UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-09729

iShares Trust

(Exact name of Registrant as specified in charter)

c/o: State Street Bank and Trust Company

1 Iron Street, Boston, MA 02210

(Address of principal executive offices) (Zip code)

The Corporation Trust Company

1209 Orange Street, Wilmington, DE 19801

(Name and address of agent for service)

Registrant’s telephone number, including area code: (415) 670-2000

Date of fiscal year end: August 31, 2016

Date of reporting period: August 31, 2016

Item 1. Reports to Stockholders.

AUGUST 31, 2016

2016 ANNUAL REPORT

iShares Trust

^Ø  iShares MSCI All Peru Capped ETF  |  EPU  |  NYSE Arca

^Ø  iShares MSCI Brazil Small-Cap ETF  |  EWZS  |  NASDAQ

^Ø  iShares MSCI China ETF  |  MCHI  |  NASDAQ

^Ø  iShares MSCI China Small-Cap ETF  |  ECNS  |  NYSE Arca

^Ø  iShares MSCI Indonesia ETF  |  EIDO  |  NYSE Arca

^Ø  iShares MSCI Philippines ETF  |  EPHE  |  NYSE Arca

^Ø  iShares MSCI Poland Capped ETF  |  EPOL  |  NYSE Arca

^Ø  iShares MSCI Qatar Capped ETF  |  QAT  |  NASDAQ

^Ø  iShares MSCI Saudi Arabia Capped ETF  |  KSA  |  NYSE Arca

^Ø  iShares MSCI UAE Capped ETF  |  UAE  |  NASDAQ

Table of Contents

Management’s Discussions of Fund Performance	5
About Fund Performance	26
Shareholder Expenses	26
Schedules of Investments	27
iShares MSCI All Peru Capped ETF	27
iShares MSCI Brazil Small-Cap ETF	29
iShares MSCI China ETF	31
iShares MSCI China Small-Cap ETF	36
iShares MSCI Indonesia ETF	46
iShares MSCI Philippines ETF	49
iShares MSCI Poland Capped ETF	51
iShares MSCI Qatar Capped ETF	53
iShares MSCI Saudi Arabia Capped ETF	55
iShares MSCI UAE Capped ETF	57
Financial Statements	59
Financial Highlights	73
Notes to Financial Statements	83
Report of Independent Registered Public Accounting Firm	96
Tax Information	97
Board Review and Approval of Investment Advisory Contract	98
Supplemental Information	111
Trustee and Officer Information	121

Management’s Discussion of Fund Performance

iSHARES^® TRUST

GLOBAL EQUITY MARKET OVERVIEW

Global equity markets advanced for the 12 months ended August 31, 2016 (the “reporting period”). The MSCI ACWI, a broad global equity index that includes both developed and emerging markets, returned 7.24% for the reporting period.

Early in the reporting period, global stock markets were volatile but generally declined overall amid lower energy prices and weaker global economic growth, including slowdowns in stronger developed economies such as the U.S. and U.K. In response, many of the world’s central banks took more aggressive actions to stimulate economic activity, including expanded quantitative easing measures and negative interest rates.

In the U.S., the Federal Reserve Bank (the “Fed”) postponed plans to raise its short-term interest rate target until December 2015, when it ended a seven-year period of near-zero interest rates by increasing the federal funds target interest rate from a range of 0%-0.25% to a range of 0.25%-0.50%. It was the Fed’s first interest rate hike since June 2006.

After bottoming in mid-February 2016, global equity markets reversed course, rallying through the end of the reporting period. Central bank stimulus activity and a recovery in energy prices helped global equity markets rebound, as did signs of stabilization in China, which had experienced a marked economic slowdown that put downward pressure on its currency. Despite the overall upward trend in global equity markets, geopolitical factors — including the “Brexit” referendum in the U.K. (an affirmative vote to leave the European Union), terrorist attacks in France, and an attempted coup in Turkey — contributed to increased equity market volatility late in the reporting period.

Among developed countries, the U.S. was among the best-performing markets, returning approximately 12% for the reporting period. Although employment growth remained robust, other segments of the U.S. economy struggled, leading to three consecutive quarters of growth below a 1.5% annual rate. As a result, the Fed — which was expected to raise short-term interest rates further in 2016 — held rates steady through the first eight months of the year. Stable Fed monetary policy, as well as the relative strength of the U.S. economy compared with other regions of the globe, provided a favorable backdrop for U.S. equity market performance.

Equity markets in the Asia/Pacific region gained approximately 6% for the reporting period. New Zealand and Australia were the leading markets in the region, benefiting from improving economic growth during the reporting period, while the laggards included Singapore and Japan. In particular, the Japanese equity market declined by more than 12%, but a strong rally in the Japanese yen (which appreciated by 15% against the U.S. dollar) helped offset the overall market decline, resulting in a 3% gain in U.S. dollar terms.

European stock markets declined by approximately 3% for the reporting period. Markets in Italy and Spain, which were adversely affected by political instability and struggling banking sectors, declined the most, while Belgium and Portugal performed best. In the U.K., the equity market advanced by about 13%, but a sharp decline in the British pound in the wake of the Brexit vote led to negative returns in U.S. dollar terms.

Emerging markets stocks outperformed developed markets, advancing by nearly 12% for the reporting period in U.S. dollar terms. Latin American equity markets generated the best returns, led by rebounding markets in Peru and Brazil, while stock markets in Eastern Europe lagged.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 5

Management’s Discussion of Fund Performance

iSHARES^® MSCI ALL PERU CAPPED ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		44.13%		39.87%		45.45%		44.13%		39.87%		45.45%
5 Years		(2.98)%		(3.32)%		(2.47)%		(14.03)%		(15.53)%		(11.74)%
Since Inception		5.82%		5.46%		6.57%		50.35%		46.64%		58.05%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 6/19/09. The first day of secondary market trading was 6/22/09.

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 26 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,509.30	$	3.97	$	1,000.00	$	1,022.00	$	3.20		0.63%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 26 for more information.

6 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI ALL PERU CAPPED ETF

The iShares MSCI All Peru Capped ETF (the “Fund”) seeks to track the investment results of an index composed of Peruvian equities, as represented by the MSCI All Peru Capped Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 44.13%, net of fees, while the total return for the Index was 45.45%.

Peruvian equities, as represented by the Index, advanced significantly for the reporting period in an environment of high volatility. The U.S. dollar appreciated approximately 5% against the Peruvian sol during the reporting period. As a result, returns on Peruvian investments were lower when translated back into U.S. dollars.

As a major commodity producer, Peru struggled with declining prices for its largest exports, copper, gold, and iron ore, during the reporting period. However, copper production experienced a resurgence during the reporting period and gold prices rebounded, helping to boost the country’s export levels and gross domestic product (“GDP”) growth. After growing an annual 2.9% in the third quarter of 2015, GDP expanded to an annual 4.7% in the fourth quarter of 2015, making Peru the fastest growing economy among the largest countries in Latin America for 2015 as a whole. A weak currency early in the reporting period led to problematic inflation, which peaked at a period-high annual 4.61% pace in January of 2016. Peru’s central bank raised interest rates to 4.25% in response, and inflation declined through the remainder of the reporting period to an annual 2.94% pace in August of 2016.

The materials sector comprised about 49% of the Index on average during the reporting period. This sector contributed significantly to Index returns. The financials sector, which accounted for an average of approximately 28% of the Index, was also a notable contributor to Index performance. There were no significant detractors from the Index’s return at the sector level for the reporting period.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Materials	44.08	%
Financials	30.76
Consumer Staples	9.23
Industrials	6.72
Utilities	6.01
Consumer Discretionary	2.09
Energy	1.11
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Credicorp Ltd.	23.88	%
Cia. de Minas Buenaventura SAA ADR	8.69
Southern Copper Corp.	8.31
Alicorp SAA	4.77
Intercorp Financial Services Inc.	4.42
Grana y Montero SAA	4.05
Fortuna Silver Mines Inc.	3.94
Hochschild Mining PLC	3.71
InRetail Peru Corp.	3.38
Cementos Pacasmayo SAA	3.12
TOTAL	68.27	%

* Excludes money market funds.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 7

Management’s Discussion of Fund Performance

iSHARES^® MSCI BRAZIL SMALL-CAP ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		45.17%		43.48%		44.36%		45.17%		43.48%		44.36%
5 Years		(13.40)%		(13.53)%		(13.14)%		(51.30)%		(51.66)%		(50.57)%
Since Inception		(10.27)%		(10.25)%		(9.98)%		(47.39)%		(47.31)%		(46.35)%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 9/28/10. The first day of secondary market trading was 9/29/10.

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 26 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,734.70	$	4.33	$	1,000.00	$	1,022.00	$	3.20		0.63%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 26 for more information.

8 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI BRAZIL SMALL-CAP ETF

The iShares MSCI Brazil Small-Cap ETF (the “Fund”) seeks to track the investment results of an index composed of small-capitalization Brazilian equities, as represented by the MSCI Brazil Small Cap Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 45.17%, net of fees, while the total return for the Index was 44.36%.

Brazilian small-capitalization equities, as represented by the Index, advanced for the reporting period and outperformed larger-capitalization Brazilian equities. The Brazilian real appreciated 10% relative to the U.S. dollar, making returns on Brazilian investments higher when translated back into U.S. dollars.

Brazilian small-capitalization stocks declined for the first half of the reporting period amid declining prices for oil and other commodities. Economic cooling in China, Brazil’s largest export partner, hindered economic activity as Chinese demand for Brazil’s exports softened. The investigation of a massive corruption scandal surrounding Brazil’s state-owned oil company, as well as an impeachment process against the country’s president, added to market volatility. Manufacturing production declined and unemployment climbed, reaching 11.6% in July 2016. Largely as a result, Brazil’s economy marked its ninth consecutive quarter of annual economic contraction in the second quarter of 2016. Inflation, which topped a 10% annual pace during the reporting period, limited the central bank’s ability to ease interest rates as a means to stimulate growth. As commodity prices rebounded in 2016, the Chinese economy showed signs of stabilizing. In addition, speculation about a new government in Brazil arose in the second half of the reporting period, and Brazilian small-capitalization equities recovered.

Within the Index, the consumer discretionary sector contributed the most to the Index’s return for the reporting period, driven by gains in the consumer durables industry. The financials sector also contributed. The utilities sector contributed amid a rebound in hydroelectric supply, and materials stocks benefited from the rebound in commodities prices. Telecommunication services stocks detracted modestly from the Index’s return.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Consumer Discretionary	44.82	%
Industrials	11.61
Materials	9.18
Utilities	9.12
Consumer Staples	7.84
Real Estate**	5.91
Financials**	5.00
Health Care	3.71
Information Technology	2.19
Energy	0.62
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Estacio Participacoes SA	6.26	%
MRV Engenharia e Participacoes SA	4.95
Smiles SA	4.34
Cyrela Brazil Realty SA Empreendimentos e Participacoes	3.82
Fleury SA	3.71
Cia. Hering	3.66
Sao Martinho SA	3.55
B2W Cia. Digital	3.47
Bradespar SA (Preferred)	3.27
Metalurgica Gerdau SA (Preferred)	3.13
TOTAL	40.16	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 9

Management’s Discussion of Fund Performance

iSHARES^® MSCI CHINA ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		7.63%		8.20%		8.04%		7.63%		8.20%		8.04%
5 Years		3.26%		3.16%		3.80%		17.42%		16.84%		20.51%
Since Inception		1.07%		1.02%		1.59%		5.97%		5.65%		8.93%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 3/29/11. The first day of secondary market trading was 3/31/11.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 26 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,240.70	$	3.55	$	1,000.00	$	1,022.00	$	3.20		0.63%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 26 for more information.

10 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI CHINA ETF

The iShares MSCI China ETF (the “Fund”) seeks to track the investment results of an index composed of Chinese equities that are available to international investors, as represented by the MSCI China Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 7.63%, net of fees, while the total return for the Index was 8.04%.

Chinese equities, as represented by the Index, posted a positive return for the reporting period. Although China’s economic growth slowed during the reporting period, consumer spending increased as the country continued to move toward a more consumption-based economy from one based on manufacturing and exports. Recent data on retail sales and industrial output exceeded market expectations, as did the amount of new loans issued. In addition, the country’s housing market experienced some recovery.

The information technology sector, which represented about 22% of the Index on average, was the largest contributor to the Index’s return during the reporting period, reflecting strong performance in the internet software and services segment. The financials and consumer discretionary sectors also contributed significantly to the Index’s return. Increased lending activity and a stabilizing housing market likely benefited the financials sector, particularly the banks and real estate management and development industries, which performed well. In the consumer discretionary sector, the autos and components industry helped Index performance amid increased car sales.

The industrials sector detracted from the Index’s performance during the reporting period despite 6.3% growth in industrial production for the reporting period. The utilities sector also hindered the Index’s return, as did the consumer staples sector, largely due to declines in the food products industry.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Information Technology	32.29	%
Financials**	26.29
Telecommunication Services	8.48
Consumer Discretionary	8.06
Energy	6.18
Industrials	5.68
Real Estate**	4.37
Utilities	2.96
Consumer Staples	2.36
Health Care	2.16
Materials	1.17
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Tencent Holdings Ltd.	13.62	%
Alibaba Group Holding Ltd. ADR	10.11
China Mobile Ltd.	7.06
China Construction Bank Corp. Class H	5.83
Industrial & Commercial Bank of China Ltd. Class H	4.35
Baidu Inc.	4.30
Bank of China Ltd. Class H	3.31
Ping An Insurance Group Co. of China Ltd. Class H	2.49
CNOOC Ltd.	2.04
China Petroleum & Chemical Corp. Class H	1.72
TOTAL	54.83	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 11

Management’s Discussion of Fund Performance

iSHARES^® MSCI CHINA SMALL-CAP ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		10.50%		11.54%		9.21%		10.50%		11.54%		9.21%
5 Years		4.21%		3.75%		3.40%		22.89%		20.22%		18.21%
Since Inception		0.14%		(0.08)%		(0.40)%		0.83%		(0.44)%		(2.32)%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 9/28/10. The first day of secondary market trading was 9/29/10.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 26 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,153.80	$	3.41	$	1,000.00	$	1,022.00	$	3.20		0.63%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 26 for more information.

12 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI CHINA SMALL-CAP ETF

The iShares MSCI China Small-Cap ETF (the “Fund”) seeks to track the investment results of an index composed of small-capitalization Chinese equities that are available to international investors, as represented by the MSCI China Small Cap Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 10.50%, net of fees, while the total return for the Index was 9.21%.

As represented by the Index, Chinese small-capitalization equities posted a positive return for the reporting period and outperformed Chinese mid- and large-capitalization stocks. Although the country’s economic growth slowed during the reporting period, consumer spending increased as the country moved towards a more consumption-based economy from one based on manufacturing and exports. Recent data on retail sales and industrial output exceeded market expectations, as did the amount of new loans issued. In addition, the country’s housing market experienced some recovery.

The information technology sector, which represented about 17% of the Index on average, was the largest contributor to the Index’s return during the reporting period, reflecting strong performance for small-capitalization technology hardware and equipment stocks. The financials and consumer discretionary sectors also contributed significantly to the Index’s return. Increased loan activity and a stabilizing housing market likely benefited the financials sector, particularly the real estate management and development industry, which performed well. In the consumer discretionary sector, the autos and components industry performed well amid increased car sales.

The healthcare sector detracted from the Index’s performance during the reporting period. Within the sector, small-capitalization pharmaceuticals and biotechnology stocks declined. The utilities sector also hindered the Index’s return, as did the industrials sector. Within the industrials sector, the capital goods industry struggled despite 6.3% growth in industrial production for the reporting period.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Consumer Discretionary	21.35	%
Information Technology	21.07
Industrials	14.78
Real Estate**	13.95
Health Care	8.45
Materials	8.31
Consumer Staples	4.33
Utilities	3.19
Financials**	2.61
Energy	1.78
Telecommunication Services	0.18
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Sina Corp.	2.86	%
Sunny Optical Technology Group Co. Ltd.	2.45
Minth Group Ltd.	1.73
Kingboard Chemical Holdings Ltd.	1.13
Shenzhen International Holdings Ltd.	1.03
Shenzhen Investment Ltd.	0.97
Skyworth Digital Holdings Ltd.	0.95
Intime Retail Group Co. Ltd.	0.88
Sohu.com Inc.	0.87
Xinyi Solar Holdings Ltd.	0.75
TOTAL	13.62	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 13

Management’s Discussion of Fund Performance

iSHARES^® MSCI INDONESIA ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		29.59%		29.68%		30.49%		29.59%		29.68%		30.49%
5 Years		(2.42)%		(3.50)%		(2.00)%		(11.53)%		(16.33)%		(9.60)%
Since Inception		2.83%		2.63%		3.32%		19.28%		17.86%		22.91%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 5/5/10. The first day of secondary market trading was 5/7/10.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 26 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,156.90	$	3.42	$	1,000.00	$	1,022.00	$	3.20		0.63%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 26 for more information.

14 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI INDONESIA ETF

The iShares MSCI Indonesia ETF (the “Fund”) seeks to track the investment results of a broad-based index composed of Indonesian equities, as represented by the MSCI Indonesia Investable Market Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 29.59%, net of fees, while the total return for the Index was 30.49%.

Indonesian equities, as represented by the Index, advanced significantly for the reporting period. The Indonesian rupiah appreciated 5% against the U.S. dollar during the reporting period. As a result, returns on Indonesian investments were higher when translated back into U.S. dollars.

The Indonesian economy, the largest in Southeast Asia, experienced improving growth during the reporting period. For the second quarter of 2016, annual gross domestic product growth reached 5.18%, its highest level since the fourth quarter of 2013. The country’s government unveiled a series of stimulus packages during the reporting period in response to lower commodity prices, resulting in an increase in public spending. In addition, inflation slowed and interest rates were cut several times during the reporting period. Indonesian equity and currency markets also benefited from a tax amnesty bill, which was expected to repatriate $30 billion in funds being held overseas.

Within the Index, all sectors posted positive returns and contributed to the Index’s performance. The financials sector, at an average of 37% of the Index, made the most significant contribution for the reporting period. Within this sector, banks benefited from the passage of the tax amnesty bill. The telecommunication services sector contributed meaningfully amid increased internet and mobile usage among subscribers. The consumer staples and consumer discretionary sectors contributed, as government stimulus-related infrastructure projects created jobs, fueling consumer spending

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Financials**	30.07	%
Consumer Discretionary	16.18
Consumer Staples	15.51
Telecommunication Services	14.58
Real Estate**	7.07
Materials	4.30
Industrials	4.03
Energy	3.74
Health Care	2.53
Utilities	1.99
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Telekomunikasi Indonesia Persero Tbk PT	12.84	%
Bank Central Asia Tbk PT	11.23
Astra International Tbk PT	9.99
Bank Rakyat Indonesia Persero Tbk PT	7.83
Bank Mandiri Persero Tbk PT	6.34
Unilever Indonesia Tbk PT	4.22
Matahari Department Store Tbk PT	2.83
Bank Negara Indonesia Persero Tbk PT	2.65
Kalbe Farma Tbk PT	2.29
Hanjaya Mandala Sampoerna Tbk PT	2.24
TOTAL	62.46	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 15

Management’s Discussion of Fund Performance

iSHARES^® MSCI PHILIPPINES ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		11.19%		10.95%		11.94%		11.19%		10.95%		11.94%
5 Years		10.64%		10.00%		11.47%		65.75%		61.08%		72.10%
Since Inception		8.96%		8.59%		9.52%		66.24%		62.92%		71.32%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 9/28/10. The first day of secondary market trading was 9/29/10.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 26 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,216.90	$	3.51	$	1,000.00	$	1,022.00	$	3.20		0.63%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 26 for more information.

16 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI PHILIPPINES ETF

The iShares MSCI Philippines ETF (the “Fund”) seeks to track the investment results of a broad-based index composed of Philippine equities, as represented by the MSCI Philippines Investable Market Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 11.19%, net of fees, while the total return for the Index was 11.94%.

Philippine equities, as represented by the Index, advanced for the reporting period and outperformed broader global equity markets.

The Philippine economy expanded throughout the reporting period and grew at an annual 7.0% rate in the second quarter of 2016, its strongest pace in three years. With solid government and household expenditure levels, the Philippines is less dependent than many other Asian countries on export trade for economic growth. During the reporting period, strong domestic demand, supported by low inflation and sizable cash remittances from overseas Filipino workers, was a key driver of economic growth. For 2015 as a whole, remittances accounted for 9.8% of gross domestic product (“GDP”). Government spending also contributed to GDP growth, primarily through infrastructure projects. For 2016, the government allocated 25% of the national budget to infrastructure investment, a 29.1% increase over 2015. In May 2016, the central bank lowered its benchmark interest rate from 4% to a record low of 3% and established a system to strengthen monetary policy.

Within the Index, financials was the largest sector, representing an average of 48% of the Index. Financials contributed meaningfully to the Index’s performance for the reporting period, driven by strength in the real estate management and development industry and the diversified financial services industry. Consumer discretionary stocks also contributed, as strong remittances and relatively low unemployment led to healthy consumer spending levels. On the other side of the spectrum, the telecommunication services sector detracted from the Index’s performance amid record spending levels as companies continue to bring their services up to date.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Financials**	25.31	%
Real Estate**	24.07
Industrials	22.28
Telecommunication Services	7.96
Utilities	7.31
Consumer Staples	6.06
Consumer Discretionary	5.55
Materials	1.22
Information Technology	0.24
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Ayala Land Inc.	9.22	%
SM Prime Holdings Inc.	8.06
JG Summit Holdings Inc.	7.27
Ayala Corp.	7.02
BDO Unibank Inc.	6.05
PLDT Inc.	5.80
SM Investments Corp.	5.29
Universal Robina Corp.	4.75
Aboitiz Equity Ventures Inc.	4.72
GT Capital Holdings Inc.	4.01
TOTAL	62.19	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 17

Management’s Discussion of Fund Performance

iSHARES^® MSCI POLAND CAPPED ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		(15.17)%		(15.68)%		(15.15)%		(15.17)%		(15.68)%		(15.15)%
5 Years		(6.90)%		(6.85)%		(6.50)%		(30.06)%		(29.87)%		(28.53)%
Since Inception		(1.28)%		(1.33)%		(0.99)%		(7.75)%		(8.06)%		(6.03)%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 5/25/10. The first day of secondary market trading was 5/26/10.

Index performance through February 11, 2013 reflects the performance of the MSCI Poland Investable Market Index. Index performance beginning on February 12, 2013 reflects the performance of the MSCI Poland Investable Market Index 25/50.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 26 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,035.70	$	3.22	$	1,000.00	$	1,022.00	$	3.20		0.63%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 26 for more information.

18 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI POLAND CAPPED ETF

The iShares MSCI Poland Capped ETF (the “Fund”) seeks to track the investment results of a broad-based index composed of Polish equities, as represented by the MSCI Poland Investable Market Index 25/50 (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was -15.17%, net of fees, while the total return for the Index was -15.15%.

Polish equities, as represented by the Index, declined for the reporting period and underperformed broader global equity markets. The Polish zloty depreciated 4% relative to the U.S. dollar. As a result, Polish investments were worth less when translated back into U.S. dollars.

The Polish economy experienced solid growth during the reporting period. Falling unemployment levels helped to drive up consumer spending, which reached a record high in the first quarter of 2016. Countering that strength, however, rating agency Standard & Poor’s unexpectedly downgraded Poland’s credit rating in January 2016 from A- to BBB+, stating that the country’s new government had weakened the independence of key institutions. The agency said it could make additional cuts if the credibility of monetary policy were undermined. The Polish zloty declined in value following the announcement, dipping to a four-year low against the euro.

Within the Index, sector performance was largely negative. The financials sector, the largest weight at an average of 45% of the Index, detracted significantly from the Index’s return for the reporting period. Banks declined amid changes to Poland’s tax regime, plans to convert banks’ foreign currency-denominated mortgages into local currency, and increased costs from deposit insurance payments following the bankruptcy of a major Polish bank. The utilities sector detracted as power prices declined. Energy stocks as a group also hindered the Index’s performance. On the other side of the spectrum, information technology stocks contributed to the Index’s return as software companies performed well.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Financials**	45.67	%
Energy	16.50
Materials	10.14
Utilities	8.15
Consumer Discretionary	7.68
Information Technology	3.89
Telecommunication Services	2.66
Industrials	2.11
Consumer Staples	1.96
Real Estate**	1.01
Health Care	0.23
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Powszechna Kasa Oszczednosci Bank Polski SA	11.38	%
Polski Koncern Naftowy ORLEN SA	10.18
Bank Pekao SA	10.07
Powszechny Zaklad Ubezpieczen SA	7.48
Bank Zachodni WBK SA	5.28
PGE Polska Grupa Energetyczna SA	4.42
Polskie Gornictwo Naftowe i Gazownictwo SA	4.41
KGHM Polska Miedz SA	4.40
mBank SA	3.08
LPP SA	2.80
TOTAL	63.50	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 19

Management’s Discussion of Fund Performance

iSHARES^® MSCI QATAR CAPPED ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		(2.32)%		(3.79)%		(1.59)%		(2.32)%		(3.79)%		(1.59)%
Since Inception		(4.61)%		(4.51)%		(4.10)%		(10.46)%		(10.25)%		(9.33)%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 4/29/14. The first day of secondary market trading was 5/1/14.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 26 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,123.50	$	3.36	$	1,000.00	$	1,022.00	$	3.20		0.63%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 26 for more information.

20 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI QATAR CAPPED ETF

The iShares MSCI Qatar Capped ETF (the “Fund”) seeks to track the investment results of an index composed of Qatar equities, as represented by the MSCI All Qatar Capped Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was -2.32%, net of fees, while the total return for the Index was -1.59%.

As represented by the Index, Qatari stocks fell modestly in the reporting period, trailing broader global equity markets.

The industrials sector detracted from the Index’s return in the reporting period after a large industrial conglomerate, one of the sector’s largest components, reported disappointing earnings. The company faced weaker demand for its packaging and automotive products from export markets. Also detracting from the Index’s performance in the reporting period was the healthcare sector, which was dragged down by weakness in a company in the healthcare providers and services industry. The company’s stock fell as the government cut healthcare infrastructure spending due to a budget deficit resulting from continued low oil and gas prices. The financials sector detracted from the Index’s return amid weakness in the banking and real estate management and development industries. In addition, the energy sector constrained the Index’s performance in the reporting period.

On the positive side, the telecommunication services sector contributed to the Index’s performance during the reporting period. One of the main components of the sector, a large integrated telecommunications company, saw its stock gain in the reporting period after strengthening its balance sheet and competitive position. The materials sector also contributed to the Index’s return, as infrastructure spending for the 2022 FIFA World Cup soccer tournament helped drive gains in the construction materials industry. The utilities sector also added to the Index’s performance during the reporting period.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Financials**	48.29	%
Real Estate**	14.50
Industrials	13.97
Telecommunication Services	7.46
Energy	6.09
Utilities	4.24
Materials	2.84
Consumer Staples	1.81
Health Care	0.80
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Qatar National Bank SAQ	20.43	%
Industries Qatar QSC	9.48
Ezdan Holding Group QSC	7.95
Masraf Al Rayan QSC	7.62
Qatar Gas Transport Co. Ltd.	4.63
Qatar Islamic Bank SAQ	4.53
Ooredoo QSC	4.49
Qatar Insurance Co. SAQ	4.43
Commercial Bank QSC (The)	4.39
Qatar Electricity & Water Co. QSC	4.24
TOTAL	72.19	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 21

Management’s Discussion of Fund Performance

iSHARES^® MSCI SAUDI ARABIA CAPPED ETF

Performance as of August 31, 2016

	Cumulative Total Returns
	NAV		MARKET		INDEX
Since Inception		(11.64)%		(11.55)%		(10.92)%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 9/16/15. The first day of secondary market trading was 9/17/15.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 26 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,042.60	$	3.80	$	1,000.00	$	1,021.40	$	3.76		0.74%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 26 for more information.

22 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SAUDI ARABIA CAPPED ETF

The iShares MSCI Saudi Arabia Capped ETF (the “Fund”) seeks to track the investment results of a broad-based index composed of Saudi Arabian equities, as represented by the MSCI Saudi Arabia Investable Market Index (IMI) 25/50 (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from September 16, 2015 (inception date of the Fund) through August 31, 2016 (the “reporting period”), the total return for the Fund was -11.64%, net of fees, while the total return for the Index was -10.92%.

As represented by the Index, Saudi Arabian stocks declined during the reporting period. The Index trailed broader global stock markets, as low oil prices plagued the Saudi Arabian economy.

The financials sector, representing approximately 32% of the Index on average, was the largest detractor from Index performance in the reporting period. Within the sector, the Saudi Arabian banking industry detracted notably from Index performance. Low oil prices and resulting cuts in government spending raised fears of increased credit risk in the banking system. Rumors of a currency devaluation also constrained the banking industry in the reporting period, as the government clamped down on speculative currency trades involving the Saudi Arabian riyal.

The consumer discretionary sector detracted from the Index’s return in the reporting period amid mounting signs of weakening consumer spending. Besides the impact of lower oil prices on disposable income amid government spending cuts, geopolitical tensions also made shoppers more cautious. Weak consumer spending in Saudi Arabia also negatively impacted the consumer staples sector during the reporting period.

On the positive side, the materials sector, representing about 32% of the Index on average, contributed to the Index’s performance in the reporting period. Within the sector, notable strength in the chemicals and metals and mining industries boosted sector performance. The utilities sector added to the Index’s return in the reporting period amid growing electricity demand despite the country’s economic weakness. The healthcare sector also contributed to the Index’s performance.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Materials	35.09	%
Financials**	28.61
Telecommunication Services	12.63
Consumer Staples	8.17
Utilities	5.97
Health Care	4.13
Consumer Discretionary	2.37
Energy	1.30
Industrials	1.08
Real Estate**	0.65
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Saudi Basic Industries Corp.	22.18	%
Saudi Telecom Co.	9.80
Al Rajhi Bank	7.26
Saudi Electricity Co.	5.96
Almarai Co.	4.46
Saudi Arabian Mining Co.	4.36
National Commercial Bank	4.34
Samba Financial Group	3.98
Riyad Bank	3.48
Banque Saudi Fransi	2.89
TOTAL	68.71	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 23

Management’s Discussion of Fund Performance

iSHARES^® MSCI UAE CAPPED ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		(2.66)%		(4.63)%		(1.88)%		(2.66)%		(4.63)%		(1.88)%
Since Inception		(11.50)%		(11.89)%		(11.11)%		(24.89)%		(25.66)%		(24.05)%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 4/29/14. The first day of secondary market trading was 5/1/14.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 26 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,107.90	$	3.34	$	1,000.00	$	1,022.00	$	3.20		0.63%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 26 for more information.

24 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI UAE CAPPED ETF

The iShares MSCI UAE Capped ETF (the “Fund”) seeks to track the investment results of an index composed of United Arab Emirates (“UAE”) equities, as represented by the MSCI All UAE Capped Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was -2.66%, net of fees, while the total return for the Index was -1.88%.

As represented by the Index, UAE stocks declined moderately for the reporting period, trailing broader global equity markets.

The financials sector, representing approximately 58% of the Index on average, detracted from Index performance in the reporting period. Within the sector, the banking industry was a notable detractor from Index returns. UAE banks were squeezed by decreased government spending due to low oil prices, as well as stricter global capital rules. During the reporting period, the announcement of a planned merger between two large banks set off speculation about a wave of consolidation in the UAE banking industry.

The industrials sector also detracted from Index returns during the reporting period, as the capital goods and construction and engineering industries were hurt by slowing infrastructure spending and a soft real estate market. Other detractors in the reporting period included the energy and consumer staples sectors.

Conversely, the telecommunication services sector contributed to Index performance for the reporting period. Implementation of fixed network sharing among the UAE’s two major telecommunications companies increased efficiency for the UAE’s relatively advanced networks. The healthcare sector also boosted Index results, as it benefited from the government’s continued heavy investment in healthcare infrastructure. In addition, the consumer discretionary sector made a positive contribution to Index performance for the reporting period.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Financials**	31.36	%
Real Estate**	21.35
Telecommunication Services	17.43
Health Care	11.71
Industrials	11.12
Consumer Discretionary	3.60
Energy	2.45
Consumer Staples	0.98
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Emirates Telecommunications Group Co. PJSC	17.43	%
Emaar Properties PJSC	12.22
Mediclinic International PLC	8.50
Abu Dhabi Commercial Bank PJSC	5.35
First Gulf Bank PJSC	4.52
DP World Ltd.	4.50
Aldar Properties PJSC	4.47
National Bank of Abu Dhabi PJSC	4.01
Dubai Islamic Bank PJSC	3.88
Dubai Parks & Resorts PJSC	3.60
TOTAL	68.48	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 25

About Fund Performance

Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.ishares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.

Shareholder Expenses

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested on March 1, 2016 and held through August 31, 2016, is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.

Actual Expenses — The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number corresponding to your Fund under the heading entitled “Expenses Paid During Period.”

Hypothetical Example for Comparison Purposes — The table also provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

26 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI ALL PERU CAPPED ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 100.16%
BANKS — 30.81%
BBVA Banco Continental SA		4,689,874	$	5,373,512
Credicorp Ltd.		332,879		52,155,481
Intercorp Financial Services Inc.		316,276		9,646,418
				67,175,411
CONSTRUCTION & ENGINEERING — 4.06%
Grana y Montero SAA		5,359,719		8,840,513
				8,840,513
CONSTRUCTION MATERIALS — 6.00%
Cementos Pacasmayo SAA		3,488,888		6,813,150
Union Andina de Cementos SAA		7,347,648		6,276,157
				13,089,307
ELECTRIC UTILITIES — 3.45%
Empresa de Distribucion Electrica de Lima Norte SAA		1,488,653		2,753,598
Luz del Sur SAA		1,374,971		4,770,746
				7,524,344
FOOD & STAPLES RETAILING — 3.39%
InRetail Peru Corp.a,b		388,566		7,382,754
				7,382,754
FOOD PRODUCTS — 5.86%
Alicorp SAA		4,717,928		10,422,214
Casa Grande SAA		1,110,858		2,349,257
				12,771,471
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS — 2.57%
Edegel SAA		5,908,872		5,604,126
				5,604,126
METALS & MINING — 38.14%
Cia. de Minas Buenaventura SAA ADRb		1,535,161		18,974,590
Cia. Minera Milpo SAA		6,965,526		5,477,881
Fortuna Silver Mines Inc.b		1,152,920		8,602,635
Hochschild Mining PLCb		2,573,093		8,108,168
Minsur SAb		11,746,028		4,255,431
Pan American Silver Corp.		280,722		4,893,192
Sociedad Minera Cerro Verde SAAb		244,844		4,605,515
Southern Copper Corp.		702,568		18,140,306
Tahoe Resources Inc.		311,117		4,057,171
Volcan Cia. Minera SAA Class B		31,558,405		6,041,932
				83,156,821

Security	Shares		Value
MULTILINE RETAIL — 2.09%
SACI Falabella		637,254	$	4,553,182
				4,553,182
OIL, GAS & CONSUMABLE FUELS — 1.11%
Refineria La Pampilla SAA Relapasab		31,538,269		2,424,520
				2,424,520
TRADING COMPANIES & DISTRIBUTORS — 2.68%
Ferreycorp SAA		12,163,451		5,839,718
				5,839,718
TOTAL COMMON STOCKS
(Cost: $272,954,313)				218,362,167
SHORT-TERM INVESTMENTS — 0.04%
MONEY MARKET FUNDS — 0.04%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		96,476		96,476
				96,476
TOTAL SHORT-TERM INVESTMENTS
(Cost: $96,476)				96,476
TOTAL INVESTMENTS IN SECURITIES — 100.20%
(Cost: $273,050,789)e				218,458,643
Other Assets, Less Liabilities — (0.20)%				(432,957	)
NET ASSETS — 100.00%			$	218,025,686

ADR — American Depositary Receipts

^a  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^b  Non-income earning security.

^c  Affiliated money market fund.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

^e  The cost of investments for federal income tax purposes was $284,212,270. Net unrealized depreciation was $65,753,627, of which $11,897,197 represented gross unrealized appreciation on securities and $77,650,824 represented gross unrealized depreciation on securities.

SCHEDULES OF INVESTMENTS 27

Schedule of Investments (Continued)

iSHARES^® MSCI ALL PERU CAPPED ETF

August 31, 2016

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	218,362,167	$	—	$	—	$	218,362,167
Money market funds		96,476		—		—		96,476
Total	$	218,458,643	$	—	$	—	$	218,458,643

See notes to financial statements.

28 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI BRAZIL SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 79.56%
AUTO COMPONENTS — 2.24%
Mahle-Metal Leve SA		87,000	$	634,918
Tupy SA		113,100		485,444
				1,120,362
COMMERCIAL SERVICES & SUPPLIES — 2.55%
Valid Solucoes e Servicos de Seguranca em Meios de Pagamento e Identificacao SA		144,410		1,278,514
				1,278,514
CONSTRUCTION MATERIALS — 0.71%
Magnesita Refratarios SAa		69,620		355,011
				355,011
DIVERSIFIED CONSUMER SERVICES — 7.81%
Estacio Participacoes SA		609,000		3,122,401
GAEC Educacao SA		84,200		366,868
Ser Educacional SAb		84,200		422,849
				3,912,118
ELECTRIC UTILITIES — 3.71%
Alupar Investimento SA Units		200,172		1,002,160
Light SA		182,700		858,189
				1,860,349
FOOD PRODUCTS — 7.81%
Marfrig Global Foods SAa		591,600		934,837
Minerva SAa		243,600		711,109
Sao Martinho SA		114,100		1,772,647
SLC Agricola SA		110,000		492,207
				3,910,800
HEALTH CARE PROVIDERS & SERVICES — 3.70%
Fleury SA		156,600		1,851,326
				1,851,326
HOTELS, RESTAURANTS & LEISURE — 1.45%
CVC Brasil Operadora e Agencia de Viagens SA		104,400		724,776
				724,776
HOUSEHOLD DURABLES — 12.49%
Cyrela Brazil Realty SA Empreendimentos e Participacoes		583,000		1,905,594
Even Construtora e Incorporadora SA		487,200		634,273
EZ TEC Empreendimentos e Participacoes SA		130,553		669,761
Gafisa SA		779,000		575,734
MRV Engenharia e Participacoes SA		650,000		2,472,324
				6,257,686

Security	Shares		Value
INSURANCE — 1.02%
FPC Par Corretora de Seguros SA		127,200	$	511,349
				511,349
INTERNET & DIRECT MARKETING RETAIL — 3.46%
B2W Cia. Digitala		342,300		1,730,659
				1,730,659
MACHINERY — 1.53%
Iochpe Maxion SA		135,800		764,290
				764,290
MEDIA — 7.16%
Multiplus SA		110,000		1,423,558
Smiles SA		139,200		2,165,180
				3,588,738
MULTILINE RETAIL — 0.73%
Marisa Lojas SAa		135,800		367,447
				367,447
OIL, GAS & CONSUMABLE FUELS — 0.62%
QGEP Participacoes SA		178,800		309,077
				309,077
REAL ESTATE MANAGEMENT & DEVELOPMENT — 5.88%
Aliansce Shopping Centers SA		182,700		850,845
BR Properties SA		170,200		444,737
Iguatemi Empresa de Shopping Centers SA		156,600		1,389,826
Sonae Sierra Brasil SA		49,800		261,027
				2,946,435
ROAD & RAIL — 0.82%
JSL SA		144,400		409,025
				409,025
SOFTWARE — 2.19%
Linx SA		204,600		1,094,557
				1,094,557
SPECIALTY RETAIL — 4.74%
Cia. Hering		330,600		1,823,831
Via Varejo SA		287,100		550,442
				2,374,273
TEXTILES, APPAREL & LUXURY GOODS — 2.42%
Arezzo Industria e Comercio SA		101,400		815,264
Guararapes Confeccoes SA		17,400		399,084
				1,214,348
TRANSPORTATION INFRASTRUCTURE — 3.58%
EcoRodovias Infraestrutura e Logistica SAa		504,600		1,298,247

SCHEDULES OF INVESTMENTS 29

Schedule of Investments (Continued)

iSHARES^® MSCI BRAZIL SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
Santos Brasil Participacoes SA		539,400	$	497,066
				1,795,313
WATER UTILITIES — 2.94%
Cia. de Saneamento de Minas Gerais-COPASA		144,400		1,473,560
				1,473,560
TOTAL COMMON STOCKS
(Cost: $33,170,209)				39,850,013
PREFERRED STOCKS — 20.05%
BANKS — 3.96%
Banco ABC Brasil SA		139,209		617,741
Banco do Estado do Rio Grande do Sul SA Class B		408,900		1,365,613
				1,983,354
ELECTRIC UTILITIES — 2.43%
Cia. Energetica do Ceara Class A		26,100		403,469
Eletropaulo Metropolitana Eletricidade de Sao Paulo SA		213,200		810,922
				1,214,391
MACHINERY — 3.09%
Marcopolo SA		1,000,500		996,230
Randon SA Implemetos e Participacoes		393,850		549,281
				1,545,511
METALS & MINING — 8.43%
Bradespar SA		513,300		1,631,741
Metalurgica Gerdau SA		1,362,000		1,562,564

Security	Shares		Value
Usinas Siderurgicas de Minas Gerais SA Class A		959,600	$	1,029,690
				4,223,995
TEXTILES, APPAREL & LUXURY GOODS — 2.14%
Alpargatas SA		333,600		1,072,868
				1,072,868
TOTAL PREFERRED STOCKS
(Cost: $7,545,210)				10,040,119
SHORT-TERM INVESTMENTS — 0.06%
MONEY MARKET FUNDS — 0.06%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		32,159		32,159
				32,159
TOTAL SHORT-TERM INVESTMENTS
(Cost: $32,159)				32,159
TOTAL INVESTMENTS IN SECURITIES — 99.67%
(Cost: $40,747,578)e				49,922,291
Other Assets, Less Liabilities — 0.33%				164,774
NET ASSETS — 100.00%			$	50,087,065

^a  Non-income earning security.

^b  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^c  Affiliated money market fund.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

^e  The cost of investments for federal income tax purposes was $50,790,669. Net unrealized depreciation was $868,378, of which $9,791,947 represented gross unrealized appreciation on securities and $10,660,325 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	39,850,013	$	—	$	—	$	39,850,013
Preferred stocks		10,040,119		—		—		10,040,119
Money market funds		32,159		—		—		32,159
Total	$	49,922,291	$	—	$	—	$	49,922,291

See notes to financial statements.

30 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI CHINA ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.84%
AEROSPACE & DEFENSE — 0.14%
AviChina Industry & Technology Co. Ltd. Class H		4,032,000	$	2,962,890
				2,962,890
AIR FREIGHT & LOGISTICS — 0.09%
Sinotrans Ltd. Class H		4,032,000		1,996,052
				1,996,052
AIRLINES — 0.23%
Air China Ltd. Class H		3,584,000		2,652,163
China Southern Airlines Co. Ltd. Class H		3,584,000		2,125,426
				4,777,589
AUTOMOBILES — 2.05%
Brilliance China Automotive Holdings Ltd.		5,824,000		6,659,861
Byd Co. Ltd. Class Ha,b		1,232,000		8,576,788
Chongqing Changan Automobile Co. Ltd. Class B		1,657,684		2,521,761
Dongfeng Motor Group Co. Ltd. Class H		5,376,000		5,745,582
Geely Automobile Holdings Ltd.a		10,080,000		8,082,973
Great Wall Motor Co. Ltd. Class H		6,048,000		5,871,201
Guangzhou Automobile Group Co. Ltd. Class H		4,032,000		5,551,521
				43,009,687
BANKS — 17.31%
Agricultural Bank of China Ltd. Class H		47,712,000		19,621,785
Bank of China Ltd. Class H		154,336,000		69,440,505
Bank of Communications Co. Ltd. Class H		17,024,200		13,146,609
China CITIC Bank Corp. Ltd. Class H		17,248,800		11,385,420
China Construction Bank Corp. Class H		163,520,000		122,269,765
China Everbright Bank Co. Ltd. Class H		6,048,000		2,861,528
China Merchants Bank Co. Ltd. Class H		7,616,150		18,537,778
China Minsheng Banking Corp. Ltd. Class H		11,424,300		12,283,323

Security	Shares		Value
Chongqing Rural Commercial Bank Co. Ltd. Class H		4,928,000	$	2,858,929
Industrial & Commercial Bank of China Ltd. Class H		143,360,000		91,116,099
				363,521,741
BEVERAGES — 0.49%
China Resources Beer Holdings Co. Ltd.		3,136,000		7,236,845
Tsingtao Brewery Co. Ltd. Class H		896,000		3,003,320
				10,240,165
BIOTECHNOLOGY — 0.09%
3SBio Inc.a,b,c		1,904,000		1,944,072
				1,944,072
CAPITAL MARKETS — 2.22%
China Cinda Asset Management Co. Ltd. Class H		17,024,000		5,772,149
China Everbright Ltd.		1,792,000		3,719,496
China Galaxy Securities Co. Ltd. Class H		5,712,000		5,353,562
CITIC Securities Co. Ltd. Class H		4,256,000		9,514,170
GF Securities Co. Ltd. Class H		2,643,200		5,758,866
Haitong Securities Co. Ltd. Class H		6,003,200		10,448,087
Huatai Securities Co. Ltd. Class Hc		2,822,400		5,974,642
				46,540,972
CHEMICALS — 0.16%
Sinopec Shanghai Petrochemical Co. Ltd. Class H		6,720,000		3,474,032
				3,474,032
COMMERCIAL SERVICES & SUPPLIES — 0.29%
China Everbright International Ltd.a		4,704,000		6,015,880
				6,015,880
COMMUNICATIONS EQUIPMENT — 0.09%
ZTE Corp. Class H		1,478,440		1,997,493
				1,997,493
CONSTRUCTION & ENGINEERING — 1.24%
China Communications Construction Co. Ltd. Class H		8,512,000		9,283,723

SCHEDULES OF INVESTMENTS 31

Schedule of Investments (Continued)

iSHARES^® MSCI CHINA ETF

August 31, 2016

Security	Shares		Value
China Railway Construction Corp. Ltd. Class H		3,808,000	$	4,658,900
China Railway Group Ltd. Class H		7,840,000		5,811,712
China State Construction International Holdings Ltd.		3,584,000		4,278,576
Sinopec Engineering Group Co. Ltd. Class H		2,464,000		2,042,546
				26,075,457
CONSTRUCTION MATERIALS — 0.43%
Anhui Conch Cement Co. Ltd. Class H		2,352,000		6,610,191
China National Building Material Co. Ltd. Class H		5,376,000		2,425,758
				9,035,949
DIVERSIFIED CONSUMER SERVICES — 0.72%
New Oriental Education & Technology Group Inc. ADR		259,168		10,231,953
TAL Education Group Class A ADRa,b		83,328		4,979,681
				15,211,634
DIVERSIFIED FINANCIAL SERVICES — 0.17%
Far East Horizon Ltd.		3,808,000		3,559,223
				3,559,223
DIVERSIFIED TELECOMMUNICATION SERVICES — 1.42%
China Communications Services Corp. Ltd. Class H		4,480,800		2,634,151
China Telecom Corp. Ltd. Class H		26,880,000		13,896,129
China Unicom Hong Kong Ltd.		11,648,000		13,199,590
				29,729,870
ELECTRICAL EQUIPMENT — 0.37%
Shanghai Electric Group Co. Ltd. Class Hb		5,376,000		2,391,105
Zhuzhou CRRC Times Electric Co. Ltd. Class H		1,008,000		5,360,492
				7,751,597
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 0.79%
AAC Technologies Holdings Inc.		1,456,000		16,602,727
				16,602,727
ENERGY EQUIPMENT & SERVICES — 0.13%
China Oilfield Services Ltd. Class H		3,584,000		2,813,879
				2,813,879

Security	Shares		Value
FOOD & STAPLES RETAILING — 0.14%
Sun Art Retail Group Ltd.a		4,592,000	$	2,954,083
				2,954,083
FOOD PRODUCTS — 1.14%
China Huishan Dairy Holdings Co. Ltd.a		7,840,000		3,011,983
China Mengniu Dairy Co. Ltd.		5,376,000		10,202,046
Tingyi Cayman Islands Holding Corp.a		3,584,000		3,317,513
Want Want China Holdings Ltd.a		11,200,000		7,378,348
				23,909,890
GAS UTILITIES — 0.90%
China Gas Holdings Ltd.a		3,136,000		5,328,582
China Resources Gas Group Ltd.		1,792,000		6,006,639
ENN Energy Holdings Ltd.		1,344,000		7,528,514
				18,863,735
HEALTH CARE EQUIPMENT & SUPPLIES — 0.11%
Shandong Weigao Group Medical Polymer Co. Ltd. Class H		3,584,000		2,319,487
				2,319,487
HEALTH CARE PROVIDERS & SERVICES — 0.74%
Shanghai Pharmaceuticals Holding Co. Ltd. Class H		1,344,000		3,690,618
Sinopharm Group Co. Ltd. Class H		2,329,600		11,938,196
				15,628,814
HEALTH CARE TECHNOLOGY — 0.19%
Alibaba Health Information Technology Ltd.b		6,272,000		3,905,471
				3,905,471
HOUSEHOLD DURABLES — 0.20%
Haier Electronics Group Co. Ltd.		2,464,000		4,123,211
				4,123,211
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS — 1.38%
CGN Power Co. Ltd. Class Hc		20,608,000		5,977,761
China Longyuan Power Group Corp. Ltd.		6,272,000		5,271,981
China Power International Development Ltd.		6,496,000		2,453,770
China Resources Power Holdings Co. Ltd.		3,584,000		6,191,459

32 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI CHINA ETF

August 31, 2016

Security	Shares		Value
Huadian Power International Corp. Ltd. Class H		3,136,000	$	1,402,897
Huaneng Power International Inc. Class H		8,064,000		4,906,963
Huaneng Renewables Corp. Ltd. Class H		7,616,000		2,827,741
				29,032,572
INDUSTRIAL CONGLOMERATES — 1.36%
Beijing Enterprises Holdings Ltd.		1,008,000		5,782,834
CITIC Ltd.a		8,512,000		13,409,823
Fosun International Ltd.		5,040,000		6,978,387
Shanghai Industrial Holdings Ltd.a		896,000		2,333,348
				28,504,392
INSURANCE — 6.55%
China Life Insurance Co. Ltd. Class H		14,560,000		34,800,967
China Pacific Insurance Group Co. Ltd. Class H		5,107,200		17,974,868
China Taiping Insurance Holdings Co. Ltd.b		3,136,124		6,291,049
New China Life Insurance Co. Ltd. Class H		1,500,800		6,104,392
People’s Insurance Co. Group of China Ltd. (The) Class H		13,664,000		5,496,075
PICC Property & Casualty Co. Ltd. Class H		8,960,308		14,809,185
Ping An Insurance Group Co. of China Ltd. Class H		10,080,000		52,175,460
				137,651,996
INTERNET & DIRECT MARKETING RETAIL — 3.76%
Ctrip.com International Ltd.a,b		673,568		31,893,445
JD.com Inc. ADRa,b		1,335,712		33,940,442
Qunar Cayman Islands Ltd. ADRa,b		69,216		2,057,099
Vipshop Holdings Ltd. ADRb		783,104		11,088,753
				78,979,739
INTERNET SOFTWARE & SERVICES — 30.12%
58.com Inc. ADRa,b		149,632		6,808,256
Alibaba Group Holding Ltd. ADRa,b		2,181,760		212,045,254
Baidu Inc.b		527,296		90,204,527
Netease Inc.		153,216		32,477,196
SouFun Holdings Ltd. ADRb		550,144		2,475,648
Tencent Holdings Ltd.		10,976,000		285,552,171

Security	Shares		Value
YY Inc. ADRa,b		56,672	$	2,915,774
				632,478,826
IT SERVICES — 0.19%
TravelSky Technology Ltd. Class H		1,792,000		3,899,695
				3,899,695
MACHINERY — 0.82%
China Conch Venture Holdings Ltd.		2,576,000		4,954,900
CRRC Corp. Ltd. Class H		8,064,650		7,215,479
Haitian International Holdings Ltd.		1,344,000		2,706,453
Weichai Power Co. Ltd. Class H		1,792,000		2,261,731
				17,138,563
MARINE — 0.15%
China COSCO Holdings Co. Ltd. Class Ha,b		5,040,000		1,676,372
China Shipping Container Lines Co. Ltd. Class Hb		7,392,000		1,543,822
				3,220,194
MEDIA — 0.22%
Alibaba Pictures Group Ltd.a,b		22,400,000		4,620,492
				4,620,492
METALS & MINING — 0.45%
Aluminum Corp. of China Ltd. Class Ha,b		7,616,000		2,857,197
Jiangxi Copper Co. Ltd. Class H		2,464,000		2,846,223
Zijin Mining Group Co. Ltd. Class H		11,200,000		3,725,271
				9,428,691
OIL, GAS & CONSUMABLE FUELS — 6.04%
China Coal Energy Co. Ltd. Class Hb		4,032,000		1,928,478
China Petroleum & Chemical Corp. Class H		49,729,000		36,094,275
China Shenhua Energy Co. Ltd. Class H		6,608,000		11,875,530
CNOOC Ltd.		34,720,000		42,657,247
Kunlun Energy Co. Ltd.		6,272,000		4,617,027
PetroChina Co. Ltd. Class H		41,216,000		27,524,270
Yanzhou Coal Mining Co. Ltd. Class H		3,584,000		2,051,498
				126,748,325

SCHEDULES OF INVESTMENTS 33

Schedule of Investments (Continued)

iSHARES^® MSCI CHINA ETF

August 31, 2016

Security	Shares		Value
PAPER & FOREST PRODUCTS — 0.12%
Nine Dragons Paper (Holdings) Ltd.		3,136,000	$	2,518,746
				2,518,746
PERSONAL PRODUCTS — 0.59%
Hengan International Group Co. Ltd.		1,456,000		12,322,996
				12,322,996
PHARMACEUTICALS — 1.02%
China Medical System Holdings Ltd.		2,464,000		4,129,565
CSPC Pharmaceutical Group Ltd.		8,064,000		7,828,268
Luye Pharma Group Ltd.b		2,576,000		1,637,242
Shanghai Fosun Pharmaceutical Group Co. Ltd. Class H		784,000		2,274,148
Sino Biopharmaceutical Ltd.		8,736,000		5,608,700
				21,477,923
REAL ESTATE MANAGEMENT & DEVELOPMENT — 4.36%
China Evergrande Groupa		8,064,000		5,572,313
China Jinmao Holdings Group Ltd.		7,168,000		2,236,318
China Overseas Land & Investment Ltd.		7,616,000		25,184,568
China Resources Land Ltd.		5,376,665		15,145,535
China Vanke Co. Ltd. Class H		2,553,631		6,551,359
Country Garden Holdings Co. Ltd.		10,976,727		5,575,570
Dalian Wanda Commercial Properties Co. Ltd. Class Hc		1,142,400		7,761,560
Guangzhou R&F Properties Co. Ltd. Class H		1,881,600		3,177,743
Longfor Properties Co. Ltd.		2,800,000		4,512,199
Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd. Class B		1,792,064		2,978,410
Shimao Property Holdings Ltd.		2,352,000		3,274,774
Shui On Land Ltd.		7,056,000		2,001,251
Sino-Ocean Group Holding Ltd.		5,824,000		2,702,988
SOHO China Ltd.		4,032,000		2,406,699
Sunac China Holdings Ltd.a		3,584,000		2,490,445
				91,571,732

Security	Shares		Value
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 0.45%
GCL-Poly Energy Holdings Ltd.a		25,312,000	$	3,589,545
Semiconductor Manufacturing International Corp.b		53,312,000		5,842,034
				9,431,579
SOFTWARE — 0.15%
Kingsoft Corp. Ltd.a		1,568,000		3,206,044
				3,206,044
SPECIALTY RETAIL — 0.13%
GOME Electrical Appliances Holding Ltd.a		23,968,000		2,842,758
				2,842,758
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 0.45%
Lenovo Group Ltd.		13,888,000		9,364,004
				9,364,004
TEXTILES, APPAREL & LUXURY GOODS — 0.96%
ANTA Sports Products Ltd.		1,792,000		4,851,517
Belle International Holdings Ltd.		12,320,000		8,005,002
Shenzhou International Group Holdings Ltd.		1,120,000		7,356,689
				20,213,208
TRANSPORTATION INFRASTRUCTURE — 0.99%
Beijing Capital International Airport Co. Ltd. Class H		2,688,000		3,032,198
China Merchants Holdings International Co. Ltd.a		2,688,000		7,658,465
COSCO Pacific Ltd.		3,584,000		3,881,213
Jiangsu Expressway Co. Ltd. Class H		2,240,000		3,147,710
Zhejiang Expressway Co. Ltd. Class H		2,688,000		2,997,544
				20,717,130
WATER UTILITIES — 0.68%
Beijing Enterprises Water Group Ltd.		8,512,000		5,936,755
Guangdong Investment Ltd.		5,376,000		8,316,885
				14,253,640
WIRELESS TELECOMMUNICATION SERVICES — 7.05%
China Mobile Ltd.		11,984,000		148,008,792
				148,008,792
TOTAL COMMON STOCKS
(Cost: $2,091,373,261)				2,096,597,637

34 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI CHINA ETF

August 31, 2016

Security	Shares		Value
SHORT-TERM INVESTMENTS — 12.58%
MONEY MARKET FUNDS — 12.58%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%d,e,f		260,259,118	$	260,259,118
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%d,e		3,910,538		3,910,538
				264,169,656
TOTAL SHORT-TERM INVESTMENTS
(Cost: $264,169,656)				264,169,656
TOTAL INVESTMENTS IN SECURITIES — 112.42%
(Cost: $2,355,542,917)g				2,360,767,293
Other Assets, Less Liabilities — (12.42)%				(260,775,916	)
NET ASSETS — 100.00%			$	2,099,991,377

ADR — American Depositary Receipts

^a  All or a portion of this security represents a security on loan. See Note 1.

^b  Non-income earning security.

^c  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^d  Affiliated money market fund.

^e  The rate quoted is the annualized seven-day yield of the fund at period end.

^f  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^g  The cost of investments for federal income tax purposes was $2,444,571,228. Net unrealized depreciation was $83,803,935, of which $230,638,930 represented gross unrealized appreciation on securities and $314,442,865 represented gross unrealized depreciation on securities.

