Form 497 for iShares Trust

497 1 d946260d497.htm FORM 497 FOR ISHARES TRUST Form 497 for iShares Trust

IMPORTANT NOTICE REGARDING CHANGE IN INVESTMENT POLICY

iShares^®

iShares Trust

Supplement dated June 26, 2015

to the Prospectus dated December 1, 2014 (the “Prospectus”) and

the Statement of Additional Information

dated December 1, 2014 (the “SAI”)

for the iShares MSCI USA Quality Factor ETF (QUAL) (the “Fund”)

The information in this Supplement updates information in, and should be read in conjunction with, the Prospectus and the SAI for the Fund.

The following changes will take effect for the Fund on or around August 31, 2015:


	Current	New
Underlying Index	MSCI USA Quality Index	MSCI USA Sector Neutral Quality Index

Change in the Fund’s Principal Investment Strategies

The first paragraph of the section of the Prospectus entitled “Principal Investment Strategies” is deleted in its entirety and replaced with the following:

The Fund seeks to track the investment results of the MSCI USA Sector Neutral Quality Index (the “Underlying Index”), which is based on a traditional market capitalization-weighted parent index, the MSCI USA Index, which includes U.S. large- and mid-capitalization stocks. The Underlying Index seeks to capture the performance of stocks that exhibit higher quality characteristics relative to their peers within the same Global Industry Classification Standard (GICS^®) sector. To construct the Underlying Index, the quality score of each security in the parent index is determined based on three fundamental variables: high return on equity, stable year-over-year earnings growth and low debt-to-equity. As of April 30, 2015, there were 124 securities in the Underlying Index. Components primarily include financials, healthcare and technology companies. The components of the Underlying Index, and the degree to which these components represent certain industries, may change over time.

Changes in the Fund’s Principal Risks

The section of the Prospectus entitled “Summary of Principal Risks” is amended to delete “Consumer Discretionary Sector Risk” and “Information Technology Sector Risk” and to add the following:

Financials Sector Risk. Performance of companies in the financials sector may be adversely impacted by many factors, including, among others, government regulations, economic conditions, credit rating downgrades, changes in interest rates, and decreased liquidity in credit markets. This sector has experienced significant losses in the recent past, and the impact of more stringent capital requirements, recent or future regulation on any individual financial company, or regulation on the financials sector as a whole cannot be predicted.

Technology Sector Risk. Technology companies, including information technology companies, may have limited product lines, markets, financial resources and/or personnel. Technology companies typically face intense competition and potentially rapid product obsolescence. They are also heavily dependent on intellectual property rights and may be adversely affected by the loss or impairment of those rights.

The section of the Prospectus entitled “A Further Discussion of Principal Risks” is amended to delete “Consumer Discretionary Sector Risk” and “Information Technology Sector Risk” and to add the following:

Financials Sector Risk. Companies in the financials sector of an economy are often subject to extensive governmental regulation and intervention, which may adversely affect the scope of their activities, the prices they can charge and the amount of capital they must maintain. Governmental regulation may change frequently and may have significant adverse consequences for companies in the financials sector, including effects not intended by such regulation. The impact of recent or future regulation in various countries on any individual financial company or on the financials sector as a whole cannot be predicted. Certain risks may impact the value of investments in the financials sector more severely than those of investments outside this sector, including the risks associated with companies that operate with substantial financial leverage. Companies in the financials sector may also be adversely affected by increases in interest rates and loan losses, decreases in the availability of money or asset valuations, credit rating downgrades and adverse conditions in other related markets. Insurance companies, in particular, may be subject to severe price competition and/or rate regulation, which may have an adverse impact on their profitability. During the financial crisis that began in 2007, the deterioration of the credit markets impacted a broad range of mortgage, asset-backed, auction rate, sovereign debt and other markets, including U.S. and non-U.S. credit and interbank money markets, thereby affecting a wide range of financial institutions and markets. During the

financial crisis, a number of large financial institutions failed, merged with stronger institutions or had significant government infusions of capital. Instability in the financial markets caused certain financial companies to incur large losses. Some financial companies experienced declines in the valuations of their assets, took actions to raise capital (such as the issuance of debt or equity securities), or even ceased operations. Some financial companies borrowed significant amounts of capital from government sources and may face future government-imposed restrictions on their businesses or increased government intervention. Those actions caused the securities of many financial companies to decline in value. The financials sector is particularly sensitive to fluctuations in interest rates.

Technology Sector Risk. Technology companies, including information technology companies, face intense competition, both domestically and internationally, which may have an adverse effect on profit margins. Technology companies may have limited product lines, markets, financial resources and/or personnel. The products of technology companies may face obsolescence due to rapid technological developments, frequent new product introduction, unpredictable changes in growth rates and competition for the services of qualified personnel. Companies in the technology sector are heavily dependent on patent and other intellectual property rights. The loss or impairment of these rights may adversely affect the profitability of these companies.

