DECEMBER302014asrevisedJune292015 - PDF document

1 DECEMBER30,2014(asrevisedJune29,2015) 20
DECEMBER30,2014(asrevisedJune29,2015) 2014PROSPECTUS iSharesCurrencyHedgedMSCIEurozoneETF|HEZU|NYSEARCATheSecuritiesandExchangeCommission(SECŽ)hasnotapprovedordisapprovedthesesecuritiesorpassedupontheadequacyofthisprospectus.Anyrepresentationtothecontraryisacriminaloffense. FundOverview................................S-1MoreInformationAbouttheFund........1AFurtherDiscussionofPrincipalRisks..2AFurtherDiscussionofOtherRisks......13PortfolioHoldingsInformation.............15AFurtherDiscussionofPrincipalInvestmentStrategies.....................15..................................16ShareholderInformation....................19....................................29FinancialHighlights..........................30IndexProvider.................................31....................................31SupplementalInformation..................33MSCIEMU100%HedgedtoUSDIndexŽisaservicemarkofMSCIInc.andhasbeenlicensedforuseforcertainpurposesbyBlackRockFundAdvisorsoritsaffiliates.iSharesandBlackRockareregisteredtrademarksofBlackRockFundAdvisorsanditsaffiliates.TheFundisnotsponsored,endorsed,sold,orpromotedbyMSCIInc.,nordoesMSCIInc.makeanyrepresentationregardingtheadvisabilityofinvestingintheFund.TableofContents [THISPAGEINTENTIONALLYLEFTBLANK] iSHARESCURRENCYHEDGEDMSCIEUROZONEETFTicker:HEZUStockExchange:NYSEArcaInvestmentObjectiveTheiSharesCurrencyHedgedMSCIEurozoneETF(theFundŽ)seekstotracktheinvestmentresultsofanindexcomposedoflarge-andmid-capitalizationequitiesfromdevelopedmarketcountrieswhichusetheeuroastheirofficialcurrencywhilemitigatingexposuretofluctuationsbetweenthevalueoftheeuroandtheU.S.dollar.FeesandExpensesThefollowingtabledescribesthefeesandexpensesthatyouwillincurifyouownsharesoftheFund.TheinvestmentadvisoryagreementbetweeniSharesTrust(theTrustŽ)andBlackRockFundAdvisors(BFAŽ)(formerly,BarclaysGlobalFundAdvisors(BGFAŽ))(theInvestmentAdvisoryAgreementŽ)providesthatBFAwillpayalloperatingexpensesoftheFund,exceptinterestexpenses,taxes,brokerageexpenses,futuredistributionfeesorexpenses,andextraordinaryexpenses.AcquiredFundFeesandExpensesŽreflecttheFundsproratashareofthefeesandexpensesincurredbyinvestinginotherinvestmentcompanies.TheimpactofAcquiredFundFeesandExpensesisincludedinthetotalreturnsoftheFund.AcquiredFundFeesandExpensesarenotusedtocalculat

2 etheFundsnetassetvaluepershare(NAVŽ)an
etheFundsnetassetvaluepershare(NAVŽ)andarenotincludedinthecalculationoftheratioofexpensestoaveragenetassetsshownintheFinancialHighlightssectionoftheFundsprospectus(theProspectusŽ).BFA,theinvestmentadvisertotheFund,hascontractuallyagreeduntilDecember31,2020toareductioninthemanagementfeeoftheFundonthoseassetsattributabletotheFundsinvestmentsintheiSharesMSCIEurozoneETF(EZUŽortheUnderlyingFundŽ)(andthoseassetsusedbytheFundtohedgetheFundsexposuretothesecuritiesinEZUsportfolioagainsttheU.S.dollar)suchthatthemanagementfeeonsuchassetsisequaltothenettotalexpenseratioafterfeewaiverofEZUplus0.03%.ThecontractualwaivermaybeterminatedpriortoDecember31,2020onlyuponwrittenagreementoftheTrustandBFA.YoumayalsoincurusualandcustomarybrokeragecommissionswhenbuyingorsellingsharesoftheFund,whicharenotreflectedintheExamplethatfollows: AnnualFundOperatingExpenses(ongoingexpensesthatyoupayeachyearasapercentageofthevalueofyourinvestments)FeesService(12b-1)FeesExpensesAcquiredFundFeesandExpensesTotalAnnualOperatingExpensesFeeWaiverTotalAnnualOperatingExpensesFeeWaiver0.62%NoneNone0.47%1.09%(0.59)%0.50% Theexpenseinformationinthetablehasbeenrestatedtoreflectcurrentfees. S-1 ThisExampleisintendedtohelpyoucomparethecostofowningsharesoftheFundwiththecostofinvestinginotherfunds.TheExampleassumesthatyouinvest$10,000intheFundforthetimeperiodsindicatedandthensellallofyoursharesattheendofthoseperiods.TheExamplealsoassumesthatyourinvestmenthasa5%returneachyearandthattheFundsoperatingexpensesremainthesame.Althoughyouractualcostsmaybehigherorlower,basedontheseassumptions,yourcostswouldbe: 1Year3Years$51$160PortfolioTurnover.TheFundandtheotherfundinwhichtheFundprincipallyinvests,theUnderlyingFund,maypaytransactioncosts,suchascommissions,whentheybuyandsellsecurities(orturnoverŽtheirportfolios).AhigherportfolioturnoverratefortheFundortheUnderlyingFundmayindicatehighertransactioncostsandcausetheFundortheUnderlyingFundtoincurincreasedexpenses.Thesecosts,whicharenotreflectedinAnnualFundOperatingExpensesorintheExample(exceptcoststotheUnderlyingFundincludedaspartofAcquiredFundFeesandExpenses),affecttheFundsperformance.Frominception,July9,2014,tothemostrecentfiscalyearend,theFundsportfolioturnoverratewas0%oftheaveragevalueofitsportfolio.PrincipalInvestmentTheFundseekstotracktheinve

3 stmentresultsoftheMSCIEMU100%HedgedtoUSD
stmentresultsoftheMSCIEMU100%HedgedtoUSDIndex(theUnderlyingIndexŽ),whichhasbeendevelopedbyMSCIInc.(MSCIŽ)asanequitybenchmarkfortheEuropeanMonetaryUnioncountrieswiththecurrencyriskofthesecuritiesincludedintheUnderlyingIndexhedgedagainsttheU.S.dollaronamonthlybasis.AsofJune30,2014,theUnderlyingIndexconsistsofstocksfromthefollowing10developedmarketcountries:Austria,Belgium,Finland,France,Germany,Ireland,Italy,theNetherlands,PortugalandSpain.TheUnderlyingIndexmayincludelarge-ormid-capitalizationcompanies,andcomponentsprimarilyincludeconsumerdiscretionary,financialsandindustrialscompanies.ThecomponentsoftheUnderlyingIndex,andthedegreetowhichthesecomponentsrepresentcertainindustries,maychangeoverCurrently,theFundachievesitsinvestmentobjectivebyinvestingasubstantialportionofitsassetsintheUnderlyingFund.BFAusesapassiveŽorindexingapproachtotrytoachievetheFundsinvestmentobjective.Unlikemanyinvestmentcompanies,theFunddoesnottrytobeatŽtheindexittracksanddoesnotseektemporarydefensivepositionswhenmarketsdeclineorappearovervalued.IndexingmayeliminatethechancethattheFundwillsubstantiallyoutperformtheUnderlyingIndexbutalsomayreducesomeoftherisksofactivemanagement,suchaspoorsecurityselection.Indexingseekstoachievelowercostsandbetterafter-taxperformancebykeepingportfolio S-2 turnoverlowincomparisontoactivelymanagedinvestmentcompanies.BFAusesarepresentativesamplingindexingstrategytomanagetheFundandtheUnderlyingFund.RepresentativesamplingŽisanindexingstrategythatinvolvesinvestinginarepresentativesampleofsecuritiesorotherinstrumentscomprisingtheUnderlyingIndex.Thesecuritiesselectedareexpectedtohave,intheaggregate,investmentcharacteristics(basedonfactorssuchasmarketcapitalizationandindustryweightings),fundamentalcharacteristics(suchasreturnvariabilityandyield)andliquiditymeasuressimilartothoseoftheUnderlyingIndex.TheFundortheUnderlyingFundmayormaynotholdallofthesecuritiesinitsUnderlyingIndex.TheFundgenerallywillinvestatleast90%ofitsassetsinthecomponentsecurities(includingindirectinvestmentsthroughtheUnderlyingFund)andotherinstrumentsoftheUnderlyingIndexandininvestmentsthathaveeconomiccharacteristicsthataresubstantiallyidenticaltothecomponentsecuritiesoftheUnderlyingIndex(,depositaryreceiptsrepresentingsecuritiesoftheUnderlyingIndex)andmayinvestupto10%ofitsassetsi

4 ncertainfutures,optionsandswapcontracts,
ncertainfutures,optionsandswapcontracts,cashandcashequivalents,includingsharesofmoneymarketfundsadvisedbyBFAoritsaffiliates,aswellasinsecuritiesnotincludedintheUnderlyingIndex,butwhichBFAbelieveswillhelptheFundtracktheUnderlyingIndex.ComponentsoftheUnderlyingIndexincludeequitysecuritiesandforeigncurrencyforwardcontracts(bothdeliverableandnon-deliverable)designedtohedgeagainstnon-U.S.currencyfluctuations.Thenotionalexposuretoforeigncurrencyforwardcontracts(deliverableandnon-deliverable)generallywillbeashortpositionthathedgesthecurrencyriskoftheequityportfolio.TheFundseekstotracktheinvestmentresultsoftheUnderlyingIndexbeforethefeesandexpensesoftheFund.TheUnderlyingIndexappliesamethodologythatsellsforwardthetotalvalueofthenon-U.S.dollardenominatedsecuritiesincludedintheUnderlyingIndexataone-monthforwardratetoeffectivelycreateahedgeŽagainstfluctuationsintherelativevalueofthecomponentcurrenciesinrelationtotheU.S.dollar.Thehedgeisresetonamonthlybasis.TheUnderlyingIndexisdesignedtohavehigherreturnsthananequivalentunhedgedinvestmentwhenthecomponentcurrenciesareweakeningrelativetotheU.S.dollar.Conversely,theUnderlyingIndexisdesignedtohavelowerreturnsthananequivalentunhedgedinvestmentwhenthecomponentcurrenciesarerisingrelativetotheU.S.dollar.InordertoreplicatethehedgingŽcomponentoftheUnderlyingIndex,theFundintendstoenterintoforeigncurrencyforwardcontractsdesignedtooffsettheFundsexposuretothecomponentcurrencies.Aforeigncurrencyforwardcontractisacontractbetweentwopartiestobuyorsellaspecifiedamountofaspecificcurrencyinthefutureatanagreeduponexchangerate.TheFundsexposuretoforeigncurrencyforwardcontractsisbasedontheaggregateexposureoftheFundtothecomponentcurrencies.WhilethisapproachisdesignedtominimizetheimpactofcurrencyfluctuationsonFundreturns,itdoesnotnecessarilyeliminatetheFundsexposuretothecomponentcurrencies. S-3 ThereturnoftheforeigncurrencyforwardcontractsmaynotperfectlyoffsettheactualfluctuationsbetweenthecomponentcurrenciesandtheU.S.dollar.TheFundmayusenon-deliverableforward(NDFŽ)contractstoexecuteitshedgingtransactions.AnNDFisacontractwherethereisnophysicalsettlementoftwocurrenciesatmaturity.Rather,basedonthemovementofthecurrencies,anetcashsettlementwillbemadebyonepartytotheother.TheFundmaylendsecuritiesrepresentinguptoone-thirdofthevalueoftheF

5 undstotalassets(includingthevalueofthec
undstotalassets(includingthevalueofthecollateralreceived).TheUnderlyingIndexiscalculatedbyanorganization(theIndexProviderŽ)thatisindependentoftheFundandBFA.TheIndexProviderdeterminesthecompositionandrelativeweightingsofthesecuritiesintheUnderlyingIndexandpublishesinformationregardingthemarketvalueoftheUnderlyingIndex.TheFundsIndexProviderisMSCI.IndustryConcentrationPolicy.TheFundwillconcentrateitsinvestments,hold25%ormoreofitstotalassets)inaparticularindustryorgroupofindustriestoapproximatelythesameextentthattheUnderlyingIndexisconcentrated.Forpurposesofthislimitation,securitiesoftheU.S.government(includingitsagenciesandinstrumentalities)andrepurchaseagreementscollateralizedbyU.S.governmentsecuritiesarenotconsideredtobeissuedbymembersofanyindustry.SummaryofPrincipalRisksAswithanyinvestment,youcouldloseallorpartofyourinvestmentintheFund,andtheFundsperformancecouldtrailthatofotherinvestments.TheFundissubjecttotheprincipalrisksnotedbelow(eitherdirectlyorthroughitsinvestmentsintheUnderlyingFund),anyofwhichmayadverselyaffecttheFundsNAV,tradingprice,yield,totalreturnandabilitytomeetitsinvestmentAssetClassRisk.SecuritiesintheUnderlyingIndexorintheFundsportfoliomayunderperformincomparisontothegeneralsecuritiesmarkets,aparticularsecuritiesmarketorotherassetclasses.ConcentrationRisk.TheFundmaybesusceptibletoanincreasedriskofloss,includinglossesduetoadverseoccurrencesaffectingtheFundmorethanthemarketasawhole,totheextentthattheFundsortheUnderlyingFundsinvestmentsareconcentratedinthesecuritiesofaparticularissuerorissuers,country,groupofcountries,region,market,industry,groupofindustries,sectororassetclass.ConsumerDiscretionarySectorRisk.Theconsumerdiscretionarysectormaybeaffectedbychangesindomesticandinternationaleconomies,exchangeandinterestrates,competition,consumersdisposableincome,consumerpreferences,socialtrendsandmarketingcampaigns.CurrencyHedgingRisk.WhenaderivativeisusedasahedgeagainstapositionthattheFundholds,anylossgeneratedbythederivativegenerallyshouldbesubstantiallyoffsetbygainsonthehedgedinvestment,andviceversa.Whilehedgingcanreduceoreliminatelosses,itcanalsoreduceor S-4 eliminategains.Hedgesaresometimessubjecttoimperfectmatchingbetweenthederivativeanditsreferenceasset,andtherecanbenoassurancethattheFundshedgingtransactionswillbeInseeki

6 ngtotracktheperformanceoftheUnderlyingIn
ngtotracktheperformanceoftheUnderlyingIndex,theFundwillattempttohedgethecurrencyexposureofnon-U.S.dollardenominatedsecuritiesheldinitsportfoliobyinvestinginforeigncurrencyforwardcontracts,whichmayincludebothphysically-settledforwardcontractsandNDFs.NDFsmaybelessliquidthandeliverableforwardcurrencycontracts.AlackofliquidityinNDFsofthehedgedcurrencycouldresultintheFundbeingunabletostructureitshedgingtransactionsasintended.Inaddition,BFAmayseektolimitthesizeoftheFundinordertoattempttoreduceasituationwheretheFundisunabletoobtainsufficientliquidityinanunderlyingcurrencytoimplementitsinvestmentobjective.Foreigncurrencyforwardcontracts,includingNDFs,donoteliminatemovementsinthevalueofnon-U.S.currenciesandsecuritiesbutratherallowtheFundtoestablishafixedrateofexchangeforafuturepointintime.ExchangeratesmaybevolatileandmaychangequicklyandunpredictablyinresponsetobothglobaleconomicdevelopmentsandeconomicconditionsinageographicregioninwhichtheFundortheUnderlyingFundinvests.Inaddition,theFundsexposuretothevalueofthecomponentcurrenciesmaynotbefullyhedgedatalltimes.BecausetheFundscurrencyhedgeisresetonamonthlybasis,currencyriskcandeveloporincreaseintra-month.Furthermore,whiletheFundisdesignedtohedgeagainstcurrencyfluctuations,itispossiblethatadegreeofcurrencyexposuremayremainevenatthetimeahedgingtransactionisimplemented.Asaresult,theFundmaynotbeabletostructureitshedgingtransactionsasanticipatedoritshedgingtransactionsmaynotsuccessfullyreducethecurrencyriskincludedintheFundsportfolio.TheeffectivenessoftheFundscurrencyhedgingstrategywillingeneralbeaffectedbythevolatilityofboththeUnderlyingIndex,andthevolatilityoftheU.S.dollarrelativetothecurrenciestobehedged.IncreasedvolatilitywillgenerallyreducetheeffectivenessoftheFundscurrencyhedgingstrategy.TheeffectivenessoftheFundscurrencyhedgingstrategymayalsoingeneralbeaffectedbyinterestrates.SignificantdifferencesbetweenU.S.dollarinterestratesandforeigncurrencyinterestratesmayimpacttheeffectivenessoftheFundscurrencyhedgingstrategy.CurrencyRiskBecausetheFundsandtheUnderlyingFundsNAVsaredeterminedinU.S.dollars,theFundsNAVcoulddeclineifthecurrencyofanon-U.S.marketinwhichtheFundinvestsdepreciatesagainsttheU.S.dollarandtheFundsattempttohedgecurrencyexposureisunsuccessful.Generally,anincreaseinthevalueoftheU.S.dollar