Schedule 1 — Futures Contracts (Note 5)

Futures contracts outstanding as of August 31, 2016 were as follows:

Issue	Number of long (short) contracts		Expiration date		Exchange		Initial notional value		Current notional value		Unrealized appreciation (depreciation)
H-Shares Index		49		Sep. 2016		Hong Kong Futures	$	2,996,725	$	3,016,405	$	19,680

Schedule 2 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	2,094,206,532	$	2,391,105	$	—	$	2,096,597,637
Money market funds		264,169,656		—		—		264,169,656
Total	$	2,358,376,188	$	2,391,105	$	—	$	2,360,767,293
Derivative financial instrumentsa:
Assets:
Futures contracts	$	19,680	$	—	$	—	$	19,680
Total	$	19,680	$	—	$	—	$	19,680

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 35

Schedule of Investments

iSHARES^® MSCI CHINA SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.68%
AEROSPACE & DEFENSE — 0.16%
AVIC International Holding HK Ltd.a,b		468,000	$	31,977
				31,977
AIR FREIGHT & LOGISTICS — 0.08%
Guangdong Yueyen Transportaion Co. Ltd. Class H		27,000		15,733
				15,733
AIRLINES — 0.21%
Shandong Airlines Co. Ltd. Class B		18,000		41,677
				41,677
AUTO COMPONENTS — 3.73%
Chaowei Power Holdings Ltd.b		72,000		53,187
China First Capital Group Ltd.a		36,000		30,771
Hunan Tyen Machinery Co. Ltd. Class Ba		37,800		20,525
Launch Tech Co. Ltd.a		22,500		21,146
Minth Group Ltd.b		90,000		340,542
Nexteer Automotive Group Ltd.		99,000		136,055
Tianneng Power International Ltd.b		90,000		73,562
Xinchen China Power Holdings Ltd.a,b		72,000		10,303
Xingda International Holdings Ltd.b		72,000		23,391
Zhejiang Shibao Co. Ltd. Class H		18,000		24,830
				734,312
AUTOMOBILES — 0.14%
Qingling Motors Co. Ltd. Class H		90,000		28,079
				28,079
BANKS — 0.27%
Bank of Chongqing Co. Ltd. Class H		67,500		52,735
				52,735
BEVERAGES — 0.92%
Anhui Gujing Distillery Co. Ltd. Class B		16,200		62,592
Dynasty Fine Wines Group Ltd.a,b		128,000		7,129
New Silkroad Culturaltainment Ltd.a		180,000		35,272
Tibet Water Resources Ltd.		207,000		75,523
				180,516
BIOTECHNOLOGY — 0.48%
China Regenerative Medicine International Ltd.a,b		1,620,000		63,699
Shanghai Haohai Biological Technology Co. Ltd.c		6,300		30,539
				94,238

Security	Shares		Value
BUILDING PRODUCTS — 0.91%
China Fangda Group Co. Ltd. Class B		39,600	$	37,166
China Lesso Group Holdings Ltd.		144,000		101,177
Far East Global Group Ltd.		72,000		9,468
Luoyang Glass Co. Ltd. Class Ha,b		36,000		21,488
Yuanda China Holdings Ltd.a		324,000		9,231
				178,530
CAPITAL MARKETS — 1.13%
Central China Securities Co. Ltd. Class H		153,000		70,023
FDG Kinetic Ltd.a		216,000		33,694
Guolian Securities Co. Ltd.		62,000		33,011
Noah Holdings Ltd. ADRa,b		3,249		85,449
				222,177
CHEMICALS — 2.65%
Century Sunshine Group Holdings Ltd.		246,250		9,683
China BlueChemical Ltd. Class H		234,000		44,648
China Lumena New Materials Corp.a,b		868,000		8,717
China XLX Fertiliser Ltd.		27,000		7,867
Dahua Group Dalian Chemical Industry Co.a		10,800		14,504
Danhua Chemical Technology Co. Ltd. Class Ba		21,600		12,787
Dongyue Group Ltd.a		200,000		31,792
Fufeng Group Ltd.		144,600		63,196
Huabao International Holdings Ltd.a		261,000		100,608
Hubei Sanonda Co. Ltd. Class B		49,000		40,277
Ko Yo Chemical Group Ltd.a		252,000		6,075
Shanghai Chlor-Alkali Chemical Co. Ltd. Class Ba		58,500		47,385
Sinofert Holdings Ltd.b		270,000		34,112
Tianjin TEDA Biomedical Engineering Co. Ltd.a		135,000		27,150
Yingde Gases Group Co. Ltd.		135,000		59,000
Yip’s Chemical Holdings Ltd.b		36,000		14,109
				521,910
COMMERCIAL SERVICES & SUPPLIES — 0.95%
Beijing Enterprises Environment Group Ltd.a		81,000		16,499
Broad Greenstate International Co. Ltd.b		72,000		11,417
Capital Environment Holdings Ltd.a		612,000		24,853
Dongjiang Environmental Co. Ltd. Class Hb		28,900		48,063

36 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI CHINA SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
Dynagreen Environmental Protection Group Co. Ltd. Class Hb		54,000	$	27,916
Shanghai Zhongyida Co. Ltd.a		54,000		31,266
Tianjin Capital Environmental Protection Group Co. Ltd. Class H		54,000		27,847
				187,861
COMMUNICATIONS EQUIPMENT — 1.46%
BYD Electronic International Co. Ltd.a		90,000		75,998
China All Access Holdings Ltd.b		144,000		50,681
China Fiber Optic Network System Group Ltd.a		181,600		14,281
Comba Telecom Systems Holdings Ltd.		174,600		30,838
Eastern Communications Co. Ltd. Class B		45,900		35,160
Nanjing Panda Electronics Co. Ltd. Class H		18,000		14,434
Shanghai Potevio Co. Ltd. Class Ba		17,100		29,019
Trigiant Group Ltd.		108,000		14,063
Yangtze Optical Fibre and Cable Joint Stock Ltd. Co.c		18,000		23,066
				287,540
CONSTRUCTION & ENGINEERING — 0.52%
Baoye Group Co. Ltd. Class H		18,000		12,369
Beijing Urban Construction Design & Development Group Co. Ltd.c		27,000		16,221
China Singyes Solar Technologies Holdings Ltd.b		63,400		35,064
Concord New Energy Group Ltd.		630,000		38,579
				102,233
CONSTRUCTION MATERIALS — 0.97%
Asia Cement China Holdings Corp.		76,500		17,950
China National Materials Co. Ltd. Class H		144,000		35,272
China Shanshui Cement Group Ltd.a,b		480,000		56,931
Huaxin Cement Co. Ltd. Class B		31,500		20,065
Shanghai Yaohua Pilkington Glass Group Co. Ltd. Class Ba		27,900		20,311
Tongfang Kontafarma Holdings Ltd.		162,000		13,158
West China Cement Ltd.a		270,000		27,151
				190,838
CONSUMER FINANCE — 0.84%
Credit China Holdings Ltd.a,b		252,000		146,520
Differ Group Holding Co.Ltd.a,b		216,000		18,657
				165,177

Security	Shares		Value
CONTAINERS & PACKAGING — 0.84%
AMVIG Holdings Ltd.b		72,000	$	25,341
CPMC Holdings Ltd.		45,000		24,656
Foshan Huaxin Packaging Co. Ltd.		39,100		34,122
Greatview Aseptic Packaging Co. Ltd.		144,000		73,144
Sheen Tai Holdings Group Co. Ltd.		72,000		7,797
				165,060
DISTRIBUTORS — 0.78%
China Animation Characters Co. Ltd.a,b		54,000		27,847
China Beidahuang Industry Group Holdings Ltd.a		288,000		14,480
Dah Chong Hong Holdings Ltd.		108,000		47,200
Xinhua Winshare Publishing and Media Co. Ltd. Class Ha		63,000		64,164
				153,691
DIVERSIFIED CONSUMER SERVICES — 0.94%
China Maple Leaf Educational Systems Ltd.b		72,000		54,115
Fu Shou Yuan International Group Ltd.b		117,000		72,100
Tarena International Inc. ADR		4,545		59,540
				185,755
DIVERSIFIED FINANCIAL SERVICES — 0.37%
China Merchants China Direct Investments Ltd.		22,075		32,102
Kong Sun Holdings Ltd.a		500,000		22,625
Min Xin Holdings Ltd.		18,000		18,843
				73,570
DIVERSIFIED TELECOMMUNICATION SERVICES — 0.18%
APT Satellite Holdings Ltd.		49,500		36,375
				36,375
ELECTRICAL EQUIPMENT — 2.17%
Boer Power Holdings Ltd.b		36,000		15,594
China Energine International Holdings Ltd.a		252,000		18,843
China High Speed Transmission Equipment Group Co. Ltd.		135,000		124,266
FDG Electric Vehicles Ltd.a,b		1,575,000		97,464
Foshan Electrical and Lighting Co. Ltd. Class B		39,640		34,137
Hangzhou Steam Turbine Co. Ltd. Class Ba		34,224		43,548
Harbin Electric Co. Ltd. Class H		90,000		40,958

SCHEDULES OF INVESTMENTS 37

Schedule of Investments (Continued)

iSHARES^® MSCI CHINA SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
Tech Pro Technology Development Ltd.a,b		648,000	$	18,880
Trony Solar Holdings Co. Ltd.a,b		216,000		7,466
Welling Holding Ltd.b		145,600		26,654
				427,810
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 6.81%
Anxin-China Holdings Ltd.a		672,000		20,160
AVIC International Holdings Ltd. Class H		37,184		21,476
China Aerospace International Holdings Ltd.b		252,000		34,437
China Innovationpay Group Ltd.a,b		468,000		24,435
Digital China Holdings Ltd.		126,000		113,545
INESA Intelligent Tech Inc. Class B		41,400		36,225
Ju Teng International Holdings Ltd.		108,000		32,024
Kingboard Chemical Holdings Ltd.		85,500		222,658
Kingboard Laminates Holdings Ltd.		121,500		105,104
Nanjing Sample Technology Co. Ltd.		9,000		17,543
PAX Global Technology Ltd.b		99,000		76,578
Sunny Optical Technology Group Co. Ltd.b		90,000		480,936
Technovator International Ltd.b		54,000		21,790
Tongda Group Holdings Ltd.b		450,000		93,983
Wasion Group Holdings Ltd.		72,000		40,749
				1,341,643
ENERGY EQUIPMENT & SERVICES — 0.33%
Anton Oilfield Services Group/Hong Konga,b		162,000		15,037
Hilong Holding Ltd.b		117,000		13,575
Shandong Molong Petroleum Machinery Co. Ltd. Class Ha		43,200		18,546
Wison Engineering Services Co. Ltd.a		153,000		17,358
				64,516
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) — 0.69%
Spring REIT		81,000		36,236
Yuexiu REIT		153,000		100,399
				136,635
FOOD & STAPLES RETAILING — 0.14%
Lianhua Supermarket Holdings Co. Ltd. Class Ha		63,000		27,371
				27,371

Security	Shares		Value
FOOD PRODUCTS — 2.71%
Biostime International Holdings Ltd.a,b		22,500	$	57,202
China Agri-Industries Holdings Ltd.a		279,000		98,554
China Foods Ltd.		108,000		48,732
China Huiyuan Juice Group Ltd.a		67,500		25,323
China Modern Dairy Holdings Ltd.a,b		315,000		49,544
China Shengmu Organic Milk Ltd.a,b,c		171,000		37,918
China Yurun Food Group Ltd.a		180,000		25,062
Honworld Group Ltd.c		27,000		15,385
Leyou Technologies Holdings Ltd.a,b		315,000		46,701
Qinqin Foodstuffs Group Cayman Co. Ltd.a		9,000		3,237
Shandong Zhonglu Oceanic Fisheries Co. Ltd.a		17,100		14,814
Shanghai Greencourt Investment Group Co. Ltd. Class Ba		52,200		31,999
Shenguan Holdings Group Ltd.		144,000		10,396
Tenwow International Holdings Ltd.b		90,000		24,134
Yashili International Holdings Ltd.		117,000		25,341
YuanShengTai Dairy Farm Ltd.a,b		342,000		19,841
				534,183
GAS UTILITIES — 0.63%
China Oil and Gas Group Ltd.a		556,000		41,574
Towngas China Co. Ltd.b		144,000		82,983
				124,557
HEALTH CARE EQUIPMENT & SUPPLIES — 0.64%
Lifetech Scientific Corp.a,b		270,000		53,953
Microport Scientific Corp.a		72,000		45,947
PW Medtech Group Ltd.a,b		90,000		25,294
				125,194
HEALTH CARE PROVIDERS & SERVICES — 2.37%
China NT Pharma Group Co.Ltd.b		117,000		30,469
China Pioneer Pharma Holdings Ltd.b		54,000		17,404
Golden Meditech Holdings Ltd.		216,000		27,847
Harmonicare Medical Holdings Ltd.b,c		36,180		20,663
Huayi Tencent Entertainment Co. Ltd.		720,000		40,842
iKang Healthcare Group Inc. ADRa		6,363		117,334
Phoenix Healthcare Group Co. Ltd.		76,500		133,734
Universal Health International Group Holding Ltd.		207,000		10,408
Universal Medical Financial & Technical Advisory Services Co. Ltd.b,c		72,000		53,465
Wenzhou Kangning Hospital Co. Ltd.c		2,700		15,141
				467,307

38 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI CHINA SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
HOTELS, RESTAURANTS & LEISURE — 2.34%
500.com Ltd. ADRa		3,159	$	56,862
Ajisen (China) Holdings Ltd.		72,000		28,682
China LotSynergy Holdings Ltd.a		900,000		29,007
China Nuclear Energy Technology Corp. Ltd.a		72,000		14,202
China Travel International Investment Hong Kong Ltd.		342,000		100,527
China Vanguard Group Ltd.a		225,000		5,830
Haichang Ocean Park Holdings Ltd.a,c		162,000		33,834
Huangshan Tourism Development Co. Ltd. Class B		32,400		46,235
Shanghai Jin Jiang International Hotels Group Co. Ltd. Class H		162,000		52,212
Shanghai Jinjiang International Travel Co. Ltd. Class B		9,000		35,037
Tuniu Corp. ADRa		4,752		43,528
Zhuhai Holdings Investment Group Ltd.		90,000		15,084
				461,040
HOUSEHOLD DURABLES — 2.06%
Hefei Meiling Co. Ltd. Class B		18,936		11,498
Hisense Kelon Electrical Holdings Co. Ltd. Class H		63,000		43,209
HongDa Financial Holding Ltd.a		270,000		10,965
Konka Group Co. Ltd. Class Ba		94,500		37,523
Ozner Water International Holding Ltd.a,b,c		54,000		11,348
Skyworth Digital Holdings Ltd.		252,000		186,805
TCL Multimedia Technology Holdings Ltd.a,b		54,000		26,803
Wuxi Little Swan Co. Ltd. Class B		11,700		42,973
Yuxing InfoTech Investment Holdings Ltd.a,b		108,000		34,808
				405,932
HOUSEHOLD PRODUCTS — 0.36%
NVC Lighting Holdings Ltd.		153,000		18,936
Vinda International Holdings Ltd.		27,000		51,029
				69,965
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS — 1.13%
Canvest Environment Protection Group Co. Ltd.a,b		81,000		37,489
CGN Meiya Power Holdings Co. Ltd.a,b,c		144,000		23,577

Security	Shares		Value
China Datang Corp. Renewable Power Co. Ltd. Class Ha		315,000	$	30,051
China Power New Energy Development Co. Ltd. New		61,500		37,423
Huadian Energy Co. Ltd. Class Ba		65,700		34,361
Shanghai Lingyun Industries Development Co. Ltd. Class Ba		21,600		28,749
United Photovoltaics Group Ltd.a		414,000		31,490
				223,140
INDUSTRIAL CONGLOMERATES — 0.06%
Chongqing Machinery & Electric Co. Ltd. Class H		108,000		11,974
				11,974
INTERNET & DIRECT MARKETING RETAIL — 0.92%
Cogobuy Groupa,b,c		54,000		87,439
E-Commerce China Dangdang Inc. ADRa		7,353		48,015
Jumei International Holding Ltd. ADRa		8,523		45,001
				180,455
INTERNET SOFTWARE & SERVICES — 6.19%
21Vianet Group Inc. ADRa		8,586		79,592
Baozun Inc. ADRa		2,574		33,951
Bitauto Holdings Ltd. ADRa,b		3,366		84,958
HC International Inc.a		72,000		56,436
Momo Inc. ADRa,b		4,797		115,176
Pacific Online Ltd.		72,900		18,045
Phoenix New Media Ltd. ADRa		4,419		15,732
Renren Inc.a		9,063		16,585
Sina Corp.a		7,344		561,816
Sino-I Technology Ltd.a		1,080,000		15,455
Sohu.com Inc.a		3,996		169,990
Tian Ge Interactive Holdings Ltd.c		54,000		34,321
Xunlei Ltd. ADRa		3,249		17,544
				1,219,601
IT SERVICES — 1.19%
AGTech Holdings Ltd.a,b		324,000		68,085
Chinasoft International Ltd.a		234,000		108,904
Hi Sun Technology (China) Ltd.a,b		270,000		43,511
Peace Map Holding Ltd.a,b		720,000		13,552
				234,052
LEISURE PRODUCTS — 0.62%
Goodbaby International Holdings Ltd.		108,000		52,769
Shanghai Phoenix Enterprise Group Co. Ltd. Class Ba		22,500		21,150

SCHEDULES OF INVESTMENTS 39

Schedule of Investments (Continued)

iSHARES^® MSCI CHINA SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
Shenzhen China Bicycle Co. Holdings Ltd.a		36,000	$	23,716
Zhonglu Co. Ltd. Class B		10,860		23,773
				121,408
MACHINERY — 2.71%
Changchai Co. Ltd. Class B		19,800		12,457
China Huarong Energy Co. Ltd.a,b		150,300		8,622
China Ocean Industry Group Ltd.a		1,515,000		34,180
China Yuchai International Ltd.		1,584		17,677
CIMC Enric Holdings Ltd.		72,000		29,982
CRCC High-Tech Equipment Corp. Ltd.		54,000		25,271
Dalian Refrigeration Co. Ltd. Class B		13,500		10,721
EVA Precision Industrial Holdings Ltd.b		162,000		19,005
First Tractor Co. Ltd. Class H		54,000		28,682
Huangshi Dongbei Electrical Appliance Co. Ltd. Class Ba		18,000		35,820
Kama Co. Ltd.a		29,715		37,441
Lonking Holdings Ltd.		252,000		40,935
Sany Heavy Equipment International Holdings Co. Ltd.a,b		108,000		15,455
Shang Gong Group Co. Ltd. Class Ba		39,000		42,783
Shanghai Diesel Engine Co. Ltd. Class B		44,145		39,245
Shanghai Highly Group Co. Ltd. Class B		39,600		31,601
Shanghai Lingang Holdings Corp. Ltd. Class Ba		17,200		28,294
Shanghai Prime Machinery Co. Ltd. Class H		108,000		17,961
Sinotruk Hong Kong Ltd.		97,000		47,520
Zhengzhou Coal Mining Machinery Group Co. Ltd. Class H		25,200		10,948
				534,600
MARINE — 0.66%
Chu Kong Shipping Enterprises Group Co. Ltd.		54,000		14,411
Seaspan Corp.		6,102		88,479
Sinotrans Shipping Ltd.a,b		189,000		27,046
				129,936
MEDIA — 1.85%
AirMedia Group Inc. ADRa		3,204		9,804
IMAX China Holding Inc.a,b,c		13,500		76,404
Nan Hai Corp. Ltd.a		1,800,000		44,787

Security	Shares		Value
Neo Telemedia Ltd.a		648,000	$	30,492
Phoenix Satellite Television Holdings Ltd.		198,000		43,395
Poly Culture Group Corp. Ltd. Class H		11,700		28,659
SMI Holdings Group Ltd.b		684,000		60,845
Viva China Holdings Ltd.a,b		365,600		35,821
Wisdom Sports Groupa,b		99,000		33,567
				363,774
METALS & MINING — 2.33%
Bengang Steel Plates Co. Ltd. Class Ba		56,700		18,713
Chiho-Tiande Group Ltd.a		54,000		39,542
China Daye Non-Ferrous Metals Mining Ltd.a		864,000		13,032
China Metal Recycling Holdings Ltd.a		184,800		—
China Silver Group Ltd.b		90,000		20,653
Chongqing Iron & Steel Co. Ltd. Class Ha		90,000		25,062
Da Ming International Holdings Ltd.a		36,000		12,438
Huili Resources Group Ltd.a		54,000		13,784
Inner Mongolia Eerduosi Resourses Co. Ltd. Class B		38,700		36,455
MMG Ltd.a,b		216,000		49,567
North Mining Shares Co. Ltd.a		1,530,000		34,716
Real Gold Mining Ltd.a		126,000		93
Shougang Concord International Enterprises Co. Ltd.a		684,000		20,194
Shougang Fushan Resources Group Ltd.		306,000		56,807
Xinjiang Xinxin Mining Industry Co. Ltd. Class Ha		72,000		7,797
Zhaojin Mining Industry Co. Ltd. Class H		108,000		110,552
				459,405
MULTI-UTILITIES — 0.13%
Tianjin Development Holdings Ltd.		54,000		25,619
				25,619
MULTILINE RETAIL — 1.46%
Golden Eagle Retail Group Ltd.b		54,000		67,111
Intime Retail Group Co. Ltd.b		211,500		171,779
Maoye International Holdings Ltd.		162,000		17,335
New World Department Store China Ltd.		117,000		15,687
Parkson Retail Group Ltd.b		177,000		14,832
				286,744

40 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI CHINA SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
OIL, GAS & CONSUMABLE FUELS — 1.44%
China Suntien Green Energy Corp. Ltd. Class H		216,000	$	30,353
Inner Mongolia Yitai Coal Co. Ltd. Class B		141,300		112,616
MIE Holdings Corp.a		144,000		14,109
Shanxi Guoxin Energy Corp. Ltd.		17,120		20,698
Sino Oil And Gas Holdings Ltd.a		1,215,000		32,737
Sinopec Kantons Holdings Ltd.		108,000		52,213
Yanchang Petroleum International Ltd.a		810,000		21,616
				284,342
PAPER & FOREST PRODUCTS — 1.49%
Chengde Nanjiang Co. Ltd. Class Ba		121,800		45,380
China Forestry Holdings Co. Ltd.a		306,000		—
China Wood Optimization Holding Ltd.a		36,000		15,548
Lee & Man Paper Manufacturing Ltd.		180,000		145,267
Qunxing Paper Holdings Co. Ltd.a		148,000		1,717
Shandong Chenming Paper Holdings Ltd. Class B		67,523		58,237
Shandong Chenming Paper Holdings Ltd. Class H		31,500		27,696
Superb Summit International Group Ltd.a		59,500		598
				294,443
PERSONAL PRODUCTS — 0.19%
CKH Food & Health Ltd.a		7,560		16,205
Golden Throat Holdings Group Co. Ltd.c		22,500		22,219
				38,424
PHARMACEUTICALS — 4.93%
Beijing Tong Ren Tang Chinese Medicine Co. Ltd.		36,000		48,546
China Animal Healthcare Ltd.a,b		140,000		6,023
China Shineway Pharmaceutical Group Ltd.		45,000		47,223
China Traditional Chinese Medicine Holdings Co. Ltd.a,b		252,000		128,652
Consun Pharmaceutical Group Ltd.b		54,000		33,695
Dawnrays Pharmaceutical Holdings Ltd.		36,000		25,155
Hua Han Health Industry Holdings Ltd. Class Hb		651,960		45,387
Hutchison China Meditech Ltd.a		2,322		55,729

Security	Shares		Value
Lee’s Pharmaceutical Holdings Ltd.		36,000	$	29,703
Livzon Pharmaceutical Group Inc. Class H		10,820		57,401
Shandong Luoxin Pharmaceutical Group Stock Co. Ltd. Class H		18,000		27,104
Shandong Xinhua Pharmaceutical Co. Ltd. Class H		22,000		16,932
Shanghai Dingli Technology Development Group Co. Ltd. Class B		32,000		22,159
Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co. Ltd. Class H		36,000		33,648
Shanghai Kai Kai Industrial Co. Ltd.		11,700		18,311
Shanghai Shenqi Pharmaceutical Investment Management Co. Ltd.		3,600		6,275
Sihuan Pharmaceutical Holdings Group Ltd.		600,000		135,366
SSY Group Ltd.		252,255		87,155
Tianjin ZhongXin Pharmaceutical Group Corp. Ltd.		26,100		20,358
Tong Ren Tang Technologies Co. Ltd. Class H		72,000		127,538
				972,360
PROFESSIONAL SERVICES — 0.56%
51job Inc. ADRa		2,700		89,991
Zhaopin Ltd. ADRa		1,305		20,228
				110,219
REAL ESTATE MANAGEMENT & DEVELOPMENT — 13.21%
Agile Property Holdings Ltd.		216,000		122,804
Beijing Capital Land Ltd. Class H		144,000		56,622
Beijing Enterprises Medical & Health Group Ltd.a		594,000		35,992
Beijing North Star Co. Ltd. Class H		90,000		29,239
Beijing Properties Holdings Ltd.a,b		288,000		15,780
C C Land Holdings Ltd.		171,000		44,311
Carnival Group International Holdings Ltd.a,b		548,000		67,116
Central China Real Estate Ltd.		99,038		22,344
China Aoyuan Property Group Ltd.b		153,000		34,518
China Merchants Land Ltd.		180,000		30,399
China Minsheng Drawin Technology Group Ltd.a		532,000		20,919
China New Town Development Co. Ltd.a		500,000		22,561

SCHEDULES OF INVESTMENTS 41

Schedule of Investments (Continued)

iSHARES^® MSCI CHINA SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
China Oceanwide Holdings Ltd.a,b		522,000	$	54,510
China Overseas Grand Oceans Group Ltd.a		126,000		39,798
China Overseas Property Holdings Ltd.b		150,000		30,554
China SCE Property Holdings Ltd.b		162,800		38,828
China South City Holdings Ltd.		360,000		77,507
China Vast Industrial Urban Development Co. Ltd.b,c		54,000		23,670
CIFI Holdings Group Co. Ltd.		360,000		112,779
Colour Life Services Group Co. Ltd.		36,000		28,357
Crown International Corp. Ltd.a		90,000		22,974
EverChina International Holdings Co. Ltd.a		450,000		15,084
Fantasia Holdings Group Co. Ltd.		216,000		33,416
Future Land Development Holdings Ltd.b		252,000		46,782
Gemdale Properties & Investment Corp. Ltd.		522,000		32,302
Glorious Property Holdings Ltd.a		351,000		42,988
Greenland Hong Kong Holdings Ltd.a,b		108,000		31,606
Greentown China Holdings Ltd.a,b		85,500		69,884
Guangdong Land Holdings Ltd.a		72,000		18,472
Guorui Properties Ltd.b		117,000		39,368
HKC Holdings Ltd.a		873,000		14,181
HNA Innovation Hainan Co. Ltd.a		11,700		7,137
Hopson Development Holdings Ltd.		90,000		88,181
Hydoo International Holding Ltd.b		180,000		19,261
K Wah International Holdings Ltd.		153,000		83,830
KWG Property Holding Ltd.		157,500		105,789
Logan Property Holdings Co. Ltd.b		144,000		62,934
Minmetals Land Ltd.		198,000		24,760
Optics Valley Union Holding Co. Ltd.a		288,000		30,817
Overseas Chinese Town Asia Holdings Ltd.		36,000		13,459
Ping An Securities Group Holdings Ltd.a,b		1,620,000		16,290
Poly Property Group Co. Ltd.a,b		270,000		77,275
Powerlong Real Estate Holdings Ltd.b		162,000		46,365
Renhe Commercial Holdings Co. Ltd.a,b		1,998,000		55,380
Road King Infrastructure Ltd.		27,000		23,182
Ronshine China Holdings Ltd.a,b		45,000		48,732
Shanghai Huili Building Materials Co. Ltd.a		9,900		19,800

Security	Shares		Value
Shanghai Industrial Urban Development Group Ltd.		198,000	$	45,947
Shanghai Shibei Hi-Tech Co. Ltd. Class B		31,500		38,525
Shanghai Zendai Property Ltd.a		630,000		11,208
Shenzhen Investment Ltd.		396,000		189,915
Shenzhen SEG Co. Ltd. Class B		32,400		22,305
Shenzhen Wongtee International Enterprise Co. Ltd. Class Ba		19,800		14,269
Sinolink Worldwide Holdings Ltd.a		252,000		28,589
Tian Shan Development Holding Ltd.		36,000		13,598
Xinyuan Real Estate Co. Ltd. ADR		5,247		32,059
Yuexiu Property Co. Ltd.b		864,000		131,436
Yuzhou Properties Co. Ltd.		180,440		62,808
Zhong An Real Estate Ltd.a,b		144,000		14,109
				2,603,625
ROAD & RAIL — 0.81%
Dazhong Transportation Group Co. Ltd. Class B		97,200		73,872
eHi Car Services Ltd. ADRa		4,302		45,042
Shanghai Jinjiang International Industrial Investment Co. Ltd. Class B		23,400		40,014
				158,928
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 1.73%
China Electronics Corp. Holdings Co. Ltd.		126,000		31,513
Hua Hong Semiconductor Ltd.c		45,000		49,312
JA Solar Holdings Co. Ltd. ADRa,b		5,805		43,015
JinkoSolar Holding Co. Ltd.a,b		2,907		53,663
Shanghai Fudan Microelectronics Group Co. Ltd. Class Ha		18,000		15,107
Xinyi Solar Holdings Ltd.b		360,000		148,052
				340,662
SOFTWARE — 2.79%
Boyaa Interactive International Ltd.a,b		36,000		16,058
Changyou.com Ltd. ADRa		1,503		37,244
Chanjet Information Technology Co. Ltd. Class Ha		9,000		12,601
Cheetah Mobile Inc. ADRa,b		3,951		50,810
China City Railway Transportation Technology Holdings Co. Ltd.a,b		72,000		13,831
Feiyu Technology International Co. Ltd.c		54,000		9,886

42 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI CHINA SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
iDreamsky Technology Ltd. ADRa		1,548	$	21,455
Kingdee International Software Group Co. Ltd.a,b		253,200		97,601
KongZhong Corp. ADRa		3,042		19,864
National Agricultural Holdings Ltd.a		108,000		22,695
NetDragon Websoft Holdings Ltd.		22,500		75,853
NQ Mobile Inc. ADRa,b		10,719		44,270
Ourgame International Holdings Ltd.a		45,000		19,841
Shanghai Baosight Software Co. Ltd. Class B		31,580		60,002
Sinosoft Technology Group Ltd.b		54,000		29,030
V1 Group Ltd.		396,000		18,889
				549,930
SPECIALTY RETAIL — 1.92%
Baoxin Auto Group Ltd.a,b		68,358		41,457
Boshiwa International Holding Ltd.a,b		153,000		1,586
China Harmony New Energy Auto Holding Ltd.b		94,500		50,194
China ZhengTong Auto Services Holdings Ltd.		121,500		42,292
Goldlion Holdings Ltd.		36,000		14,573
Hengdeli Holdings Ltd.a,b		288,000		31,560
Pou Sheng International Holdings Ltd.a,b		288,000		98,763
Symphony Holdings Ltd.		180,000		19,725
Zhongsheng Group Holdings Ltd.b		85,500		78,481
				378,631
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 0.94%
Coolpad Group Ltd.a		432,000		82,983
Goldpac Group Ltd.b		45,000		15,258
TCL Communication Technology Holdings Ltd.		63,000		58,641
TPV Technology Ltd.a		144,000		28,589
				185,471
TEXTILES, APPAREL & LUXURY GOODS — 4.53%
361 Degrees International Ltd.		81,000		25,166
Best Pacific International Holdings Ltd.		36,000		29,239
Bosideng International Holdings Ltd.		378,000		35,087
C.banner International Holdings Ltd.a		135,000		41,770
Cabbeen Fashion Ltd.		36,000		11,742
China Dongxiang Group Co. Ltd.		414,000		83,262
China Lilang Ltd.		54,000		32,093
China Longevity Group Co. Ltd.a		96,000		4,076

Security	Shares		Value
Citychamp Watch & Jewellery Group Ltd.b		198,000	$	45,181
Cosmo Lady China Holdings Co. Ltd.b,c		63,000		23,716
Daphne International Holdings Ltd.a		144,000		19,864
Fuguiniao Co. Ltd. Class Hb		43,200		21,609
HOSA International Ltd.		72,000		24,412
Lao Feng Xiang Co. Ltd. Class B		27,980		100,868
Li Ning Co. Ltd.a,b		171,000		116,179
Luthai Textile Co. Ltd. Class B		36,900		46,430
Peak Sport Products Co. Ltd.		108,000		33,555
Shanghai Haixin Group Co. Class B		57,600		48,326
Silverman Holdings Ltd.a,b		108,000		17,543
Texhong Textile Group Ltd.		31,500		46,783
Weiqiao Textile Co. Class H		54,000		37,802
XTEP International Holdings Ltd.b		94,500		48,854
				893,557
TRADING COMPANIES & DISTRIBUTORS — 0.80%
China Aircraft Leasing Group Holdings Ltd.b		27,000		34,774
China Chengtong Development Group Ltd.a,b		342,000		30,864
CITIC Resources Holdings Ltd.a,b		342,200		38,381
Shanghai Dasheng Agricultural Finance Technology Co. Ltd.		324,000		26,315
Skyway Securities Group Ltd.a,b		990,000		27,951
				158,285
TRANSPORTATION INFRASTRUCTURE — 4.02%
Anhui Expressway Co. Ltd. Class H		54,000		44,416
COSCO International Holdings Ltd.		72,000		33,602
Guangdong Provincial Expressway Development Co. Ltd. Class B		45,000		28,369
HNA Infrastructure Company Ltd. Class H		18,000		19,864
Hopewell Highway Infrastructure Ltd.		112,500		65,556
Jinzhou Port Co. Ltd. Class B		41,400		22,190
Qingdao Port International Co. Ltd.c		108,000		61,820
Qinhuangdao Port Co. Ltd.		99,000		22,718
Shenzhen Chiwan Wharf Holdings Ltd. Class B		17,100		26,984
Shenzhen Expressway Co. Ltd. Class H		90,000		95,143
Shenzhen International Holdings Ltd.		126,000		202,399
Sichuan Expressway Co. Ltd. Class H		108,000		39,542
Tianjin Port Development Holdings Ltd.		252,000		38,985

SCHEDULES OF INVESTMENTS 43

Schedule of Investments (Continued)

iSHARES^® MSCI CHINA SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
Xiamen International Port Co. Ltd. Class H		144,000	$	28,775
Yuexiu Transport Infrastructure Ltd.		90,000		62,423
				792,786
WATER UTILITIES — 1.29%
China Everbright Water Ltd.		66,600		28,344
China Water Affairs Group Ltd.		108,000		67,389
China Water Industry Group Ltd.a		144,000		23,577
CT Environmental Group Ltd.		288,000		88,738
Kangda International Environmental Co. Ltd.c		99,000		19,783
Yunnan Water Investment Co. Ltd.b		45,000		26,454
				254,285
TOTAL COMMON STOCKS
(Cost: $22,727,574)				19,642,793
SHORT-TERM INVESTMENTS — 31.06%
MONEY MARKET FUNDS — 31.06%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%d,e,f		6,103,400		6,103,400
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%d,e		17,981		17,981
				6,121,381
TOTAL SHORT-TERM INVESTMENTS
(Cost: $6,121,381)				6,121,381

	Value
TOTAL INVESTMENTS IN SECURITIES — 130.74%
(Cost: $28,848,955)g	$	25,764,174
Other Assets, Less Liabilities — (30.74)%		(6,058,069	)
NET ASSETS — 100.00%	$	19,706,105

ADR — American Depositary Receipts

^a  Non-income earning security.

^b  All or a portion of this security represents a security on loan. See Note 1.

^c  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^d  Affiliated money market fund.

^e  The rate quoted is the annualized seven-day yield of the fund at period end.

^f  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^g  The cost of investments for federal income tax purposes was $29,499,047. Net unrealized depreciation was $3,734,873, of which $3,266,336 represented gross unrealized appreciation on securities and $7,001,209 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	19,244,909	$	67,735	$	330,149	$	19,642,793
Money market funds		6,121,381		—		—		6,121,381
Total	$	25,366,290	$	67,735	$	330,149	$	25,764,174

44 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI CHINA SMALL-CAP ETF

August 31, 2016

The following table includes a rollforward for the year ended August 31, 2016 of investments whose values are classified as Level 3 as of the beginning or end of the year.

iShares MSCI China Small-Cap ETF	Common Stocks
Balance at beginning of year	$	1,334,239
Realized gain (loss) and change in unrealized appreciation/depreciation		(231,395	)
Purchases		87,873
Sales		(314,801	)
Transfers ina		120,154	b
Transfers outa		(665,921	)c
Balance at end of year	$	330,149
Net change in unrealized appreciation/depreciation on investments still held at end of year	$	(297,857	)

^a  Represents the value as of the beginning of the reporting period.

^b  Transfers in to Level 3 are due to the suspension of trading of equity securities.

^c  Transfers out of Level 3 are due to resumption of trading of equity securities.

The following table summarizes the valuation techniques used and unobservable inputs developed by the Global Valuation Committee to determine the fair value of certain of the Fund’s level 3 investments as of August 31, 2016:

	Value		Valuation Techniques	Unobservable Inputs	Range of Unobservable Input			Weighted Average of Unobservable Inputs a
Assets:
Common Stockb	$	41,457	Last traded price — adjusted	Adjustment based on change on proxy index		+11	%c		+11	%
Common Stockb	$	160,180	Last traded price — adjusted	Adjustment based on change on proxy index		-7% to -76	%c		-17	%
Common Stock	$	81,413	Grey market trade	Trade details		n/a			n/a

^a  Unobservable inputs are weighted based on the fair value of the investments included in the range.

^b  Does not include Level 3 investments with values derived utilizing prices from prior transactions or third party pricing information without adjustment for which such inputs are unobservable.

^c  An increase in the unobservable input may result in a significant increase to the value, while a decrease in the unobservable input may result in a significant decrease to value.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 45

Schedule of Investments

iSHARES^® MSCI INDONESIA ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.97%
AIRLINES — 0.10%
Garuda Indonesia Persero Tbk PTa		21,776,700	$	738,750
				738,750
AUTOMOBILES — 9.98%
Astra International Tbk PT		114,093,730		70,099,050
				70,099,050
BANKS — 29.89%
Bank Bukopin Tbk		20,389,199		1,099,003
Bank Central Asia Tbk PT		69,484,458		78,834,609
Bank Danamon Indonesia Tbk PT		18,908,160		5,815,703
Bank Mandiri Persero Tbk PT		52,607,780		44,517,326
Bank Negara Indonesia Persero Tbk PT		42,045,158		18,621,584
Bank Pembangunan Daerah Jawa Barat Dan Banten Tbk PT		13,618,136		1,652,861
Bank Pembangunan Daerah Jawa Timur Tbk PT		16,735,300		756,968
Bank Rakyat Indonesia Persero Tbk PT		62,571,972		54,953,899
Bank Tabungan Negara Persero Tbk PT		23,862,126		3,615,746
				209,867,699
BUILDING PRODUCTS — 0.16%
Arwana Citramulia Tbk PT		26,897,000		1,125,355
				1,125,355
CONSTRUCTION & ENGINEERING — 2.45%
Adhi Karya Persero Tbk PT		10,040,510		2,020,970
Pembangunan Perumahan Persero Tbk PT		13,633,100		4,470,711
Sitara Propertindo Tbk PTa		25,488,300		1,258,563
Surya Semesta Internusa Tbk PT		18,474,874		856,543
Waskita Karya Persero Tbk PT		26,775,600		5,631,656
Wijaya Karya Persero Tbk PT		12,135,239		2,964,054
				17,202,497
CONSTRUCTION MATERIALS — 3.61%
Indocement Tunggal Prakarsa Tbk PT		8,299,444		11,074,268
PT Holcim Indonesia Tbk		8,598,500		761,646
PT Wijaya Karya Beton Tbk		14,737,000		1,055,420
Semen Indonesia Persero Tbk PT		16,716,455		12,475,907
				25,367,241

Security	Shares		Value
DIVERSIFIED TELECOMMUNICATION SERVICES — 13.13%
Inovisi Infracom Tbk PTa		9,476,400	$	—
Link Net Tbk PT		6,002,300		2,009,062
Telekomunikasi Indonesia Persero Tbk PT		284,082,290		90,161,059
				92,170,121
FOOD & STAPLES RETAILING — 0.12%
Matahari Putra Prima Tbk PT		6,062,400		872,912
				872,912
FOOD PRODUCTS — 6.94%
Charoen Pokphand Indonesia Tbk PT		41,592,325		11,695,392
Eagle High Plantations Tbk PTa		53,074,252		840,226
Indofood CBP Sukses Makmur Tbk PT		13,146,154		9,885,630
Indofood Sukses Makmur Tbk PT		24,745,130		14,783,653
Japfa Comfeed Indonesia Tbk PT		27,057,000		3,457,340
Nippon Indosari Corpindo Tbk PT		8,559,100		1,042,062
Perusahaan Perkebunan London Sumatra Indonesia Tbk PT		17,305,800		2,087,394
PT Bisi International Tbk		8,411,000		1,115,971
Salim Ivomas Pratama Tbk PT		17,750,000		689,125
Sawit Sumbermas Sarana Tbk PT		10,737,400		1,355,834
Tiga Pilar Sejahtera Food Tbka		10,885,000		1,764,248
				48,716,875
GAS UTILITIES — 1.99%
Perusahaan Gas Negara Persero Tbk PT		61,487,207		13,998,595
				13,998,595
HEALTH CARE PROVIDERS & SERVICES — 0.24%
Siloam International Hospitals Tbk PTa		1,954,400		1,664,887
				1,664,887
HOUSEHOLD PRODUCTS — 4.22%
Sekawan Intipratama Tbk PTa		30,572,100		46,094
Unilever Indonesia Tbk PT		8,601,304		29,600,417
				29,646,511
INSURANCE — 0.17%
Panin Financial Tbk PTa		71,887,478		1,192,254
				1,192,254
MARINE — 0.00%
Berlian Laju Tanker Tbk PTa		20,137,514		—
				—

46 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI INDONESIA ETF

August 31, 2016

Security	Shares		Value
MEDIA — 2.15%
Global Mediacom Tbk PT		40,019,100	$	2,685,036
Media Nusantara Citra Tbk PT		28,163,400		4,076,421
Surya Citra Media Tbk PT		32,965,600		7,530,024
Visi Media Asia Tbk PTa		36,957,600		780,108
				15,071,589
METALS & MINING — 0.68%
Aneka Tambang Persero Tbk PTa		47,443,754		2,575,160
Krakatau Steel Persero Tbk PTa		17,682,900		1,206,410
Timah Persero Tbk PT		16,717,180		1,008,198
				4,789,768
MULTILINE RETAIL — 3.45%
Matahari Department Store Tbk PT		13,157,100		19,837,316
Mitra Adiperkasa Tbk PTa		4,210,300		1,460,036
Multipolar Tbk PTa		39,710,743		1,275,294
Ramayana Lestari Sentosa Tbk PT		17,998,100		1,682,446
				24,255,092
OIL, GAS & CONSUMABLE FUELS — 3.74%
Adaro Energy Tbk PT		81,130,539		7,033,556
Indo Tambangraya Megah Tbk PT		2,228,480		1,910,965
Sugih Energy Tbk PTa		119,120,611		1,023,728
Tambang Batubara Bukit Asam Persero Tbk PT		3,890,450		2,910,872
United Tractors Tbk PT		9,460,796		13,372,780
				26,251,901
PERSONAL PRODUCTS — 0.10%
Industri Jamu Dan Farmasi Sido Muncul Tbk PT		16,832,100		716,935
				716,935
PHARMACEUTICALS — 2.29%
Kalbe Farma Tbk PT		118,896,085		16,088,841
				16,088,841
REAL ESTATE MANAGEMENT & DEVELOPMENT — 7.07%
Agung Podomoro Land Tbk PTa		28,757,000		628,687
Alam Sutera Realty Tbk PTa		55,459,316		2,056,991
Bumi Serpong Damai Tbk PT		43,384,722		7,031,825
Ciputra Development Tbk PT		60,841,713		7,086,351
Hanson International Tbk PTa		376,731,035		4,458,860
Intiland Development Tbk PT		35,056,420		1,572,452
Kawasan Industri Jababeka Tbk PT		87,347,270		2,093,964

Security	Shares		Value
Lippo Cikarang Tbk PTa		2,353,700	$	1,162,211
Lippo Karawaci Tbk PT		104,062,362		8,629,370
Modernland Realty Tbk PTa		45,918,118		1,329,254
Pakuwon Jati Tbk PT		135,726,577		6,087,999
Summarecon Agung Tbk PT		56,921,958		7,509,493
				49,647,457
SPECIALTY RETAIL — 0.47%
Ace Hardware Indonesia Tbk PT		43,479,479		3,277,759
				3,277,759
TEXTILES, APPAREL & LUXURY GOODS — 0.13%
Sri Rejeki Isman Tbk PT		46,959,700		906,271
				906,271
TOBACCO — 4.12%
Gudang Garam Tbk PT		2,710,842		13,160,816
Hanjaya Mandala Sampoerna Tbk PT		52,450,600		15,737,157
				28,897,973
TRADING COMPANIES & DISTRIBUTORS — 0.72%
AKR Corporindo Tbk PT		10,016,400		5,040,292
				5,040,292
TRANSPORTATION INFRASTRUCTURE — 0.60%
Jasa Marga Persero Tbk PT		11,498,400		4,212,757
				4,212,757
WIRELESS TELECOMMUNICATION SERVICES — 1.45%
Tower Bersama Infrastructure Tbk PT		13,507,200		5,676,792
XL Axiata Tbk PTa		21,062,900		4,509,509
				10,186,301
TOTAL COMMON STOCKS
(Cost: $733,911,030)				702,005,683
SHORT-TERM INVESTMENTS — 0.02%
MONEY MARKET FUNDS — 0.02%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		104,297		104,297
				104,297
TOTAL SHORT-TERM INVESTMENTS
(Cost: $104,297)				104,297

SCHEDULES OF INVESTMENTS 47

Schedule of Investments (Continued)

iSHARES^® MSCI INDONESIA ETF

August 31, 2016

	Value
TOTAL INVESTMENTS IN SECURITIES — 99.99%
(Cost: $734,015,327)d	$	702,109,980
Other Assets, Less Liabilities — 0.01%		87,984
NET ASSETS — 100.00%	$	702,197,964

^a  Non-income earning security.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $740,251,713. Net unrealized depreciation was $38,141,733, of which $33,897,237 represented gross unrealized appreciation on securities and $72,038,970 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	700,935,861	$	1,023,728	$	46,094	$	702,005,683
Money market funds		104,297		—		—		104,297
Total	$	701,040,158	$	1,023,728	$	46,094	$	702,109,980

See notes to financial statements.

48 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI PHILIPPINES ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.61%
AIRLINES — 0.87%
Cebu Air Inc.		1,081,650	$	2,750,843
				2,750,843
BANKS — 11.22%
Bank of the Philippine Islands		3,518,559		7,966,691
BDO Unibank Inc.		7,803,696		19,142,879
Metropolitan Bank & Trust Co.		3,200,686		5,735,750
Rizal Commercial Banking Corp.		539,858		375,392
Security Bank Corp.		525,640		2,407,374
				35,628,086
BEVERAGES — 0.14%
Pepsi-Cola Products Philippines Inc.		6,689,500		445,057
				445,057
CHEMICALS — 0.97%
D&L Industries Inc.		12,747,100		3,085,895
				3,085,895
DIVERSIFIED FINANCIAL SERVICES — 13.99%
Ayala Corp.		1,182,018		22,196,926
GT Capital Holdings Inc.		384,725		12,674,168
Metro Pacific Investments Corp.		64,125,900		9,523,580
				44,394,674
ELECTRIC UTILITIES — 0.55%
First Philippine Holdings Corp.		1,108,929		1,737,350
				1,737,350
FOOD & STAPLES RETAILING — 0.66%
Cosco Capital Inc.		11,210,900		2,086,029
				2,086,029
FOOD PRODUCTS — 5.23%
Century Pacific Food Inc.		4,329,300		1,588,819
Universal Robina Corp.		3,745,390		15,031,397
				16,620,216
HOTELS, RESTAURANTS & LEISURE — 4.97%
Bloomberry Resorts Corp.a		18,704,565		2,239,972
Jollibee Foods Corp.		2,112,853		11,109,539
Max’s Group Inc.		1,410,600		999,030
Melco Crown Philippines Resorts Corp.a		8,505,700		693,672
Premium Leisure Corp.		38,662,000		730,176
				15,772,389

Security	Shares		Value
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS — 5.59%
Aboitiz Power Corp.		7,332,715	$	7,160,394
Energy Development Corp.		45,635,520		5,612,008
First Gen Corp.		6,271,437		3,425,434
Lopez Holdings Corp.		9,153,150		1,553,845
				17,751,681
INDUSTRIAL CONGLOMERATES — 19.90%
Aboitiz Equity Ventures Inc.		9,271,500		14,923,543
Alliance Global Group Inc.		10,256,439		3,587,938
DMCI Holdings Inc.		19,974,600		4,929,883
JG Summit Holdings Inc.		13,733,302		22,989,539
SM Investments Corp.		1,145,771		16,721,199
				63,152,102
MEDIA — 0.56%
ABS-CBN Holdings Corp. PDR		1,648,290		1,775,816
				1,775,816
METALS & MINING — 0.24%
Nickel Asia Corp.		5,805,600		776,240
				776,240
REAL ESTATE MANAGEMENT & DEVELOPMENT — 23.97%
Ayala Land Inc.		35,288,340		29,157,658
Belle Corp.		20,598,967		1,361,623
DoubleDragon Properties Corp.		3,250,560		4,182,232
Filinvest Land Inc.		49,598,590		2,043,766
Megaworld Corp.		55,714,700		5,631,854
Robinsons Land Corp.		8,144,600		5,575,979
SM Prime Holdings Inc.		39,773,835		25,480,180
Vista Land & Lifescapes Inc.		20,851,300		2,662,630
				76,095,922
SOFTWARE — 0.24%
Xurpas Inc.		2,190,300		756,816
				756,816
TRANSPORTATION INFRASTRUCTURE — 1.43%
International Container Terminal Services Inc.		2,523,550		4,549,377
				4,549,377
WATER UTILITIES — 1.15%
Manila Water Co. Inc.		6,056,029		3,639,206
				3,639,206

SCHEDULES OF INVESTMENTS 49

Schedule of Investments (Continued)

iSHARES^® MSCI PHILIPPINES ETF

August 31, 2016

Security	Shares		Value
WIRELESS TELECOMMUNICATION SERVICES — 7.93%
Globe Telecom Inc.		161,620	$	6,833,166
PLDT Inc.		467,787		18,331,990
				25,165,156
TOTAL COMMON STOCKS
(Cost: $327,834,306)				316,182,855
SHORT-TERM INVESTMENTS — 0.02%
MONEY MARKET FUNDS — 0.02%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		59,257		59,257
				59,257
TOTAL SHORT-TERM INVESTMENTS
(Cost: $59,257)				59,257

	Value
TOTAL INVESTMENTS IN SECURITIES — 99.63%
(Cost: $327,893,563)d	$	316,242,112
Other Assets, Less Liabilities — 0.37%		1,161,001
NET ASSETS — 100.00%	$	317,403,113

PDR — Philippine Depositary Receipt

^a  Non-income earning security.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $330,362,154. Net unrealized depreciation was $14,120,042, of which $18,020,205 represented gross unrealized appreciation on securities and $32,140,247 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	316,182,855	$	—	$	—	$	316,182,855
Money market funds		59,257		—		—		59,257
Total	$	316,242,112	$	—	$	—	$	316,242,112

See notes to financial statements.

50 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI POLAND CAPPED ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.76%
BANKS — 35.86%
Alior Bank SAa,b		334,292	$	4,554,545
Bank Handlowy w Warszawie SA		128,904		2,399,226
Bank Millennium SAa		1,951,270		2,888,479
Bank Pekao SA		538,027		18,054,136
Bank Zachodni WBK SAb		115,279		9,460,815
Getin Holding SAa,b		1,900,386		471,289
Getin Noble Bank SAa,b		5,341,020		696,414
mBank SAa		55,479		5,524,709
Powszechna Kasa Oszczednosci Bank Polski SAa		3,002,580		20,396,679
				64,446,292
CAPITAL MARKETS — 0.61%
Warsaw Stock Exchange		122,257		1,098,683
				1,098,683
CHEMICALS — 3.81%
Ciech SA		109,228		1,884,719
Grupa Azoty SA		171,839		2,820,965
Synthos SAa		2,162,336		2,145,005
				6,850,689
CONSTRUCTION & ENGINEERING — 1.31%
Budimex SA		46,690		2,351,600
				2,351,600
CONSUMER FINANCE — 1.63%
KRUK SAb		50,815		2,923,128
				2,923,128
DIVERSIFIED TELECOMMUNICATION SERVICES — 2.66%
Netia SA		1,148,838		1,377,542
Orange Polska SA		2,471,119		3,398,985
				4,776,527
ELECTRIC UTILITIES — 8.13%
Enea SAa		861,674		2,172,167
Energa SA		791,048		1,638,178
PGE Polska Grupa Energetyczna SA		2,685,659		7,923,736
Tauron Polska Energia SAa		4,046,049		2,875,738
				14,609,819
FOOD & STAPLES RETAILING — 1.95%
Eurocash SA		318,984		3,506,797
				3,506,797

Security	Shares		Value
HEALTH CARE PROVIDERS & SERVICES — 0.23%
Neuca SAb		4,468	$	413,519
				413,519
INSURANCE — 7.46%
Powszechny Zaklad Ubezpieczen SA		1,897,456		13,413,440
				13,413,440
MEDIA — 2.55%
Cyfrowy Polsat SAa		729,199		4,586,216
				4,586,216
METALS & MINING — 6.30%
Boryszew SAa,b		536,124		834,749
Jastrzebska Spolka Weglowa SAa,b		262,506		2,601,335
KGHM Polska Miedz SA		421,514		7,893,924
				11,330,008
OIL, GAS & CONSUMABLE FUELS — 16.46%
Grupa Lotos SAa		363,709		2,701,305
Lubelski Wegiel Bogdanka SA		50,548		723,711
Polski Koncern Naftowy ORLEN SA		1,097,889		18,245,052
Polskie Gornictwo Naftowe i Gazownictwo SA		5,808,550		7,915,316
				29,585,384
REAL ESTATE MANAGEMENT & DEVELOPMENT — 1.01%
Globe Trade Centre SAa,b		983,685		1,810,764
				1,810,764
ROAD & RAIL — 0.80%
PKP Cargo SAa,b		126,230		1,436,137
				1,436,137
SOFTWARE — 3.88%
Asseco Poland SA		285,029		4,154,449
CD Projekt SAa		260,047		2,825,622
				6,980,071
TEXTILES, APPAREL & LUXURY GOODS — 5.11%
CCC SA		89,393		4,159,568
LPP SA		4,362		5,018,472
				9,178,040
TOTAL COMMON STOCKS
(Cost: $273,246,558)				179,297,114

SCHEDULES OF INVESTMENTS 51

Schedule of Investments (Continued)

iSHARES^® MSCI POLAND CAPPED ETF

August 31, 2016

Security	Shares		Value
SHORT-TERM INVESTMENTS — 4.23%
MONEY MARKET FUNDS — 4.23%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%c,d,e		7,546,737	$	7,546,737
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		61,697		61,697
				7,608,434
TOTAL SHORT-TERM INVESTMENTS
(Cost: $7,608,434)				7,608,434
TOTAL INVESTMENTS IN SECURITIES — 103.99%
(Cost: $280,854,992)f				186,905,548
Other Assets, Less Liabilities — (3.99)%				(7,168,155	)
NET ASSETS — 100.00%			$	179,737,393

^a  Non-income earning security.

^b  All or a portion of this security represents a security on loan. See Note 1.

^c  Affiliated money market fund.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

^e  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^f  The cost of investments for federal income tax purposes was $291,334,392. Net unrealized depreciation was $104,428,844, of which $2,045,138 represented gross unrealized appreciation on securities and $106,473,982 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	179,297,114	$	—	$	—	$	179,297,114
Money market funds		7,608,434		—		—		7,608,434
Total	$	186,905,548	$	—	$	—	$	186,905,548

See notes to financial statements.

52 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI QATAR CAPPED ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.92%
BANKS — 42.00%
Commercial Bank QSC (The)		203,584	$	2,348,175
Doha Bank QSC		158,597		1,635,470
Masraf Al Rayan QSC		390,067		4,070,618
Qatar International Islamic Bank QSC		59,049		1,073,515
Qatar Islamic Bank SAQ		79,510		2,419,352
Qatar National Bank SAQ		243,853		10,915,743
				22,462,873
CONSTRUCTION MATERIALS — 2.84%
Qatar National Cement Co. QSC		27,363		659,775
Qatari Investors Group QSC		58,452		857,192
				1,516,967
DIVERSIFIED FINANCIAL SERVICES —1.83%
Qatar Industrial Manufacturing Co. QSC		33,705		408,198
Salam International Investment Ltd. QSC		173,995		571,008
				979,206
DIVERSIFIED TELECOMMUNICATION SERVICES — 4.48%
Ooredoo QSC		85,001		2,397,353
				2,397,353
ENERGY EQUIPMENT & SERVICES — 1.45%
Gulf International Services QSC		79,233		776,805
				776,805
FOOD & STAPLES RETAILING — 1.10%
Al Meera Consumer Goods Co. QSC		9,757		586,811
				586,811
FOOD PRODUCTS — 0.71%
Widam Food Co.		21,104		379,615
				379,615
HEALTH CARE PROVIDERS & SERVICES — 0.80%
Medicare Group		16,932		425,468
				425,468
INDUSTRIAL CONGLOMERATES — 10.34%
Industries Qatar QSC		164,795		5,068,736
Mannai Corp. QSC		20,186		462,886
				5,531,622
INSURANCE — 4.42%
Qatar Insurance Co. SAQ		99,071		2,367,028
				2,367,028

Security	Shares		Value
MARINE — 3.61%
Qatar Navigation QSC		77,765	$	1,932,726
				1,932,726
MULTI-UTILITIES — 4.24%
Qatar Electricity & Water Co. QSC		38,110		2,265,867
				2,265,867
OIL, GAS & CONSUMABLE FUELS — 4.63%
Qatar Gas Transport Co. Ltd.		360,799		2,477,096
				2,477,096
REAL ESTATE MANAGEMENT & DEVELOPMENT — 14.49%
Barwa Real Estate Co.		141,584		1,419,204
Ezdan Holding Group QSC		822,741		4,247,746
Mazaya Qatar Real Estate Development QSCa		93,753		376,160
National Leasing		59,637		296,601
United Development Co. QSC		251,258		1,409,697
				7,749,408
WIRELESS TELECOMMUNICATION SERVICES — 2.98%
Vodafone Qatar QSCa		487,158		1,592,041
				1,592,041
TOTAL COMMON STOCKS
(Cost: $55,781,961)				53,440,886
SHORT-TERM INVESTMENTS — 0.12%
MONEY MARKET FUNDS — 0.12%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		65,229		65,229
				65,229
TOTAL SHORT-TERM INVESTMENTS
(Cost: $65,229)				65,229
TOTAL INVESTMENTS IN SECURITIES — 100.04%
(Cost: $55,847,190)d				53,506,115
Other Assets, Less Liabilities — (0.04)%				(20,066	)
NET ASSETS — 100.00%			$	53,486,049

^a  Non-income earning security.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $60,012,130. Net unrealized depreciation was $6,506,015, of which $2,374,919 represented gross unrealized appreciation on securities and $8,880,934 represented gross unrealized depreciation on securities.

SCHEDULES OF INVESTMENTS 53

Schedule of Investments (Continued)

iSHARES^® MSCI QATAR CAPPED ETF

August 31, 2016

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	53,440,886	$	—	$	—	$	53,440,886
Money market funds		65,229		—		—		65,229
Total	$	53,506,115	$	—	$	—	$	53,506,115

See notes to financial statements.

54 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI SAUDI ARABIA CAPPED ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.27%
BANKS — 26.03%
Al Rajhi Bank		20,578	$	310,068
Alinma Bank		28,481		94,624
Arab National Bank		19,429		88,225
Banque Saudi Fransi		22,041		123,594
National Commercial Bank		19,962		185,230
Riyad Bank		53,392		148,630
Samba Financial Group		34,786		169,925
				1,120,296
BUILDING PRODUCTS — 0.53%
Saudi Ceramic Co.		2,630		22,854
				22,854
CHEMICALS — 25.96%
Advanced Petrochemical Co.		4,790		47,129
Sahara Petrochemical Co.		12,241		34,435
Saudi Arabian Fertilizer Co.		939		16,690
Saudi Basic Industries Corp.		43,022		947,658
Saudi Chemical Co.		2,480		26,418
Saudi International Petrochemical Co.		10,704		37,389
Yanbu National Petrochemical Co.		685		7,861
				1,117,580
CONSTRUCTION MATERIALS — 4.02%
Arabian Cement Co./Saudi Arabia		3,025		35,127
City Cement Co.		7,673		26,986
Eastern Province Cement Co.		3,590		25,750
Najran Cement Co.		8,048		23,519
Northern Region Cement Co.		8,167		25,566
Qassim Cement Co. (The)		2,399		35,982
				172,930
DIVERSIFIED FINANCIAL SERVICES — 0.59%
Aseer Trading Tourism & Manufacturing Co.		6,085		25,279
				25,279
DIVERSIFIED TELECOMMUNICATION SERVICES — 9.73%
Saudi Telecom Co.		27,054		418,901
				418,901
ELECTRIC UTILITIES — 5.92%
Saudi Electricity Co.		49,603		254,870
				254,870
FOOD & STAPLES RETAILING — 0.75%
Abdullah Al Othaim Markets Co.		1,333		32,366
				32,366

Security	Shares		Value
FOOD PRODUCTS — 7.35%
Almarai Co.		13,485	$	190,570
Saudia Dairy & Foodstuff Co.		921		34,273
Savola Group (The)		10,249		91,768
				316,611
HEALTH CARE PROVIDERS & SERVICES — 3.34%
Al Hammadi Development and Investment Co.		3,609		34,143
Dallah Healthcare Holding Co.		1,635		38,129
Mouwasat Medical Services Co.		1,237		41,714
National Medical Care Co.		1,721		29,805
				143,791
HOTELS, RESTAURANTS & LEISURE — 1.80%
Abdul Mohsen Al-Hokair Tourism and Development Co.		2,843		23,530
Dur Hospitality Co.		4,412		24,128
Herfy Food Services Co.		1,537		29,713
				77,371
INSURANCE — 1.79%
Co for Cooperative Insurance (The)		2,272		54,050
Mediterranean & Gulf Insurance & Reinsurance Co. (The)a		4,769		22,940
				76,990
MEDIA — 0.56%
Saudi Research & Marketing Groupa		2,978		24,044
				24,044
METALS & MINING — 4.85%
Saudi Arabian Mining Co.a		20,221		186,339
Zamil Industrial Investment Co.		3,308		22,501
				208,840
OIL, GAS & CONSUMABLE FUELS — 1.29%
Rabigh Refining & Petrochemical Co.		19,415		55,651
				55,651
PHARMACEUTICALS — 0.76%
Saudi Pharmaceutical Industries & Medical Appliances Corp.		3,713		32,731
				32,731
REAL ESTATE MANAGEMENT & DEVELOPMENT — 0.65%
Arriyadh Development Co.		5,205		27,868
				27,868
ROAD & RAIL — 0.54%
United International Transportation Co.		2,936		23,212
				23,212

SCHEDULES OF INVESTMENTS 55

Schedule of Investments (Continued)

iSHARES^® MSCI SAUDI ARABIA CAPPED ETF

August 31, 2016

Security	Shares		Value
WIRELESS TELECOMMUNICATION SERVICES — 2.81%
Etihad Etisalat Co.a		14,798	$	88,622
Mobile Telecommunications Co.a		18,264		32,142
				120,764
TOTAL COMMON STOCKS
(Cost: $4,816,510)				4,272,949
SHORT-TERM INVESTMENTS — 0.04%
MONEY MARKET FUNDS — 0.04%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		1,845		1,845
				1,845
TOTAL SHORT-TERM INVESTMENTS
(Cost: $1,845)				1,845

	Value
TOTAL INVESTMENTS IN SECURITIES — 99.31%
(Cost: $4,818,355)d	$	4,274,794
Other Assets, Less Liabilities — 0.69%		29,769
NET ASSETS — 100.00%	$	4,304,563

^a  Non-income earning security.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $4,831,312. Net unrealized depreciation was $556,518, of which $129,194 represented gross unrealized appreciation on securities and $685,712 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	4,272,949	$	—	$	—	$	4,272,949
Money market funds		1,845		—		—		1,845
Total	$	4,274,794	$	—	$	—	$	4,274,794

See notes to financial statements.