Changes in the Fund’s Other Risks

The section of the Prospectus entitled “A Further Discussion of Other Risks” is amended to delete “Capital Goods Industry Group Risk” and “Consumer Services Industry Risk” and to add the following:

Consumer Discretionary Sector Risk. The success of consumer product manufacturers and retailers is tied closely to the performance of domestic and international economies, interest rates, exchange rates, competition, consumer confidence, changes in demographics and consumer preferences. Companies in the consumer discretionary sector depend heavily on disposable household income and consumer spending, and may be strongly affected by social trends and marketing campaigns. These companies may be subject to severe competition, which may have an adverse impact on their profitability.

The last paragraph on page 38 of the section of the SAI entitled “The MSCI Indexes” is deleted in its entirety and replaced with the following:

MSCI USA Sector Neutral Quality Index

Number of Components: approximately 124

Index Description. The MSCI USA Sector Neutral Quality Index is based on a traditional market capitalization-weighted parent index, the MSCI USA

Index, which includes U.S. large- and mid-capitalization stocks. The Underlying Index seeks to capture the performance of stocks that exhibit higher quality characteristics relative to their peers within the same Global Industry Classification Standard (GICS^®) sector. To construct the Underlying Index, the quality score of each security in the parent index is determined based on three fundamental variables: high return on equity, stable year-over-year earnings growth and low debt-to-equity.

If you have any questions, please call 1-800-iShares (1-800-474-2737).


iShares^® is a registered trademark of BlackRock Fund Advisors and its affiliates.
			IS-A-QUAL-S

PLEASE RETAIN THIS SUPPLEMENT

FOR FUTURE REFERENCE

IMPORTANT NOTICE REGARDING CHANGE IN INVESTMENT POLICY

iShares^®

iShares Trust

Supplement dated June 26, 2015

to the Prospectus dated December 1, 2014 (the “Prospectus”) and

the Statement of Additional Information

dated December 1, 2014 (the “SAI”)

for the iShares MSCI USA Value Factor ETF (VLUE) (the “Fund”)

The information in this Supplement updates information in, and should be read in conjunction with, the Prospectus and the SAI for the Fund.

The following changes will take effect for the Fund on or around August 31, 2015:


	Current	New
Underlying Index	MSCI USA Value Weighted Index	MSCI USA Enhanced Value Index

Change in the Fund’s Principal Investment Strategies

The first paragraph of the section of the Prospectus entitled “Principal Investment Strategies” is deleted in its entirety and replaced with the following:

The Fund seeks to track the investment results of the MSCI USA Enhanced Value Index (the “Underlying Index”), which is based on a traditional market capitalization-weighted parent index, the MSCI USA Index, which includes U.S. large- and mid- capitalization stocks. The Underlying Index is designed to represent the performance of securities in the parent index that exhibit higher value characteristics relative to their peers within the corresponding Global Industry Classification Standard (GICS^®) sector. To construct the Underlying Index, the value weighting of each security in the parent index is determined using three variables: price-to-book value, price-to-forward earnings and enterprise value-to-cash flow from operations. As of April 30, 2015, there were 146 issuers in the Underlying Index. Components primarily include financials, healthcare and technology companies. The components of the Underlying Index, and the degree to which these components represent certain industries, may change over time.

Changes in the Fund’s Principal Risks

The section of the Prospectus entitled “Summary of Principal Risks” is amended to delete “Energy Sector Risk” and “Information Technology Sector Risk” and to add the following:

Healthcare Sector Risk. The healthcare sector may be affected by government regulations and government healthcare programs, increases or decreases in the cost of medical products and services and product liability claims, among other factors. Many healthcare companies are heavily dependent on patent protection, and the expiration of a company’s patent may adversely affect that company’s profitability. Healthcare companies are subject to competitive forces that may result in price discounting, and may be thinly capitalized and susceptible to product obsolescence.

The section of the Prospectus entitled “A Further Discussion of Principal Risks” is amended to delete “Energy Sector Risk” and “Information Technology Sector Risk” and to add the following:

Healthcare Sector Risk. The profitability of companies in the healthcare sector may be affected by extensive government regulations, restrictions on government reimbursement for medical expenses, rising costs of medical products and services, pricing pressure, an increased emphasis on outpatient services, limited number of products, industry innovation, changes in technologies and other market developments. Many healthcare companies are heavily dependent on patent protection. The expiration of a company’s patents may adversely affect that company’s profitability. Many healthcare companies are subject to extensive litigation based on product liability and similar claims. Healthcare companies are subject to competitive forces that may make it difficult to raise prices and, in fact, may result in price discounting. Many new products in the healthcare sector may be subject to regulatory approvals. The process of obtaining such approvals may be long and costly, and ultimately may be unsuccessful. Companies in the healthcare sector may be thinly capitalized and may be susceptible to product obsolescence.

personnel. The products of technology companies may face obsolescence due to rapid technological developments, frequent new product introduction, unpredictable changes in growth rates and competition for the services of qualified personnel. Companies in the technology sector are heavily dependent on patent and other intellectual property rights. The loss or impairment of these rights may adversely affect the profitability of these companies.

