
1.82 | 1.69 | 1.30 | 1.29 | 1.74 | |||||||||||||||
Net realized and unrealized gain (loss)(b) |
(0.94 | ) | (8.28 | ) | 8.06 | (0.98 | ) | (1.58 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) from investment operations |
0.88 | (6.59 | ) | 9.36 | 0.31 | 0.16 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Distributions from net investment income(c) |
(1.52 | ) | (2.72 | ) | (1.17 | ) | (1.50 | ) | (2.01 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net asset value, end of year |
$ | 41.22 | $ | 41.86 | $ | 51.17 | $ | 42.98 | $ | 44.17 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Return(d) |
||||||||||||||||||||
Based on net asset value |
2.00 | % | (13.22 | )% | 21.82 | % | 0.72 | % | 0.56 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ratios to Average Net Assets(e) |
||||||||||||||||||||
Total expenses |
0.48 | % | 0.47 | % | 0.47 | % | 0.48 | % | 0.48 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income |
4.28 | % | 3.61 | % | 2.66 | % | 3.04 | % | 3.89 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Supplemental Data |
||||||||||||||||||||
Net assets, end of year (000) |
$ | 1,842,668 | $ | 2,135,008 | $ | 2,440,764 | $ | 1,882,380 | $ | 2,266,116 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Portfolio turnover rate(f) |
7 | % | 15 | % | 9 | % | 8 | % | 7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
(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) |
Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(f) |
Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
62 |
2 0 2 3 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 (continued)
(For a share outstanding throughout each period)
iShares MSCI Singapore ETF | ||||||||||||||||||||
|
Year Ended 08/31/23 |
|
Year Ended 08/31/22 |
|
Year Ended 08/31/21 |
|
Year Ended 08/31/20 |
|
Year Ended 08/31/19 |
|||||||||||
|
||||||||||||||||||||
Net asset value, beginning of year |
$ | 18.21 | $ | 23.03 | $ | 19.12 | $ | 22.83 | $ | 23.84 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income(a) |
0.80 | 0.67 | 0.63 | 0.76 | 0.91 | |||||||||||||||
Net realized and unrealized gain (loss)(b) |
0.44 | (4.21 | ) | 3.92 | (3.57 | ) | (1.02 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) from investment operations |
1.24 | (3.54 | ) | 4.55 | (2.81 | ) | (0.11 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Distributions from net investment income(c) |
(0.89 | ) | (1.28 | ) | (0.64 | ) | (0.90 | ) | (0.90 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net asset value, end of year |
$ | 18.56 | $ | 18.21 | $ | 23.03 | $ | 19.12 | $ | 22.83 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Return(d) |
||||||||||||||||||||
Based on net asset value |
6.84 | % | (15.92 | )% | 23.91 | % | (12.84 | )% | (0.41 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ratios to Average Net Assets(e) |
||||||||||||||||||||
Total expenses |
0.50 | % | 0.50 | % | 0.50 | % | 0.51 | % | 0.50 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income |
4.25 | % | 3.25 | % | 2.87 | % | 3.59 | % | 3.86 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Supplemental Data |
||||||||||||||||||||
Net assets, end of year (000) |
$ | 488,040 | $ | 553,489 | $ | 618,238 | $ | 525,733 | $ | 513,651 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Portfolio turnover rate(f) |
25 | % | 36 | % | 17 | % | 22 | % | 9 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
(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) |
Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(f) |
Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S |
63 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares MSCI Taiwan ETF | ||||||||||||||||||||||
|
Year Ended 08/31/23 |
|
Year Ended 08/31/22 |
|
Year Ended 08/31/21 |
|
Year Ended 08/31/20 |
|
Year Ended 08/31/19 |
|||||||||||||
|
||||||||||||||||||||||
Net asset value, beginning of year |
$ | 50.47 | $ | 64.79 | $ | 44.08 | $ | 34.94 | $ | 37.91 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net investment income(a) |
1.31 | 1.60 | 1.22 | 1.05 | 0.92 | |||||||||||||||||
Net realized and unrealized gain (loss)(b) |
1.55 | (14.16 | ) | 20.46 | 9.11 | (2.89 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) from investment operations |
2.86 | (12.56 | ) | 21.68 | 10.16 | (1.97 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Distributions(c) |
||||||||||||||||||||||
From net investment income |
(2.37 | ) | (1.39 | ) | (0.97 | ) | (1.02 | ) | (1.00 | ) | ||||||||||||
From net realized gain |
(5.19 | ) | (0.37 | ) | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total distributions |
(7.56 | ) | (1.76 | ) | (0.97 | ) | (1.02 | ) | (1.00 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net asset value, end of year |
$ | 45.77 | $ | 50.47 | $ | 64.79 | $ | 44.08 | $ | 34.94 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Return(d) |
||||||||||||||||||||||
Based on net asset value |
7.17 | % | (19.96 | )% | 49.79 | % | 29.34 | % | (4.92 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ratios to Average Net Assets(e) |
||||||||||||||||||||||
Total expenses |
0.59 | % | 0.58 | % | 0.57 | % | 0.59 | % | 0.59 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net investment income |
2.89 | % | 2.65 | % | 2.16 | % | 2.68 | % | 2.70 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Supplemental Data |
||||||||||||||||||||||
Net assets, end of year (000) |
$ | 3,281,992 | $ | 3,750,151 | $ | 7,555,064 | $ | 4,231,455 | $ | 2,662,495 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Portfolio turnover rate(f) |
34 | %(g) | 12 | %(g) | 12 | % | 15 | % | 7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
||||||||||||||||||||||
(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) Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
| |||||||||||||||||||||
(f) Portfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash in U.S. dollars (“cash creations”). |
| |||||||||||||||||||||
(g) Portfolio turnover rate excluding cash creations was as follows: |
8 | % | 12 | % | 12 | % | 14 | % | 6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
See notes to financial statements.
64 |
2 0 2 3 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 (continued)
(For a share outstanding throughout each period)
iShares MSCI Thailand ETF | ||||||||||||||||||||
Year Ended 08/31/23 |
Year Ended 08/31/22 |
Year Ended 08/31/21 |
Year Ended 08/31/20 |
Year Ended 08/31/19 |
||||||||||||||||
|
||||||||||||||||||||
Net asset value, beginning of year |
$ | 70.43 | $ | 79.95 | $ | 68.25 | $ | 90.53 | $ | 90.80 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income(a) |
1.88 | 2.00 | 1.70 | 1.97 | 2.10 | |||||||||||||||
Net realized and unrealized gain (loss)(b) |
(1.29 | ) | (9.17 | ) | 11.73 | (22.24 | ) | (0.33 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) from investment operations |
0.59 | (7.17 | ) | 13.43 | (20.27 | ) | 1.77 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Distributions from net investment income(c) |
(1.79 | ) | (2.35 | ) | (1.73 | ) | (2.01 | ) | (2.04 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net asset value, end of year |
$ | 69.23 | $ | 70.43 | $ | 79.95 | $ | 68.25 | $ | 90.53 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Return(d) |
||||||||||||||||||||
Based on net asset value |
0.86 | % | (9.07 | )% | 19.65 | % | (22.57 | )% | 2.03 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ratios to Average Net Assets(e) |
||||||||||||||||||||
Total expenses |
0.59 | % | 0.58 | % | 0.57 | % | 0.59 | % | 0.59 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income |
2.66 | % | 2.67 | % | 2.26 | % | 2.57 | % | 2.36 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Supplemental Data |
||||||||||||||||||||
Net assets, end of year (000) |
$ | 308,087 | $ | 334,535 | $ | 411,738 | $ | 436,789 | $ | 466,237 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Portfolio turnover rate(f) |
11 | % | 9 | % | 17 | % | 11 | % | 17 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
(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) |
Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(f) |
Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S |
65 |
1. |
ORGANIZATION |
iShares, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Company is organized as a Maryland corporation 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 |
|||
MSCI Hong Kong |
Non-diversified | |||
MSCI Japan Small-Cap |
Diversified | |||
MSCI Malaysia |
Non-diversified | |||
MSCI Pacific ex Japan |
Diversified | |||
MSCI Singapore |
Non-diversified | |||
MSCI Taiwan |
Non-diversified | |||
MSCI Thailand |
Non-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. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Funds are informed of the ex-dividend date. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. 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.