56 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI UAE CAPPED ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.94%
AIRLINES — 2.26%
Air Arabia PJSC		2,529,433	$	929,660
				929,660
BANKS — 22.02%
Abu Dhabi Commercial Bank PJSC		1,258,227		2,199,183
Ajman Bank PJSCa		1,136,042		476,302
Dubai Islamic Bank PJSC		1,073,804		1,596,191
First Gulf Bank PJSC		583,839		1,859,714
National Bank of Abu Dhabi PJSC		663,853		1,648,291
Union National Bank PJSC		1,124,119		1,282,312
				9,061,993
BUILDING PRODUCTS — 0.89%
National Central Cooling Co. PJSC		887,167		364,712
				364,712
CAPITAL MARKETS — 5.40%
Amanat Holdings PJSC		1,922,831		444,966
Dubai Financial Market PJSC		2,311,364		843,219
Dubai Investments PJSC		1,605,323		935,284
				2,223,469
CONSTRUCTION & ENGINEERING — 3.47%
Arabtec Holding PJSCa		2,460,948		978,188
Orascom Construction Ltd.a		90,108		450,540
				1,428,728
DIVERSIFIED FINANCIAL SERVICES — 3.00%
Al Waha Capital PJSC		1,190,262		631,895
Gulf General Investment Co.a		1,952,840		293,476
SHUAA Capital PSCa		1,753,647		311,284
				1,236,655
DIVERSIFIED TELECOMMUNICATION SERVICES — 17.42%
Emirates Telecommunications Group Co. PJSC		1,333,643		7,170,904
				7,170,904
ENERGY EQUIPMENT & SERVICES — 0.82%
Lamprell PLCa		418,126		335,417
				335,417
FOOD PRODUCTS — 0.98%
Agthia Group PJSC		247,735		401,302
				401,302
HEALTH CARE PROVIDERS & SERVICES — 11.70%
Mediclinic International PLC		261,314		3,497,721
NMC Health PLC		74,356		1,319,554
				4,817,275

Security	Shares		Value
HOTELS, RESTAURANTS & LEISURE — 3.60%
Dubai Parks & Resorts PJSCa		3,315,143	$	1,480,176
				1,480,176
OIL, GAS & CONSUMABLE FUELS — 1.64%
Dana Gas PJSCa		4,339,203		673,367
				673,367
REAL ESTATE MANAGEMENT & DEVELOPMENT — 21.33%
Aldar Properties PJSC		2,446,361		1,838,217
Deyaar Development PJSCa		1,528,012		247,520
Emaar Malls Group PJSC		739,409		555,599
Emaar Properties PJSC		2,600,170		5,026,056
Eshraq Properties Co. PJSCa		1,993,670		439,649
RAK Properties PJSC		2,162,294		359,097
Union Properties PJSCa		1,568,901		314,370
				8,780,508
THRIFTS & MORTGAGE FINANCE — 0.92%
Amlak Finance PJSCa		1,024,779		376,644
				376,644
TRANSPORTATION INFRASTRUCTURE — 4.49%
DP World Ltd.		99,975		1,849,538
				1,849,538
TOTAL COMMON STOCKS
(Cost: $42,142,369)				41,130,348
SHORT-TERM INVESTMENTS — 0.10%
MONEY MARKET FUNDS — 0.10%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		42,509		42,509
				42,509
TOTAL SHORT-TERM INVESTMENTS
(Cost: $42,509)				42,509
TOTAL INVESTMENTS IN SECURITIES — 100.04%
(Cost: $42,184,878)d				41,172,857
Other Assets, Less Liabilities — (0.04)%				(16,960	)
NET ASSETS — 100.00%			$	41,155,897

^a  Non-income earning security.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $49,435,137. Net unrealized depreciation was $8,262,280, of which $2,041,435 represented gross unrealized appreciation on securities and $10,303,715 represented gross unrealized depreciation on securities.

SCHEDULES OF INVESTMENTS 57

Schedule of Investments (Continued)

iSHARES^® MSCI UAE CAPPED ETF

August 31, 2016

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	41,130,348	$	—	$	—	$	41,130,348
Money market funds		42,509		—		—		42,509
Total	$	41,172,857	$	—	$	—	$	41,172,857

See notes to financial statements.

58 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities

iSHARES^® TRUST

August 31, 2016

	iShares MSCI All Peru Capped ETF			iShares MSCI Brazil Small-Cap ETF			iShares MSCI China ETF
ASSETS
Investments, at cost:
Unaffiliated	$	272,954,313		$	40,715,419		$	2,091,373,261
Affiliated (Note 2)		96,476			32,159			264,169,656
Total cost of investments	$	273,050,789		$	40,747,578		$	2,355,542,917
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated	$	218,362,167		$	49,890,132		$	2,096,597,637
Affiliated (Note 2)		96,476			32,159			264,169,656
Total fair value of investments		218,458,643			49,922,291			2,360,767,293
Foreign currency, at valueb		276,177			64,272			9,199,765
Foreign currency pledged to broker, at valueb		—			—			741,715
Receivables:
Investment securities sold		9,559,108			39,182			23,182,962
Dividends and interest		140,364			101,321			405,086
Total Assets		228,434,292			50,127,066			2,394,296,821
LIABILITIES
Payables:
Investment securities purchased		10,222,826			13,435			32,889,002
Collateral for securities on loan (Note 1)		—			—			260,259,118
Capital shares redeemed		61,955			—			—
Futures variation margin		—			—			69,241
Foreign taxes (Note 1)		199			—			—
Investment advisory fees (Note 2)		123,626			26,566			1,088,083
Total Liabilities		10,408,606			40,001			294,305,444
NET ASSETS	$	218,025,686		$	50,087,065		$	2,099,991,377
Net assets consist of:
Paid-in capital	$	360,323,672		$	87,200,914		$	2,329,553,987
Undistributed (distributions in excess of) net investment income		(46,398	)		(111,469	)		17,863,598
Accumulated net realized loss		(87,653,327	)		(46,182,663	)		(252,668,107	)
Net unrealized appreciation (depreciation)		(54,598,261	)		9,180,283			5,241,899
NET ASSETS	$	218,025,686		$	50,087,065		$	2,099,991,377
Shares outstandingc		6,650,000			4,350,000			44,800,000
Net asset value per share	$	32.79		$	11.51		$	46.87

^a  Securities on loan with values of $  —, $  — and $248,934,350, respectively. See Note 1.

^b  Cost of foreign currency including currency at broker, if any: $277,082, $63,919 and $9,943,327, respectively.

^c  No par value, unlimited number of shares authorized.

See notes to financial statements.

FINANCIAL STATEMENTS 59

Statements of Assets and Liabilities (Continued)

iSHARES^® TRUST

August 31, 2016

	iShares MSCI China Small-Cap ETF			iShares MSCI Indonesia ETF			iShares MSCI Philippines ETF
ASSETS
Investments, at cost:
Unaffiliated	$	22,727,574		$	733,911,030		$	327,834,306
Affiliated (Note 2)		6,121,381			104,297			59,257
Total cost of investments	$	28,848,955		$	734,015,327		$	327,893,563
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated	$	19,642,793		$	702,005,683		$	316,182,855
Affiliated (Note 2)		6,121,381			104,297			59,257
Total fair value of investments		25,764,174			702,109,980			316,242,112
Foreign currency, at valueb		16,445			400,317			253,447
Receivables:
Investment securities sold		124,468			—			4,278,096
Dividends and interest		44,076			68,305			624,522
Total Assets		25,949,163			702,578,602			321,398,177
LIABILITIES
Payables:
Investment securities purchased		129,525			—			3,803,727
Collateral for securities on loan (Note 1)		6,103,400			—			—
Capital shares redeemed		—			3,781			11,201
Investment advisory fees (Note 2)		10,133			376,857			180,136
Total Liabilities		6,243,058			380,638			3,995,064
NET ASSETS	$	19,706,105		$	702,197,964		$	317,403,113
Net assets consist of:
Paid-in capital	$	27,428,857		$	794,579,303		$	361,441,379
Undistributed (distributions in excess of) net investment income		(2,599	)		(62,658	)		19,665
Accumulated net realized loss		(4,635,284	)		(60,408,705	)		(32,410,246	)
Net unrealized depreciation		(3,084,869	)		(31,909,976	)		(11,647,685	)
NET ASSETS	$	19,706,105		$	702,197,964		$	317,403,113
Shares outstandingc		450,000			27,200,000			8,100,000
Net asset value per share	$	43.79		$	25.82		$	39.19

^a  Securities on loan with values of $4,868,706, $  — and $  —, respectively. See Note 1.

^b  Cost of foreign currency: $16,531, $404,767 and $251,031, respectively.

^c  No par value, unlimited number of shares authorized.

See notes to financial statements.

60 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Continued)

iSHARES^® TRUST

August 31, 2016

	iShares MSCI Poland Capped ETF			iShares MSCI Qatar Capped ETF			iShares MSCI Saudi Arabia Capped ETF
ASSETS
Investments, at cost:
Unaffiliated	$	273,246,558		$	55,781,961		$	4,816,510
Affiliated (Note 2)		7,608,434			65,229			1,845
Total cost of investments	$	280,854,992		$	55,847,190		$	4,818,355
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated	$	179,297,114		$	53,440,886		$	4,272,949
Affiliated (Note 2)		7,608,434			65,229			1,845
Total fair value of investments		186,905,548			53,506,115			4,274,794
Foreign currency, at valueb		277,813			—			14,739
Receivables:
Investment securities sold		1,446,991			910,552			102,276
Dividends and interest		134,137			10			25,091
Tax reclaims		71,381			—			—
Total Assets		188,835,870			54,416,677			4,416,900
LIABILITIES
Payables:
Investment securities purchased		1,453,793			903,772			109,607
Collateral for securities on loan (Note 1)		7,546,737			—			—
Investment advisory fees (Note 2)		97,947			26,856			2,730
Total Liabilities		9,098,477			930,628			112,337
NET ASSETS	$	179,737,393		$	53,486,049		$	4,304,563
Net assets consist of:
Paid-in capital	$	318,091,145		$	64,737,649		$	4,962,929
Undistributed (distributions in excess of) net investment income		1,994,555			(66,825	)		52,929
Accumulated net realized loss		(46,369,633	)		(8,843,700	)		(167,734	)
Net unrealized depreciation		(93,978,674	)		(2,341,075	)		(543,561	)
NET ASSETS	$	179,737,393		$	53,486,049		$	4,304,563
Shares outstandingc		9,950,000			2,650,000			200,000
Net asset value per share	$	18.06		$	20.18		$	21.52

^a  Securities on loan with values of $7,152,398, $  — and $  —, respectively. See Note 1.

^b  Cost of foreign currency: $283,693, $  — and $14,739, respectively.

^c  No par value, unlimited number of shares authorized.

See notes to financial statements.

FINANCIAL STATEMENTS 61

Statements of Assets and Liabilities (Continued)

iSHARES^® TRUST

August 31, 2016

	iShares MSCI UAE Capped ETF
ASSETS
Investments, at cost:
Unaffiliated	$	42,142,369
Affiliated (Note 2)		42,509
Total cost of investments	$	42,184,878
Investments in securities, at fair value (Note 1):
Unaffiliated	$	41,130,348
Affiliated (Note 2)		42,509
Total fair value of investments		41,172,857
Foreign currency, at valuea		7,436
Receivables:
Investment securities sold		589,536
Interest		10
Total Assets		41,769,839
LIABILITIES
Payables:
Investment securities purchased		595,115
Investment advisory fees (Note 2)		18,827
Total Liabilities		613,942
NET ASSETS	$	41,155,897
Net assets consist of:
Paid-in capital	$	58,936,123
Undistributed net investment income		30,133
Accumulated net realized loss		(16,798,344	)
Net unrealized depreciation		(1,012,015	)
NET ASSETS	$	41,155,897
Shares outstandingb		2,400,000
Net asset value per share	$	17.15

^a  Cost of foreign currency: $7,429.

^b  No par value, unlimited number of shares authorized.

See notes to financial statements.

62 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations

iSHARES^® TRUST

Year ended August 31, 2016

	iShares MSCI All Peru Capped ETF			iShares MSCI Brazil Small-Cap ETF			iShares MSCI China ETF
NET INVESTMENT INCOME
Dividends — unaffiliateda	$	2,971,389		$	981,570		$	52,204,301
Dividends — affiliated (Note 2)		276			47			5,182
Securities lending income — affiliated — net (Note 2)		—			—			2,637,553
		2,971,665			981,617			54,847,036
Less: Other foreign taxes (Note 1)		(649	)		—			—
Total investment income		2,971,016			981,617			54,847,036
EXPENSES
Investment advisory fees (Note 2)		1,008,652			183,129			12,113,646
Total expenses		1,008,652			183,129			12,113,646
Net investment income		1,962,364			798,488			42,733,390
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		(39,070,764	)		(11,251,154	)		(195,627,164	)
In-kind redemptions — unaffiliated		3,143,594			—			14,456,005
Futures contracts		—			—			2,250,383
Foreign currency transactions		(59,343	)		(80,403	)		17,961
Net realized loss		(35,986,513	)		(11,331,557	)		(178,902,815	)
Net change in unrealized appreciation/depreciation on:
Investments		97,076,173			22,382,648			267,533,327
Futures contracts		—			—			203,660
Translation of assets and liabilities in foreign currencies		(3,827	)		31,808			(5,503	)
Net change in unrealized appreciation/depreciation		97,072,346			22,414,456			267,731,484
Net realized and unrealized gain		61,085,833			11,082,899			88,828,669
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	63,048,197		$	11,881,387		$	131,562,059

^a  Net of foreign withholding tax of $118,317, $40,442 and $4,065,724, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 63

Statements of Operations (Continued)

iSHARES^® TRUST

Year ended August 31, 2016

	iShares MSCI China Small-Cap ETF			iShares MSCI Indonesia ETF			iShares MSCI Philippines ETF
NET INVESTMENT INCOME
Dividends — unaffiliateda	$	512,287		$	8,686,630		$	3,320,599
Dividends — affiliated (Note 2)		72			632			249
Securities lending income — affiliated — net (Note 2)		275,873			—			—
Total investment income		788,232			8,687,262			3,320,848
EXPENSES
Investment advisory fees (Note 2)		140,070			2,618,299			1,738,932
Total expenses		140,070			2,618,299			1,738,932
Net investment income		648,162			6,068,963			1,581,916
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		(2,398,310	)		(22,872,153	)		(7,956,861	)
In-kind redemptions — unaffiliated		(214,163	)		(13,726,153	)		10,240,758
Foreign currency transactions		(857	)		(36,202	)		10,912
Net realized gain (loss)		(2,613,330	)		(36,634,508	)		2,294,809
Net change in unrealized appreciation/depreciation on:
Investments		4,304,640			131,749,004			20,736,465
Translation of assets and liabilities in foreign currencies		(60	)		6,009			9,922
Net change in unrealized appreciation/depreciation		4,304,580			131,755,013			20,746,387
Net realized and unrealized gain		1,691,250			95,120,505			23,041,196
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,339,412		$	101,189,468		$	24,623,112

^a  Net of foreign withholding tax of $9,308, $1,553,580 and $1,423,114, respectively.

See notes to financial statements.

64 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Continued)

iSHARES^® TRUST

Year ended August 31, 2016

	iShares MSCI Poland Capped ETF			iShares MSCI Qatar Capped ETF			iShares MSCI Saudi Arabia Capped ETFa
NET INVESTMENT INCOME
Dividends — unaffiliatedb	$	4,883,928		$	1,835,442		$	187,663
Dividends — affiliated (Note 2)		217			318			3
Securities lending income — affiliated — net (Note 2)		185,287			—			—
Total investment income		5,069,432			1,835,760			187,666
EXPENSES
Investment advisory fees (Note 2)		1,120,883			286,616			31,187
Total expenses		1,120,883			286,616			31,187
Net investment income		3,948,549			1,549,144			156,479
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		(19,250,037	)		(4,079,619	)		(167,734	)
In-kind redemptions — unaffiliated		(5,476,467	)		—			—
Foreign currency transactions		(32,572	)		(7,159	)		(441	)
Net realized loss		(24,759,076	)		(4,086,778	)		(168,175	)
Net change in unrealized appreciation/depreciation on:
Investments		(13,591,837	)		1,313,485			(543,561	)
Translation of assets and liabilities in foreign currencies		(6,623	)		—			—
Net change in unrealized appreciation/depreciation		(13,598,460	)		1,313,485			(543,561	)
Net realized and unrealized loss		(38,357,536	)		(2,773,293	)		(711,736	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(34,408,987	)	$	(1,224,149	)	$	(555,257	)

^a  For the period from September 16, 2015 (commencement of operations) to August 31, 2016.

^b  Net of foreign withholding tax of $854,178, $  — and $6,594, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 65

Statements of Operations (Continued)

iSHARES^® TRUST

Year ended August 31, 2016

	iShares MSCI UAE Capped ETF
NET INVESTMENT INCOME
Dividends — unaffiliated	$	1,382,500	a
Dividends — affiliated (Note 2)		133
Total investment income		1,382,633
EXPENSES
Investment advisory fees (Note 2)		185,858
Total expenses		185,858
Net investment income		1,196,775
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		(5,682,725	)
In-kind redemptions — unaffiliated		163,432
Foreign currency transactions		(17,621	)
Net realized loss		(5,536,914	)
Net change in unrealized appreciation/depreciation on:
Investments		3,815,374
Translation of assets and liabilities in foreign currencies		40
Net change in unrealized appreciation/depreciation		3,815,414
Net realized and unrealized loss		(1,721,500	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(524,725	)

^a  Includes $287,663 related to a special distribution from Mediclinic International PLC.

See notes to financial statements.

66 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets

iSHARES^® TRUST

	iShares MSCI All Peru Capped ETF						iShares MSCI Brazil Small-Cap ETF
	Year ended August 31, 2016			Year ended August 31, 2015			Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	1,962,364		$	2,481,013		$	798,488		$	914,679
Net realized loss		(35,986,513	)		(37,918,254	)		(11,331,557	)		(20,631,912	)
Net change in unrealized appreciation/depreciation		97,072,346			(58,356,098	)		22,414,456			(11,726,810	)
Net increase (decrease) in net assets resulting from operations		63,048,197			(93,793,339	)		11,881,387			(31,444,043	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(2,162,091	)		(2,665,421	)		(679,799	)		(1,023,857	)
Return of capital		—			—			—			(10,630	)
Total distributions to shareholders		(2,162,091	)		(2,665,421	)		(679,799	)		(1,034,487	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		72,962,118			124,545,347			14,888,226			61,727,326
Cost of shares redeemed		(47,417,453	)		(149,030,849	)		(3,192,180	)		(43,010,391	)
Net increase (decrease) in net assets from capital share transactions		25,544,665			(24,485,502	)		11,696,046			18,716,935
INCREASE (DECREASE) IN NET ASSETS		86,430,771			(120,944,262	)		22,897,634			(13,761,595	)
NET ASSETS
Beginning of year		131,594,915			252,539,177			27,189,431			40,951,026
End of year	$	218,025,686		$	131,594,915		$	50,087,065		$	27,189,431
Distributions in excess of net investment income included in net assets at end of year	$	(46,398	)	$	(26,537	)	$	(111,469	)	$	(161,342	)
SHARES ISSUED AND REDEEMED
Shares sold		2,650,000			3,650,000			1,450,000			4,050,000
Shares redeemed		(1,700,000	)		(4,850,000	)		(450,000	)		(2,650,000	)
Net increase (decrease) in shares outstanding		950,000			(1,200,000	)		1,000,000			1,400,000

See notes to financial statements.

FINANCIAL STATEMENTS 67

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares MSCI China ETF						iShares MSCI China Small-Cap ETF
	Year ended August 31, 2016			Year ended August 31, 2015			Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	42,733,390		$	44,616,022		$	648,162		$	894,017
Net realized gain (loss)		(178,902,815	)		(20,335,293	)		(2,613,330	)		1,650,024
Net change in unrealized appreciation/depreciation		267,731,484			(296,198,598	)		4,304,580			(8,662,972	)
Net increase (decrease) in net assets resulting from operations		131,562,059			(271,917,869	)		2,339,412			(6,118,931	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(41,167,086	)		(35,519,586	)		(768,088	)		(1,013,156	)
Total distributions to shareholders		(41,167,086	)		(35,519,586	)		(768,088	)		(1,013,156	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		351,971,009			1,083,775,135			1,041			9,519,850
Cost of shares redeemed		(157,677,223	)		(93,593,554	)		(6,512,739	)		(11,549,036	)
Net increase (decrease) in net assets from capital share transactions		194,293,786			990,181,581			(6,511,698	)		(2,029,186	)
INCREASE (DECREASE) IN NET ASSETS		284,688,759			682,744,126			(4,940,374	)		(9,161,273	)
NET ASSETS
Beginning of year		1,815,302,618			1,132,558,492			24,646,479			33,807,752
End of year	$	2,099,991,377		$	1,815,302,618		$	19,706,105		$	24,646,479
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	17,863,598		$	16,159,277		$	(2,599	)	$	25,310
SHARES ISSUED AND REDEEMED
Shares sold		7,800,000			19,900,000			—			150,000
Shares redeemed		(3,800,000	)		(1,600,000	)		(150,000	)		(250,000	)
Net increase (decrease) in shares outstanding		4,000,000			18,300,000			(150,000	)		(100,000	)

See notes to financial statements.

68 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares MSCI Indonesia ETF						iShares MSCI Philippines ETF
	Year ended August 31, 2016			Year ended August 31, 2015			Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	6,068,963		$	6,025,267		$	1,581,916		$	3,542,631
Net realized gain (loss)		(36,634,508	)		(46,924,048	)		2,294,809			14,537,095
Net change in unrealized appreciation/depreciation		131,755,013			(109,458,855	)		20,746,387			(42,267,364	)
Net increase (decrease) in net assets resulting from operations		101,189,468			(150,357,636	)		24,623,112			(24,187,638	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(5,726,092	)		(7,146,963	)		(2,096,978	)		(3,401,574	)
Return of capital		(324,115	)		—			—			—
Total distributions to shareholders		(6,050,207	)		(7,146,963	)		(2,096,978	)		(3,401,574	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		618,736,023			350,507,801			217,152,095			181,925,965
Cost of shares redeemed		(280,057,830	)		(501,033,410	)		(188,547,640	)		(239,377,426	)
Net increase (decrease) in net assets from capital share transactions		338,678,193			(150,525,609	)		28,604,455			(57,451,461	)
INCREASE (DECREASE) IN NET ASSETS		433,817,454			(308,030,208	)		51,130,589			(85,040,673	)
NET ASSETS
Beginning of year		268,380,510			576,410,718			266,272,524			351,313,197
End of year	$	702,197,964		$	268,380,510		$	317,403,113		$	266,272,524
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	(62,658	)	$	(369,327	)	$	19,665		$	523,815
SHARES ISSUED AND REDEEMED
Shares sold		27,200,000			12,900,000			5,900,000			4,550,000
Shares redeemed		(13,300,000	)		(19,800,000	)		(5,300,000	)		(6,250,000	)
Net increase (decrease) in shares outstanding		13,900,000			(6,900,000	)		600,000			(1,700,000	)

See notes to financial statements.

FINANCIAL STATEMENTS 69

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares MSCI Poland Capped ETF
	Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	3,948,549		$	5,750,522
Net realized loss		(24,759,076	)		(32,171,586	)
Net change in unrealized appreciation/depreciation		(13,598,460	)		(29,261,221	)
Net decrease in net assets resulting from operations		(34,408,987	)		(55,682,285	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(2,589,910	)		(7,044,918	)
Total distributions to shareholders		(2,589,910	)		(7,044,918	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		108,806,967			124,802,601
Cost of shares redeemed		(85,638,124	)		(165,563,821	)
Net increase (decrease) in net assets from capital share transactions		23,168,843			(40,761,220	)
DECREASE IN NET ASSETS		(13,830,054	)		(103,488,423	)
NET ASSETS
Beginning of year		193,567,447			297,055,870
End of year	$	179,737,393		$	193,567,447
Undistributed net investment income included in net assets at end of year	$	1,994,555		$	667,515
SHARES ISSUED AND REDEEMED
Shares sold		5,750,000			4,850,000
Shares redeemed		(4,750,000	)		(6,500,000	)
Net increase (decrease) in shares outstanding		1,000,000			(1,650,000	)

See notes to financial statements.

70 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares MSCI Qatar Capped ETF									iShares MSCI Saudi Arabia Capped ETF
	Year ended August 31, 2016			Period from August 1, 2015 to August 31, 2015a			Year ended July 31, 2015			Period from September 16, 2015b to August 31, 2016
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	1,549,144		$	(24,706	)	$	1,188,326		$	156,479
Net realized loss		(4,086,778	)		(732,039	)		(3,676,376	)		(168,175	)
Net change in unrealized appreciation/depreciation		1,313,485			(937,120	)		(1,737,468	)		(543,561	)
Net decrease in net assets resulting from operations		(1,224,149	)		(1,693,865	)		(4,225,518	)		(555,257	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(1,597,151	)		—			(1,237,579	)		(103,109	)
Return of capital		(37,823	)		—			—			—
Total distributions to shareholders		(1,634,974	)		—			(1,237,579	)		(103,109	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		19,039,707			1,215,687			36,943,689			4,962,929
Cost of shares redeemed		(7,694,517	)		(2,112,214	)		(19,743,106	)		—
Net increase (decrease) in net assets from capital share transactions		11,345,190			(896,527	)		17,200,583			4,962,929
INCREASE (DECREASE) IN NET ASSETS		8,486,067			(2,590,392	)		11,737,486			4,304,563
NET ASSETS
Beginning of period		44,999,982			47,590,374			35,852,888			—
End of period	$	53,486,049		$	44,999,982		$	47,590,374		$	4,304,563
Undistributed (distributions in excess of) net investment income or accumulated net investment loss included in net assets at end of period	$	(66,825	)	$	(11,659	)	$	(37,617	)	$	52,929
SHARES ISSUED AND REDEEMED
Shares sold		950,000			50,000			1,500,000			200,000
Shares redeemed		(400,000	)		(100,000	)		(800,000	)		—
Net increase (decrease) in shares outstanding		550,000			(50,000	)		700,000			200,000

^a  The Fund’s fiscal year-end was changed from July 31 to August 31.

^b  Commencement of operations.

See notes to financial statements.

FINANCIAL STATEMENTS 71

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares MSCI UAE Capped ETF
	Year ended August 31, 2016			Period from August 1, 2015 to August 31, 2015a			Year ended July 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	1,196,775		$	(20,536	)	$	2,061,633
Net realized loss		(5,536,914	)		(26,278	)		(9,688,331	)
Net change in unrealized appreciation/depreciation		3,815,414			(3,454,541	)		968,435
Net decrease in net assets resulting from operations		(524,725	)		(3,501,355	)		(6,658,263	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(1,213,587	)		—			(2,090,666	)
Total distributions to shareholders		(1,213,587	)		—			(2,090,666	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		20,543,971			916,895			15,545,495
Cost of shares redeemed		(8,821,510	)		—			(24,650,566	)
Net increase (decrease) in net assets from capital share transactions		11,722,461			916,895			(9,105,071	)
INCREASE (DECREASE) IN NET ASSETS		9,984,149			(2,584,460	)		(17,854,000	)
NET ASSETS
Beginning of period		31,171,748			33,756,208			51,610,208
End of period	$	41,155,897		$	31,171,748		$	33,756,208
Undistributed (distributions in excess of) net investment income included in net assets at end of period	$	30,133		$	48,087		$	(32,653	)
SHARES ISSUED AND REDEEMED
Shares sold		1,200,000			50,000			700,000
Shares redeemed		(500,000	)		—			(1,200,000	)
Net increase (decrease) in shares outstanding		700,000			50,000			(500,000	)

^a  The Fund’s fiscal year-end was changed from July 31 to August 31.

See notes to financial statements.

72 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI All Peru Capped ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	23.09		$	36.60		$	33.90		$	41.33		$	42.15
Income from investment operations:
Net investment incomea		0.33			0.36			0.45			0.94			0.99
Net realized and unrealized gain (loss)b		9.73			(13.48	)		2.73			(7.07	)		(0.67	)
Total from investment operations		10.06			(13.12	)		3.18			(6.13	)		0.32
Less distributions from:
Net investment income		(0.36	)		(0.39	)		(0.48	)		(1.30	)		(1.14	)
Total distributions		(0.36	)		(0.39	)		(0.48	)		(1.30	)		(1.14	)
Net asset value, end of year	$	32.79		$	23.09		$	36.60		$	33.90		$	41.33
Total return		44.13	%		(36.15	)%		9.50	%		(15.36	)%		0.79	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	218,026		$	131,595		$	252,539		$	313,565		$	332,708
Ratio of expenses to average net assets		0.63	%		0.61	%		0.51	%		0.51	%		0.51	%
Ratio of expenses to average net assets prior to waived fees		n/a			0.62	%		0.62	%		0.61	%		0.61	%
Ratio of net investment income to average net assets		1.23	%		1.15	%		1.33	%		2.24	%		2.37	%
Portfolio turnover ratec		22	%		21	%		13	%		11	%		10	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  Portfolio turnover rates exclude portfolio securities received or delivered in Creation Units but include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rate for the year ended August 31, 2016 was 22%. See Note 4.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 73

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI Brazil Small-Cap ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	8.12		$	21.00		$	19.78		$	25.65		$	26.81
Income from investment operations:
Net investment incomea		0.24			0.37			0.47			0.32			0.56
Net realized and unrealized gain (loss)b		3.35			(12.85	)		1.13			(5.59	)		(1.14	)
Total from investment operations		3.59			(12.48	)		1.60			(5.27	)		(0.58	)
Less distributions from:
Net investment income		(0.20	)		(0.40	)		(0.38	)		(0.43	)		(0.58	)
Return of capital		—			(0.00	)c		—			(0.17	)		—
Total distributions		(0.20	)		(0.40	)		(0.38	)		(0.60	)		(0.58	)
Net asset value, end of year	$	11.51		$	8.12		$	21.00		$	19.78		$	25.65
Total return		45.17	%		(60.01	)%		8.18	%		(21.00	)%		(1.82	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	50,087		$	27,189		$	40,951		$	34,608		$	51,307
Ratio of expenses to average net assets		0.63	%		0.62	%		0.62	%		0.61	%		0.61	%
Ratio of net investment income to average net assets		2.77	%		2.87	%		2.36	%		1.25	%		2.27	%
Portfolio turnover rated		38	%		172	%		40	%		51	%		67	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  Rounds to less than $0.01.

^d  Portfolio turnover rates include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units solely for cash in U.S. dollars. Excluding such transactions, the portfolio turnover rates for the years ended August 31, 2016, August 31, 2015, August 31,2014, August 31, 2013 and August 31 2012 were 28%, 39%, 35%, 39% and 43%, respectively. See Note 4.

See notes to financial statements.

74 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI China ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	44.49		$	50.34		$	43.90		$	39.68		$	44.50
Income from investment operations:
Net investment incomea		0.97			1.41			1.15			1.36			1.56
Net realized and unrealized gain (loss)b		2.34			(6.21	)		6.24			3.88			(5.46	)
Total from investment operations		3.31			(4.80	)		7.39			5.24			(3.90	)
Less distributions from:
Net investment income		(0.93	)		(1.05	)		(0.95	)		(1.02	)		(0.92	)
Total distributions		(0.93	)		(1.05	)		(0.95	)		(1.02	)		(0.92	)
Net asset value, end of year	$	46.87		$	44.49		$	50.34		$	43.90		$	39.68
Total return		7.63	%		(9.86	)%		17.03	%		13.40	%		(8.80	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	2,099,991		$	1,815,303		$	1,132,558		$	856,075		$	349,140
Ratio of expenses to average net assets		0.64	%		0.62	%		0.62	%		0.61	%		0.61	%
Ratio of net investment income to average net assets		2.24	%		2.65	%		2.48	%		3.02	%		3.69	%
Portfolio turnover ratec		27	%		14	%		7	%		10	%		8	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  Portfolio turnover rates exclude portfolio securities received or delivered in Creation Units but include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rates for the years ended August 31, 2016, August 31, 2015 and August 31, 2014 were 27%, 14% and 7%, respectively. See Note 4.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 75

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI China Small-Cap ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	41.08		$	48.30		$	41.98		$	32.15		$	41.04
Income from investment operations:
Net investment incomea		1.25			1.24			1.09			1.07			0.92
Net realized and unrealized gain (loss)b		2.99			(7.18	)		6.55			9.87			(8.98	)
Total from investment operations		4.24			(5.94	)		7.64			10.94			(8.06	)
Less distributions from:
Net investment income		(1.53	)		(1.28	)		(1.32	)		(1.11	)		(0.83	)
Total distributions		(1.53	)		(1.28	)		(1.32	)		(1.11	)		(0.83	)
Net asset value, end of year	$	43.79		$	41.08		$	48.30		$	41.98		$	32.15
Total return		10.50	%		(12.94	)%		18.46	%		34.30	%		(19.70	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	19,706		$	24,646		$	33,808		$	31,487		$	14,468
Ratio of expenses to average net assets		0.64	%		0.62	%		0.62	%		0.61	%		0.61	%
Ratio of net investment income to average net assets		2.95	%		2.44	%		2.38	%		2.60	%		2.60	%
Portfolio turnover ratec		31	%		35	%		33	%		27	%		33	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  Portfolio turnover rates exclude portfolio securities received or delivered in Creation Units but include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rates for the years ended August 31, 2016, August 31, 2015, August 31, 2014 and August 31, 2013 were 31%, 32%, 33% and 27%, respectively. See Note 4.

See notes to financial statements.

76 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI Indonesia ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	20.18		$	28.54		$	24.78		$	28.49		$	31.43
Income from investment operations:
Net investment incomea		0.34			0.31			0.37			0.53			0.39
Net realized and unrealized gain (loss)b		5.59			(8.29	)		3.75			(3.77	)		(2.88	)
Total from investment operations		5.93			(7.98	)		4.12			(3.24	)		(2.49	)
Less distributions from:
Net investment income		(0.27	)		(0.38	)		(0.36	)		(0.47	)		(0.45	)
Return of capital		(0.02	)		—			—			—			—
Total distributions		(0.29	)		(0.38	)		(0.36	)		(0.47	)		(0.45	)
Net asset value, end of year	$	25.82		$	20.18		$	28.54		$	24.78		$	28.49
Total return		29.59	%		(28.13	)%		16.79	%		(11.67	)%		(7.92	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	702,198		$	268,381		$	576,411		$	392,769		$	282,073
Ratio of expenses to average net assets		0.63	%		0.62	%		0.62	%		0.61	%		0.61	%
Ratio of net investment income to average net assets		1.47	%		1.16	%		1.41	%		1.67	%		1.31	%
Portfolio turnover ratec		5	%		4	%		8	%		15	%		8	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 77

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI Philippines ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	35.50		$	38.19		$	31.93		$	29.37		$	24.74
Income from investment operations:
Net investment incomea		0.21			0.34			0.35			0.42			0.33
Net realized and unrealized gain (loss)b		3.74			(2.70	)		6.22			2.47			4.62
Total from investment operations		3.95			(2.36	)		6.57			2.89			4.95
Less distributions from:
Net investment income		(0.26	)		(0.33	)		(0.31	)		(0.33	)		(0.32	)
Total distributions		(0.26	)		(0.33	)		(0.31	)		(0.33	)		(0.32	)
Net asset value, end of year	$	39.19		$	35.50		$	38.19		$	31.93		$	29.37
Total return		11.19	%		(6.21	)%		20.53	%c		9.81	%		20.08	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	317,403		$	266,273		$	351,313		$	277,824		$	98,380
Ratio of expenses to average net assets		0.64	%		0.62	%		0.62	%		0.61	%		0.61	%
Ratio of net investment income to average net assets		0.58	%		0.85	%		1.02	%		1.14	%		1.21	%
Portfolio turnover rated		10	%		12	%		24	%		23	%		25	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  The total return disclosed is based on the net asset value (“NAV”) calculated daily for the creation and redemption of shares in the Fund, which may differ from the NAV calculated for financial reporting purposes. Based on the NAV calculated for financial reporting purposes, the total return for the Fund was 20.63%.

^d  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

78 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI Poland Capped ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	21.63		$	28.02		$	27.12		$	24.31		$	30.61
Income from investment operations:
Net investment incomea		0.42			0.65			0.84			0.74			1.22
Net realized and unrealized gain (loss)b		(3.70	)		(6.25	)		1.04			2.94			(6.23	)
Total from investment operations		(3.28	)		(5.60	)		1.88			3.68			(5.01	)
Less distributions from:
Net investment income		(0.29	)		(0.79	)		(0.98	)		(0.87	)		(1.29	)
Total distributions		(0.29	)		(0.79	)		(0.98	)		(0.87	)		(1.29	)
Net asset value, end of year	$	18.06		$	21.63		$	28.02		$	27.12		$	24.31
Total return		(15.17	)%		(20.31	)%		6.82	%		15.13	%		(15.88	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	179,737		$	193,567		$	297,056		$	277,933		$	127,635
Ratio of expenses to average net assets		0.64	%		0.62	%		0.62	%		0.61	%		0.61	%
Ratio of net investment income to average net assets		2.24	%		2.60	%		2.83	%		2.73	%		5.03	%
Portfolio turnover ratec		10	%		17	%		10	%		21	%		15	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 79

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI Qatar Capped ETF
	Year ended Aug. 31, 2016			Period from Aug. 1, 2015 to Aug. 31, 2015a			Year ended Jul. 31, 2015			Period from Apr. 29, 2014b to Jul. 31, 2014
Net asset value, beginning of period	$	21.43		$	22.14		$	24.73		$	24.26
Income from investment operations:
Net investment income (loss)c		0.67			(0.01	)		0.70			(0.02	)
Net realized and unrealized gain (loss)d		(1.24	)		(0.70	)		(2.44	)		0.49
Total from investment operations		(0.57	)		(0.71	)		(1.74	)		0.47
Less distributions from:
Net investment income		(0.66	)		—			(0.85	)		—
Return of capital		(0.02	)		—			—			—
Total distributions		(0.68	)		—			(0.85	)		—
Net asset value, end of period	$	20.18		$	21.43		$	22.14		$	24.73
Total return		(2.32	)%		(3.21	)%e		(7.10	)%		1.94	%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	53,486		$	45,000		$	47,590		$	35,853
Ratio of expenses to average net assetsf		0.64	%		0.63	%		0.62	%		0.61	%
Ratio of net investment income to average net assetsf		3.44	%		(0.63	)%		2.94	%		(0.34	)%
Portfolio turnover rateg		29	%		5	%		85	%		11	%

^a  The Fund’s fiscal year-end was changed from July 31 to August 31.

^b Commencement of operations.

^c  Based on average shares outstanding throughout each period.

^d  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^e  Not annualized.

^f  Annualized for periods of less than one year.

^g  Portfolio turnover rates include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units solely for cash in U.S. dollars. Excluding such transactions, the portfolio turnover rates for the year ended August 31, 2016, the period ended August 31, 2015, the year ended July 31, 2015 and the period ended July 31, 2014 were 12%, 2%, 37% and 0%, respectively. See Note 4.

See notes to financial statements.

80 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout the period)

iShares MSCI Saudi Arabia Capped ETF

	Period from Sep. 16, 2015a to Aug. 31, 2016
Net asset value, beginning of period	$	24.92
Income from investment operations:
Net investment incomeb		0.81
Net realized and unrealized lossc		(3.69	)
Total from investment operations		(2.88	)
Less distributions from:
Net investment income		(0.52	)
Total distributions		(0.52	)
Net asset value, end of period	$	21.52
Total return		(11.64	)%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	4,305
Ratio of expenses to average net assetse		0.74	%
Ratio of net investment income to average net assetse		3.71	%
Portfolio turnover ratef		17	%

^a  Commencement of operations.

^b Based on average shares outstanding throughout the period.

^c  The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d Not annualized.

^e Annualized for periods of less than one year.

^f  Portfolio turnover rate includes portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units solely for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rate for the period ended August 31, 2016 was 17%. See Note 4.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 81

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI UAE Capped ETF
	Year ended Aug. 31, 2016			Period from Aug. 1, 2015 to Aug. 31, 2015a			Year ended Jul. 31, 2015			Period from Apr. 29, 2014b to Jul. 31, 2014
Net asset value, beginning of period	$	18.34		$	20.46		$	24.00		$	25.04
Income from investment operations:
Net investment income (loss)c		0.68	d		(0.01	)		1.01			0.01
Net realized and unrealized losse		(1.19	)		(2.11	)		(3.56	)		(1.01	)
Total from investment operations		(0.51	)		(2.12	)		(2.55	)		(1.00	)
Less distributions from:
Net investment income		(0.68	)		—			(0.99	)		(0.04	)
Total distributions		(0.68	)		—			(0.99	)		(0.04	)
Net asset value, end of period	$	17.15		$	18.34		$	20.46		$	24.00
Total return		(2.66	)%		(10.36	)%f		(10.33	)%		(4.00	)%f
Ratios/Supplemental data:
Net assets, end of period (000s)	$	41,156		$	31,172		$	33,756		$	51,610
Ratio of expenses to average net assetsg		0.64	%		0.63	%		0.62	%		0.62	%
Ratio of net investment income to average net assetsg		4.09	%d		(0.76	)%		4.81	%		0.19	%
Portfolio turnover rateh		55	%		1	%		72	%		22	%

^a  The Fund’s fiscal year-end was changed from July 31 to August 31.

^b  Commencement of operations.

^c  Based on average shares outstanding throughout each period.

^d  Includes a special distribution from Mediclinic International PLC. Excluding such special distribution, the net investment income would have been $0.52 per share and 3.11% of average net assets.

^e  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^f  Not annualized.

^g  Annualized for periods of less than one year.

^h  Portfolio turnover rates include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units solely for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rates for the year ended August 31, 2016, the period ended August 31, 2015, the year ended July 31, 2015 and the period ended July 31, 2014 were 29%, 1%, 38% and 1%, respectively. See Note 4.

See notes to financial statements.

82 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements

iSHARES^® TRUST

iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999.

These financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):

iShares ETF	Diversification Classification
MSCI All Peru Capped		Non-diversified
MSCI Brazil Small-Cap		Diversified
MSCI China		Non-diversified
MSCI China Small-Cap		Diversified
MSCI Indonesia		Non-diversified

iShares ETF	Diversification Classification
MSCI Philippines		Non-diversified
MSCI Poland Capped		Non-diversified
MSCI Qatar Capped		Non-diversified
MSCI Saudi Arabia Cappeda		Non-diversified
MSCI UAE Capped		Non-diversified

^a  The Fund commenced operations on September 16, 2015.

The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.

Pursuant to the Trust’s organizational documents, the Funds’ officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.

SECURITY VALUATION

Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Trustees of the Trust (the “Board”).

• Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price.

NOTES TO FINANCIAL STATEMENTS 83

Notes to Financial Statements (Continued)

iSHARES^® TRUST

• Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”).

• Futures contracts are valued at that day’s last reported settlement price on the exchange where the contract is traded.

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such factors are reported to the Board on a quarterly basis.

The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Trust’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements in market values, and reviews of market related activity.

Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.

Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and is not necessarily an indication of the risk associated with investing in the instrument. The three levels of the fair value hierarchy are as follows:

• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and

• Level 3 — Unobservable inputs for the asset or liability, including the Global Valuation Committee’s assumptions used in determining the fair value of investments.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.

84 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2016 are reflected in tax reclaims receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.

FOREIGN CURRENCY TRANSLATION

The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.

Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes.

FOREIGN TAXES

The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their statements of operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “other foreign taxes”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of August 31, 2016, if any, are disclosed in the Funds’ statements of assets and liabilities.

DISTRIBUTIONS TO SHAREHOLDERS

Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.

LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Funds. Any additional required collateral is delivered to the Funds and any excess collateral is returned by the Funds on the next business

NOTES TO FINANCIAL STATEMENTS 85

Notes to Financial Statements (Continued)

iSHARES^® TRUST

day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

On July 23, 2014, the U.S. Securities and Exchange Commission (the “SEC”) adopted amendments to Rule 2a-7 under the 1940 Act, which governs the operations of U.S. money market funds. When implemented in October 2016, the change may affect the Funds with regard to the reinvestment of cash collateral received for securities on loan. The Funds may be exposed to additional risk from reinvesting the cash collateral in money market funds that do not maintain a fixed NAV per share of $1.00.

Any cash received as collateral for securities on loan may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates. As of August 31, 2016, any securities on loan were collateralized by cash and/or U.S. government obligations. Cash collateral received was invested in money market funds managed by BFA and is disclosed in the schedules of investments. The securities on loan for each Fund are also disclosed in its schedule of investments. The total value of any securities on loan as of August 31, 2016 and the total value of the related collateral are disclosed in the statements of assets and liabilities. Income earned by the Funds from securities lending is disclosed in the statements of operations.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities lent. Each Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.

Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (“MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, a Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, the borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.

86 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

The following table is a summary of securities lending agreements which are subject to offset under an MSLA as of August 31, 2016:

iShares ETF and Counterparty	Market Value of Securities on Loan		Cash Collateral Received a		Net Amount b
MSCI China
Barclays Capital Inc.	$	17,832	$	17,832	$	—
BNP Paribas Prime Brokerage International Ltd.		3,699,550		3,699,550		—
Citigroup Global Markets Inc.		8,444,563		8,444,563		—
Credit Suisse Securities (USA) LLC		3,081,941		3,081,941		—
Deutsche Bank Securities Inc.		10,168,533		10,168,533		—
Goldman Sachs & Co.		34,350,468		34,350,468		—
HSBC Bank PLC		25,827		25,827		—
JPMorgan Clearing Corp.		61,427,990		61,427,990		—
Merrill Lynch, Pierce, Fenner & Smith		54,382,781		54,382,781		—
Morgan Stanley & Co. LLC		24,620,317		24,620,317		—
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending)		3,479,325		3,374,178		(105,147	)
UBS Securities LLC		109,200		109,200		—
Wells Fargo Securities LLC		45,126,023		45,126,023		—
	$	248,934,350	$	248,829,203	$	(105,147	)
MSCI China Small-Cap
Barclays Capital Inc.	$	189,068	$	189,068	$	—
Citigroup Global Markets Inc.		165,037		165,037		—
Credit Suisse Securities (USA) LLC		318,776		318,776		—
Deutsche Bank Securities Inc.		286,386		286,386		—
Goldman Sachs & Co.		880,261		880,261		—
HSBC Bank PLC		452,132		452,132		—
Jefferies LLC		1,422		1,422		—
JPMorgan Clearing Corp.		652,732		652,732		—
Merrill Lynch, Pierce, Fenner & Smith		610,817		610,817		—
Morgan Stanley & Co. LLC		770,775		770,775		—
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending)		29,222		29,222		—
SG Americas Securities LLC		18,559		18,559		—
State Street Bank & Trust Company		207,564		207,564		—
UBS Securities LLC		285,955		285,955		—
	$	4,868,706	$	4,868,706	$	—
MSCI Poland Capped
Citigroup Global Markets Inc.	$	4,785,238	$	4,785,238	$	—
Deutsche Bank Securities Inc.		496,356		496,356		—
JPMorgan Clearing Corp.		320,644		320,644		—
Merrill Lynch, Pierce, Fenner & Smith		92,551		92,551		—
UBS Securities LLC		1,457,609		1,457,609		—
	$	7,152,398	$	7,152,398	$	—

^a  Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s statement of assets and liabilities.

^b  Additional collateral is delivered to the Funds on the next business day in accordance with the MSLA. The net amount would be subject to the borrower default indemnity in the event of default by a counterparty.

NOTES TO FINANCIAL STATEMENTS 87

Notes to Financial Statements (Continued)

iSHARES^® TRUST

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Agreement with the Trust, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.

For its investment advisory services to each of the iShares MSCI All Peru Capped, iShares MSCI Brazil Small-Cap, iShares MSCI China, iShares MSCI China Small-Cap, iShares MSCI Indonesia, iShares MSCI Philippines, iShares MSCI Poland Capped, iShares MSCI Qatar Capped and iShares MSCI UAE Capped ETFs, BFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:

Investment Advisory Fee			Aggregate Average Daily Net Assets
	0.74	%	First $2 billion
	0.69		Over $2 billion, up to and including $4  billion
	0.64		Over $4 billion, up to and including $8  billion
	0.57		Over $8 billion, up to and including $16  billion
	0.51		Over $16 billion, up to and including $24 billiona
	0.48		Over $24 billion, up to and including $32 billiona
	0.45		Over $32 billion

^a  Breakpoint level was added or amended effective July 1, 2016.

For its investment advisory services to the iShares MSCI Saudi Arabia Capped ETF, BFA is entitled to an annual investment advisory fee of 0.74% based on the average daily net assets of the Fund.

The SEC has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by BFA, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the “collateral investment fees”). Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Funds retain a portion of securities lending income and remit the remaining portion to BTC as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, each Fund retains 80% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in a given calendar year exceeds the aggregate securities lending income generated across the iShares ETF Complex in the calendar year 2013, each Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 85% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.

88 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

For the year ended August 31, 2016, the total of securities lending agent services and collateral investment fees paid were as follows:

iShares ETF	Fees Paid to BTC
MSCI China	$	690,756
MSCI China Small-Cap		67,790
MSCI Poland Capped		45,933

BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.

Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.

For the year ended August 31, 2016, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:

iShares ETF	Purchases		Sales
MSCI All Peru Capped	$	10,149,191	$	590,239
MSCI China		3,068,635		26,479,513
MSCI China Small-Cap		138,691		—
MSCI Poland Capped		2,841,259		52,737
MSCI Qatar Capped		127,320		102,923
MSCI UAE Capped		1,613,182		351,301

Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends – affiliated” in the statements of operations.

The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.

Certain trustees and officers of the Trust are also officers of BTC and/or BFA.

NOTES TO FINANCIAL STATEMENTS 89

Notes to Financial Statements (Continued)

iSHARES^® TRUST

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2016 were as follows:

iShares ETF	Purchases		Sales
MSCI All Peru Capped	$	36,676,876	$	35,645,329
MSCI Brazil Small-Cap		23,149,013		11,320,333
MSCI China		613,248,492		507,257,616
MSCI China Small-Cap		6,864,434		8,143,005
MSCI Indonesia		24,740,487		19,094,433
MSCI Philippines		27,484,437		27,781,569
MSCI Poland Capped		17,458,915		17,144,088
MSCI Qatar Capped		24,306,177		13,085,674
MSCI Saudi Arabia Capped		5,739,264		755,020
MSCI UAE Capped		26,755,088		16,454,630

In-kind transactions (see Note 4) for the year ended August 31, 2016 were as follows:

iShares ETF	In-kind Purchases		In-kind Sales
MSCI All Peru Capped	$	71,730,546	$	46,706,900
MSCI China		248,453,400		154,521,967
MSCI China Small-Cap		—		5,320,396
MSCI Indonesia		610,688,429		278,341,818
MSCI Philippines		216,498,444		188,108,923
MSCI Poland Capped		108,153,326		84,863,557
MSCI UAE Capped		2,355,032		952,845

4. CAPITAL SHARE TRANSACTIONS

Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the statements of changes in net assets.

The consideration for the purchase of Creation Units of a fund in the Trust generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Trust may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Trust’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Proceeds from shares sold” in the statements of changes in net assets.

90 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

5. FUTURES CONTRACTS

Each Fund may purchase or sell futures contracts in an effort to help such Fund track its underlying index. A futures contract is a standardized, exchange-traded agreement to buy or sell a financial instrument at a set price on a future date. Upon entering into a futures contract, the Fund is required to pledge to the executing broker which holds segregated from its own assets, an amount of cash, U.S. government securities or other high-quality debt and equity securities equal to the minimum initial margin requirements of the exchange on which the contract is traded. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as margin variation and are recorded by the Fund as unrealized appreciation or depreciation. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Losses may arise if the value of a futures contract decreases due to an unfavorable change in the market rates or values of the underlying instrument during the term of the contract or if the counterparty does not perform under the contract. The use of futures contracts also involves the risk of an imperfect correlation in the movements in the price of futures contracts and the assets underlying such contracts.

The following table shows the value of futures contracts held by the iShares MSCI China ETF as of August 31, 2016 and the related locations in the statement of assets and liabilities, presented by risk exposure category:

Assets
Equity contracts:
Variation margin / Net assets consist of – net unrealized appreciation (depreciation)a	$	19,680

^a  Represents cumulative appreciation of futures contracts as reported in the schedule of investments. Only current day’s variation margin is reported separately within the statement of assets and liabilities.

The following table shows the realized and unrealized gains (losses) on futures contracts held by the iShares MSCI China ETF during the year ended August 31, 2016 and the related locations in the statement of operations, presented by risk exposure category:

	Net Realized Gain (Loss)		Net Change in Unrealized Appreciation/Depreciation
Equity contracts:
Futures contracts	$	2,250,383	$	203,660

The following table shows the average quarter-end balances of open futures contracts for the iShares MSCI China ETF for the year ended August 31, 2016:

Average value of contracts purchased $ 4,149,269

6. PRINCIPAL RISKS

In the normal course of business, each Fund’s investment activities expose it to various types of risk associated with the financial instruments and markets in which it invests. The significant types of financial risks each Fund is exposed to include market risk and credit risk. Each Fund’s prospectus provides details of these and other types of risk.

NOTES TO FINANCIAL STATEMENTS 91

Notes to Financial Statements (Continued)

iSHARES^® TRUST

BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.

MARKET RISK

Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss each Fund may suffer through holding market positions in the face of market movements. Each Fund is exposed to market risk by virtue of its direct and/or indirect investment in equity and financial derivative instruments. The fair value of securities held by the Funds may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of each Fund’s exposure to market risk is the market value of the investments held as shown in the Fund’s schedule of investments.

A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its schedule of investments.

Investing in the securities of non-U.S. issuers, whether directly or indirectly, involves certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets; and the risk of war. These risks are heightened for investments in issuers from countries with less developed markets.

When a fund concentrates its investments in issuers located in a single country, whether directly or indirectly, it assumes the risk that economic, political and social conditions in that country may have a significant impact on its investment performance.

CREDIT RISK

Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of each Fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its statement of assets and liabilities.

7. INCOME TAX INFORMATION

Each Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute

92 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.

U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or NAV per share. The following permanent differences as of August 31, 2016, attributable to passive foreign investment companies, distributions paid in excess of taxable income, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:

iShares ETF	Paid-in Capital			Undistributed Net Investment Income/Distributions in Excess of Net Investment Income			Undistributed Net Realized Gain/Accumulated Net Realized Loss
MSCI All Peru Capped	$	(3,646,349	)	$	179,866		$	3,466,483
MSCI Brazil Small-Cap		—			(68,816	)		68,816
MSCI China		(6,129,562	)		138,017			5,991,545
MSCI China Small-Cap		(378,419	)		92,017			286,402
MSCI Indonesia		(21,066,501	)		(36,202	)		21,102,703
MSCI Philippines		5,470,276			10,912			(5,481,188	)
MSCI Poland Capped		(14,470,900	)		(31,599	)		14,502,499
MSCI Qatar Capped		—			(7,159	)		7,159
MSCI Saudi Arabia Capped		—			(441	)		441
MSCI UAE Capped		160,904			(1,142	)		(159,762	)

The tax character of distributions paid during the years ended August 31, 2016, August 31, 2015 and, where applicable, July 31, 2015 was as follows:

iShares ETF	Year ended August 31, 2016		Year ended August 31, 2015		Year ended July 31, 2015
MSCI All Peru Capped
Ordinary income	$	2,162,091	$	2,665,421
MSCI Brazil Small-Cap
Ordinary income	$	679,799	$	1,023,857
Return of capital		—		10,630
	$	679,799	$	1,034,487
MSCI China
Ordinary income	$	41,167,086	$	35,519,586
MSCI China Small-Cap
Ordinary income	$	768,088	$	1,013,156

NOTES TO FINANCIAL STATEMENTS 93

Notes to Financial Statements (Continued)

iSHARES^® TRUST

iShares ETF	Year ended August 31, 2016		Year ended August 31, 2015		Year ended July 31, 2015
MSCI Indonesia
Ordinary income	$	5,726,092	$	7,146,963
Return of capital		324,115		—
	$	6,050,207	$	7,146,963
MSCI Philippines
Ordinary income	$	2,096,978	$	3,401,574
MSCI Poland Capped
Ordinary income	$	2,589,910	$	7,044,918
MSCI Qatar Capped
Ordinary income	$	1,597,151	$	—	$	1,237,579
Return of capital		37,823		—		—
	$	1,634,974	$	—	$	1,237,579
MSCI Saudi Arabia Capped
Ordinary income	$	103,109		N/A
MSCI UAE Capped
Ordinary income	$	1,213,587	$	—	$	2,090,666

As of August 31, 2016, the tax components of accumulated net earnings (losses) were as follows:

iShares ETF	Undistributed Ordinary Income		Capital Loss Carryforwards			Net Unrealized Gains (Losses) a			Qualified Late-Year Losses b			Total
MSCI All Peru Capped	$	—	$	(44,956,203	)	$	(65,759,895	)	$	(31,581,888	)	$	(142,297,986	)
MSCI Brazil Small-Cap		64,911		(22,816,649	)		(862,808	)		(13,499,303	)		(37,113,849	)
MSCI China		18,310,354		(56,808,559	)		(83,786,412	)		(107,277,993	)		(229,562,610	)
MSCI China Small-Cap		304,886		(1,865,131	)		(3,734,961	)		(2,427,546	)		(7,722,752	)
MSCI Indonesia		—		(38,805,669	)		(38,146,362	)		(15,429,308	)		(92,381,339	)
MSCI Philippines		19,665		(25,985,091	)		(14,116,276	)		(3,956,564	)		(44,038,266	)
MSCI Poland Capped		2,506,014		(30,257,933	)		(104,458,074	)		(6,143,759	)		(138,353,752	)
MSCI Qatar Capped		—		(2,790,520	)		(6,506,015	)		(1,955,065	)		(11,251,600	)
MSCI Saudi Arabia Capped		52,929		—			(556,518	)		(154,777	)		(658,366	)
MSCI UAE Capped		403,694		(7,345,153	)		(8,262,274	)		(2,576,493	)		(17,780,226	)

^a  The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies.

^b  The Funds have elected to defer certain qualified late-year losses and recognize such losses in the next taxable year.

94 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

As of August 31, 2016, the following Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:

iShares ETF	Non- Expiring a		Expiring 2019		Total
MSCI All Peru Capped	$	44,475,179	$	481,024	$	44,956,203
MSCI Brazil Small-Cap		22,816,649		—		22,816,649
MSCI China		56,808,559		—		56,808,559
MSCI China Small-Cap		1,865,131		—		1,865,131
MSCI Indonesia		38,785,340		20,329		38,805,669
MSCI Philippines		25,985,091		—		25,985,091
MSCI Poland Capped		30,257,928		5		30,257,933
MSCI Qatar Capped		2,790,520		—		2,790,520
MSCI UAE Capped		7,345,153		—		7,345,153

^a  Must be utilized prior to losses subject to expiration.

The Funds may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Funds may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.

Management has analyzed tax laws and regulations and their application to the Funds as of August 31, 2016, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

8. SUBSEQUENT EVENTS

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

NOTES TO FINANCIAL STATEMENTS 95

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees of

iShares Trust:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of iShares MSCI All Peru Capped ETF, iShares MSCI Brazil Small-Cap ETF, iShares MSCI China ETF, iShares MSCI China Small-Cap ETF, iShares MSCI Indonesia ETF, iShares MSCI Philippines ETF, iShares MSCI Poland Capped ETF, iShares MSCI Qatar Capped ETF, iShares MSCI Saudi Arabia Capped ETF and iShares MSCI UAE Capped ETF (the “Funds”) at August 31, 2016, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2016 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 21, 2016

96 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Tax Information (Unaudited)

iSHARES^® TRUST

The following maximum amounts are hereby designated as qualified dividend income for individuals for the fiscal year ended August 31, 2016:

iShares ETF	Qualified Dividend Income
MSCI All Peru Capped	$	909,836
MSCI China		40,268,445
MSCI China Small-Cap		92,706
MSCI Indonesia		10,101,895
MSCI Philippines		4,549,264
MSCI Poland Capped		5,624,852
MSCI UAE Capped		321,831

For corporate shareholders, the percentage of income dividends paid by the iShares MSCI All Peru Capped ETF during the fiscal year ended August 31, 2016 that qualified for the dividends-received deduction was 7.64%.

For the fiscal year ended August 31, 2016, the following Funds earned foreign source income and paid foreign taxes which they intend to pass through to their shareholders:

iShares ETF	Foreign Source Income Earned		Foreign Taxes Paid
MSCI All Peru Capped	$	3,089,706	$	118,311
MSCI Brazil Small-Cap		1,022,012		40,144
MSCI China		56,270,142		4,065,724
MSCI China Small-Cap		521,595		9,282
MSCI Indonesia		10,240,210		1,552,856

iShares ETF	Foreign Source Income Earned		Foreign Taxes Paid
MSCI Philippines	$	4,743,713	$	1,423,057
MSCI Poland Capped		5,738,106		854,098
MSCI Qatar Capped		1,835,442		—
MSCI Saudi Arabia Capped		194,257		6,590
MSCI UAE Capped		1,382,497		—

TAX INFORMATION 97

Board Review and Approval of Investment Advisory

Contract

iSHARES^® TRUST

I. iShares MSCI All Peru Capped ETF, iShares MSCI Brazil Small-Cap ETF, iShares MSCI Indonesia ETF and iShares MSCI Philippines ETF

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on April 28, 2016 and May 9, 2016. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 17, 2016, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 21-23, 2016, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA, including the additional information management provided at the request of the Independent Trustees. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential enhancements and adjustments to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:

Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of each Fund in comparison with the same information for other exchange traded funds (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising such Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of Broadridge’s proprietary ETF methodology used by Broadridge to determine the applicable Peer Groups. The Board further noted that due to the limitations in providing comparable funds in the various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.