7 againstaforeigncurrencywillreducethevalu
againstaforeigncurrencywillreducethevalueofasecuritydenominatedinthatforeigncurrency,therebydecreasingtheFundsoverallNAV.Inaddition,fluctuationsintheexchangeratesofcurrenciescouldaffecttheeconomyorparticularbusinessoperationsofcompaniesinageographicregion,includingsecuritiesinwhichtheFundortheUnderlyingFundinvests,causinganadverseimpactontheFundsortheUnderlyingFundsinvestmentsintheaffected S-5 regionandtheUnitedStates.Asaresult,investorshavethepotentialforlossesregardlessofthelengthoftimetheyintendtoholdFundshares.DerivativesRisk.TheFundwillusecurrencyforwardsandNDFstohedgethecurrencyexposureresultingfrominvestmentsinforeignsecurities.TheFundsuseoftheseinstruments,likeinstrumentsinotherderivatives,mayreducetheFundsreturnsand/orincreasevolatility.Volatilityisdefinedasthecharacteristicofasecurity,acurrency,anindexoramarket,tofluctuatesignificantlyinpricewithinashorttimeperiod.Currencyforwards,likeotherderivatives,arealsosubjecttocounterpartyrisk,whichistheriskthattheotherpartyinthetransactionwillnotfulfillitscontractualobligation.AriskoftheFundsuseofderivativesisthatthefluctuationsintheirvaluesmaynotcorrelateperfectlywiththecurrencybeinghedged.ThepossiblelackofaliquidsecondarymarketforderivativesandtheresultinginabilityoftheFundtosellorotherwisecloseaderivativespositioncouldexposetheFundtolossesandcouldmakederivativesmoredifficultfortheFundtovalueaccurately.TheFundcouldalsosufferlossesrelatedtoitsderivativespositionsasaresultofunanticipatedmarketmovements,whichlossesarepotentiallyunlimited.BFAsuseofderivativesisnotintendedtopredictthedirectionofsecuritiesprices,currencyexchangerates,interestratesandothereconomicfactors,whichcouldcausetheFundsderivativespositionstolosevalue.DerivativesmaygiverisetoaformofleverageandmayexposetheFundtogreaterriskandincreaseitscosts.TheU.S.andcertainothercountrieshaveadoptedorareintheprocessofadoptingregulatoryreformsaffectingthederivativesmarkets.Theseregulationsmaymakederivativesmorecostly,maylimittheavailabilityofderivatives,andmayotherwiseadverselyaffectthevalueandperformanceofderivatives.EquitySecuritiesRisksecuritiesaresubjecttochangesinvalueandtheirvaluesmaybemorevolatilethanthoseofotherassetFinancialsSectorRiskPerformanceofcompaniesinthefinancialssectormaybeadverselyimpactedbymanyfactors,including,among

8 others,governmentregulations,economiccon
others,governmentregulations,economicconditions,creditratingdowngrades,changesininterestrates,anddecreasedliquidityincreditmarkets.Thissectorhasexperiencedsignificantlossesintherecentpast,andtheimpactofmorestringentcapitalrequirementsandofrecentorfutureregulationonanyindividualfinancialcompanyoronthesectorasawholecannotbepredicted.GeographicRiskAnaturalorotherdisastercouldoccurinageographicregioninwhichtheFundortheUnderlyingFundinvests,whichcouldaffecttheeconomyorparticularbusinessoperationsofcompaniesinthespecificgeographicregion,causinganadverseimpactontheFundsortheUnderlyingFundsinvestmentsintheaffectedregion.Index-RelatedRisk.ThereisnoguaranteethattheFundwillachieveahighdegreeofcorrelationtotheUnderlyingIndexandthereforeachieveitsinvestmentobjective.MarketdisruptionsandregulatoryrestrictionscouldhaveanadverseeffectontheFundsabilitytoadjustitsexposuretotherequiredlevelsinordertotracktheUnderlyingIndex.Errorsinthe S-6 constructionoftheUnderlyingIndexinaccordancewithitsmethodologymayoccurfromtimetotimeandmaynotbeidentifiedandcorrectedbytheIndexProviderforaperiodoftime,whichmayhaveanadverseimpactontheFundanditsshareholders.IndustrialsSectorRisk.Theindustrialssectormaybeaffectedbychangesinthesupplyofanddemandforproductsandservices,productobsolescence,claimsforenvironmentaldamageorproductliabilityandgeneraleconomicconditions,amongotherfactors.InvestmentinUnderlyingFundsRisk.TheFundexpectstoinvestasubstantialportionofitsassetsintheUnderlyingFund,sotheFundsinvestmentperformanceisdirectlyrelatedtotheperformanceoftheUnderlyingFund.TheFundsNAVwillchangewithchangesinthevalueoftheUnderlyingFundandothersecuritiesinwhichtheFundinvestsbasedontheirmarketvaluations.AninvestmentintheFundwillentailmorecostsandexpensesthanadirectinvestmentintheUnderlyingFund.AstheFundsallocationtotheUnderlyingFundchangesfromtimetotime,ortotheextentthattheexpenseratiooftheUnderlyingFundchanges,theweightedaverageoperatingexpensesbornebytheFundmayincreaseordecrease.IssuerRiskFundperformancedependsontheperformanceofindividualsecuritiestowhichtheFundortheUnderlyingFundhasexposure.Changesinthefinancialconditionorcreditratingofanissuerofthosesecuritiesmaycausethevalueofthesecuritiestodecline.ManagementRiskAstheFundmaynotfullyreplicatetheUnderlyingIndex,itissubjecttotheriskthatBFA

9 sinvestmentstrategymaynotproducetheinten
sinvestmentstrategymaynotproducetheintendedresults.MarketRiskTheFundandtheUnderlyingFundcouldlosemoneyovershortperiodsduetoshort-termmarketmovementsandoverlongerperiodsduringmarketdownturns.MarketTradingRiskTheFundandtheUnderlyingFundfacenumerousmarkettradingrisks,includingthepotentiallackofanactivemarketfortheirshares,lossesfromtradinginsecondarymarkets,periodsofhighvolatilityanddisruptioninthecreation/redemptionprocessoftheFundorUnderlyingFund.ANYOFTHESEFACTORS,AOTHERS,MAYLEADTOTHEFUNDSSHARESTRADINGATAPREMIUMORDISCOUNTTONAV.Non-DiversificationRiskTheFundortheUnderlyingFundmayinvestalargepercentageofitsassetsinsecuritiesissuedbyorrepresentingasmallnumberofissuers.Asaresult,theFundsperformancemaydependontheperformanceofasmallnumberofNon-U.S.SecuritiesRiskinthesecuritiesofnon-U.S.issuersaresubjecttotherisksassociatedwithinvestinginthosenon-U.S.markets,suchasheightenedrisksofinflationornationalization.TheFundmaylosemoneyduetopolitical,economicandgeographiceventsaffectingissuersofnon-U.S.securitiesornon-U.S.markets.TheFundisspecificallyexposedtoEuropeanEconomicRiskPassiveInvestmentRiskTheFundandtheUnderlyingFundarenotactivelymanagedandBFAdoesnotattempttotakedefensivepositionsunderanymarketconditions,includingdecliningmarkets. S-7 RelianceonTradingPartnersRiskTheFundortheUnderlyingFundinvestsincountrieswhoseeconomiesareheavilydependentupontradingwithkeypartners.AnyreductioninthistradingmayhaveanadverseimpactontheFundsinvestments.Throughitsportfoliocompaniestradingpartners,theFundisspecificallyexposedtoEuropeanEconomicRiskEconomicRiskRiskofInvestinginDevelopedTheFundsortheUnderlyingFundsinvestmentindevelopedcountryissuersmaysubjecttheFundtoregulatory,political,currency,security,andeconomicrisksspecifictodevelopedcountries.Developedcountriestendtorepresentasignificantportionoftheglobaleconomyandhavegenerallyexperiencedslowereconomicgrowththansomeothercountries.Amajorityofdevelopedcountrieshaverecentlyexperiencedasignificanteconomicslowdown.Inaddition,developedcountriesmaybeimpactedbychangestotheeconomichealthofcertainkeytradingpartners,regulatoryburdens,debtburdensandthepriceoravailabilityofcertaincommodities.RiskofInvestinginFrance.TheFundsortheUnderlyingFundsinvestmentinFrenchissuersmaysubjecttheFundtolegal,regulatory,political,currency,secur

10 ity,andeconomicriskspecifictoFrance.TheF
ity,andeconomicriskspecifictoFrance.TheFrencheconomy,alongwithcertainotherEuropeanUnion(theEUŽ)economies,experiencedasignificanteconomicslowdownduringtherecentfinancialcrisis.Recently,newconcernsemergedwithrespecttotheeconomicoutlookforcertainEUcountries,includingFrance.Asaresult,theFrencheconomyhasexperiencedsignificantvolatilityandadversetrendsduetoconcernsaboutaprolongedeconomicdownturnandrisinggovernmentdebtlevels.TheFrencheconomyisdependentonagriculturalexports,andasaresult,issusceptibletofluctuationsindemandforagriculturalproducts.RiskofInvestinginGermany.TheFundsortheUnderlyingFundsinvestmentinGermanissuerssubjectstheFundtolegal,regulatory,political,currency,security,andeconomicrisksspecifictoGermany.TheGermaneconomy,alongwithcertainotherEUeconomies,experiencedasignificanteconomicslowdownduringtherecentfinancialcrisis.Germanyhasanexportdependenteconomyandthereforereliesheavilyontradewithkeytradingpartners,includingtheUnitedStates,France,ItalyandotherEuropeancountries.GermanyisdependentontheeconomiesoftheseothercountriesandanychangeinthepriceordemandforGermanexportsmayhaveanadverseimpactonitseconomy.SecuritiesLendingRisk.TheFundortheUnderlyingFundmayengageinsecuritieslending.SecuritieslendinginvolvestheriskthattheFundortheUnderlyingFundmaylosemoneybecausetheborroweroftheloanedsecuritiesfailstoreturnthesecuritiesinatimelymanneroratall.TheFundortheUnderlyingFundcouldalsolosemoneyintheeventofadeclineinthevalueofthecollateralprovidedforloanedsecuritiesoradeclineinthevalueofanyinvestmentsmadewithcashcollateral.TheseeventscouldalsotriggeradversetaxconsequencesfortheFund.SecurityRiskSomecountriesandregionsinwhichtheFundortheUnderlyingFundinvestshaveexperiencedsecurityconcerns.Incidentsinvolvingacountrysor S-8 regionssecuritymaycauseuncertaintyinthesemarketsandmayadverselyaffecttheireconomiesandtheFundsTaxRiskBecausetheFundisexpectedtoinvestintheUnderlyingFund,theFundsrealizedlossesonsalesofsharesoftheUnderlyingFundmaybeindefinitelyorpermanentlydeferredaswashsales.ŽDistributionsofshort-termcapitalgainsbytheUnderlyingFundwillberecognizedasordinaryincomebytheFundandwouldnotbeoffsetbytheFundscapitallosscarryforwards,ifany.CapitallosscarryforwardsoftheUnderlyingFund,ifany,wouldnotoffsetnetcapitalgainsoftheFund.EachoftheseeffectsiscausedbytheFu

11 ndsinvestmentintheUnderlyingFundandmayr
ndsinvestmentintheUnderlyingFundandmayresultindistributionstoFundshareholdersbeingofhighermagnitudesandlesslikelytoqualifyforlowercapitalgaintaxratesthaniftheFundweretoinvestotherwise.TrackingErrorRiskTrackingerroristhedivergenceoftheFundsperformancefromthatoftheUnderlyingIndex.Trackingerrormayoccurbecauseofdifferencesbetweenthesecurities(includingsharesoftheUnderlyingFund)andotherinstrumentsheldintheFundsportfolioandthoseincludedintheUnderlyingIndex,pricingdifferences(includingdifferencesbetweenasecurityspriceatthelocalmarketcloseandtheintrinsicvalueofasecurityatthetimeofcalculationoftheNAV),differencesintransactionandhedgingcostsandforwardratesachieved,theFundsholdingofuninvestedcash,differencesintimingoftheaccrualofdividends,changestotheUnderlyingIndexandthecosttotheFundofcomplyingwithvariousneworexistingregulatoryrequirements.Theserisksmaybeheightenedduringtimesofincreasedmarketvolatilityorotherunusualmarketconditionsintheaffectedsecuritiesand/orforeignexchangemarkets.Inaddition,trackingerrormayresultbecausetheFundincursfeesandexpenses,whiletheUnderlyingIndexdoesnot,andbecausetheFundacceptscreationsandredemptionsduringtimeperiodsbetweenwhichitisabletoadjustitscurrencyhedges,whereastheUnderlyingIndexdoesnot.TotheextentthattheFundseeksitsinvestmentobjectivethroughinvestmentsinanUnderlyingFund,theFundmayexperienceincreasedtrackingerror.ThepotentialforincreasedtrackingerrormayresultfrominvestmentsinanUnderlyingFunddueto,amongotherthings,differencesinthecompositionoftheinvestmentportfoliooftheUnderlyingFundascomparedtotheindextrackedbytheUnderlyingFundanddifferencesintheFundsvaluationoftheUnderlyingFund(valuedasofthecloseoftheNewYorkStockExchange,typically4:00p.m.EasternTime)andthevaluationofthesecurities(generallyvaluedasofeachsecurityslocalmarketclose)andtheforeigncurrencyforwardcontracts(generallyvaluedat4:00p.m.Londontime)intheUnderlyingIndex.ValuationRiskThepricetheFundandtheUnderlyingFundcouldreceiveuponsaleofasecurityorunwindofafinancialinstrumentmaydifferfromtheFundsvaluationofthesecurityorotherinstrumentandmaydifferfromthevalueusedbytheUnderlyingIndex,particularlyforsecuritiesorassetsthattradeinlowvolumeorvolatilemarketsorthatarevaluedusingafairvaluemethodology.Inaddition,thevalueofthesecuritiesorassetsintheFundsortheUnderlyingFu

12 ndsportfoliomaychangeondayswhensharehol
ndsportfoliomaychangeondayswhenshareholderswillnotbeabletopurchaseorselltheFundsshares. S-9 PerformanceInformationAsofthedateoftheProspectus,theFundhasbeeninoperationforlessthanonefullcalendaryearandthereforedoesnotreportitsperformanceInvestmentAdviser.BlackRockFundPortfolioManagers.MatthewGoff,DianeHsiung,JenniferHsui,OrlandoMontalvoandGregSavage(thePortfolioManagersŽ)areprimarilyresponsiblefortheday-to-daymanagementoftheFund.EachPortfolioManagersupervisesaportfoliomanagementteam.Mr.Goff,Ms.Hsiung,Ms.Hsui,Mr.MontalvoandMr.SavagehavebeenPortfolioManagersoftheFundsince2014.PurchaseandSaleofFundTheFundisanexchange-tradedfund(commonlyreferredtoasanETFŽ).IndividualFundsharesmayonlybepurchasedandsoldonanationalsecuritiesexchangethroughabroker-dealer.ThepriceofFundsharesisbasedonmarketprice,andbecauseETFsharestradeatmarketpricesratherthanatNAV,sharesmaytradeatapricegreaterthanNAV(apremium)orlessthanNAV(adiscount).TheFundwillonlyissueorredeemsharesthathavebeenaggregatedintoblocksof50,000sharesormultiplesthereof(CreationUnitsŽ)toauthorizedparticipantswhohaveenteredintoagreementswiththeFundsdistributor.TheFundgenerallywillissueorredeemCreationUnitsinreturnforadesignatedportfolioofsecurities(andanamountofcash)thattheFundspecifieseachday.TaxInformationTheFundintendstomakedistributionsthatmaybetaxabletoyouasordinaryincomeorcapitalgains,unlessyouareinvestingthroughatax-deferredarrangementsuchasa401(k)planoranindividualretirementaccount(IRAŽ).PaymentstoBroker-DealersandotherFinancialIfyoupurchasesharesoftheFundthroughabroker-dealerorotherfinancialintermediary(suchasabank),BFAorotherrelatedcompaniesmaypaytheintermediaryformarketingactivitiesandpresentations,educationaltrainingprograms,conferences,thedevelopmentoftechnologyplatformsandreportingsystemsorotherservicesrelatedtothesaleorpromotionoftheFund.Thesepaymentsmaycreateaconflictofinterestbyinfluencingthebroker-dealerorotherintermediaryandyoursalespersontorecommendtheFundoveranotherinvestment.Askyoursalespersonorvisityourfinancialintermediaryswebsiteformore S-10 MoreInformationAbouttheFundThisProspectuscontainsimportantinformationaboutinvestingintheFund.PleasereadthisProspectuscarefullybeforeyoumakeanyinvestmentdecisions.AdditionalinformationregardingtheFundisavailableatwww.iShares.com.OnJune29,2015,t

13 henameoftheFundchangedfromiSharesCurrenc
henameoftheFundchangedfromiSharesCurrencyHedgedMSCIEMUETFtoiSharesCurrencyHedgedMSCIEurozoneETF.BFAistheinvestmentadvisertotheFund.SharesoftheFundarelistedfortradingonNYSEArca,Inc.(NYSEArcaŽ).ThemarketpriceforashareoftheFundmaybedifferentfromtheFundsmostrecentNAV.ETFsarefundsthattradelikeotherpubliclytradedsecurities.TheFundisdesignedtotrackanindex.Similartosharesofanindexmutualfund,eachshareoftheFundrepresentsapartialownershipinanunderlyingportfolioofsecuritiesandotherinstrumentsintendedtotrackamarketindex.Unlikesharesofamutualfund,whichcanbeboughtandredeemedfromtheissuingfundbyallshareholdersatapricebasedonNAV,sharesoftheFundmaybepurchasedorredeemeddirectlyfromtheFundatNAVsolelybyAuthorizedParticipants(asdefinedintheCreationsandRedemptionssectionofthisProspectus).Alsounlikesharesofamutualfund,sharesoftheFundarelistedonanationalsecuritiesexchangeandtradeinthesecondarymarketatmarketpricesthatchangethroughouttheday.TheFundinvestsinaparticularsegmentofthesecuritiesmarketsandseekstotracktheperformanceofacurrencyhedgedsecuritiesindexthatgenerallyisnotrepresentativeofthemarketasawhole.TheFundisdesignedtobeusedaspartofbroaderassetallocationstrategies.Accordingly,aninvestmentintheFundshouldnotconstituteacompleteinvestmentprogram.AnindexisatheoreticalfinancialcalculationwhiletheFundisanactualinvestmentportfolio.TheperformanceoftheFundandtheUnderlyingIndexmayvaryfromoneanotherforanumberofreasons,includingtransactioncosts,non-U.S.currencyvaluations,assetvaluations,corporateactions(suchasmergersandspin-offs),timingvariancesanddifferencesbetweentheFundsportfolioandtheUnderlyingIndexresultingfromlegalrestrictions(suchasdiversificationrequirements)thatapplytotheFundbutnottotheUnderlyingIndexortotheFundsuseofrepresentativesampling.TrackingerrorŽisthedivergenceoftheperformance(return)oftheFundsportfoliofromthatoftheUnderlyingIndex.BFAexpectsthat,overtime,theFundstrackingerrorwillnotexceed5%.BecausetheFundusesarepresentativesamplingindexingstrategy,itcanbeexpectedtohavealargertrackingerrorthanifitusedareplicationindexingstrategy.ReplicationŽisanindexingstrategyinwhichafundinvestsinsubstantiallyallofthesecuritiesinitsunderlyingindexinapproximatelythesameproportionsasintheunderlyingindex.AninvestmentintheFundisnotabankdepositanditisnotinsuredorguaranteedbyt