Foreign Currency Translation: Each Fund’s books and records are maintained in U.S. dollars. Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using prevailing market rates as quoted by one or more data service providers. Purchases and sales of investments are recorded at the rates of exchange prevailing on the respective dates of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the investments denominated in that currency will lose value; the opposite effect occurs if the U.S. dollar falls in relative value.
Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of investments for financial reporting purposes. Accordingly, the effects of changes in exchange rates on investments are not segregated in the Statements of Operations from the effects of changes in market prices of those investments, but are included as a component of net realized and unrealized gain (loss) from investments. Each Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.
Foreign Taxes: The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which each Fund invests. These foreign taxes, if any, are paid by each Fund and are reflected in its Statements of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “Other foreign taxes”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of August 31, 2023, if any, are disclosed in the Statements of Assets and Liabilities.
The Funds file withholding tax reclaims in certain jurisdictions to recover a portion of amounts previously withheld. The Funds may record a reclaim receivable based on collectability, which includes factors such as the jurisdiction’s applicable laws, payment history and market convention. The Statements of Operations includes tax reclaims recorded as well as professional and other fees, if any, associated with recovery of foreign withholding taxes.
Collateralization: If required by an exchange or counterparty agreement, the Funds may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments.
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.
66 |
2 0 2 3 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 |
Notes to Financial Statements (continued)
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.
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. The Board of Directors of the Company (the “Board”) of each Fund has approved the designation of BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, as the valuation designee for each Fund. Each Fund determines the fair values of its financial instruments using various independent dealers or pricing services under BFA’s policies. 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 BFA’s policies and procedures as reflecting fair value. BFA has formed a committee (the “Valuation Committee”) to develop pricing policies and procedures and to oversee the pricing function for all financial instruments, with assistance from other BlackRock pricing committees.
Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Fund’s assets and liabilities:
• |
Equity investments traded on a recognized securities exchange are valued at that day’s official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are 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. |
• |
Futures contracts are valued based on that day’s last reported settlement or trade price on the exchange where the contract is traded. |
• |
Forward foreign currency exchange contracts are valued at the mean between the bid and ask prices and are determined as of the close of trading on the New York Stock Exchange (“NYSE”) based on that day’s prevailing forward exchange rate for the underlying currencies. |
• |
Swap agreements are valued utilizing quotes received daily by independent pricing services or through brokers, which are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows, trades and values of the underlying reference instruments. |
Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the New York Stock Exchange (“NYSE”). Each business day, the Funds use current market factors supplied by independent pricing services to value certain foreign instruments (“Systematic Fair Value Price”). The Systematic Fair Value Price is designed to value such foreign securities at fair value as of the close of trading on the NYSE, which follows the close of the local markets.
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 Valuation Committee, in accordance with BFA’s policies and procedures as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the 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 Valuation Committee 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 Valuation Committee deems relevant and consistent with the principles of fair value measurement.
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 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
N 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 |
67 |
Notes to Financial Statements (continued)
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 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 BFA, 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.
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 |
|
Securities Loaned at Value |
|
|
Cash Collateral Received |
(a) |
|
Non-Cash Collateral Received, at Fair Value |
(a) |
|
Net Amount |
| ||||
|
||||||||||||||||
MSCI Hong Kong |
||||||||||||||||
BofA Securities, Inc. |
$ | 101,408 | $ | (101,408 | ) | $ | — | $ | — | |||||||
Goldman Sachs & Co. |
7,307,020 | (7,307,020 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 7,408,428 | $ | (7,408,428 | ) | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
MSCI Japan Small-Cap |
||||||||||||||||
Barclays Capital, Inc. |
$ | 29,071 | $ | (29,071 | ) | $ | — | $ | — | |||||||
BNP Paribas SA |
5,469 | (5,469 | ) | — | — | |||||||||||
BofA Securities, Inc. |
270,374 | (270,374 | ) | — | — | |||||||||||
Citigroup Global Markets, Inc. |
383,705 | (383,705 | ) | — | — | |||||||||||
Goldman Sachs & Co. LLC |
479,376 | (479,376 | ) | — | — | |||||||||||
HSBC Bank PLC |
83,266 | (83,266 | ) | — | — | |||||||||||
J.P. Morgan Securities LLC |
699,735 | (699,735 | ) | — | — | |||||||||||
Morgan Stanley & Co. LLC |
54,501 | (54,501 | ) | — | — | |||||||||||
SG Americas Securities LLC |
9,194 | (9,194 | ) | — | — | |||||||||||
State Street Bank & Trust Co. |
132,528 | (132,528 | ) | — | — | |||||||||||
UBS AG |
121,823 | (121,823 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 2,269,042 | $ | (2,269,042 | ) | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
MSCI Malaysia |
||||||||||||||||
Macquarie Bank Ltd. |
$ | 40,621 | $ | (40,621 | ) | $ | — | $ | — | |||||||
Morgan Stanley |
32,074 | (32,074 | ) | — | — | |||||||||||
UBS AG |
509,547 | (509,547 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 582,242 | $ | (582,242 | ) | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
68 |
2 0 2 3 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 |
Notes to Financial Statements (continued)
|
||||||||||||||||
iShares ETF and Counterparty |
|
Securities Loaned at Value |
|
|
Cash Collateral Received |
(a) |
|
Non-Cash Collateral Received, at Fair Value |
(a) |
Net Amount | ||||||
|
||||||||||||||||
MSCI Pacific ex Japan |
||||||||||||||||
BNP Paribas SA |
$ | 3,468,720 | $ | (3,468,720 | ) | $ | — | $ | — | |||||||
Goldman Sachs & Co. |
4,172 | (4,172 | ) | — | — | |||||||||||
HSBC Bank PLC |
25,613 | (25,613 | ) | — | — | |||||||||||
Morgan Stanley |
1,677,451 | (1,677,451 | ) | — | — | |||||||||||
Toronto-Dominion Bank |
4,049,853 | (4,049,853 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 9,225,809 | $ | (9,225,809 | ) | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
MSCI Singapore |
||||||||||||||||
Barclays Bank PLC |
$ | 617,132 | $ | (617,132 | ) | $ | — | $ | — | |||||||
HSBC BANK PLC |
988,080 | (988,080 | ) | — | — | |||||||||||
J.P. Morgan Securities LLC |
1,046,114 | (1,046,114 | ) | — | — | |||||||||||
Morgan Stanley |
21,849 | (21,849 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 2,673,175 | $ | (2,673,175 | ) | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
MSCI Taiwan |
||||||||||||||||
Citigroup Global Markets Ltd. |
$ | 18,451,242 | $ | (18,451,242 | ) | $ | — | $ | — | |||||||
Goldman Sachs International |
58,688,346 | (58,688,346 | ) | — | — | |||||||||||
J.P. Morgan Securities PLC |
120,387,133 | (120,387,133 | ) | — | — | |||||||||||
Macquarie Bank Ltd. |
21,875,674 | (21,875,674 | ) | — | — | |||||||||||
Morgan Stanley |
206,371,687 | (206,371,687 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 425,774,082 | $ | (425,774,082 | ) | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
MSCI Thailand |
||||||||||||||||
Barclays Capital, Inc. |
$ | 1,812,452 | $ | (1,812,452 | ) | $ | — | $ | — | |||||||
BofA Securities, Inc. |
269,396 | (269,396 | ) | — | — | |||||||||||
Citigroup Global Markets, Inc. |
46,801 | (46,801 | ) | — | — | |||||||||||
Goldman Sachs & Co. LLC |
73,873 | (73,873 | ) | — | — | |||||||||||
J.P. Morgan Securities LLC |
5,216,148 | (5,216,148 | ) | — | — | |||||||||||
Morgan Stanley |
6,207,459 | (6,207,459 | ) | — | — | |||||||||||
SG Americas Securities LLC |
49,465 | (49,465 | ) | — | — | |||||||||||
UBS AG |
309,965 | (309,965 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 13,985,559 | $ | (13,985,559 | ) | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
(a) |
Collateral received, if any, 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 Statements 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. |
DERIVATIVE FINANCIAL INSTRUMENTS |
Futures Contracts: Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk) and changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).