The Board also noted that the investment advisory fee rates and overall expenses (net of waivers and reimbursements) for the Funds were within range of the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group, excluding iShares funds.

In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as any particular Fund, Broadridge also provided, and the Board reviewed, a comparison of such Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the “last quarter” period ended December 31, 2015, to that of such relevant comparison funds for the same periods.

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Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

The Board noted that each Fund seeks to track its own underlying index and that, during the year, the Board received periodic reports on each Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including additional detailed information on certain specific iShares funds requested by the Board, was also considered. The Board noted that each Fund generally performed in line with its underlying index over the relevant periods.

Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, product design and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds, as well as the resources available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 21-23, 2016 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.

Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Costs of Services Provided to the Funds and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock of the Funds, on a Fund-by-Fund basis and in the aggregate, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analyses and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.

Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 99

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Funds already provided for breakpoints in the Funds’ investment advisory fee rates, and that, following negotiations, BFA and the Board had agreed to revise the Advisory Contract for the Funds to provide for additional breakpoints, as the assets of the Funds, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that the revisions of the Advisory Contract to provide additional breakpoints had been subject to further negotiation after receipt of management’s proposal, and that at the request of the Board, management had modified its initial proposal, in a manner more favorable to the Funds, regarding adding additional breakpoints to the Funds. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future.

Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue periodically, determined to approve the continuance of the Advisory Contract for the coming year.

Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objectives and strategies as the Funds and that track the same respective indexes as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different and generally more extensive services provided to the Funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded exchange traded funds, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.

Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be

100 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.

Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of each Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.

II. iShares MSCI China ETF and iShares MSCI Qatar Capped ETF

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on April 28, 2016 and May 9, 2016. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 17, 2016, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 21-23, 2016, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA, including the additional information management provided at the request of the Independent Trustees. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential enhancements and adjustments to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:

Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of each Fund in comparison with the same information for other exchange traded funds (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising such Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of Broadridge’s proprietary ETF methodology used by Broadridge to determine the applicable Peer Groups. The Board further noted that due to the limitations in providing comparable funds in the various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 101

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

The Board also noted that the investment advisory fee rates and overall expenses (net of waivers and reimbursements) for the Funds were lower than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group, excluding iShares funds.

In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as any particular Fund, Broadridge also provided, and the Board reviewed, a comparison of such Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the “last quarter” period ended December 31, 2015, to that of such relevant comparison funds for the same periods.

The Board noted that each Fund seeks to track its own underlying index and that, during the year, the Board received periodic reports on each Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including additional detailed information on certain specific iShares funds requested by the Board, was also considered. The Board noted that each Fund generally performed in line with its underlying index over the relevant periods.

Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, product design and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds, as well as the resources available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 21-23, 2016 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.

Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Costs of Services Provided to the Funds and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock of the Funds, on a Fund-by-Fund basis and in the aggregate, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analyses and reviewed

102 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.

Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Funds already provided for breakpoints in the Funds’ investment advisory fee rates, and that, following negotiations, BFA and the Board had agreed to revise the Advisory Contract for the Funds to provide for additional breakpoints, as the assets of the Funds, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that the revisions of the Advisory Contract to provide additional breakpoints had been subject to further negotiation after receipt of management’s proposal, and that at the request of the Board, management had modified its initial proposal, in a manner more favorable to the Funds, regarding adding additional breakpoints to the Funds. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future.

Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue periodically, determined to approve the continuance of the Advisory Contract for the coming year.

Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do manage Other Accounts with substantially the same investment objectives and strategies as the Funds and that track the same respective indexes as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different and generally more extensive services provided to the Funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded exchange traded funds, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.

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Board Review and Approval of Investment Advisory

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iSHARES^® TRUST

Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.

Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of each Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.

III. iShares MSCI China Small-Cap ETF, iShares MSCI Poland Capped ETF and iShares MSCI UAE Capped ETF

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on April 28, 2016 and May 9, 2016. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 17, 2016, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 21-23, 2016, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA, including the additional information management provided at the request of the Independent Trustees. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential enhancements and adjustments to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:

Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of each

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Fund in comparison with the same information for other exchange traded funds (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising such Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of Broadridge’s proprietary ETF methodology used by Broadridge to determine the applicable Peer Groups. The Board further noted that due to the limitations in providing comparable funds in the various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.

The Board also noted that the investment advisory fee rates and overall expenses (net of waivers and reimbursements) for the Funds were lower than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group, excluding iShares funds, except for iShares MSCI Poland Capped ETF, which were within range of the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.

In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as any particular Fund, Broadridge also provided, and the Board reviewed, a comparison of such Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the “last quarter” period ended December 31, 2015, to that of such relevant comparison funds for the same periods.

The Board noted that each Fund seeks to track its own underlying index and that, during the year, the Board received periodic reports on each Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including additional detailed information on certain specific iShares funds requested by the Board, was also considered. The Board noted that each Fund generally performed in line with its underlying index over the relevant periods.

Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, product design and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds, as well as the resources available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 21-23, 2016 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.

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Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Costs of Services Provided to the Funds and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock of the Funds, on a Fund-by-Fund basis and in the aggregate, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analyses and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.

Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Funds already provided for breakpoints in the Funds’ investment advisory fee rates, and that, following negotiations, BFA and the Board had agreed to revise the Advisory Contract for the Funds to provide for additional breakpoints, as the assets of the Funds, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that the revisions of the Advisory Contract to provide additional breakpoints had been subject to further negotiation after receipt of management’s proposal, and that at the request of the Board, management had modified its initial proposal, in a manner more favorable to the Funds, regarding adding additional breakpoints to the Funds. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future.

Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue periodically, determined to approve the continuance of the Advisory Contract for the coming year.

Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objectives and strategies as the Funds and that track the same respective indexes as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different and generally more extensive services provided to the Funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically

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based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded exchange traded funds, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.

Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.

Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of each Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.

IV. iShares MSCI Saudi Arabia Capped ETF

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on April 28, 2016 and May 9, 2016. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 17, 2016, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 21-23, 2016, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA, including the additional information management provided at the request of the Independent Trustees. The Board noted its satisfaction with the

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extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential enhancements and adjustments to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Fund, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:

Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of Broadridge’s proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.

The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were higher than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.

In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the “last quarter” period ended December 31, 2015, to that of such relevant comparison funds for the same periods.

The Board noted that the Fund seeks to track its own underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including additional detailed information on certain specific iShares funds requested by the Board, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.

Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, product design and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as

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necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 21-23, 2016 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.

Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Costs of Services Provided to the Fund and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock of the Fund, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.

Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Fund did not provide for any breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that should material economies of scale exist in the future that are not otherwise shared, a breakpoint structure for the Fund may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.

Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue periodically, determined to approve the continuance of the Advisory Contract for the coming year.

Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same

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investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded exchange traded fund, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.

Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.

Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.

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Section 19(a) Notices

The amounts and sources of distributions reported are estimates and are provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report these distributions for federal income tax purposes.

	Total Cumulative Distributions for the Fiscal Year								% Breakdown of the Total Cumulative Distributions for the Fiscal Year
iShares ETF	Net Investment Income		Net Realized Capital Gains		Return of Capital		Total Per Share		Net Investment Income			Net Realized Capital Gains			Return of Capital			Total Per Share
MSCI All Peru Capped	$	0.330110	$	—	$	0.029630	$	0.359740		92	%		—	%		8	%		100	%
MSCI China		0.934456		—		—		0.934456		100			—			—			100
MSCI China Small-Cap		1.494471		—		0.035890		1.530361		98			—			2			100
MSCI Indonesia		0.292708		—		—		0.292708		100			—			—			100
MSCI Philippines		0.216422		—		0.046822		0.263244		82			—			18			100
MSCI Poland Capped		0.292532		—		—		0.292532		100			—			—			100
MSCI Qatar Capped		0.681995		—		—		0.681995		100			—			—			100
MSCI UAE Capped		0.681135		—		—		0.681135		100			—			—			100

Premium/Discount Information

The Premium/Discount Information section is intended to present information about the differences between the daily market price on secondary markets for shares of a fund and that fund’s NAV. NAV is the price at which a fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of a fund generally is determined using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of such fund are listed for trading, as of the time that the fund’s NAV is calculated. A fund’s Market Price may be at, above or below its NAV. The NAV of a fund will fluctuate with changes in the fair value of its portfolio holdings. The Market Price of a fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.

Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of a fund on a given day, generally at the time the NAV is calculated. A premium is the amount that a fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that a fund is trading below the reported NAV, expressed as a percentage of the NAV.

The following information shows the frequency of distributions of premiums and discounts for each of the Funds. The information shown for each Fund is for five calendar years (or from the inception date of such Fund if less than five years) through the date of the most recent calendar quarter-end. The specific periods covered for each Fund are disclosed in the table for such Fund.

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Each line in the table shows the number of trading days in which the Fund traded within the premium/discount range indicated. The number of trading days in each premium/discount range is also shown as a percentage of the total number of trading days in the period covered by each table. All data presented here represents past performance, which cannot be used to predict future results.

iShares MSCI All Peru Capped ETF

Period Covered: January 1, 2011 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 2.5%		1		0.07	%
Greater than 2.0% and Less than 2.5%		1		0.07
Greater than 1.5% and Less than 2.0%		8		0.58
Greater than 1.0% and Less than 1.5%		44		3.18
Greater than 0.5% and Less than 1.0%		123		8.89
Between 0.5% and –0.5%		675		48.82
Less than –0.5% and Greater than –1.0%		401		29.00
Less than –1.0% and Greater than –1.5%		93		6.72
Less than –1.5% and Greater than –2.0%		25		1.81
Less than –2.0% and Greater than –2.5%		9		0.65
Less than –2.5% and Greater than –3.0%		1		0.07
Less than –3.0% and Greater than –3.5%		1		0.07
Less than –3.5%		1		0.07
		1,383		100.00	%

iShares MSCI Brazil Small-Cap ETF

Period Covered: January 1, 2011 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 4.0%		1		0.07	%
Greater than 3.5% and Less than 4.0%		1		0.07
Greater than 3.0% and Less than 3.5%		6		0.43
Greater than 2.5% and Less than 3.0%		35		2.53
Greater than 2.0% and Less than 2.5%		70		5.06
Greater than 1.5% and Less than 2.0%		75		5.42
Greater than 1.0% and Less than 1.5%		99		7.16
Greater than 0.5% and Less than 1.0%		184		13.30
Between 0.5% and –0.5%		611		44.19
Less than –0.5% and Greater than –1.0%		206		14.91
Less than –1.0% and Greater than –1.5%		67		4.84
Less than –1.5% and Greater than –2.0%		14		1.01
Less than –2.0% and Greater than –2.5%		7		0.51
Less than –2.5% and Greater than –3.0%		6		0.43
Less than –3.0%		1		0.07
		1,383		100.00	%

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iSHARES^® TRUST

iShares MSCI China ETF

Period Covered: March 29, 2011 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 3.5%		5		0.38	%
Greater than 3.0% and Less than 3.5%		5		0.38
Greater than 2.5% and Less than 3.0%		10		0.76
Greater than 2.0% and Less than 2.5%		27		2.04
Greater than 1.5% and Less than 2.0%		39		2.95
Greater than 1.0% and Less than 1.5%		100		7.55
Greater than 0.5% and Less than 1.0%		245		18.49
Between 0.5% and –0.5%		587		44.33
Less than –0.5% and Greater than –1.0%		153		11.55
Less than –1.0% and Greater than –1.5%		85		6.42
Less than –1.5% and Greater than –2.0%		39		2.95
Less than –2.0% and Greater than –2.5%		8		0.60
Less than –2.5% and Greater than –3.0%		7		0.53
Less than –3.0% and Greater than –3.5%		5		0.38
Less than –3.5% and Greater than –4.0%		5		0.38
Less than –4.0% and Greater than –4.5%		1		0.08
Less than –4.5% and Greater than –5.0%		2		0.15
Less than –5.0% and Greater than –5.5%		1		0.08
		1,324		100.00	%

SUPPLEMENTAL INFORMATION 113

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares MSCI China Small-Cap ETF

Period Covered: January 1, 2011 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 3.5%		3		0.22	%
Greater than 3.0% and Less than 3.5%		6		0.43
Greater than 2.5% and Less than 3.0%		10		0.72
Greater than 2.0% and Less than 2.5%		15		1.08
Greater than 1.5% and Less than 2.0%		27		1.95
Greater than 1.0% and Less than 1.5%		93		6.72
Greater than 0.5% and Less than 1.0%		178		12.88
Between 0.5% and –0.5%		575		41.59
Less than –0.5% and Greater than –1.0%		212		15.34
Less than –1.0% and Greater than –1.5%		136		9.83
Less than –1.5% and Greater than –2.0%		52		3.76
Less than –2.0% and Greater than –2.5%		32		2.31
Less than –2.5% and Greater than –3.0%		18		1.30
Less than –3.0% and Greater than –3.5%		5		0.36
Less than –3.5% and Greater than –4.0%		13		0.94
Less than –4.0% and Greater than –4.5%		2		0.14
Less than –4.5% and Greater than –5.0%		3		0.22
Less than –5.0% and Greater than –5.5%		2		0.14
Less than –5.5%		1		0.07
		1,383		100.00	%

114 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares MSCI Indonesia ETF

Period Covered: January 1, 2011 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 6.0%		1		0.07	%
Greater than 5.5% and Less than 6.0%		1		0.07
Greater than 5.0% and Less than 5.5%		1		0.07
Greater than 4.5% and Less than 5.0%		1		0.07
Greater than 4.0% and Less than 4.5%		2		0.14
Greater than 3.5% and Less than 4.0%		2		0.14
Greater than 3.0% and Less than 3.5%		6		0.43
Greater than 2.5% and Less than 3.0%		8		0.58
Greater than 2.0% and Less than 2.5%		23		1.66
Greater than 1.5% and Less than 2.0%		51		3.69
Greater than 1.0% and Less than 1.5%		89		6.44
Greater than 0.5% and Less than 1.0%		211		15.27
Between 0.5% and –0.5%		465		33.62
Less than –0.5% and Greater than –1.0%		209		15.12
Less than –1.0% and Greater than –1.5%		131		9.48
Less than –1.5% and Greater than –2.0%		65		4.70
Less than –2.0% and Greater than –2.5%		42		3.04
Less than –2.5% and Greater than –3.0%		31		2.24
Less than –3.0% and Greater than –3.5%		9		0.65
Less than –3.5% and Greater than –4.0%		12		0.87
Less than –4.0% and Greater than –4.5%		6		0.43
Less than –4.5% and Greater than –5.0%		2		0.14
Less than –5.0%		15		1.08
		1,383		100.00	%

SUPPLEMENTAL INFORMATION 115

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares MSCI Philippines ETF

Period Covered: January 1, 2011 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 5.0%		1		0.07	%
Greater than 4.5% and Less than 5.0%		1		0.07
Greater than 4.0% and Less than 4.5%		1		0.07
Greater than 3.5% and Less than 4.0%		1		0.07
Greater than 3.0% and Less than 3.5%		2		0.14
Greater than 2.5% and Less than 3.0%		4		0.29
Greater than 2.0% and Less than 2.5%		17		1.23
Greater than 1.5% and Less than 2.0%		41		2.96
Greater than 1.0% and Less than 1.5%		104		7.52
Greater than 0.5% and Less than 1.0%		233		16.86
Between 0.5% and –0.5%		516		37.32
Less than –0.5% and Greater than –1.0%		211		15.27
Less than –1.0% and Greater than –1.5%		132		9.54
Less than –1.5% and Greater than –2.0%		58		4.19
Less than –2.0% and Greater than –2.5%		26		1.88
Less than –2.5% and Greater than –3.0%		19		1.37
Less than –3.0% and Greater than –3.5%		5		0.36
Less than –3.5% and Greater than –4.0%		2		0.14
Less than –4.0% and Greater than –4.5%		2		0.14
Less than –4.5% and Greater than –5.0%		1		0.07
Less than –5.0% and Greater than –5.5%		3		0.22
Less than –5.5%		3		0.22
		1,383		100.00	%

116 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares MSCI Poland Capped ETF

Period Covered: January 1, 2011 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 3.5%		3		0.22	%
Greater than 3.0% and Less than 3.5%		2		0.14
Greater than 2.5% and Less than 3.0%		4		0.29
Greater than 2.0% and Less than 2.5%		11		0.80
Greater than 1.5% and Less than 2.0%		14		1.01
Greater than 1.0% and Less than 1.5%		75		5.42
Greater than 0.5% and Less than 1.0%		267		19.31
Between 0.5% and –0.5%		750		54.24
Less than –0.5% and Greater than –1.0%		157		11.35
Less than –1.0% and Greater than –1.5%		52		3.76
Less than –1.5% and Greater than –2.0%		25		1.81
Less than –2.0% and Greater than –2.5%		9		0.65
Less than –2.5% and Greater than –3.0%		4		0.29
Less than –3.0% and Greater than –3.5%		5		0.36
Less than –3.5% and Greater than –4.0%		2		0.14
Less than –4.0% and Greater than –4.5%		2		0.14
Less than –4.5% and Greater than –5.0%		1		0.07
		1,383		100.00	%

iShares MSCI Qatar Capped ETF

Period Covered: April 29, 2014 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 3.0%		2		0.36	%
Greater than 2.5% and Less than 3.0%		1		0.18
Greater than 2.0% and Less than 2.5%		6		1.09
Greater than 1.5% and Less than 2.0%		16		2.91
Greater than 1.0% and Less than 1.5%		61		11.11
Greater than 0.5% and Less than 1.0%		95		17.30
Between 0.5% and –0.5%		211		38.44
Less than –0.5% and Greater than –1.0%		91		16.58
Less than –1.0% and Greater than –1.5%		49		8.93
Less than –1.5% and Greater than –2.0%		12		2.19
Less than –2.0% and Greater than –2.5%		1		0.18
Less than –2.5% and Greater than –3.0%		3		0.55
Less than –3.0%		1		0.18
		549		100.00	%

SUPPLEMENTAL INFORMATION 117

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares MSCI Saudi Arabia Capped ETF

Period Covered: September 16, 2015 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 5.0%		1		0.50	%
Greater than 4.5% and Less than 5.0%		2		1.00
Greater than 4.0% and Less than 4.5%		3		1.50
Greater than 3.5% and Less than 4.0%		5		2.50
Greater than 3.0% and Less than 3.5%		19		9.50
Greater than 2.5% and Less than 3.0%		26		13.00
Greater than 2.0% and Less than 2.5%		29		14.50
Greater than 1.5% and Less than 2.0%		66		33.00
Greater than 1.0% and Less than 1.5%		28		14.00
Greater than 0.5% and Less than 1.0%		11		5.50
Between 0.5% and –0.5%		7		3.50
Less than –0.5% and Greater than –1.0%		2		1.00
Less than –1.0%		1		0.50
		200		100.00	%

iShares MSCI UAE Capped ETF

Period Covered: April 29, 2014 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 3.5% and Less than 4.0%		1		0.18	%
Greater than 3.0% and Less than 3.5%		1		0.18
Greater than 2.5% and Less than 3.0%		4		0.73
Greater than 2.0% and Less than 2.5%		3		0.55
Greater than 1.5% and Less than 2.0%		9		1.64
Greater than 1.0% and Less than 1.5%		34		6.19
Greater than 0.5% and Less than 1.0%		66		12.02
Between 0.5% and –0.5%		215		39.17
Less than –0.5% and Greater than –1.0%		107		19.49
Less than –1.0% and Greater than –1.5%		72		13.11
Less than –1.5% and Greater than –2.0%		26		4.74
Less than –2.0% and Greater than –2.5%		5		0.91
Less than –2.5% and Greater than –3.0%		3		0.55
Less than –3.0% and Greater than –3.5%		2		0.36
Less than –3.5% and Greater than –4.0%		1		0.18
		549		100.00	%

118 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

Regulation under the Alternative Investment Fund Managers Directive (“AIFMD” or the “Directive”)

The Directive imposes detailed and prescriptive obligations on fund managers established in the European Union (the “EU”). These do not currently apply to managers established outside of the EU, such as BFA. Rather, non-EU managers are only required to comply with certain disclosure, reporting and transparency obligations of the Directive if such managers market a fund to EU investors.

BFA has registered the iShares MSCI China ETF and the iShares MSCI Philippines ETF (each a “Fund”, collectively the “Funds”) for marketing to investors in the United Kingdom, the Netherlands, Finland, Sweden, and Luxembourg.

Report on Remuneration

BFA is required under the Directive to make quantitative disclosures of remuneration. These disclosures are made in line with BlackRock’s interpretation of currently available regulatory guidance on quantitative remuneration disclosures. As market or regulatory practice develops BlackRock may consider it appropriate to make changes to the way in which quantitative remuneration disclosures are calculated. Where such changes are made, this may result in disclosures in relation to a fund not being comparable to the disclosures made in the prior year, or in relation to other BlackRock fund disclosures in that same year.

Disclosures are provided in relation to (a) the staff of BFA; (b) staff who are senior management; and (c) staff who have the ability to materially affect the risk profile of the Funds.

All individuals included in the aggregated figures disclosed are rewarded in line with BlackRock’s remuneration policy for their responsibilities across the relevant BlackRock business area. As all individuals have a number of areas of responsibilities, only the portion of remuneration for those individuals’ services attributable to the Funds is included in the aggregate figures disclosed.

BlackRock has a clear and well defined pay-for-performance philosophy, and compensation programs which support that philosophy. For senior management, a significant percentage of variable remuneration is deferred over time. All employees are subject to a claw-back policy.

Compensation decisions for employees are made based on BlackRock’s full-year financial results and other non-financial goals and objectives. Alongside financial performance, individual compensation is also based on strategic and operating results and other considerations such as management and leadership capabilities. No set formulas are established and no fixed benchmarks are used in determining annual incentive awards.

Bonus pools are reviewed by BlackRock’s independent compensation committee, taking into account both actual and projected financial information together with information provided by the Operational Risk and Regulatory Compliance departments in relation to any activities, incidents or events that warrant consideration in making compensation decisions.

Functions such as Finance, Operational Risk, Legal & Compliance, and Human Resources each have their own organizational structures which are independent of the business units. Functional bonus pools are determined with reference to the performance of each individual function and the remuneration of the senior members of control functions is directly overseen by BlackRock’s independent compensation committee. No individual is involved in setting his or her own remuneration.

Members of staff and senior management of BFA typically provide both AIFMD and non-AIFMD related services in respect of multiple funds, clients and functions of BFA and across the broader BlackRock group. Therefore, the figures disclosed are a sum of each individual’s portion of remuneration attributable to the Funds according to an objective apportionment methodology which

SUPPLEMENTAL INFORMATION 119

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

acknowledges the multiple-service nature of BFA. Accordingly the figures are not representative of any individual’s actual remuneration or their remuneration structure.

The amount of the total remuneration awarded by BFA to its staff which has been attributed to the iShares MSCI China ETF in respect of BFA’s financial year ending December 31, 2015 is USD 345.97 thousand. This figure is comprised of fixed remuneration of USD 134.55 thousand and variable remuneration of USD 211.42 thousand. There were a total of 457 beneficiaries of the remuneration described above.

The amount of the aggregate remuneration awarded by BFA, which has been attributed to the iShares MSCI China ETF in respect of BFA’s financial year ending December 31, 2015, to its senior management was USD 41.12 thousand, and to members of its staff whose actions have a material impact on the risk profile of the Fund was USD 9.96 thousand.

The amount of the total remuneration awarded by BFA to its staff which has been attributed to the iShares MSCI Philippines ETF in respect of BFA’s financial year ending December 31, 2015 is USD 42.33 thousand. This figure is comprised of fixed remuneration of USD 16.46 thousand and variable remuneration of USD 25.87 thousand. There were a total of 457 beneficiaries of the remuneration described above.

The amount of the aggregate remuneration awarded by BFA, which has been attributed to the iShares MSCI Philippines ETF in respect of BFA’s financial year ending December 31, 2015, to its senior management was USD 5.03 thousand, and to members of its staff whose actions have a material impact on the risk profile of the Fund was USD 1.22 thousand.

120 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee and Officer Information

iSHARES^® TRUST

The Board of Trustees has responsibility for the overall management and operations of the Funds, including general supervision of the duties performed by BFA and other service providers. Each Trustee serves until he or she resigns, is removed, dies, retires or becomes incapacitated. Each officer shall hold office until his or her successor is elected and qualifies or until his or her death, or his or her resignation or removal. Trustees who are not “interested persons” (as defined in the 1940 Act) of the Trust are referred to as independent trustees (“Independent Trustees”).

The registered investment companies advised by BFA or its affiliates (the “BlackRock-advised Funds”) are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Trustee also serves as a Director of iShares, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 333 funds (as of August 31, 2016) within the Exchange-Traded Fund Complex. With the exception of Robert S. Kapito, Mark Wiedman and Benjamin Archibald, the address of each Trustee and officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito, Mr. Wiedman and Mr. Archibald is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52nd Street, New York, NY 10055. The Board has designated Cecilia H. Herbert as its Independent Board Chair. Additional information about the Funds’ Trustees and officers may be found in the Funds’ combined Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-iShares (1-800-474-2737).

Interested Trustees

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Robert S. Kapitoa (59)	Trustee (since 2009).	President and Director, BlackRock, Inc. (since 2006); Vice Chairman of BlackRock, Inc. and Head of BlackRock, Inc.’s Portfolio Management Group (since its formation in 1998) and BlackRock, Inc.’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983).	Director of iShares, Inc. (since 2009); Trustee of iShares U.S. ETF Trust (since 2011).
Mark Wiedmanb (45)	Trustee (since 2013).	Managing Director, BlackRock, Inc. (since 2007); Global Head of iShares (since 2011); Head of Corporate Strategy, BlackRock, Inc. (2009-2011).	Director of iShares, Inc. (since 2013); Trustee of iShares U.S. ETF Trust (since 2013); Director of PennyMac Financial Services, Inc. (since 2008).

^a  Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc.

^b  Mark Wiedman is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc. and its affiliates.

TRUSTEE AND OFFICER INFORMATION 121

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Independent Trustees^c

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Cecilia H. Herbert (67)	Trustee (since 2005); Independent Board Chair (since 2016); Nominating and Governance Committee Chair (since 2016).	Director (1998-2013) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010) of the Thacher School; Member (since 1992) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco; Trustee and Member of the Investment Committee, WNET, the New York public media company (since 2011).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Independent Board Chair of iShares, Inc. and iShares U.S. ETF Trust (since 2016); Director of Forward Funds (23 portfolios) (since 2009); Director of Salient MF Trust (4 portfolios) (since 2015).
Jane D. Carlin (60)	Trustee (since 2015); Risk Committee Chair (since 2016).	Managing Director and Global Head of Financial Holding Company Governance & Assurance and the Global Head of Operational Risk Management of Morgan Stanley (2006-2012).	Director of iShares, Inc. (since 2015); Trustee of iShares U.S. ETF Trust (since 2015); Director of PHH Corporation (mortgage solutions) (since 2012).
Charles A. Hurty (72)	Trustee (since 2005); Audit Committee Chair (since 2006).	Retired; Partner, KPMG LLP (1968-2001).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (2 portfolios) (since 2002).
John E. Kerrigan (61)	Trustee (since 2005); Securities Lending Committee Chair (since 2016).	Chief Investment Officer, Santa Clara University (since 2002).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011).
John E. Martinez (55)	Trustee (since 2003); Fixed Income Plus Committee Chair (since 2016).	Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005).	Director of iShares, Inc. (since 2003); Trustee of iShares U.S. ETF Trust (since 2011).

122 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Independent Trustees^c (Continued)

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Madhav V. Rajan (52)	Trustee (since 2011); Equity Plus Committee Chair and 15(c) Committee Chair (since 2016).	Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (2007-2008).	Director of iShares, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011); Director, Cavium, Inc. (since 2013).

^c  Robert H. Silver served as an Independent Trustee until March 31, 2016.

TRUSTEE AND OFFICER INFORMATION 123

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Officers^d

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years
Martin Small (41)	President (since 2016).	Managing Director, BlackRock, Inc. (since January 2010); Head of U.S. iShares (since 2015); Co-Head of the U.S. Financial Markets Advisory Group, BlackRock, Inc. (2008-2014).
Jack Gee (56)	Treasurer and Chief Financial Officer (since 2008).	Managing Director, BlackRock, Inc. (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director of Fund Administration of Intermediary Investor Business, BGI (2004-2009).
Benjamin Archibald (41)	Secretary (since 2015).	Managing Director, BlackRock, Inc. (since 2014); Director, BlackRock, Inc. (2010-2013); Secretary of the BlackRock-advised Mutual Funds (since 2012).
Steve Messinger (54)	Executive Vice President (since 2016).	Managing Director, BlackRock, Inc. (2007-2014 and since 2016); Managing Director, Beacon Consulting Group (2014-2016).
Charles Park (49)	Chief Compliance Officer (since 2006).	Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex (since 2014); Chief Compliance Officer, BFA (since 2006).
Scott Radell (47)	Executive Vice President (since 2012).	Managing Director, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005).
Amy Schioldager (53)	Executive Vice President (since 2007).	Senior Managing Director, BlackRock, Inc. (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006).

^d  Manish Mehta served as President until October 15, 2016.

124 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 125

Notes:

126 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

For more information visit www.iShares.com or call 1-800-474-2737

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

Investing involves risk, including possible loss of principal.

The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.

A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.

The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily basis on the Funds’ website.

©2016 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.

iS-AR-806-0816

AUGUST 31, 2016

2016 ANNUAL REPORT

iShares Trust

^Ø  iShares MSCI Denmark Capped ETF  |  EDEN  |  BATS

^Ø  iShares MSCI Finland Capped ETF  |  EFNL  |  BATS

^Ø  iShares MSCI Germany Small-Cap ETF  |  EWGS  |  BATS

^Ø  iShares MSCI Ireland Capped ETF  |  EIRL  |  NYSE Arca

^Ø  iShares MSCI New Zealand Capped ETF  |  ENZL  |  NASDAQ

^Ø  iShares MSCI Norway Capped ETF  |  ENOR  |  BATS

Table of Contents

Management’s Discussions of Fund Performance	5
About Fund Performance	18
Shareholder Expenses	18
Schedules of Investments	19
iShares MSCI Denmark Capped ETF	19
iShares MSCI Finland Capped ETF	21
iShares MSCI Germany Small-Cap ETF	23
iShares MSCI Ireland Capped ETF	27
iShares MSCI New Zealand Capped ETF	29
iShares MSCI Norway Capped ETF	31
Financial Statements	33
Financial Highlights	40
Notes to Financial Statements	46
Report of Independent Registered Public Accounting Firm	58
Tax Information	59
Board Review and Approval of Investment Advisory Contract	60
Supplemental Information	67
Trustee and Officer Information	71

Management’s Discussion of Fund Performance

iSHARES^® TRUST

GLOBAL EQUITY MARKET OVERVIEW

Global equity markets advanced for the 12 months ended August 31, 2016 (the “reporting period”). The MSCI ACWI, a broad global equity index that includes both developed and emerging markets, returned 7.24% for the reporting period.

Early in the reporting period, global stock markets were volatile but generally declined overall amid lower energy prices and weaker global economic growth, including slowdowns in stronger developed economies such as the U.S. and U.K. In response, many of the world’s central banks took more aggressive actions to stimulate economic activity, including expanded quantitative easing measures and negative interest rates.

In the U.S., the Federal Reserve Bank (the “Fed”) postponed plans to raise its short-term interest rate target until December 2015, when it ended a seven-year period of near-zero interest rates by increasing the federal funds target interest rate from a range of 0%-0.25% to a range of 0.25%-0.50%. It was the Fed’s first interest rate hike since June 2006.

After bottoming in mid-February 2016, global equity markets reversed course, rallying through the end of the reporting period. Central bank stimulus activity and a recovery in energy prices helped global equity markets rebound, as did signs of stabilization in China, which had experienced a marked economic slowdown that put downward pressure on its currency. Despite the overall upward trend in global equity markets, geopolitical factors — including the “Brexit” referendum in the U.K. (an affirmative vote to leave the European Union), terrorist attacks in France, and an attempted coup in Turkey — contributed to increased equity market volatility late in the reporting period.

Among developed countries, the U.S. was among the best-performing markets, returning approximately 12% for the reporting period. Although employment growth remained robust, other segments of the U.S. economy struggled, leading to three consecutive quarters of growth below a 1.5% annual rate. As a result, the Fed — which was expected to raise short-term interest rates further in 2016 — held rates steady through the first eight months of the year. Stable Fed monetary policy, as well as the relative strength of the U.S. economy compared with other regions of the globe, provided a favorable backdrop for U.S. equity market performance.

Equity markets in the Asia/Pacific region gained approximately 6% for the reporting period. New Zealand and Australia were the leading markets in the region, benefiting from improving economic growth during the reporting period, while the laggards included Singapore and Japan. In particular, the Japanese equity market declined by more than 12%, but a strong rally in the Japanese yen (which appreciated by 15% against the U.S. dollar) helped offset the overall market decline, resulting in a 3% gain in U.S. dollar terms.

European stock markets declined by approximately 3% for the reporting period. Markets in Italy and Spain, which were adversely affected by political instability and struggling banking sectors, declined the most, while Belgium and Portugal performed best. In the U.K., the equity market advanced by about 13%, but a sharp decline in the British pound in the wake of the Brexit vote led to negative returns in U.S. dollar terms.

Emerging markets stocks outperformed developed markets, advancing by nearly 12% for the reporting period in U.S. dollar terms. Latin American equity markets generated the best returns, led by rebounding markets in Peru and Brazil, while stock markets in Eastern Europe lagged.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 5

Management’s Discussion of Fund Performance

iSHARES^® MSCI DENMARK CAPPED ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		5.63%		5.42%		6.05%		5.63%		5.42%		6.05%
Since Inception		19.69%		19.70%		20.02%		128.75%		128.82%		131.44%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 1/25/12. The first day of secondary market trading was 1/26/12.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 18 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,075.40	$	2.76	$	1,000.00	$	1,022.50	$	2.69		0.53%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 18 for more information.

6 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI DENMARK CAPPED ETF

The iShares MSCI Denmark Capped ETF (the “Fund”) seeks to track the investment results of a broad-based index composed of Danish equities, as represented by the MSCI Denmark Investable Market Index 25/50 (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 5.63%, net of fees, while the total return for the Index was 6.05%.

Danish stock prices, as measured by the Index, advanced during the reporting period, reflecting a rebound in Denmark’s economic growth.

Rising private and public spending contributed to domestic economic growth, which enabled the Danish economy to move out of recession. A stronger labor market and rising consumer confidence helped boost consumer spending.

Denmark’s industrials sector, which comprised about 23% of the Index on average, made the largest contribution to the Index’s performance for the reporting period, driven in large measure by the sector’s electrical equipment industry, much of which is dedicated to wind power. The consumer staples sector also added substantially to the Index’s return, with beverage brewers making a strong contribution. Stocks in the consumer discretionary sector made meaningful contributions as well, as did certain segments of the healthcare sector, including the healthcare equipment and supplies and biotechnology industries.

The financials sector was the largest detractor from the Index’s performance for the reporting period, with earnings at banks challenged by an ongoing environment of low short-term interest rates. Stocks in the telecommunication services sector also detracted from the Index’s return, as fierce competition in a highly saturated market put earnings pressure on many companies operating in the sector. The healthcare sector was a detractor as well, mainly within the pharmaceuticals industry, which comprised almost one-quarter of the sector on average. Pharmaceuticals companies with end markets in the United States saw their stock prices pressured by U.S. political rhetoric aimed at lowering drug prices.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total Investments*

Health Care	36.42	%
Industrials	24.17
Financials	15.11
Consumer Discretionary	7.25
Materials	6.84
Consumer Staples	6.55
Telecommunication Services	2.02
Information Technology	1.31
Energy	0.33
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total Investments*

Novo Nordisk A/S Class B	22.48	%
Danske Bank A/S	8.08
Vestas Wind Systems A/S	7.30
Pandora A/S	5.52
Carlsberg A/S Class B	4.16
DSV A/S	4.13
Novozymes A/S Class B	4.04
Genmab A/S	3.99
Coloplast A/S Class B	3.54
AP Moeller–Maersk A/S Class B	3.07
TOTAL	66.31	%

* Excludes money market funds.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 7

Management’s Discussion of Fund Performance

iSHARES^® MSCI FINLAND CAPPED ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		8.60%		9.49%		7.33%		8.60%		9.49%		7.33%
Since Inception		9.37%		9.56%		8.80%		51.02%		52.25%		47.40%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 1/25/12. The first day of secondary market trading was 1/26/12.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 18 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio b
$	1,000.00	$	1,128.20	$	4.65	$	1,000.00	$	1,020.80	$	4.42		0.87%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 18 for more information.

^b  Excluding the effect of the non-recurring professional fees for foreign withholding tax claims (See Note 7), the annualized expense ratio would have been 0.53%.

8 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI FINLAND CAPPED ETF

The iShares MSCI Finland Capped ETF (the “Fund”) seeks to track the investment results of a broad-based index composed of Finnish equities, as represented by the MSCI Finland Investable Market Index 25/50 (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 8.60%, net of fees, while the total return for the Index was 7.33%.

Finnish stock prices, as represented by the Index, advanced during the reporting period, reflecting a recent rebound in Finland’s domestic economy.

The recovery in the Finnish economy proceeded slowly and advanced largely due to stronger domestic demand. Economic growth was driven by both private domestic consumption and business investment, but Finnish exports continued to be held back by the recession in Russia and still-weak global demand.

Finland’s industrials sector, which constituted nearly one quarter of the Index on average, was the most significant contributor to the Index’s return during the reporting period. In particular, stocks in the machinery industry within the sector were the most beneficial, as demand for certain Finnish-made heavy machinery, including forestry machinery, was solid. Finnish materials-sector stocks also were strong contributors, especially those in the paper and forest products industry, as global demand for Finnish exports of pulp and paperboard was robust. The energy sector also helped support the Index’s return, with companies engaged in the oil, gas, and consumable fuels industry seeing advances in their stock prices.

Only three of the 10 sectors in the Index detracted from its performance during the reporting period. The largest detractor was the information technology sector, which accounted for about 22% of the Index on average. Within the sector, the communications equipment industry was the hardest hit, which was reflective of the intense global competition in that space. Stocks in the financials sector, especially those in the insurance segment, also detracted from the Index’s return, as did certain industries in the healthcare sector.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total Investments*

Industrials	25.50	%
Information Technology	21.85
Materials	14.49
Financials**	10.91
Consumer Discretionary	6.76
Utilities	4.53
Energy	3.79
Telecommunication Services	3.57
Health Care	3.42
Consumer Staples	2.72
Real Estate**	2.46
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total Investments*

Nokia OYJ	20.06	%
Sampo OYJ Class A	10.90
Kone OYJ Class B	9.51
UPM-Kymmene OYJ	4.74
Fortum OYJ	4.53
Wartsila OYJ Abp	4.29
Neste OYJ	3.79
Elisa OYJ	3.57
Stora Enso OYJ Class R	3.48
Nokian Renkaat OYJ	2.99
TOTAL	67.86	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 9

Management’s Discussion of Fund Performance

iSHARES^® MSCI GERMANY SMALL-CAP ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		9.72%		10.84%		9.44%		9.72%		10.84%		9.44%
Since Inception		13.92%		13.96%		13.81%		82.18%		82.47%		81.29%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 1/25/12. The first day of secondary market trading was 1/26/12.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 18 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,151.80	$	3.19	$	1,000.00	$	1,022.20	$	3.00		0.59%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 18 for more information.

10 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI GERMANY SMALL-CAP ETF

The iShares MSCI Germany Small-Cap ETF (the “Fund”) seeks to track the investment results of an index composed of small-capitalization German equities, as represented by the MSCI Germany Small Cap Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 9.72%, net of fees, while the total return for the Index was 9.44%.

Small-capitalization German equities, as represented by the Index, posted a positive return in U.S. dollar terms. The euro was little changed relative to the U.S. dollar during the reporting period, so currency fluctuations had comparatively little effect on the Index’s performance.

The German economy expanded at a 3.1% annual rate through the second quarter of 2016, while the unemployment rate stood at 4.2% in July, the lowest level in more than 35 years. In addition, corporate profits, consumer confidence, and industrial output generally improved over the course of the reporting period. At the same time, German inflation ran at just a 0.4% annual rate in August, well below the European Central Bank’s (“ECB’s”) stated inflation target of 2%. To head off potential deflation and stimulate growth, the ECB cut interest rates to 0% in March 2016 and announced a corporate asset purchase program aimed at lowering long-term corporate borrowing costs.

Small-capitalization stocks in the industrials sector contributed the most to the Index’s performance during the reporting period. Machinery companies were the main sources of strength, followed by aerospace and defense firms and industrial conglomerates. Financial stocks were also key contributors, as small-capitalization German real estate management and development companies benefited from low interest rates and strong rental demand. Healthcare, information technology, and consumer staples stocks were other notable contributors to the Index’s performance.

At the other end of the spectrum, small-capitalization consumer discretionary stocks detracted the most from the Index’s return, reflecting the poor performance of companies in the auto parts and media industries. Materials, telecommunication services, and utilities stocks were other sources of weakness in the Index’s performance.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total Investments*

Industrials	31.30	%
Real Estate**	16.19
Information Technology	14.98
Health Care	12.12
Consumer Discretionary	7.54
Financials**	6.64
Telecommunication Services	4.59
Materials	4.27
Consumer Staples	2.01
Utilities	0.26
Energy	0.10
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total Investments*

LEG Immobilien AG	4.97	%
Wirecard AG	4.69
MTU Aero Engines AG	4.26
KION Group AG	3.00
Freenet AG	2.96
STADA Arzneimittel AG	2.70
Rheinmetall AG	2.28
Sartorius AG (Preferred)	2.27
Dialog Semiconductor PLC	2.20
KUKA AG New	2.20
TOTAL	31.53	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 11

Management’s Discussion of Fund Performance

iSHARES^® MSCI IRELAND CAPPED ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		(2.12)%		(2.20)%		(1.89)%		(2.12)%		(2.20)%		(1.89)%
5 Years		17.09%		16.84%		17.66%		120.10%		117.78%		125.50%
Since Inception		11.01%		11.01%		11.53%		93.62%		93.63%		99.35%

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

The inception date of the Fund was 5/5/10. The first day of secondary market trading was 5/7/10.

Index performance through November 26, 2013 reflects the performance of the MSCI Ireland Investable Market Index 25/50. Index performance beginning on November 27, 2013 reflects the performance of the MSCI All Ireland Capped Index.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 18 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,041.90	$	2.51	$	1,000.00	$	1,022.70	$	2.49		0.49%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 18 for more information.

12 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI IRELAND CAPPED ETF

The iShares MSCI Ireland Capped ETF (the “Fund”) seeks to track the investment results of a broad-based index composed of Irish equities, as represented by the MSCI All Ireland Capped Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was -2.12%, net of fees, while the total return for the Index was -1.89%.

Irish stocks, as measured by the Index, posted a modest decline during the reporting period.

Ireland’s economy slowed considerably during the reporting period. In 2015, its economy grew more than 25%, partially driven by a boom in Irish exports attributable in part to the relative weakness of the euro. Economic growth also resulted from considerable foreign direct investment. During mid-2016, however, Irish economic growth slowed due in part to concerns about the potential negative effects of the United Kingdom’s decision to leave the European Union (“E.U.”). Manufacturing and services activities slowed toward the end of the reporting period.

The financials sector was the largest detractor from the Index’s return for the reporting period, with banks most hard hit. The decline in Irish bank stocks was attributable to the ongoing environment of extremely low interest rates in the Eurozone, as well as uncertainties surrounding Britain’s exit from the E.U. Similarly, industrials sector stocks also declined, with the greatest weaknesses coming from the trading companies and distributors segment. Leisure-related stocks in the consumer discretionary sector underperformed as well.

On the upside, the materials sector was the largest contributor to the Index’s performance for the reporting period. Materials was the Index’s largest sector and represented about 26% of the Index on average. The solid performance of building materials stocks was notable amid overseas sales growth. Within the consumer staples sector, producers and distributors of food and beverage products also performed well, as did the health care providers and services segment of the healthcare sector.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total Investments*

Materials	27.74	%
Consumer Staples	23.53
Industrials	14.23
Consumer Discretionary	11.26
Health Care	8.22
Real Estate**	7.48
Financials**	7.29
Information Technology	0.25
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total Investments*

CRH PLC	23.04	%
Kerry Group PLC Class A	12.84
Paddy Power Betfair PLC	8.54
Bank of Ireland	4.97
Kingspan Group PLC	4.78
Smurfit Kappa Group PLC	4.70
ICON PLC	4.52
Glanbia PLC	4.26
UDG Healthcare PLC	3.70
Ryanair Holdings PLC ADR	3.49
TOTAL	74.84	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 13

Management’s Discussion of Fund Performance

iSHARES^® MSCI NEW ZEALAND CAPPED ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		50.49%		50.01%		51.25%		50.49%		50.01%		51.25%
5 Years		13.18%		12.98%		13.60%		85.73%		84.08%		89.21%
Since Inception		16.03%		15.97%		16.52%		144.02%		143.20%		150.17%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 9/1/10. The first day of secondary market trading was 9/2/10.

Index performance through February 11, 2013 reflects the performance of the MSCI New Zealand Investable Market Index. Index performance beginning on February 12, 2013 reflects the performance of the MSCI New Zealand Investable Market Index 25/50.

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 18 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,315.10	$	2.85	$	1,000.00	$	1,022.70	$	2.49		0.49%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 18 for more information.

14 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI NEW ZEALAND CAPPED ETF

The iShares MSCI New Zealand Capped ETF (the “Fund”) seeks to track the investment results of a broad-based index composed of New Zealand equities, as represented by the MSCI New Zealand Investable Market Index 25/50 (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 50.49%, net of fees, while the total return for the Index was 51.25%.

Stocks in New Zealand, as represented by the Index, posted significant gains during the reporting period. The large rally in New Zealand stock prices was mostly attributable to a robust economic environment, but also due in part to heightened global interest in the country’s growing presence as a capital markets and funds management center.

The New Zealand economy expanded at a brisk pace during the reporting period, driven by surging immigration, growing housing demand, and record-low interest rates. Construction projects accounted for a large portion of the economy’s forward momentum, more than offsetting a small drop in manufacturing activity. Additionally, with service industries making up roughly 70% of New Zealand’s economy, growing healthcare needs and the impact of tourism on leisure-related industries also added to the economy’s brisk growth rate.

All 10 of the sectors represented in the Index made contributions to the Index’s performance. The healthcare sector, which constituted about 16% of the Index on average, was the largest contributor for the reporting period, owing in part to the needs of New Zealand’s rising population and its aging demographics. Stocks in the materials sector also made a strong contribution to the Index’s return, mainly through increasing sales of building products to support growing housing demand. A growing population base also demanded more services from companies in the utilities sector, which was a notable contributor as well. The industrials and telecommunication services sectors also made solid contributions to the Index’s performance.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Utilities	17.53	%
Health Care	15.42
Industrials	13.23
Telecommunication Services	12.06
Consumer Discretionary	11.55
Materials	11.54
Real Estate	9.07
Energy	5.04
Information Technology	2.35
Consumer Staples	2.21
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Fletcher Building Ltd.	9.83	%
Auckland International Airport Ltd.	9.51
Spark New Zealand Ltd.	9.33
Fisher & Paykel Healthcare Corp. Ltd.	7.21
Contact Energy Ltd.	4.76
Meridian Energy Ltd.	4.68
SKYCITY Entertainment Group Ltd.	4.49
Ryman Healthcare Ltd.	4.49
Z Energy Ltd.	4.34
Trade Me Group Ltd.	3.45
TOTAL	62.09	%

* Excludes money market funds.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 15

Management’s Discussion of Fund Performance

iSHARES^® MSCI NORWAY CAPPED ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		2.89%		3.35%		3.04%		2.89%		3.35%		3.04%
Since Inception		(2.15)%		(2.10)%		(1.89)%		(9.54)%		(9.31)%		(8.40)%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 1/23/12. The first day of secondary market trading was 1/24/12.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 18 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,130.50	$	2.84	$	1,000.00	$	1,022.50	$	2.69		0.53%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 18 for more information.

16 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI NORWAY CAPPED ETF

The iShares MSCI Norway Capped ETF (the “Fund”) seeks to track the investment results of a broad-based index composed of Norwegian equities, as represented by the MSCI Norway Investable Market Index 25/50 (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 2.89%, net of fees, while the total return for the Index was 3.04%.

Norwegian stocks, as represented by the Index, posted a modest gain for the reporting period, reflecting a small uptick in oil prices and supportive fiscal and monetary policy stances by the Norwegian government.

Norway is Western Europe’s largest petroleum producer, and its economy is partially dependent on the price of oil. Oil prices strengthened at times during the reporting period, but they have remained at generally low levels for the past two years as a result of a glut of supply and weak global demand. Despite still-low oil prices, Norway’s economy benefited from solid household spending, which was supported by low interest rates, rising housing wealth, and expansionary fiscal policy. Norway’s non-oil exports were helped by currency depreciation and slowing domestic wage growth.

Stocks in the consumer staples sector, led by food producers, made the largest contributions to the Index’s performance during the reporting period. Materials sector stocks also contributed, with the metals and mining industry making the largest strides. Within the financials sector, which accounted for roughly 20% of the Index during the reporting period, insurance and diversified financials company stocks helped support the Index’s return.

On the downside, with oil prices still low, stocks in the energy sector were the largest detractors from the Index’s performance. The Norwegian energy sector accounted for about 30% of the Index on average during the reporting period, and lower investment in oil and gas drilling equipment and services weighed on stock prices in that segment of the sector. Stocks in the telecommunication services sector also detracted from the Index’s return.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Energy	28.07	%
Financials**	19.18
Consumer Staples	16.01
Telecommunication Services	11.82
Materials	9.89
Consumer Discretionary	6.78
Information Technology	3.67
Industrials	2.45
Real Estate**	1.80
Utilities	0.33
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Statoil ASA	16.09	%
Telenor ASA	11.82
DNB ASA	10.65
Orkla ASA	6.52
Yara International ASA	4.55
Norsk Hydro ASA	4.42
Marine Harvest ASA	4.34
Gjensidige Forsikring ASA	3.38
Subsea 7 SA	2.85
Schibsted ASA Class B	2.33
TOTAL	66.95	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 17

About Fund Performance

Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.ishares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.

Shareholder Expenses

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested on March 1, 2016 and held through August 31, 2016, is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.

Actual Expenses — The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During Period.”

Hypothetical Example for Comparison Purposes — The table also provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

18 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI DENMARK CAPPED ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.21%
BANKS — 11.77%
Danske Bank A/S		131,091	$	3,840,963
Jyske Bank A/S Registered		17,103		819,754
Spar Nord Bank A/S		32,889		319,903
Sydbank A/S		20,876		660,400
				5,641,020
BEVERAGES — 5.44%
Carlsberg A/S Class B		21,134		1,978,170
Royal Unibrew A/S		12,807		630,327
				2,608,497
BIOTECHNOLOGY — 5.35%
Bavarian Nordic A/Sa,b		11,941		433,318
Genmab A/Sa		11,890		1,896,678
Zealand Pharma A/Sa,b		14,026		235,075
				2,565,071
BUILDING PRODUCTS — 1.02%
Rockwool International A/S Class B		2,568		486,500
				486,500
CHEMICALS — 6.79%
Chr Hansen Holding A/S		22,007		1,332,421
Novozymes A/S Class B		44,356		1,920,239
				3,252,660
COMMERCIAL SERVICES & SUPPLIES — 2.66%
ISS A/S		31,473		1,272,559
				1,272,559
CONSTRUCTION & ENGINEERING — 1.47%
FLSmidth & Co. A/Sb		13,094		482,408
Per Aarsleff Holding A/S		9,256		220,922
				703,330
DIVERSIFIED TELECOMMUNICATION SERVICES — 2.00%
TDC A/S		173,569		957,894
				957,894
ELECTRICAL EQUIPMENT — 7.25%
Vestas Wind Systems A/S		41,936		3,473,435
				3,473,435
FOOD PRODUCTS — 0.76%
Schouw & Co.		5,764		362,697
				362,697
HEALTH CARE EQUIPMENT & SUPPLIES — 7.62%
Ambu A/S Class Bb		9,673		480,567
Coloplast A/S Class B		22,168		1,683,515

Security	Shares		Value
GN Store Nord A/S		37,805	$	810,681
William Demant Holding A/Sa		32,487		677,684
				3,652,447
HEALTH CARE TECHNOLOGY — 0.08%
NNIT A/Sc		1,208		40,673
				40,673
HOUSEHOLD DURABLES — 0.60%
Bang & Olufsen A/Sa,b		28,462		287,491
				287,491
INSURANCE — 3.22%
Alm Brand A/S		42,452		317,631
Topdanmark A/Sa		21,132		562,879
Tryg A/S		33,236		661,975
				1,542,485
MACHINERY — 1.03%
NKT Holding A/S		8,440		494,962
				494,962
MARINE — 5.96%
AP Moeller – Maersk A/S Class A		492		700,165
AP Moeller – Maersk A/S Class B		978		1,459,843
D/S Norden A/Sa		13,128		174,841
Dfds A/S		9,946		523,599
				2,858,448
OIL, GAS & CONSUMABLE FUELS — 0.32%
TORM PLC		17,408		154,996
				154,996
PHARMACEUTICALS — 23.08%
ALK-Abello A/S		2,722		372,704
Novo Nordisk A/S Class B		228,400		10,687,558
				11,060,262
ROAD & RAIL — 4.10%
DSV A/S		39,698		1,965,712
				1,965,712
SOFTWARE — 1.30%
SimCorp A/S		11,900		623,260
				623,260
SPECIALTY RETAIL — 0.58%
Matas A/S		15,063		279,504
				279,504
TEXTILES, APPAREL & LUXURY GOODS — 6.01%
IC Group A/S		9,438		257,043
Pandora A/S		21,116		2,622,674
				2,879,717

SCHEDULES OF INVESTMENTS 19

Schedule of Investments (Continued)

iSHARES^® MSCI DENMARK CAPPED ETF

August 31, 2016

Security	Shares		Value
TOBACCO — 0.30%
Scandinavian Tobacco Group A/Sc		8,724	$	145,300
				145,300
TRADING COMPANIES & DISTRIBUTORS — 0.50%
Solar A/S Class B		4,163		238,283
				238,283
TOTAL COMMON STOCKS
(Cost: $49,953,416)				47,547,203
SHORT-TERM INVESTMENTS — 3.57%
MONEY MARKET FUNDS — 3.57%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%d,e,f		1,695,200		1,695,200
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%d,e		17,692		17,692
				1,712,892
TOTAL SHORT-TERM INVESTMENTS
(Cost: $1,712,892)				1,712,892

	Value
TOTAL INVESTMENTS IN SECURITIES — 102.78%
(Cost: $51,666,308)g	$	49,260,095
Other Assets, Less Liabilities — (2.78)%		(1,331,667	)
NET ASSETS — 100.00%	$	47,928,428

^a  Non-income earning security.

^b  All or a portion of this security represents a security on loan. See Note 1.

^c  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^d  Affiliated money market fund.

^e  The rate quoted is the annualized seven-day yield of the fund at period end.

^f  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^g  The cost of investments for federal income tax purposes was $52,188,905. Net unrealized depreciation was $2,928,810, of which $2,695,019 represented gross unrealized appreciation on securities and $5,623,829 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	47,547,203	$	—	$	—	$	47,547,203
Money market funds		1,712,892		—		—		1,712,892
Total	$	49,260,095	$	—	$	—	$	49,260,095

See notes to financial statements.

20 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI FINLAND CAPPED ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 98.94%
AUTO COMPONENTS — 2.96%
Nokian Renkaat OYJ		31,336	$	1,129,728
				1,129,728
BUILDING PRODUCTS — 0.89%
Uponor OYJ		18,839		339,907
				339,907
CHEMICALS — 1.09%
Kemira OYJ		32,424		415,291
				415,291
COMMERCIAL SERVICES & SUPPLIES — 0.67%
Caverion Corp.		36,700		257,101
				257,101
COMMUNICATIONS EQUIPMENT — 19.84%
Nokia OYJ		1,349,339		7,574,241
				7,574,241
CONSTRUCTION & ENGINEERING — 1.43%
Outotec OYJa		59,398		252,975
YIT OYJ		41,742		290,796
				543,771
CONTAINERS & PACKAGING — 2.86%
Huhtamaki OYJ		25,171		1,093,333
				1,093,333
DIVERSIFIED TELECOMMUNICATION SERVICES — 3.53%
Elisa OYJ		38,368		1,347,778
				1,347,778
ELECTRIC UTILITIES — 4.48%
Fortum OYJ		110,983		1,710,724
				1,710,724
ELECTRICAL EQUIPMENT — 0.52%
PKC Group OYJ		9,836		198,940
				198,940
FOOD & STAPLES RETAILING — 2.09%
Kesko OYJ Class B		18,410		799,456
				799,456
FOOD PRODUCTS — 0.60%
Atria OYJ		11,507		115,343
HKScan OYJ Class A		29,490		112,985
				228,328
HEALTH CARE PROVIDERS & SERVICES — 0.59%
Oriola-KD OYJ Class B		47,315		225,543
				225,543

Security	Shares		Value
INSURANCE — 10.79%
Sampo OYJ Class A		96,065	$	4,118,135
				4,118,135
IT SERVICES — 1.33%
Tieto OYJ		17,007		506,686
				506,686
LEISURE PRODUCTS — 2.61%
Amer Sports OYJ		33,076		994,636
				994,636
MACHINERY — 20.29%
Cargotec OYJ Class B		11,031		494,502
Kone OYJ Class B		71,563		3,590,632
Konecranes OYJ		15,633		494,131
Metso OYJ		31,565		882,403
Ponsse OYJ		6,045		168,450
Valmet OYJ		36,927		492,296
Wartsila OYJ Abp		39,454		1,620,576
				7,742,990
MEDIA — 0.71%
Sanoma OYJ		29,222		269,644
				269,644
METALS & MINING — 1.27%
Outokumpu OYJa		88,993		486,064
				486,064
MULTILINE RETAIL — 0.42%
Stockmann OYJ Abp Class Ba		20,055		158,587
				158,587
OIL, GAS & CONSUMABLE FUELS — 3.75%
Neste OYJ		34,453		1,432,811
				1,432,811
PAPER & FOREST PRODUCTS — 9.11%
Metsa Board OYJ		63,907		376,523
Stora Enso OYJ Class R		148,915		1,312,735
UPM-Kymmene OYJ		89,159		1,788,407
				3,477,665
PHARMACEUTICALS — 2.79%
Orion OYJ Class B		28,195		1,065,790
				1,065,790
REAL ESTATE MANAGEMENT & DEVELOPMENT — 2.44%
Citycon OYJ		136,112		348,668
Sponda OYJ		73,174		381,734
Technopolis OYJ		45,249		199,064
				929,466

SCHEDULES OF INVESTMENTS 21

Schedule of Investments (Continued)

iSHARES^® MSCI FINLAND CAPPED ETF

August 31, 2016

Security	Shares		Value
SOFTWARE — 0.44%
F-Secure OYJ		45,715	$	169,038
				169,038
TRADING COMPANIES & DISTRIBUTORS — 1.44%
Cramo OYJ		12,979		338,111
Ramirent OYJ		28,713		210,422
				548,533
TOTAL COMMON STOCKS
(Cost: $38,727,801)				37,764,186
SHORT-TERM INVESTMENTS — 0.02%
MONEY MARKET FUNDS — 0.02%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		8,430		8,430
				8,430
TOTAL SHORT-TERM INVESTMENTS
(Cost: $8,430)				8,430

	Value
TOTAL INVESTMENTS IN SECURITIES — 98.96%
(Cost: $38,736,231)d	$	37,772,616
Other Assets, Less Liabilities — 1.04%		395,186
NET ASSETS — 100.00%	$	38,167,802

^a  Non-income earning security.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $39,649,544. Net unrealized depreciation was $1,876,928, of which $1,740,548 represented gross unrealized appreciation on securities and $3,617,476 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	37,764,186	$	—	$	—	$	37,764,186
Money market funds		8,430		—		—		8,430
Total	$	37,772,616	$	—	$	—	$	37,772,616

See notes to financial statements.