14 heFederalDepositInsuranceCorporationoran
heFederalDepositInsuranceCorporationoranyothergovernmentagency,BFAoranyofitsaffiliates. TheFundsinvestmentobjectiveandtheUnderlyingIndexmaybechangedwithoutshareholderapproval.AFurtherDiscussionofPrincipalRisksTheFundissubjecttovariousrisks,includingtheprincipalrisksnotedbelow,anyofwhichmayadverselyaffecttheFundsNAV,tradingprice,yield,totalreturnandabilitytomeetitsinvestmentobjective.TheFundmaybeexposedtotheserisksdirectly,orindirectlythroughtheFundsinvestmentsintheUnderlyingFund.YoucouldloseallorpartofyourinvestmentintheFund,andtheFundcouldunderperformotherAssetClassRisk.ThesecuritiesintheUnderlyingIndexorintheFundsortheUnderlyingFundsportfoliomayunderperformthereturnsofothersecuritiesorindexesthattrackothercountries,groupsofcountries,regions,industries,groupsofindustries,markets,assetclassesorsectors.Varioustypesofsecuritiesorindexestendtoexperiencecyclesofoutperformanceandunderperformanceincomparisontothegeneralsecuritiesmarkets.ConcentrationRisk.TheFundmaybesusceptibletoanincreasedriskofloss,includinglossesduetoadverseoccurrencesaffectingtheFundmorethanthemarketasawhole,totheextentthattheFundsortheUnderlyingFundsinvestmentsareconcentratedinthesecuritiesofaparticularissuerorissuers,country,groupofcountries,region,market,industry,groupofindustries,sectororassetclass.TheFundmaybemoreadverselyaffectedbytheunderperformanceofthosesecurities,mayexperienceincreasedpricevolatilityandmaybemoresusceptibletoadverseeconomic,market,politicalorregulatoryoccurrencesaffectingthosesecuritiesthanafundthatdoesnotconcentrateitsinvestments.ConsumerDiscretionarySectorRisk.Thesuccessofconsumerproductmanufacturersandretailersistiedcloselytotheperformanceofdomesticandinternationaleconomies,interestrates,exchangerates,competition,consumerconfidence,changesindemographicsandconsumerpreferences.Companiesintheconsumerdiscretionarysectordependheavilyondisposablehouseholdincomeandconsumerspending,andmaybestronglyaffectedbysocialtrendsandmarketingcampaigns.Thesecompaniesmaybesubjecttoseverecompetition,whichmayhaveanadverseimpactontheirprofitability.CurrencyHedgingRisk.WhenaderivativeisusedasahedgeagainstapositionthattheFundholds,anylossgeneratedbythederivativegenerallyshouldbesubstantiallyoffsetbygainsonthehedgedinvestment,andviceversa.Whilehedgingcanreduceoreliminatelo

15 sses,itcanalsoreduceoreliminategains.Hed
sses,itcanalsoreduceoreliminategains.Hedgesaresometimessubjecttoimperfectmatchingbetweenthederivativeanditsreferenceasset,andtherecanbenoassurancethattheFundshedgingtransactionswillbeeffective.InseekingtotracktheperformanceoftheUnderlyingIndex,theFundwillattempttohedgethecurrencyexposureofnon-U.S.dollardenominatedsecuritiesheldinitsportfolioorheldbytheUnderlyingFundbyinvestinginforeigncurrencyforwardcontracts,whichmayincludebothphysically-settledforwardcontractsandNDFs.NDFsmaybelessliquidthandeliverableforwardcurrencycontracts.AlackofliquidityinNDFsofthehedgedcurrencycouldresultintheFundbeingunabletostructureitshedgingtransactionsas intended.Inaddition,BFAmayseektolimitthesizeoftheFundinordertoattempttoreduceasituationwheretheFundisunabletoobtainsufficientliquidityinanunderlyingcurrencytoimplementitsinvestmentobjective.ThereisnoassurancethattheFundshedgingstrategywillbeeffectiveinhedgingfluctuationsinthevalueofthesecurrenciesagainsttheU.S.dollar.TheeffectivenessoftheFundscurrencyhedgingstrategywillingeneralbeaffectedbythevolatilityofboththeUnderlyingIndexandthevolatilityoftheU.S.dollarrelativetothecurrenciestobehedged.IncreasedvolatilitywillgenerallyreducetheeffectivenessoftheFundscurrencyhedgingstrategy.TheeffectivenessoftheFundscurrencyhedgingstrategymayalsobeaffectedbyinterestrates,whichmaydifferamongtheaffectedcountries.SignificantdifferencesbetweenU.S.dollarinterestratesandsomeoralloftheapplicableforeigncurrencyinterestratesmayimpacttheeffectivenessoftheFundscurrencyhedgingstrategy.Inaddition,thecurrencyhedgingcarriedoutbytheFundmayresultinlowerreturnsthanthosegeneratedthroughdirectinvestmentsinthesecuritiescomprisingtheUnderlyingIndexorintheindextrackedbytheUnderlyingFundwhenthelocalcurrencyappreciatesagainsttheU.S.dollar.Foreigncurrencyforwardcontracts,includingNDFs,donoteliminatemovementsinthevalueofnon-U.S.currenciesandsecuritiesbutratherallowtheFundtoestablishafixedrateofexchangeforafuturepointintime.WhenaderivativeorotherinstrumentisusedasahedgeagainstpositionsthattheFundholds,anylossgeneratedbythederivativeorotherinstrumentgenerallyshouldbesubstantiallyoffsetbygainsinthecurrencyvalueembeddedinthehedgedinvestmentandviceversa.Whilehedgingcanreduceoreliminatelosses,itcanalsoreduceoreliminategains.Exchangeratesmaybevolatileandmaycha

16 ngequicklyandunpredictablyinresponsetobo
ngequicklyandunpredictablyinresponsetobothglobaleconomicdevelopmentsandeconomicconditionsinageographicregioninwhichtheFundinvests.Inaddition,theFundsexposuretothevalueofthecomponentcurrenciesmaynotbefullyhedgedatalltimes.Also,governmentsfromtimetotimeinterveneinthecurrencymarkets,directlyandbyregulation,inordertoinfluenceprices.Fromtimetotime,governmentsmayadoptpoliciesdesignedtodirectlyinfluenceforeignexchangerateswithrespecttotheircurrency.Asaresult,theFundmaynotbeabletostructureitshedgingtransactionsasanticipatedoritshedgingtransactionsmaynotsuccessfullyreducethecurrencyriskincludedintheFundsportfolioinawaythattrackstheUnderlyingIndex.TotheextenttheFundentersintoover-the-counterderivativetransactionsorotherinstrumentstopursueitscurrencyhedgingstrategy,theFundwillbesubjecttocounterpartyriskaswellasmarketorliquidityriskwithrespecttothesetransactions.Inaddition,theFundscurrencyhedgingactivitiesmayinvolvefrequenttradingofcurrencyinstruments,whichmayincreasetransactioncostsandcausetheFundsreturntodeviatefromtheUnderlyingInvestors,suchastheFund,seekingtotradeinforeigncurrenciesmayhavelimitedaccesstocertaincurrencymarketsduetoavarietyoffactors,includinggovernmentregulations,adversetaxtreatment,exchangecontrols,currencyconvertibilityissuesandlackofmarketliquidity.Theselimitationsandrestrictionsmayimpacttheavailability,liquidityandpricingofthefinancialinstrumentsthatarenecessaryfortheFundtohedgeexposuretothecurrencymarkets.IftheFundsabilitytoenterintocontractstopurchaseorsellthecurrencyofanon-U.S.marketinwhichtheFund investsisimpaired,theFundmaynotbeabletoachieveitsinvestmentobjective.Inaddition,theseforeigncurrencyhedginginstrumentsofteninvolvederivativeinvestmentsand,therefore,exposetheFundtotherisksdescribedunderDerivativesCurrencyRisk.BecausetheFundsandtheUnderlyingFundsNAVsaredeterminedonthebasisoftheU.S.dollar,investorsmaylosemoneyifthecurrencyofanon-U.S.marketinwhichtheFundinvestsdepreciatesagainsttheU.S.dollarandtheFundsattempttohedgecurrencyexposureisunsuccessful.Generally,anincreaseinthevalueoftheU.S.dollaragainstaforeigncurrencywillreducethevalueofasecuritydenominatedinthatforeigncurrency,therebydecreasingtheFundsoverallNAV.Inaddition,fluctuationsintheexchangevaluesofcurrenciescouldaffecttheeconomyorparticularbusinessoperationsofco

17 mpaniesinageographicregioninwhichtheFund
mpaniesinageographicregioninwhichtheFundortheUnderlyingFundinvests,causinganadverseimpactontheFundsortheUnderlyingFundsinvestmentsintheaffectedregionandtheUnitedStates.Asaresult,investorshavethepotentialforlossesregardlessofthelengthoftimetheyintendtoholdFundshares.DerivativesRisk.TheFundwillusecurrencyforwardsandNDFstohedgethecurrencyexposureresultingfrominvestmentsinforeignsecurities.TheFundsuseoftheseinstruments,likeinstrumentsinotherderivatives,mayreducetheFundsreturnsand/orincreasevolatility.Volatilityisdefinedasthecharacteristicofasecurity,acurrency,anindexoramarkettofluctuatesignificantlyinpricewithinashorttimeperiod.Currencyforwards,likeotherderivatives,arealsosubjecttocounterpartyrisk,whichistheriskthattheotherpartyinthetransactionwillnotfulfillitscontractualobligation.AriskoftheFundsuseofderivativesisthatthefluctuationsintheirvaluesmaynotcorrelateperfectlywiththecurrencybeinghedged.ThepossiblelackofaliquidsecondarymarketforderivativesandtheresultinginabilityoftheFundtosellorotherwisecloseaderivativespositioncouldexposetheFundtolossesandcouldmakederivativesmoredifficultfortheFundtovalueaccurately.TheFundcouldalsosufferlossesrelatedtoitsderivativespositionsasaresultofunanticipatedmarketmovements,whichlossesarepotentiallyunlimited.BFAsuseofderivativesisnotintendedtopredictthedirectionofsecuritiesprices,currencyexchangerates,interestratesandothereconomicfactors,whichcouldcausetheFundsderivativespositionstolosevalue.DerivativesmaygiverisetoaformofleverageandmayexposetheFundtogreaterriskandincreaseitscosts.TheU.S.andcertainothercountrieshaveadoptedorareintheprocessofadoptingregulatoryreformsaffectingthederivativesmarkets.Theseregulationsmaymakederivativesmorecostly,maylimittheavailabilityofderivatives,andmayotherwiseadverselyaffectthevalueandperformanceofEquitySecuritiesRisk.TheFundandtheUnderlyingFundeachinvestinequitysecurities,whicharesubjecttochangesinvaluethatmaybeattributabletomarketperceptionofaparticularissuerortogeneralstockmarketfluctuationsthataffectallissuers.Investmentsinequitysecuritiesmaybemorevolatilethaninvestmentsinotherassetclasses.EuropeanEconomicRisk.TheEconomicandMonetaryUnionoftheEUrequirescompliancewithrestrictionsoninflationrates,deficits,interestrates,debtlevelsand fiscalandmonetarycontrols,eachofwhichmaysigni

18 ficantlyaffecteverycountryinEurope.Decre
ficantlyaffecteverycountryinEurope.Decreasingimportsorexports,changesingovernmentalorEUregulationsontrade,changesintheexchangerateoftheeuro(thecommoncurrencyofcertainEUcountries),thedefaultorthreatofdefaultbyanEUmembercountryonitssovereigndebt,and/oraneconomicrecessioninanEUmembercountrymayhaveasignificantadverseeffectontheeconomiesofEUmembercountriesandtheirtradingpartners.TheEuropeanfinancialmarketshaveexperiencedvolatilityandadversetrendsinrecentyearsduetoconcernsabouteconomicdownturnsorrisinggovernmentdebtlevelsinseveralEuropeancountries,includingGreece,Ireland,Italy,PortugalandSpain.TheseeventshaveadverselyaffectedtheexchangerateoftheeuroandmaycontinuetosignificantlyaffectotherEuropeancountries.ResponsestofinancialproblemsbyEuropeangovernments,centralbanksandothers,includingausteritymeasuresandreforms,maynotproducethedesiredresults,mayresultinsocialunrestandmaylimitfuturegrowthandeconomicrecoveryorhaveotherunintendedconsequences.Furtherdefaultsorrestructuringsbygovernmentsandotherentitiesoftheirdebtcouldhaveadditionaladverseeffectsoneconomies,financialmarketsandassetvaluationsaroundtheworld.Inaddition,oneormorecountriesmayabandontheeuroand/orwithdrawfromtheEU.Theimpactoftheseactions,especiallyiftheyoccurinadisorderlyfashion,isnotclearbutcouldbesignificantandfar-reaching.FinancialsSectorRisk.Companiesinthefinancialssectorofaneconomyareoftensubjecttoextensivegovernmentalregulationandintervention,whichmayadverselyaffectthescopeoftheiractivities,thepricestheycanchargeandtheamountofcapitaltheymustmaintain.Governmentalregulationmaychangefrequentlyandmayhavesignificantadverseconsequencesforcompaniesinthefinancialssector,includingeffectsnotintendedbysuchregulation.Theimpactofrecentorfutureregulationinvariouscountriesonanyindividualfinancialcompanyoronthesectorasawholecannotbepredicted.Certainrisksmayimpactthevalueofinvestmentsinthefinancialssectormoreseverelythanthoseofinvestmentsoutsidethissector,includingtherisksassociatedwithcompaniesthatoperatewithsubstantialfinancialleverage.Companiesinthefinancialssectormayalsobeadverselyaffectedbyincreasesininterestratesandloanlosses,decreasesintheavailabilityofmoneyorassetvaluations,creditratingdowngradesandadverseconditionsinotherrelatedmarkets.Insurancecompanies,inparticular,maybesubjecttoseverepricecompet

19 itionand/orrateregulation,whichmayhavean
itionand/orrateregulation,whichmayhaveanadverseimpactontheirprofitability.Duringthefinancialcrisisthatbeganin2007,thedeteriorationofthecreditmarketsimpactedabroadrangeofmortgage,asset-backed,auctionrate,sovereigndebtandothermarkets,includingU.S.andnon-U.S.creditandinterbankmoneymarkets,therebyaffectingawiderangeoffinancialinstitutionsandmarkets.Anumberoflargefinancialinstitutionsfailedduringthattime,mergedwithstrongerinstitutionsorhadsignificantgovernmentinfusionsofcapital.Instabilityinthefinancialmarketscausedcertainfinancialcompaniestoincurlargelosses.Somefinancialcompaniesexperienceddeclinesinthevaluationsoftheirassets,tookactionstoraisecapital(suchastheissuanceofdebtorequitysecurities),orevenceasedoperations.Somefinancialcompaniesborrowedsignificantamountsofcapitalfromgovernmentsourcesandmayfacefuturegovernment-imposedrestrictionsontheirbusinessesorincreased governmentintervention.Thoseactionscausedthesecuritiesofmanyfinancialcompaniestodeclineinvalue.Thefinancialssectorisparticularlysensitivetofluctuationsininterestrates.GeographicRisk.SomeofthemarketsinwhichtheFundortheUnderlyingFundinvestsarelocatedinpartsoftheworldthathavehistoricallybeenpronetonaturaldisasters,suchasearthquakes,tornadoes,volcaniceruptions,droughts,floods,hurricanesortsunamis,andareeconomicallysensitivetoenvironmentalevents.Anysucheventmayadverselyimpacttheeconomiesofthesegeographicareas,causinganadverseimpactonthevalueoftheFund.Index-RelatedRisk.TheFundseekstoachieveareturnwhichcorrespondsgenerallytothepriceandyieldperformance,beforefeesandexpenses,oftheUnderlyingIndexaspublishedbytheIndexProvider.ThereisnoassurancethattheIndexProviderwillcompiletheUnderlyingIndexaccurately,orthattheUnderlyingIndexwillbedetermined,composedorcalculatedaccurately.WhiletheIndexProviderprovidesdescriptionsofwhattheUnderlyingIndexisdesignedtoachieve,theIndexProviderdoesnotprovideanywarrantyoracceptanyliabilityinrelationtothequality,accuracyorcompletenessofdatainrespectofitsindices,anddoesnotguaranteethattheUnderlyingIndexwillbeinlinewiththeIndexProvidersmethodology.BFAsmandateasdescribedinthisProspectusistomanagetheFundconsistentlywiththeUnderlyingIndexprovidedbytheIndexProvidertoBFA.Consequently,BFAdoesnotprovideanywarrantyorguaranteeforIndexProvidererrors.Errorsinrespectofthequality,accur

20 acyandcompletenessofthedatamayoccurfromt
acyandcompletenessofthedatamayoccurfromtimetotimeandmaynotbeidentifiedandcorrectedbytheIndexProviderforaperiodoftime,particularlywheretheindicesarelesscommonlyused.Therefore,gains,lossesorcostsassociatedwithIndexProvidererrorswillgenerallybebornebytheFundanditsshareholders.Forexample,duringaperiodwheretheFundsUnderlyingIndexcontainsincorrectconstituents,theFundwouldhavemarketexposuretosuchconstituentsandwouldbeunderexposedtotheUnderlyingIndexsotherconstituents.SucherrorsmaynegativelyorpositivelyimpacttheFundanditsshareholders.AnygainsduetoIndexProvidererrorswillbekeptbytheFundanditsshareholdersandanylossesresultingfromIndexProvidererrorswillbebornebytheFundanditsshareholders.Apartfromscheduledrebalances,theIndexProvidermaycarryoutadditionaladhocrebalancestotheUnderlyingIndexinorder,forexample,tocorrectanerrorintheselectionofindexconstituents.WhentheUnderlyingIndexoftheFundisrebalancedandtheFundinturnrebalancesitsportfoliotoattempttoincreasethecorrelationbetweentheFundsportfolioandtheUnderlyingIndex,anytransactioncostsandmarketexposurearisingfromsuchportfoliorebalancingwillbebornedirectlybytheFundanditsshareholders.UnscheduledrebalancestotheUnderlyingIndexmayalsoexposetheFundtotrackingerrorrisk,whichistheriskthattheFundsreturnsmaynottrackthoseoftheUnderlyingIndex.Therefore,errorsandadditionaladhocrebalancescarriedoutbytheIndexProvidertotheUnderlyingIndexmayincreasethecostsandmarketexposureriskoftheFund.SimilarrisksexistfortheUnderlyingFundintrackingitsunderlyingindex,whichmayresultintheFundsperformancedeviatingfromthereturnoftheUnderlyingIndex. IndustrialsSectorRisk.Thevalueofsecuritiesissuedbycompaniesintheindustrialssectormaybeadverselyaffectedbysupplyanddemandrelatedtotheirspecificproductsorservicesandindustrialssectorproductsingeneral.Theproductsofmanufacturingcompaniesmayfaceobsolescenceduetorapidtechnologicaldevelopmentsandfrequentnewproductintroduction.Governmentregulations,worldevents,economicconditionsandexchangeratesmayadverselyaffecttheperformanceofcompaniesintheindustrialssector.Companiesintheindustrialssectormaybeadverselyaffectedbyliabilityforenvironmentaldamageandproductliabilityclaims.Theindustrialssectormayalsobeadverselyaffectedbychangesortrendsincommodityprices,whichmaybeinfluencedbyunpredictablefactors.InvestmentinUnderlyi