Futures contracts are exchange-traded agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement date. Upon entering into a futures contract, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Statements of Assets and Liabilities.
Securities deposited as initial margin are designated in the Schedule of Investments and cash deposited, if any, are shown as cash pledged for futures contracts in the Statements of Assets and Liabilities. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the notional amount of the contract at the time it was opened and the notional amount at the time it was closed. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest rates, foreign currency exchange rates or underlying assets.
N 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 |
69 |
Notes to Financial Statements (continued)
Forward Foreign Currency Exchange Contracts: Forward foreign currency exchange contracts are entered into to gain or reduce exposure to foreign currencies (foreign currency exchange rate risk).
A forward foreign currency exchange contract is an agreement between two parties to buy and sell a currency at a set exchange rate on a specified date. These contracts help to manage the overall exposure to the currencies in which some of the investments held by the Funds are denominated and in some cases, may be used to obtain exposure to a particular market.The contracts are traded over-the-counter (“OTC”) and not on an organized exchange.
The contract is marked-to-market daily and the change in market value is recorded as unrealized appreciation or depreciation in the Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the value at the time it was opened and the value at the time it was closed. Non-deliverable forward foreign currency exchange contracts are settled with the counterparty in cash without the delivery of foreign currency. The use of forward foreign currency exchange contracts involves the risk that the value of a contract changes unfavorably due to movements in the value of the referenced foreign currencies, and such value may exceed the amount(s) reflected in the Statements of Assets and Liabilities. Cash amounts pledged for forward foreign currency exchange contracts are considered restricted and are included in cash pledged as collateral for OTC derivatives in the Statements of Assets and Liabilities. A fund’s risk of loss from counterparty credit risk on OTC derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by the Fund.
Swaps: Swap contracts are entered into to manage exposure to issuers, markets and securities. Such contracts are agreements between the Funds and a counterparty to make periodic net payments on a specified notional amount or a net payment upon termination. Swap agreements are privately negotiated in the OTC market and may be entered into as a bilateral contract (“OTC swaps”) or centrally cleared (“centrally cleared swaps”).
For OTC swaps, any upfront premiums paid and any upfront fees received are shown as swap premiums paid and swap premiums received, respectively, in the Statements of Assets and Liabilities and amortized over the term of the contract. The daily fluctuation in market value is recorded as unrealized appreciation (depreciation) on OTC Swaps in the Statements of Assets and Liabilities. Payments received or paid are recorded in the Statements of Operations as realized gains or losses, respectively. When an OTC swap is terminated, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the proceeds from (or cost of) the closing transaction and the Funds’ basis in the contract, if any. Generally, the basis of the contract is the premium received or paid.
Total return swaps are entered into by the iShares MSCI Hong Kong ETF and iShares MSCI Singapore ETF to obtain exposure to a security or market without owning such security or investing directly in such market or to exchange the risk/return of one security or market (e.g., fixed-income) with another security or market (e.g., equity or commodity prices) (equity risk, commodity price risk and/or interest rate risk).
Total return swaps are agreements in which there is an exchange of cash flows whereby one party commits to make payments based on the total return (distributions plus capital gains/losses) of an underlying instrument, or basket or underlying instruments, in exchange for fixed or floating rate interest payments. If the total return of the instruments or index underlying the transaction exceeds or falls short of the offsetting fixed or floating interest rate obligation, the Fund receives payment from or makes a payment to the counterparty.
Certain total return swaps are designed to function as a portfolio of direct investments in long and short equity positions. This means that the Fund has the ability to trade in and out of these long and short positions within the swap and will receive the economic benefits and risks equivalent to direct investment in these positions, subject to certain adjustments due to events related to the counterparty. Benefits and risks include capital appreciation (depreciation), corporate actions and dividends received and paid, all of which are reflected in the swap’s market value. The market value also includes interest charges and credits (“financing fees”) related to the notional values of the long and short positions and cash balances within the swap. These interest charges and credits are based on a specified benchmark rate plus or minus a specified spread determined based upon the country and/or currency of the positions in the portfolio.
Positions within the swap and financing fees are reset periodically. During a reset, any unrealized appreciation (depreciation) on positions and accrued financing fees become available for cash settlement between the Fund and the counterparty. The amounts that are available for cash settlement are recorded as realized gains or losses in the Statements of Operations. Cash settlement in and out of the swap may occur at a reset date or any other date, at the discretion of the Fund and the counterparty, over the life of the agreement. Certain swaps have no stated expiration and can be terminated by either party at any time.
Swap transactions involve, to varying degrees, elements of interest rate, credit and market risks in excess of the amounts recognized in the Statements of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreements, and that there may be unfavorable changes in interest rates and/or market values associated with these transactions.
Master Netting Arrangements: In order to define its contractual rights and to secure rights that will help mitigate its counterparty risk, a Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between a Fund and a counterparty that governs certain OTC derivatives and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, a Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency, or other events.
For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the mark-to-market amount for each transaction under such agreement, and comparing that amount to the value of any collateral currently pledged by a fund and the counterparty.
70 |
2 0 2 3 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 |
Notes to Financial Statements (continued)
Cash collateral that has been pledged to cover obligations of the Funds and cash collateral received from the counterparty, if any, is reported separately in the Statements of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by the Funds, if any, is noted in the Schedules of Investments. Generally, the amount of collateral due from or to a counterparty is subject to a certain minimum transfer amount threshold before a transfer is required, which is determined at the close of business of the Funds. Any additional required collateral is delivered to/pledged by the Funds on the next business day. Typically, the counterparty is not permitted to sell, re-pledge or use cash and non-cash collateral it receives. A fund generally agrees not to use non-cash collateral that it receives but may, absent default or certain other circumstances defined in the underlying ISDA Master Agreement, be permitted to use cash collateral received. In such cases, interest may be paid pursuant to the collateral arrangement with the counterparty. To the extent amounts due to the Funds from the counterparty are not fully collateralized, each Fund bears the risk of loss from counterparty non-performance. Likewise, to the extent the Funds have delivered collateral to a counterparty and stand ready to perform under the terms of their agreement with such counterparty, each Fund bears the risk of loss from a counterparty in the amount of the value of the collateral in the event the counterparty fails to return such collateral. Based on the terms of agreements, collateral may not be required for all derivative contracts.
For financial reporting purposes, each Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements, if any, in the Statements of Assets and Liabilities.
6. |
INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Investment Advisory Fees: Pursuant to an Investment Advisory Agreement with the Company, 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 directors).
For its investment advisory services to each of the iShares MSCI Hong Kong, iShares MSCI Japan Small-Cap, iShares MSCI Malaysia and iShares MSCI Singapore ETFs, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Funds, based on each Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:
Aggregate Average Daily Net Assets | Investment Advisory Fees | |||
First $7 billion |
0.59 | % | ||
Over $7 billion, up to and including $11 billion |
0.54 | |||
Over $11 billion, up to and including $24 billion |
0.49 | |||
Over $24 billion, up to and including $48 billion |
0.44 | |||
Over $48 billion, up to and including $72 billion |
0.40 | |||
Over $72 billion, up to and including $96 billion |
0.36 | |||
Over $96 billion |
0.32 |
For its investment advisory services to the iShares MSCI Pacific ex Japan ETF, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Fund, based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:
Aggregate Average Daily Net Assets | Investment Advisory Fees | |||
First $46 billion |
0.5000 | % | ||
Over $46 billion, up to and including $81 billion |
0.4750 | |||
Over $81 billion, up to and including $111 billion |
0.4513 | |||
Over $111 billion, up to and including $141 billion |
0.4287 | |||
Over $141 billion, up to and including $171 billion |
0.4073 | |||
Over $171 billion |
0.3869 |
For its investment advisory services to each of the iShares MSCI Taiwan and iShares MSCI Thailand ETFs, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Funds, based on each Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:
Aggregate Average Daily Net Assets | Investment Advisory Fees | |||
First $2 billion |
0.7400 | % | ||
Over $2 billion, up to and including $4 billion |
0.6900 | |||
Over $4 billion, up to and including $8 billion |
0.6400 | |||
Over $8 billion, up to and including $16 billion |
0.5700 | |||
Over $16 billion, up to and including $24 billion |
0.5100 | |||
Over $24 billion, up to and including $32 billion |
0.4800 | |||
Over $32 billion, up to and including $40 billion |
0.4500 | |||
Over $40 billion |
0.4275 |
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.