22 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI GERMANY SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 94.56%
AEROSPACE & DEFENSE — 4.34%
MTU Aero Engines AG		9,953	$	1,010,522
OHB SE		1,026		21,329
				1,031,851
AUTO COMPONENTS — 2.30%
ElringKlinger AGa		5,477		94,153
Grammer AG		2,107		122,027
LEONI AG		6,249		230,614
SAF-Holland SA		8,714		99,964
				546,758
AUTOMOBILES — 0.13%
EDAG Engineering Group AG		1,924		31,907
				31,907
BANKS — 0.24%
comdirect bank AG		5,443		56,378
				56,378
BIOTECHNOLOGY — 0.11%
Biotest AG		1,322		25,030
				25,030
BUILDING PRODUCTS — 0.12%
CENTROTEC Sustainable AG		1,715		29,186
				29,186
CAPITAL MARKETS — 1.57%
AURELIUS Equity Opportunities SE & Co KGaA		4,487		253,068
Deutsche Beteiligungs AG		2,106		70,132
MLP AG		11,604		49,111
				372,311
CHEMICALS — 1.17%
Wacker Chemie AG		2,992		277,717
				277,717
COMMERCIAL SERVICES & SUPPLIES — 1.15%
Bilfinger SEb		6,598		190,878
Cewe Stiftung & Co. KGAA		998		82,753
				273,631
COMMUNICATIONS EQUIPMENT — 0.29%
ADVA Optical Networking SEb		8,088		69,091
				69,091
CONSTRUCTION & ENGINEERING — 0.11%
Bauer AG		1,804		26,180
				26,180

Security	Shares		Value
CONSTRUCTION MATERIALS — 0.45%
BRAAS Monier Building Group SA		4,515	$	106,706
				106,706
CONSUMER FINANCE — 0.39%
Ferratum OYJ		1,684		39,687
Sixt Leasing AG		2,391		51,901
				91,588
DIVERSIFIED FINANCIAL SERVICES — 1.60%
GRENKE AG		1,693		327,525
Hypoport AGb		595		52,418
				379,943
ELECTRICAL EQUIPMENT — 1.78%
Nordex SEb		12,061		333,204
SGL Carbon SEa,b		7,063		90,778
				423,982
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 0.75%
Jenoptik AG		9,840		178,801
				178,801
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) — 2.19%
Alstria office REIT AG		27,803		387,070
Hamborner REIT AG		11,294		132,768
				519,838
FOOD PRODUCTS — 2.01%
KWS Saat SE		377		120,507
Suedzucker AG		13,684		356,781
				477,288
HEALTH CARE EQUIPMENT & SUPPLIES — 1.33%
Carl Zeiss Meditec AG Bearer		6,223		226,050
Draegerwerk AG & Co. KGaA		586		34,023
STRATEC Biomedical AG		915		56,916
				316,989
HEALTH CARE PROVIDERS & SERVICES — 0.79%
RHOEN-KLINIKUM AG		6,390		188,704
				188,704
HEALTH CARE TECHNOLOGY — 0.82%
CompuGroup Medical SE		4,578		194,288
				194,288
HOTELS, RESTAURANTS & LEISURE — 0.32%
bet-at-home.com AGa		396		26,904
Zeal Network SE		1,380		49,068
				75,972

SCHEDULES OF INVESTMENTS 23

Schedule of Investments (Continued)

iSHARES^® MSCI GERMANY SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
HOUSEHOLD DURABLES — 0.16%
Surteco SE		1,491	$	38,194
				38,194
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS — 0.26%
Capital Stage AG		8,770		62,239
				62,239
INDUSTRIAL CONGLOMERATES — 3.07%
Indus Holding AG		3,499		188,440
Rheinmetall AG		7,503		540,997
				729,437
INSURANCE — 0.38%
Wuestenrot & Wuerttembergische AG		4,508		90,625
				90,625
INTERNET & DIRECT MARKETING RETAIL — 1.33%
Delticom AGa		1,163		24,377
Takkt AG		6,304		141,615
zooplus AGa,b		1,075		151,097
				317,089
INTERNET SOFTWARE & SERVICES — 0.46%
XING AG		540		108,617
				108,617
IT SERVICES — 6.89%
Bechtle AG		2,812		313,343
CANCOM SE		3,145		149,147
GFT Technologies SE		3,048		65,976
Wirecard AG		22,475		1,110,648
				1,639,114
LIFE SCIENCES TOOLS & SERVICES — 3.42%
Evotec AGb		21,649		108,430
Gerresheimer AG		6,010		498,341
MorphoSys AGa,b		4,821		205,325
				812,096
MACHINERY — 15.53%
DEUTZ AG		17,450		77,759
DMG Mori AG		7,541		357,242
Duerr AG		4,966		419,241
Gesco AG		580		45,535
Heidelberger Druckmaschinen AGa,b		46,992		114,200
KION Group AG		12,495		710,705
Koenig & Bauer AGb		2,540		124,699
Krones AG		2,717		259,333
KUKA AG		170		19,303

Security	Shares		Value
KUKA AG Newb		4,400	$	520,678
NORMA Group SE		6,092		325,678
Pfeiffer Vacuum Technology AG		1,327		125,049
Rational AG		653		320,621
SLM Solutions Group AGa,b		2,396		72,611
Vossloh AGa,b		1,997		121,328
Wacker Neuson SE		5,401		78,500
				3,692,482
MEDIA — 2.61%
Borussia Dortmund GmbH & Co. KGaA		12,253		57,726
CTS Eventim AG & Co. KGaA		9,182		318,145
Stroeer SE & Co. KGaAa		5,290		244,595
				620,466
METALS & MINING — 2.38%
Aurubis AG		6,453		339,335
Salzgitter AG		7,467		226,829
				566,164
OIL, GAS & CONSUMABLE FUELS — 0.10%
VERBIO Vereinigte BioEnergie AG		4,216		24,342
				24,342
PHARMACEUTICALS — 2.69%
STADA Arzneimittel AG		11,935		639,906
				639,906
PROFESSIONAL SERVICES — 0.80%
Amadeus Fire AG		1,000		72,951
Bertrandt AG		1,072		117,806
				190,757
REAL ESTATE MANAGEMENT & DEVELOPMENT — 13.95%
ADLER Real Estate AGa,b		4,433		67,394
ADO Properties SAc		4,786		209,645
Deutsche Euroshop AG		8,774		403,243
DIC Asset AG		8,580		83,137
Grand City Properties SA		22,081		484,353
LEG Immobilien AG		12,096		1,178,927
PATRIZIA Immobilien AGb		8,025		191,180
TAG Immobilien AG		23,529		337,919
TLG Immobilien AG		12,908		291,407
WCM Beteiligungs & Grundbesitz-AGa,b		19,803		70,335
				3,317,540
ROAD & RAIL — 0.82%
Sixt SE		2,375		134,506
VTG AGa		1,943		60,538
				195,044

24 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI GERMANY SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 3.40%
AIXTRON SEa,b		20,575	$	126,837
Dialog Semiconductor PLCa,b		14,905		521,752
Manz AGa,b		894		29,771
Siltronic AGb		2,309		49,568
SMA Solar Technology AGa		2,333		81,641
				809,569
SOFTWARE — 2.67%
Nemetschek SE		2,942		174,842
RIB Software AGa		6,750		70,517
Software AG		9,827		389,854
				635,213
SPECIALTY RETAIL — 0.20%
Hornbach Baumarkt AG		1,537		48,188
				48,188
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 0.46%
Wincor Nixdorf AGb		1,576		110,161
				110,161
TEXTILES, APPAREL & LUXURY GOODS — 0.46%
Bijou Brigitte AG		785		47,212
Gerry Weber International AGa		4,864		61,838
				109,050
THRIFTS & MORTGAGE FINANCE — 2.46%
Aareal Bank AG		11,436		384,653
Deutsche Pfandbriefbank AGc		20,543		199,397
				584,050
TRADING COMPANIES & DISTRIBUTORS — 1.20%
BayWa AGa		2,580		85,371
Kloeckner & Co. SEb		14,306		201,078
				286,449
TRANSPORTATION INFRASTRUCTURE — 0.32%
Hamburger Hafen und Logistik AG		4,713		75,666
				75,666
WIRELESS TELECOMMUNICATION SERVICES — 4.58%
Drillisch AG		8,386		386,252
Freenet AG		24,509		702,622
				1,088,874
TOTAL COMMON STOCKS
(Cost: $22,384,625)				22,485,471

Security	Shares		Value
PREFERRED STOCKS — 5.14%
BIOTECHNOLOGY — 0.24%
Biotest AG		3,820	$	55,947
				55,947
BUILDING PRODUCTS — 0.16%
Villeroy & Boch AG		2,427		38,762
				38,762
CONSTRUCTION MATERIALS — 0.26%
STO SE & Co. KGaA		490		60,577
				60,577
HEALTH CARE EQUIPMENT & SUPPLIES — 2.69%
Draegerwerk AG & Co. KGaA		1,460		102,020
Sartorius AG		6,810		537,902
				639,922
MACHINERY — 1.21%
Jungheinrich AG		9,179		288,087
				288,087
ROAD & RAIL — 0.58%
Sixt SE		3,249		137,850
				137,850
TOTAL PREFERRED STOCKS
(Cost: $976,184)				1,221,145
SHORT-TERM INVESTMENTS — 8.67%
MONEY MARKET FUNDS — 8.67%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%d,e,f		2,045,500		2,045,500
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%d,e		16,538		16,538
				2,062,038
TOTAL SHORT-TERM INVESTMENTS
(Cost: $2,062,038)				2,062,038

SCHEDULES OF INVESTMENTS 25

Schedule of Investments (Continued)

iSHARES^® MSCI GERMANY SMALL-CAP ETF

August 31, 2016

	Value
TOTAL INVESTMENTS IN SECURITIES — 108.37%
(Cost: $25,422,847)g	$	25,768,654
Other Assets, Less Liabilities — (8.37)%		(1,990,145	)
NET ASSETS — 100.00%	$	23,778,509

^a  All or a portion of this security represents a security on loan. See Note 1.

^b  Non-income earning security.

^c  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^d  Affiliated money market fund.

^e  The rate quoted is the annualized seven-day yield of the fund at period end.

^f  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^g  The cost of investments for federal income tax purposes was $25,568,036. Net unrealized appreciation was $200,618, of which $3,401,552 represented gross unrealized appreciation on securities and $3,200,934 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	22,485,471	$	—	$	—	$	22,485,471
Preferred stocks		1,221,145		—		—		1,221,145
Money market funds		2,062,038		—		—		2,062,038
Total	$	25,768,654	$	—	$	—	$	25,768,654

See notes to financial statements.

26 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI IRELAND CAPPED ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.99%
AIRLINES — 3.49%
Ryanair Holdings PLC ADR		59,818	$	4,343,385
				4,343,385
BANKS — 6.84%
Bank of Irelanda		27,511,827		6,189,539
Permanent TSB Group Holdings PLCa		1,049,046		2,336,749
				8,526,288
BEVERAGES — 2.93%
C&C Group PLC		865,959		3,655,309
				3,655,309
BUILDING PRODUCTS — 4.78%
Kingspan Group PLC		217,387		5,951,178
				5,951,178
CONSTRUCTION MATERIALS — 23.04%
CRH PLC		849,202		28,704,977
				28,704,977
CONTAINERS & PACKAGING — 4.70%
Smurfit Kappa Group PLC		237,859		5,854,629
				5,854,629
DIVERSIFIED FINANCIAL SERVICES — 0.23%
IFG Group PLC		131,998		289,615
				289,615
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) — 7.47%
Green REIT PLC		2,044,824		3,354,642
Hibernia REIT PLC		2,171,428		3,378,542
Irish Residential Properties REIT PLC		1,979,161		2,579,019
				9,312,203
FOOD & STAPLES RETAILING — 1.01%
Fyffes PLC		314,201		542,409
Total Produce PLC		406,037		721,296
				1,263,705
FOOD PRODUCTS — 19.58%
Glanbia PLC		279,434		5,312,516
Kerry Group PLC Class A		188,576		15,999,813
Origin Enterprises PLC		476,246		3,079,081
				24,391,410
HEALTH CARE PROVIDERS & SERVICES — 3.70%
UDG Healthcare PLC		574,652		4,609,806
				4,609,806

Security	Shares		Value
HOTELS, RESTAURANTS & LEISURE — 11.09%
Dalata Hotel Group PLCa		656,643	$	3,181,311
Paddy Power Betfair PLC		89,100		10,633,038
				13,814,349
INSURANCE — 0.22%
FBD Holdings PLCa		34,240		269,613
				269,613
INTERNET SOFTWARE & SERVICES — 0.25%
Datalex PLC		84,900		310,148
				310,148
LIFE SCIENCES TOOLS & SERVICES — 4.52%
ICON PLCa		73,369		5,634,005
				5,634,005
MARINE — 2.45%
Irish Continental Group PLC		581,652		3,057,685
				3,057,685
PROFESSIONAL SERVICES — 0.14%
CPL Resources PLC		28,586		169,695
				169,695
SPECIALTY RETAIL — 0.17%
Applegreen PLCa		41,530		217,394
				217,394
TRADING COMPANIES & DISTRIBUTORS — 3.38%
Grafton Group PLC		586,752		4,207,366
				4,207,366
TOTAL COMMON STOCKS
(Cost: $124,915,916)				124,582,760
SHORT-TERM INVESTMENTS — 0.00%
MONEY MARKET FUNDS — 0.00%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		1,230		1,230
				1,230
TOTAL SHORT-TERM INVESTMENTS
(Cost: $1,230)				1,230

SCHEDULES OF INVESTMENTS 27

Schedule of Investments (Continued)

iSHARES^® MSCI IRELAND CAPPED ETF

August 31, 2016

	Value
TOTAL INVESTMENTS IN SECURITIES — 99.99%
(Cost: $124,917,146)d	$	124,583,990
Other Assets, Less Liabilities — 0.01%		11,564
NET ASSETS — 100.00%	$	124,595,554

ADR  —  American Depositary Receipts

^a  Non-income earning security.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $125,858,235. Net unrealized depreciation was $1,274,245, of which $10,226,543 represented gross unrealized appreciation on securities and $11,500,788 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	124,582,760	$	—	$	—	$	124,582,760
Money market funds		1,230		—		—		1,230
Total	$	124,583,990	$	—	$	—	$	124,583,990

See notes to financial statements.

28 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI NEW ZEALAND CAPPED ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.93%
AIR FREIGHT & LOGISTICS — 1.69%
Freightways Ltd.		588,408	$	2,894,314
				2,894,314
AIRLINES — 2.03%
Air New Zealand Ltd.		2,116,352		3,470,034
				3,470,034
CHEMICALS — 1.71%
Nuplex Industries Ltd.		753,404		2,924,281
				2,924,281
CONSTRUCTION MATERIALS — 9.82%
Fletcher Building Ltd.		2,186,200		16,812,531
				16,812,531
DIVERSIFIED TELECOMMUNICATION SERVICES — 12.05%
Chorus Ltd.		1,515,376		4,672,471
Spark New Zealand Ltd.		5,779,629		15,954,822
				20,627,293
ELECTRIC UTILITIES — 12.84%
Contact Energy Ltd.		2,159,643		8,147,468
Genesis Energy Ltd.		1,906,200		3,097,803
Infratil Ltd.		2,011,703		4,933,077
Mercury NZ Ltd.		2,522,524		5,801,388
				21,979,736
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) — 9.06%
Argosy Property Ltd.		3,113,691		2,620,420
Goodman Property Trust		3,997,413		3,915,165
Kiwi Property Group Ltd.		4,610,204		5,184,289
Precinct Properties New Zealand Ltd.		4,033,980		3,790,014
				15,509,888
FOOD PRODUCTS — 2.21%
a2 Milk Co. Ltd.a,b		2,730,835		3,784,131
				3,784,131
HEALTH CARE EQUIPMENT & SUPPLIES — 7.20%
Fisher & Paykel Healthcare Corp. Ltd.		1,757,193		12,327,735
				12,327,735
HEALTH CARE PROVIDERS & SERVICES — 7.77%
Metlifecare Ltd.		544,404		2,409,287
Ryman Healthcare Ltd.		1,101,878		7,674,358

Security	Shares		Value
Summerset Group Holdings Ltd.		804,777	$	3,211,261
				13,294,906
HEALTH CARE TECHNOLOGY — 0.44%
Orion Health Group Ltd.a		253,434		753,852
				753,852
HOTELS, RESTAURANTS & LEISURE — 4.49%
SKYCITY Entertainment Group Ltd.		2,115,301		7,688,599
				7,688,599
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS — 4.68%
Meridian Energy Ltd.		3,807,563		8,010,921
				8,010,921
INTERNET & DIRECT MARKETING RETAIL — 3.45%
Trade Me Group Ltd.		1,480,000		5,905,569
				5,905,569
MEDIA — 2.92%
Sky Network Television Ltd.		1,418,949		5,003,114
				5,003,114
MULTILINE RETAIL — 0.67%
Warehouse Group Ltd. (The)		549,405		1,151,934
				1,151,934
OIL, GAS & CONSUMABLE FUELS — 5.04%
New Zealand Refining Co. Ltd. (The)		702,793		1,198,209
Z Energy Ltd.		1,205,792		7,418,320
				8,616,529
SOFTWARE — 2.35%
Xero Ltd.a		280,292		4,026,366
				4,026,366
TRANSPORTATION INFRASTRUCTURE — 9.51%
Auckland International Airport Ltd.		2,991,089		16,275,260
				16,275,260
TOTAL COMMON STOCKS
(Cost: $148,479,896)				171,056,993
SHORT-TERM INVESTMENTS — 0.11%
MONEY MARKET FUNDS — 0.11%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%c,d,e		145,000		145,000

SCHEDULES OF INVESTMENTS 29

Schedule of Investments (Continued)

iSHARES^® MSCI NEW ZEALAND CAPPED ETF

August 31, 2016

Security	Shares		Value
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		48,547	$	48,547
				193,547
TOTAL SHORT-TERM INVESTMENTS
(Cost: $193,547)				193,547
TOTAL INVESTMENTS IN SECURITIES — 100.04%
(Cost: $148,673,443)f				171,250,540
Other Assets, Less Liabilities — (0.04)%				(67,853	)
NET ASSETS — 100.00%			$	171,182,687

^a  Non-income earning security.

^b  All or a portion of this security represents a security on loan. See Note 1.

^c  Affiliated money market fund.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

^e  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^f  The cost of investments for federal income tax purposes was $150,914,562. Net unrealized appreciation was $20,335,978, of which $24,750,647 represented gross unrealized appreciation on securities and $4,414,669 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	171,056,993	$	—	$	—	$	171,056,993
Money market funds		193,547		—		—		193,547
Total	$	171,250,540	$	—	$	—	$	171,250,540

See notes to financial statements.

30 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI NORWAY CAPPED ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.54%
AIR FREIGHT & LOGISTICS — 0.18%
Treasure ASAa		24,332	$	48,716
				48,716
AIRLINES — 1.10%
Norwegian Air Shuttle ASAa,b		8,019		291,299
				291,299
AUTO COMPONENTS — 0.42%
Kongsberg Automotive ASAa		152,800		110,830
				110,830
BANKS — 12.19%
DNB ASA		230,985		2,805,239
Skandiabanken ASAa,c		3,698		28,374
Sparebank 1 Nord Norge		32,050		160,229
SpareBank 1 SMN		37,126		231,451
				3,225,293
CHEMICALS — 5.44%
Borregaard ASA		29,873		242,641
Yara International ASA		33,755		1,197,052
				1,439,693
DIVERSIFIED FINANCIAL SERVICES — 0.95%
Aker ASA Class A		8,069		250,551
				250,551
DIVERSIFIED TELECOMMUNICATION SERVICES — 11.77%
Telenor ASA		178,489		3,113,516
				3,113,516
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 0.47%
IDEX ASAa		127,972		123,506
				123,506
ENERGY EQUIPMENT & SERVICES — 7.80%
Akastor ASAa,b		70,055		73,825
Aker Solutions ASAa		47,675		210,565
Fred Olsen Energy ASAa,b		18,069		30,869
Ocean Yield ASAb		15,979		128,352
Petroleum Geo-Services ASAa,b		66,311		140,952
Prosafe SEb		104,268		7,000
Seadrill Ltd.a,b		96,506		238,572
Subsea 7 SAa		69,077		750,306
TGS Nopec Geophysical Co. ASA		27,804		484,006
				2,064,447
FOOD PRODUCTS — 15.94%
Austevoll Seafood ASA		26,885		210,314

Security	Shares		Value
Bakkafrost P/F		10,699	$	384,164
Leroy Seafood Group ASA		8,317		372,919
Marine Harvest ASA		74,104		1,144,285
Orkla ASA		187,871		1,718,545
Salmar ASA		14,023		387,851
				4,218,078
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS — 0.33%
Scatec Solar ASAb,c		23,659		88,213
				88,213
INSURANCE — 5.96%
Gjensidige Forsikring ASA		51,832		889,230
Protector Forsikring ASAb		19,324		177,229
Storebrand ASAa		120,560		509,205
				1,575,664
INTERNET SOFTWARE & SERVICES — 0.84%
Opera Software ASAa		33,876		223,373
				223,373
IT SERVICES — 0.88%
Atea ASA		23,876		234,006
				234,006
MACHINERY — 0.41%
Hexagon Composites ASAa,b		33,039		108,135
				108,135
MARINE — 0.74%
Golden Ocean Group Ltd.a,b		7,333		25,759
Stolt-Nielsen Ltd.		9,113		113,078
Wilh Wilhelmsen ASA		24,324		57,448
				196,285
MEDIA — 4.47%
Schibsted ASA		17,963		569,830
Schibsted ASA Class B		21,253		614,065
				1,183,895
METALS & MINING — 4.40%
Norsk Hydro ASA		274,141		1,164,124
				1,164,124
MULTILINE RETAIL — 0.61%
Europris ASAc		34,222		160,830
				160,830
OIL, GAS & CONSUMABLE FUELS — 20.14%
Avance Gas Holding Ltd.b,c		13,090		26,365
BW LPG Ltd.c		26,256		69,251
Det Norske Oljeselskap ASAa,b		28,706		391,300

SCHEDULES OF INVESTMENTS 31

Schedule of Investments (Continued)

iSHARES^® MSCI NORWAY CAPPED ETF

August 31, 2016

Security	Shares		Value
DNO ASAa,b		195,985	$	205,945
Frontline Ltd./Bermudab		22,358		166,993
Hoegh LNG Holdings Ltd.b		14,945		155,433
Statoil ASA		268,177		4,237,538
Tanker Investments Ltd.a		13,051		76,042
				5,328,867
REAL ESTATE MANAGEMENT & DEVELOPMENT — 1.79%
Entra ASAc		24,531		262,482
Norwegian Property ASA		89,904		113,174
Selvaag Bolig ASA		20,146		97,335
				472,991
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 1.04%
Nordic Semiconductor ASAa,b		38,174		179,404
REC Silicon ASAa,b		669,640		96,579
				275,983
SPECIALTY RETAIL — 1.25%
XXL ASAc		27,390		330,016
				330,016
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 0.42%
Thin Film Electronics ASAa,b		207,184		110,782
				110,782
TOTAL COMMON STOCKS
(Cost: $33,209,171)				26,339,093

Security	Shares		Value
SHORT-TERM INVESTMENTS — 10.22%
MONEY MARKET FUNDS — 10.22%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%d,e,f		2,690,510	$	2,690,510
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%d,e		15,071		15,071
				2,705,581
TOTAL SHORT-TERM INVESTMENTS
(Cost: $2,705,581)				2,705,581
TOTAL INVESTMENTS IN SECURITIES — 109.76%
(Cost: $35,914,752)g				29,044,674
Other Assets, Less Liabilities — (9.76)%				(2,582,937	)
NET ASSETS — 100.00%			$	26,461,737

^a  Non-income earning security.

^b  All or a portion of this security represents a security on loan. See Note 1.

^c  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^d  Affiliated money market fund.

^e  The rate quoted is the annualized seven-day yield of the fund at period end.

^f  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^g  The cost of investments for federal income tax purposes was $38,292,279. Net unrealized depreciation was $9,247,605, of which $681,825 represented gross unrealized appreciation on securities and $9,929,430 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	26,339,093	$	—	$	—	$	26,339,093
Money market funds		2,705,581		—		—		2,705,581
Total	$	29,044,674	$	—	$	—	$	29,044,674

See notes to financial statements.

32 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities

iSHARES^® TRUST

August 31, 2016

	iShares MSCI Denmark Capped ETF			iShares MSCI Finland Capped ETF			iShares MSCI Germany Small-Cap ETF
ASSETS
Investments, at cost:
Unaffiliated	$	49,953,416		$	38,727,801		$	23,360,809
Affiliated (Note 2)		1,712,892			8,430			2,062,038
Total cost of investments	$	51,666,308		$	38,736,231		$	25,422,847
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated	$	47,547,203		$	37,764,186		$	23,706,616
Affiliated (Note 2)		1,712,892			8,430			2,062,038
Total fair value of investments		49,260,095			37,772,616			25,768,654
Foreign currency, at valueb		40,870			22,128			19,805
Receivables:
Investment securities sold		1,603,765			1,094,790			104,766
Dividends and interest		15,002			900			10,034
Tax reclaims		361,731			—			36,581
Foreign withholding tax claims (Note 7)		—			518,739			—
Total Assets		51,281,463			39,409,173			25,939,840
LIABILITIES
Payables:
Investment securities purchased		1,631,374			1,071,961			103,889
Collateral for securities on loan (Note 1)		1,695,200			—			2,045,500
IRS compliance fee for foreign withholding tax claims (Note 7)		—			99,047			—
Professional fees (Note 9)		—			53,326			—
Investment advisory fees (Note 2)		26,461			17,037			11,942
Total Liabilities		3,353,035			1,241,371			2,161,331
NET ASSETS	$	47,928,428		$	38,167,802		$	23,778,509
Net assets consist of:
Paid-in capital	$	52,473,144		$	40,324,965		$	24,470,476
Undistributed net investment income		33,540			333,509			32,354
Accumulated net realized loss		(2,175,652	)		(1,526,203	)		(1,069,607	)
Net unrealized appreciation (depreciation)		(2,402,604	)		(964,469	)		345,286
NET ASSETS	$	47,928,428		$	38,167,802		$	23,778,509
Shares outstandingc		850,000			1,150,000			550,000
Net asset value per share	$	56.39		$	33.19		$	43.23

^a  Securities on loan with values of $1,602,891, $  — and $1,189,787, respectively. See Note 1.

^b  Cost of foreign currency: $41,564, $22,142 and $19,880, respectively.

^c  No par value, unlimited number of shares authorized.

See notes to financial statements.

FINANCIAL STATEMENTS 33

Statements of Assets and Liabilities (Continued)

iSHARES^® TRUST

August 31, 2016

	iShares MSCI Ireland Capped ETF			iShares MSCI New Zealand Capped ETF			iShares MSCI Norway Capped ETF
ASSETS
Investments, at cost:
Unaffiliated	$	124,915,916		$	148,479,896		$	33,209,171
Affiliated (Note 2)		1,230			193,547			2,705,581
Total cost of investments	$	124,917,146		$	148,673,443		$	35,914,752
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated	$	124,582,760		$	171,056,993		$	26,339,093
Affiliated (Note 2)		1,230			193,547			2,705,581
Total fair value of investments		124,583,990			171,250,540			29,044,674
Foreign currency, at valueb		126,275			131,161			64,317
Receivables:
Investment securities sold		6,344,270			233,350			132,556
Dividends and interest		19,740			19,158			56,940
Tax reclaims		14,149			—			1,661
Total Assets		131,088,424			171,634,209			29,300,148
LIABILITIES
Payables:
Investment securities purchased		6,436,725			242,724			135,993
Collateral for securities on loan (Note 1)		—			145,000			2,690,510
Capital shares redeemed		3,630			—			—
Investment advisory fees (Note 2)		52,515			63,798			11,908
Total Liabilities		6,492,870			451,522			2,838,411
NET ASSETS	$	124,595,554		$	171,182,687		$	26,461,737
Net assets consist of:
Paid-in capital	$	131,147,317		$	159,283,204		$	37,603,844
Undistributed (distributions in excess of) net investment income		(178,384	)		3,514			71,337
Accumulated net realized loss		(6,040,981	)		(10,681,563	)		(4,342,924	)
Net unrealized appreciation (depreciation)		(332,398	)		22,577,532			(6,870,520	)
NET ASSETS	$	124,595,554		$	171,182,687		$	26,461,737
Shares outstandingc		3,200,000			3,650,000			1,300,000
Net asset value per share	$	38.94		$	46.90		$	20.36

^a  Securities on loan with values of $  —, $138,571 and $2,466,801, respectively. See Note 1.

^b  Cost of foreign currency: $125,373, $130,743 and $64,728, respectively.

^c  No par value, unlimited number of shares authorized.

See notes to financial statements.

34 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations

iSHARES^® TRUST

Year ended August 31, 2016

	iShares MSCI Denmark Capped ETF			iShares MSCI Finland Capped ETF			iShares MSCI Germany Small-Cap ETF
NET INVESTMENT INCOME
Dividends — unaffiliateda	$	1,334,132		$	1,065,772		$	460,821
Dividends — affiliated (Note 2)		305			27			37
Securities lending income — affiliated — net (Note 2)		99,357			22,924			124,820
Foreign withholding tax claims (Note 7)		—			518,739			—
		1,433,794			1,607,462			585,678
Less: IRS Compliance fee for foreign withholding tax claims (Note 7)		—			(99,047	)		—
Total investment income		1,433,794			1,508,415			585,678
EXPENSES
Investment advisory fees (Note 2)		397,191			146,974			148,906
Professional fees (Note 2)		—			53,326			—
Total expenses		397,191			200,300			148,906
Net investment income		1,036,603			1,308,115			436,772
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		(4,350,161	)		(1,515,954	)		(633,125	)
In-kind redemptions — unaffiliated		1,805,400			767,689			254,252
Foreign currency transactions		(72,308	)		(4,577	)		1,096
Net realized loss		(2,617,069	)		(752,842	)		(377,777	)
Net change in unrealized appreciation/depreciation on:
Investments		2,616,845			2,796,220			2,074,039
Translation of assets and liabilities in foreign currencies		(2,988	)		(1,078	)		(1,029	)
Net change in unrealized appreciation/depreciation		2,613,857			2,795,142			2,073,010
Net realized and unrealized gain (loss)		(3,212	)		2,042,300			1,695,233
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	1,033,391		$	3,350,415		$	2,132,005

^a  Net of foreign withholding tax of $233,539, $188,783 and $52,844, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 35

Statements of Operations (Continued)

iSHARES^® TRUST

Year ended August 31, 2016

	iShares MSCI Ireland Capped ETF			iShares MSCI New Zealand Capped ETF			iShares MSCI Norway Capped ETF
NET INVESTMENT INCOME
Dividends — unaffiliateda	$	2,743,392		$	3,124,369		$	780,379
Dividends — affiliated (Note 2)		141			152			53
Securities lending income — affiliated — net (Note 2)		–			32,149			97,852
Total investment income		2,743,533			3,156,670			878,284
EXPENSES
Investment advisory fees (Note 2)		753,992			432,091			123,807
Total expenses		753,992			432,091			123,807
Net investment income		1,989,541			2,724,579			754,477
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		(4,589,202	)		(1,469,117	)		(3,862,853	)
In-kind redemptions — unaffiliated		10,160,887			1,562,473			(1,948,416	)
Foreign currency transactions		8,316			117,877			(7,934	)
Net realized gain (loss)		5,580,001			211,233			(5,819,203	)
Net change in unrealized appreciation/depreciation on:
Investments		(12,349,156	)		33,174,232			4,969,165
Translation of assets and liabilities in foreign currencies		(36,446	)		1,504			664
Net change in unrealized appreciation/depreciation		(12,385,602	)		33,175,736			4,969,829
Net realized and unrealized gain (loss)		(6,805,601	)		33,386,969			(849,374	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(4,816,060	)	$	36,111,548		$	(94,897	)

^a  Net of foreign withholding tax of $16,363, $509,467 and $179,854, respectively.

See notes to financial statements.

36 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets

iSHARES^® TRUST

	iShares MSCI  Denmark Capped ETF						iShares MSCI Finland Capped ETF
	Year ended August 31, 2016			Year ended August 31, 2015			Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	1,036,603		$	995,563		$	1,308,115		$	443,363
Net realized gain (loss)		(2,617,069	)		7,933,787			(752,842	)		(677,761	)
Net change in unrealized appreciation/depreciation		2,613,857			(7,558,507	)		2,795,142			(2,920,949	)
Net increase (decrease) in net assets resulting from operations		1,033,391			1,370,843			3,350,415			(3,155,347	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(947,962	)		(976,596	)		(966,760	)		(460,665	)
Total distributions to shareholders		(947,962	)		(976,596	)		(966,760	)		(460,665	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		123,953,924			99,033,157			21,961,223			40,321,518
Cost of shares redeemed		(124,704,602	)		(111,468,767	)		(9,664,730	)		(49,463,373	)
Net increase (decrease) in net assets from capital share transactions		(750,678	)		(12,435,610	)		12,296,493			(9,141,855	)
INCREASE (DECREASE) IN NET ASSETS		(665,249	)		(12,041,363	)		14,680,148			(12,757,867	)
NET ASSETS
Beginning of year		48,593,677			60,635,040			23,487,654			36,245,521
End of year	$	47,928,428		$	48,593,677		$	38,167,802		$	23,487,654
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	33,540		$	17,207		$	333,509		$	(4,507	)
SHARES ISSUED AND REDEEMED
Shares sold		2,250,000			1,850,000			700,000			1,200,000
Shares redeemed		(2,300,000	)		(2,150,000	)		(300,000	)		(1,500,000	)
Net increase (decrease) in shares outstanding		(50,000	)		(300,000	)		400,000			(300,000	)

See notes to financial statements.

FINANCIAL STATEMENTS 37

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares MSCI  Germany Small-Cap ETF						iShares MSCI Ireland Capped ETF
	Year ended August 31, 2016			Year ended August 31, 2015			Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	436,772		$	390,636		$	1,989,541		$	1,412,782
Net realized gain (loss)		(377,777	)		1,217,384			5,580,001			3,345,938
Net change in unrealized appreciation/depreciation		2,073,010			(1,301,624	)		(12,385,602	)		7,486,528
Net increase (decrease) in net assets resulting from operations		2,132,005			306,396			(4,816,060	)		12,245,248
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(399,725	)		(482,393	)		(2,173,143	)		(1,615,175	)
From net realized gain		—			—			—			(622,810	)
Total distributions to shareholders		(399,725	)		(482,393	)		(2,173,143	)		(2,237,985	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		—			9,932,930			17,760,405			89,533,413
Cost of shares redeemed		(3,976,338	)		(20,717,059	)		(63,671,347	)		(49,024,326	)
Net increase (decrease) in net assets from capital share transactions		(3,976,338	)		(10,784,129	)		(45,910,942	)		40,509,087
INCREASE (DECREASE) IN NET ASSETS		(2,244,058	)		(10,960,126	)		(52,900,145	)		50,516,350
NET ASSETS
Beginning of year		26,022,567			36,982,693			177,495,699			126,979,349
End of year	$	23,778,509		$	26,022,567		$	124,595,554		$	177,495,699
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	32,354		$	(15,811	)	$	(178,384	)	$	(119,680	)
SHARES ISSUED AND REDEEMED
Shares sold		—			250,000			450,000			2,250,000
Shares redeemed		(100,000	)		(550,000	)		(1,650,000	)		(1,450,000	)
Net increase (decrease) in shares outstanding		(100,000	)		(300,000	)		(1,200,000	)		800,000

See notes to financial statements.

38 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares MSCI New Zealand Capped ETF						iShares MSCI Norway Capped ETF
	Year ended August 31, 2016			Year ended August 31, 2015			Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	2,724,579		$	6,415,418		$	754,477		$	670,855
Net realized gain (loss)		211,233			(1,166,238	)		(5,819,203	)		(2,087,780	)
Net change in unrealized appreciation/depreciation		33,175,736			(28,485,102	)		4,969,829			(10,733,571	)
Net increase (decrease) in net assets resulting from operations		36,111,548			(23,235,922	)		(94,897	)		(12,150,496	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(2,843,446	)		(7,000,765	)		(742,180	)		(624,192	)
Total distributions to shareholders		(2,843,446	)		(7,000,765	)		(742,180	)		(624,192	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		92,950,854			13,238,478			12,537,865			56,764,370
Cost of shares redeemed		(19,380,405	)		(78,103,248	)		(15,833,684	)		(35,674,721	)
Net increase (decrease) in net assets from capital share transactions		73,570,449			(64,864,770	)		(3,295,819	)		21,089,649
INCREASE (DECREASE) IN NET ASSETS		106,838,551			(95,101,457	)		(4,132,896	)		8,314,961
NET ASSETS
Beginning of year		64,344,136			159,445,593			30,594,633			22,279,672
End of year	$	171,182,687		$	64,344,136		$	26,461,737		$	30,594,633
Undistributed net investment income included in net assets at end of year	$	3,514		$	4,504		$	71,337		$	66,974
SHARES ISSUED AND REDEEMED
Shares sold		2,200,000			350,000			600,000			2,300,000
Shares redeemed		(550,000	)		(2,250,000	)		(800,000	)		(1,500,000	)
Net increase (decrease) in shares outstanding		1,650,000			(1,900,000	)		(200,000	)		800,000

See notes to financial statements.

FINANCIAL STATEMENTS 39

Financial Highlights

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI Denmark Capped ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Period from Jan. 25, 2012 a to Aug. 31, 2012
Net asset value, beginning of period	$	53.99		$	50.53		$	37.64		$	29.32		$	26.12
Income from investment operations:
Net investment incomeb		0.76			0.84			0.65			0.33			0.32
Net realized and unrealized gainc		2.27			3.43			12.66			8.40			3.20
Total from investment operations		3.03			4.27			13.31			8.73			3.52
Less distributions from:
Net investment income		(0.63	)		(0.81	)		(0.42	)		(0.41	)		(0.32	)
Total distributions		(0.63	)		(0.81	)		(0.42	)		(0.41	)		(0.32	)
Net asset value, end of period	$	56.39		$	53.99		$	50.53		$	37.64		$	29.32
Total return		5.63	%		8.43	%		35.33	%		29.94	%		13.58	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	47,928		$	48,594		$	60,635		$	9,410		$	5,864
Ratio of expenses to average net assetse		0.53	%		0.53	%		0.53	%		0.53	%		0.53	%
Ratio of net investment income to average net assetse		1.38	%		1.62	%		1.32	%		0.96	%		1.87	%
Portfolio turnover ratef		40	%		9	%		9	%		12	%		12	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

40 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI Finland Capped ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Period from Jan. 25, 2012 a to Aug. 31, 2012
Net asset value, beginning of period	$	31.32		$	34.52		$	27.57		$	22.10		$	25.63
Income from investment operations:
Net investment incomeb		1.51	c		0.56			1.72			0.90			1.01
Net realized and unrealized gain (loss)d		1.13			(3.25	)		6.37			5.47			(3.50	)
Total from investment operations		2.64			(2.69	)		8.09			6.37			(2.49	)
Less distributions from:
Net investment income		(0.77	)		(0.51	)		(1.14	)		(0.90	)		(1.00	)
Return of capital		—			—			—			—			(0.04	)
Total distributions		(0.77	)		(0.51	)		(1.14	)		(0.90	)		(1.04	)
Net asset value, end of period	$	33.19		$	31.32		$	34.52		$	27.57		$	22.10
Total return		8.60	%c		(7.90	)%		29.25	%		29.10	%		(9.52	)%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	38,168		$	23,488		$	36,246		$	9,651		$	2,210
Ratio of expenses to average net assetsf		0.72	%		0.53	%		0.53	%		0.53	%		0.53	%
Ratio of expenses to average net assets excluding professional fees for foreign withholding tax claims (Note 7)		0.53	%		n/a			n/a			n/a			n/a
Ratio of net investment income to average net assetsf		4.72	%c		1.68	%		4.95	%		3.38	%		7.04	%
Portfolio turnover rateg		21	%		12	%		14	%		12	%		11	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  Reflects the one-time, positive effect of foreign withholding tax claims, net of the associated IRS compliance fees and professional fees (See Note 7), which resulted in the following increases:

• Net investment income per share by $0.42

• Total return by 1.05%

• Ratio of net investment income to average net assets by 1.32%

^d  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^e  Not annualized.

^f  Annualized for periods of less than one year.

^g  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 41

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI Germany Small-Cap ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Period from Jan. 25, 2012 a to Aug. 31, 2012
Net asset value, beginning of period	$	40.03		$	38.93		$	34.54		$	26.69		$	25.84
Income from investment operations:
Net investment incomeb		0.71			0.53			0.70			0.67			0.57
Net realized and unrealized gainc		3.16			1.26			4.26			7.81			0.79
Total from investment operations		3.87			1.79			4.96			8.48			1.36
Less distributions from:
Net investment income		(0.67	)		(0.69	)		(0.57	)		(0.63	)		(0.51	)
Total distributions		(0.67	)		(0.69	)		(0.57	)		(0.63	)		(0.51	)
Net asset value, end of period	$	43.23		$	40.03		$	38.93		$	34.54		$	26.69
Total return		9.72	%		4.61	%		14.21	%		31.93	%		5.34	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	23,779		$	26,023		$	36,983		$	10,363		$	2,669
Ratio of expenses to average net assetse		0.59	%		0.59	%		0.59	%		0.59	%		0.59	%
Ratio of net investment income to average net assetse		1.73	%		1.36	%		1.72	%		2.09	%		3.54	%
Portfolio turnover ratef		12	%		18	%		15	%		19	%		10	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

42 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI Ireland Capped ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	40.34		$	35.27		$	31.16		$	20.90		$	19.32
Income from investment operations:
Net investment incomea		0.49			0.52	b		0.47			0.56			0.38
Net realized and unrealized gain (loss)c		(1.33	)		5.43			4.32			10.06			1.56
Total from investment operations		(0.84	)		5.95			4.79			10.62			1.94
Less distributions from:
Net investment income		(0.56	)		(0.62	)		(0.68	)		(0.36	)		(0.36	)
Net realized gain		—			(0.26	)		—			—			—
Total distributions		(0.56	)		(0.88	)		(0.68	)		(0.36	)		(0.36	)
Net asset value, end of year	$	38.94		$	40.34		$	35.27		$	31.16		$	20.90
Total return		(2.12	)%		17.10	%		15.45	%		51.07	%		10.11	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	124,596		$	177,496		$	126,979		$	84,121		$	8,359
Ratio of expenses to average net assets		0.48	%		0.48	%		0.48	%		0.50	%		0.53	%
Ratio of net investment income to average net assets		1.27	%		1.41	%b		1.30	%		2.03	%		1.91	%
Portfolio turnover rated		31	%		26	%		31	%		29	%		21	%

^a  Based on average shares outstanding throughout each period.

^b  Includes a special distribution from Paddy Power PLC. Excluding such special distribution, the net investment income would have been $0.34 per share and 0.94% of average net assets.

^c  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 43

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI New Zealand Capped ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	32.17		$	40.88		$	34.14		$	31.12		$	32.41
Income from investment operations:
Net investment incomea		1.21			1.87			1.68			1.45			1.25
Net realized and unrealized gain (loss)b		14.76			(8.57	)		6.78			3.23			(0.50	)
Total from investment operations		15.97			(6.70	)		8.46			4.68			0.75
Less distributions from:
Net investment income		(1.24	)		(2.01	)		(1.72	)		(1.66	)		(2.04	)
Total distributions		(1.24	)		(2.01	)		(1.72	)		(1.66	)		(2.04	)
Net asset value, end of year	$	46.90		$	32.17		$	40.88		$	34.14		$	31.12
Total return		50.49	%		(17.01	)%		25.02	%		15.15	%		3.30	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	171,183		$	64,344		$	159,446		$	145,081		$	104,263
Ratio of expenses to average net assets		0.48	%		0.48	%		0.48	%		0.51	%		0.53	%
Ratio of net investment income to average net assets		3.05	%		4.83	%		4.17	%		4.07	%		4.21	%
Portfolio turnover ratec		11	%		14	%		20	%		26	%		12	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

44 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI Norway Capped ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Period from Jan. 23, 2012 a to Aug. 31, 2012
Net asset value, beginning of period	$	20.40		$	31.83		$	28.33		$	27.37		$	25.94
Income from investment operations:
Net investment incomeb		0.64			0.64			1.09			0.92			0.82
Net realized and unrealized gain (loss)c		(0.06	)		(11.49	)		3.43			0.85			1.26
Total from investment operations		0.58			(10.85	)		4.52			1.77			2.08
Less distributions from:
Net investment income		(0.62	)		(0.58	)		(1.02	)		(0.81	)		(0.65	)
Total distributions		(0.62	)		(0.58	)		(1.02	)		(0.81	)		(0.65	)
Net asset value, end of period	$	20.36		$	20.40		$	31.83		$	28.33		$	27.37
Total return		2.89	%		(34.32	)%		15.91	%		6.61	%		8.32	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	26,462		$	30,595		$	22,280		$	11,331		$	5,474
Ratio of expenses to average net assetse		0.53	%		0.53	%		0.53	%		0.53	%		0.53	%
Ratio of net investment income to average net assetse		3.23	%		2.60	%		3.48	%		3.16	%		5.16	%
Portfolio turnover ratef		19	%		14	%		12	%		10	%		7	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 45

Notes to Financial Statements

iSHARES^® TRUST

iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999.

These financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):

iShares ETF	Diversification Classification
MSCI Denmark Capped	Non-diversified
MSCI Finland Capped	Non-diversified
MSCI Germany Small-Cap	Diversified
MSCI Ireland Capped	Non-diversified
MSCI New Zealand Capped	Non-diversified
MSCI Norway Capped	Non-diversified

The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.

Pursuant to the Trust’s organizational documents, the Funds’ officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.

SECURITY VALUATION

Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Trustees of the Trust (the “Board”).

• Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price.

46 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

• Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”).

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such factors are reported to the Board on a quarterly basis.

The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Trust’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements in market values, and reviews of market related activity.

Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.

Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and is not necessarily an indication of the risk associated with investing in the instrument. The three levels of the fair value hierarchy are as follows:

• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and

• Level 3 — Unobservable inputs for the asset or liability, including the Global Valuation Committee’s assumptions used in determining the fair value of investments.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2016 are reflected in tax reclaims receivable. Non-cash dividends received in the form of stock in an

NOTES TO FINANCIAL STATEMENTS 47

Notes to Financial Statements (Continued)

iSHARES^® TRUST

elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.

FOREIGN CURRENCY TRANSLATION

The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.

Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes.

FOREIGN TAXES

The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their statements of operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “other foreign taxes”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of August 31, 2016, if any, are disclosed in the Funds’ statements of assets and liabilities.

DISTRIBUTIONS TO SHAREHOLDERS

Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.

LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Funds. Any additional required collateral is delivered to the Funds and any excess collateral is returned by the Funds on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

48 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

On July 23, 2014, the U.S. Securities and Exchange Commission (the “SEC”) adopted amendments to Rule 2a-7 under the 1940 Act, which governs the operations of U.S. money market funds. When implemented in October 2016, the change may affect the Funds with regard to the reinvestment of cash collateral received for securities on loan. The Funds may be exposed to additional risk from reinvesting the cash collateral in money market funds that do not maintain a fixed NAV per share of $1.00.

Any cash received as collateral for securities on loan may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates. As of August 31, 2016, any securities on loan were collateralized by cash and/or U.S. government obligations. Cash collateral received was invested in money market funds managed by BFA and is disclosed in the schedules of investments. The securities on loan for each Fund are also disclosed in its schedule of investments. The total value of any securities on loan as of August 31, 2016 and the total value of the related collateral are disclosed in the statements of assets and liabilities. Income earned by the Funds from securities lending is disclosed in the statements of operations.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities lent. Each Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.

Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (“MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, a Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, the borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.

The following table is a summary of securities lending agreements which are subject to offset under an MSLA as of August 31, 2016:

iShares ETF and Counterparty	Market Value of Securities on Loan		Cash Collateral Received  a		Net Amount
MSCI Denmark Capped
Deutsche Bank Securities Inc.	$	97,032	$	97,032	$	—
Goldman Sachs & Co.		203,381		203,381		—
JPMorgan Clearing Corp.		68,515		68,515		—
Morgan Stanley & Co. LLC		853,852		853,852		—
UBS Securities LLC		380,111		380,111		—
	$	1,602,891	$	1,602,891	$	—

NOTES TO FINANCIAL STATEMENTS 49

Notes to Financial Statements (Continued)

iSHARES^® TRUST

iShares ETF and Counterparty	Market Value of Securities on Loan		Cash Collateral Received  a		Net Amount
MSCI Germany Small-Cap
Citigroup Global Markets Inc.	$	11,793	$	11,793	$	—
Credit Suisse Securities (USA) LLC		82,465		82,465		—
Deutsche Bank Securities Inc.		124,373		124,373		—
Goldman Sachs & Co.		275,824		275,824		—
JPMorgan Clearing Corp.		42,553		42,553		—
Merrill Lynch, Pierce, Fenner & Smith		25,062		25,062		—
Morgan Stanley & Co. LLC		215,901		215,901		—
Nomura Securities International Inc.		131,303		131,303		—
Scotia Capital (USA) Inc.		361		361		—
State Street Bank & Trust Company		44,317		44,317		—
UBS Securities LLC		235,835		235,835		—
	$	1,189,787	$	1,189,787	$	—
MSCI New Zealand Capped
Barclays Capital Inc.	$	138,571	$	138,571	$	—
	$	138,571	$	138,571	$	—
MSCI Norway Capped
BNP Paribas Prime Brokerage Inc.	$	103,401	$	103,401	$	—
Citigroup Global Markets Inc.		192,260		192,260		—
Credit Suisse Securities (USA) LLC		557,149		557,149		—
Deutsche Bank Securities Inc.		82,009		82,009		—
Goldman Sachs & Co.		119,543		119,543		—
HSBC Bank PLC		30,869		30,869		—
JPMorgan Clearing Corp.		135,810		135,810		—
Merrill Lynch, Pierce, Fenner & Smith		225,883		225,883		—
Morgan Stanley & Co. LLC		443,439		443,439		—
Nomura Securities International Inc.		1,637		1,637		—
Scotia Capital (USA) Inc.		22,755		22,755		—
UBS Securities LLC		552,046		552,046		—
	$	2,466,801	$	2,466,801	$	—

^a  Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s statement of assets and liabilities.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Agreement with the Trust, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.

50 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

For its investment advisory services to each of the following Funds, BFA is entitled to an annual investment advisory fee based on the average daily net assets of each Fund as follows:

iShares ETF	Investment Advisory Fee
MSCI Denmark Capped		0.53	%
MSCI Finland Capped		0.53
MSCI Germany Small-Cap		0.59
MSCI Norway Capped		0.53

For its investment advisory services to each of the iShares MSCI Ireland Capped and iShares MSCI New Zealand Capped ETFs, BFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:

Investment Advisory Fee			Aggregate Average Daily Net Assets
	0.59	%	First $7 billion
	0.54		Over $7 billion, up to and including $11  billion
	0.49		Over $11 billion, up to and including $24  billion
	0.44		Over $24 billion, up to and including $48 billion
	0.40		Over $48 billion, up to and including $72 billion
	0.36		Over $72 billion

The SEC has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by BFA, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the “collateral investment fees”). Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Funds retain a portion of securities lending income and remit the remaining portion to BTC as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, each Fund retains 80% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in a given calendar year exceeds the aggregate securities lending income generated across the iShares ETF Complex in the calendar year 2013, each Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 85% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.

NOTES TO FINANCIAL STATEMENTS 51

Notes to Financial Statements (Continued)

iSHARES^® TRUST

For the year ended August 31, 2016, the total of securities lending agent services and collateral investment fees paid were as follows:

iShares ETF	Fees Paid to BTC
MSCI Denmark Capped	$	24,633
MSCI Finland Capped		5,640
MSCI Germany Small-Cap		31,672
MSCI New Zealand Capped		7,803
MSCI Norway Capped		24,451

BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.

Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.

For the year ended August 31, 2016, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:

iShares ETF	Purchases		Sales
MSCI Denmark Capped	$	1,258,953	$	313,316
MSCI Finland Capped		954,578		171,945
MSCI Germany Small-Cap		—		5,684
MSCI Ireland Capped		2,659,932		5,416,618
MSCI Norway Capped		927,251		729,344

Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends – affiliated” in the statements of operations.

The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.

Certain trustees and officers of the Trust are also officers of BTC and/or BFA.

52 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2016 were as follows:

iShares ETF	Purchases		Sales
MSCI Denmark Capped	$	29,130,346	$	30,823,565
MSCI Finland Capped		5,863,468		5,944,494
MSCI Germany Small-Cap		3,073,671		3,070,139
MSCI Ireland Capped		52,842,148		48,979,462
MSCI New Zealand Capped		10,091,651		9,798,779
MSCI Norway Capped		4,450,613		4,435,359

In-kind transactions (see Note 4) for the year ended August 31, 2016 were as follows:

iShares ETF	In-kind Purchases		In-kind Sales
MSCI Denmark Capped	$	106,923,989	$	106,135,163
MSCI Finland Capped		21,921,997		9,601,892
MSCI Germany Small-Cap		—		3,962,301
MSCI Ireland Capped		17,725,973		62,710,821
MSCI New Zealand Capped		92,624,612		19,317,863
MSCI Norway Capped		12,369,295		15,741,798

4. CAPITAL SHARE TRANSACTIONS

Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the statements of changes in net assets.

The consideration for the purchase of Creation Units of a fund in the Trust generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Trust may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Trust’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Proceeds from shares sold” in the statements of changes in net assets.

5. PRINCIPAL RISKS

In the normal course of business, each Fund’s investment activities expose it to various types of risk associated with the financial instruments and markets in which it invests. The significant types of financial risks each Fund is exposed to include market risk and credit risk. Each Fund’s prospectus provides details of these and other types of risk.

NOTES TO FINANCIAL STATEMENTS 53

Notes to Financial Statements (Continued)

iSHARES^® TRUST

BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.

MARKET RISK

Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss each Fund may suffer through holding market positions in the face of market movements. Each Fund is exposed to market risk by virtue of its direct and/or indirect investment in equity instruments. The fair value of securities held by the Funds may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of each Fund’s exposure to market risk is the market value of the investments held as shown in the Fund’s schedule of investments.

A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its schedule of investments.

Investing in the securities of non-U.S. issuers, whether directly or indirectly, involves certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets; and the risk of war. These risks are heightened for investments in issuers from countries with less developed markets.

The economies and markets of European countries are often closely connected and interdependent, and events in one European country can have an adverse impact on other European countries. The European financial markets have experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of several European countries. Responses to the financial problems by European governments, central banks and others, including austerity measures and reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In addition, the United Kingdom has voted to withdraw from the European Union. The referendum may introduce significant new uncertainties and instability in the financial markets as the United Kingdom negotiates its exit from the European Union.

When a fund concentrates its investments in issuers located in a single country, whether directly or indirectly, it assumes the risk that economic, political and social conditions in that country may have a significant impact on its investment performance.

CREDIT RISK

Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to issuer and counterparty

54 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of each Fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its statement of assets and liabilities.

6. INCOME TAX INFORMATION

Each Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.

U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or NAV per share. The following permanent differences as of August 31, 2016, attributable to passive foreign investment companies, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:

iShares ETF	Paid-in Capital			Undistributed Net Investment Income/Distributions in Excess of Net Investment Income			Undistributed Net Realized Gain/Accumulated Net Realized Loss
MSCI Denmark Capped	$	(503,060	)	$	(72,308	)	$	575,368
MSCI Finland Capped		473,443			(3,339	)		(470,104	)
MSCI Germany Small-Cap		137,961			11,118			(149,079	)
MSCI Ireland Capped		8,757,290			124,898			(8,882,188	)
MSCI New Zealand Capped		1,001,756			117,877			(1,119,633	)
MSCI Norway Capped		(2,600,891	)		(7,934	)		2,608,825

NOTES TO FINANCIAL STATEMENTS 55

Notes to Financial Statements (Continued)

iSHARES^® TRUST

The tax character of distributions paid during the years ended August 31, 2016 and August 31, 2015 was as follows:

iShares ETF	2016		2015
MSCI Denmark Capped
Ordinary income	$	947,962	$	976,596
MSCI Finland Capped
Ordinary income	$	966,760	$	460,665
MSCI Germany Small-Cap
Ordinary income	$	399,725	$	482,393
MSCI Ireland Capped
Ordinary income	$	2,173,143	$	2,110,400
Long-term capital gain		—		127,585
	$	2,173,143	$	2,237,985
MSCI New Zealand Capped
Ordinary income	$	2,843,446	$	7,000,765
MSCI Norway Capped
Ordinary income	$	742,180	$	624,192

As of August 31, 2016, the tax components of accumulated net earnings (losses) were as follows:

iShares ETF	Undistributed Ordinary Income		Capital Loss Carryforwards			Net Unrealized Gains (Losses) a			Qualified Late-Year Losses b			Total
MSCI Denmark Capped	$	33,540	$	(131,341	)	$	(2,925,201	)	$	(1,521,714	)	$	(4,544,716	)
MSCI Finland Capped		18,084		(103,008	)		(1,511,416	)		(560,823	)		(2,157,163	)
MSCI Germany Small-Cap		50,088		(384,620	)		200,097			(557,532	)		(691,967	)
MSCI Ireland Capped		—		(885,342	)		(1,273,487	)		(4,392,934	)		(6,551,763	)
MSCI New Zealand Capped		730,052		(8,762,256	)		20,336,413			(404,726	)		11,899,483
MSCI Norway Capped		72,906		(746,411	)		(9,248,047	)		(1,220,555	)		(11,142,107	)

^a  The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales, the foreign withholding tax reclaims and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies.

^b  The Funds have elected to defer certain qualified late-year losses and recognize such losses in the next taxable year.

56 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

As of August 31, 2016, the following Funds had non-expiring capital loss carryforwards available to offset future realized capital gains as follows:

iShares ETF	Non- Expiring
MSCI Denmark Capped	$	131,341
MSCI Finland Capped		103,008
MSCI Germany Small-Cap		384,620
MSCI Ireland Capped		885,342
MSCI New Zealand Capped		8,762,256
MSCI Norway Capped		746,411

The Funds may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Funds may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.

Management has analyzed tax laws and regulations and their application to the Funds as of August 31, 2016, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

7. FOREIGN WITHHOLDING TAX CLAIMS

The iShares MSCI Finland Capped ETF intends to file claims to recover taxes withheld by Finland on dividend income on the basis that Finland had purportedly violated certain provisions in the Treaty on the Functioning of the European Union. The Fund has recorded a receivable for all recoverable taxes withheld by Finland based upon recent favorable determinations issued by the Finnish Tax Authority. Withholding tax claims may be for the current year and potentially for a limited number of prior calendar years, based on Finland’s statute of limitation on taxes. The Fund continues to evaluate developments in Finland for potential impact to the receivables recorded. Such foreign withholding tax claims are disclosed in the statement of assets and liabilities and statement of operations. Professional fees associated with the filing of these claims resulting in the recovery of foreign withholding taxes were approved by the Board as appropriate expenses of the Fund.

The Fund plans to seek a closing agreement with the Internal Revenue Service (“IRS”) to address any prior years’ U.S. income tax liabilities attributable to Fund shareholders resulting from the recovery of foreign taxes. The closing agreement would result in the Fund (on behalf of its shareholders) paying a compliance fee to the IRS representing the estimated tax savings generated from foreign tax credits claimed by Fund shareholders on their tax returns from prior calendar years. The Fund has accrued an estimated liability for this IRS compliance fee, which is disclosed as “Payable for IRS compliance fee for foreign withholding tax claims” in the statement of assets and liabilities. The actual IRS compliance fee may differ from the estimate and that difference may be material.

8. SUBSEQUENT EVENTS

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

NOTES TO FINANCIAL STATEMENTS 57

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees of

iShares Trust:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of iShares MSCI Denmark Capped ETF, iShares MSCI Finland Capped ETF, iShares MSCI Germany Small-Cap ETF, iShares MSCI Ireland Capped ETF, iShares MSCI New Zealand Capped ETF and iShares MSCI Norway Capped ETF (the “Funds”) at August 31, 2016, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2016 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 21, 2016

58 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Tax Information (Unaudited)

iSHARES^® TRUST

The following maximum amounts are hereby designated as qualified dividend income for individuals for the fiscal year ended August 31, 2016:

iShares ETF	Qualified Dividend Income
MSCI Denmark Capped	$	1,488,257
MSCI Finland Capped		1,163,400
MSCI Germany Small-Cap		482,851
MSCI Ireland Capped		2,573,565
MSCI New Zealand Capped		3,288,423
MSCI Norway Capped		847,291

For the fiscal year ended August 31, 2016, the Funds earned foreign source income and paid foreign taxes which they intend to pass through to their shareholders:

iShares ETF	Foreign Source Income Earned		Foreign Taxes Paid
MSCI Denmark Capped	$	1,567,671	$	232,890
MSCI Finland Capped		1,253,714		—
MSCI Germany Small-Cap		513,665		52,818
MSCI Ireland Capped		2,759,755		16,363
MSCI New Zealand Capped		3,633,836		508,936
MSCI Norway Capped		960,233		179,838

TAX INFORMATION 59

Board Review and Approval of Investment Advisory

Contract

iSHARES^® TRUST

I. iShares MSCI Denmark Capped ETF, iShares MSCI Finland Capped ETF, iShares MSCI Germany Small-Cap ETF and iShares MSCI Norway Capped ETF

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on April 28, 2016 and May 9, 2016. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 17, 2016, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 21-23, 2016, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA, including the additional information management provided at the request of the Independent Trustees. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential enhancements and adjustments to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:

Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of each Fund in comparison with the same information for other exchange traded funds (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising such Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of Broadridge’s proprietary ETF methodology used by Broadridge to determine the applicable Peer Groups. The Board further noted that due to the limitations in providing comparable funds in the various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.