21 ngFundsRisk.TheFundexpectstoinvestasubst
ngFundsRisk.TheFundexpectstoinvestasubstantialportionofitsassetsintheUnderlyingFund,sotheFundsinvestmentperformanceisdirectlyrelatedtotheperformanceoftheUnderlyingFund.TheFundmayalsoinvestinotherfunds,includingmoneymarketfunds.TheFundsNAVwillchangewithchangesinthevalueoftheUnderlyingFundandothersecuritiesinwhichtheFundinvestsbasedontheirmarketvaluations.AninvestmentintheFundwillentailmoredirectandindirectcostsandexpensesthanadirectinvestmentintheUnderlyingFund.Forexample,theFundindirectlypaysaportionoftheexpenses(includingoperatingexpensesandmanagementfees)incurredbytheUnderlyingFund.AninvestorintheFundmayreceivetaxablegainsfromportfoliotransactionsbytheUnderlyingFund,aswellastaxablegainsfromtransactionsinsharesoftheUnderlyingFundheldbytheFund.Certainofthefundsmayalsoholdcommonportfoliosecurities.AstheFundsallocationstotheUnderlyingFundchangefromtimetotime,ortotheextentthattheexpenseratiooftheUnderlyingFundchanges,theweightedaverageoperatingexpensesbornebytheFundmayincreaseordecrease.IssuerRisk.TheperformanceoftheFunddependsontheperformanceofindividualsecuritiestowhichtheFundortheUnderlyingFundhasexposure.Anyissuerofthesesecuritiesmayperformpoorly,causingthevalueofitssecuritiestodecline.Poorperformancemaybecausedbypoormanagementdecisions,competitivepressures,changesintechnology,expirationofpatentprotection,disruptionsinsupply,laborproblemsorshortages,corporaterestructurings,fraudulentdisclosuresorotherfactors.Issuersmay,intimesofdistressorattheirowndiscretion,decidetoreduceoreliminatedividends,whichmayalsocausetheirstockpricestodecline.ManagementRisk.TheFundmaynotfullyreplicatetheUnderlyingIndexandmayholdsecuritiesnotincludedintheUnderlyingIndex.Asaresult,theFundissubjecttotheriskthatBFAsinvestmentstrategy,theimplementationofwhichissubjecttoanumberofconstraints,maynotproducetheintendedresults.MarketRisk.TheFundandtheUnderlyingFundcouldlosemoneyduetoshort-termmarketmovementsandoverlongerperiodsduringmarketdownturns.Securitiesmaydeclineinvalueduetofactorsaffectingsecuritiesmarketsgenerallyorparticularassetclassesorindustriesrepresentedinthemarkets.Thevalueofasecurityorassetmaydeclineduetogeneralmarketconditions,economictrendsoreventsthatarenotspecificallyrelatedtotheissuerofthesecurityorassetorduetofactorsthataffecta particularindustryorgroupof

22 industries.Duringageneraldownturninthese
industries.Duringageneraldownturninthesecuritiesmarkets,multipleassetclassesmaybenegativelyaffected.MarketTradingRiskAbsenceofActiveMarket.AlthoughsharesoftheFundandtheUnderlyingFundarelistedfortradingononeormorestockexchanges,therecanbenoassurancethatanactivetradingmarketforsuchshareswilldeveloporbemaintainedbymarketmakersorAuthorizedParticipants.RiskofSecondaryListings.TheFundsandtheUnderlyingFundssharesmaybelistedortradedonU.S.andnon-U.S.stockexchangesotherthantheU.S.stockexchangewheretheFundsprimarylistingismaintained.TherecanbenoassurancethattheFundsandtheUnderlyingFundsshareswillcontinuetotradeonanysuchstockexchangeorinanymarketorthattheFundsandtheUnderlyingFundsshareswillcontinuetomeettherequirementsforlistingortradingonanyexchangeorinanymarket.TheFundsandtheUnderlyingFundssharesmaybelessactivelytradedincertainmarketsthaninothers,andinvestorsaresubjecttotheexecutionandsettlementrisksandmarketstandardsofthemarketwheretheyortheirbrokerdirecttheirtradesforexecution.CertaininformationavailabletoinvestorswhotradeFundsharesonaU.S.stockexchangeduringregularU.S.markethoursmaynotbeavailabletoinvestorswhotradeinothermarkets,whichmayresultinsecondarymarketpricesinsuchmarketsbeinglessefficient.SecondaryMarketTradingRisk.SharesoftheFundandtheUnderlyingFundmaytradeinthesecondarymarketattimeswhentheFundandtheUnderlyingFunddonotacceptorderstopurchaseorredeemshares.Atsuchtimes,sharesmaytradeinthesecondarymarketwithmoresignificantpremiumsordiscountsthanmightbeexperiencedattimeswhentheFundandtheUnderlyingFundacceptspurchaseandredemptionorders.IftheFundpurchasessharesoftheUnderlyingFundatatimewhenthemarketpriceofUnderlyingFundsharesisatapremiumtotheirNAVorsellsUnderlyingFundshareswhentheirmarketpriceisatadiscounttotheirNAV,theFundmayincurlosses.SecondarymarkettradinginFundsharesmaybehaltedbyastockexchangebecauseofmarketconditionsorforotherreasons.Inaddition,tradinginFundsharesonastockexchangeorinanymarketmaybesubjecttotradinghaltscausedbyextraordinarymarketvolatilitypursuanttocircuitbreakerŽrulesonthestockexchangeormarket.TherecanbenoassurancethattherequirementsnecessarytomaintainthelistingortradingofFundshareswillcontinuetobemetorwillremainunchanged.SharesoftheFund,similartosharesofotherissuerslistedonastockexchange,maybesoldshortandarethereforesub

23 jecttotheriskofincreasedvolatilityassoci
jecttotheriskofincreasedvolatilityassociatedwithshortselling.SharesoftheFundandtheUnderlyingFundMayTradeatPricesOtherThanNAV.oftheFundandtheUnderlyingFundeachtradeonstockexchangesatpricesat,aboveorbelowtheFundsmostrecentNAV.TheNAVoftheFundiscalculatedattheendofeachbusinessdayandfluctuateswithchangesinthemarketvalueoftheFundsortheUnderlyingFundsholdings.ThetradingpriceofeachoftheFundsandtheUnderlying FundssharesfluctuatescontinuouslythroughouttradinghoursbasedonbothmarketsupplyofanddemandfortheirsharesandtheunderlyingvalueoftheirportfolioholdingsorNAV.Asaresult,thetradingpricesoftheFundsandtheUnderlyingFundssharesmaydeviatesignificantlyfromNAVduringperiodsofmarketvolatility.ANYOFTHESEFACTORS,AMONGOTHERS,MAYLEADTOSHARESTRADINGATAPREMIUMORDISCOUNTTONAV.However,becausesharescanbecreatedandredeemedinCreationUnitsatNAV,BFAbelievesthatlargediscountsorpremiumstotheNAVoftheFundortheUnderlyingFund,asapplicable,arenotlikelytobesustainedoverthelongterm(unlikesharesofmanyclosed-endfunds,whichfrequentlytradeatappreciablediscountsfrom,andsometimesatpremiumsto,theirNAVs).However,BFAmayseektolimitthesizeoftheFundinordertoattempttoreduceasituationwheretheFundisunabletoobtainsufficientliquidityinanunderlyingcurrencytoimplementitsinvestmentobjective,includingbyrecommendingthattheFundlimitpurchasesofFundsharesthroughCreationUnittransactions.IftheFundelectstoimposelimitationsoncreationtransactions,Fundsharesmaybemorelikelytotradeatapremiuminthesecondarymarket.Whilethecreation/redemptionfeatureisdesignedtomakeitmorelikelythattheFundsortheUnderlyingFundssharesnormallywilltradeonstockexchangesatpricesclosetotheFundsortheUnderlyingFundsnextcalculatedNAV,exchangepricesarenotexpectedtocorrelateexactlywiththeNAVduetotimingreasons,supplyanddemandimbalancesandotherfactors.Inaddition,disruptionstocreationsandredemptions,includingdisruptionsatmarketmakers,AuthorizedParticipants,ormarketparticipantsorduringperiodsofsignificantmarketvolatility,mayresultintradingpricesforsharesoftheFundortheUnderlyingFundthatdiffersignificantlyfromitsNAV.CostsofBuyingorSellingFundShares.BuyingorsellingFundsharesonanexchangeinvolvestwotypesofcoststhatapplytoallsecuritiestransactions.WhenbuyingorsellingsharesoftheFundthroughabroker,youwilllikelyincurabrokeragecommissionorotherchargesimpose

24 dbybrokersasdeterminedbythatbroker.Inadd
dbybrokersasdeterminedbythatbroker.Inaddition,youmayincurthecostofthespread,Žthatis,thedifferencebetweenwhatinvestorsarewillingtopayforFundshares(thebidŽprice)andthepriceatwhichtheyarewillingtosellFundshares(theaskŽprice).BecauseofthecostsinherentinbuyingorsellingFundshares,frequenttradingmaydetractsignificantlyfrominvestmentresultsandaninvestmentinFundsharesmaynotbeadvisableforinvestorswhoanticipateregularlymakingsmallinvestments.Non-DiversificationRisk.TheFundisclassifiedasnon-diversified.ŽThismeansthattheFundmayinvestalargepercentageofitsassetsinsecuritiesissuedbyorrepresentingasmallnumberofissuers.Asaresult,theFundmaybemoresusceptibletotherisksassociatedwiththeseparticularissuers,ortoasingleeconomic,politicalorregulatoryoccurrenceaffectingtheseissuers.Non-U.S.SecuritiesRisk.Investmentsinthesecuritiesofnon-U.S.issuersaresubjecttotherisksofinvestinginthemarketswheresuchissuersarelocated,includingheightenedrisksofinflationornationalizationandmarketfluctuationscausedbyeconomicandpoliticaldevelopments.Asaresultofinvestinginnon-U.S.securities,theFundmaybesubjecttoincreasedriskoflosscausedbyanyofthefactorslistedbelow: Lowerlevelsofliquidityandmarketefficiency;Greatersecuritiespricevolatility;Exchangeratefluctuationsandexchangecontrols;Lessavailabilityofpublicinformationaboutissuers;Limitationsonforeignownershipofsecurities;Impositionofwithholdingorothertaxes;ImpositionofrestrictionsontheexpatriationofthefundsorotherassetsoftheFund;Highertransactionandcustodycostsanddelaysinsettlementprocedures;Difficultiesinenforcingcontractualobligations;Lowerlevelsofregulationofthesecuritiesmarkets;Weakeraccounting,disclosureandreportingrequirements;andLegalprinciplesrelatingtocorporategovernance,directorsfiduciarydutiesandliabilitiesandstockholdersrightsinmarketsinwhichtheFundinvestsmaydifferand/ormaynotbeasextensiveorprotectiveasthosethatapplyintheUnitedPassiveInvestmentRisk.TheFundandtheUnderlyingFundarenotactivelymanagedandmaybeaffectedbyageneraldeclineinmarketsegmentsrelatedtotheUnderlyingIndex.TheFundinvestsinsecuritiesincludedin,orrepresentativeof,theUnderlyingIndex,regardlessoftheirinvestmentmerits.BFAgenerallydoesnotattempttotakedefensivepositionsunderanymarketconditions,includingdecliningmarkets.RelianceonTradingPartnersRisk.Theeconomiesofsomecount

25 riesinwhichtheFundortheUnderlyingFundinv
riesinwhichtheFundortheUnderlyingFundinvestsaredependentontradewithcertainkeytradingpartners.Reductioninspendingontheproductsandservicesofthesecountries,institutionoftariffsorothertradebarriersbyanyoftheirkeytradingpartnersoraslowdownintheeconomiesofanyoftheirkeytradingpartnersmaycauseanadverseimpactontheeconomiesofsuchcountries.RiskofInvestinginDevelopedCountries.InvestmentindevelopedcountryissuersmaysubjecttheFundortheUnderlyingFundtoregulatory,political,currency,security,andeconomicriskspecifictodevelopedcountries.Developedcountriesgenerallytendtorelyonservicessectors(thefinancialservicessector)astheprimarymeansofeconomicgrowth.Aprolongedslowdownin,amongothers,servicessectorsislikelytohaveanegativeimpactoneconomiesofcertaindevelopedcountries.Developedcountriesexperiencedasignificanteconomicslowdownduringtherecentfinancialcrisis.Inthepast,certaindevelopedcountrieshavebeentargetsofterrorism.ActsofterrorismindevelopedcountriesoragainsttheirinterestsabroadmaycauseuncertaintyinthefinancialmarketsandadverselyaffecttheperformanceoftheissuerstowhichtheFundortheUnderlyingFundhasexposure.Heavyregulationof,amongothers,laborandproductmarketsmayhaveanadverseeffectoncertainissuers.Suchregulationsmaynegativelyaffecteconomicgrowthorcauseprolongedperiodsofrecession.Manydevelopedcountriesareheavilyindebtedand facerisinghealthcareandretirementexpenses.Inaddition,pricefluctuationsofcertaincommoditiesandregulationsimpactingtheimportofcommoditiesmaynegativelyaffectdevelopedcountryeconomies.RiskofInvestinginFrance.InvestmentinFrenchissuersmaysubjecttheFundtolegal,regulatory,political,currency,security,andeconomicriskspecifictoFrance.Duringthemostrecentfinancialcrisis,theFrencheconomy,alongwithcertainotherEUeconomies,experiencedasignificanteconomicslowdown.Recently,newconcernsemergedinrelationtotheeconomichealthoftheEU.TheseconcernshaveledtotremendousdownwardpressureoncertainEUmemberstates,includingFrance.InterestratesonFrancesdebtmayrisetolevelsthatmakeitdifficultforittoservicehighdebtlevelswithoutsignificantfinancialhelpfrom,amongothers,theEuropeanCentralBankandcouldpotentiallyresultindefault.Inaddition,theFrencheconomyisdependenttoasignificantextentontheeconomiesofcertainkeytradingpartners,includingGermanyandotherWesternEuropeancountries.ReductioninspendingonFren

26 chproductsandservices,orchangesinanyofth
chproductsandservices,orchangesinanyoftheeconomiesmaycauseanadverseimpactontheFrencheconomy.Inaddition,Francemaybesubjecttoactsofterrorism.TheFrencheconomyisdependentonexportsfromtheagriculturalsector.Leadingagriculturalexportsincludedairyproducts,meat,wine,fruitandvegetables,andfish.Asaresult,theFrencheconomyissusceptibletofluctuationsindemandforagriculturalproducts.RiskofInvestinginGermany.InvestmentinGermanissuerssubjectstheFundtolegal,regulatory,political,currency,security,andeconomicrisksspecifictoGermany.Duringthemostrecentfinancialcrisis,theGermaneconomy,alongwithcertainotherEUeconomies,experiencedasignificanteconomicslowdown.Recently,newconcernshaveemergedinrelationtotheeconomichealthoftheEU.Theseconcernshaveledtotremendousdownwardpressureoncertainfinancialinstitutions,includingGermanfinancialservicescompanies.DuringtherecentEuropeandebtcrisis,Germanyplayedakeyroleinstabilizingtheeuro.However,sucheffortsmayproveunsuccessful,andanyongoingcrisismaycontinuetosignificantlyaffecttheeconomiesofeverycountryinEurope,includingGermany.TheGermaneconomyisdependenttoasignificantextentontheeconomiesofcertainkeytradingpartners,includingtheUnitedStatesandFrance,ItalyandotherEuropeancountries.ReductioninspendingonGermanproductsandservices,orchangesinanyoftheeconomiesmayhaveanadverseimpactontheGermaneconomy.Inaddition,heavyregulationoflaborandproductmarketsinGermanymayhaveanadverseimpactonGermanissuers.Suchregulationsmaynegativelyimpacteconomicgrowthorcauseprolongedperiodsofrecession.SecuritiesLendingRisk.TheFundortheUnderlyingFundmayengageinsecuritieslending.SecuritieslendinginvolvestheriskthattheFundortheUnderlyingFund,asapplicable,maylosemoneybecausetheborroweroftheloanedsecuritiesfailstoreturnthesecuritiesinatimelymanneroratall.TheFundortheUnderlyingFundcouldalsolosemoneyintheeventofadeclineinthevalueofthecollateralprovidedfortheloanedsecuritiesoradeclineinthevalueofanyinvestmentsmadewithcashcollateral.TheseeventscouldalsotriggeradversetaxconsequencesfortheFund.BlackRockInstitutionalTrustCompany,N.A.(BTCŽ),theFundssecuritieslending agent,willtakeintoaccountthetaximpacttoshareholdersofsubstitutepaymentsfordividendswhenmanagingtheFundssecuritieslendingprogram.SecurityRisk.SomegeographicareasinwhichtheFundortheUnderlyingFundinvestshaveexperiencedactsof