N 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 |
71 |
Notes to Financial Statements (continued)
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, including any custodial costs. 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 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 August 31, 2023, the Funds paid BTC the following amounts for securities lending agent services:
iShares ETF |
Amounts
|
|||
MSCI Hong Kong |
$ | 6,656 | ||
MSCI Japan Small-Cap |
4,982 | |||
MSCI Malaysia |
17,230 | |||
MSCI Pacific ex Japan |
21,563 | |||
MSCI Singapore |
32,230 | |||
MSCI Taiwan |
1,658,334 | |||
MSCI Thailand |
414,238 |
Officers and Directors: Certain officers and/or directors of the Company are officers and/or directors 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 August 31, 2023, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:
iShares ETF
|
Purchases
|
Sales
|
Net Realized
|
|||||||||
MSCI Hong Kong |
$ | 9,677,193 | $ | 9,246,857 | $ | (2,118,735 | ) | |||||
MSCI Japan Small-Cap |
905,880 | 1,572,811 | 553,116 | |||||||||
MSCI Pacific ex Japan |
14,248,066 | 13,878,840 | (5,959,488 | ) | ||||||||
MSCI Singapore |
29,968,499 | 41,179,989 | (13,816,552 | ) |
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.
72 |
2 0 2 3 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 |
Notes to Financial Statements (continued)
7. |
PURCHASES AND SALES |
For the year ended August 31, 2023, purchases and sales of investments, excluding short-term securities and in-kind transactions, were as follows:
iShares ETF |
Purchases |
Sales |
||||||
MSCI Hong Kong |
$ | 186,452,688 | $ | 145,974,824 | ||||
MSCI Japan Small-Cap |
7,630,732 | 6,378,015 | ||||||
MSCI Malaysia |
69,184,519 | 29,672,427 | ||||||
MSCI Pacific ex Japan |
155,094,841 | 134,769,934 | ||||||
MSCI Singapore |
135,874,211 | 132,917,878 | ||||||
MSCI Taiwan |
1,278,236,412 | 1,915,663,165 | ||||||
MSCI Thailand |
34,833,103 | 33,827,858 |
For the year ended August 31, 2023, in-kind transactions were as follows:
iShares ETF | In-kind Purchases |
In-kind Sales |
||||||
MSCI Hong Kong |
$ | 5,971,479 | $ | 61,811,507 | ||||
MSCI Japan Small-Cap |
46,983,119 | — | ||||||
MSCI Pacific ex Japan |
110,176,761 | 388,121,986 | ||||||
MSCI Singapore |
57,389,505 | 131,852,296 | ||||||
MSCI Thailand |
103,426,074 | 115,800,758 |
8. |
INCOME TAX INFORMATION |
Each Fund is treated as an entity separate from the Company’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.
Management has analyzed tax laws and regulations and their application to the Funds as of August 31, 2023, 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 August 31, 2023, permanent differences attributable to certain deemed distributions and realized gains (losses) from in-kind redemptions were reclassified to the following accounts:
iShares ETF | Paid-in Capital |
Accumulated |
||||||
MSCI Hong Kong |
$ | (864,200 | ) | $ | 864,200 | |||
MSCI Pacific ex Japan |
50,617,084 | (50,617,084 | ) | |||||
MSCI Singapore |
15,159,576 | (15,159,576 | ) | |||||
MSCI Taiwan |
26,607,905 | (26,607,905 | ) | |||||
MSCI Thailand |
(11,429,391 | ) | 11,429,391 |
The tax character of distributions paid was as follows:
|
||||||||
iShares ETF | Year Ended 08/31/23 |
Year Ended 08/31/22 |
||||||
|
||||||||
MSCI Hong Kong |
||||||||
Ordinary income |
$ | 22,175,367 | $ | 22,238,487 | ||||
|
|
|
|
|||||
MSCI Japan Small-Cap |
||||||||
Ordinary income |
$ | 700,151 | $ | 1,582,668 | ||||
|
|
|
|
|||||
MSCI Malaysia |
||||||||
Ordinary income |
$ | 6,188,831 | $ | 12,037,624 | ||||
|
|
|
|
|||||
MSCI Pacific ex Japan |
||||||||
Ordinary income |
$ | 73,694,870 | $ | 133,885,979 | ||||
|
|
|
|
|||||
MSCI Singapore |
||||||||
Ordinary income |
$ | 23,446,994 | $ | 34,423,217 | ||||
|
|
|
|
N 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 |
73 |
Notes to Financial Statements (continued)
|
||||||||
iShares ETF | Year Ended 08/31/23 |
Year Ended 08/31/22 |
||||||
|
||||||||
MSCI Taiwan |
||||||||
Ordinary income |
$ | 191,309,029 | $ | 150,879,986 | ||||
Long-term capital gains |
419,346,990 | 39,755,522 | ||||||
|
|
|
|
|||||
$ | 610,656,019 | $ | 190,635,508 | |||||
|
|
|
|
|||||
MSCI Thailand |
||||||||
Ordinary income |
$ | 7,677,615 | $ | 12,119,104 | ||||
|
|
|
|
As of August 31, 2023, the tax components of accumulated net earnings (losses) were as follows:
iShares ETF |
|
Undistributed Ordinary Income |
|
|
Undistributed Long-Term Capital Gains |
|
|
Non-expiring Capital Loss Carryforwards |
(a) |
|
Net
Unrealized Gains (Losses) |
(b) |
Total | |||||||
MSCI Hong Kong |
$ | 8,508,576 | $ | — | $ | (532,771,946 | ) | $ | (249,126,293 | ) | $ | (773,389,663 | ) | |||||||
MSCI Japan Small-Cap |
750,337 | — | (16,073,853 | ) | (11,753,877 | ) | (27,077,393 | ) | ||||||||||||
MSCI Malaysia |
423,802 | — | (129,635,513 | ) | 56,308,293 | (72,903,418 | ) | |||||||||||||
MSCI Pacific ex Japan |
19,326,958 | — | (642,958,205 | ) | (281,039,706 | ) | (904,670,953 | ) | ||||||||||||
MSCI Singapore |
6,088,590 | — | (337,745,463 | ) | (23,566,631 | ) | (355,223,504 | ) | ||||||||||||
MSCI Taiwan |
142,605,878 | 163,064,117 | — | 1,940,781,671 | 2,246,451,666 | |||||||||||||||
MSCI Thailand |
1,539,011 | — | (141,242,558 | ) | (84,798,094 | ) | (224,501,641 | ) |
(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, the realization for tax purposes of unrealized gains (losses) on certain futures contracts, the accounting for swap agreements, the characterization of corporate actions and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies. |
A fund may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” Such fund may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.
As of August 31, 2023, 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) |
||||||||||||
MSCI Hong Kong |
$ | 880,141,083 | $ | 31,336,472 | $ | (280,461,878 | ) | $ | (249,125,406 | ) | ||||||
MSCI Japan Small-Cap |
133,122,312 | 7,104,847 | (18,855,870 | ) | (11,751,023 | ) | ||||||||||
MSCI Malaysia |
202,126,595 | 67,293,879 | (10,984,070 | ) | 56,309,809 | |||||||||||
MSCI Pacific ex Japan |
2,118,626,154 | 185,138,955 | (466,185,725 | ) | (281,046,770 | ) | ||||||||||
MSCI Singapore |
512,074,343 | 40,922,206 | (64,491,916 | ) | (23,569,710 | ) | ||||||||||
MSCI Taiwan |
1,776,652,458 | 2,009,450,375 | (68,640,280 | ) | 1,940,810,095 | |||||||||||
MSCI Thailand |
409,498,716 | 11,991,906 | (96,793,830 | ) | (84,801,924 | ) |
9. |
LINE OF CREDIT |
The iShares MSCI Hong Kong ETF, iShares MSCI Japan Small-Cap ETF, iShares MSCI Malaysia ETF, iShares MSCI Singapore ETF, iShares MSCI Taiwan ETF and iShares MSCI Thailand ETF, along with certain other iShares funds (“Participating Funds”), are parties to a $800 million credit agreement (“Syndicated Credit Agreement”) with a group of lenders, which expires on August 9, 2024. The line of credit may be used for temporary or emergency purposes, including redemptions, settlement of trades and rebalancing of portfolio holdings in certain target markets. The Funds may borrow up to the aggregate commitment amount subject to asset coverage and other limitations as specified in the Syndicated Credit Agreement. The Syndicated Credit Agreement has the following terms: a commitment fee of 0.15% per annum on the unused portion of the credit agreement and interest at a rate equal to the higher of (a) Daily Simple Secured Overnight Financing Rate (“SOFR”) plus 0.10% and 1.00% per annum or (b) the U.S. Federal Funds rate plus 1.00% per annum on amounts borrowed. The commitment fee is generally allocated to each Participating Fund based on the lesser of a Participating Fund’s relative exposure to certain target markets or a Participating Fund’s maximum borrowing amount as set forth by the terms of the Syndicated Credit Agreement.