The Board also noted that the investment advisory fee rates and overall expenses (net of waivers and reimbursements) for the Funds were higher than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group, excluding iShares funds. The Board further noted that the pricing for iShares MSCI Denmark Capped ETF and iShares MSCI Finland Capped ETF reflects the unique country exposure of each Fund, and that there were no comparison funds in the Peer Group for iShares MSCI Denmark Capped ETF that focused on Demark, and no comparison funds in the Peer Group for iShares MSCI Finland Capped ETF that focused on Finland. In addition, the Board noted that iShares MSCI Norway Capped ETF invests primarily in Norwegian securities, as compared to most of the competitor funds identified by Broadridge, which do not invest primarily in Norwegian securities. The Board further noted that the

60 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

pricing for iShares MSCI Germany Small-Cap ETF reflects that it invests primarily in small-cap companies, as compared to the competitor funds as determined by Broadridge, which do not invest primarily in small-cap companies.

In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as any particular Fund, Broadridge also provided, and the Board reviewed, a comparison of such Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the “last quarter” period ended December 31, 2015, to that of such relevant comparison funds for the same periods.

The Board noted that each Fund seeks to track its own underlying index and that, during the year, the Board received periodic reports on each Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including additional detailed information on certain specific iShares funds requested by the Board, was also considered. The Board noted that each Fund generally performed in line with its underlying index over the relevant periods.

Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, product design and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds, as well as the resources available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 21-23, 2016 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.

Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Costs of Services Provided to the Funds and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock of the Funds, on a Fund-by-Fund basis and in the aggregate, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analyses and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 61

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.

Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Funds did not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase. However, the Board noted that should material economies of scale exist in the future that are not otherwise shared, a breakpoint structure for the Funds may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.

Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue periodically, determined to approve the continuance of the Advisory Contract for the coming year.

Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objectives and strategies as the Funds and that track the same respective indexes as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different and generally more extensive services provided to the Funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded exchange traded funds, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.

Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does not use soft dollars or consider the value of

62 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.

Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of each Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.

II. iShares MSCI Ireland Capped ETF and iShares MSCI New Zealand Capped ETF

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on April 28, 2016 and May 9, 2016. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 17, 2016, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 21-23, 2016, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA, including the additional information management provided at the request of the Independent Trustees. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential enhancements and adjustments to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:

Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of each Fund in comparison with the same information for other exchange traded funds (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising such Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of Broadridge’s proprietary ETF methodology used by Broadridge to determine the

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 63

Board Review and Approval of Investment Advisory

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iSHARES^® TRUST

applicable Peer Groups. The Board further noted that due to the limitations in providing comparable funds in the various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.

The Board also noted that the investment advisory fee rates and overall expenses (net of waivers and reimbursements) for the Funds were lower than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group, excluding iShares funds.

In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as any particular Fund, Broadridge also provided, and the Board reviewed, a comparison of such Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the “last quarter” period ended December 31, 2015, to that of such relevant comparison funds for the same periods.

The Board noted that each Fund seeks to track its own underlying index and that, during the year, the Board received periodic reports on each Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including additional detailed information on certain specific iShares funds requested by the Board, was also considered. The Board noted that each Fund generally performed in line with its underlying index over the relevant periods.

Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, product design and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds, as well as the resources available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 21-23, 2016 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.

Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Costs of Services Provided to the Funds and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock of the Funds, on a Fund-by-Fund basis and in the aggregate, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its

64 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analyses and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.

Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Funds already provided for breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future.

Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue periodically, determined to approve the continuance of the Advisory Contract for the coming year.

Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objectives and strategies as the Funds and that track the same respective indexes as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different and generally more extensive services provided to the Funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded exchange traded funds, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 65

Board Review and Approval of Investment Advisory

Contract (Continued)

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Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.

Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of each Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.

66 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited)

iSHARES^® TRUST

Section 19(a) Notices

The amounts and sources of distributions reported are estimates and are provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report these distributions for federal income tax purposes.

	Total Cumulative Distributions for the Fiscal Year								% Breakdown of the Total Cumulative Distributions for the Fiscal Year
iShares ETF	Net Investment Income		Net Realized Capital Gains		Return of Capital		Total Per Share		Net Investment Income			Net Realized Capital Gains			Return of Capital			Total Per Share
MSCI Denmark Capped	$	0.630625	$	—	$	—	$	0.630625		100	%		—	%		—	%		100	%
MSCI Germany Small-Cap		0.666057		—		—		0.666057		100			—			—			100
MSCI Ireland Capped		0.541191		—		0.015327		0.556518		97			—			3			100
MSCI New Zealand Capped		1.235725		—		—		1.235725		100			—			—			100
MSCI Norway Capped		0.617119		—		—		0.617119		100			—			—			100

Premium/Discount Information

The Premium/Discount Information section is intended to present information about the differences between the daily market price on secondary markets for shares of a fund and that fund’s NAV. NAV is the price at which a fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of a fund generally is determined using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of such fund are listed for trading, as of the time that the fund’s NAV is calculated. A fund’s Market Price may be at, above or below its NAV. The NAV of a fund will fluctuate with changes in the fair value of its portfolio holdings. The Market Price of a fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.

Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of a fund on a given day, generally at the time the NAV is calculated. A premium is the amount that a fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that a fund is trading below the reported NAV, expressed as a percentage of the NAV.

The following information shows the frequency of distributions of premiums and discounts for each of the Funds. The information shown for each Fund is for five calendar years (or from the inception date of the Fund if less than five years) through the date of the most recent calendar quarter-end. The specific periods covered for each Fund are disclosed in the table for the Fund.

SUPPLEMENTAL INFORMATION 67

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

Each line in the table shows the number of trading days in which the Fund traded within the premium/discount range indicated. The number of trading days in each premium/discount range is also shown as a percentage of the total number of trading days in the period covered by each table. All data presented here represents past performance, which cannot be used to predict future results.

iShares MSCI Denmark Capped ETF

Period Covered: January 25, 2012 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 3.0% and Less than 3.5%		1		0.09	%
Greater than 2.5% and Less than 3.0%		1		0.09
Greater than 2.0% and Less than 2.5%		1		0.09
Greater than 1.5% and Less than 2.0%		8		0.72
Greater than 1.0% and Less than 1.5%		21		1.88
Greater than 0.5% and Less than 1.0%		165		14.78
Between 0.5% and –0.5%		819		73.39
Less than –0.5% and Greater than –1.0%		73		6.54
Less than –1.0% and Greater than –1.5%		19		1.70
Less than –1.5% and Greater than –2.0%		6		0.54
Less than –2.0% and Greater than –2.5%		1		0.09
Less than –2.5% and Greater than –3.0%		1		0.09
		1,116		100.00	%

iShares MSCI Finland Capped ETF

Period Covered: January 25, 2012 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 2.5% and Less than 3.0%		1		0.09	%
Greater than 2.0% and Less than 2.5%		3		0.27
Greater than 1.5% and Less than 2.0%		10		0.90
Greater than 1.0% and Less than 1.5%		31		2.78
Greater than 0.5% and Less than 1.0%		173		15.50
Between 0.5% and –0.5%		787		70.51
Less than –0.5% and Greater than –1.0%		80		7.17
Less than –1.0% and Greater than –1.5%		21		1.88
Less than –1.5% and Greater than –2.0%		6		0.54
Less than –2.0% and Greater than –2.5%		1		0.09
Less than –2.5% and Greater than –3.0%		1		0.09
Less than –3.0%		2		0.18
		1,116		100.00	%

68 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares MSCI Germany Small-Cap ETF

Period Covered: January 25, 2012 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 2.0%		1		0.09	%
Greater than 1.5% and Less than 2.0%		10		0.90
Greater than 1.0% and Less than 1.5%		26		2.33
Greater than 0.5% and Less than 1.0%		135		12.10
Between 0.5% and –0.5%		826		74.01
Less than –0.5% and Greater than –1.0%		98		8.78
Less than –1.0% and Greater than –1.5%		15		1.34
Less than –1.5% and Greater than –2.0%		1		0.09
Less than –2.0% and Greater than –2.5%		2		0.18
Less than –2.5% and Greater than –3.0%		2		0.18
		1,116		100.00	%

iShares MSCI Ireland Capped ETF

Period Covered: January 1, 2011 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 4.0%		2		0.14	%
Greater than 3.5% and Less than 4.0%		2		0.14
Greater than 3.0% and Less than 3.5%		7		0.51
Greater than 2.5% and Less than 3.0%		9		0.65
Greater than 2.0% and Less than 2.5%		46		3.33
Greater than 1.5% and Less than 2.0%		156		11.28
Greater than 1.0% and Less than 1.5%		339		24.52
Greater than 0.5% and Less than 1.0%		286		20.68
Between 0.5% and –0.5%		451		32.62
Less than –0.5% and Greater than –1.0%		62		4.48
Less than –1.0% and Greater than –1.5%		14		1.01
Less than –1.5% and Greater than –2.0%		6		0.43
Less than –2.0% and Greater than –2.5%		2		0.14
Less than –2.5% and Greater than –3.0%		1		0.07
		1,383		100.00	%

SUPPLEMENTAL INFORMATION 69

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares MSCI New Zealand Capped ETF

Period Covered: January 1, 2011 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 2.5%		2		0.14	%
Greater than 2.0% and Less than 2.5%		4		0.29
Greater than 1.5% and Less than 2.0%		11		0.80
Greater than 1.0% and Less than 1.5%		51		3.69
Greater than 0.5% and Less than 1.0%		208		15.04
Between 0.5% and –0.5%		899		65.00
Less than –0.5% and Greater than –1.0%		139		10.05
Less than –1.0% and Greater than –1.5%		43		3.11
Less than –1.5% and Greater than –2.0%		13		0.94
Less than –2.0% and Greater than –2.5%		8		0.58
Less than –2.5% and Greater than –3.0%		3		0.22
Less than –3.0%		2		0.14
		1,383		100.00	%

iShares MSCI Norway Capped ETF

Period Covered: January 25, 2012 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 2.5% and Less than 3.0%		1		0.09	%
Greater than 2.0% and Less than 2.5%		1		0.09
Greater than 1.5% and Less than 2.0%		13		1.16
Greater than 1.0% and Less than 1.5%		29		2.59
Greater than 0.5% and Less than 1.0%		177		15.83
Between 0.5% and –0.5%		739		66.11
Less than –0.5% and Greater than –1.0%		111		9.93
Less than –1.0% and Greater than –1.5%		34		3.04
Less than –1.5% and Greater than –2.0%		11		0.98
Less than –2.0% and Greater than –2.5%		1		0.09
Less than –2.5%		1		0.09
		1,118		100.00	%

70 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee and Officer Information

iSHARES^® TRUST

The Board of Trustees has responsibility for the overall management and operations of the Funds, including general supervision of the duties performed by BFA and other service providers. Each Trustee serves until he or she resigns, is removed, dies, retires or becomes incapacitated. Each officer shall hold office until his or her successor is elected and qualifies or until his or her death, or his or her resignation or removal. Trustees who are not “interested persons” (as defined in the 1940 Act) of the Trust are referred to as independent trustees (“Independent Trustees”).

The registered investment companies advised by BFA or its affiliates (the “BlackRock-advised Funds”) are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Trustee also serves as a Director of iShares, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 333 funds (as of August 31, 2016) within the Exchange-Traded Fund Complex. With the exception of Robert S. Kapito, Mark Wiedman and Benjamin Archibald, the address of each Trustee and officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito, Mr. Wiedman and Mr. Archibald is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52^nd Street, New York, NY 10055. The Board has designated Cecilia H. Herbert as its Independent Board Chair. Additional information about the Funds’ Trustees and officers may be found in the Funds’ combined Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-iShares (1-800-474-2737).

Interested Trustees

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Robert S. Kapitoa (59)	Trustee (since 2009).	President and Director, BlackRock, Inc. (since 2006); Vice Chairman of BlackRock, Inc. and Head of BlackRock, Inc.’s Portfolio Management Group (since its formation in 1998) and BlackRock, Inc.’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983).	Director of iShares, Inc. (since 2009); Trustee of iShares U.S. ETF Trust (since 2011).
Mark Wiedmanb (45)	Trustee (since 2013).	Managing Director, BlackRock, Inc. (since 2007); Global Head of iShares (since 2011); Head of Corporate Strategy, BlackRock, Inc. (2009-2011).	Director of iShares, Inc. (since 2013); Trustee of iShares U.S. ETF Trust (since 2013); Director of PennyMac Financial Services, Inc. (since 2008).

^a  Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc.

^b  Mark Wiedman is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc. and its affiliates.

TRUSTEE AND OFFICER INFORMATION 71

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Independent Trustees^c

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Cecilia H. Herbert (67)	Trustee (since 2005); Independent Board Chair (since 2016); Nominating and Governance Committee Chair (since 2016).	Director (1998-2013) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010) of the Thacher School; Member (since 1992) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco; Trustee and Member of the Investment Committee, WNET, the New York public media company (since 2011).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Independent Board Chair of iShares, Inc. and iShares U.S. ETF Trust (since 2016); Director of Forward Funds (23 portfolios) (since 2009); Director of Salient MF Trust (4 portfolios) (since 2015).
Jane D. Carlin (60)	Trustee (since 2015); Risk Committee Chair (since 2016).	Managing Director and Global Head of Financial Holding Company Governance & Assurance and the Global Head of Operational Risk Management of Morgan Stanley (2006-2012).	Director of iShares, Inc. (since 2015); Trustee of iShares U.S. ETF Trust (since 2015); Director of PHH Corporation (mortgage solutions) (since 2012).
Charles A. Hurty (72)	Trustee (since 2005); Audit Committee Chair (since 2006).	Retired; Partner, KPMG LLP (1968-2001).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (2 portfolios) (since 2002).
John E. Kerrigan (61)	Trustee (since 2005); Securities Lending Committee Chair (since 2016).	Chief Investment Officer, Santa Clara University (since 2002).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011).
John E. Martinez (55)	Trustee (since 2003); Fixed Income Plus Committee Chair (since 2016).	Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005).	Director of iShares, Inc. (since 2003); Trustee of iShares U.S. ETF Trust (since 2011).

72 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Independent Trustees^c (Continued)

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Madhav V. Rajan (52)	Trustee (since 2011); Equity Plus Committee Chair and 15(c) Committee Chair (since 2016).	Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (2007-2008).	Director of iShares, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011); Director, Cavium, Inc. (since 2013).

^c  Robert H. Silver served as an Independent Trustee until March 31, 2016.

TRUSTEE AND OFFICER INFORMATION 73

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Officers^d

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years
Martin Small (41)	President (since 2016).	Managing Director, BlackRock, Inc. (since January 2010); Head of U.S. iShares (since 2015); Co-Head of the U.S. Financial Markets Advisory Group, BlackRock, Inc. (2008-2014).
Jack Gee (56)	Treasurer and Chief Financial Officer (since 2008).	Managing Director, BlackRock, Inc. (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director of Fund Administration of Intermediary Investor Business, BGI (2004-2009).
Benjamin Archibald (41)	Secretary (since 2015).	Managing Director, BlackRock, Inc. (since 2014); Director, BlackRock, Inc. (2010-2013); Secretary of the BlackRock-advised Mutual Funds (since 2012).
Steve Messinger (54)	Executive Vice President (since 2016).	Managing Director, BlackRock, Inc. (2007-2014 and since 2016); Managing Director, Beacon Consulting Group (2014-2016).
Charles Park (49)	Chief Compliance Officer (since 2006).	Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex (since 2014); Chief Compliance Officer, BFA (since 2006).
Scott Radell (47)	Executive Vice President (since 2012).	Managing Director, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005).
Amy Schioldager (53)	Executive Vice President (since 2007).	Senior Managing Director, BlackRock, Inc. (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006).

^d  Manish Mehta served as President until October 15, 2016.

74 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

For more information visit www.iShares.com or call 1-800-474-2737

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

Investing involves risk, including possible loss of principal.

The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.

A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.

The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily basis on the Funds’ website.

©2016 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.

iS-AR-808-0816

AUGUST 31, 2016

2016 ANNUAL REPORT

iShares Trust

^Ø  iShares MSCI India ETF  |  INDA  |  BATS

^Ø  iShares MSCI India Small-Cap ETF  |  SMIN  |  BATS

Table of Contents

Management’s Discussions of Fund Performance	5
About Fund Performance	10
Shareholder Expenses	10
Consolidated Schedules of Investments	11
iShares MSCI India ETF	11
iShares MSCI India Small-Cap ETF	14
Consolidated Financial Statements	19
Consolidated Financial Highlights	22
Notes to Consolidated Financial Statements	24
Report of Independent Registered Public Accounting Firm	32
Tax Information	33
Board Review and Approval of Investment Advisory Contract	34
Supplemental Information	40
Trustee and Officer Information	42

Management’s Discussion of Fund Performance

iSHARES^® TRUST

GLOBAL EQUITY MARKET OVERVIEW

Global equity markets advanced for the 12 months ended August 31, 2016 (the “reporting period”). The MSCI ACWI, a broad global equity index that includes both developed and emerging markets, returned 7.24% for the reporting period.

Early in the reporting period, global stock markets were volatile but generally declined overall amid lower energy prices and weaker global economic growth, including slowdowns in stronger developed economies such as the U.S. and U.K. In response, many of the world’s central banks took more aggressive actions to stimulate economic activity, including expanded quantitative easing measures and negative interest rates.

In the U.S., the Federal Reserve Bank (the “Fed”) postponed plans to raise its short-term interest rate target until December 2015, when it ended a seven-year period of near-zero interest rates by increasing the federal funds target interest rate from a range of 0%-0.25% to a range of 0.25%-0.50%. It was the Fed’s first interest rate hike since June 2006.

After bottoming in mid-February 2016, global equity markets reversed course, rallying through the end of the reporting period. Central bank stimulus activity and a recovery in energy prices helped global equity markets rebound, as did signs of stabilization in China, which had experienced a marked economic slowdown that put downward pressure on its currency. Despite the overall upward trend in global equity markets, geopolitical factors — including the “Brexit” referendum in the U.K. (an affirmative vote to leave the European Union), terrorist attacks in France, and an attempted coup in Turkey — contributed to increased equity market volatility late in the reporting period.

Among developed countries, the U.S. was among the best-performing markets, returning approximately 12% for the reporting period. Although employment growth remained robust, other segments of the U.S. economy struggled, leading to three consecutive quarters of growth below a 1.5% annual rate. As a result, the Fed — which was expected to raise short-term interest rates further in 2016 — held rates steady through the first eight months of the year. Stable Fed monetary policy, as well as the relative strength of the U.S. economy compared with other regions of the globe, provided a favorable backdrop for U.S. equity market performance.

Equity markets in the Asia/Pacific region gained approximately 6% for the reporting period. New Zealand and Australia were the leading markets in the region, benefiting from improving economic growth during the reporting period, while the laggards included Singapore and Japan. In particular, the Japanese equity market declined by more than 12%, but a strong rally in the Japanese yen (which appreciated by 15% against the U.S. dollar) helped offset the overall market decline, resulting in a 3% gain in U.S. dollar terms.

European stock markets declined by approximately 3% for the reporting period. Markets in Italy and Spain, which were adversely affected by political instability and struggling banking sectors, declined the most, while Belgium and Portugal performed best. In the U.K., the equity market advanced by about 13%, but a sharp decline in the British pound in the wake of the Brexit vote led to negative returns in U.S. dollar terms.

Emerging markets stocks outperformed developed markets, advancing by nearly 12% for the reporting period in U.S. dollar terms. Latin American equity markets generated the best returns, led by rebounding markets in Peru and Brazil, while stock markets in Eastern Europe lagged.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 5

Management’s Discussion of Fund Performance

iSHARES^® MSCI INDIA ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		6.73%		7.02%		7.61%		6.73%		7.02%		7.61%
Since Inception		4.07%		4.08%		4.68%		20.06%		20.09%		23.30%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 2/2/12. The first day of secondary market trading was 2/3/12.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 10 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,248.60	$	3.90	$	1,000.00	$	1,021.70	$	3.51		0.69%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 10 for more information.

6 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI INDIA ETF

The iShares MSCI India ETF (the “Fund”) seeks to track the investment results of an index composed of Indian equities, as represented by the MSCI India Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 6.73%, net of fees, while the total return for the Index was 7.61%.

As represented by the Index, Indian stocks posted a positive return for the reporting period and outperformed broader global equity indexes. The Indian rupee was down slightly relative to the U.S. dollar, which had a negative effect on the Index’s performance, as returns on Indian investments were lower when translated back into U.S. dollars.

India’s economic growth was lower in 2016’s second quarter compared to the first quarter, at the slowest rate since 2014’s fourth quarter. In an effort to boost economic growth, the Reserve Bank of India cut its key interest rate in April 2016 to the lowest rate in more than five years. However, personal incomes rose, while consumer spending increased in late 2015 and early 2016 to record-high levels before moderating somewhat in 2016’s second quarter.

In U.S. dollar terms, the financials sector, which represented about 16% of the Index on average, was the largest contributor to the Index’s return for the reporting period, largely due to the strong performance of Indian banks. The consumer discretionary and materials sectors also contributed to the Index’s performance for the reporting period. In the consumer discretionary sector, the automobile-related industries performed well, while the metals and mining industry boosted performance in the materials sector. Conversely, the healthcare sector was the largest detractor from the Index’s return for the reporting period. Within the sector, the stock prices of Indian pharmaceutical companies generally declined amid renewed scrutiny over drug pricing. The information technology sector also hindered the Index’s performance during the reporting period, as Indian IT services companies fell.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Financials	22.06	%
Information Technology	16.86
Consumer Discretionary	14.07
Health Care	10.22
Consumer Staples	9.86
Energy	8.78
Materials	7.28
Industrials	6.08
Telecommunication Services	2.77
Utilities	2.02
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Housing Development Finance Corp. Ltd.	9.02	%
Infosys Ltd.	8.14
Reliance Industries Ltd.	5.88
Tata Consultancy Services Ltd.	5.08
Axis Bank Ltd.	4.26
ITC Ltd.	3.76
Tata Motors Ltd.	3.63
Sun Pharmaceuticals Industries Ltd.	3.19
Hindustan Unilever Ltd.	2.54
Mahindra & Mahindra Ltd.	2.29
TOTAL	47.79	%

* Excludes money market funds.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 7

Management’s Discussion of Fund Performance

iSHARES^® MSCI INDIA SMALL-CAP ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		13.99%		14.21%		15.07%		13.99%		14.21%		15.07%
Since Inception		9.27%		9.34%		9.81%		49.88%		50.30%		53.22%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 2/8/12. The first day of secondary market trading was 2/9/12.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 10 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,375.90	$	4.96	$	1,000.00	$	1,021.00	$	4.22		0.83%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 10 for more information.

8 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI INDIA SMALL-CAP ETF

The iShares MSCI India Small-Cap ETF (the “Fund”) seeks to track the investment results of an index composed of small-capitalization Indian equities, as represented by the MSCI India Small Cap Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 13.99%, net of fees, while the total return for the Index was 15.07%.

As represented by the Index, Indian small-capitalization stocks posted a positive return for the reporting period and outperformed Indian mid- and large-capitalization stocks, as well as broader global equity indexes. The Indian rupee was down slightly relative to the U.S. dollar, which had a negative effect on the Index’s performance, as returns on Indian investments were lower when translated back into U.S. dollars.

India’s economic growth was lower in 2016’s second quarter compared to the first quarter, at the slowest rate since 2014’s fourth quarter. In an effort to boost economic growth, the Reserve Bank of India cut its key interest rate in April 2016 to the lowest rate in more than five years. However, personal incomes rose, while consumer spending increased in late 2015 and early 2016 to record-high levels before moderating somewhat in 2016’s second quarter.

In U.S. dollar terms, the financials sector, which represented about 19% of the Index on average, was the largest contributor to the Index’s return for the reporting period, largely due to the strong performance of small-capitalization consumer finance stocks. The materials sector contributed to the Index’s performance, as small-capitalization chemicals and construction materials companies generally performed well. The industrials sector also helped the Index’s return for the reporting period, as did the consumer discretionary sector. Conversely, the information technology sector detracted from the Index’s performance for the reporting period, largely due to internet software and services companies. The healthcare sector also hindered the Index’s return. Within the sector, several pharmaceutical companies declined amid renewed scrutiny over drug pricing.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Consumer Discretionary	21.72	%
Financials**	18.73
Industrials	16.96
Materials	12.93
Health Care	9.15
Information Technology	7.76
Utilities	4.65
Consumer Staples	3.38
Real Estate**	1.98
Telecommunication Services	1.61
Energy	1.13
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Federal Bank Ltd.	1.65	%
Page Industries Ltd.	1.57
Bharat Financial Inclusion Ltd.	1.50
Rural Electrification Corp. Ltd.	1.38
Reliance Infrastructure Ltd.	1.23
Berger Paints India Ltd.	1.17
Crompton Greaves Consumer Electricals Ltd.	1.10
MindTree Ltd.	1.09
Reliance Capital Ltd.	1.04
Indian Hotels Co. Ltd.	1.00
TOTAL	12.73	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 9

About Fund Performance

Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.ishares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.

Shareholder Expenses

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested on March 1, 2016 and held through August 31, 2016, is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.

Actual Expenses — The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number corresponding to your Fund under the heading entitled “Expenses Paid During Period.”

Hypothetical Example for Comparison Purposes — The table also provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

10 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Consolidated Schedule of Investments

iSHARES^® MSCI INDIA ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.91%
AUTO COMPONENTS — 1.60%
Bharat Forge Ltd.		1,232,342	$	15,646,713
Bosch Ltd.		88,649		31,991,210
Motherson Sumi Systems Ltd.		3,734,520		17,986,702
				65,624,625
AUTOMOBILES — 10.58%
Bajaj Auto Ltd.		987,176		43,904,789
Hero Motocorp Ltd.		587,271		31,054,683
Mahindra & Mahindra Ltd.		4,383,845		94,039,596
Maruti Suzuki India Ltd.		1,243,763		93,856,098
Tata Motors Ltd.		18,598,557		149,327,223
Tata Motors Ltd. Class A		4,486,214		23,013,869
				435,196,258
BANKS — 8.96%
Axis Bank Ltd.		19,645,329		175,083,091
ICICI Bank Ltd.		12,999,415		50,079,873
State Bank of India		18,263,954		68,861,406
Yes Bank Ltd.		3,657,627		74,610,785
				368,635,155
BEVERAGES — 0.65%
United Spirits Ltd.a		769,323		26,571,339
				26,571,339
CHEMICALS — 2.39%
Asian Paints Ltd.		3,385,144		58,528,569
UPL Ltd.		4,173,663		39,820,247
				98,348,816
CONSTRUCTION & ENGINEERING — 2.05%
Larsen & Toubro Ltd.		3,727,053		84,199,564
				84,199,564
CONSTRUCTION MATERIALS — 2.26%
ACC Ltd.		530,063		13,532,951
Ambuja Cements Ltd.		7,007,621		29,084,191
Shree Cement Ltd.		98,356		25,223,900
Ultratech Cement Ltd.		419,691		25,247,262
				93,088,304
CONSUMER FINANCE — 1.96%
Bajaj Finance Ltd.		190,122		31,259,555
Mahindra & Mahindra Financial Services Ltd.		3,278,511		17,440,190
Shriram Transport Finance Co. Ltd.		1,734,996		32,048,332
				80,748,077

Security	Shares		Value
DIVERSIFIED FINANCIAL SERVICES — 0.34%
Power Finance Corp. Ltd.		7,453,770	$	13,767,827
				13,767,827
DIVERSIFIED TELECOMMUNICATION SERVICES — 0.85%
Bharti Infratel Ltd.		6,693,605		35,057,219
				35,057,219
ELECTRIC UTILITIES — 0.37%
Tata Power Co. Ltd.		13,044,857		15,290,746
				15,290,746
ELECTRICAL EQUIPMENT — 0.79%
Bharat Heavy Electricals Ltd.		6,910,339		14,353,115
Havells India Ltd.		2,939,011		18,326,579
				32,679,694
FOOD PRODUCTS — 0.92%
GlaxoSmithKline Consumer Healthcare Ltd.		118,736		11,118,934
Nestle India Ltd.		272,212		26,524,310
				37,643,244
GAS UTILITIES — 0.52%
GAIL (India) Ltd.		3,730,531		21,384,961
				21,384,961
HEALTH CARE PROVIDERS & SERVICES — 0.44%
Apollo Hospitals Enterprise Ltd.		900,152		18,144,844
				18,144,844
HOUSEHOLD PRODUCTS — 2.54%
Hindustan Unilever Ltd.		7,636,838		104,574,620
				104,574,620
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS — 1.12%
NTPC Ltd.		19,399,602		46,130,904
				46,130,904
INDUSTRIAL CONGLOMERATES — 0.39%
Siemens Ltd.		837,866		15,839,633
				15,839,633
IT SERVICES — 16.84%
HCL Technologies Ltd.		6,637,420		77,162,361
Infosys Ltd.		21,616,641		334,352,659
Tata Consultancy Services Ltd.		5,563,134		208,611,295
Tech Mahindra Ltd.		2,740,075		19,180,934
Wipro Ltd.		7,266,245		53,344,025
				692,651,274

CONSOLIDATED SCHEDULES OF INVESTMENTS 11

Consolidated Schedule of Investments (Continued)

iSHARES^® MSCI INDIA ETF

August 31, 2016

Security	Shares		Value
LIFE SCIENCES TOOLS & SERVICES — 0.45%
Divi’s Laboratories Ltd.		936,876	$	18,501,098
				18,501,098
MACHINERY — 1.72%
Ashok Leyland Ltd.		13,391,331		17,506,511
Eicher Motors Ltd.		156,575		53,191,429
				70,697,940
MEDIA — 1.33%
Zee Entertainment Enterprises Ltd.		6,779,117		54,611,522
				54,611,522
METALS & MINING — 2.62%
Hindalco Industries Ltd.		13,117,725		31,193,037
JSW Steel Ltd.		995,250		26,053,050
Tata Steel Ltd.		3,541,805		19,573,272
Vedanta Ltd.		12,206,626		30,985,911
				107,805,270
OIL, GAS & CONSUMABLE FUELS — 8.78%
Bharat Petroleum Corp. Ltd.		3,062,239		27,554,207
Cairn India Ltd.		5,293,322		15,740,855
Coal India Ltd.		8,173,490		40,702,687
Oil & Natural Gas Corp. Ltd.		10,064,509		35,512,072
Reliance Industries Ltd.		15,251,934		241,407,347
				360,917,168
PERSONAL PRODUCTS — 1.99%
Dabur India Ltd.		6,214,432		26,966,014
Godrej Consumer Products Ltd.		1,402,087		31,753,701
Marico Ltd.		5,312,060		23,121,778
				81,841,493
PHARMACEUTICALS — 9.32%
Aurobindo Pharma Ltd.		3,097,719		36,581,023
Cadila Healthcare Ltd.		2,408,621		13,699,324
Cipla Ltd.		4,064,233		34,770,827
Dr. Reddy’s Laboratories Ltd.		1,384,279		63,867,619
Glenmark Pharmaceuticals Ltd.		1,626,480		20,427,540
Lupin Ltd.		2,597,935		57,498,272
Piramal Enterprises Ltd.		913,499		25,078,596
Sun Pharmaceuticals Industries Ltd.		11,324,749		131,163,828
				383,087,029
ROAD & RAIL — 0.20%
Container Corp. of India Ltd.		389,918		8,119,459
				8,119,459

Security	Shares		Value
TEXTILES, APPAREL & LUXURY GOODS — 0.56%
Titan Co. Ltd.		3,655,309	$	22,842,270
				22,842,270
THRIFTS & MORTGAGE FINANCE — 10.77%
Housing Development Finance Corp. Ltd.		17,661,935		370,658,004
Indiabulls Housing Finance Ltd.		3,469,852		42,444,419
LIC Housing Finance Ltd.		3,502,686		29,971,842
				443,074,265
TOBACCO — 3.75%
ITC Ltd.		39,759,614		154,389,840
				154,389,840
TRANSPORTATION INFRASTRUCTURE — 0.93%
Adani Ports & Special Economic Zone Ltd.		9,744,906		38,262,252
				38,262,252
WIRELESS TELECOMMUNICATION SERVICES — 1.92%
Bharti Airtel Ltd.		11,756,155		58,219,036
Idea Cellular Ltd.		14,824,534		20,686,168
				78,905,204
TOTAL COMMON STOCKS
(Cost: $3,797,261,415)				4,108,631,914
TOTAL INVESTMENTS IN SECURITIES — 99.91%
(Cost: $3,797,261,415)b				4,108,631,914
Other Assets, Less Liabilities — 0.09%				3,620,367
NET ASSETS — 100.00%			$	4,112,252,281

^a  Non-income earning security.

^b  The cost of investments for federal income tax purposes was $3,975,996,830. Net unrealized appreciation was $132,635,084, of which $447,406,787 represented gross unrealized appreciation on securities and $314,771,703 represented gross unrealized depreciation on securities.

12 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Consolidated Schedule of Investments (Continued)

iSHARES^® MSCI INDIA ETF

August 31, 2016

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	4,108,631,914	$	—	$	—	$	4,108,631,914
Total	$	4,108,631,914	$	—	$	—	$	4,108,631,914

See notes to consolidated financial statements.

CONSOLIDATED SCHEDULES OF INVESTMENTS 13

Consolidated Schedule of Investments

iSHARES^® MSCI INDIA SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.73%
AIR FREIGHT & LOGISTICS — 0.71%
Allcargo Logistics Ltd.		50,436	$	139,176
Blue Dart Express Ltd.		3,960		321,888
				461,064
AIRLINES — 0.40%
Jet Airways India Ltd.a		18,972		152,708
SpiceJet Ltd.a		121,572		107,013
				259,721
AUTO COMPONENTS — 5.34%
Apollo Tyres Ltd.		191,976		524,730
Asahi India Glass Ltd.		47,840		140,155
Balkrishna Industries Ltd.		32,266		422,850
Ceat Ltd.		15,140		201,927
Exide Industries Ltd.		172,296		476,728
Mahindra CIE Automotive Ltd.a		64,512		170,889
MRF Ltd.		864		482,919
Sundram Fasteners Ltd.		42,386		184,557
Tube Investments of India Ltd.		60,460		504,932
WABCO India Ltd.		3,808		354,655
				3,464,342
AUTOMOBILES — 0.72%
TVS Motor Co. Ltd.		95,401		464,469
				464,469
BANKS — 5.18%
Allahabad Banka		121,771		153,009
Andhra Bank		111,096		100,114
Canara Bank Ltd.a		91,584		383,663
City Union Bank Ltd.		49,044		96,448
DCB Bank Ltd.a		115,704		208,274
Federal Bank Ltd.		1,038,643		1,066,249
Jammu & Kashmir Bank Ltd. (The)		161,076		169,206
Karnataka Bank Ltd. (The)		76,825		173,794
Karur Vysya Bank Ltd. (The)		40,968		294,918
Oriental Bank of Commerce		59,281		111,224
State Bank of Bikaner & Jaipur		11,412		115,662
Syndicate Banka		135,174		155,621
Union Bank of India		115,776		244,967
Vijaya Banka		143,028		82,438
				3,355,587
BIOTECHNOLOGY — 0.86%
Biocon Ltd.		40,578		555,441
				555,441

Security	Shares		Value
BUILDING PRODUCTS — 1.84%
Astral Polytechnik Ltd.		24,084	$	170,893
Blue Star Ltd.		18,972		141,971
Cera Sanitaryware Ltd.		2,677		96,192
Kajaria Ceramics Ltd.		27,036		509,231
Sintex Industries Ltd.		244,808		273,613
				1,191,900
CAPITAL MARKETS — 3.41%
Credit Analysis & Research Ltd.		14,719		274,544
CRISIL Ltd.		14,953		490,622
Edelweiss Financial Services Ltd.		276,325		477,803
IIFL Holdings Ltd.		107,233		446,497
JM Financial Ltd.		156,955		155,619
Motilal Oswal Financial Services Ltd.		28,588		208,018
PTC India Financial Services Ltd.		111,816		61,777
Tata Investment Corp. Ltd.		11,380		97,181
				2,212,061
CHEMICALS — 8.28%
Aarti Industries		17,136		158,515
Akzo Nobel India Ltd.		9,249		237,543
Atul Ltd.		6,120		203,462
BASF India Ltd.		7,128		120,943
Bayer CropScience Ltd./India		7,092		426,198
Berger Paints India Ltd.		195,422		759,715
Coromandel International Ltd.		58,635		235,652
Dhanuka Agritech Ltd.		9,678		110,191
EID Parry India Ltd.		44,965		170,138
Finolex Industries Ltd.		25,560		185,450
Godrej Industries Ltd.		56,556		355,491
Gujarat Fluorochemicals Ltd.		22,203		196,336
Kansai Nerolac Paints Ltd.		109,729		609,678
Monsanto India Ltd.		3,418		119,712
PI Industries Ltd.		45,795		551,803
Rallis India Ltd.		38,520		130,509
SH Kelkar & Co. Ltd.b		29,376		149,885
Sharda Cropchem Ltd.		18,325		99,820
Supreme Industries Ltd.		31,928		456,227
Vinati Organics Ltd.		10,404		92,482
				5,369,750
COMMUNICATIONS EQUIPMENT — 0.16%
Sterlite Technologies Ltd.		82,481		104,194
				104,194

14 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Consolidated Schedule of Investments (Continued)

iSHARES^® MSCI INDIA SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
CONSTRUCTION & ENGINEERING — 4.75%
Alstom India Ltd.a		13,680	$	125,381
Ashoka Buildcon Ltd.		37,936		90,152
Engineers India Ltd.		67,680		264,373
Gayatri Projects Ltd.		16,380		166,931
GMR Infrastructure Ltd.a		1,774,218		360,301
Hindustan Construction Co. Ltd.a		364,974		149,870
IRB Infrastructure Developers Ltd.		131,959		446,596
Kalpataru Power Transmission Ltd.		31,213		121,762
KEC International Ltd.		50,904		102,842
NCC Ltd./India		279,379		354,178
PNC Infratech Ltd.		48,780		88,499
Sadbhav Engineering Ltd.		69,958		311,139
Voltas Ltd.		85,070		495,786
				3,077,810
CONSTRUCTION MATERIALS — 3.12%
Century Textiles & Industries Ltd.		22,846		247,137
Dalmia Bharat Ltd.		17,928		445,684
India Cements Ltd. (The)		128,520		287,476
JK Cement Ltd.		14,040		166,889
JK Lakshmi Cement Ltd.		24,195		163,299
Orient Cement Ltd.		41,645		119,612
Prism Cement Ltd.a		100,366		172,722
Ramco Cements Ltd. (The)		48,600		419,163
				2,021,982
CONSUMER FINANCE — 4.45%
Bharat Financial Inclusion Ltd.a		79,424		971,897
Capital First Ltd.		19,127		199,895
Manappuram Finance Ltd.		346,768		441,680
Muthoot Finance Ltd.		81,638		458,048
Repco Home Finance Ltd.		25,641		327,452
Sundaram Finance Ltd.		22,359		485,692
				2,884,664
CONTAINERS & PACKAGING — 0.35%
Essel Propack Ltd.		30,564		102,275
HSIL Ltd.		24,264		125,795
				228,070
DIVERSIFIED FINANCIAL SERVICES — 3.72%
IFCI Ltd.		489,395		207,173
L&T Finance Holdings Ltd.		350,263		507,063
Reliance Capital Ltd.		84,695		672,552
Rural Electrification Corp. Ltd.		250,092		890,091
SREI Infrastructure Finance Ltd.		110,376		135,724
				2,412,603

Security	Shares		Value
DIVERSIFIED TELECOMMUNICATION SERVICES — 0.70%
Himachal Futuristic Communications Ltd.a		315,648	$	80,597
Tata Communications Ltd.		47,896		376,224
				456,821
ELECTRIC UTILITIES — 2.57%
Adani Transmissions Ltd.a		136,784		81,188
CESC Ltd.		50,065		498,332
Reliance Infrastructure Ltd.		89,080		793,633
Sterlite Power Transmission		16,038		19,530
Torrent Power Ltd.		96,376		271,197
				1,663,880
ELECTRICAL EQUIPMENT — 3.02%
Alstom T&D India Ltd.		51,707		246,722
Amara Raja Batteries Ltd.		17,930		256,045
Crompton Greaves Ltd.a		287,050		357,044
Finolex Cables Ltd.		59,907		397,308
Schneider Electric Infrastructure Ltd.a		40,573		81,485
Suzlon Energy Ltd.a		1,893,855		446,811
V-Guard Industries Ltd.		59,760		169,857
				1,955,272
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 0.53%
Redington India Ltd.		216,036		343,232
				343,232
FOOD PRODUCTS — 2.01%
Balrampur Chini Mills Ltd.		92,340		147,879
CCL Products India Ltd.		15,144		61,632
Kaveri Seed Co. Ltd.		23,328		125,296
KRBL Ltd.		60,955		246,569
McLeod Russel India Ltd.		36,936		100,185
Tata Global Beverages Ltd.		247,572		518,471
Zydus Wellness Ltd.		7,704		101,117
				1,301,149
GAS UTILITIES — 1.07%
Gujarat Gas Ltd.		27,468		261,617
Gujarat State Petronet Ltd.		114,552		259,653
Indraprastha Gas Ltd.		14,258		170,566
				691,836
HEALTH CARE PROVIDERS & SERVICES — 0.92%
Fortis Healthcare Ltd.a		77,004		205,014
Max India Ltd.a		100,130		231,150

CONSOLIDATED SCHEDULES OF INVESTMENTS 15

Consolidated Schedule of Investments (Continued)

iSHARES^® MSCI INDIA SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
Narayana Hrudayalaya Ltd.a		34,468	$	159,422
				595,586
HOTELS, RESTAURANTS & LEISURE — 3.21%
Coffee Day Enterprises Ltd.a,b		34,020		125,016
Cox & Kings Ltd.		64,058		179,060
Delta Corp. Ltd.		45,052		104,171
EIH Ltd.		95,940		157,584
Indian Hotels Co. Ltd.		331,550		644,089
Jubilant Foodworks Ltd.		30,204		529,641
Mahindra Holidays & Resorts India Ltd.		17,748		129,354
Thomas Cook India Ltd.		72,299		214,511
				2,083,426
HOUSEHOLD DURABLES — 2.91%
Bajaj Electricals Ltd.		19,334		76,995
Crompton Greaves Consumer Electricals Ltd.a		289,855		713,060
Hitachi Home & Life Solutions India Ltd.		5,362		123,241
LA Opala RG Ltd.		11,196		92,542
Symphony Ltd.		7,023		242,114
TTK Prestige Ltd.		2,338		171,327
Videocon Industries Ltd.a		72,648		112,926
Whirlpool of India Ltd.a		25,956		356,047
				1,888,252
HOUSEHOLD PRODUCTS — 0.46%
Eveready Industries India Ltd.		30,203		129,300
Jyothy Laboratories Ltd.		36,853		169,792
				299,092
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS — 0.72%
Adani Power Ltd.a		672,501		277,657
PTC India Ltd.		148,536		186,751
				464,408
INDUSTRIAL CONGLOMERATES — 1.09%
Aditya Birla Nuvo Ltd.		26,418		542,482
Chennai Super Kings Cricket Ltd.a		206,787		6,948
Jaiprakash Associates Ltd.a		919,824		160,011
				709,441
INSURANCE — 0.37%
Max Financial Services Ltd.		27,399		237,210
				237,210
INTERNET SOFTWARE & SERVICES — 1.29%
Info Edge India Ltd.		50,513		621,136
Just Dial Ltd.		29,086		215,528
				836,664

Security	Shares		Value
IT SERVICES — 3.95%
eClerx Services Ltd.		17,096	$	411,037
Hexaware Technologies Ltd.		76,109		230,759
MindTree Ltd.		84,329		708,366
Mphasis Ltd.		61,524		521,259
Persistent Systems Ltd.		32,740		304,301
Polaris Consulting & Services Ltd./Indiaa		20,183		55,392
Rolta India Ltd.		69,955		67,532
Vakrangee Ltd.		89,692		262,098
				2,560,744
LIFE SCIENCES TOOLS & SERVICES — 0.07%
Dishman Pharmaceuticals & Chemicals Ltd.		17,088		45,087
				45,087
MACHINERY — 3.71%
AIA Engineering Ltd.		27,648		529,077
BEML Ltd.		8,280		131,779
Escorts Ltd.		41,279		200,601
Force Motors Ltd.		2,664		123,649
Greaves Cotton Ltd.		49,752		102,223
Ingersoll-Rand India Ltd.		6,048		65,695
ISGEC Heavy Engineering Ltd.		1,476		109,099
Jain Irrigation Systems Ltd.		242,428		304,800
Lakshmi Machine Works Ltd.		2,268		138,314
SKF India Ltd.		10,584		221,265
Texmaco Rail & Engineering Ltd.		40,626		69,641
Thermax Ltd.		23,832		297,802
Timken India Ltd.		13,284		110,892
				2,404,837
MARINE — 0.12%
Shipping Corp. of India Ltd.a		77,688		76,911
				76,911
MEDIA — 2.86%
DEN Networks Ltd.a		46,001		54,265
Dish TV India Ltd.a		314,818		463,742
Jagran Prakashan Ltd.		71,964		203,631
PVR Ltd.		19,332		342,878
Sun TV Network Ltd.		79,272		559,177
TV18 Broadcast Ltd.a		370,296		233,059
				1,856,752
METALS & MINING — 0.92%
Jindal Steel & Power Ltd.a		269,388		343,724
MOIL Ltd.		27,972		104,963

16 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Consolidated Schedule of Investments (Continued)

iSHARES^® MSCI INDIA SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
Ratnamani Metals & Tubes Ltd.		9,504	$	78,450
Welspun Corp. Ltd.		55,224		67,123
				594,260
MULTILINE RETAIL — 0.50%
Bharti Retail Ltd.a		95,555		227,722
Shoppers Stop Ltd.		16,813		98,049
				325,771
OIL, GAS & CONSUMABLE FUELS — 1.13%
Aegis Logistics Ltd.		65,592		128,794
Chennai Petroleum Corp. Ltd.		29,628		130,289
Great Eastern Shipping Co. Ltd. (The)		68,616		377,916
Gujarat Mineral Development Corp. Ltd.		65,083		94,121
				731,120
PAPER & FOREST PRODUCTS — 0.22%
Century Plyboards India Ltd.		44,303		143,553
				143,553
PERSONAL PRODUCTS — 0.90%
Bajaj Corp. Ltd.		37,134		221,795
Gillette India Ltd.		5,442		363,184
				584,979
PHARMACEUTICALS — 7.28%
Ajanta Pharma Ltd.		17,732		503,417
Alembic Pharmaceuticals Ltd.		38,412		360,517
AstraZeneca Pharma India Ltd.a		5,004		76,891
FDC Ltd./India		36,036		101,672
Granules India Ltd.		43,793		84,356
Indoco Remedies Ltd.		19,188		90,267
Ipca Laboratories Ltd.		37,260		301,107
Jubilant Life Sciences Ltd.		53,546		429,959
Marksans Pharma Ltd.		164,772		100,384
Natco Pharma Ltd.		46,676		480,142
Pfizer Ltd./India		9,151		272,214
Sanofi India Ltd.		4,572		299,979
Sequent Scientific Ltd.a		69,408		141,365
Shilpa Medicare Ltd.		18,315		151,918
Strides Shasun Ltd.		36,801		522,726
Sun Pharma Advanced Research Co. Ltd.a		51,267		291,013
Suven Life Sciences Ltd.		36,459		104,581
Unichem Laboratories Ltd.		30,421		122,352
Wockhardt Ltd.a		23,089		281,898
				4,716,758

Security	Shares		Value
REAL ESTATE MANAGEMENT & DEVELOPMENT — 1.98%
Godrej Properties Ltd.a		43,468	$	233,437
Housing Development & Infrastructure Ltd.a		216,252		299,175
Indiabulls Real Estate Ltd.a		148,742		182,679
Oberoi Realty Ltd.		71,648		322,881
Sobha Ltd.		32,538		139,175
Unitech Ltd.a		1,295,948		104,496
				1,281,843
ROAD & RAIL — 0.12%
VRL Logistics Ltd.		18,036		78,680
				78,680
SOFTWARE — 1.76%
Cyient Ltd.		61,206		455,504
KPIT Technologies Ltd.		125,259		238,005
NIIT Technologies Ltd.		25,560		152,665
Tata Elxsi Ltd.		6,375		150,360
Zensar Technologies Ltd.		9,083		146,024
				1,142,558
SPECIALTY RETAIL — 0.38%
PC Jeweller Ltd.		37,260		245,192
				245,192
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 0.05%
Ricoh India Ltd.		7,560		31,382
				31,382
TEXTILES, APPAREL & LUXURY GOODS — 5.73%
Aditya Birla Fashion and Retail Ltd.a		155,351		361,179
Arvind Ltd.		106,514		495,114
Bata India Ltd.		25,734		205,369
Himatsingka Seide Ltd.		20,628		80,054
Indo Count Industries Ltd.		7,668		93,614
Kitex Garments Ltd.		9,504		69,318
KPR Mill Ltd.		7,524		127,954
Page Industries Ltd.		4,572		1,014,104
Rajesh Exports Ltd.		74,535		489,091
Raymond Ltd.		20,304		125,305
SRF Ltd.		11,827		304,019
Vardhman Textiles Ltd.		12,996		194,416
Welspun India Ltd.		211,392		153,722
				3,713,259

CONSOLIDATED SCHEDULES OF INVESTMENTS 17

Consolidated Schedule of Investments (Continued)

iSHARES^® MSCI INDIA SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
THRIFTS & MORTGAGE FINANCE — 1.55%
Can Fin Homes Ltd.		5,220	$	116,244
Dewan Housing Finance Corp. Ltd.		121,824		528,626
GRUH Finance Ltd.		73,044		360,366
				1,005,236
TRADING COMPANIES & DISTRIBUTORS — 0.23%
Adani Enterprises Ltd.		139,287		151,412
				151,412
TRANSPORTATION INFRASTRUCTURE — 0.92%
Gateway Distriparks Ltd.		63,824		267,514
Gujarat Pipavav Port Ltd.		92,563		245,885
Navkar Corp. Ltd.a,b		27,864		81,903
				595,302
WATER UTILITIES — 0.29%
VA Tech Wabag Ltd.		22,248		189,027
				189,027
WIRELESS TELECOMMUNICATION SERVICES — 0.90%
Reliance Communications Ltd.a		728,676		587,010
				587,010
TOTAL COMMON STOCKS
(Cost: $53,208,576)				64,651,600

Security	Shares		Value
RIGHTS — 0.01%
BUILDING PRODUCTS — 0.01%
Sintex Industries Ltd.a		42,152	$	6,200
				6,200
TOTAL RIGHTS
(Cost: $0)				6,200
TOTAL INVESTMENTS IN SECURITIES — 99.74%
(Cost: $53,208,576)c				64,657,800
Other Assets, Less Liabilities — 0.26%				167,498
NET ASSETS — 100.00%			$	64,825,298

^a  Non-income earning security.

^b  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^c  The cost of investments for federal income tax purposes was $55,847,905. Net unrealized appreciation was $8,809,895, of which $14,119,197 represented gross unrealized appreciation on securities and $5,309,302 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	64,593,740	$	57,860	$	—	$	64,651,600
Rights		—		6,200		—		6,200
Total	$	64,593,740	$	64,060	$	—	$	64,657,800

See notes to consolidated financial statements.

18 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Consolidated Statements of Assets and Liabilities

iSHARES^® TRUST

August 31, 2016

	iShares MSCI India ETF			iShares MSCI India Small-Cap ETF
ASSETS
Investments, at cost:
Unaffiliated	$	3,797,261,415		$	53,208,576
Total cost of investments	$	3,797,261,415		$	53,208,576
Investments in securities, at fair value (Note 1):
Unaffiliated	$	4,108,631,914		$	64,657,800
Total fair value of investments		4,108,631,914			64,657,800
Foreign currency, at valuea		4,009,307			26,819
Cash		6,387,902			169,311
Receivables:
Investment securities sold		163,292,200			310,009
Dividends and interest		1,556,519			44,845
Total Assets		4,283,877,842			65,208,784
LIABILITIES
Payables:
Investment securities purchased		169,402,666			344,149
Investment advisory fees (Note 2)		2,222,895			39,337
Total Liabilities		171,625,561			383,486
NET ASSETS	$	4,112,252,281		$	64,825,298
Net assets consist of:
Paid-in capital	$	4,173,005,187		$	60,874,739
Undistributed (distributions in excess of) net investment income		6,057,574			(386,430	)
Accumulated net realized loss		(377,932,694	)		(7,111,947	)
Net unrealized appreciation		311,122,214			11,448,936
NET ASSETS	$	4,112,252,281		$	64,825,298
Shares outstandingb		138,900,000			1,800,000
Net asset value per share	$	29.61		$	36.01

^a  Cost of foreign currency: $4,005,776 and $26,813, respectively.

^b  No par value, unlimited number of shares authorized.

See notes to consolidated financial statements.

CONSOLIDATED FINANCIAL STATEMENTS 19

Consolidated Statements of Operations

iSHARES^® TRUST

Year ended August 31, 2016

	iShares MSCI India ETF			iShares MSCI India Small-Cap ETF
NET INVESTMENT INCOME
Dividends — unaffiliated	$	53,130,183		$	660,069
Dividends — affiliated (Note 2)		9,420			149
Miscellaneous income		2,250			—
Total investment income		53,141,853			660,218
EXPENSES
Investment advisory fees (Note 2)		22,897,521			476,262
Mauritius income taxes (Note 1)		2,282,269			38,955
Total expenses		25,179,790			515,217
Net investment income		27,962,063			145,001
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		(188,197,597	)		(3,591,347	)
Foreign currency transactions		(1,206,692	)		(20,523	)
Net realized loss		(189,404,289	)		(3,611,870	)
Net change in unrealized appreciation/depreciation on:
Investments		397,348,065			9,979,333
Translation of assets and liabilities in foreign currencies		(163,336	)		2,438
Net change in unrealized appreciation/depreciation		397,184,729			9,981,771
Net realized and unrealized gain		207,780,440			6,369,901
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	235,742,503		$	6,514,902

See notes to consolidated financial statements.

20 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Consolidated Statements of Changes in Net Assets

iSHARES^® TRUST

	iShares MSCI India ETF						iShares MSCI India Small-Cap ETF
	Year ended August 31, 2016			Year ended August 31, 2015			Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	27,962,063		$	41,529,522		$	145,001		$	263,564
Net realized loss		(189,404,289	)		(159,809,149	)		(3,611,870	)		(2,646,754	)
Net change in unrealized appreciation/depreciation		397,184,729			(302,084,736	)		9,981,771			(865,592	)
Net increase (decrease) in net assets resulting from operations		235,742,503			(420,364,363	)		6,514,902			(3,248,782	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(47,587,162	)		(23,540,326	)		(1,347,936	)		(101,755	)
Total distributions to shareholders		(47,587,162	)		(23,540,326	)		(1,347,936	)		(101,755	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		700,911,673			2,794,655,158			18,237,854			60,394,649
Cost of shares redeemed		(360,176,432	)		(224,282,874	)		(21,453,214	)		(5,172,927	)
Net increase (decrease) in net assets from capital share transactions		340,735,241			2,570,372,284			(3,215,360	)		55,221,722
INCREASE IN NET ASSETS		528,890,582			2,126,467,595			1,951,606			51,871,185
NET ASSETS
Beginning of year		3,583,361,699			1,456,894,104			62,873,692			11,002,507
End of year	$	4,112,252,281		$	3,583,361,699		$	64,825,298		$	62,873,692
Undistributed (distributions in excess of ) net investment income	$	6,057,574		$	19,674,264		$	(386,430	)	$	114,179
SHARES ISSUED AND REDEEMED
Shares sold		25,000,000			87,800,000			550,000			1,750,000
Shares redeemed		(13,550,000	)		(7,600,000	)		(700,000	)		(150,000	)
Net increase (decrease) in shares outstanding		11,450,000			80,200,000			(150,000	)		1,600,000

See notes to consolidated financial statements.

CONSOLIDATED FINANCIAL STATEMENTS 21

Consolidated Financial Highlights

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI India ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Period from Feb. 2, 2012a to Aug. 31, 2012
Net asset value, beginning of period	$	28.12		$	30.83		$	20.48		$	22.44		$	25.55
Income from investment operations:
Net investment incomeb		0.22			0.45			0.40			0.41			0.21
Net realized and unrealized gain (loss)c		1.64			(2.92	)		10.12			(2.29	)		(3.24	)
Total from investment operations		1.86			(2.47	)		10.52			(1.88	)		(3.03	)
Less distributions from:
Net investment income		(0.37	)		(0.24	)		(0.17	)		(0.08	)		(0.08	)
Total distributions		(0.37	)		(0.24	)		(0.17	)		(0.08	)		(0.08	)
Net asset value, end of period	$	29.61		$	28.12		$	30.83		$	20.48		$	22.44
Total return		6.73	%		(8.05	)%		51.61	%		(8.47	)%		(11.84	)%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	4,112,252		$	3,583,362		$	1,456,894		$	206,812		$	17,949
Ratio of expenses to average net assetse		0.71	%		0.68	%		0.68	%		0.67	%		0.67	%
Ratio of net investment income to average net assetse		0.79	%		1.47	%		1.47	%		1.69	%		1.61	%
Portfolio turnover ratef		25	%		30	%		22	%		176	%		4	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rates include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units solely for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rates for the years ended August 31, 2016, August 31, 2015, August 31, 2014, August 31, 2013 and the period ended August 31, 2012 were 15%, 22%, 14%, 22% and 4%, respectively. See Note 4.

See notes to consolidated financial statements.

22 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Consolidated Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI India Small-Cap ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Period from Feb. 8, 2012a to Aug. 31, 2012
Net asset value, beginning of period	$	32.24		$	31.44		$	15.49		$	21.19		$	25.10
Income from investment operations:
Net investment incomeb		0.07			0.21			0.26			0.21			0.21
Net realized and unrealized gain (loss)c		4.36			0.69			15.84			(5.59	)		(4.12	)
Total from investment operations		4.43			0.90			16.10			(5.38	)		(3.91	)
Less distributions from:
Net investment income		(0.66	)		(0.10	)		(0.15	)		(0.32	)		(0.00	)d
Total distributions		(0.66	)		(0.10	)		(0.15	)		(0.32	)		(0.00	)d
Net asset value, end of period	$	36.01		$	32.24		$	31.44		$	15.49		$	21.19
Total return		13.99	%		2.87	%		104.53	%e		(25.98	)%		(15.57	)%f
Ratios/Supplemental data:
Net assets, end of period (000s)	$	64,825		$	62,874		$	11,003		$	2,324		$	4,238
Ratio of expenses to average net assetsg		0.80	%		0.74	%		0.74	%		0.74	%		0.74	%
Ratio of net investment income to average net assetsg		0.23	%		0.62	%		1.06	%		0.92	%		1.62	%
Portfolio turnover rateh		53	%		73	%		54	%		26	%		6	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Rounds to less than $0.01.

^e  The total return disclosed is based on the net asset value (“NAV”) calculated daily for the creation and redemption of shares in the Fund, which may differ from the NAV calculated for financial reporting purposes. Based on the NAV calculated for financial reporting purposes, the total return for the Fund was 104.39%.

^f  Not annualized.

^g  Annualized for periods of less than one year.

^h  Portfolio turnover rates include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units solely for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rates for the years ended August 31, 2016, August 3, 2015, August 31, 2014, August 31, 2013 and the period ended August 31, 2012 were 25%, 61%, 28%, 26% and 6%, respectively. See Note 4.

See notes to consolidated financial statements.

CONSOLIDATED FINANCIAL HIGHLIGHTS 23

Notes to Consolidated Financial Statements

iSHARES^® TRUST

iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999.

These consolidated financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):

iShares ETF	Diversification Classification
MSCI India	Non-diversified
MSCI India Small-Cap	Diversified

The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.

Each Fund carries out its investment strategies by investing substantially all of its assets in a wholly-owned subsidiary in the Republic of Mauritius (each, a “Subsidiary”), which in turn, invests in securities that comprise the underlying index. The investment adviser of each Fund also serves as the investment adviser to each Subsidiary. Through this investment structure, each Fund expects to obtain certain benefits under a current tax treaty between Mauritius and India. The accompanying consolidated financial statements for each Fund include the accounts of its Subsidiary. Intercompany accounts and transactions, if any, have been eliminated.

Pursuant to the Trust’s organizational documents, the Funds’ officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.

SECURITY VALUATION

Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant

24 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Consolidated Financial Statements (Continued)

iSHARES^® TRUST

to policies and procedures developed by the Global Valuation Committee and approved by the Board of Trustees of the Trust (the “Board”).

• Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price.

• Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”).

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such factors are reported to the Board on a quarterly basis.

The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Trust’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements in market values, and reviews of market related activity.

Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.

Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and is not necessarily an indication of the risk associated with investing in the instrument. The three levels of the fair value hierarchy are as follows:

• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and

• Level 3 — Unobservable inputs for the asset or liability, including the Global Valuation Committee’s assumptions used in determining the fair value of investments.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 25

Notes to Consolidated Financial Statements (Continued)

iSHARES^® TRUST

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2016 are reflected in tax reclaims receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.

FOREIGN CURRENCY TRANSLATION

The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.

Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes.

FOREIGN TAXES

The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their consolidated statements of operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “other foreign taxes”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of August 31, 2016, if any, are disclosed in the Funds’ consolidated statements of assets and liabilities.

Each Fund conducts its investment activities in India through its Subsidiary and expects to obtain benefits under the Double Tax Avoidance Agreement (“DTAA”) between India and Mauritius. In order to be eligible to claim benefits under the DTAA, each Subsidiary must, on an annual basis, satisfy certain tests and conditions, including the establishment and maintenance of valid tax residence in Mauritius and related requirements. Each Fund has obtained a current tax residence certificate issued by the Mauritian Revenue Authorities.