27 terrorismorstrainedinternationalrelation
terrorismorstrainedinternationalrelationsduetoterritorialdisputes,historicalanimositiesorotherdefenseconcerns.ThesesituationsmaycauseuncertaintyinthemarketsofthesegeographicareasandmayadverselyaffecttheireconomiesandtheFundsinvestments.TaxRisk.BecausetheFundisexpectedtoinvestintheUnderlyingFund,theFundsrealizedlossesonsalesofsharesoftheUnderlyingFundmaybeindefinitelyorpermanentlydeferredaswashsales.ŽDistributionsofshort-termcapitalgainsbytheUnderlyingFundwillberecognizedasordinaryincomebytheFundandwouldnotbeoffsetbytheFundscapitallosscarryforwards,ifany.CapitallosscarryforwardsoftheUnderlyingFund,ifany,wouldnotoffsetnetcapitalgainsoftheFund.EachoftheseeffectsiscausedbytheFundsinvestmentintheUnderlyingFundandmayresultindistributionstoFundshareholdersbeingofhighermagnitudesandlesslikelytoqualifyforlowercapitalgaintaxratesthaniftheFundweretoinvestotherwise.TrackingErrorRisk.TrackingerroristhedivergenceoftheFundsperformancefromthatoftheUnderlyingIndex.Trackingerrormayoccurbecauseofdifferencesbetweenthesecurities(includingsharesoftheUnderlyingFund)andotherinstrumentsheldintheFundsportfolioandthoseincludedintheUnderlyingIndex,pricingdifferences(includingdifferencesbetweenasecurityspriceatthelocalmarketcloseandtheintrinsicvalueofasecurityatthetimeofcalculationoftheNAV),differencesintransactionandhedgingcostsandforwardratesachieved,theFundsholdingofuninvestedcash,differencesintimingoftheaccrualofdividendsorinterest,changestotheUnderlyingIndexandthecosttotheFundofcomplyingwithvariousneworexistingregulatoryrequirements.Theserisksmaybeheightenedduringtimesofincreasedmarketvolatilityorotherunusualmarketconditionsintheaffectedsecuritiesand/orforeignexchangemarkets.Inaddition,trackingerrormayresultbecausetheFundincursfeesandexpenses,whiletheUnderlyingIndexdoesnot,andbecausetheFundacceptscreationsandredemptionsduringtimeperiodsbetweenwhichitisabletoadjustitscurrencyhedges,whereastheUnderlyingIndexdoesnot.TotheextentthattheFundseeksitsinvestmentobjectivethroughinvestmentsinanUnderlyingFund,theFundmayexperienceincreasedtrackingerror.ThepotentialforincreasedtrackingerrormayresultfrominvestmentsinanUnderlyingFunddueto,amongotherthings,differencesinthecompositionoftheinvestmentportfoliooftheUnderlyingFundascomparedtotheindextrackedbytheUnderlyingFundanddiff

28 erencesintheFundsvaluationoftheUnderlyi
erencesintheFundsvaluationoftheUnderlyingFund(valuedasofthecloseoftheNewYorkStockExchange,typically4:00p.m.EasternTime)andthevaluationofthesecurities(generallyvaluedasofeachsecurityslocalmarketclose)andtheforeigncurrencyforwardcontracts(generallyvaluedat4:00p.m.Londontime)intheUnderlyingIndex.U.S.EconomicRisk.TheUnitedStatesisasignificant,andinsomecasesthemostsignificant,tradingpartnerof,orforeigninvestorincountriesinwhichtheUnderlyingFundinvestsandtheeconomiesofthesecountriesmaybeparticularlyaffectedbychangesintheU.S.economy.AdecreaseinU.S.imports,newtraderegulations, changesintheU.S.dollarexchangerateoraneconomicslowdownintheUnitedStatesmayhaveamaterialadverseeffectoneconomiesofthosecountriesand,asaresult,securitiestowhichtheUnderlyingFundhasexposure.ValuationRisk.ThesalepricetheFundcouldreceiveforasecurityorassetmaydifferfromtheFundsvaluationofthesecurityorassetandmaydifferfromthevalueusedbytheUnderlyingIndex,particularlyforsecuritiesorassetsthattradeinlowvolumeorvolatilemarkets,orthatarevaluedusingafairvaluemethodology.Becausenon-U.S.exchangesmaybeopenondayswhentheFunddoesnotpriceitsshares,thevalueofthesecuritiesorassetsintheFundsportfoliomaychangeondayswhenshareholderswillnotbeabletopurchaseorselltheFundsshares.Inaddition,forpurposesofcalculatingtheFundsNAV,thevalueofassetsdenominatedinnon-U.S.currenciesisconvertedintoU.S.dollarsusingprevailingmarketratesonthedateofvaluationasquotedbyoneormoredataserviceproviders.ThisconversionmayresultinadifferencebetweenthepricesusedtocalculatetheFundsNAVandthepricesusedbytheUnderlyingIndex,which,inturn,couldresultinadifferencebetweentheFundsperformanceandtheperformanceoftheUnderlyingIndex.AFurtherDiscussionofOtherRisksTheFundmayalsobesubjecttocertainotherrisksassociatedwithitsinvestmentsandinvestmentstrategieseitherdirectlyorindirectlythroughtheFundsinvestmentsintheUnderlyingFund.ConsumerStaplesSectorRisk.Theconsumerstaplessectormaybeaffectedbythepermissibilityofusingvariousproductcomponentsandproductionmethods,marketingcampaignsandotherfactorsaffectingconsumerdemand.Tobaccocompanies,inparticular,maybeadverselyaffectedbynewlaws,regulationsandlitigation.Theconsumerstaplessectormayalsobeadverselyaffectedbychangesortrendsincommodityprices,whichmaybeinfluencedorcharacterizedbyunpredictablefactors.Ene

29 rgySectorRisk.Theenergysectorofaneconomy
rgySectorRisk.Theenergysectorofaneconomyiscyclicalandhighlydependentonenergyprices.Themarketvalueofcompaniesintheenergysectorisstronglyaffectedbythelevelsandvolatilityofglobalenergyprices,energysupplyanddemand,capitalexpendituresonexplorationandproductionofenergysources,energyconservationefforts,exchangerates,interestrates,economicconditions,taxtreatment,increasedcompetitionandtechnologicaladvances,amongotherfactors.Companiesinthissectormaybesubjecttosubstantialgovernmentregulationandcontractualfixedpricing,whichmayincreasethecostofdoingbusinessandlimittheearningsofthesecompanies.Asignificantportionoftherevenuesofthesecompaniesdependsonarelativelysmallnumberofcustomers,includinggovernmentalentitiesandutilities.Asaresult,governmentalbudgetconstraintsmayhaveamaterialadverseeffectonthestockpricesofcompaniesinthissector.Energycompaniesmayalsooperatein,orengageintransactionsinvolvingcountrieswith,lessdevelopedregulatoryregimesorahistoryofexpropriation,nationalizationorotheradversepolicies.Energycompaniesalsofaceasignificantriskofliabilityfromaccidentsresultingininjuryorlossoflifeorproperty,pollutionorotherenvironmentalproblems,equipmentmalfunctionsormishandlingofmaterialsandariskoflossfromterrorism, politicalstrifeandnaturaldisasters.AnysucheventcouldhaveseriousconsequencesforthegeneralpopulationoftheaffectedareaandcouldhaveanadverseimpactontheFundsortheUnderlyingFundsportfolioandtheperformanceoftheFund.Energycompaniescanbesignificantlyaffectedbythesupplyof,anddemandfor,specificproducts(,oilandnaturalgas)andservices,explorationandproductionspending,governmentsubsidization,worldeventsandgeneraleconomicconditions.HealthcareSectorRisk.Theprofitabilityofcompaniesinthehealthcaresectormaybeaffectedbyextensivegovernmentregulations,restrictionsongovernmentreimbursementformedicalexpenses,risingcostsofmedicalproductsandservices,pricingpressure,anincreasedemphasisonoutpatientservices,limitednumberofproducts,industryinnovation,changesintechnologiesandothermarketdevelopments.Manyhealthcarecompaniesareheavilydependentonpatentprotection.Theexpirationofacompanyspatentsmayadverselyaffectthatcompanysprofitability.Manyhealthcarecompaniesaresubjecttoextensivelitigationbasedonproductliabilityandsimilarclaims.Healthcarecompaniesaresubjecttocompetitiveforcesthatmaymakei

30 tdifficulttoraisepricesand,infact,mayres
tdifficulttoraisepricesand,infact,mayresultinpricediscounting.Manynewproductsinthehealthcaresectormaybesubjecttoregulatoryapprovals.Theprocessofobtainingsuchapprovalsmaybelongandcostly,andultimatelymaybeunsuccessful.Companiesinthehealthcaresectormaybethinlycapitalizedandmaybesusceptibletoproductobsolescence.InformationTechnologySectorRisk.Informationtechnologycompaniesfaceintensecompetition,bothdomesticallyandinternationally,whichmayhaveanadverseeffectonprofitmargins.Likeothertechnologycompanies,informationtechnologycompaniesmayhavelimitedproductlines,markets,financialresourcesorpersonnel.Theproductsofinformationtechnologycompaniesmayfaceobsolescenceduetorapidtechnologicaldevelopments,frequentnewproductintroduction,unpredictablechangesingrowthratesandcompetitionfortheservicesofqualifiedpersonnel.Companiesintheinformationtechnologysectorareheavilydependentonpatentandintellectualpropertyrights.Thelossorimpairmentoftheserightsmayadverselyaffecttheprofitabilityofthesecompanies.MaterialsSectorRisk.Companiesinthematerialssectormaybeadverselyaffectedbycommoditypricevolatility,exchangerates,importcontrols,increasedcompetition,depletionofresources,technicaladvances,laborrelationsandgovernmentregulations,amongotherfactors.Also,companiesinthematerialssectorareatriskofliabilityforenvironmentaldamageandproductliabilityclaims.Productionofmaterialsmayexceeddemandasaresultofmarketimbalancesoreconomicdownturns,leadingtopoorinvestmentreturns.Mid-CapitalizationCompaniesRisk.Stockpricesofmid-capitalizationcompaniesmaybemorevolatilethanthoseoflarge-capitalizationcompaniesand,therefore,theFundsortheUnderlyingFundssharepricemaybemorevolatilethanthoseoffundsthatinvestalargerpercentageoftheirassetsinstocksissuedbylarge-capitalizationcompanies.Stockpricesofmid-capitalizationcompaniesarealsomorevulnerablethanthoseoflarge-capitalizationcompaniestoadversebusinessoreconomicdevelopments,andthestocksofmid-capitalizationcompaniesmaybelessliquid,makingitdifficultfortheFundtobuyandsellthem.Inaddition,mid-capitalization companiesgenerallyhavelessdiverseproductlinesthanlarge-capitalizationcompaniesandaremoresusceptibletoadversedevelopmentsrelatedtotheirUtilitiesSectorRisk.Deregulationissubjectingutilitycompaniestogreatercompetitionandmayadverselyaffecttheirprofitability.Asderegula

31 tionallowsutilitycompaniestodiversifyout
tionallowsutilitycompaniestodiversifyoutsideoftheiroriginalgeographicregionsandtheirtraditionallinesofbusiness,utilitycompaniesmayengageinriskierventures.Companiesintheutilitiesindustrymayhavedifficultyobtaininganadequatereturnoninvestedcapital,raisingcapital,orfinancinglargeconstructionprojectsduringperiodsofinflationorunsettledcapitalmarkets;facerestrictionsonoperationsandincreasedcostanddelaysattributabletoenvironmentalconsiderationsandregulation;findthatexistingplants,equipmentorproductshavebeenrenderedobsoletebytechnologicalinnovations;orbesubjecttoincreasedcostsbecauseofthescarcityofcertainfuelsortheeffectsofman-madeornaturaldisasters.Existingandfutureregulationsorlegislationmaymakeitdifficultforutilitycompaniestooperateprofitably.Governmentregulatorsmonitorandcontrolutilityrevenuesandcosts,andthereforemaylimitutilityprofits.Incertaincountries,regulatoryauthoritiesmayalsorestrictutilitycompaniesaccesstonewmarkets,therebydiminishingthesecompanieslong-termprospects.Thereisnoassurancethatregulatoryauthoritieswillgrantrateincreasesinthefuture,orthatsuchincreaseswillbeadequatetopermitthepaymentofdividendsonstocksissuedbyautilitycompany.Thederegulationofcertainutilitycompaniesmayeliminaterestrictionsonprofits,butmayalsosubjectthesecompaniestogreaterrisksofloss.Energyconservationandchangesinclimatepolicymayalsohaveasignificantadverseimpactontherevenuesandexpensesofutilitycompanies.PortfolioHoldingsInformationAdescriptionoftheTrustspoliciesandprocedureswithrespecttothedisclosureoftheFundsportfoliosecuritiesisavailableintheFundsStatementofAdditionalInformation(SAIŽ).ThetopholdingsoftheFundcanbefoundatwww.iShares.com.FundfactsheetsprovideinformationregardingtheFundstopholdingsandmayberequestedbycalling1-800-iShares(1-800-474-2737).AFurtherDiscussionofPrincipalInvestmentStrategiesOverviewTheFundallocatesandreallocatesitsassetsamongdirectinvestmentsinsecuritiesandotherinstruments,andininvestmentsintheUnderlyingFundconsistentwiththeallocationandreallocationofsecuritiesintheUnderlyingIndexasdeterminedbytheIndexProvider.TheFundwillinvestinforeigncurrencyforwardcontractsdesignedtohedgenon-U.S.currencyfluctuationsinherentinthesecuritiesintheUnderlyingIndex.Inaddition,theFundmayborrow,lenditsportfoliosecuritiestobrokers,dealersandfinancialinstitutions

32 ,andmayinvestthecollateralincertainshort
,andmayinvestthecollateralincertainshort-terminstruments,eitherdirectlyorthroughoneormoremoneymarketfunds,asdescribedingreaterdetailintheFundsSAI. TheUnderlyingFundTheFundinvestsasubstantialportionofitsassetsintheUnderlyingFund,sotheFundsinvestmentperformanceisdirectlyrelatedtotheperformanceoftheUnderlyingFund.TheFundsNAVwillchangewithchangesinthevalueoftheUnderlyingFundandothersecuritiesinwhichtheFundinvests,subjecttotheimpactofcurrencyhedges,whichmaycausetheFundtooutperformorunderperformthereturnoftheUnderlyingFund.AninvestmentintheFundwillentailmoredirectandindirectcostsandexpensesthanadirectinvestmentintheUnderlyingFund.TheUnderlyingFundinvestsinnon-U.S.securitieswithoutimplementingahedgeofthelocalcurrencyrisk.Thisstrategyissubjecttoadditionalrisks,asdescribedinthisProspectusandintheFundsSAI.BFAisnotrequiredtoinvesttheFundsassetsinanyparticularunderlyingfund,includingtheUnderlyingFund,orallocateanyparticularpercentageoftheFundsassetstoanyparticularunderlyingfund,includingtheUnderlyingFund.Currently,theFundachievesitsinvestmentobjectivebyinvestingasubstantialportionofitsassetsinoneUnderlyingFund,theiSharesMSCIEurozoneETF.TheiSharesMSCIEurozoneETFseeksinvestmentresultsthatcorrespondgenerallytothepriceandyieldperformance,beforefeesandexpenses,oftheMSCIEMUIndex,whichconsistsofstocksfromthefollowing10developedmarketcountries:Austria,Belgium,Finland,France,Germany,Ireland,Italy,theNetherlands,PortugalandSpain.MSCIEMUIndexŽisaservicemarkofMSCIInc.andhasbeenlicensedforuseforcertainpurposesbyBFAoritsaffiliates.TheiSharesMSCIEurozoneETFisnotsponsored,endorsed,sold,orpromotedbyMSCIInc.andMSCIInc.makesnorepresentationregardingtheadvisabilityofinvestingintheFund.InmanagingtheUnderlyingFund,BFAusesarepresentativesamplingindexstrategy.Representativesamplingisanindexingstrategythatinvolvesinvestinginarepresentativesampleofsecuritiesthatcollectivelyhaveaninvestmentprofilesimilartoaspecifiedbenchmarkindex.SecuritiesselectedfortheUnderlyingFundareexpectedtohave,intheaggregate,investmentcharacteristics(basedonfactorssuchasmarketcapitalizationandindustryweightings),fundamentalcharacteristics(suchasreturnvariabilityandyield)andliquiditymeasuressimilartothoseoftheapplicableunderlyingindex.TheUnderlyingFundmayormaynotholdallofthesecuritiesthatareincludedinits

33 underlyingindexandmayholdcertainsecuriti
underlyingindexandmayholdcertainsecuritiesthatarenotincludedinitsunderlyingindex.InvestmentAdviser.Asinvestmentadviser,BFAhasoverallresponsibilityforthegeneralmanagementandadministrationoftheTrust.BFAprovidesaninvestmentprogramfortheFundandmanagestheinvestmentoftheFundsassets.InmanagingtheFund,BFAmaydrawupontheresearchandexpertiseofitsassetmanagementaffiliateswithrespecttocertainportfoliosecurities.InseekingtoachievetheFundsinvestmentobjective,BFAusesteamsofportfoliomanagers,investmentstrategistsandotherinvestmentspecialists.ThisteamapproachbringstogethermanydisciplinesandleveragesBFAsextensiveresources. PursuanttotheInvestmentAdvisoryAgreementbetweenBFAandtheTrust(enteredintoonbehalfoftheFund),BFAisresponsibleforsubstantiallyallexpensesoftheFund,exceptinterestexpenses,taxes,brokerageexpenses,futuredistributionfeesorexpensesandextraordinaryexpenses.ForitsinvestmentadvisoryservicestotheFund,BFAwillbepaidamanagementfeefromtheFundbasedonapercentageoftheFundsaveragedailynetassets,atanannualrateof0.62%.BFA,theinvestmentadvisertotheFund,hascontractuallyagreeduntilDecember31,2020toareductioninthemanagementfeeoftheFundonthoseassetsattributabletotheFundsinvestmentsinEZU(andthoseassetsusedbytheFundtohedgetheFundsexposuretothesecuritiesinEZUsportfolioagainsttheU.S.dollar)suchthatthemanagementfeeonsuchassetsisequaltothenettotalexpenseratioafterfeewaiverofEZUplus0.03%.ThecontractualwaivermaybeterminatedpriortoDecember31,2020onlyuponwrittenagreementoftheTrustandBFA.Inaddition,BFAmayfromtimetotimevoluntarilywaiveand/orreimbursefeesorexpensesinordertolimitTotalAnnualFundOperatingExpenses(excludingAcquiredFundFeesandExpenses,ifany).AnysuchvoluntarywaiverorreimbursementmaybeeliminatedbyBFAatanytime.BFAislocatedat400HowardStreet,SanFrancisco,CA94105.Itisanindirectwholly-ownedsubsidiaryofBlackRock,Inc.(BlackRockŽ).AsofSeptember30,2014,BFAanditsaffiliatesprovidedinvestmentadvisoryservicesforassetsinexcessof$4.52trillion.BFAanditsaffiliatesdeal,tradeandinvestfortheirownaccountsinthetypesofsecuritiesinwhichtheFundmayalsoinvest.AdiscussionregardingthebasisfortheTrustsBoardofTrustees(theBoardŽ)approvaloftheInvestmentAdvisoryAgreementwithBFAisavailableintheFundsannualreportfortheperiodendedAugust31.PortfolioManagers.MatthewGoff,DianeHsiung,JenniferHsui,Orlando