During the year ended August 31, 2023, the Funds did not borrow under the Syndicated Credit Agreement.
74 |
2 0 2 3 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 |
Notes to Financial Statements (continued)
10. |
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.
Infectious Illness Risk: An outbreak of an infectious illness, such as the COVID-19 pandemic, may adversely impact the economies of many nations and the global economy, and may impact individual issuers and capital markets in ways that cannot be foreseen. An infectious illness outbreak may result in, among other things, closed international borders, prolonged quarantines, supply chain disruptions, market volatility or disruptions and other significant economic, social and political impacts.
Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. A fund may invest in illiquid investments. An illiquid investment is any investment that a fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. A fund may experience difficulty in selling illiquid investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause a fund’s NAV to experience significant increases or decreases over short periods of time. If there is a general decline in the securities and other markets, the NAV of a fund may lose value, regardless of the individual results of the securities and other instruments in which a fund invests.
The price each Fund could receive upon the sale of any particular portfolio investment may differ from each Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation technique or a price provided by an independent pricing service. Changes to significant unobservable inputs and assumptions (i.e., publicly traded company multiples, growth rate, time to exit) due to the lack of observable inputs.
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 BFA 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.
A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.
With exchange-traded futures, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.
Geographic/Asset Class 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 issuers located in a single country or a limited number of countries. When a fund concentrates its investments in this manner, it assumes the risk that economic, regulatory, political and social conditions in that country or those countries may have a significant impact on the fund and could affect the income from, or the value or liquidity of, the Fund’s portfolio. Unanticipated or sudden political or social developments may cause uncertainty in the markets and as a result adversely affect the Fund’s investments. Foreign issuers may not be subject to the same uniform accounting, auditing and financial reporting standards and practices as used in the United States. Foreign securities markets may also be more volatile and less liquid than U.S. securities and may be less subject to governmental supervision not typically associated with investing in U.S. securities. Investment percentages in specific countries are presented in the Schedule of Investments.
N 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 |
75 |
Notes to Financial Statements (continued)
Certain Funds invest a significant portion of their assets in securities of issuers located in Asia or with significant exposure to Asian issuers or countries. The Asian financial markets have recently experienced volatility and adverse trends due to concerns in several Asian countries regarding monetary policy, government intervention in the markets, rising government debt levels or economic downturns. These events may spread to other countries in Asia and may affect the value and liquidity of certain of the Funds’ 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.
Significant Shareholder Redemption Risk: Certain shareholders may own or manage a substantial amount of fund shares and/or hold their fund investments for a limited period of time. Large redemptions of fund shares by these shareholders may force a fund to sell portfolio securities, which may negatively impact the fund’s NAV, increase the fund’s brokerage costs, and/or accelerate the realization of taxable income/gains and cause the fund to make additional taxable distributions to shareholders.
11. 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 08/31/23 |
Year Ended 08/31/22 |
|||||||||||||||
iShares ETF | Shares | Amount | Shares | Amount | ||||||||||||
|
||||||||||||||||
MSCI Hong Kong |
||||||||||||||||
Shares sold |
6,300,000 | $ | 130,025,042 | 2,025,000 | $ | 48,803,341 | ||||||||||
Shares redeemed |
(7,350,000 | ) | (147,364,615 | ) | (6,075,000 | ) | (139,653,870 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(1,050,000 | ) | $ | (17,339,573 | ) | (4,050,000 | ) | $ | (90,850,529 | ) | |||||||
|
|
|
|
|
|
|
|
|||||||||
MSCI Japan Small-Cap |
||||||||||||||||
Shares sold |
700,000 | $ | 47,638,207 | 100,000 | $ | 8,692,269 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
MSCI Malaysia |
||||||||||||||||
Shares sold |
2,250,000 | $ | 47,357,800 | 4,650,000 | $ | 117,878,462 | ||||||||||
Shares redeemed |
(450,000 | ) | (9,837,692 | ) | (4,200,000 | ) | (102,040,456 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
1,800,000 | $ | 37,520,108 | 450,000 | $ | 15,838,006 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
MSCI Pacific ex Japan |
||||||||||||||||
Shares sold |
3,000,000 | $ | 139,222,729 | 4,500,000 | $ | 215,646,290 | ||||||||||
Shares redeemed |
(9,300,000 | ) | (408,934,307 | ) | (1,200,000 | ) | (54,757,203 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(6,300,000 | ) | $ | (269,711,578 | ) | 3,300,000 | $ | 160,889,087 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
MSCI Singapore |
||||||||||||||||
Shares sold |
3,150,000 | $ | 60,208,375 | 9,250,000 | $ | 189,839,642 | ||||||||||
Shares redeemed |
(7,250,000 | ) | (138,669,604 | ) | (5,700,000 | ) | (115,869,175 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(4,100,000 | ) | $ | (78,461,229 | ) | 3,550,000 | $ | 73,970,467 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
MSCI Taiwan |
||||||||||||||||
Shares sold |
23,900,000 | $ | 1,097,040,697 | 1,000,000 | $ | 76,329,985 | ||||||||||
Shares redeemed |
(26,500,000 | ) | (1,236,770,063 | ) | (43,300,000 | ) | (2,435,070,926 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(2,600,000 | ) | $ | (139,729,366 | ) | (42,300,000 | ) | $ | (2,358,740,941 | ) | |||||||
|
|
|
|
|
|
|
|
|||||||||
MSCI Thailand |
||||||||||||||||
Shares sold |
1,350,000 | $ | 103,857,931 | 1,600,000 | $ | 124,280,513 | ||||||||||
Shares redeemed |
(1,650,000 | ) | (116,712,481 | ) | (2,000,000 | ) | (149,394,805 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(300,000 | ) | $ | (12,854,550 | ) | (400,000 | ) | $ | (25,114,292 | ) | |||||||
|
|
|
|
|
|
|
|
The consideration for the purchase of Creation Units of a fund in the Company generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Company 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 Company’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.
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.
76 |
2 0 2 3 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 |
Notes to Financial Statements (continued)
12. |
SUBSEQUENT EVENTS |
Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were available to be issued and the following item was noted:
Effective October 18, 2023, the Syndicated Credit Agreement to which the Participating Funds are party was amended to extend the maturity date to October 2024 under the same terms.
N 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 |
77 |
Report of Independent Registered Public Accounting Firm
To the Board of Directors of
iShares, Inc. and Shareholders of each of the seven funds listed in the table below
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of each of the funds listed in the table below (seven of the funds constituting iShares, Inc., hereafter collectively referred to as the “Funds”) as of August 31, 2023, the related statements of operations for the year ended August 31, 2023, the statements of changes in net assets for each of the two years in the period ended August 31, 2023, including the related notes, and the financial highlights for each of the five years in the period ended August 31, 2023 (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 August 31, 2023, 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 August 31, 2023 and each of the financial highlights for each of the five years in the period ended August 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
iShares MSCI Hong Kong ETF iShares MSCI Japan Small-Cap ETF iShares MSCI Malaysia ETF iShares MSCI Pacific ex Japan ETF iShares MSCI Singapore ETF iShares MSCI Taiwan ETF iShares MSCI Thailand ETF |
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 August 31, 2023 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
October 23, 2023
We have served as the auditor of one or more BlackRock investment companies since 2000.