Based upon current interpretation and practice of the current tax laws in India and Mauritius and the DTAA, each Subsidiary is subject to tax in Mauritius on its net income at the rate of 15%. However, a system of tax credits effectively reduces the Mauritius

26 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Consolidated Financial Statements (Continued)

iSHARES^® TRUST

income tax rate to a maximum of 3%. Taxes on income, if any, are paid by the Subsidiaries and are disclosed in the consolidated statements of operations. Any dividends paid by a Subsidiary to its Fund are not subject to tax in Mauritius. Each Subsidiary is currently exempt from tax in Mauritius on any gains from the sale of securities.

On May 10, 2016, India and Mauritius signed an amendment to the DTAA. The amendment provides that capital gains will be taxable in India with respect to the sale of shares acquired on or after April 1, 2017. Capital gains arising from shares acquired before April 1, 2017, regardless of when they are sold, will continue to be exempt from taxation under the amended DTAA, assuming requirements for eligibility under the DTAA are satisfied. Tax laws in India also include provisions that impose Indian tax on certain indirect transfers of shares of Indian companies. However, until such time that India provides more definitive authoritative guidance on the indirect transfer rules, the impact to the Funds, if any, cannot be determined. Management is continuing to monitor and assess the impact to the Funds arising from the DTAA amendment and the indirect transfer rules.

DISTRIBUTIONS TO SHAREHOLDERS

Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Agreement with the Trust, BlackRock Fund Advisors (“BFA”) manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (“BlackRock”). Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.

Each Subsidiary has entered into a separate contract with BFA under which BFA provides investment advisory services to the Subsidiary but does not receive separate compensation from the Subsidiary for providing it with such services. Each Subsidiary has also entered into separate arrangements that provide for the provision of other services to the Subsidiary (including administrative, custody, transfer agency and other services), and BFA pays the costs and expenses related to the provision of those services.

For its investment advisory services to the iShares MSCI India ETF, BFA is entitled to an annual investment advisory fee based on the average daily net assets of the Fund as follows:

Investment Advisory Fee			Average Daily Net Assets
	0.6500	%	First $4 billion
	0.6175		Over $4 billion, up to and including $6 billion
	0.5867		Over $6 billion

Prior to July 1, 2016, for its investment advisory services to the iShares MSCI India ETF, BFA was entitled to an annual investment advisory fee of 0.65% based on the average daily net assets of the Fund.

For its investment advisory services to the iShares MSCI India Small-Cap ETF, BFA is entitled to an annual investment advisory fee of 0.74% based on the average daily net assets of the Fund.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 27

Notes to Consolidated Financial Statements (Continued)

iSHARES^® TRUST

BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.

Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends – affiliated” in the consolidated statements of operations.

The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.

Certain trustees and officers of the Trust are also officers of BlackRock Institutional Trust Company, N.A. and/or BFA.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2016 were as follows:

iShares ETF	Purchases		Sales
MSCI India	$	1,231,475,350	$	902,571,533
MSCI India Small-Cap		34,214,600		37,498,689

There were no in-kind transactions (see Note 4) for the year ended August 31, 2016.

4. CAPITAL SHARE TRANSACTIONS

Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the consolidated statements of changes in net assets.

The consideration for the purchase of Creation Units of a fund in the Trust generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Trust may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Trust’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Proceeds from shares sold” in the consolidated statements of changes in net assets.

5. PRINCIPAL RISKS

In the normal course of business, each Fund’s investment activities expose it to various types of risk associated with the financial instruments and markets in which it invests. The significant types of financial risks each Fund is exposed to include market risk and credit risk. Each Fund’s prospectus provides details of these and other types of risk.

BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.

28 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Consolidated Financial Statements (Continued)

iSHARES^® TRUST

MARKET RISK

Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss each Fund may suffer through holding market positions in the face of market movements. Each Fund is exposed to market risk by virtue of its direct and/or indirect investment in equity instruments. The fair value of securities held by the Funds may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of each Fund’s exposure to market risk is the market value of the investments held as shown in the Fund’s consolidated schedule of investments.

A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its consolidated schedule of investments.

Investing in the securities of non-U.S. issuers, whether directly or indirectly, involves certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets; and the risk of war. These risks are heightened for investments in issuers from countries with less developed markets.

When a fund concentrates its investments in issuers located in a single country, whether directly or indirectly, it assumes the risk that economic, political and social conditions in that country may have a significant impact on its investment performance.

CREDIT RISK

Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of each Fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its consolidated statement of assets and liabilities.

6. INCOME TAX INFORMATION

Each Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 29

Notes to Consolidated Financial Statements (Continued)

iSHARES^® TRUST

U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or NAV per share. The following permanent differences as of August 31, 2016, attributable to the characterization of corporate actions, passive foreign investment companies and foreign currency transactions, were reclassified to the following accounts:

iShares ETF	Paid-in Capital		Undistributed Net Investment Income/Distributions in Excess of Net Investment Income		Undistributed Net Realized Gain/Accumulated Net Realized Loss
MSCI India	$	—	$	6,008,409	$	(6,008,409	)
MSCI India Small-Cap		—		702,326		(702,326	)

The tax character of distributions paid during the years ended August 31, 2016 and August 31, 2015 was as follows:

iShares ETF	2016		2015
MSCI India
Ordinary income	$	47,587,162	$	23,540,326
MSCI India Small-Cap
Ordinary income	$	1,347,936	$	101,755

As of August 31, 2016, the tax components of accumulated net earnings (losses) were as follows:

iShares ETF	Undistributed Ordinary Income		Capital Loss Carryforwards			Net Unrealized Gains (Losses) a		Qualified Late-Year Losses  b			Total
MSCI India	$	8,169,065	$	(84,674,856	)	$	132,557,382	$	(116,804,497	)	$	(60,752,906	)
MSCI India Small-Cap		612,506		(1,981,373	)		8,809,890		(3,490,464	)		3,950,559

^a  The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the characterization of corporate actions, the tax deferral of losses on wash sales, the realization for tax purposes of unrealized gains (losses) on certain foreign currency contracts and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies.

^b  The Funds have elected to defer certain qualified late-year losses and recognize such losses in the next taxable year.

As of August 31, 2016, the Funds had non-expiring capital loss carryforwards available to offset future realized capital gains as follows:

iShares ETF	Non- Expiring
MSCI India	$	84,674,856
MSCI India Small-Cap		1,981,373

The Funds may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Funds may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.

30 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Consolidated Financial Statements (Continued)

iSHARES^® TRUST

Management has analyzed tax laws and regulations and their application to the Funds as of August 31, 2016, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ consolidated financial statements.

7. SUBSEQUENT EVENTS

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 31

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees of

iShares Trust:

In our opinion, the accompanying consolidated statements of assets and liabilities, including the consolidated schedules of investments, and the related consolidated statements of operations and of changes in net assets and the consolidated financial highlights present fairly, in all material respects, the financial position of iShares MSCI India ETF and iShares MSCI India Small-Cap ETF and their subsidiaries (the “Funds”) at August 31, 2016, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These consolidated financial statements and consolidated financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2016 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 21, 2016

32 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Tax Information (Unaudited)

iSHARES^® TRUST

The following maximum amounts are hereby designated as qualified dividend income for individuals for the fiscal year ended August 31, 2016:

iShares ETF	Qualified Dividend Income
MSCI India	$	59,902,887
MSCI India Small-Cap		1,903,631

For the fiscal year ended August 31, 2016, the Funds earned foreign source income and paid foreign taxes which they intend to pass through to their shareholders:

iShares ETF	Foreign Source Income Earned		Foreign Taxes Paid
MSCI India	$	60,306,212	$	2,282,269
MSCI India Small-Cap		1,919,121		38,955

TAX INFORMATION 33

Board Review and Approval of Investment Advisory

Contract

iSHARES^® TRUST

I. iShares MSCI India ETF

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on April 28, 2016 and May 9, 2016. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 17, 2016, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 21-23, 2016, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA, including the additional information management provided at the request of the Independent Trustees. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential enhancements and adjustments to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Fund, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:

Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of Broadridge’s proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.

The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were lower than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.

In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the “last quarter” period ended December 31, 2015, to that of such relevant comparison funds for the same periods.

The Board noted that the Fund seeks to track its own underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative

34 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory Contract

iSHARES^® TRUST

performance information, including additional detailed information on certain specific iShares funds requested by the Board, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.

Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, product design and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 21-23, 2016 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.

Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Costs of Services Provided to the Fund and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock of the Fund, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.

Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 35

Board Review and Approval of Investment Advisory Contract (Continued)

iSHARES^® TRUST

services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that BFA and the Board had agreed to revise the Advisory Contract for the Fund to provide for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future.

Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue periodically, determined to approve the continuance of the Advisory Contract for the coming year.

Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded exchange traded fund, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.

Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.

Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.

36 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory Contract (Continued)

iSHARES^® TRUST

II. iShares MSCI India Small-Cap ETF

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on April 28, 2016 and May 9, 2016. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 17, 2016, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 21-23, 2016, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA, including the additional information management provided at the request of the Independent Trustees. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential enhancements and adjustments to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Fund, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:

Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of Broadridge’s proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.

The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were lower than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.

In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the “last quarter” period ended December 31, 2015, to that of such relevant comparison funds for the same periods.

The Board noted that the Fund seeks to track its own underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 37

Board Review and Approval of Investment Advisory Contract (Continued)

iSHARES^® TRUST

performance information, including additional detailed information on certain specific iShares funds requested by the Board, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.

Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, product design and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 21-23, 2016 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.

Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Costs of Services Provided to the Fund and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock of the Fund, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.

Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The

38 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory Contract (Continued)

iSHARES^® TRUST

cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Fund did not provide for any breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that should material economies of scale exist in the future that are not otherwise shared, a breakpoint structure for the Fund may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.

Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue periodically, determined to approve the continuance of the Advisory Contract for the coming year.

Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded exchange traded fund, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.

Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.

Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 39

Supplemental Information (Unaudited)

iSHARES^® TRUST

Section 19(a) Notices

The amounts and sources of distributions reported are estimates and are provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report these distributions for federal income tax purposes.

	Total Cumulative Distributions for the Fiscal Year								% Breakdown of the Total Cumulative Distributions for the Fiscal Year
iShares ETF	Net Investment Income		Net Realized Capital Gains		Return of Capital		Total Per Share		Net Investment Income			Net Realized Capital Gains			Return of Capital			Total Per Share
MSCI India	$	0.369160	$	—	$	—	$	0.369160		100	%		—	%		—	%		100	%
MSCI India Small-Cap		0.586646		—		0.068571		0.655217		90			—			10			100

Premium/Discount Information

The Premium/Discount Information section is intended to present information about the differences between the daily market price on secondary markets for shares of a fund and that fund’s NAV. NAV is the price at which a fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of a fund generally is determined using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of such fund are listed for trading, as of the time that the fund’s NAV is calculated. A fund’s Market Price may be at, above or below its NAV. The NAV of a fund will fluctuate with changes in the fair value of its portfolio holdings. The Market Price of a fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.

Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of a fund on a given day, generally at the time the NAV is calculated. A premium is the amount that a fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that a fund is trading below the reported NAV, expressed as a percentage of the NAV.

The following information shows the frequency of distributions of premiums and discounts for each of the Funds. The information shown for each Fund is for five calendar years (or from the inception date of such Fund if less than five years) through the date of the most recent calendar quarter-end. The specific periods covered for each Fund, are disclosed in the table for such Fund.

40 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

Each line in the table shows the number of trading days in which the Fund traded within the premium/discount range indicated. The number of trading days in each premium/discount range is also shown as a percentage of the total number of trading days in the period covered by each table. All data presented here represents past performance, which cannot be used to predict future results.

iShares MSCI India ETF

Period Covered: February 2, 2012 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 3.0%		2		0.18	%
Greater than 2.5% and Less than 3.0%		4		0.36
Greater than 2.0% and Less than 2.5%		10		0.90
Greater than 1.5% and Less than 2.0%		18		1.62
Greater than 1.0% and Less than 1.5%		100		9.01
Greater than 0.5% and Less than 1.0%		210		18.92
Between 0.5% and –0.5%		603		54.33
Less than –0.5% and Greater than –1.0%		107		9.64
Less than –1.0% and Greater than –1.5%		39		3.51
Less than –1.5% and Greater than –2.0%		12		1.08
Less than –2.0% and Greater than –2.5%		3		0.27
Less than –2.5% and Greater than –3.0%		1		0.09
Less than –3.0%		1		0.09
		1,110		100.00	%

iShares MSCI India Small-Cap ETF Period Covered: February 8, 2012 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 4.5%		5		0.45	%
Greater than 4.0% and Less than 4.5%		4		0.36
Greater than 3.5% and Less than 4.0%		9		0.81
Greater than 3.0% and Less than 3.5%		8		0.72
Greater than 2.5% and Less than 3.0%		15		1.36
Greater than 2.0% and Less than 2.5%		30		2.71
Greater than 1.5% and Less than 2.0%		61		5.52
Greater than 1.0% and Less than 1.5%		88		7.96
Greater than 0.5% and Less than 1.0%		177		16.00
Between 0.5% and –0.5%		458		41.42
Less than –0.5% and Greater than –1.0%		155		14.01
Less than –1.0% and Greater than –1.5%		67		6.06
Less than –1.5% and Greater than –2.0%		18		1.63
Less than –2.0% and Greater than –2.5%		5		0.45
Less than –2.5% and Greater than –3.0%		2		0.18
Less than –3.0% and Greater than –3.5%		3		0.27
Less than –3.5%		1		0.09
		1,106		100.00	%

SUPPLEMENTAL INFORMATION 41

Trustee and Officer Information

iSHARES^® TRUST

The Board of Trustees has responsibility for the overall management and operations of the Funds, including general supervision of the duties performed by BFA and other service providers. Each Trustee serves until he or she resigns, is removed, dies, retires or becomes incapacitated. Each officer shall hold office until his or her successor is elected and qualifies or until his or her death, or his or her resignation or removal. Trustees who are not “interested persons” (as defined in the 1940 Act) of the Trust are referred to as independent trustees (“Independent Trustees”).

The registered investment companies advised by BFA or its affiliates (the “BlackRock-advised Funds”) are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Trustee also serves as a Director of iShares, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 333 funds (as of August 31, 2016) within the Exchange-Traded Fund Complex. With the exception of Robert S. Kapito, Mark Wiedman and Benjamin Archibald, the address of each Trustee and officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito, Mr. Wiedman and Mr. Archibald is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52^nd Street, New York, NY 10055. The Board has designated Cecilia H. Herbert as its Independent Board Chair. Additional information about the Funds’ Trustees and officers may be found in the Funds’ combined Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-iShares (1-800-474-2737).

Interested Trustees

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Robert S. Kapitoa (59)	Trustee (since 2009).	President and Director, BlackRock, Inc. (since 2006); Vice Chairman of BlackRock, Inc. and Head of BlackRock, Inc.’s Portfolio Management Group (since its formation in 1998) and BlackRock, Inc.’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983).	Director of iShares, Inc. (since 2009); Trustee of iShares U.S. ETF Trust (since 2011).
Mark Wiedmanb (45)	Trustee (since 2013).	Managing Director, BlackRock, Inc. (since 2007); Global Head of iShares (since 2011); Head of Corporate Strategy, BlackRock, Inc. (2009-2011).	Director of iShares, Inc. (since 2013); Trustee of iShares U.S. ETF Trust (since 2013); Director of PennyMac Financial Services, Inc. (since 2008).

^a  Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc.

^b  Mark Wiedman is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc. and its affiliates.

42 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Independent Trustees^c

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Cecilia H. Herbert (67)	Trustee (since 2005); Independent Board Chair (since 2016); Nominating and Governance Committee Chair (since 2016).	Director (1998-2013) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010) of the Thacher School; Member (since 1992) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco; Trustee and Member of the Investment Committee, WNET, the New York public media company (since 2011).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Independent Board Chair of iShares, Inc. and iShares U.S. ETF Trust (since 2016); Director of Forward Funds (23 portfolios) (since 2009); Director of Salient MF Trust (4 portfolios) (since 2015).
Jane D. Carlin (60)	Trustee (since 2015); Risk Committee Chair (since 2016).	Managing Director and Global Head of Financial Holding Company Governance & Assurance and the Global Head of Operational Risk Management of Morgan Stanley (2006-2012).	Director of iShares, Inc. (since 2015); Trustee of iShares U.S. ETF Trust (since 2015); Director of PHH Corporation (mortgage solutions) (since 2012).
Charles A. Hurty (72)	Trustee (since 2005); Audit Committee Chair (since 2006).	Retired; Partner, KPMG LLP (1968-2001).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (2 portfolios) (since 2002).
John E. Kerrigan (61)	Trustee (since 2005); Securities Lending Committee Chair (since 2016).	Chief Investment Officer, Santa Clara University (since 2002).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011).
John E. Martinez (55)	Trustee (since 2003); Fixed Income Plus Committee Chair (since 2016).	Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005).	Director of iShares, Inc. (since 2003); Trustee of iShares U.S. ETF Trust (since 2011).

TRUSTEE AND OFFICER INFORMATION 43

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Independent Trustees^c (Continued)

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Madhav V. Rajan (52)	Trustee (since 2011); Equity Plus Committee Chair and 15(c) Committee Chair (since 2016).	Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (2007-2008).	Director of iShares, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011); Director, Cavium, Inc. (since 2013).

^c  Robert H. Silver served as an Independent Trustee until March 31, 2016.

44 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Officers^d

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years
Martin Small (41)	President (since 2016).	Managing Director, BlackRock, Inc. (since January 2010); Head of U.S. iShares (since 2015); Co-Head of the U.S. Financial Markets Advisory Group, BlackRock, Inc. (2008-2014).
Jack Gee (56)	Treasurer and Chief Financial Officer (since 2008).	Managing Director, BlackRock, Inc. (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director of Fund Administration of Intermediary Investor Business, BGI (2004-2009).
Benjamin Archibald (41)	Secretary (since 2015).	Managing Director, BlackRock, Inc. (since 2014); Director, BlackRock, Inc. (2010-2013); Secretary of the BlackRock-advised Mutual Funds (since 2012).
Steve Messinger (54)	Executive Vice President (since 2016).	Managing Director, BlackRock, Inc. (2007-2014 and since 2016); Managing Director, Beacon Consulting Group (2014-2016).
Charles Park (49)	Chief Compliance Officer (since 2006).	Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex (since 2014); Chief Compliance Officer, BFA (since 2006).
Scott Radell (47)	Executive Vice President (since 2012).	Managing Director, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005).
Amy Schioldager (53)	Executive Vice President (since 2007).	Senior Managing Director, BlackRock, Inc. (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006).

^d  Manish Mehta served as President until October 15, 2016.

TRUSTEE AND OFFICER INFORMATION 45

Notes:

46 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

For more information visit www.iShares.com or call 1-800-474-2737

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

Investing involves risk, including possible loss of principal.

The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.

A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.

The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily basis on the Funds’ website.

©2016 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.

iS-AR-809-0816

AUGUST 31, 2016

2016 ANNUAL REPORT

iShares Trust

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

^Ø  iShares MSCI United Kingdom ETF  |  EWU  |  NYSE Arca

^Ø  iShares MSCI United Kingdom Small-Cap ETF  |  EWUS  |  BATS

Table of Contents

Management’s Discussions of Fund Performance	5
About Fund Performance	12
Shareholder Expenses	12
Schedules of Investments	13
iShares Currency Hedged MSCI United Kingdom ETF	13
iShares MSCI United Kingdom ETF	15
iShares MSCI United Kingdom Small-Cap ETF	19
Financial Statements	24
Financial Highlights	28
Notes to Financial Statements	31
Report of Independent Registered Public Accounting Firm	44
Tax Information	45
Board Review and Approval of Investment Advisory Contract	46
Supplemental Information	53
Trustee and Officer Information	57

Management’s Discussion of Fund Performance

iSHARES^® TRUST

GLOBAL MARKET OVERVIEW

Global equity markets advanced for the 12 months ended August 31, 2016 (the “reporting period”). The MSCI ACWI, a broad global equity index that includes both developed and emerging markets, returned 7.24% for the reporting period.

Early in the reporting period, global stock markets were volatile but generally declined overall amid lower energy prices and weaker global economic growth, including slowdowns in stronger developed economies such as the U.S. and U.K. In response, many of the world’s central banks took more aggressive actions to stimulate economic activity, including expanded quantitative easing measures and negative interest rates.

In the U.S., the Federal Reserve Bank (the “Fed”) postponed plans to raise its short-term interest rate target until December 2015, when it ended a seven-year period of near-zero interest rates by increasing the federal funds target interest rate from a range of 0%-0.25% to a range of 0.25%-0.50%. It was the Fed’s first interest rate hike since June 2006.

After bottoming in mid-February 2016, global equity markets reversed course, rallying through the end of the reporting period. Central bank stimulus activity and a recovery in energy prices helped global equity markets rebound, as did signs of stabilization in China, which had experienced a marked economic slowdown that put downward pressure on its currency. Despite the overall upward trend in global equity markets, geopolitical factors — including the “Brexit” referendum in the U.K. (an affirmative vote to leave the European Union), terrorist attacks in France, and an attempted coup in Turkey — contributed to increased equity market volatility late in the reporting period.

Among developed countries, the U.S. was among the best-performing markets, returning approximately 12% for the reporting period. Although employment growth remained robust, other segments of the U.S. economy struggled, leading to three consecutive quarters of growth below a 1.5% annual rate. As a result, the Fed — which was expected to raise short-term interest rates further in 2016 — held rates steady through the first eight months of the year. Stable Fed monetary policy, as well as the relative strength of the U.S. economy compared with other regions of the globe, provided a favorable backdrop for U.S. equity market performance.

Equity markets in the Asia/Pacific region gained approximately 6% for the reporting period. New Zealand and Australia were the leading markets in the region, benefiting from improving economic growth during the reporting period, while the laggards included Singapore and Japan. In particular, the Japanese equity market declined by more than 12%, but a strong rally in the Japanese yen (which appreciated by 15% against the U.S. dollar) helped offset the overall market decline, resulting in a 3% gain in U.S. dollar terms.

European stock markets declined by approximately 3% for the reporting period. Markets in Italy and Spain, which were adversely affected by political instability and struggling banking sectors, declined the most, while Belgium and Portugal performed best. In the U.K., the equity market advanced by about 13%, but a sharp decline in the British pound in the wake of the Brexit vote led to negative returns in U.S. dollar terms.

Emerging markets stocks outperformed developed markets, advancing by nearly 12% for the reporting period in U.S. dollar terms. Latin American equity markets generated the best returns, led by rebounding markets in Peru and Brazil, while stock markets in Eastern Europe lagged.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 5

Management’s Discussion of Fund Performance

iSHARES^® CURRENCY HEDGED MSCI UNITED KINGDOM ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		12.90%		13.19%		12.80%		12.90%		13.19%		12.80%
Since Inception		6.48%		6.56%		5.94%		7.66%		7.75%		6.98%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 6/29/15. The first day of secondary market trading was 7/1/15.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 12 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period  a,b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period  a,b		Annualized Expense Ratio a
$	1,000.00	$	1,149.70	$	0.00	$	1,000.00	$	1,025.10	$	0.00		0.00%

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

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 12 for more information.

The iShares Currency Hedged MSCI United Kingdom ETF (the “Fund”) seeks to track the investment results of an index composed of large- and mid-capitalization United Kingdom equities while mitigating exposure to fluctuations between the value of the British pound and the U.S. dollar, as represented by the MSCI United Kingdom 100% Hedged to USD Index (the “Index”).

The Index sells forward the non-U.S. dollar currencies in which the constituent securities are denominated in an amount equal to those securities at a one-month forward rate to effectively create a “hedge” against fluctuations in the relative value of the British pound in relation to the U.S. dollar. In order to replicate the hedging component of the Index, the Fund enters into foreign currency forward contracts designed to offset the Fund’s exposure to the British pound.

The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the

6 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® CURRENCY HEDGED MSCI UNITED KINGDOM ETF

Index. The Fund currently seeks to achieve its investment objective by investing a substantial portion of its assets in one underlying fund, the iShares MSCI United Kingdom ETF. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 12.90%, net of fees, while the total return for the Index was 12.80%.

The Index posted a positive return for the reporting period, as the U.K. equity market posted a gain when measured in British pounds. The Index’s currency hedging offset the negative effect of the British pound’s sharp decline relative to the U.S. dollar during the reporting period.

The consumer staples sector was a solid contributor to the Index’s return in U.S. dollar terms. Many consumer staples stocks in the U.K. benefited from rising valuations amid economic uncertainty, as investors sought the relative stability of companies with steady sales of household products.

At the other end of the spectrum, the financials sector was the largest detractor for the reporting period in U.S. dollar terms. Within the sector, banks and insurance stocks weighed on the Index’s performance. Banks struggled with credit concerns and widespread analyst downgrades after the Brexit vote, while profitability in the insurance sector continued to be restrained by low interest rates.

The consumer discretionary and telecommunication services sectors were notable detractors from the Index’s performance during the reporting period. Consumer confidence fell sharply in the second half of the reporting period, while consumer spending in June 2016 fell by the most in 10 years. Within the consumer discretionary sector, the retailing industry detracted the most from the Index’s performance. In the telecommunication services sector, increasing regulatory pressure on the U.K.’s largest telecommunications company sought to increase competition in the sector.

The currency hedging portion of the investment process delivered a large contribution to the Index’s return, offsetting the negative impact of the 17% decline in the British pound against the U.S. dollar. The Brexit vote triggered an immediate, sharp devaluation of the British pound amid uncertainty about trade agreements and the U.K.’s economic prospects. Although currency fluctuations had an impact on returns, foreign exchange hedging helped to mitigate the negative effects of currency movement and deliver returns that were relatively close to the U.K. market’s return in British pounds for the reporting period.

ALLOCATION BY SECTOR¹

As of 8/31/16

Sector Percentage of
Total  Investments²

Consumer Staples	19.80	%
Financials3	19.23
Energy	13.04
Health Care	11.35
Consumer Discretionary	8.84
Industrials	7.99
Materials	6.19
Telecommunication Services	5.44
Utilities	4.44
Information Technology	2.22
Real Estate3	1.46
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS¹

As of 8/31/16

Security Percentage of
Total  Investments²

HSBC Holdings PLC	6.26	%
British American Tobacco PLC	4.94
GlaxoSmithKline PLC	4.47
BP PLC	4.47
Royal Dutch Shell PLC Class A	4.37
Royal Dutch Shell PLC Class B	4.08
AstraZeneca PLC	3.48
Vodafone Group PLC	3.42
Diageo PLC	2.97
Reckitt Benckiser Group PLC	2.62
TOTAL	41.08	%

¹  Table shown is for the iShares MSCI United Kingdom ETF, the underlying fund in which the Fund invests.

²  Excludes money market funds.

³  Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 7

Management’s Discussion of Fund Performance

iSHARES^® MSCI UNITED KINGDOM ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		(4.44)%		(3.33)%		(3.96)%		(4.44)%		(3.33)%		(3.96)%
5 Years		3.31%		3.47%		3.85%		17.66%		18.62%		20.79%
10 Years		0.69%		0.68%		1.25%		7.13%		7.01%		13.22%

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 12 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,068.30	$	2.55	$	1,000.00	$	1,022.70	$	2.49		0.49%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 12 for more information.

8 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI UNITED KINGDOM ETF

The iShares MSCI United Kingdom ETF (the “Fund”) seeks to track the investment results of an index composed of U.K. equities, as represented by the MSCI United Kingdom Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was -4.44%, net of fees, while the total return for the Index was -3.96%.

The Index posted a negative return for the reporting period, as the British pound fell sharply against the U.S. dollar in June 2016, following the United Kingdom’s vote to leave the European Union. The British pound’s decline exceeded the positive return of Britain’s stock market for the reporting period, resulting in a negative return for U.S. investors.

The financials sector was the largest detractor for the reporting period, accounting for the majority of the Index’s negative return. Within the sector, banks and insurance stocks weighed on the Index’s performance. Banks struggled with credit concerns and widespread analyst downgrades after the Brexit vote, while profitability in the insurance sector continued to be restrained by low interest rates.

The consumer discretionary and telecommunication services sectors were notable detractors from the Index’s performance during the reporting period. Consumer confidence fell sharply in the second half of the reporting period, while consumer spending in June 2016 fell by the most in 10 years. Within the consumer discretionary sector, the retailing industry detracted the most from the Index’s performance. In the telecommunication services sector, increasing regulatory pressure on the U.K.’s largest telecommunications company sought to increase competition in the sector.

At the other end of the spectrum, the consumer staples sector was a solid contributor to the Index’s return for the reporting period. Many consumer staples stocks in the U.K. benefited from rising valuations amid economic uncertainty, as investors sought the relative stability of companies with steady sales of household products.

Special Note: At the meeting of the Board of Trustees held on September 28–29, 2016, the Board approved a one-for-two reverse stock split for the Fund, effective after the close of trading on November 4, 2016. The impact of the stock split will be to decrease the number of shares outstanding by a factor of two, while increasing the NAV per share by a factor of two, resulting in no effect on the net assets of the Fund.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Consumer Staples	19.80	%
Financials**	19.23
Energy	13.04
Health Care	11.35
Consumer Discretionary	8.84
Industrials	7.99
Materials	6.19
Telecommunication Services	5.44
Utilities	4.44
Information Technology	2.22
Real Estate**	1.46
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

HSBC Holdings PLC	6.26	%
British American Tobacco PLC	4.94
GlaxoSmithKline PLC	4.47
BP PLC	4.47
Royal Dutch Shell PLC Class A	4.37
Royal Dutch Shell PLC Class B	4.08
AstraZeneca PLC	3.48
Vodafone Group PLC	3.42
Diageo PLC	2.97
Reckitt Benckiser Group PLC	2.62
TOTAL	41.08	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 9

Management’s Discussion of Fund Performance

iSHARES^® MSCI UNITED KINGDOM SMALL-CAP ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		(9.66)%		(9.06)%		(9.22)%		(9.66)%		(9.06)%		(9.22)%
Since Inception		10.70%		10.75%		11.37%		59.63%		60.01%		64.11%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 1/25/12. The first day of secondary market trading was 1/26/12.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 12 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a		Annualized Expense Ratio
$	1,000.00	$	1,026.60	$	3.01	$	1,000.00	$	1,022.20	$	3.00		0.59%

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 12 for more information.

10 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI UNITED KINGDOM SMALL-CAP ETF

The iShares MSCI United Kingdom Small-Cap ETF (the “Fund”) seeks to track the investment results of an index composed of small-capitalization U.K. equities, as represented by the MSCI United Kingdom Small Cap Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was -9.66%, net of fees, while the total return for the Index was -9.22%.

United Kingdom small-capitalization stocks, as represented by the Index, posted a negative return for the reporting period, as the British pound fell sharply against the U.S. dollar in June 2016, following the United Kingdom’s vote to leave the European Union. In the United Kingdom, small-capitalization stocks trailed large-capitalization stocks during the reporting period. Small-capitalization stocks tend to be more volatile than large-capitalization stocks, so small-capitalization stocks were hardest hit during the sharp decline in the equity market following the Brexit vote.

Nine out of ten economic sectors in the Index declined for the reporting period. The financials sector, which accounted for 24% of the Index on average, was the largest detractor from the Index’s performance. The weak global economy and extremely low interest rates limited the profitability across most of the financials sector. Following the Brexit vote, commercial and residential real estate markets slowed, as investors anticipated less demand for real estate in the U.K. As a result, industries related to real estate were among the Index’s worst performers during the reporting period.

The consumer discretionary and industrials sectors, which tend to rise and fall with the economic outlook, were also large detractors from the Index’s return. Consumer confidence fell sharply in the second half of the reporting period, while consumer spending in June 2016 fell by the most in 10 years. Within the consumer discretionary sector, the specialty retail and household durables industries detracted the most from the Index’s performance. For industrials stocks, slow growth in industrial production and concerns about U.K. companies’ competitive position after Brexit weighed on performance for the reporting period.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Industrials	20.85	%
Consumer Discretionary	20.63
Financials**	14.64
Information Technology	12.22
Real Estate**	8.87
Materials	6.89
Health Care	5.17
Energy	4.13
Consumer Staples	3.98
Utilities	1.99
Telecommunication Services	0.63
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Informa PLC	1.71	%
Micro Focus International PLC	1.70
Halma PLC	1.49
Rentokil Initial PLC	1.46
Rightmove PLC	1.44
DS Smith PLC	1.44
IG Group Holdings PLC	1.30
Pennon Group PLC	1.28
Spirax-Sarco Engineering PLC	1.19
Hiscox Ltd.	1.11
TOTAL	14.12	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 11

About Fund Performance

Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.ishares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.

Shareholder Expenses

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested on March 1, 2016 and held through August 31, 2016, is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.

Actual Expenses — The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number corresponding to your Fund under the heading entitled “Expenses Paid During Period.”

Hypothetical Example for Comparison Purposes — The table also provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

12 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® CURRENCY HEDGED MSCI UNITED KINGDOM ETF

August 31, 2016

Security	Shares		Value
INVESTMENT COMPANIES — 100.07%
EXCHANGE-TRADED FUNDS — 100.07%
iShares MSCI United Kingdom ETFa		7,259,436	$	114,481,306
				114,481,306
TOTAL INVESTMENT COMPANIES
(Cost: $113,995,857)				114,481,306
SHORT-TERM INVESTMENTS — 0.03%
MONEY MARKET FUNDS — 0.03%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		27,872		27,872
				27,872
TOTAL SHORT-TERM INVESTMENTS
(Cost: $27,872)				27,872

	Value
TOTAL INVESTMENTS IN SECURITIES — 100.10%
(Cost: $114,023,729)d	$	114,509,178
Other Assets, Less Liabilities — (0.10)%		(111,628	)
NET ASSETS — 100.00%	$	114,397,550

^a  Affiliated issuer. See Schedule 1.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $114,050,743. Net unrealized appreciation was $458,435, of which $458,435 represented gross unrealized appreciation on securities and $ — represented gross unrealized depreciation on securities.

Schedule 1 — Affiliates (Note 2)

Investments in issuers considered to be affiliates of the Fund (excluding affiliated money market funds) during the year ended August 31, 2016, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

Affiliated issuer	Shares held at beginning of year		Shares purchased		Shares sold			Shares held at end of year		Value at end of year		Dividend income		Net realized gain (loss)
iShares MSCI United Kingdom ETF		135,768		7,610,906		(487,238	)		7,259,436	$	114,481,306	$	193,127	$	(345,179	)

Schedule 2 — Forward Currency Contracts (Note 6)

Forward currency contracts outstanding as of August 31, 2016 were as follows:

Currency purchased			Currency sold			Counterparty	Settlement date		Unrealized appreciation (depreciation)
	GBP	49,572,000		USD	64,964,602	BNP		09/06/2016	$	134,803
	USD	52,548,344		GBP	39,858,000	BNP		09/06/2016		205,649
										340,452
	GBP	2,969,000		USD	3,903,335	BNP		09/06/2016	$	(4,358	)
	USD	16,474,384		GBP	12,683,000	BNP		09/06/2016		(181,304	)
	GBP	143,000		USD	187,999	BNP		10/05/2016		(66	)
	USD	115,046,904		GBP	87,802,000	BNP		10/05/2016		(344,005	)
										(529,733	)
					Net unrealized depreciation				$	(189,281	)

Counterparties:

BNP — BNP Paribas SA

Currency abbreviations:

GBP — British Pound

USD — United States Dollar

SCHEDULES OF INVESTMENTS 13

Schedule of Investments (Continued)

iSHARES^® CURRENCY HEDGED MSCI UNITED KINGDOM ETF

August 31, 2016

Schedule 3 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2			Level 3		Total
Investments:
Assets:
Exchange-traded funds	$	114,481,306	$	—		$	—	$	114,481,306
Money market funds		27,872		—			—		27,872
Total	$	114,509,178	$	—		$	—	$	114,509,178
Derivative financial instrumentsa:
Assets:
Forward currency contracts	$	—	$	340,452		$	—	$	340,452
Liabilities:
Forward currency contracts		—		(529,733	)		—		(529,733	)
Total	$	—	$	(189,281	)	$	—	$	(189,281	)

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

14 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI UNITED KINGDOM ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.01%
AEROSPACE & DEFENSE — 2.09%
BAE Systems PLC		2,588,958	$	18,259,225
Cobham PLC		1,400,492		2,965,939
Meggitt PLC		632,716		3,880,651
Rolls-Royce Holdings PLC		1,502,879		15,156,062
				40,261,877
AIR FREIGHT & LOGISTICS — 0.26%
Royal Mail PLC		734,005		4,941,215
				4,941,215
AIRLINES — 0.10%
easyJet PLC		129,243		1,870,428
				1,870,428
AUTO COMPONENTS — 0.29%
GKN PLC		1,396,671		5,688,872
				5,688,872
BANKS — 11.49%
Barclays PLC		13,813,706		31,163,129
HSBC Holdings PLC		16,186,359		119,627,448
Lloyds Banking Group PLC		52,505,744		40,813,060
Royal Bank of Scotland Group PLCa,b		2,876,828		7,592,076
Standard Chartered PLCa		2,679,349		22,528,690
				221,724,403
BEVERAGES — 5.49%
Coca-Cola HBC AG		147,559		3,235,138
Diageo PLC		2,056,561		56,791,955
SABMiller PLC		794,836		45,783,013
				105,810,106
BIOTECHNOLOGY — 2.37%
Shire PLC		733,205		45,718,842
				45,718,842
CAPITAL MARKETS — 1.68%
3i Group PLC		799,501		6,434,466
Aberdeen Asset Management PLC		752,729		3,160,631
Hargreaves Lansdown PLC		213,173		3,690,925
ICAP PLC		449,456		2,815,524
Investec PLC		504,301		2,977,456
London Stock Exchange Group PLC		255,788		9,229,398
Schroders PLC		110,722		4,037,149
				32,345,549

Security	Shares		Value
CHEMICALS — 0.60%
Croda International PLC		107,022	$	4,639,516
Johnson Matthey PLC		158,432		6,926,293
				11,565,809
COMMERCIAL SERVICES & SUPPLIES — 0.49%
Aggreko PLC		208,586		2,783,755
Babcock International Group PLC		205,793		2,819,252
G4S PLC		1,267,524		3,828,134
				9,431,141
CONSUMER FINANCE — 0.24%
Provident Financial PLC		120,112		4,728,757
				4,728,757
DIVERSIFIED TELECOMMUNICATION SERVICES — 2.00%
BT Group PLC		6,893,824		34,882,912
Inmarsat PLC		367,229		3,708,198
				38,591,110
ELECTRIC UTILITIES — 0.84%
SSE PLC		822,748		16,206,390
				16,206,390
ENERGY EQUIPMENT & SERVICES — 0.12%
Petrofac Ltd.		211,074		2,298,628
				2,298,628
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) — 1.45%
British Land Co. PLC (The)		810,067		7,034,060
Hammerson PLC		646,915		4,914,132
Intu Properties PLCb		769,134		3,183,176
Land Securities Group PLC		644,789		9,238,609
Segro PLC		610,832		3,625,629
				27,995,606
FOOD & STAPLES RETAILING — 1.21%
J Sainsbury PLCb		1,339,869		4,216,846
Tesco PLCa		6,656,034		14,501,401
Wm Morrison Supermarkets PLC		1,808,718		4,666,687
				23,384,934
FOOD PRODUCTS — 0.79%
Associated British Foods PLC		291,327		11,602,959
Tate & Lyle PLC		381,902		3,668,797
				15,271,756
HEALTH CARE EQUIPMENT & SUPPLIES — 0.61%
Smith & Nephew PLC		732,546		11,791,211
				11,791,211

SCHEDULES OF INVESTMENTS 15

Schedule of Investments (Continued)

iSHARES^® MSCI UNITED KINGDOM ETF

August 31, 2016

Security	Shares		Value
HEALTH CARE PROVIDERS & SERVICES — 0.21%
Mediclinic International PLC		300,584	$	4,023,355
				4,023,355
HOTELS, RESTAURANTS & LEISURE — 3.10%
Carnival PLC		154,850		7,410,566
Compass Group PLC		1,343,921		25,381,111
InterContinental Hotels Group PLC		153,003		6,534,650
Merlin Entertainments PLCc		579,042		3,640,939
TUI AG		406,451		5,658,653
Whitbread PLC		148,963		8,139,436
William Hill PLC		723,369		3,014,614
				59,779,969
HOUSEHOLD DURABLES — 1.07%
Barratt Developments PLC		817,300		5,287,862
Berkeley Group Holdings PLC		107,305		3,755,156
Persimmon PLC		250,758		5,990,337
Taylor Wimpey PLC		2,656,792		5,612,593
				20,645,948
HOUSEHOLD PRODUCTS — 2.59%
Reckitt Benckiser Group PLC		518,540		49,943,331
				49,943,331
INDUSTRIAL CONGLOMERATES — 0.63%
DCC PLC		72,404		6,571,544
Smiths Group PLC		322,083		5,656,766
				12,228,310
INSURANCE — 5.62%
Admiral Group PLC		172,175		4,622,699
Aviva PLC		3,306,209		18,550,319
Direct Line Insurance Group PLC		1,120,449		5,414,896
Legal & General Group PLC		4,867,049		13,405,302
Old Mutual PLC		4,029,885		10,244,477
Prudential PLC		2,103,232		37,558,993
RSA Insurance Group PLC		828,642		5,381,863
St. James’s Place PLC		427,757		5,501,489
Standard Life PLC		1,612,495		7,697,816
				108,377,854
INTERNET SOFTWARE & SERVICES — 0.21%
Auto Trader Group PLCc		818,313		3,998,677
				3,998,677
IT SERVICES — 0.23%
Worldpay Group PLCa,c		1,142,260		4,470,099
				4,470,099

Security	Shares		Value
MACHINERY — 0.34%
IMI PLC		221,617	$	3,067,960
Weir Group PLC (The)		174,477		3,443,682
				6,511,642
MEDIA — 2.54%
ITV PLC		2,969,254		7,804,882
Pearson PLC		670,178		7,596,768
Sky PLC		845,016		9,396,027
WPP PLC		1,054,811		24,258,882
				49,056,559
METALS & MINING — 5.21%
Anglo American PLCa		1,145,783		11,701,923
Antofagasta PLC		321,429		2,082,565
BHP Billiton PLC		1,726,257		22,380,428
Fresnillo PLC		180,823		3,803,390
Glencore PLC		9,999,654		22,794,529
Randgold Resources Ltd.		77,515		7,258,776
Rio Tinto PLC		1,010,674		30,457,856
				100,479,467
MULTI-UTILITIES — 2.88%
Centrica PLC		4,435,064		13,510,805
National Grid PLC		3,061,090		41,955,311
				55,466,116
MULTILINE RETAIL — 0.75%
Marks & Spencer Group PLC		1,322,520		5,970,561
Next PLC		116,845		8,455,008
				14,425,569
OIL, GAS & CONSUMABLE FUELS — 12.79%
BP PLC		15,233,810		85,373,373
Royal Dutch Shell PLC Class A		3,427,532		83,518,524
Royal Dutch Shell PLC Class B		3,059,972		77,828,435
				246,720,332
PAPER & FOREST PRODUCTS — 0.32%
Mondi PLC		300,573		6,097,798
				6,097,798
PERSONAL PRODUCTS — 2.51%
Unilever PLC		1,048,901		48,479,460
				48,479,460
PHARMACEUTICALS — 8.04%
AstraZeneca PLC		1,033,184		66,426,646
GlaxoSmithKline PLC		3,979,941		85,433,305
Hikma Pharmaceuticals PLC		117,199		3,284,803
				155,144,754

16 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI UNITED KINGDOM ETF

August 31, 2016

Security	Shares		Value
PROFESSIONAL SERVICES — 2.38%
Capita PLC		542,965	$	7,360,101
Experian PLC		784,725		15,560,193
Intertek Group PLC		132,044		6,037,264
RELX PLC		894,037		16,919,790
				45,877,348
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 1.33%
ARM Holdings PLC		1,151,222		25,571,520
				25,571,520
SOFTWARE — 0.43%
Sage Group PLC (The)		882,825		8,382,706
				8,382,706
SPECIALTY RETAIL — 0.67%
Dixons Carphone PLC		799,410		3,881,180
Kingfisher PLC		1,867,061		9,074,466
				12,955,646
TEXTILES, APPAREL & LUXURY GOODS — 0.32%
Burberry Group PLC		364,173		6,219,521
				6,219,521
TOBACCO — 7.01%
British American Tobacco PLC		1,523,450		94,276,106
Imperial Brands PLC		783,514		40,980,011
				135,256,117
TRADING COMPANIES & DISTRIBUTORS — 1.64%
Ashtead Group PLC		411,727		6,821,368
Bunzl PLC		273,798		8,455,625
Travis Perkins PLC		203,886		4,446,039
Wolseley PLC		206,057		11,820,425
				31,543,457
WATER UTILITIES — 0.68%
Severn Trent PLC		191,630		5,975,779
United Utilities Group PLC		556,606		7,082,104
				13,057,883

Security	Shares		Value
WIRELESS TELECOMMUNICATION SERVICES — 3.39%
Vodafone Group PLC		21,703,251	$	65,334,252
				65,334,252
TOTAL COMMON STOCKS
(Cost: $2,496,486,461)				1,909,674,324
SHORT-TERM INVESTMENTS — 0.68%
MONEY MARKET FUNDS — 0.68%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%d,e,f		12,785,896		12,785,896
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%d,e		371,827		371,827
				13,157,723
TOTAL SHORT-TERM INVESTMENTS
(Cost: $13,157,723)				13,157,723
TOTAL INVESTMENTS IN SECURITIES — 99.69%
(Cost: $2,509,644,184)g				1,922,832,047
Other Assets, Less Liabilities — 0.31%				6,048,663
NET ASSETS — 100.00%			$	1,928,880,710

^a  Non-income earning security.

^b  All or a portion of this security represents a security on loan. See Note 1.

^c  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^d  Affiliated money market fund.

^e  The rate quoted is the annualized seven-day yield of the fund at period end.

^f  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^g  The cost of investments for federal income tax purposes was $2,581,132,631. Net unrealized depreciation was $658,300,584, of which $60,724,210 represented gross unrealized appreciation on securities and $719,024,794 represented gross unrealized depreciation on securities.

Schedule 1 — Futures Contracts (Note 5)

Futures contracts outstanding as of August 31, 2016 were as follows:

Issue	Number of long (short) contracts		Expiration date		Exchange		Initial notional value		Current notional value		Unrealized appreciation (depreciation)
FTSE 100 Index		198		Sep. 2016		Intercontinental	$	16,592,375	$	17,597,487	$	1,005,112

SCHEDULES OF INVESTMENTS 17

Schedule of Investments (Continued)

iSHARES^® MSCI UNITED KINGDOM ETF

August 31, 2016

Schedule 2 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	1,909,674,324	$	—	$	—	$	1,909,674,324
Money market funds		13,157,723		—		—		13,157,723
Total	$	1,922,832,047	$	—	$	—	$	1,922,832,047
Derivative financial instrumentsa:
Assets:
Futures contracts	$	1,005,112	$	—	$	—	$	1,005,112
Total	$	1,005,112	$	—	$	—	$	1,005,112

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

18 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI UNITED KINGDOM SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.65%
AEROSPACE & DEFENSE — 1.46%
Chemring Group PLC		19,719	$	36,996
QinetiQ Group PLC		41,705		125,901
Senior PLC		29,915		92,503
Ultra Electronics Holdings PLC		5,007		110,825
				366,225
AIRLINES — 0.16%
Dart Group PLC		6,846		40,236
				40,236
BANKS — 1.83%
Aldermore Group PLCa		14,883		31,870
BGEO Group PLC		2,803		105,287
CYBG PLCa,b		62,972		222,598
Shawbrook Group PLCa,c		9,898		29,881
Virgin Money Holdings UK PLC		17,422		71,761
				461,397
BEVERAGES — 1.02%
Britvic PLC		17,723		149,136
Fevertree Drinks PLC		6,157		79,267
Stock Spirits Group PLC		12,706		28,165
				256,568
BIOTECHNOLOGY — 0.90%
Abcam PLC		12,943		122,983
Genus PLC		4,347		103,674
				226,657
BUILDING PRODUCTS — 0.21%
Polypipe Group PLC		13,511		52,077
				52,077
CAPITAL MARKETS — 7.09%
Allied Minds PLCa		13,028		55,420
Ashmore Group PLC		27,770		127,951
Brewin Dolphin Holdings PLC		20,305		70,499
Close Brothers Group PLC		10,687		190,496
CMC Markets PLCa,c		7,940		29,575
Henderson Group PLC		80,724		252,046
IG Group Holdings PLC		26,141		325,592
Intermediate Capital Group PLC		19,616		152,862
Jupiter Fund Management PLC		30,955		170,073
Man Group PLC		121,227		172,584
P2P Global Investments PLC/Fund		6,152		67,480
SVG Capital PLCa		11,177		81,610
Tullett Prebon PLC		17,292		86,399
				1,782,587

Security	Shares		Value
CHEMICALS — 2.17%
Elementis PLC		33,021	$	94,280
Essentra PLC		18,710		126,443
Scapa Group PLC		10,181		32,268
Sirius Minerals PLCa		147,394		79,630
Synthomer PLC		19,396		92,517
Victrex PLC		6,091		121,416
				546,554
COMMERCIAL SERVICES & SUPPLIES — 5.14%
Berendsen PLC		12,301		197,355
Cape PLC		8,650		23,847
De La Rue PLC		7,249		57,486
Homeserve PLC		18,636		138,147
Mitie Group PLC		25,355		89,793
Regus PLC		46,565		182,776
Rentokil Initial PLC		130,196		364,737
Restore PLCb		7,578		33,000
RPS Group PLC		15,974		38,129
Serco Group PLCa		78,368		131,377
Shanks Group PLC		27,015		36,266
				1,292,913
COMMUNICATIONS EQUIPMENT — 0.26%
Spirent Communications PLC		40,909		45,542
Telit Communications PLCb		6,024		19,231
				64,773
CONSTRUCTION & ENGINEERING — 2.87%
Balfour Beatty PLCa		49,213		181,954
Carillion PLCb		30,639		104,413
Costain Group PLC		6,119		28,250
Galliford Try PLC		5,885		87,481
Interserve PLC		10,460		58,942
John Laing Group PLCc		25,989		86,626
Keller Group PLC		5,132		61,097
Kier Group PLC		6,865		112,209
				720,972
CONSTRUCTION MATERIALS — 0.14%
Ibstock PLCc		14,351		34,339
				34,339
CONSUMER FINANCE — 0.38%
Arrow Global Group PLC		11,358		38,379
International Personal Finance PLC		15,817		56,180
				94,559
CONTAINERS & PACKAGING — 2.50%
DS Smith PLC		67,357		360,368

SCHEDULES OF INVESTMENTS 19

Schedule of Investments (Continued)

iSHARES^® MSCI UNITED KINGDOM SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
RPC Group PLC		23,629	$	268,929
				629,297
DISTRIBUTORS — 1.14%
Inchcape PLC		27,489		252,556
John Menzies PLC		4,345		33,945
				286,501
DIVERSIFIED CONSUMER SERVICES — 1.08%
AA PLC		43,351		153,411
Dignity PLC		3,337		117,522
				270,933
DIVERSIFIED FINANCIAL SERVICES — 0.17%
Plus500 Ltd.		4,516		42,201
				42,201
DIVERSIFIED TELECOMMUNICATION SERVICES — 0.62%
Kcom Group PLC		36,926		53,561
TalkTalk Telecom Group PLCb		37,484		103,586
				157,147
ELECTRICAL EQUIPMENT — 0.06%
Dialight PLCa		1,710		14,132
				14,132
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 3.91%
Electrocomponents PLC		31,474		125,643
Halma PLC		26,981		374,572
Laird PLC		19,333		75,708
Oxford Instruments PLC		3,921		39,440
Premier Farnell PLC		26,489		63,314
Renishaw PLC		2,604		89,422
Spectris PLC		8,493		215,347
				983,446
ENERGY EQUIPMENT & SERVICES — 1.93%
Amec Foster Wheeler PLC		27,795		196,941
Hunting PLC		9,002		54,794
John Wood Group PLC		25,679		234,245
				485,980
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) — 6.20%
Big Yellow Group PLC		10,600		105,024
Derwent London PLC		7,543		269,896
Empiric Student Property PLC		35,686		53,398
Great Portland Estates PLC		24,582		218,121
Hansteen Holdings PLC		52,980		80,351
LondonMetric Property PLC		42,632		91,625

Security	Shares		Value
NewRiver REIT PLC		16,665	$	69,625
Primary Health Properties PLC		42,351		61,291
Redefine International PLC/Isle of Man		88,161		50,920
Safestore Holdings PLC		14,762		71,980
Schroder REIT Ltd.		36,277		27,557
Shaftesbury PLC		18,793		238,133
Standard Life Investment Property Income Trust Ltd.		27,238		28,806
Tritax Big Box REIT PLC		59,641		112,872
Workspace Group PLC		8,703		78,249
				1,557,848
FOOD & STAPLES RETAILING — 1.59%
Booker Group PLC		119,846		276,411
Greggs PLC		7,244		98,385
Majestic Wine PLCa,b		4,495		24,961
				399,757
FOOD PRODUCTS — 1.01%
Dairy Crest Group PLC		10,019		86,145
Greencore Group PLC		29,223		134,340
Premier Foods PLCa		49,917		33,015
				253,500
HEALTH CARE EQUIPMENT & SUPPLIES — 0.16%
Advanced Medical Solutions Group PLC		13,904		40,426
				40,426
HEALTH CARE PROVIDERS & SERVICES — 1.11%
CVS Group PLC		4,007		47,835
Spire Healthcare Group PLCc		20,010		91,410
UDG Healthcare PLC		17,502		140,400
				279,645
HEALTH CARE TECHNOLOGY — 0.21%
EMIS Group PLC		4,051		53,746
				53,746
HOTELS, RESTAURANTS & LEISURE — 5.14%
888 Holdings PLC		11,294		32,246
Domino’s Pizza Group PLC		35,529		166,958
Enterprise Inns PLCa		36,527		45,089
Greene King PLC		21,979		233,885
GVC Holdings PLC		19,796		178,765
J D Wetherspoon PLC		5,768		67,045
Ladbrokes PLC		65,091		131,029
Marston’s PLC		40,969		78,178
Mitchells & Butlers PLC		14,633		49,273
Restaurant Group PLC (The)		14,212		69,335

20 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI UNITED KINGDOM SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
SSP Group PLC		33,760	$	144,098
Thomas Cook Group PLCa		104,202		94,985
				1,290,886
HOUSEHOLD DURABLES — 2.33%
Bellway PLC		8,736		266,588
Bovis Homes Group PLC		9,610		112,772
Crest Nicholson Holdings PLC		17,949		109,335
Redrow PLC		15,768		76,720
Telford Homes PLC		4,876		21,010
				586,425
HOUSEHOLD PRODUCTS — 0.35%
PZ Cussons PLC		19,937		87,473
				87,473
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS — 0.46%
Drax Group PLC		28,998		115,417
				115,417
INSURANCE — 4.67%
Beazley PLC		37,405		190,862
Chesnara PLC		9,086		40,341
esure Group PLC		20,710		73,234
Hastings Group Holdings Ltd.c		9,142		26,485
Hiscox Ltd.		20,305		277,636
JRP Group PLC		33,137		42,531
Lancashire Holdings Ltd.b		13,468		111,302
Phoenix Group Holdings		15,924		181,236
Saga PLC		79,591		229,537
				1,173,164
INTERNET & DIRECT MARKETING RETAIL — 2.05%
AO World PLCa,b		15,162		34,751
ASOS PLCa		3,866		229,367
boohoo.com PLCa		47,804		51,496
Hostelworld Group PLCc		6,833		16,556
N Brown Group PLC		11,172		29,834
Ocado Group PLCa,b		35,696		142,404
On the Beach Group PLCa,c		4,203		11,959
				516,367
INTERNET SOFTWARE & SERVICES — 3.32%
iomart Group PLC		5,801		22,641
Just Eat PLCa		33,690		238,710
Moneysupermarket.com Group PLC		38,992		147,279
Rightmove PLC		6,724		360,975
Zoopla Property Group PLCc		16,339		63,877
				833,482

Security	Shares		Value
IT SERVICES — 1.16%
Equiniti Group PLCc		15,050	$	33,065
Kainos Group PLC		3,612		8,018
Paysafe Group PLCa		32,494		185,848
Redcentric PLC		10,108		23,399
SafeCharge International Group Ltd.		3,863		13,509
Softcat PLC		6,261		27,101
				290,940
LIFE SCIENCES TOOLS & SERVICES — 0.22%
Clinigen Healthcare Ltd.a		6,556		54,910
				54,910
MACHINERY — 3.99%
Bodycote PLC		13,660		105,643
Fenner PLC		13,944		30,590
Melrose Industries PLC		134,318		260,356
Morgan Advanced Materials PLC		20,358		76,202
Rotork PLC		62,012		163,165
Spirax-Sarco Engineering PLC		5,236		297,208
Vesuvius PLC		15,480		70,960
				1,004,124
MEDIA — 4.27%
Cineworld Group PLC		13,234		98,969
Daily Mail & General Trust PLC Class A NVS		19,240		181,934
Entertainment One Ltd.		24,282		69,329
Informa PLC		46,271		429,359
ITE Group PLC		18,625		41,773
UBM PLC		28,024		252,333
				1,073,697
METALS & MINING — 2.05%
Acacia Mining PLC		11,750		70,897
African Minerals Ltd.b		10,533		—
Centamin PLC		77,936		151,578
Evraz PLCa		25,076		42,038
Gem Diamonds Ltd.		7,814		12,869
Hochschild Mining PLCa		18,093		57,013
KAZ Minerals PLCa		17,252		38,683
Lonmin PLCa,b		19,905		50,184
Petra Diamonds Ltd.		37,466		55,694
Vedanta Resources PLC		5,760		37,191
				516,147
MULTI-UTILITIES — 0.25%
Telecom Plus PLC		4,558		62,561
				62,561

SCHEDULES OF INVESTMENTS 21

Schedule of Investments (Continued)

iSHARES^® MSCI UNITED KINGDOM SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
MULTILINE RETAIL — 1.16%
B&M European Value Retail SA		50,023	$	180,428
Debenhams PLC		83,524		66,291
Poundland Group PLC		15,289		44,904
				291,623
OIL, GAS & CONSUMABLE FUELS — 2.18%
Amerisur Resources PLCa,b		64,502		21,964
Cairn Energy PLCa		41,239		100,298
EnQuest PLCa		48,856		17,117
Faroe Petroleum PLCa,b		20,944		18,104
Nostrum Oil & Gas PLCa		5,961		23,187
Ophir Energy PLCa,b		50,227		48,514
Pantheon Resources PLCa,b		15,520		27,644
Premier Oil PLCa		35,749		34,062
SOCO International PLC		14,262		27,318
Stobart Group Ltd.		20,941		43,471
Tullow Oil PLCa		65,064		185,682
				547,361
PHARMACEUTICALS — 2.54%
BTG PLCa		27,271		214,658
GW Pharmaceuticals PLCa,b		20,061		135,442
Indivior PLC		51,228		211,076
Vectura Group PLCa		45,501		78,066
				639,242
PROFESSIONAL SERVICES — 1.53%
Hays PLC		97,011		165,934
Pagegroup PLC		22,166		100,737
WS Atkins PLC		6,072		118,890
				385,561
REAL ESTATE MANAGEMENT & DEVELOPMENT — 2.65%
Capital & Counties Properties PLC		54,091		210,120
Countrywide PLC		10,918		37,479
Foxtons Group PLCb		18,788		29,220
Grainger PLC		29,683		90,075
Helical PLC		7,215		26,884
Savills PLC		9,455		91,636
ST Modwen Properties PLC		13,529		50,712
UNITE Group PLC (The)		15,722		129,003
				665,129
ROAD & RAIL — 2.15%
FirstGroup PLCa		85,949		123,712
Go-Ahead Group PLC		3,071		79,597
National Express Group PLC		31,053		143,850
Northgate PLC		9,459		52,155

Security	Shares		Value
Redde PLC		21,058	$	55,228
Stagecoach Group PLC		28,655		85,417
				539,959
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 0.22%
Imagination Technologies Group PLCa,b		18,749		56,048
				56,048
SOFTWARE — 3.16%
AVEVA Group PLC		4,554		113,681
Micro Focus International PLC		16,282		426,064
Playtech PLC		16,089		191,963
Sophos Group PLCc		19,271		63,502
				795,210
SPECIALTY RETAIL — 3.06%
Card Factory PLC		21,827		81,844
Dunelm Group PLC		7,190		84,562
GAME Digital PLC		6,684		6,215
Halfords Group PLC		14,200		64,664
JD Sports Fashion PLC		4,810		81,392
Lookers PLC		22,640		40,474
Pets at Home Group PLC		26,682		85,616
Sports Direct International PLCa,b		19,172		74,651
SuperGroup PLC		3,471		67,508
Topps Tiles PLC		12,423		18,711
WH Smith PLC		8,138		162,433
				768,070
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 0.15%
Xaar PLC		5,558		36,615
				36,615
TEXTILES, APPAREL & LUXURY GOODS — 0.33%
Jimmy Choo PLCa,b		8,159		13,357
Ted Baker PLC		2,028		69,138
				82,495
THRIFTS & MORTGAGE FINANCE — 0.45%
OneSavings Bank PLC		7,874		27,586
Paragon Group of Companies PLC (The)		20,392		84,743
				112,329
TRADING COMPANIES & DISTRIBUTORS — 2.29%
Brammer PLC		9,478		14,275
Diploma PLC		8,079		87,929
Grafton Group PLC		15,993		114,679

22 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI UNITED KINGDOM SMALL-CAP ETF

August 31, 2016

Security	Shares		Value
Howden Joinery Group PLC		45,192	$	270,134
SIG PLC		42,380		69,437
Speedy Hire PLC		37,482		18,777
				575,231
TRANSPORTATION INFRASTRUCTURE — 0.92%
BBA Aviation PLC		73,505		232,009
				232,009
WATER UTILITIES — 1.28%
Pennon Group PLC		27,927		320,954
				320,954
TOTAL COMMON STOCKS
(Cost: $27,239,786)				25,047,845
SHORT-TERM INVESTMENTS — 4.46%
MONEY MARKET FUNDS — 4.46%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%d,e,f		1,117,597		1,117,597
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%d,e		3,642		3,642
				1,121,239
TOTAL SHORT-TERM INVESTMENTS
(Cost: $1,121,239)				1,121,239

	Value
TOTAL INVESTMENTS IN SECURITIES — 104.11%
(Cost: $28,361,025)g	$	26,169,084
Other Assets, Less Liabilities — (4.11)%		(1,034,203	)
NET ASSETS — 100.00%	$	25,134,881

NVS — Non-Voting Shares

^a  Non-income earning security.