34 MontalvoandGregSavageareprimarilyrespons
MontalvoandGregSavageareprimarilyresponsiblefortheday-to-daymanagementoftheFund.EachPortfolioManagerisresponsibleforvariousfunctionsrelatedtoportfoliomanagement,including,butnotlimitedto,investingcashinflows,coordinatingwithmembersofhisorherportfoliomanagementteamtofocusoncertainassetclasses,implementinginvestmentstrategy,researchingandreviewinginvestmentstrategyandoverseeingmembersofhisorherportfoliomanagementteamthathavemorelimitedMatthewGoffhasbeenemployedbyBFAandBTC(formerly,BarclaysGlobalInvestors,N.A.(BGIŽ))asaportfoliomanagersince2008.Priortothat,Mr.Goffwasaportfoliomanagerfrom2007to2008forUSTrust,aproductmanagerfrom2006to2007forIrisFinancialSolutionsandaproductmanagerfrom2003to2006forMSCIBarra.Mr.GoffhasbeenaPortfolioManageroftheFundsince2014.DianeHsiunghasbeenemployedbyBFAandBTCasaseniorportfoliomanagersince2007.Priortothat,Ms.Hsiungwasaportfoliomanagerfrom2002to2006forBGFAandBGI.Ms.HsiunghasbeenaPortfolioManageroftheFundsince2014.JenniferHsuihasbeenemployedbyBFAandBTCasaseniorportfoliomanagersince2007.Priortothat,Ms.Hsuiwasaportfoliomanagerfrom2006to2007forBGFAandBGI.Ms.HsuihasbeenaPortfolioManageroftheFundsince2014. OrlandoMontalvohasbeenemployedbyBFAandBTCasaseniorportfoliomanagersince2009.Priortothat,Mr.Montalvowasaseniorportfoliomanagerfrom2005to2009forBGFAandBGI.Mr.MontalvohasbeenaPortfolioManageroftheFundsinceGregSavagehasbeenemployedbyBFAandBTCasaseniorportfoliomanagersince2006.Priortothat,Mr.Savagewasaportfoliomanagerfrom2001to2006forBGFAandBGI.Mr.SavagehasbeenaPortfolioManageroftheFundsince2014.TheFundsSAIprovidesadditionalinformationaboutthePortfolioManagerscompensation,otheraccountsmanagedbythePortfolioManagersandthePortfolioManagersownership(ifany)ofsharesintheFund.Administrator,CustodianandTransferAgent.StateStreetBankandTrustCompany(StateStreetŽ)istheadministrator,custodianandtransferagentfortheConflictsofInterest.BFAwantsyoutoknowthatithasrelationshipswithcertainentitiesthatmaygiverisetoconflictsofinterestortheappearanceofconflictsofinterest.TheseentitiesareBFAsaffiliates,includingBlackRockandThePNCFinancialServicesGroup,Inc.,andeachoftheiraffiliates,directors,partners,trustees,managingmembers,officersandemployees(collectively,theAffiliatesŽ).TheactivitiesofBFAandtheAffiliatesinthemanagementof,ortheirinterestin,the

35 irownaccountsandotheraccountstheymanage,
irownaccountsandotheraccountstheymanage,maypresentconflictsofinterestthatcoulddisadvantagetheFundanditsshareholders.BFAandtheAffiliatesprovideinvestmentmanagementservicestootherfundsanddiscretionarymanagedaccountsthatmayfollowaninvestmentprogramsimilartothatoftheFund.BFAandtheAffiliatesareinvolvedworldwidewithabroadspectrumoffinancialservicesandassetmanagementactivitiesandmayengageintheordinarycourseofbusinessinactivitiesinwhichtheirinterestsortheinterestsoftheirclientsmayconflictwiththoseoftheFund.BFAoroneormoreoftheAffiliatesacts,ormayact,asaninvestor,investmentbanker,researchprovider,investmentmanager,commoditypooloperator,commoditytradingadvisor,financier,underwriter,adviser,marketmaker,trader,primebroker,lender,agentorprincipal,andhaveotherdirectandindirectinterestsinsecurities,currencies,commodities,derivativesandotherinstrumentsinwhichtheFundmaydirectlyorindirectlyinvest.Thus,itislikelythattheFundwillhavemultiplebusinessrelationshipswithandwillinvestin,engageintransactionswith,makevotingdecisionswithrespectto,orobtainservicesfrom,entitiesforwhichBFAoranAffiliateseekstoperforminvestmentbankingorotherservices.BFAoroneormoreAffiliatesmayengageinproprietarytradingandadviseaccountsandfundsthathaveinvestmentobjectivessimilartothoseoftheFundand/orthatengageinandcompetefortransactionsinthesametypesofsecurities,currenciesandotherinstrumentsastheFund,includinginsecuritiesissuedbyotheropen-endandclosed-endinvestmentcompanies,whichmayincludeinvestmentcompaniesthatareaffiliatedwiththeFundandBFA,totheextentpermittedundertheInvestmentCompanyActof1940,asamended(the1940ActŽ).ThetradingactivitiesofBFAandtheseAffiliatesarecarriedoutwithoutreferencetopositionshelddirectlyorindirectly bytheFundandmayresultinBFAoranAffiliatehavingpositionsincertainsecuritiesthatareadversetothoseoftheFund.NoAffiliateisunderanyobligationtoshareanyinvestmentopportunity,ideaorstrategywiththeFund.Asaresult,anAffiliatemaycompetewiththeFundforappropriateinvestmentopportunities.Asaresultofthisandseveralotherfactors,theresultsoftheFundsinvestmentactivitiesmaydifferfromthoseofanAffiliateandofotheraccountsmanagedbyanAffiliate,anditispossiblethattheFundcouldsustainlossesduringperiodsinwhichoneormoreAffiliatesandotheraccountsachieveprofitsontheirtradingforproprietaryorotheraccounts.Theopp

36 ositeresultisalsoTheFundmay,fromtimetoti
ositeresultisalsoTheFundmay,fromtimetotime,enterintotransactionsinwhichBFAsoranAffiliatesclientshaveaninterestadversetotheFund.Furthermore,transactionsundertakenbyAffiliate-advisedclientsmayadverselyimpacttheFund.TransactionsbyoneormoreAffiliate-advisedclientsorBFAmayhavetheeffectofdilutingorotherwisedisadvantagingthevalues,pricesorinvestmentstrategiesoftheFund.TheFundsactivitiesmaybelimitedbecauseofregulatoryrestrictionsapplicabletooneormoreAffiliatesand/ortheirinternalpoliciesdesignedtocomplywithsuchrestrictions.Inaddition,theFundmayinvestinsecuritiesofcompanieswithwhichanAffiliatehasdevelopedoristryingtodevelopinvestmentbankingrelationshipsorinwhichanAffiliatehassignificantdebtorequityinvestmentsorotherinterests.TheFundalsomayinvestinsecuritiesofcompaniesforwhichanAffiliateprovidesormayinthefutureprovideresearchcoverage.AnAffiliatemayhavebusinessrelationshipswith,andpurchase,distributeorsellservicesorproductsfromorto,distributors,consultantsorotherswhorecommendtheFundorwhoengageintransactionswithorfortheFund,andmayreceivecompensationforsuchservices.TheFundmayalsomakebrokerageandotherpaymentstoAffiliatesinconnectionwiththeFundsportfolioinvestmenttransactions.PursuanttoasecuritieslendingprogramapprovedbytheBoard,theFundhasretainedanAffiliateofBFAtoserveasthesecuritieslendingagentfortheFundtotheextentthattheFundparticipatesinthesecuritieslendingprogram.Fortheseservices,thelendingagentmayreceiveafeefromtheFund,includingafeebasedonthereturnsearnedontheFundsinvestmentofthecashreceivedascollateralforanyloanedsecurities.BFAmayreceivecompensationformanagingthereinvestmentofcashcollateral.Inaddition,oneormoreAffiliatesmaybeamongtheentitiestowhichtheFundmaylenditsportfoliosecuritiesunderthesecuritieslendingprogram.TheactivitiesofBFAortheAffiliatesmaygiverisetootherconflictsofinterestthatcoulddisadvantagetheFundanditsshareholders.BFAhasadoptedpoliciesandproceduresdesignedtoaddressthesepotentialconflictsofinterest.SeetheFundsSAIforfurtherinformation.ShareholderInformationAdditionalshareholderinformation,includinghowtobuyandsellsharesoftheFund,isavailablefreeofchargebycallingtoll-free:1-800-iShares(1-800-474-2737)orvisitingourwebsiteatwww.iShares.com. BuyingandSellingShares.SharesoftheFundmaybeacquiredorredeemeddirectlyfromtheFundonlyinCreationUnitsor

37 multiplesthereof,asdiscussedintheandRede
multiplesthereof,asdiscussedintheandRedemptionssectionofthisProspectus.OnlyanAuthorizedParticipant(asdefinedintheCreationsandRedemptionssection)mayengageincreationorredemptiontransactionsdirectlywiththeFund.Oncecreated,sharesoftheFundgenerallytradeinthesecondarymarketinamountslessthanaCreationUnit.SharesoftheFundarelistedonanationalsecuritiesexchangefortradingduringthetradingday.Sharescanbeboughtandsoldthroughoutthetradingdaylikesharesofotherpubliclytradedcompanies.TheTrustdoesnotimposeanyminimuminvestmentforsharesoftheFundpurchasedonanexchange.TheFundssharestradeunderthetradingsymbolHEZU.ŽBuyingorsellingFundsharesonanexchangeinvolvestwotypesofcoststhatmayapplytoallsecuritiestransactions.WhenbuyingorsellingsharesoftheFundthroughabroker,youwilllikelyincurabrokeragecommissionorotherchargesdeterminedbyyourbroker.Thecommissionisfrequentlyafixedamountandmaybeasignificantproportionalcostforinvestorsseekingtobuyorsellsmallamountsofshares.Inaddition,youmayincurthecostofthespread,Žthatis,anydifferencebetweenthebidpriceandtheaskprice.ThespreadvariesovertimeforsharesoftheFundbasedontheFundstradingvolumeandmarketliquidity,andisgenerallyloweriftheFundhasalotoftradingvolumeandmarketliquidity,andhigheriftheFundhaslittletradingvolumeandmarketliquidity(whichisoftenthecaseforfundsthatarenewlylaunchedorsmallinsize).TheFundsspreadmayalsobeimpactedbytheliquidityoftheunderlyingsecuritiesheldbytheFund,particularlyfornewlylaunchedorsmallerfundsorininstancesofsignificantvolatilityoftheunderlyingsecurities.TheBoardhasadoptedapolicyofnotmonitoringforfrequentpurchasesandredemptionsofFundshares(frequenttradingŽ)thatappeartoattempttotakeadvantageofapotentialarbitrageopportunitypresentedbyalagbetweenachangeinthevalueoftheFundsportfoliosecuritiesafterthecloseoftheprimarymarketsfortheFundsportfoliosecuritiesandthereflectionofthatchangeintheFundsNAV(markettimingŽ),becausetheFundgenerallysellsandredeemsitssharesdirectlythroughtransactionsthatarein-kindand/orforcash,subjecttotheconditionsdescribedbelowunderCreationsandRedemptions.TheBoardhasnotadoptedapolicyofmonitoringforotherfrequenttradingactivitybecausesharesoftheFundarelistedfortradingonanationalsecuritiesexchange.ThenationalsecuritiesexchangeonwhichtheFundssharesarelistedisopenfortradingMondaythroughFridayandisclos

38 edonweekendsandthefollowingholidays:NewY
edonweekendsandthefollowingholidays:NewYearsDay,MartinLutherKing,Jr.Day,PresidentsDay,GoodFriday,MemorialDay,IndependenceDay,LaborDay,ThanksgivingDayandChristmasDay.TheFundsprimaryListingExchangeisNYSEArca.AlthoughtheSEChasgrantedanexemptiveordertotheTrustpermittingregisteredinvestmentcompaniesandunitinvestmenttruststhatenterintoaparticipationagreementwiththeTrust(InvestingFundsŽ)toinvestiniSharesFundsbeyondthelimitssetforthinSection12(d)(1)ofthe1940Actsubjecttocertaintermsandconditions,theexemptiveorderisnotapplicabletotheFund.Accordingly,Investing FundsmustadheretothelimitssetforthinSection12(d)(1)ofthe1940ActwheninvestingintheFund.BookEntry.SharesoftheFundareheldinbook-entryform,whichmeansthatnostockcertificatesareissued.TheDepositoryTrustCompany(DTCŽ)oritsnomineeistherecordownerofalloutstandingsharesoftheFundandisrecognizedastheownerofallsharesforallpurposes.InvestorsowningsharesoftheFundarebeneficialownersasshownontherecordsofDTCoritsparticipants.DTCservesasthesecuritiesdepositoryforsharesoftheFund.DTCparticipantsincludesecuritiesbrokersanddealers,banks,trustcompanies,clearingcorporationsandotherinstitutionsthatdirectlyorindirectlymaintainacustodialrelationshipwithDTC.Asabeneficialownerofshares,youarenotentitledtoreceivephysicaldeliveryofstockcertificatesortohavesharesregisteredinyourname,andyouarenotconsideredaregisteredownerofshares.Therefore,toexerciseanyrightasanownerofshares,youmustrelyupontheproceduresofDTCanditsparticipants.Theseproceduresarethesameasthosethatapplytoanyothersecuritiesthatyouholdinbook-entryorstreetnameŽform.SharePrices.ThetradingpricesoftheFundssharesinthesecondarymarketgenerallydifferfromtheFundsdailyNAVandareaffectedbymarketforcessuchasthesupplyofanddemandforETFsharesandsharesofunderlyingsecuritiesheldbytheFund,economicconditionsandotherfactors.InformationregardingtheintradayvalueofsharesoftheFund,alsoknownastheindicativeoptimizedportfoliovalueŽ(IOPVŽ),isdisseminatedevery15secondsthroughoutthetradingdaybythenationalsecuritiesexchangeonwhichtheFundssharesarelistedorbymarketdatavendorsorotherinformationproviders.TheIOPVisbasedonthecurrentmarketvalueofthesecuritiesorotherassetsand/orcashrequiredtobedepositedinexchangeforaCreationUnit.TheIOPVdoesnotnecessarilyreflecttheprecisecompositionofthecurrentportfolioo

39 fsecuritiesheldbytheFundataparticularpoi
fsecuritiesheldbytheFundataparticularpointintimeorthebestpossiblevaluationofthecurrentportfolio.Therefore,theIOPVshouldnotbeviewedasareal-timeŽupdateoftheFundsNAV,whichiscomputedonlyonceaday.TheIOPVisgenerallydeterminedbyusingbothcurrentmarketquotationsand/orpricequotationsobtainedfrombroker-dealersthatmaytradeintheportfoliosecuritiesorotherassetsheldbytheFund.ThequotationsofcertainFundholdingsmaynotbeupdatedduringU.S.tradinghoursifsuchholdingsdonottradeintheUnitedStates.TheFundisnotinvolvedin,orresponsiblefor,thecalculationordisseminationoftheIOPVandmakesnorepresentationorwarrantyastoitsaccuracy.DeterminationofNetAssetValue.TheNAVoftheFundnormallyisdeterminedoncedailyMondaythroughFriday,generallyasoftheregularlyscheduledcloseofbusinessoftheNewYorkStockExchange(NYSEŽ)(normally4:00p.m.,Easterntime)oneachdaythattheNYSEisopenfortrading,basedonpricesatthetimeofclosingprovidedthat(a)anyFundassetsorliabilitiesdenominatedincurrenciesotherthantheU.S.dollararetranslatedintoU.S.dollarsattheprevailingmarketratesonthedateofvaluationasquotedbyoneormoredataserviceproviders(asdetailedbelow)and(b)U.S.fixed-incomeassetsmaybevaluedasoftheannouncedclosingtimefortradinginfixed-incomeinstrumentsinaparticularmarketorexchange.TheNAVoftheFundiscalculatedbydividingthevalueofthenetassetsoftheFund(,thevalueof itstotalassets,whichincludesthevaluesoftheUnderlyingFundsharesinwhichtheFundinvests,lesstotalliabilities)bythetotalnumberofoutstandingsharesoftheFund,generallyroundedtothenearestcent.ThevalueofthesecuritiesandotherassetsandliabilitiesheldbytheFundaredeterminedpursuanttovaluationpoliciesandproceduresapprovedbytheBoard.TheFundsassetsandliabilitiesarevaluedonthebasisofmarketquotations,whenreadilyEquityinvestmentsandinvestmentsintheUnderlyingFundarevaluedatmarketvalue,whichisgenerallydeterminedusingthelastreportedofficialclosingpriceorlasttradingpriceontheexchangeormarketonwhichthesecurityisprimarilytradedatthetimeofvaluation.TheFundmayinvestinnon-U.S.securities.Foreigncurrencyexchangeratesaregenerallydeterminedasof4:00p.m.,Londontime.TheFundmayalsoinvestinforeigncurrencyforwardcontracts,whicharegenerallyvaluedasof4:00p.m.,Easterntime.Non-U.S.securitiesheldbytheFundmaytradeonweekendsorotherdayswhentheFunddoesnotpriceitsshares.Asaresult,theFundsNAVmaychangeondayswhenA