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Important Tax Information (unaudited)
The following amounts, or maximum amounts allowable by law, are hereby designated as qualified dividend income for individuals for the fiscal year ended August 31, 2023:
iShares ETF |
Qualified Dividend Income |
|||
MSCI Japan Small-Cap |
$ | 1,458,944 | ||
MSCI Pacific ex Japan |
67,075,035 | |||
MSCI Thailand |
8,773,617 |
The Funds hereby designate the following amounts, or maximum amounts allowable by law, as capital gain dividends, subject to a long-term capital gains tax rate as noted below, for the fiscal year ended August 31, 2023:
iShares ETF |
20% Rate Long-Term Capital Gain Dividends |
|||
MSCI Taiwan |
$ | 445,197,508 |
The Funds intend to pass through to their shareholders the following amounts, or maximum amounts allowable by law, of foreign source income earned and foreign taxes paid for the fiscal year ended August 31, 2023:
iShares ETF |
Foreign Source Income Earned |
Foreign Taxes Paid |
||||||
MSCI Hong Kong |
$ | 27,676,086 | $ | — | ||||
MSCI Japan Small-Cap |
1,919,269 | 176,756 | ||||||
MSCI Malaysia |
9,263,546 | — | ||||||
MSCI Pacific ex Japan |
99,363,709 | 723,709 | ||||||
MSCI Singapore |
33,375,790 | 166,592 | ||||||
MSCI Taiwan |
151,407,084 | 30,015,358 | ||||||
MSCI Thailand |
9,296,018 | 943,671 |
79 |
Board Review and Approval of Investment Advisory Contract
iShares MSCI Hong Kong ETF (the “Fund”)
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors (the “Board”), including a majority of Board Members who are not “interested persons” of the Company (as that term is defined in the 1940 Act) (the “Independent Board Members”), is required annually to consider the approval of the Investment Advisory Agreement between the Company and BFA (the “Advisory Agreement”) on behalf of the Fund. The Board’s consideration entails a year-long process 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 2, 2023 and May 15, 2023, 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 7-8, 2023, 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 other fund(s) in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs, objectively selected by Broadridge as comprising the Fund’s applicable expense 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 the investment advisory fee rate and overall expenses (net of any waivers and reimbursements) for the Fund were lower than the median of the investment advisory fee rates and overall expenses (net of any 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, 2022, to that of such 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 ongoing enhancements and initiatives with respect 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, including related programs implemented pursuant to regulatory requirements. 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 provided at the May 2, 2023 meeting and throughout the year, and matters related to BFA’s portfolio compliance program and other compliance programs and services.
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
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Board Review and Approval of Investment Advisory Contract (continued)
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 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 information considered with respect to 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, 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.
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 (as discussed above), 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 already provided for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to assess the appropriateness of adding new or revised 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 received and 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 manage Other Accounts withsubstantially 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 considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s expenses borne by BFA under this arrangement and 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, as applicable (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 further considered other direct benefits that might accrue to BFA, including the potential for reduction in the Fund’s expenses that are borne by BFA under the “all-inclusive” management fee arrangement, due in part to the size and scope of BFA’s investment operations servicing the Fund (and other funds in the iShares complex) as well as in response to a changing market environment. The Board also reviewed and considered information provided by BFA concerning authorized participant primary market order processing services that are provided by BlackRock Investments, LLC (“BRIL”), an affiliate of BFA, and paid for by authorized participants under the ETF Servicing Platform. The Board also noted the revenue received by BFA and/or its affiliates pursuant to 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. The Board 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.
B O A R D R E V I E W A N D A P P R O V A L O F I N V E S T M E N T A D V I S O R Y C O N T R A C T |
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Board Review and Approval of Investment Advisory Contract (continued)
iShares MSCI Japan Small-Cap ETF, iShares MSCI Thailand ETF (each the “Fund”)
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors (the “Board”), including a majority of Board Members who are not “interested persons” of the Company (as that term is defined in the 1940 Act) (the “Independent Board Members”), is required annually to consider the approval of the Investment Advisory Agreement between the Company and BFA (the “Advisory Agreement”) on behalf of the Fund. The Board’s consideration entails a year-long process 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 2, 2023 and May 15, 2023, 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 7-8, 2023, 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 other fund(s) in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs, objectively selected by Broadridge as comprising the Fund’s applicable expense 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 the investment advisory fee rate and overall expenses (net of any waivers and reimbursements) for the Fund were higher than the median of the investment advisory fee rates and overall expenses (net of any 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, 2022, to that of such 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 ongoing enhancements and initiatives with respect 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, including related programs implemented pursuant to regulatory requirements. 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 provided at the May 2, 2023 meeting and throughout the year, and matters related to BFA’s portfolio compliance program and other compliance programs and services.
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
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Board Review and Approval of Investment Advisory Contract (continued)
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 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 information considered with respect to 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, 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.
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 (as discussed above), 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 already provided for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to assess the appropriateness of adding new or revised 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 received and 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 considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s expenses borne by BFA under this arrangement and 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, as applicable (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 further considered other direct benefits that might accrue to BFA, including the potential for reduction in the Fund’s expenses that are borne by BFA under the “all-inclusive” management fee arrangement, due in part to the size and scope of BFA’s investment operations servicing the Fund (and other funds in the iShares complex) as well as in response to a changing market environment. The Board also reviewed and considered information provided by BFA concerning authorized participant primary market order processing services that are provided by BlackRock Investments, LLC (“BRIL”), an affiliate of BFA, and paid for by authorized participants under the ETF Servicing Platform. The Board also noted the revenue received by BFA and/or its affiliates pursuant to 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. The Board 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.
B O A R D R E V I E W A N D A P P R O V A L O F I N V E S T M E N T A D V I S O R Y C O N T R A C T |
83 |
Board Review and Approval of Investment Advisory Contract (continued)
iShares MSCI Malaysia ETF, iShares MSCI Taiwan ETF (each the “Fund”)
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors (the “Board”), including a majority of Board Members who are not “interested persons” of the Company (as that term is defined in the 1940 Act) (the “Independent Board Members”), is required annually to consider the approval of the Investment Advisory Agreement between the Company and BFA (the “Advisory Agreement”) on behalf of the Fund. The Board’s consideration entails a year-long process 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 2, 2023 and May 15, 2023, 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 7-8, 2023, 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 other fund(s) in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs, objectively selected by Broadridge as comprising the Fund’s applicable expense 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 the investment advisory fee rate and overall expenses (net of any waivers and reimbursements) for the Fund were lower than the median of the investment advisory fee rates and overall expenses (net of any 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, 2022, to that of such 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 ongoing enhancements and initiatives with respect 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, including related programs implemented pursuant to regulatory requirements. 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 provided at the May 2, 2023 meeting and throughout the year, and matters related to BFA’s portfolio compliance program and other compliance programs and services.
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
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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 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 information considered with respect to 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, 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.
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 (as discussed above), 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 already provided for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to assess the appropriateness of adding new or revised 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 received and 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 considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s expenses borne by BFA under this arrangement and 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, as applicable (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 further considered other direct benefits that might accrue to BFA, including the potential for reduction in the Fund’s expenses that are borne by BFA under the “all-inclusive” management fee arrangement, due in part to the size and scope of BFA’s investment operations servicing the Fund (and other funds in the iShares complex) as well as in response to a changing market environment. The Board also reviewed and considered information provided by BFA concerning authorized participant primary market order processing services that are provided by BlackRock Investments, LLC (“BRIL”), an affiliate of BFA, and paid for by authorized participants under the ETF Servicing Platform. The Board also noted the revenue received by BFA and/or its affiliates pursuant to 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. The Board 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.