Changes in the Fund’s Other Risks

The section of the Prospectus entitled “A Further Discussion of Other Risks” is amended to delete “Healthcare Sector Risk” and to add the following:

Energy Sector Risk. The energy sector of an economy is cyclical and highly dependent on energy prices. The market value of companies in the local energy sector is strongly affected by the levels and volatility of global energy prices, energy supply and demand, capital expenditures on exploration and production of energy sources, energy conservation efforts, exchange rates, interest rates, economic conditions, tax treatment, increased competition and technological advances, among other factors. Companies in this sector may be subject to substantial government regulation and contractual fixed pricing, which may increase the cost of doing business and limit the earnings of these companies. A significant portion of the revenues of these companies depends on a relatively small number of customers, including governmental entities and utilities. As a result, governmental budget constraints may have a material adverse effect on the stock prices of companies in this sector. Energy companies may also operate in, or engage in transactions involving countries with, less developed regulatory regimes or a history of expropriation, nationalization or other adverse policies. Energy companies also face a significant risk of liability from accidents resulting in injury or loss of life or property, pollution or other environmental problems, equipment malfunctions or mishandling of materials and a risk of loss from terrorism, political strife and natural disasters. Any such event could have serious consequences for the general population of the affected area and could have an adverse impact on the Fund’s portfolio and the performance of the Fund. Energy companies can be significantly affected by the supply of, and demand for, specific products (e.g., oil and natural gas) and services, exploration and production spending, government subsidization, world events and general economic conditions. Energy companies may have relatively high levels of debt, and may be more likely to restructure their businesses if there are downturns in certain energy markets or the markets as a whole. If an energy company in the Fund’s portfolio becomes distressed, the Fund could lose all or a substantial portion of its investment.

The fourth paragraph on page 39 of the section of the SAI entitled “The MSCI Indexes” is deleted in its entirety and replaced with the following:

MSCI USA Enhanced Value Index

Number of Components: approximately 146

Index Description. The MSCI USA Enhanced Value Index is based on a traditional market capitalization-weighted parent index, the MSCI USA Index, which includes U.S. large- and mid- capitalization stocks. The Underlying Index is designed to represent the performance of securities in the parent index that exhibit higher value characteristics relative to their peers within the corresponding Global Industry Classification Standard (GICS^®) sector. To construct the Underlying Index, the value weighting of each security in the parent index is determined using three variables: price-to-book value, price-to-forward earnings and enterprise value-to-cash flow from operations.

If you have any questions, please call 1-800-iShares (1-800-474-2737).


iShares^® is a registered trademark of BlackRock Fund Advisors and its affiliates.
			IS-A-VLUE-S

PLEASE RETAIN THIS SUPPLEMENT

FOR FUTURE REFERENCE

IMPORTANT NOTICE REGARDING CHANGE IN INVESTMENT POLICY

iShares^®

iShares Trust

Supplement dated June 26, 2015

to the Summary Prospectus dated December 1, 2014

for the iShares MSCI USA Quality Factor ETF (QUAL) (the “Fund”)

The information in this Supplement updates information in, and should be read in conjunction with, the Summary Prospectus for the Fund.

The following changes will take effect for the Fund on or around August 31, 2015:


	Current	New
Underlying Index	MSCI USA Quality Index	MSCI USA Sector Neutral Quality Index

Change in the Fund’s Principal Investment Strategies

The first paragraph of the section of the Summary Prospectus entitled “Principal Investment Strategies” is deleted in its entirety and replaced with the following:

Changes in the Fund’s Principal Risks

The section of the Summary Prospectus entitled “Summary of Principal Risks” is amended to delete “Consumer Discretionary Sector Risk” and “Information Technology Sector Risk” and to add the following:

If you have any questions, please call 1-800-iShares (1-800-474-2737).


iShares^® is a registered trademark of BlackRock Fund Advisors and its affiliates.
			IS-A-QUAL-SP

PLEASE RETAIN THIS SUPPLEMENT

FOR FUTURE REFERENCE

IMPORTANT NOTICE REGARDING CHANGE IN INVESTMENT POLICY

iShares^®

iShares Trust

Supplement dated June 26, 2015

to the Summary Prospectus dated December 1, 2014

for the iShares MSCI USA Value Factor ETF (VLUE) (the “Fund”)

The information in this Supplement updates information in, and should be read in conjunction with, the Summary Prospectus for the Fund.

The following changes will take effect for the Fund on or around August 31, 2015:


	Current	New
Underlying Index	MSCI USA Value Weighted Index	MSCI USA Enhanced Value Index

Change in the Fund’s Principal Investment Strategies

The first paragraph of the section of the Summary Prospectus entitled “Principal Investment Strategies” is deleted in its entirety and replaced with the following:

Changes in the Fund’s Principal Risks

The section of the Summary Prospectus entitled “Summary of Principal Risks” is amended to delete “Energy Sector” Risk and “Information Technology Sector Risk” and to add the following:

If you have any questions, please call 1-800-iShares (1-800-474-2737).


iShares^® is a registered trademark of BlackRock Fund Advisors and its affiliates.
			IS-A-VLUE-SP

PLEASE RETAIN THIS SUPPLEMENT

FOR FUTURE REFERENCE