40 uthorizedParticipantswillnotbeabletopurc
uthorizedParticipantswillnotbeabletopurchaseorredeemFundshares.Generally,tradinginnon-U.S.securities,U.S.governmentsecurities,moneymarketinstrumentsandcertainfixed-incomesecuritiesissubstantiallycompletedeachdayatvarioustimespriortothecloseofbusinessontheNYSE.ThevaluesofsuchsecuritiesusedincomputingtheNAVoftheFundaredeterminedasofsuchtimes.WhenmarketquotationsarenotreadilyavailableorarebelievedbyBFAtobeunreliable,theFundsinvestmentsarevaluedatfairvalue.FairvaluedeterminationsaremadebyBFAinaccordancewithpoliciesandproceduresapprovedbytheTrustsBoard.BFAmayconcludethatamarketquotationisnotreadilyavailableorisunreliableifasecurityorotherassetorliabilitydoesnothaveapricesourceduetoitslackofliquidity,ifamarketquotationdifferssignificantlyfromrecentpricequotationsorotherwisenolongerappearstoreflectfairvalue,wherethesecurityorotherassetorliabilityisthinlytraded,orwherethereisasignificanteventsubsequenttothemostrecentmarketquotation.AsignificanteventŽisaneventthat,inthejudgmentofBFA,islikelytocauseamaterialchangetotheclosingmarketpriceoftheassetorliabilityheldbytheFund.Non-U.S.securitieswhosevaluesareaffectedbyvolatilitythatoccursinU.S.marketsforrelatedorhighlycorrelatedassets(DepositaryReceipts,GlobalDepositaryReceiptsorETFs)onatradingdayafterthecloseofnon-U.S.securitiesmarketsmaybefairvalued.Fairvaluerepresentsagoodfaithapproximationofthevalueofanassetorliability.ThefairvalueofanassetorliabilityheldbytheFundistheamounttheFundmightreasonablyexpecttoreceivefromthecurrentsaleofthatassetorthecosttoextinguishthatliabilityinanarms-lengthtransaction.ValuingtheFundsinvestmentsusingfairvaluepricingwillresultinpricesthatmaydifferfromcurrentmarketvaluationsandthatmaynotbethepricesatwhichthoseinvestmentscouldhavebeensoldduringtheperiodinwhichtheparticularfairvalueswereused.UseoffairvaluepricesandcertaincurrentmarketvaluationscouldresultinadifferencebetweenthepricesusedtocalculatetheFundsNAVandthepricesusedbytheUnderlyingIndex, which,inturn,couldresultinadifferencebetweentheFundsperformanceandtheperformanceoftheUnderlyingIndex.Thevalueofassetsorliabilitiesdenominatedinnon-U.S.currencieswillbeconvertedintoU.S.dollarsusingprevailingmarketratesonthedateofvaluationasquotedbyoneormoredataserviceproviders.UseofaratedifferentfromtherateusedbytheIndexProvidermayadver

41 selyaffecttheFundsabilitytotracktheUnde
selyaffecttheFundsabilitytotracktheUnderlyingIndex.DividendsandDistributionsGeneralPolicies.Dividendsfromnetinvestmentincome,ifany,generallyaredeclaredandpaidatleastonceayearbytheFund.Distributionsofnetrealizedsecuritiesgains,ifany,generallyaredeclaredandpaidonceayear,buttheTrustmaymakedistributionsonamorefrequentbasisfortheFund.TheTrustreservestherighttodeclarespecialdistributionsif,initsreasonablediscretion,suchactionisnecessaryoradvisabletopreserveitsstatusasaregulatedinvestmentcompany(RICŽ)ortoavoidimpositionofincomeorexcisetaxesonundistributedincomeorrealizedgains.DividendsandotherdistributionsonsharesoftheFundaredistributedonaproratabasistobeneficialownersofsuchshares.DividendpaymentsaremadethroughDTCparticipantsandindirectparticipantstobeneficialownersthenofrecordwithproceedsreceivedfromtheFund.DividendReinvestmentService.NodividendreinvestmentserviceisprovidedbytheTrust.Broker-dealersmaymakeavailabletheDTCbook-entryDividendReinvestmentServiceforusebybeneficialownersoftheFundforreinvestmentoftheirdividenddistributions.Beneficialownersshouldcontacttheirbrokertodeterminetheavailabilityandcostsoftheserviceandthedetailsofparticipationtherein.Brokersmayrequirebeneficialownerstoadheretospecificproceduresandtimetables.Ifthisserviceisavailableandused,dividenddistributionsofbothincomeandrealizedgainswillbeautomaticallyreinvestedinadditionalwholesharesoftheFundpurchasedinthesecondarymarket.Taxes.Aswithanyinvestment,youshouldconsiderhowyourinvestmentinsharesoftheFundwillbetaxed.ThetaxinformationinthisProspectusisprovidedasgeneralinformation,basedoncurrentlaw.YoushouldconsultyourowntaxprofessionalaboutthetaxconsequencesofaninvestmentinsharesoftheFund.UnlessyourinvestmentinFundsharesismadethroughatax-exemptentityortax-deferredretirementaccount,suchasanIRA,youneedtobeawareofthepossibletaxconsequenceswhentheFundmakesdistributionsoryousellFundshares.TaxesonDistributions.DistributionsfromtheFundsnetinvestmentincome(otherthanqualifieddividendincome),includingdistributionsofincomefromsecuritieslendinganddistributionsoutoftheFundsnetshort-termcapitalgains,ifany,aretaxabletoyouasordinaryincome.DistributionsbytheFundofnetlong-termcapitalgainsinexcessofnetshort-termcapitallosses(capitalgaindividends)aretaxabletoyouaslong-termcapitalgains,regardlessofhowlongy

42 ouhaveheldtheFundsshares.Distributionsb
ouhaveheldtheFundsshares.DistributionsbytheFundthatqualifyasqualifieddividendincomearetaxabletoyouatlong-termcapitalgainrates.Long-termcapitalgainsandqualifieddividendincomearegenerallyeligiblefortaxationatamaximumrateof15%fornon-corporateshareholderswithincomesbelowapproximately$400,000($450,000ifmarriedand filingjointly),adjustedannuallyforinflation,and20%forindividualswithanyincomeabovetheseamountsthatisnetlong-termcapitalgainorqualifieddividendincome.Inaddition,a3.8%U.S.federalMedicarecontributiontaxisimposedonnetinvestmentincome,Žincluding,butnotlimitedto,interest,dividends,andnetgain,ofU.S.individualswithincomeexceeding$200,000(or$250,000ifmarriedandfilingjointly)andofestatesandtrusts.DividendswillbequalifieddividendincometoyouiftheyareattributabletoqualifieddividendincomereceivedbytheFund.Generally,qualifieddividendincomeincludesdividendincomefromtaxableU.S.corporationsandqualifiednon-U.S.corporations,providedthattheFundsatisfiescertainholdingperiodrequirementsinrespectofthestockofsuchcorporationsandhasnothedgeditspositioninthestockincertainways.SubstitutedividendsreceivedbytheFundwithrespecttodividendspaidonsecuritieslentoutwillnotbequalifieddividendincome.Forthispurpose,aqualifiednon-U.S.corporationmeansanynon-U.S.corporationthatiseligibleforbenefitsunderacomprehensiveincometaxtreatywiththeUnitedStates,whichincludesanexchangeofinformationprogram,orifthestockwithrespecttowhichthedividendwaspaidisreadilytradableonanestablishedUnitedStatessecuritiesmarket.Thetermexcludesacorporationthatisapassiveforeigninvestmentcompany.DividendsreceivedbytheFundfromaRICgenerallyarequalifieddividendincomeonlytotheextentthedividenddistributionsaremadeoutofqualifieddividendincomereceivedbysuchRIC.Foradividendtobetreatedasqualifieddividendincome,thedividendmustbereceivedwithrespecttoashareofstockheldwithoutbeinghedgedbytheFund,andwithrespecttoashareoftheFundheldwithoutbeinghedgedbyyou,for61daysduringthe121-dayperiodbeginningatthedatewhichis60daysbeforethedateonwhichsuchsharebecomesex-dividendwithrespecttosuchdividendor,inthecaseofcertainpreferredstock,91daysduringthe181-dayperiodbeginning90daysbeforesuchdate.IfyourFundsharesareloanedoutpursuanttoasecuritieslendingarrangement,youmaylosetheabilitytouseforeigntaxcreditspassedthroughbytheFundortotreatFunddividen

43 dspaidwhilethesharesareheldbytheborrower
dspaidwhilethesharesareheldbytheborrowerasqualifieddividendIngeneral,yourdistributionsaresubjecttoU.S.federalincometaxfortheyearwhentheyarepaid.CertaindistributionspaidinJanuary,however,maybetreatedaspaidonDecember31oftheprioryear.ShorttermcapitalgainsearnedbyanUnderlyingFundwillbeordinaryincomewhendistributedtotheFundandwillnotbeoffsetbytheFundscapitallosses.BecausetheFundisexpectedtoinvestintheUnderlyingFund,theFundsrealizedlossesonsalesofsharesoftheUnderlyingFundmaybeindefinitelyorpermanentlydeferredaswashIftheFundsdistributionsexceedcurrentandaccumulatedearningsandprofits,alloraportionofthedistributionsmadeinthetaxableyearmayberecharacterizedasareturnofcapitaltoshareholders.DistributionsinexcessoftheFundsminimumdistributionrequirements,butnotinexcessoftheFundsearningsandprofits,willbe taxabletoshareholdersandwillnotconstitutenontaxablereturnsofcapital.Areturnofcapitaldistributiongenerallywillnotbetaxablebutwillreducetheshareholderscostbasisandresultinahighercapitalgainorlowercapitallosswhenthosesharesonwhichthedistributionwasreceivedaresold.Onceashareholderscostbasisisreducedtozero,furtherdistributionswillbetreatedascapitalgain,iftheshareholderholdssharesoftheFundascapitalassets.IfyouareneitheraresidentnoracitizenoftheUnitedStatesorifyouareanon-U.S.entity,theFundsordinaryincomedividends(whichincludedistributionsofnetshort-termcapitalgains)willgenerallybesubjecttoa30%U.S.withholdingtax,unlessalowertreatyrateapplies,providedthatwithholdingtaxwillgenerallynotapplytoanygainorincomerealizedbyanon-U.S.shareholderinrespectofanydistributionsoflong-termcapitalgainsoruponthesaleorotherdispositionofsharesoftheFund.A30%withholdingtaxiscurrentlyimposedonU.S.-sourcedividends,interestandotherincomeitemsandwillbeimposedonproceedsfromthesaleofpropertyproducingU.S.-sourcedividendsandinterestpaidafterDecember31,2016,to(i)foreignfinancialinstitutions,includingnon-U.S.investmentfunds,unlesstheyagreetocollectanddisclosetotheInternalRevenueService(IRSŽ)informationregardingtheirdirectandindirectU.S.accountholdersand(ii)certainotherforeignentities,unlesstheycertifycertaininformationregardingtheirdirectandindirectU.S.owners.Toavoidwithholding,foreignfinancialinstitutionswillneedto(i)enterintoagreementswiththeIRSthatstatethattheywillprovidetheIRSinformation,i

44 ncludingthenames,addressesandtaxpayeride
ncludingthenames,addressesandtaxpayeridentificationnumbersofdirectandindirectU.S.accountholders,complywithduediligenceprocedureswithrespecttotheidentificationofU.S.accounts,reporttotheIRScertaininformationwithrespecttoU.S.accountsmaintained,agreetowithholdtaxoncertainpaymentsmadetonon-compliantforeignfinancialinstitutionsortoaccountholderswhofailtoprovidetherequiredinformation,anddeterminecertainotherinformationconcerningtheiraccountholders,or(ii)intheeventthatanapplicableintergovernmentalagreementandimplementinglegislationareadopted,providelocalrevenueauthoritieswithsimilaraccountholderinformation.Otherforeignentitiesmayneedtoreportthename,address,andtaxpayeridentificationnumberofeachsubstantialU.S.ownerorprovidecertificationsofnosubstantialU.S.ownershipunlesscertainexceptionsapply.Dividends,interestandcapitalgainsearnedbytheUnderlyingFundwithrespecttonon-U.S.positionsmaygiverisetowithholdingandothertaxesimposedbynon-U.S.countries.TaxconventionsbetweencertaincountriesandtheUnitedStatesmayreduceoreliminatesuchtaxes.Ifmorethan50%ofthetotalassetsoftheUnderlyingFundatthecloseofayearconsistsofnon-U.S.stocksorsecurities(and50%ofthetotalassetsoftheFundatthecloseoftheyearconsistsofforeignsecurities,or,atthecloseofeachquarter,sharesoftheUnderlyingFund),theFundmaypassthroughŽtoyoucertainnon-U.S.incometaxes(includingwithholdingtaxes)paidbytheFundortheUnderlyingFund.Thismeansthatyouwouldbeconsideredtohavereceivedasanadditionaldividendyourshareofsuchnon-U.S.taxes,butyoumaybeentitledtoeitheracorrespondingtaxdeductionincalculatingyourtaxableincome,or,subjecttocertainlimitations,acreditincalculatingyourU.S.federalincometax. ForpurposesofforeigntaxcreditsforU.S.shareholdersoftheFund,foreigncapitalgainstaxesmaynotproduceassociatedforeignsourceincome,therebylimitingaU.S.personsabilitytousesuchcredits.IfyouarearesidentoracitizenoftheUnitedStates,bylaw,back-upwithholdingata28%ratewillapplytoyourdistributionsandproceedsifyouhavenotprovidedataxpayeridentificationnumberorsocialsecuritynumberandmadeotherrequiredTaxesWhenSharesareSold.Currently,anycapitalgainorlossrealizeduponasaleofFundsharesisgenerallytreatedasalong-termgainorlossiftheshareshavebeenheldformorethanoneyear.AnycapitalgainorlossrealizeduponasaleofFundsharesheldforoneyearorlessisgenerallytreatedasshort-te

45 rmgainorloss,exceptthatanycapitallossont
rmgainorloss,exceptthatanycapitallossonthesaleofsharesheldforsixmonthsorlessistreatedaslong-termcapitallosstotheextentthatcapitalgaindividendswerepaidwithrespecttosuchshares.Anysuchcapitalgains,includingfromsalesofFundsharesorfromcapitalgaindividends,areincludedinnetinvestmentincomeŽforpurposesofthe3.8%U.S.federalMedicarecontributiontaxmentionedabove.TheforegoingdiscussionsummarizessomeoftheconsequencesundercurrentU.S.federaltaxlawofaninvestmentintheFund.Itisnotasubstituteforpersonaltaxadvice.YoumayalsobesubjecttostateandlocaltaxationonFunddistributionsandsalesofshares.ConsultyourpersonaltaxadvisoraboutthepotentialtaxconsequencesofaninvestmentinsharesoftheFundunderallapplicabletaxlaws.CreationsandRedemptions.Priortotradinginthesecondarymarket,sharesoftheFundarecreatedŽatNAVbymarketmakers,largeinvestorsandinstitutionsonlyinblock-sizeCreationUnitsof50,000sharesormultiplesthereof.EachcreatorŽorAuthorizedParticipantŽentersintoanauthorizedparticipantagreementwiththeFundsdistributor,BlackRockInvestments,LLC(theDistributorŽ),anaffiliateofBFA.Acreationtransaction,whichissubjecttoacceptancebythetransferagent,generallytakesplacewhenanAuthorizedParticipantdepositsintotheFundadesignatedportfolioofsecurities(includinganyportionofsuchsecuritiesforwhichcashmaybesubstituted)andaspecifiedamountofcashapproximatingtheholdingsoftheFundinexchangeforaspecifiednumberofCreationUnits.Totheextentpracticable,thecompositionofsuchportfoliogenerallycorrespondsproratatotheholdingsoftheFund.However,creationandredemptionbasketsmaydiffer.Similarly,sharescanberedeemedonlyinCreationUnits,generallyforadesignatedportfolioofsecurities(includinganyportionofsuchsecuritiesforwhichcashmaybesubstituted)heldbytheFundandaspecifiedamountofcash.ExceptwhenaggregatedinCreationUnits,sharesarenotredeemablebytheFund.ThepricesatwhichcreationsandredemptionsoccurarebasedonthenextcalculationofNAVafteracreationorredemptionorderisreceivedinanacceptableformundertheauthorizedparticipantagreement.OnlyanAuthorizedParticipantmaycreateorredeemCreationUnitsdirectlywiththe Intheeventofasystemfailureorotherinterruption,includingdisruptionsatmarketmakersorAuthorizedParticipants,orderstopurchaseorredeemCreationUnitseithermaynotbeexecutedaccordingtotheFundsinstructionsormaynotbeexecutedatall,ortheFundmaynotbe

46 abletoplaceorchangeorders.Totheextentthe
abletoplaceorchangeorders.TotheextenttheFundengagesinin-kindtransactions,theFundintendstocomplywiththeU.S.federalsecuritieslawsinacceptingsecuritiesfordepositandsatisfyingredemptionswithredemptionsecuritiesby,amongothermeans,assuringthatanysecuritiesacceptedfordepositandanysecuritiesusedtosatisfyredemptionrequestswillbesoldintransactionsthatwouldbeexemptfromregistrationundertheSecuritiesActof1933,asamended(the1933ActŽ).Further,anAuthorizedParticipantthatisnotaqualifiedinstitutionalbuyer,ŽassuchtermisdefinedunderRule144Aofthe1933Act,willnotbeabletoreceiverestrictedsecuritieseligibleforresaleunderRule144A.CreationsandredemptionsmustbemadethroughafirmthatiseitheramemberoftheContinuousNetSettlementSystemoftheNationalSecuritiesClearingCorporationoraDTCparticipantandhasexecutedanagreementwiththeDistributorwithrespecttocreationsandredemptionsofCreationUnitaggregations.InformationabouttheproceduresregardingcreationandredemptionofCreationUnits(includingthecut-offtimesforreceiptofcreationandredemptionorders)isincludedintheFundsSAI.Becausenewsharesmaybecreatedandissuedonanongoingbasis,atanypointduringthelifeoftheFundadistribution,Žassuchtermisusedinthe1933Act,maybeoccurring.Broker-dealersandotherpersonsarecautionedthatsomeactivitiesontheirpartmay,dependingonthecircumstances,resultintheirbeingdeemedparticipantsinadistributioninamannerthatcouldrenderthemstatutoryunderwritersandsubjecttotheprospectusdeliveryandliabilityprovisionsofthe1933Act.Anydeterminationofwhetheroneisanunderwritermusttakeintoaccountalltherelevantfactsandcircumstancesofeachparticularcase.Broker-dealersshouldalsonotethatdealerswhoarenotunderwritersŽbutareparticipatinginadistribution(ascontrastedtoordinarysecondarytransactions),andthusdealingwithsharesthatarepartofanunsoldallotmentŽwithinthemeaningofSection4(a)(3)(C)ofthe1933Act,wouldbeunabletotakeadvantageoftheprospectusdeliveryexemptionprovidedbySection4(a)(3)ofthe1933Act.Fordeliveryofprospectusestoexchangemembers,theprospectusdeliverymechanismofRule153underthe1933Actisavailableonlywithrespecttotransactionsonanationalsecuritiesexchange.CostsAssociatedwithCreationsandRedemptions.AuthorizedParticipantsarechargedstandardcreationandredemptiontransactionfeestooffsettransferandothertransactioncostsassociatedwiththeissuanceandredemptionofCre