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Board Review and Approval of Investment Advisory Contract (continued)
iShares MSCI Pacific ex Japan ETF (the “Fund”)
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors (the “Board”), including a majority of Board Members who are not “interested persons” of the Company (as that term is defined in the 1940 Act) (the “Independent Board Members”), is required annually to consider the approval of the Investment Advisory Agreement between the Company and BFA (the “Advisory Agreement”) on behalf of the Fund. The Board’s consideration entails a year-long process 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 2, 2023 and May 15, 2023, 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 7-8, 2023, 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 other fund(s) in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs, objectively selected by Broadridge as comprising the Fund’s applicable expense 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 the investment advisory fee rate and overall expenses (net of any waivers and reimbursements) for the Fund were within range of the median of the investment advisory fee rates and overall expenses (net of any 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, 2022, to that of such 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 ongoing enhancements and initiatives with respect 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, including related programs implemented pursuant to regulatory requirements. 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 provided at the May 2, 2023 meeting and throughout the year, and matters related to BFA’s portfolio compliance program and other compliance programs and services.
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
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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 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 information considered with respect to 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, 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.
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 (as discussed above), 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 already provided for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to assess the appropriateness of adding new or revised 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 received and 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 manage Other Accounts withsubstantially 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 considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s expenses borne by BFA under this arrangement and 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, as applicable (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 further considered other direct benefits that might accrue to BFA, including the potential for reduction in the Fund’s expenses that are borne by BFA under the “all-inclusive” management fee arrangement, due in part to the size and scope of BFA’s investment operations servicing the Fund (and other funds in the iShares complex) as well as in response to a changing market environment. The Board also reviewed and considered information provided by BFA concerning authorized participant primary market order processing services that are provided by BlackRock Investments, LLC (“BRIL”), an affiliate of BFA, and paid for by authorized participants under the ETF Servicing Platform. The Board also noted the revenue received by BFA and/or its affiliates pursuant to 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. The Board 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.
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Board Review and Approval of Investment Advisory Contract (continued)
iShares MSCI Singapore ETF (the “Fund”)
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors (the “Board”), including a majority of Board Members who are not “interested persons” of the Company (as that term is defined in the 1940 Act) (the “Independent Board Members”), is required annually to consider the approval of the Investment Advisory Agreement between the Company and BFA (the “Advisory Agreement”) on behalf of the Fund. The Board’s consideration entails a year-long process 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 2, 2023 and May 15, 2023, 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 7-8, 2023, 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 other fund(s) in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs, objectively selected by Broadridge as comprising the Fund’s applicable expense 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 the investment advisory fee rate and overall expenses (net of any waivers and reimbursements) for the Fund were higher than the median of the investment advisory fee rates and overall expenses (net of any 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, 2022, to that of such 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 ongoing enhancements and initiatives with respect 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, including related programs implemented pursuant to regulatory requirements. 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 provided at the May 2, 2023 meeting and throughout the year, and matters related to BFA’s portfolio compliance program and other compliance programs and services.
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
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Board Review and Approval of Investment Advisory Contract (continued)
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 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 information considered with respect to 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, 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.
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 (as discussed above), 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 already provided for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to assess the appropriateness of adding new or revised 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 received and 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 manage Other Accounts withsubstantially 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 considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s expenses borne by BFA under this arrangement and 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, as applicable (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 further considered other direct benefits that might accrue to BFA, including the potential for reduction in the Fund’s expenses that are borne by BFA under the “all-inclusive” management fee arrangement, due in part to the size and scope of BFA’s investment operations servicing the Fund (and other funds in the iShares complex) as well as in response to a changing market environment. The Board also reviewed and considered information provided by BFA concerning authorized participant primary market order processing services that are provided by BlackRock Investments, LLC (“BRIL”), an affiliate of BFA, and paid for by authorized participants under the ETF Servicing Platform. The Board also noted the revenue received by BFA and/or its affiliates pursuant to 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. The Board 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.
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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.
August 31, 2023
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 |
||||||||||||||||||||||||
MSCI Pacific ex Japan |
$ | 1.523342 | $ | — | $ | — | $ | 1.523342 | 100 | % | — | % | — | % | 100 | % | ||||||||||||||||
MSCI Singapore(a) |
0.872627 | — | 0.012739 | 0.885366 | 99 | — | 1 | 100 | ||||||||||||||||||||||||
MSCI Taiwan |
2.367686 | 5.189938 | — | 7.557624 | 31 | 69 | — | 100 |
(a) |
The Fund estimates that it has distributed more than its net investment income and net realized capital gains; therefore, a portion of the distribution may be a return of capital. A return of capital may occur, for example, when some or all of the shareholder’s investment in the Fund is returned to the shareholder. A return of capital does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income”. When distributions exceed total return performance, the difference will incrementally reduce the Fund’s net asset value per share. |
Tailored Shareholder Reports for Open-End Mutual Funds and ETFs
Effective January 24, 2023, the SEC adopted rule and form amendments to require open-end mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information. Other information, including financial statements, will no longer appear in a streamlined shareholder report but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the impact of these amendments on the shareholder reports for the Funds.
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.
Regulation under the Alternative Investment Fund Managers Directive
The Alternative Investment Fund Managers Directive, and its United Kingdom (“UK”) equivalent, ( “AIFMD”) impose detailed and prescriptive obligations on fund managers established in the European Union (the “EU”) and the UK. These do not currently apply to managers established outside of the EU or UK, such as BFA (the “Company”). Rather, the Company is only required to comply with certain disclosure, reporting and transparency obligations of AIFMD because it has registered the iShares MSCI Hong Kong ETF, iShares MSCI Japan Small-Cap ETF, iShares MSCI Malaysia ETF, iShares MSCI Taiwan ETF and iShares MSCI Thailand ETF (the “Funds”) to be marketed to investors in the EU and/or UK.
Report on Remuneration
The Company is required under AIFMD to make quantitative disclosures of remuneration. These disclosures are made in line with BlackRock’s interpretation of currently available regulatory guidance on quantitative remuneration disclosures. As market or regulatory practice develops BlackRock may consider it appropriate to make changes to the way in which quantitative remuneration disclosures are calculated. Where such changes are made, this may result in disclosures in relation to a fund not being comparable to the disclosures made in the prior year, or in relation to other BlackRock fund disclosures in that same year.
Disclosures are provided in relation to (a) the staff of the Company; (b) staff who are senior management; and (c) staff who have the ability to materially affect the risk profile of the Funds.
All individuals included in the aggregated figures disclosed are rewarded in line with BlackRock’s remuneration policy for their responsibilities across the relevant BlackRock business area. As all individuals have a number of areas of responsibilities, only the portion of remuneration for those individuals’ services attributable to the Funds is included in the aggregate figures disclosed.
BlackRock has a clear and well-defined pay-for-performance philosophy, and compensation programs which support that philosophy.
BlackRock operates a total compensation model for remuneration which includes a base salary, which is contractual, and a discretionary bonus scheme. Although all employees are eligible to receive a discretionary bonus, there is no contractual obligation to make a discretionary bonus award to any employees. For senior management and staff who have the ability to materially affect the risk profile of the Funds, a significant percentage of variable remuneration is deferred over time. All employees are subject to a clawback policy.
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Supplemental Information (unaudited) (continued)
Remuneration decisions for employees are made once annually in January following the end of the performance year, based on BlackRock’s full-year financial results and other non-financial goals and objectives. Alongside financial performance, individual total compensation is also based on strategic and operating results and other considerations such as management and leadership capabilities. No set formulas are established and no fixed benchmarks are used in determining annual incentive awards.
Annual incentive awards are paid from a bonus pool which is reviewed throughout the year by BlackRock’s independent compensation committee, taking into account both actual and projected financial information together with information provided by the Enterprise Risk and Regulatory Compliance departments in relation to any activities, incidents or events that warrant consideration in making compensation decisions. Individuals are not involved in setting their own remuneration.
Each of the control functions (Enterprise Risk, Legal & Compliance, and Internal Audit) each have their own organizational structures which are independent of the business units and therefore staff members in control functions are remunerated independently of the businesses they oversee. Functional bonus pools for those control functions are determined with reference to the performance of each individual function and the remuneration of the senior members of control functions is directly overseen by BlackRock’s independent remuneration committee.