47 ationUnits.Thestandardcreationandredempt
ationUnits.Thestandardcreationandredemptiontransactionfeesaresetforthinthetablebelow.ThestandardcreationtransactionfeeischargedtotheAuthorizedParticipantonthedaysuchAuthorizedParticipantcreatesaCreationUnit,andisthesameregardlessofthenumberofCreationUnitspurchasedbytheAuthorizedParticipantontheapplicablebusinessday.Similarly,thestandardredemptiontransactionfeeischargedtotheAuthorizedParticipantonthedaysuchAuthorizedParticipantredeemsaCreationUnit,andisthesameregardlessofthenumberofCreationUnitsredeemed bytheAuthorizedParticipantontheapplicablebusinessday.Creationsandredemptionsforcash(whencashcreationsandredemptions(inwholeorinpart)areavailableorspecified)arealsosubjecttoanadditionalcharge(uptothemaximumamountsshowninthetablebelow).Thischargeisintendedtocompensateforbrokerage,tax,foreignexchange,execution,marketimpactandothercostsandexpensesrelatedtocashtransactions.InvestorswhousetheservicesofabrokerorotherfinancialintermediarytoacquireordisposeofFundsharesmaypayfeesforsuchservices.Thefollowingtableshows,asofSeptember30,2014,theapproximatevalueofoneCreationUnit,standardfeesandmaximumadditionalchargesforcreationsandredemptions(asdescribedabove): ValueofaCreationUnitUnitSizeRedemptionTransactionFeeMaximumAdditionalChargeforMaximumAdditionalChargeforRedemptions*$1,249,00050,000$1003.0%2.0% *AsapercentageofthenetassetvalueperCreationUnit,inclusive,inthecaseofredemptions,ofthestandardredemptiontransactionfee.HouseholdingisanoptionavailabletocertainFundinvestors.Householdingisamethodofdelivery,basedonthepreferenceoftheindividualinvestor,inwhichasinglecopyofcertainshareholderdocumentscanbedeliveredtoinvestorswhosharethesameaddress,eveniftheiraccountsareregisteredunderdifferentnames.Pleasecontactyourbroker-dealerifyouareinterestedinenrollinginhouseholdingandreceivingasinglecopyofprospectusesandothershareholderdocuments,orifyouarecurrentlyenrolledinhouseholdingandwishtochangeyourhouseholdingstatus. TheDistributororitsagentdistributesCreationUnitsfortheFundonanagencybasis.TheDistributordoesnotmaintainasecondarymarketinsharesoftheFund.TheDistributorhasnoroleindeterminingthepoliciesoftheFundorthesecuritiesthatarepurchasedorsoldbytheFund.TheDistributorsprincipaladdressis1UniversitySquareDrive,Princeton,NJ08540.BFAoritsAffiliatesmakepaymentstobroker-dealers,

48 registeredinvestmentadvisers,banksorothe
registeredinvestmentadvisers,banksorotherintermediaries(together,intermediariesŽ)relatedtomarketingactivitiesandpresentations,educationaltrainingprograms,conferences,thedevelopmentoftechnologyplatformsandreportingsystems,ortheirmakingsharesoftheFundandcertainotheriSharesfundsavailabletotheircustomersgenerallyandincertaininvestmentprograms.Suchpayments,whichmaybesignificanttotheintermediary,arenotmadebytheFund.Rather,suchpaymentsaremadebyBFAoritsAffiliatesfromtheirownresources,whichcomedirectlyorindirectlyinpartfromfeespaidbytheiSharesfundscomplex.Paymentsofthistypearesometimesreferredtoasrevenue-sharingpayments.Afinancialintermediarymaymakedecisionsaboutwhichinvestmentoptionsitrecommendsormakesavailable,orthelevelofservicesprovided,toitscustomersbasedonthepaymentsitiseligibletoreceive.Therefore,suchpaymentstoanintermediarycreateconflictsofinterestbetweentheintermediaryanditscustomersandmaycausetheintermediarytorecommendtheFundorotheriSharesfundsoveranotherinvestment.MoreinformationregardingthesepaymentsiscontainedintheFundsSAI.PleasecontactyoursalespersonorotherinvestmentprofessionalformoreinformationregardinganysuchpaymentshisorherfirmmayreceivefromBFAoritsAffiliates. FinancialHighlightsThefinancialhighlightstableisintendedtohelpinvestorsunderstandtheFundsfinancialperformancesinceinception.CertaininformationreflectsfinancialresultsforasingleshareoftheFund.Thetotalreturninthetablerepresentstheratethataninvestorwouldhaveearned(orlost)onaninvestmentintheFund,assumingreinvestmentofalldividendsanddistributions.ThisinformationhasbeenauditedbyPricewaterhouseCoopersLLP,whosereportisincluded,alongwiththeFundsfinancialstatements,intheFundsAnnualReport(availableuponrequest).FinancialHighlights(Forashareoutstandingthroughouttheperiod) PeriodfromJul.9,2014Aug.31,2014Netassetvalue,beginningofperiod$25.14Incomefrominvestmentoperations:NetinvestmentlossNetrealizedandunrealizedlossTotalfrominvestmentoperations(0.27)Netassetvalue,endofperiodTotalreturnRatios/Supplementaldata:Netassets,endofperiod(000s)$3,730RatioofexpensestoaveragenetassetsRatioofexpensestoaveragenetassetspriortowaivedRatioofnetinvestmentlosstoaveragenetassetsPortfolioturnoverrate Commencementofoperations.Basedonaveragesharesoutstandingthroughouttheperiod.Roundstolessthan$0.01.Theamountrepor

49 tedforashareoutstandingmaynotaccordwitht
tedforashareoutstandingmaynotaccordwiththechangeinaggregategainsandlossesinsecuritiesforthefiscalperiodduetothetimingofcapitalsharetransactionsinrelationtothefluctuatingmarketvaluesoftheFundsinvestmentsinitsunderlyingfund.Notannualized.Annualizedforperiodsoflessthanoneyear.TheFundindirectlybearsitsproportionateshareoffeesandexpensesincurredbytheunderlyingfundinwhichtheFundisinvested.Thisratiodoesnotincludetheseindirectfeesandexpenses.PortfolioturnoverrateexcludesportfoliosecuritiesreceivedordeliveredasaresultofprocessingcapitalsharetransactionsinCreationUnits.PortfolioturnoverrateexcludestheportfolioactivityoftheunderlyingfundinwhichtheFundisinvested. IndexProviderMSCIisaleadingproviderofinvestmentdecisionsupporttoolstoinvestorsglobally.MSCIproductsandservicesincludeindices,portfolioriskandperformanceanalytics,andgovernancetools.MSCIisnotaffiliatedwiththeTrust,BFA,StateStreet,theDistributororanyoftheirrespectiveaffiliates.BFAoritsaffiliateshaveenteredintoalicenseagreementwiththeIndexProvidertousetheUnderlyingIndex.BFAoritsaffiliatessublicenserightsintheUnderlyingIndextotheTrustatnocharge.TheFundisnotsponsored,endorsed,soldorpromotedbyMSCIoranyaffiliateofMSCI.NeitherMSCInoranyotherpartymakesanyrepresentationorwarranty,expressorimplied,totheownersoftheFundoranymemberofthepublicregardingtheadvisabilityofinvestinginfundsgenerallyorintheFundparticularlyortheabilityoftheUnderlyingIndextotrackgeneralstockmarketperformance.MSCIisthelicensorofcertaintrademarks,servicemarksandtradenamesofMSCIandoftheUnderlyingIndexwhichisdetermined,composedandcalculatedbyMSCIwithoutregardtotheissueroftheFundortheFund.MSCIhasnoobligationtotaketheneedsoftheissueroftheFundortheownersoftheFundintoconsiderationindetermining,composingorcalculatingtheUnderlyingIndex.MSCIisnotresponsibleforandhasnotparticipatedinthedeterminationofthetimingof,pricesat,orquantitiesoftheFundtobeissuedorinthedeterminationorcalculationoftheequationbywhichtheFundisredeemableforcash.NeitherMSCInoranyotherpartyhasanyobligationorliabilitytoownersoftheFundinconnectionwiththeadministration,marketingortradingoftheFund.ALTHOUGHMSCISHALLOBTAININFORMATIONFORINCLUSIONINORFORUSEINTHECALCULATIONOFTHEINDEXESFROMSOURCESWHICHMSCICONSIDERSRELIABLE,NEITHERMSCINORANYOTHERPARTYGUARANTEESTHEACCURACYAND/ORTHECOMPLETENESSOF

50 THEINDEXESORANYDATAINCLUDEDTHEREIN.NEITH
THEINDEXESORANYDATAINCLUDEDTHEREIN.NEITHERMSCINORANYOTHERPARTYMAKESANYWARRANTY,EXPRESSORIMPLIED,ASTORESULTSTOBEOBTAINEDBYLICENSEE,LICENSEESCUSTOMERSANDCOUNTERPARTIES,OWNERSOFTHEFUND,ORANYOTHERPERSONORENTITYFROMTHEUSEOFTHEINDEXESORANYDATAINCLUDEDTHEREININCONNECTIONWITHTHERIGHTSLICENSEDHEREUNDERORFORANYOTHERUSE.NEITHERMSCINORANYOTHERPARTYMAKESANYEXPRESSORIMPLIEDWARRANTIES,ANDMSCIHEREBYEXPRESSLYDISCLAIMSALLWARRANTIESOFMERCHANTABILITYORFITNESSFORAPARTICULARPURPOSEWITHRESPECTTOTHEINDEXESORANYDATAINCLUDEDTHEREIN.WITHOUTLIMITINGANYOFTHEFOREGOING,INNOEVENTSHALLMSCIORANYOTHERPARTYHAVEANYLIABILITYFORANYDIRECT,INDIRECT,SPECIAL,PUNITIVE,CONSEQUENTIALORANYOTHERDAMAGES(INCLUDINGLOSTPROFITS)EVENIFNOTIFIEDOFTHEPOSSIBILITYOFSUCHDAMAGES. SharesoftheFundarenotsponsored,endorsedorpromotedbyNYSEArca.NYSEArcamakesnorepresentationorwarranty,expressorimplied,totheownersofthesharesoftheFundoranymemberofthepublicregardingtheabilityoftheFundtotrackthetotalreturnperformanceoftheUnderlyingIndexortheabilityoftheUnderlyingIndextotrackstockmarketperformance.NYSEArcaisnotresponsiblefor,norhasitparticipatedin,thedeterminationofthecompilationorthecalculationoftheUnderlyingIndex,norinthedeterminationofthetimingof,pricesof,orquantitiesofsharesoftheFundtobeissued,norinthedeterminationorcalculationoftheequationbywhichthesharesareredeemable.NYSEArcahasnoobligationorliabilitytoownersofthesharesoftheFundinconnectionwiththeadministration,marketingortradingofthesharesoftheFund.NYSEArcadoesnotguaranteetheaccuracyand/orthecompletenessoftheUnderlyingIndexoranydataincludedtherein.NYSEArcamakesnowarranty,expressorimplied,astoresultstobeobtainedbytheTrustonbehalfoftheFundaslicensee,licenseescustomersandcounterparties,ownersofthesharesoftheFund,oranyotherpersonorentityfromtheuseofthesubjectindexoranydataincludedthereininconnectionwiththerightslicensedasdescribedhereinorforanyotheruse.NYSEArcamakesnoexpressorimpliedwarrantiesandherebyexpresslydisclaimsallwarrantiesofmerchantabilityorfitnessforaparticularpurposewithrespecttotheUnderlyingIndexoranydataincludedtherein.Withoutlimitinganyoftheforegoing,innoeventshallNYSEArcahaveanyliabilityforanydirect,indirect,special,punitive,consequentialoranyotherdamages(includinglostprofits)evenifnotifiedofthepossibilityofsuchdamages.ThepastperformanceoftheUnder

51 lyingIndexisnotaguidetofutureperformance
lyingIndexisnotaguidetofutureperformance.BFAdoesnotguaranteetheaccuracyorthecompletenessoftheUnderlyingIndexoranydataincludedthereinandBFAshallhavenoliabilityforanyerrors,omissionsorinterruptionstherein.BFAmakesnowarranty,expressorimplied,totheownersofsharesoftheFundortoanyotherpersonorentity,astoresultstobeobtainedbytheFundfromtheuseoftheUnderlyingIndexoranydataincludedtherein.Withoutlimitinganyoftheforegoing,innoeventshallBFAhaveanyliabilityforanyspecial,punitive,direct,indirectorconsequentialdamages(includinglostprofits),evenifnotifiedofthepossibilityofsuchdamages. SupplementalInformationI.TotalReturnInformationThetablethatfollowspresentsinformationaboutthetotalreturnsoftheFundandtheUnderlyingIndexasofthefiscalyearendedAugust31,2014.CumulativeTotalReturnsŽrepresentthetotalchangeinvalueofaninvestmentovertheperiodindicated.TheFundsNAVisthevalueofoneshareoftheFundascalculatedinaccordancewiththestandardformulaforvaluingmutualfundshares.TheNAVreturnisbasedontheNAVoftheFundandthemarketreturnisbasedontheMarketPriceoftheFund.MarketPricegenerallyisdeterminedbyusingthemidpointbetweenthehighestbidandthelowestaskontheprimarystockexchangeonwhichsharesoftheFundarelistedfortrading,asofthetimethattheFundsNAViscalculated.SincesharesoftheFunddidnottradeinthesecondarymarketuntilaftertheFundsinception,fortheperiodfrominceptiontothefirstdayofsecondarymarkettradinginsharesoftheFund,theNAVoftheFundisusedasaproxyfortheMarketPricetocalculatemarketreturns.MarketandNAVreturnsassumethatdividendsandcapitalgaindistributionshavebeenreinvestedintheFundatMarketPriceandNAV,respectively.Anindexisastatisticalcompositethattracksaspecifiedfinancialmarketorsector.UnliketheFund,theUnderlyingIndexdoesnotactuallyholdaportfolioofsecuritiesandthereforedoesnotincurtheexpensesincurredbytheFund.TheseexpensesnegativelyimpacttheperformanceoftheFund.Also,marketreturnsdonotincludebrokeragecommissionsthatmaybepayableonsecondarymarkettransactions.Ifbrokeragecommissionswereincluded,marketreturnswouldbelower.ThereturnsshowninthefollowingtabledonotreflectthedeductionoftaxesthatashareholderwouldpayonFunddistributionsortheredemptionorsaleofFundshares.TheinvestmentreturnandprincipalvalueofsharesoftheFundwillvarywithchangesinmarketconditions.SharesoftheFundmaybeworthmoreorlessthantheiroriginalcostw

52 hentheyareredeemedorsoldinthemarket.TheF
hentheyareredeemedorsoldinthemarket.TheFundspastperformanceisnoguaranteeoffutureresults.PerformanceasofAugust31,2014 CumulativeTotalReturnsNAVMARKETINDEXSinceInception*(1.11)%(1.03)%(0.72)%*TotalreturnsfortheperiodsinceinceptionarecalculatedfromtheinceptiondateoftheFund(7/9/14).ThefirstdayofsecondarymarkettradinginsharesoftheFundwas [THISPAGEINTENTIONALLYLEFTBLANK] [THISPAGEINTENTIONALLYLEFTBLANK] [THISPAGEINTENTIONALLYLEFTBLANK] Formoreinformationvisitwww.iShares.comorcall1-800-474-2737CopiesoftheProspectus,SAIandrecentshareholderreportscanbefoundonourwebsiteatwww.iShares.com.FormoreinformationabouttheFund,youmayrequestacopyoftheSAI.TheSAIprovidesdetailedinformationabouttheFundandisincorporatedbyreferenceintothisProspectus.ThismeansthattheSAI,forlegalpurposes,isapartofthisProspectus.AdditionalinformationabouttheFund’sinvestmentsisavailableintheFund’sAnnualreporttoshareholders.IntheFund’sAnnualReport,youwillfindadiscussionofthemarketconditionsandinvestmentstrategiesthatsignificantlyaffectedtheFund’sperformanceduringthelastfiscalyear.IfyouhaveanyquestionsabouttheTrustorsharesoftheFundoryouwishtoobtaintheSAIorAnnualreportfreeofcharge,please:Call:1-800-iSharesor1-800-474-2737(tollfree)MondaythroughFriday,8:30a.m.to6:30p.m.(Easterntime)Email:iSharesETFs@blackrock.comWrite:c/oBlackRockInvestments,LLC1UniversitySquareDrive,Princeton,NJ08540InformationabouttheFund(includingtheSAI)canbereviewedandcopiedattheSEC’sPublicReferenceRoominWashington,D.C.,andinformationontheoperationofthePublicReferenceRoommaybeobtainedbycallingtheSECat1-202-551-8090.ReportsandotherinformationabouttheFundareavailableontheEDGARdatabaseontheSEC’swebsiteatwww.sec.gov,andcopiesofthisinformationmaybeobtained,afterpayingaduplicatingfee,byelectronicrequestatthefollowinge-mailaddress:publicinfo@sec.gov,orbywritingtotheSEC’sPublicReferenceSection,Washington,D.C.20549-1520.NopersonisauthorizedtogiveanyinformationortomakeanyrepresentationsabouttheFundanditssharesnotcontainedinthisProspectusandyoushouldnotrelyonanyotherinformation.ReadandkeepthisProspectusforfuturereference.©2014BlackRock,Inc.Allrightsreserved.areregisteredtrademarksofBFAanditsaffiliates.Allothermarksarethepropertyoftheirrespectiveowners.InvestmentCompanyActFileNo.:811-09729 Go paperless. . .It’s Easy, Economical and Gree