Members of staff and senior management of the Company typically provide both AIFMD and non-AIFMD related services in respect of multiple funds, clients and functions of the Company and across the broader BlackRock group. Conversely, members of staff and senior management of the broader BlackRock group may provide both AIFMD and non-AIFMD related services in respect of multiple funds, clients and functions of the broader BlackRock group and of the Company. Therefore, the figures disclosed are a sum of individuals’ portion of remuneration attributable to the Company according to an objective apportionment methodology which acknowledges the multiple-service nature of the Company and the broader BlackRock group. Accordingly, the figures are not representative of any individual’s actual remuneration or their remuneration structure.
The amount of the total remuneration awarded to the Company’s staff in respect of the Company’s financial year ending December 31, 2022 was USD 4.12 million. This figure is comprised of fixed remuneration of USD 685 thousand and variable remuneration of USD 3.44 million. There was a total of 8 beneficiaries of the remuneration described above.
The amount of the aggregate remuneration awarded by the Company in respect of the Company’s financial year ending December 31, 2022, to its senior management was USD 2.96 million, and to other members of its staff whose actions potentially have a material impact on the risk profile of the Company or its funds was USD 970 thousand. These figures relate to the entire Company and not to the Funds.
Disclosures Under the EU Sustainable Finance Disclosure Regulation
The iShares MSCI Hong Kong ETF, iShares MSCI Japan Small-Cap ETF, iShares MSCI Malaysia ETF, iShares MSCI Taiwan ETF and iShares MSCI Thailand ETF (the “Funds”) are registered under the Alternative Investment Fund Managers Directive to be marketed to European Union (“EU”) investors, as noted above. As a result, certain disclosures are required under the EU Sustainable Finance Disclosure Regulation (“SFDR”).
Each Fund has not been categorized under the SFDR as an “Article 8” or “Article 9” product. In addition, each Fund’s investment strategy does not take into account the criteria for environmentally sustainable economic activities under the EU sustainable investment taxonomy regulation or principal adverse impacts (“PAIs”) on sustainability factors under the SFDR. PAIs are identified under the SFDR as the material impacts of investment decisions on sustainability factors relating to environmental, social and employee matters, respect for human rights, and anti-corruption and anti-bribery matters.
S U P P L E M E N T A L I N F O R M A T I O N |
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Director and Officer Information (unaudited)
The Board of Directors 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 Director 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. Directors who are not “interested persons” (as defined in the 1940 Act) of the Company are referred to as independent directors (“Independent Directors”).
The registered investment companies advised by BFAor 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 Director also serves as a Trustee of iShares Trust 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 387 funds as of August 31, 2023. With the exception of Robert S. Kapito, Salim Ramji and Aaron Wasserman, 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. Wasserman is c/o BlackRock, Inc., 50 Hudson Yards, New York, NY 10001. The Board has designated John E. Kerrigan 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 Directors | ||||||
Name (Year of Birth) |
Position(s) |
Principal Occupation(s) During Past 5 Years |
Other Directorships Held by Director | |||
Robert S. Kapito(a) (1957) |
Director (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); Trustee of iShares U.S. ETF Trust (since 2011); Trustee of iShares Trust (since 2009). | |||
Salim Ramji(b)
(1970) |
Director (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). | Trustee of iShares U.S. ETF Trust (since 2019); Trustee of iShares 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 Directors | ||||||
Name (Year of Birth) |
Position(s) |
Principal Occupation(s) During Past 5 Years |
Other Directorships Held by Director | |||
John E. Kerrigan (1955) |
Director (since 2005); Independent Board Chair (since 2022). |
Chief Investment Officer, Santa Clara University (since 2002). | Trustee of iShares U.S. ETF Trust (since 2011); Trustee of iShares Trust (since 2005); Independent Board Chair of iShares Trust and iShares U.S. ETF Trust (since 2022). | |||
Jane D. Carlin (1956) |
Director (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). | Trustee of iShares U.S. ETF Trust (since 2015); Trustee of iShares 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 (1954) |
Director (since 2017); Audit Committee Chair (since 2019). |
Partner, KPMG LLP (2002-2016); Director of One Generation Away (since 2021). |
Trustee of iShares U.S. ETF Trust (since 2017); Trustee of iShares Trust (since 2017). | |||
Cecilia H. Herbert (1949) |
Director (since 2005); Nominating and Governance and Equity Plus Committee Chairs (since 2022). | 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), Investment Committee (since 2011) and Personnel Committee (since 2022); Member of the Wyoming State Investment Funds Committee (since 2022); Director of the Jackson Hole Center for the Arts (since 2021); Trustee of Forward Funds (14 portfolios) (2009-2018); Trustee of Salient MF Trust (4 portfolios) (2015-2018). | Trustee of iShares U.S. ETF Trust (since 2011); Trustee of iShares Trust (since 2005). |
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Director and Officer Information (unaudited) (continued)
Independent Directors (continued) | ||||||
Name (Year of Birth) |
Position(s) |
Principal Occupation(s) During Past 5 Years |
Other Directorships Held by Director | |||
Drew E. Lawton (1959) |
Director (since 2017); 15(c) Committee Chair (since 2017). | Senior Managing Director of New York Life Insurance Company (2010-2015). | Trustee of iShares U.S. ETF Trust (since 2017); Trustee of iShares Trust (since 2017); Director of Jackson Financial Inc. (since 2021). | |||
John E. Martinez (1961) |
Director (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). | Trustee of iShares U.S. ETF Trust (since 2011); Trustee of iShares Trust (since 2003). | |||
Madhav V. Rajan (1964) |
Director (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). | Trustee of iShares U.S. ETF Trust (since 2011); Trustee of iShares Trust (since 2011). | |||
Officers | ||||||
Name (Year of Birth) |
Position(s) |
Principal Occupation(s) During Past 5 Years | ||||
Dominik Rohé (1973) |
President (since 2023). |
Managing Director, BlackRock, Inc. (since 2005); Head of Americas ETF and Index Investments (since 2023); Head of Latin America (2019-2023). | ||||
Trent Walker (1974) |
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. | ||||
Aaron Wasserman (1974) |
Chief Compliance Officer (iShares, Inc. and iShares Trust, since 2023; iShares U.S. ETF Trust, since 2023). |
Managing Director of BlackRock, Inc. (since 2018); Chief Compliance Officer of the BlackRock Multi-Asset Complex, the BlackRock Fixed-Income Complex and the Exchange-Traded Fund Complex (since 2023); Deputy Chief Compliance Officer for the BlackRock Multi-Asset Complex, the BlackRock Fixed-Income Complex and the Exchange-Traded Fund Complex (2014-2023). | ||||
Marisa Rolland (1980) |
Secretary (since 2022). |
Managing Director, BlackRock, Inc. (since 2023); Director, BlackRock, Inc. (2018-2022); Vice President, BlackRock, Inc. (2010-2017). | ||||
Rachel Aguirre (1982) |
Executive Vice President (since 2022). |
Managing Director, BlackRock, Inc. (since 2018); Director, BlackRock, Inc. (2009-2018); Head of U.S. iShares Product (since 2022); Head of EII U.S. Product Engineering (since 2021); Co-Head of EII’s Americas Portfolio Engineering (2020-2021); Head of Developed Markets Portfolio Engineering (2016-2019). | ||||
Jennifer Hsui (1976) |
Executive Vice President (since 2022). |
Managing Director, BlackRock, Inc. (since 2009); Co-Head of Index Equity (since 2022). | ||||
James Mauro (1970) |
Executive Vice President (since 2022). |
Managing Director, BlackRock, Inc. (since 2010); Head of Fixed Income Index Investments in the Americas and Head of San Francisco Core Portfolio Management (since 2020). |
Effective March 30, 2023, Dominik Rohé replaced Armando Senra as President.
Effective July 1, 2023, Aaron Wasserman replaced Charles Park as Chief Compliance Officer. |
D I R E C T O R A N D O F F I C E R I N F O R M A T I O N |
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Electronic Delivery
Shareholders can sign up for e-mail 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.
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Glossary of Terms Used in this Report
Portfolio Abbreviation | ||
ADR | American Depositary Receipt | |
NVDR | Non-Voting Depositary Receipt | |
NVS | Non-Voting Shares | |
REIT | Real Estate Investment Trust |
G L O S S A R Y O F T E R M S U S E D I N T H I S R E P O R T |
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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 MSCI Inc., 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.
©2023 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCKare registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
iS-AR-803-0823
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