^b  All or a portion of this security represents a security on loan. See Note 1.

^c  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^d  Affiliated money market fund.

^e  The rate quoted is the annualized seven-day yield of the fund at period end.

^f  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^g  The cost of investments for federal income tax purposes was $28,650,562. Net unrealized depreciation was $2,481,478, of which $752,820 represented gross unrealized appreciation on securities and $3,234,298 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3			Total
Investments:
Assets:
Common stocks	$	25,047,845	$	—	$	0	a	$	25,047,845
Money market funds		1,121,239		—		—			1,121,239
Total	$	26,169,084	$	—	$	0	a	$	26,169,084

^a  Rounds to less than $1.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 23

Statements of Assets and Liabilities

iSHARES^® TRUST

August 31, 2016

	iShares Currency Hedged MSCI United Kingdom ETF		iShares MSCI United Kingdom ETF			iShares MSCI United Kingdom Small-Cap ETF
ASSETS
Investments, at cost:
Unaffiliated	$	—	$	2,496,486,461		$	27,239,786
Affiliated (Note 2)		114,023,729		13,157,723			1,121,239
Total cost of investments	$	114,023,729	$	2,509,644,184		$	28,361,025
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated	$	—	$	1,909,674,324		$	25,047,845
Affiliated (Note 2)		114,509,178		13,157,723			1,121,239
Total fair value of investments		114,509,178		1,922,832,047			26,169,084
Foreign currency, at valueb		—		4,453,951			50,319
Foreign currency pledged to broker, at valueb		—		15,347			—
Receivables:
Investment securities sold		—		1,033,687			140,334
Dividends and interest		28		15,583,273			55,930
Unrealized appreciation on forward currency contracts (Note 6)		340,452		—			—
Capital shares sold		226,393		—			—
Futures variation margin		—		1,005,112			—
Tax reclaims		—		106,664			5,978
Total Assets		115,076,051		1,945,030,081			26,421,645
LIABILITIES
Payables:
Investment securities purchased		148,768		2,547,162			156,658
Collateral for securities on loan (Note 1)		—		12,785,896			1,117,597
Unrealized depreciation on forward currency contracts (Note 6)		529,733		—			—
Investment advisory fees (Note 2)		—		816,313			12,509
Total Liabilities		678,501		16,149,371			1,286,764
NET ASSETS	$	114,397,550	$	1,928,880,710		$	25,134,881
Net assets consist of:
Paid-in capital	$	113,418,681	$	2,765,648,672		$	27,597,803
Undistributed net investment income		279		11,986,657			103,415
Undistributed net realized gain (accumulated net realized loss)		682,422		(262,969,047	)		(373,621	)
Net unrealized appreciation (depreciation)		296,168		(585,785,572	)		(2,192,716	)
NET ASSETS	$	114,397,550	$	1,928,880,710		$	25,134,881
Shares outstandingc		4,600,000		123,000,000			700,000
Net asset value per share	$	24.87	$	15.68		$	35.91

^a  Securities on loan with values of $  —, $12,208,389 and $1,049,688, respectively. See Note 1.

^b  Cost of foreign currency including currency pledged to broker: $  —, $4,473,603 and $50,080, respectively.

^c  No par value, unlimited number of shares authorized.

See notes to financial statements.

24 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations

iSHARES^® TRUST

Year ended August 31, 2016

	iShares Currency Hedged MSCI United Kingdom ETF			iShares MSCI United Kingdom ETF			iShares MSCI United Kingdom Small-Cap ETF
NET INVESTMENT INCOME
Dividends — unaffiliateda	$	—		$	96,380,981		$	510,625
Dividends — affiliated (Note 2)		193,152			2,872			25
Interest — unaffiliated		—			535			—
Securities lending income — affiliated — net (Note 2)		1,022			30,820			23,127
		194,174			96,415,208			533,777
Less: Other foreign taxes (Note 1)		—			—			(121	)
Total investment income		194,174			96,415,208			533,656
EXPENSES
Investment advisory fees (Note 2)		66,873			10,827,655			95,059
Total expenses		66,873			10,827,655			95,059
Less investment advisory fees waived (Note 2)		(66,873	)		—			—
Net expenses		—			10,827,655			95,059
Net investment income		194,174			85,587,553			438,597
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		—			(89,933,888	)		(289,265	)
Investments — affiliated (Note 2)		(88,619	)		—			—
In-kind redemptions — unaffiliated		—			(52,755,022	)		(23,702	)
In-kind redemptions — affiliated (Note 2)		(256,560	)		—			—
Futures contracts		—			340,267			—
Foreign currency transactions		842,555			(3,554,025	)		(2,997	)
Net realized gain (loss)		497,376			(145,902,668	)		(315,964	)
Net change in unrealized appreciation/depreciation on:
Investments		658,405			(89,710,361	)		(1,204,680	)
Forward currency contracts		(225,663	)		—			—
Futures contracts		—			2,734,915			—
Translation of assets and liabilities in foreign currencies		—			349,536			408
Net change in unrealized appreciation/depreciation		432,742			(86,625,910	)		(1,204,272	)
Net realized and unrealized gain (loss)		930,118			(232,528,578	)		(1,520,236	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	1,124,292		$	(146,941,025	)	$	(1,081,639	)

^a  Net of foreign withholding tax of $  —, $1,301,485 and $2,083, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 25

Statements of Changes in Net Assets

iSHARES^® TRUST

	iShares Currency Hedged MSCI United Kingdom ETF						iShares MSCI United Kingdom ETF
	Year ended August 31, 2016			Period from June 29, 2015a to August 31, 2015			Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	194,174		$	(43	)	$	85,587,553		$	110,946,684
Net realized gain (loss)		497,376			22,935			(145,902,668	)		153,842,144
Net change in unrealized appreciation/depreciation		432,742			(136,574	)		(86,625,910	)		(841,498,189	)
Net increase (decrease) in net assets resulting from operations		1,124,292			(113,682	)		(146,941,025	)		(576,709,361	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(193,895	)		—			(97,031,722	)		(120,010,696	)
From net realized gain		(59,274	)		—			—			—
Total distributions to shareholders		(253,169	)		—			(97,031,722	)		(120,010,696	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		118,249,408			2,435,039			121,795,339			1,026,055,700
Cost of shares redeemed		(7,044,338	)		—			(1,159,767,653	)		(1,354,869,387	)
Net increase (decrease) in net assets from capital share transactions		111,205,070			2,435,039			(1,037,972,314	)		(328,813,687	)
INCREASE (DECREASE) IN NET ASSETS		112,076,193			2,321,357			(1,281,945,061	)		(1,025,533,744	)
NET ASSETS
Beginning of period		2,321,357			—			3,210,825,771			4,236,359,515
End of period	$	114,397,550		$	2,321,357		$	1,928,880,710		$	3,210,825,771
Undistributed net investment income included in net assets at end of period	$	279		$	—		$	11,986,657		$	26,314,024
SHARES ISSUED AND REDEEMED
Shares sold		4,800,000			100,000			7,600,000			53,800,000
Shares redeemed		(300,000	)		—			(71,800,000	)		(73,000,000	)
Net increase (decrease) in shares outstanding		4,500,000			100,000			(64,200,000	)		(19,200,000	)

^a  Commencement of operations.

See notes to financial statements.

26 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares MSCI United Kingdom Small-Cap ETF
	Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	438,597		$	501,624
Net realized loss		(315,964	)		(645,798	)
Net change in unrealized appreciation/depreciation		(1,204,272	)		(838,734	)
Net decrease in net assets resulting from operations		(1,081,639	)		(982,908	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(427,464	)		(596,666	)
Total distributions to shareholders		(427,464	)		(596,666	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		17,589,399			5,724,278
Cost of shares redeemed		(7,310,112	)		(20,436,009	)
Net increase (decrease) in net assets from capital share transactions		10,279,287			(14,711,731	)
INCREASE (DECREASE) IN NET ASSETS		8,770,184			(16,291,305	)
NET ASSETS
Beginning of year		16,364,697			32,656,002
End of year	$	25,134,881		$	16,364,697
Undistributed net investment income included in net assets at end of year	$	103,415		$	83,126
SHARES ISSUED AND REDEEMED
Shares sold		500,000			150,000
Shares redeemed		(200,000	)		(550,000	)
Net increase (decrease) in shares outstanding		300,000			(400,000	)

See notes to financial statements.

FINANCIAL STATEMENTS 27

Financial Highlights

iSHARES^® TRUST

(For a share outstanding throughout each period)

iShares Currency Hedged MSCI United Kingdom ETF

	Year ended Aug. 31, 2016			Period from Jun. 29, 2015a to Aug. 31, 2015
Net asset value, beginning of period	$	23.21		$	24.35
Income from investment operations:
Net investment income (loss)b		0.43			(0.00	)c
Net realized and unrealized gain (loss)d		2.48			(1.14	)
Total from investment operations		2.91			(1.14	)
Less distributions from:
Net investment income		(1.01	)		—
Net realized gain		(0.24	)		—
Total distributions		(1.25	)		—
Net asset value, end of period	$	24.87		$	23.21
Total return		12.90	%		(4.64	)%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	114,398		$	2,321
Ratio of expenses to average net assetsf,g		0.00	%		0.01	%
Ratio of expenses to average net assets prior to waived feesf,g		0.62	%		0.62	%
Ratio of net investment income to average net assetsf		1.80	%		(0.01	)%
Portfolio turnover rateh,i		4	%		0	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  Rounds to less than $0.01.

^d  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^e  Not annualized.

^f  Annualized for periods of less than one year.

^g  The Fund indirectly bears its proportionate share of fees and expenses incurred by the underlying fund in which the Fund is invested. This ratio does not include these indirect fees and expenses.

^h  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

ⁱ  Portfolio turnover rates exclude the portfolio activity of the underlying fund in which the Fund is invested. See page 29 for the portfolio turnover rates of the underlying fund.

See notes to financial statements.

28 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI United Kingdom ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	17.15		$	20.52		$	18.55		$	16.91		$	16.43
Income from investment operations:
Net investment incomea		0.61			0.65			1.38	b		0.66			0.64
Net realized and unrealized gain (loss)c		(1.37	)		(3.32	)		1.85			1.49			0.46
Total from investment operations		(0.76	)		(2.67	)		3.23			2.15			1.10
Less distributions from:
Net investment income		(0.71	)		(0.70	)		(1.26	)		(0.51	)		(0.62	)
Total distributions		(0.71	)		(0.70	)		(1.26	)		(0.51	)		(0.62	)
Net asset value, end of year	$	15.68		$	17.15		$	20.52		$	18.55		$	16.91
Total return		(4.44	)%		(13.26	)%		17.56	%		12.91	%		6.94	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	1,928,881		$	3,210,826		$	4,236,360		$	2,670,796		$	1,356,494
Ratio of expenses to average net assets		0.48	%		0.48	%		0.48	%		0.51	%		0.53	%
Ratio of net investment income to average net assets		3.80	%		3.46	%		6.71	%b		3.61	%		3.88	%
Portfolio turnover rated		5	%		4	%		10	%		4	%		7	%

^a  Based on average shares outstanding throughout each period.

^b  Includes a one-time special distribution from Vodafone Group PLC which represented $0.66 per share and 3.23% of average net assets.

^c  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 29

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

	iShares MSCI United Kingdom Small-Cap ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Period from Jan. 25, 2012a to Aug. 31, 2012
Net asset value, beginning of period	$	40.91		$	40.82		$	35.27		$	27.95		$	25.48
Income from investment operations:
Net investment incomeb		1.02			1.07			0.95			0.91			0.43
Net realized and unrealized gain (loss)c		(4.89	)		0.40			5.26			7.41			2.36
Total from investment operations		(3.87	)		1.47			6.21			8.32			2.79
Less distributions from:
Net investment income		(1.13	)		(1.38	)		(0.66	)		(1.00	)		(0.32	)
Total distributions		(1.13	)		(1.38	)		(0.66	)		(1.00	)		(0.32	)
Net asset value, end of period	$	35.91		$	40.91		$	40.82		$	35.27		$	27.95
Total return		(9.66	)%		3.84	%		17.66	%		30.27	%		11.02	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	25,135		$	16,365		$	32,656		$	8,818		$	2,795
Ratio of expenses to average net assetse		0.59	%		0.59	%		0.59	%		0.59	%		0.59	%
Ratio of net investment income to average net assetse		2.72	%		2.71	%		2.29	%		2.82	%		2.65	%
Portfolio turnover ratef		21	%		17	%		13	%		19	%		12	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

30 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements

iSHARES^® TRUST

iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999.

These financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):

iShares ETF	Diversification Classification
Currency Hedged MSCI United Kingdom	Non-diversified
MSCI United Kingdom	Non-diversified
MSCI United Kingdom Small-Cap	Non-diversified

The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective. Currently the iShares Currency Hedged MSCI United Kingdom ETF seeks to achieve its investment objective by investing a substantial portion of its assets in the iShares MSCI United Kingdom ETF. The financial statements and schedule of investments for the iShares MSCI United Kingdom ETF are included in this report and should be read in conjunction with the financial statements of the iShares Currency Hedged MSCI United Kingdom ETF.

Pursuant to the Trust’s organizational documents, the Funds’ officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.

SECURITY VALUATION

Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Trustees of the Trust (the “Board”).

• Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price.

NOTES TO FINANCIAL STATEMENTS 31

Notes to Financial Statements (Continued)

iSHARES^® TRUST

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

• Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”).

• Futures contracts are valued at that day’s last reported settlement price on the exchange where the contract is traded.

• Forward currency contracts are valued based on that day’s prevailing forward exchange rate for the underlying currencies. Interpolated forward exchange rates are used for contracts with interim settlement dates for which quotations are not available.

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such factors are reported to the Board on a quarterly basis.

The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Trust’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements in market values, and reviews of market related activity.

Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.

Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and is not necessarily an indication of the risk associated with investing in the instrument. The three levels of the fair value hierarchy are as follows:

• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and

• Level 3 — Unobservable inputs for the asset or liability, including the Global Valuation Committee’s assumptions used in determining the fair value of investments.

32 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2016 are reflected in tax reclaims receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.

FOREIGN CURRENCY TRANSLATION

The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.

Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes. Each Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for federal income tax purposes. However, the iShares Currency Hedged MSCI United Kingdom ETF has elected to treat realized gains (losses) from certain foreign currency contracts as capital gain (loss) for federal income tax purposes.

FOREIGN TAXES

The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their statements of operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “other foreign taxes”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of August 31, 2016, if any, are disclosed in the Funds’ statements of assets and liabilities.

DISTRIBUTIONS TO SHAREHOLDERS

Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.

NOTES TO FINANCIAL STATEMENTS 33

Notes to Financial Statements (Continued)

iSHARES^® TRUST

LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Funds. Any additional required collateral is delivered to the Funds and any excess collateral is returned by the Funds on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

On July 23, 2014, the U.S. Securities and Exchange Commission (the “SEC”) adopted amendments to Rule 2a-7 under the 1940 Act, which governs the operations of U.S. money market funds. When implemented in October 2016, the change may affect the Funds with regard to the reinvestment of cash collateral received for securities on loan. The Funds may be exposed to additional risk from reinvesting the cash collateral in money market funds that do not maintain a fixed NAV per share of $1.00.

Any cash received as collateral for securities on loan may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates. As of August 31, 2016, any securities on loan were collateralized by cash and/or U.S. government obligations. The cash collateral received was invested in money market funds managed by BFA and is disclosed in the schedules of investments. The securities on loan for each Fund are also disclosed in its schedule of investments. The total value of any securities on loan as of August 31, 2016 and the total value of the related collateral are disclosed in the statements of assets and liabilities. Income earned by the Funds from securities lending is disclosed in the statements of operations.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities lent. Each Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.

Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (“MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, a Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, the borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.

34 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

The following table is a summary of securities lending agreements which are subject to offset under an MSLA as of August 31, 2016:

iShares ETF and Counterparty	Market Value of Securities on Loan		Cash Collateral Received  a		Net Amount
MSCI United Kingdom
Credit Suisse Securities (USA) LLC	$	3,516,848	$	3,516,848	$	—
Goldman Sachs & Co.		3,183,176		3,183,176		—
Morgan Stanley & Co. LLC		5,508,365		5,508,365		—
	$	12,208,389	$	12,208,389	$	—
MSCI United Kingdom Small-Cap
Citigroup Global Markets Inc.	$	104,413	$	104,413	$	—
Credit Suisse Securities (USA) LLC		175,707		175,707		—
Deutsche Bank Securities Inc.		133,962		133,962		—
Merrill Lynch, Pierce, Fenner & Smith		131,433		131,433		—
Morgan Stanley & Co. LLC		271,722		271,722		—
Nomura Securities International Inc.		16,486		16,486		—
UBS Securities LLC		215,965		215,965		—
	$	1,049,688	$	1,049,688	$	—

^a  Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s statement of assets and liabilities.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Agreement with the Trust, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.

For its investment advisory services to the iShares Currency Hedged MSCI United Kingdom ETF, BFA is entitled to an annual investment advisory fee of 0.62% based on the average daily net assets of the Fund. In addition, the Fund indirectly pays its pro rata share of fees and expenses attributable to its investments in other investment companies (“acquired fund fees and expenses”). BFA has contractually agreed to waive a portion of its investment advisory fees for the Fund through December 31, 2020 in an amount equal to the acquired fund fees and expenses, if any, attributable to the Fund’s investments in the iShares MSCI United Kingdom ETF (“EWU”). BFA has contractually agreed to reduce the investment advisory fee for the Fund through December 31, 2017 so that the investment advisory fee is equal to the acquired fund fees and expenses that would have been experienced by the Fund related to its investments in EWU, after taking into account any fee waivers by EWU, plus 0.03%. Additionally, BFA has contractually agreed to a reduction in its investment advisory fee through December 31, 2017 of 0.03%.

NOTES TO FINANCIAL STATEMENTS 35

Notes to Financial Statements (Continued)

iSHARES^® TRUST

For its investment advisory services to the iShares MSCI United Kingdom ETF, BFA is entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:

Investment Advisory Fee			Aggregate Average Daily Net Assets
	0.59	%	First $7 billion
	0.54		Over $7 billion, up to and including $11  billion
	0.49		Over $11 billion, up to and including $24 billion
	0.44		Over $24 billion, up to and including $48 billion
	0.40		Over $48 billion, up to and including $72 billion
	0.36		Over $72 billion

For its investment advisory services to the iShares MSCI United Kingdom Small-Cap ETF, BFA is entitled to an annual advisory fee of 0.59% based on the Fund’s average daily net assets.

The SEC has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by BFA, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the “collateral investment fees”). Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Funds retain a portion of securities lending income and remit the remaining portion to BTC as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, each Fund retains 80% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in a given calendar year exceeds the aggregate securities lending income generated across the iShares ETF Complex in the calendar year 2013, each Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 85% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.

For the year ended August 31, 2016, the total of securities lending agent services and collateral investment fees paid were as follows:

iShares ETF	Fees Paid to BTC
Currency Hedged MSCI United Kingdom	$	357
MSCI United Kingdom		10,211
MSCI United Kingdom Small-Cap		5,729

BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.

36 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.

For the year ended August 31, 2016, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:

iShares ETF	Purchases		Sales
MSCI United Kingdom	$	13,162,129	$	10,435,267
MSCI United Kingdom Small-Cap		193,693		1,175,924

Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends – affiliated” in the statements of operations.

The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.

Certain trustees and officers of the Trust are also officers of BTC and/or BFA.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2016 were as follows:

iShares ETF	Purchases		Sales
Currency Hedged MSCI United Kingdom	$	2,176,765	$	576,941
MSCI United Kingdom		176,496,845		115,129,336
MSCI United Kingdom Small-Cap		3,498,820		3,631,506

In-kind transactions (see Note 4) for the year ended August 31, 2016 were as follows:

iShares ETF	In-kind Purchases		In-kind Sales
Currency Hedged MSCI United Kingdom	$	117,243,476	$	6,991,421
MSCI United Kingdom		69,069,697		1,142,921,264
MSCI United Kingdom Small-Cap		17,419,530		7,216,647

4. CAPITAL SHARE TRANSACTIONS

Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the statements of changes in net assets.

The consideration for the purchase of Creation Units of a fund in the Trust generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Trust may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Trust’s administrator, to offset transfer and

NOTES TO FINANCIAL STATEMENTS 37

Notes to Financial Statements (Continued)

iSHARES^® TRUST

other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Proceeds from shares sold” in the statements of changes in net assets.

5. FUTURES CONTRACTS

Each Fund may purchase or sell futures contracts, in an effort to help such Fund track its underlying index. A futures contract is a standardized, exchange-traded agreement to buy or sell a financial instrument at a set price on a future date. Upon entering into a futures contract, the Fund is required to pledge to the executing broker which holds segregated from its own assets, an amount of cash, U.S. government securities or other high-quality debt and equity securities equal to the minimum initial margin requirements of the exchange on which the contract is traded. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as margin variation and are recorded by the Fund as unrealized appreciation or depreciation. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Losses may arise if the value of a futures contract decreases due to an unfavorable change in the market rates or values of the underlying instrument during the term of the contract or if the counterparty does not perform under the contract. The use of futures contracts also involves the risk of an imperfect correlation in the movements in the price of futures contracts and the assets underlying such contracts.

The following table shows the value of futures contracts held by the iShares MSCI United Kingdom ETF as of August 31, 2016 and the related locations in the statements of assets and liabilities, presented by risk exposure category:

Assets
Equity contracts:
Variation margin/Net assets consist of – net unrealized appreciation (depreciation)a	$	1,005,112

^a Represents cumulative appreciation of futures contracts as reported in the schedule of investments.

The following table shows the realized and unrealized gains (losses) on futures contracts held by the iShares MSCI United Kingdom ETF during the year ended August 31, 2016 and the related locations in the statement of operations, presented by risk exposure category:

	Net Realized Gain (Loss)		Net Change in Unrealized Appreciation/Depreciation
Equity contracts:
Futures contracts	$	340,267	$	2,734,915

The following table shows the average quarter-end balances of open futures contracts for the iShares MSCI United Kingdom ETF for the year ended August 31, 2016:

Average value of contracts purchased $ 24,943,360

38 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

6. FORWARD CURRENCY CONTRACTS

Each Fund may enter into forward currency contracts for the purpose of hedging against the effects of foreign currencies on the value of such Fund’s assets that are denominated in a non-U.S. currency. A forward currency contract is an obligation to purchase or sell a currency against another currency at a specified future date at an agreed upon price and quantity. Forward currency contracts are traded over-the-counter (“OTC”) and not on an organized exchange. The contract is marked-to-market daily and the change in market value is recorded as unrealized appreciation or depreciation. When the contract is closed, a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed is recorded. Losses may arise if there are unfavorable movements in the value of a foreign currency relative to the U.S. dollar or if the counterparties do not meet the terms of the agreement. The Fund’s use of forward currency contracts also involves the risks of imperfect correlation between the value of its currency positions and its other investments or the Fund failing to close out its position due to an illiquid market.

The following table shows the value of forward currency contracts held by the iShares Currency Hedged MSCI United Kingdom ETF as of August 31, 2016 and the related locations in the statements of assets and liabilities, presented by risk exposure category:

Assets
Forward currency contracts:
Unrealized appreciation on forward currency contracts/ Net assets consist of – net unrealized appreciation (depreciation)	$	340,452

Liabilities
Forward currency contracts:
Unrealized depreciation on forward currency contracts/ Net assets consist of – net unrealized appreciation (depreciation)	$	529,733

The following table shows the realized and unrealized gains (losses) on forward currency contracts held by the iShares Currency Hedged MSCI United Kingdom ETF during the year ended August 31, 2016 and the related locations in the statements of operations, presented by risk exposure category:

	Net Realized Gain (Loss)		Net Change in Unrealized Appreciation/Depreciation
Forward currency contracts:
Foreign currency transactions/Forward currency contracts	$	842,555	$	(225,663	)

The following table shows the average quarter-end balances of outstanding forward currency contracts for the iShares Currency Hedged MSCI United Kingdom ETF for the year ended August 31, 2016:

Average amounts purchased in U.S. dollars	$	17,121,993
Average amounts sold in U.S. dollars		42,969,672

The Funds’ risk of loss from counterparty credit risk on OTC derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by the Funds. In order to better define their contractual rights and to secure rights that will help

NOTES TO FINANCIAL STATEMENTS 39

Notes to Financial Statements (Continued)

iSHARES^® TRUST

the Funds to mitigate their counterparty risk, the Funds may enter into an International Swaps and Derivatives Association, Inc. master agreement (“ISDA Master Agreement”) or similar agreement with their derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Funds and a counterparty that governs OTC derivatives and foreign exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy or insolvency.

The collateral requirements under an ISDA Master Agreement are typically calculated by netting the mark-to-market amount for each transaction under such agreement, and comparing that amount to the value of any collateral currently pledged by the parties. Forward currency contracts held by the Funds generally do not require collateral. To the extent amounts due to the Funds from the counterparty are not fully collateralized, contractually or otherwise, the Funds bear the risk of loss from counterparty non-performance. The Funds attempt to mitigate counterparty risk by only entering into agreements with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.

For financial reporting purposes, the Funds do not offset financial assets and financial liabilities that are subject to netting arrangements in the statements of assets and liabilities.

The following table presents the exposure of the open forward currency contracts held by the iShares Currency Hedged MSCI United Kingdom ETF that are subject to potential offset on the statement of assets and liabilities as of August 31, 2016:

	Derivative Assets Subject to Offsetting		Derivatives Available for Offset			Net Amount of Derivative Assets
Forward currency contracts	$	340,452	$	(340,452	)	$	—
	Derivative Liabilities Subject to Offsetting		Derivatives Available for Offset			Net Amount of Derivative Liabilities
Forward currency contracts	$	529,733	$	(340,452	)	$	189,281

7. PRINCIPAL RISKS

In the normal course of business, each Fund’s investment activities expose it to various types of risk associated with the financial instruments and markets in which it invests. The significant types of financial risks each Fund is exposed to include market risk and credit risk. Each Fund’s prospectus provides details of these and other types of risk.

BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.

40 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

MARKET RISK

Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss each Fund may suffer through holding market positions in the face of market movements. Each Fund is exposed to market risk by virtue of its direct and/or indirect investment in equity and financial derivative instruments. The fair value of securities held by the Funds may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of each Fund’s exposure to market risk is the market value of the investments held as shown in the Fund’s schedule of investments.

A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its schedule of investments.

Investing in the securities of non-U.S. issuers, whether directly or indirectly, involves certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of a Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets; and the risk of war. These risks are heightened for investments in issuers from countries with less developed markets.

The economies and markets of European countries are often closely connected and interdependent, and events in one European country can have an adverse impact on other European countries. The European financial markets have experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of several European countries. Responses to the financial problems by European governments, central banks and others, including austerity measures and reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In addition, the United Kingdom has voted to withdraw from the European Union. The referendum may introduce significant new uncertainties and instability in the financial markets as the United Kingdom negotiates its exit from the European Union.

When a fund concentrates its investments in issuers located in a single country, whether directly or indirectly, it assumes the risk that economic, political and social conditions in that country may have a significant impact on its investment performance.

CREDIT RISK

Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of each Fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its statement of assets and liabilities.

NOTES TO FINANCIAL STATEMENTS 41

Notes to Financial Statements (Continued)

iSHARES^® TRUST

8. INCOME TAX INFORMATION

Each Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.

U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or NAV per share. The following permanent differences as of August 31, 2016, attributable to the use of equalization, passive foreign investment companies, the expiration of capital loss carryforwards, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:

iShares ETF	Paid-in Capital			Undistributed Net Investment Income/Distributions in Excess of Net Investment Income			Undistributed Net Realized Gain/Accumulated Net Realized Loss
Currency Hedged MSCI United Kingdom	$	(221,428	)	$	—		$	221,428
MSCI United Kingdom		(98,944,795	)		(2,883,198	)		101,827,993
MSCI United Kingdom Small-Cap		(225,845	)		9,156			216,689

The tax character of distributions paid during the years ended August 31, 2016 and August 31, 2015 was as follows:

iShares ETF	2016		2015
Currency Hedged MSCI United Kingdom
Ordinary income	$	217,579		N/A
Long-term capital gain		35,590		N/A
	$	253,169		N/A
MSCI United Kingdom
Ordinary income	$	97,031,722	$	120,010,696
MSCI United Kingdom Small-Cap
Ordinary income	$	427,464	$	596,666

42 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

As of August 31, 2016, the tax components of accumulated net earnings (losses) were as follows:

iShares ETF	Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Capital Loss Carryforwards			Net Unrealized Gains  (Losses) a			Qualified Late-Year Losses b			Total
Currency Hedged MSCI United Kingdom	$	243,238	$	277,196	$	—		$	458,435		$	—		$	978,869
MSCI United Kingdom		13,173,746		—		(129,017,104	)		(658,279,131	)		(62,645,473	)		(836,767,962	)
MSCI United Kingdom Small-Cap		167,204		—		(112,287	)		(2,482,253	)		(35,586	)		(2,462,922	)

^a  The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales, the realization for tax purposes of unrealized gains (losses) on certain futures contracts and foreign currency contracts, and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies.

^b  The Funds have elected to defer certain qualified late-year losses and recognize such losses in the next taxable year.

As of August 31, 2016, the following Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:

iShares ETF	Non- Expiring  a		Expiring 2017		Expiring 2018		Expiring 2019		Total
MSCI United Kingdom	$	66,802,442	$	16,140,312	$	23,559,917	$	22,514,433	$	129,017,104
MSCI United Kingdom Small-Cap		112,287		—		—		—		112,287

^a  Must be utilized prior to losses subject to expiration.

For the year ended August 31, 2016, the iShares MSCI United Kingdom Small-Cap ETF utilized $60,494 of its capital loss carryforwards.

The Funds may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Funds may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.

Management has analyzed tax laws and regulations and their application to the Funds as of August 31, 2016, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

9. SUBSEQUENT EVENTS

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

At the meeting of the Board held on September 28-29, 2016, the Board approved a one-for-two reverse stock split for the iShares MSCI United Kingdom ETF, effective after the close of trading on November 4, 2016. The impact of the stock split will be to decrease the number of shares outstanding by a factor of two, while increasing the NAV per share by a factor of two, resulting in no effect on the net assets of the Fund.

NOTES TO FINANCIAL STATEMENTS 43

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees of

iShares Trust:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of iShares Currency Hedged MSCI United Kingdom ETF, iShares MSCI United Kingdom ETF and iShares MSCI United Kingdom Small-Cap ETF (the “Funds”) at August 31, 2016, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2016 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 21, 2016

44 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Tax Information (Unaudited)

iSHARES^® TRUST

The following maximum amounts are hereby designated as qualified dividend income for individuals for the fiscal year ended August 31, 2016:

iShares ETF	Qualified Dividend Income
Currency Hedged MSCI United Kingdom	$	193,127
MSCI United Kingdom		96,233,780
MSCI United Kingdom Small-Cap		423,267

For the fiscal year ended August 31, 2016, the following Funds earned foreign source income and paid foreign taxes which they intend to pass through to their shareholders:

iShares ETF	Foreign Source Income Earned		Foreign Taxes Paid
MSCI United Kingdom	$	97,682,466	$	1,301,186
MSCI United Kingdom Small-Cap		512,708		2,083

For the fiscal year ended August 31, 2016, the iShares Currency Hedged MSCI United Kingdom ETF intends to pass through to its shareholders foreign source income earned of $194,845 and foreign taxes paid of $2,407 by the underlying fund.

The iShares Currency Hedged MSCI United Kingdom ETF hereby designates $128,529 as 20% rate long-term capital gain dividends for the fiscal year ended August 31, 2016.

The iShares Currency Hedged MSCI United Kingdom ETF hereby designates $23,684 as short-term capital gain dividends for the fiscal year ended August 31, 2016.

TAX INFORMATION 45

Board Review and Approval of Investment Advisory

Contract

iSHARES^® TRUST

I. iShares MSCI United Kingdom ETF

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on April 28, 2016 and May 9, 2016. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 17, 2016, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 21-23, 2016, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA, including the additional information management provided at the request of the Independent Trustees. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential enhancements and adjustments to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Fund, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:

Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of Broadridge’s proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.

The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were lower than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.

In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the “last quarter” period ended December 31, 2015, to that of such relevant comparison funds for the same periods.

46 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

The Board noted that the Fund seeks to track its own underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including additional detailed information on certain specific iShares funds requested by the Board, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.

Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, product design and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 21-23, 2016 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.

Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Costs of Services Provided to the Fund and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock of the Fund, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.

Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 47

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Fund already provided for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future.

Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue periodically, determined to approve the continuance of the Advisory Contract for the coming year.

Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded exchange traded fund, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.

Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.

Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the

48 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.

II. iShares MSCI United Kingdom Small-Cap ETF

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on April 28, 2016 and May 9, 2016. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 17, 2016, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 21-23, 2016, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA, including the additional information management provided at the request of the Independent Trustees. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential enhancements and adjustments to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Fund, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:

Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of Broadridge’s proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.

The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were higher than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds. The Board further noted that the Fund’s pricing reflects that it invests primarily in small-cap companies, as compared to the competitor funds as determined by Broadridge, which do not invest primarily in small-cap companies.

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 49

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the “last quarter” period ended December 31, 2015, to that of such relevant comparison funds for the same periods.

The Board noted that the Fund seeks to track its own underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including additional detailed information on certain specific iShares funds requested by the Board, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.

Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, product design and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 21-23, 2016 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.

Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Costs of Services Provided to the Fund and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock of the Fund, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.

50 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Fund did not provide for any breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that should material economies of scale exist in the future that are not otherwise shared, a breakpoint structure for the Fund may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.

Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue periodically, determined to approve the continuance of the Advisory Contract for the coming year.

Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded exchange traded fund, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.

Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 51

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.

Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.

52 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited)

iSHARES^® TRUST

Section 19(a) Notices

The amounts and sources of distributions reported are estimates and are provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report these distributions for federal income tax purposes.

	Total Cumulative Distributions for the Fiscal Year								% Breakdown of the Total Cumulative Distributions for the Fiscal Year
iShares ETF	Net Investment Income		Net Realized Capital Gains		Return of Capital		Total Per Share		Net Investment Income			Net Realized Capital Gains			Return of Capital			Total Per Share
Currency Hedged MSCI United Kingdom	$	1.007984	$	0.237096	$	—	$	1.245080		81	%		19	%		—	%		100	%
MSCI United Kingdom		0.713625		—		—		0.713625		100			—			—			100
MSCI United Kingdom Small-Cap		1.134139		—		—		1.134139		100			—			—			100

Premium/Discount Information

The Premium/Discount Information section is intended to present information about the differences between the daily market price on secondary markets for shares of a fund and that fund’s NAV. NAV is the price at which a fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of a fund generally is determined using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of such fund are listed for trading, as of the time that the fund’s NAV is calculated. A fund’s Market Price may be at, above or below its NAV. The NAV of a fund will fluctuate with changes in the fair value of its portfolio holdings. The Market Price of a fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.

Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of a fund on a given day, generally at the time the NAV is calculated. A premium is the amount that a fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that a fund is trading below the reported NAV, expressed as a percentage of the NAV.

The following information shows the frequency of distributions of premiums and discounts for each of the Funds. The information shown for each Fund is for five calendar years (or from the inception date of such Fund if less than five years) through the date of the most recent calendar quarter-end. The specific periods covered for each Fund is disclosed in the table for such Fund.

SUPPLEMENTAL INFORMATION 53

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

Each line in the table shows the number of trading days in which the Fund traded within the premium/discount range indicated. The number of trading days in each premium/discount range is also shown as a percentage of the total number of trading days in the period covered by each table. All data presented here represents past performance, which cannot be used to predict future results.

iShares Currency Hedged MSCI United Kingdom ETF

Period Covered: June 29, 2015 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 1.0%		1		0.39	%
Greater than 0.5% and Less than 1.0%		1		0.39
Between 0.5% and –0.5%		253		99.22
		255		100.00	%

iShares MSCI United Kingdom ETF

Period Covered: January 1, 2011 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 2.5% and Less than 3.0%		5		0.36	%
Greater than 2.0% and Less than 2.5%		3		0.22
Greater than 1.5% and Less than 2.0%		21		1.52
Greater than 1.0% and Less than 1.5%		87		6.29
Greater than 0.5% and Less than 1.0%		372		26.90
Between 0.5% and –0.5%		795		57.47
Less than –0.5% and Greater than –1.0%		76		5.50
Less than –1.0% and Greater than –1.5%		16		1.16
Less than –1.5% and Greater than –2.0%		4		0.29
Less than –2.0% and Greater than –2.5%		3		0.22
Less than –2.5%		1		0.07
		1,383		100.00	%

54 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares MSCI United Kingdom Small-Cap ETF

Period Covered: January 25, 2012 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 2.5%		4		0.36	%
Greater than 2.0% and Less than 2.5%		1		0.09
Greater than 1.5% and Less than 2.0%		13		1.16
Greater than 1.0% and Less than 1.5%		95		8.51
Greater than 0.5% and Less than 1.0%		269		24.10
Between 0.5% and –0.5%		654		58.61
Less than –0.5% and Greater than –1.0%		70		6.27
Less than –1.0% and Greater than –1.5%		8		0.72
Less than –1.5% and Greater than –2.0%		2		0.18
		1,116		100.00	%

Regulation under the Alternative Investment Fund Managers Directive (“AIFMD” or the “Directive”)

The Directive imposes detailed and prescriptive obligations on fund managers established in the European Union (the “EU”). These do not currently apply to managers established outside of the EU, such as BFA. Rather, non-EU managers are only required to comply with certain disclosure, reporting and transparency obligations of the Directive if such managers market a fund to EU investors.

BFA has registered the iShares MSCI United Kingdom ETF (the “Fund”) for marketing to investors in the United Kingdom, the Netherlands, Finland, Sweden, and Luxembourg.

Report on Remuneration

BFA is required under the Directive to make quantitative disclosures of remuneration. These disclosures are made in line with BlackRock’s interpretation of currently available regulatory guidance on quantitative remuneration disclosures. As market or regulatory practice develops BlackRock may consider it appropriate to make changes to the way in which quantitative remuneration disclosures are calculated. Where such changes are made, this may result in disclosures in relation to a fund not being comparable to the disclosures made in the prior year, or in relation to other BlackRock fund disclosures in that same year.

Disclosures are provided in relation to (a) the staff of BFA; (b) staff who are senior management; and (c) staff who have the ability to materially affect the risk profile of the Fund.

All individuals included in the aggregated figures disclosed are rewarded in line with BlackRock’s remuneration policy for their responsibilities across the relevant BlackRock business area. As all individuals have a number of areas of responsibilities, only the portion of remuneration for those individuals’ services attributable to the Fund is included in the aggregate figures disclosed.

BlackRock has a clear and well defined pay-for-performance philosophy, and compensation programs which support that philosophy. For senior management, a significant percentage of variable remuneration is deferred over time. All employees are subject to a claw-back policy.

SUPPLEMENTAL INFORMATION 55

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

Compensation decisions for employees are made based on BlackRock’s full-year financial results and other non-financial goals and objectives. Alongside financial performance, individual compensation is also based on strategic and operating results and other considerations such as management and leadership capabilities. No set formulas are established and no fixed benchmarks are used in determining annual incentive awards.

Bonus pools are reviewed by BlackRock’s independent compensation committee, taking into account both actual and projected financial information together with information provided by the Operational Risk and Regulatory Compliance departments in relation to any activities, incidents or events that warrant consideration in making compensation decisions.

Functions such as Finance, Operational Risk, Legal & Compliance, and Human Resources each have their own organizational structures which are independent of the business units. Functional bonus pools are determined with reference to the performance of each individual function and the remuneration of the senior members of control functions is directly overseen by BlackRock’s independent compensation committee. No individual is involved in setting his or her own remuneration.

Members of staff and senior management of BFA typically provide both AIFMD and non-AIFMD related services in respect of multiple funds, clients and functions of BFA and across the broader BlackRock group. Therefore, the figures disclosed are a sum of each individual’s portion of remuneration attributable to the Fund according to an objective apportionment methodology which acknowledges the multiple-service nature of BFA. Accordingly the figures are not representative of any individual’s actual remuneration or their remuneration structure.

The amount of the total remuneration awarded by BFA to its staff which has been attributed to the Fund in respect of BFA’s financial year ending December 31, 2015 is USD 391.2 thousand. This figure is comprised of fixed remuneration of USD 152.14 thousand and variable remuneration of USD 239.06 thousand. There were a total of 457 beneficiaries of the remuneration described above.

The amount of the aggregate remuneration awarded by BFA, which has been attributed to the Fund in respect of BFA’s financial year ending December 31, 2015, to its senior management was USD 46.49 thousand, and to members of its staff whose actions have a material impact on the risk profile of the Fund was USD 11.26 thousand.

56 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee and Officer Information

iSHARES^® TRUST

The Board of Trustees has responsibility for the overall management and operations of the Funds, including general supervision of the duties performed by BFA and other service providers. Each Trustee serves until he or she resigns, is removed, dies, retires or becomes incapacitated. Each officer shall hold office until his or her successor is elected and qualifies or until his or her death, or his or her resignation or removal. Trustees who are not “interested persons” (as defined in the 1940 Act) of the Trust are referred to as independent trustees (“Independent Trustees”).

The registered investment companies advised by BFA or its affiliates (the “BlackRock-advised Funds”) are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Trustee also serves as a Director of iShares, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 333 funds (as of August 31, 2016) within the Exchange-Traded Fund Complex. With the exception of Robert S. Kapito, Mark Wiedman and Benjamin Archibald, the address of each Trustee and officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito, Mr. Wiedman and Mr. Archibald is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52^nd Street, New York, NY 10055. The Board has designated Cecilia H. Herbert as its Independent Board Chair. Additional information about the Funds’ Trustees and officers may be found in the Funds’ combined Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-iShares (1-800-474-2737).

Interested Trustees

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Robert S. Kapitoa (59)	Trustee (since 2009).	President and Director, BlackRock, Inc. (since 2006); Vice Chairman of BlackRock, Inc. and Head of BlackRock, Inc.’s Portfolio Management Group (since its formation in 1998) and BlackRock, Inc.’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983).	Director of iShares, Inc. (since 2009); Trustee of iShares U.S. ETF Trust (since 2011).
Mark Wiedmanb (45)	Trustee (since 2013).	Managing Director, BlackRock, Inc. (since 2007); Global Head of iShares (since 2011); Head of Corporate Strategy, BlackRock, Inc. (2009-2011).	Director of iShares, Inc. (since 2013); Trustee of iShares U.S. ETF Trust (since 2013); Director of PennyMac Financial Services, Inc. (since 2008).

^a  Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc.

^b  Mark Wiedman is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc. and its affiliates.

TRUSTEE AND OFFICER INFORMATION 57

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Independent Trustees^c

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Cecilia H. Herbert (67)	Trustee (since 2005); Independent Board Chair (since 2016); Nominating and Governance Committee Chair (since 2016).	Director (1998-2013) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010) of the Thacher School; Member (since 1992) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco; Trustee and Member of the Investment Committee, WNET, the New York public media company (since 2011).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Independent Board Chair of iShares, Inc. and iShares U.S. ETF Trust (since 2016); Director of Forward Funds (23 portfolios) (since 2009); Director of Salient MF Trust (4 portfolios) (since 2015).
Jane D. Carlin (60)	Trustee (since 2015); Risk Committee Chair (since 2016).	Managing Director and Global Head of Financial Holding Company Governance & Assurance and the Global Head of Operational Risk Management of Morgan Stanley (2006-2012).	Director of iShares, Inc. (since 2015); Trustee of iShares U.S. ETF Trust (since 2015); Director of PHH Corporation (mortgage solutions) (since 2012).
Charles A. Hurty (72)	Trustee (since 2005); Audit Committee Chair (since 2006).	Retired; Partner, KPMG LLP (1968-2001).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (2 portfolios) (since 2002).
John E. Kerrigan (61)	Trustee (since 2005); Securities Lending Committee Chair (since 2016).	Chief Investment Officer, Santa Clara University (since 2002).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011).
John E. Martinez (55)	Trustee (since 2003); Fixed Income Plus Committee Chair (since 2016).	Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005).	Director of iShares, Inc. (since 2003); Trustee of iShares U.S. ETF Trust (since 2011).

58 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Independent Trustees^c (Continued)

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Madhav V. Rajan (52)	Trustee (since 2011); Equity Plus Committee Chair and 15(c) Committee Chair (since 2016).	Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (2007-2008).	Director of iShares, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011); Director, Cavium, Inc. (since 2013).

^c  Robert H. Silver served as an Independent Trustee until March 31, 2016.

TRUSTEE AND OFFICER INFORMATION 59

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Officers^d

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years
Martin Small (41)	President (since 2016).	Managing Director, BlackRock, Inc. (since January 2010); Head of U.S. iShares (since 2015); Co-Head of the U.S. Financial Markets Advisory Group, BlackRock, Inc. (2008-2014).
Jack Gee (56)	Treasurer and Chief Financial Officer (since 2008).	Managing Director, BlackRock, Inc. (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director of Fund Administration of Intermediary Investor Business, BGI (2004-2009).
Benjamin Archibald (41)	Secretary (since 2015).	Managing Director, BlackRock, Inc. (since 2014); Director, BlackRock, Inc. (2010-2013); Secretary of the BlackRock-advised Mutual Funds (since 2012).
Steve Messinger (54)	Executive Vice President (since 2016).	Managing Director, BlackRock, Inc. (2007-2014 and since 2016); Managing Director, Beacon Consulting Group (2014-2016).
Charles Park (49)	Chief Compliance Officer (since 2006).	Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex (since 2014); Chief Compliance Officer, BFA (since 2006).
Scott Radell (47)	Executive Vice President (since 2012).	Managing Director, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005).
Amy Schioldager (53)	Executive Vice President (since 2007).	Senior Managing Director, BlackRock, Inc. (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006).

^d  Manish Mehta served as President until October 15, 2016.

60 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 61

Notes:

62 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

For more information visit www.iShares.com or call 1-800-474-2737

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

Investing involves risk, including possible loss of principal.

The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.

A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.

The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily basis on the Funds’ website.

©2016 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.

iS-AR-813-0816

AUGUST 31, 2016

2016 ANNUAL REPORT

iShares Trust

^Ø  iShares Adaptive Currency Hedged MSCI Japan ETF  |  DEWJ  |  BATS

^Ø  iShares Currency Hedged MSCI Australia ETF  |  HAUD  |  NYSE Arca

^Ø  iShares Currency Hedged MSCI Canada ETF  |  HEWC  |  NYSE Arca

^Ø  iShares Currency Hedged MSCI Japan ETF  |  HEWJ  |  NYSE Arca

^Ø  iShares Currency Hedged MSCI Mexico ETF  |  HEWW  |  NYSE Arca

^Ø  iShares Currency Hedged MSCI South Korea ETF  |  HEWY  |  NYSE Arca

^Ø  iShares Edge MSCI Min Vol Global Currency Hedged ETF  |  HACV  |  BATS

Table of Contents

Management’s Discussions of Fund Performance	5
About Fund Performance	20
Shareholder Expenses	20
Schedules of Investments	21
iShares Adaptive Currency Hedged MSCI Japan ETF	21
iShares Currency Hedged MSCI Australia ETF	23
iShares Currency Hedged MSCI Canada ETF	25
iShares Currency Hedged MSCI Japan ETF	27
iShares Currency Hedged MSCI Mexico ETF	29
iShares Currency Hedged MSCI South Korea ETF	31
iShares Edge MSCI Min Vol Global Currency Hedged ETF	33
Financial Statements	36
Financial Highlights	46
Notes to Financial Statements	53
Report of Independent Registered Public Accounting Firm	70
Tax Information	71
Board Review and Approval of Investment Advisory Contract	72
Supplemental Information	75
Trustee and Officer Information	78
Additional Financial Information	82
Schedules of Investments	83
iShares Edge MSCI Min Vol Global ETF	83
iShares MSCI Australia ETF	89
iShares MSCI Canada ETF	92
iShares MSCI Japan ETF	95
iShares MSCI Mexico Capped ETF	102
iShares MSCI South Korea Capped ETF	105
Financial Statements	109
Financial Highlights	116
Notes to Financial Statements	122
Report of Independent Registered Public Accounting Firm	135

Management’s Discussion of Fund Performance

iSHARES^® TRUST

GLOBAL EQUITY MARKET OVERVIEW

Global equity markets advanced for the 12 months ended August 31, 2016 (the “reporting period”). The MSCI ACWI, a broad global equity index that includes both developed and emerging markets, returned 7.24% for the reporting period.

Early in the reporting period, global stock markets were volatile but generally declined overall amid lower energy prices and weaker global economic growth, including slowdowns in stronger developed economies such as the U.S. and U.K. In response, many of the world’s central banks took more aggressive actions to stimulate economic activity, including expanded quantitative easing measures and negative interest rates.

In the U.S., the Federal Reserve Bank (the “Fed”) postponed plans to raise its short-term interest rate target until December 2015, when it ended a seven-year period of near-zero interest rates by increasing the federal funds target interest rate from a range of 0%-0.25% to a range of 0.25%-0.50%. It was the Fed’s first interest rate hike since June 2006.

After bottoming in mid-February 2016, global equity markets reversed course, rallying through the end of the reporting period. Central bank stimulus activity and a recovery in energy prices helped global equity markets rebound, as did signs of stabilization in China, which had experienced a marked economic slowdown that put downward pressure on its currency. Despite the overall upward trend in global equity markets, geopolitical factors — including the “Brexit” referendum in the U.K. (an affirmative vote to leave the European Union), terrorist attacks in France, and an attempted coup in Turkey — contributed to increased equity market volatility late in the reporting period.

Among developed countries, the U.S. was among the best-performing markets, returning approximately 12% for the reporting period. Although employment growth remained robust, other segments of the U.S. economy struggled, leading to three consecutive quarters of growth below a 1.5% annual rate. As a result, the Fed — which was expected to raise short-term interest rates further in 2016 — held rates steady through the first eight months of the year. Stable Fed monetary policy, as well as the relative strength of the U.S. economy compared with other regions of the globe, provided a favorable backdrop for U.S. equity market performance.

Equity markets in the Asia/Pacific region gained approximately 6% for the reporting period. New Zealand and Australia were the leading markets in the region, benefiting from improving economic growth during the reporting period, while the laggards included Singapore and Japan. In particular, the Japanese equity market declined by more than 12%, but a strong rally in the Japanese yen (which appreciated by 15% against the U.S. dollar) helped offset the overall market decline, resulting in a 3% gain in U.S. dollar terms.

European stock markets declined by approximately 3% for the reporting period. Markets in Italy and Spain, which were adversely affected by political instability and struggling banking sectors, declined the most, while Belgium and Portugal performed best. In the U.K., the equity market advanced by about 13%, but a sharp decline in the British pound in the wake of the Brexit vote led to negative returns in U.S. dollar terms.

Emerging markets stocks outperformed developed markets, advancing by nearly 12% for the reporting period in U.S. dollar terms. Latin American equity markets generated the best returns, led by rebounding markets in Peru and Brazil, while stock markets in Eastern Europe lagged.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 5

Management’s Discussion of Fund Performance

iSHARES^® ADAPTIVE CURRENCY HEDGED MSCI JAPAN ETF

Performance as of August 31, 2016

	Cumulative Total Returns
	NAV		MARKET		INDEX
Since Inception		(5.06)%		(4.94)%		(4.70)%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 1/5/16. The first day of secondary market trading was 1/7/16.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 20 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Annualized Expense Ratio a
$	1,000.00	$	1,068.10	$	0.00	$	1,000.00	$	1,025.10	$	0.00		0.00%

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

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 20 for more information.

The iShares Adaptive Currency Hedged MSCI Japan ETF (the “Fund”) seeks to track the investment results of an index composed of large- and mid-capitalization Japanese equities while dynamically hedging currency risk for a U.S. dollar based investor, as represented by the MSCI Japan Adaptive Hedge to USD Index (the “Index”).

The Index applies a methodology, based on a hedge ratio as calculated by MSCI Inc., that sells the total value or a portion of the total value of each non-U.S. dollar currency in which the constituent securities are denominated in the form of a one-month currency contract to create a “hedge” against fluctuations in the relative value of the currencies in relation to the U.S. dollar. The hedge ratio is based on four commonly used indicators for measuring currency risk. The overall effect, since the four indicators are equally weighted, is that each foreign currency represented by constituent weights in the Index can be unhedged, 25% hedged, 50% hedged, 75% hedged or fully hedged relative to the U.S. dollar. In order to replicate the hedging component of the Index, the Fund enters into foreign currency forward contracts designed to offset the Fund’s exposure to the component currencies.

6 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® ADAPTIVE CURRENCY HEDGED MSCI JAPAN ETF

The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund currently seeks to achieve its investment objective by investing a substantial portion of its assets in one underlying fund, the iShares MSCI Japan ETF. For the period from January 5, 2016 (inception date of the Fund) through August 31, 2016 (the “reporting period”), the total return for the Fund was -5.06%, net of fees, while the total return for the Index was -4.70%.

The Index declined for the reporting period amid continued weakness in the Japanese economy, which grew by just 0.8% for the 12 months ended June 30, 2016 (the most recent data available). Japanese economic growth remained muted despite increased economic stimulus efforts from the Bank of Japan during the reporting period. In addition to maintaining its government bond purchase program, the Bank of Japan introduced negative interest rates in January 2016. The Japanese government also announced plans for a substantial fiscal stimulus package late in the reporting period.

The financials sector detracted the most from the Index’s performance in U.S. dollar terms; in particular, banks struggled as negative interest rates constrained profit growth. The utilities sector was also a modest detractor, as electric utilities declined for the reporting period. On the upside, the industrials and telecommunication services sectors contributed to performance for the reporting period in U.S. dollar terms. Electrical equipment and machinery manufacturers led the advance in the industrials sector, while growing demand in the wireless industry paced the gain in the telecommunication services sector. Other leading contributors included the information technology and materials sectors.

In the currency market, the Japanese yen appreciated by 13% against the U.S dollar. The Japanese yen benefited from investors seeking to reduce risk in Japanese assets, as Japanese equities declined for the reporting period in local currency terms. The Japanese yen’s positive performance meant currency hedging activity was a large detractor from the Index’s return. The adaptive currency hedging component of the Index utilizes a hedge ratio that modifies currency exposure based on the difference in interest rates, relative valuation, currency momentum, and currency volatility. During the reporting period, the hedge increased from 25% to 75% of the Index’s currency exposure at the end of the reporting period. That meant the Index outperformed the local equity market return (measured in Japanese yen), but performed worse than the Japanese equity market measured in U.S. dollars.

ALLOCATION BY SECTOR¹

As of 8/31/16

Sector Percentage of
Total  Investments  ²

Consumer Discretionary	21.18	%
Industrials	19.74
Financials3	13.00
Information Technology	10.53
Consumer Staples	8.01
Health Care	7.87
Telecommunication Services	6.22
Materials	5.93
Real Estate3	4.68
Utilities	2.07
Energy	0.77
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS¹

As of 8/31/16

Security Percentage of
Total  Investments  ²

Toyota Motor Corp.	5.51	%
Mitsubishi UFJ Financial Group Inc.	2.39
SoftBank Group Corp.	2.14
KDDI Corp.	1.84
Honda Motor Co. Ltd.	1.72
Sumitomo Mitsui Financial Group Inc.	1.62
Japan Tobacco Inc.	1.48
Mizuho Financial Group Inc.	1.41
Sony Corp.	1.36
NTT DOCOMO Inc.	1.20
TOTAL	20.67	%

¹  Table shown is for the iShares MSCI Japan ETF, the underlying fund in which the Fund invests.

²  Excludes money market funds.

³  Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 7

Management’s Discussion of Fund Performance

iSHARES^® CURRENCY HEDGED MSCI AUSTRALIA ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		5.70%		(2.53)%		6.08%		5.70%		(2.53)%		6.08%
Since Inception		1.32%		1.23%		1.74%		1.55%		1.45%		2.03%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 6/29/15. The first day of secondary market trading was 7/1/15.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 20 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Annualized Expense Ratio a
$	1,000.00	$	1,120.70	$	0.16	$	1,000.00	$	1,025.00	$	0.15		0.03%

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

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 20 for more information.

The iShares Currency Hedged MSCI Australia ETF (the “Fund”) seeks to track the investment results of an index composed of large- and mid-capitalization Australian equities while mitigating exposure to fluctuations between the value of the Australian dollar and the U.S. dollar, as represented by the MSCI Australia 100% Hedged to USD Index (the “Index”).

The Index sells forward the non-U.S. dollar currencies in which the constituent securities are denominated in an amount equal to those securities at a one-month forward rate to effectively create a “hedge” against fluctuations in the relative value of the Australian dollar in relation to the U.S. dollar. In order to replicate the hedging component of the Index, the Fund enters into foreign currency forward contracts designed to offset the Fund’s exposure to the Australian dollar.

8 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® CURRENCY HEDGED MSCI AUSTRALIA ETF

The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund currently seeks to achieve its investment objective by investing a substantial portion of its assets in one underlying fund, the iShares MSCI Australia ETF. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 5.70%, net of fees, while the total return for the Index was 6.08%.

As represented by the Index, Australian stocks posted solid gains for the reporting period in U.S. dollar terms, outpacing the broad global equity market. Improving economic growth in Australia helped equity market performance in the country. The Australian economy grew by 3.3% for the year ended June 30, 2016 (the most recent data available), the strongest growth since the second quarter of 2012. Firming commodity prices after several years of severe declines helped boost the Australian economy, as did signs of stabilization in China, which is Australia’s largest trading partner. To support the Australian economy and financial markets, the Reserve Bank of Australia lowered interest rates twice during the reporting period.

From a sector perspective, nine of the ten sectors in the Index posted positive returns in U.S. dollar terms for the reporting period. The financials sector, which represented more than half of the Index on average during the reporting period, had the biggest positive impact on the Index’s performance. Real estate investment trusts and banks contributed the most to the outperformance in the financials sector. Other leading sectors included healthcare, which benefited from strong performance in the biotechnology industry, and materials, which was led by the metals and mining industry. Several other sectors made notable contributions to the Index’s performance, including industrials, consumer staples, and consumer discretionary. The only sector to detract from the Index’s performance for the reporting period was energy, reflecting weakness in the price of oil.

In terms of currency performance, the Australian dollar appreciated by 6% against the U.S. dollar, reflecting firmer commodity prices during the reporting period. The Australian dollar’s positive performance meant hedging activity detracted from the Index’s return. A fully hedged investor seeks to bypass the currency impact — both on the upside and on the downside — related to holding foreign-currency-denominated securities. The Index’s hedging activity offset the positive impact of the Australian dollar’s performance relative to the U.S. dollar, resulting in an Index return that was relatively close to Australian equities’ return measured in Australian dollars.

ALLOCATION BY SECTOR¹

As of 8/31/16

Sector	Percentage of Total  Investments  2
Financials3		41.48	%
Materials		14.20
Real Estate3		10.02
Consumer Staples		7.80
Health Care		7.10
Industrials		5.91
Energy		4.76
Consumer Discretionary		3.01
Utilities		2.74
Telecommunication Services		2.59
Information Technology		0.39
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS¹

As of 8/31/16

Security	Percentage of Total Investments 2
Commonwealth Bank of Australia		10.45	%
Westpac Banking Corp.		8.34
Australia & New Zealand Banking Group Ltd.		6.66
National Australia Bank Ltd.		6.13
BHP Billiton Ltd.		5.57
CSL Ltd.		4.20
Wesfarmers Ltd.		4.05
Woolworths Ltd.		2.57
Scentre Group		2.24
Macquarie Group Ltd.		2.10
TOTAL		52.31	%

¹  Table shown is for the iShares MSCI Australia ETF, the underlying fund in which the Fund invests.

²  Excludes money market funds.

³  Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 9

Management’s Discussion of Fund Performance

iSHARES^® CURRENCY HEDGED MSCI CANADA ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		6.92%		7.14%		7.09%		6.92%		7.14%		7.09%
Since Inception		2.52%		2.70%		2.77%		2.97%		3.18%		3.25%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 6/29/15. The first day of secondary market trading was 7/1/15.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 20 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Annualized Expense Ratio a
$	1,000.00	$	1,146.10	$	0.16	$	1,000.00	$	1,025.00	$	0.15		0.03%

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

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 20 for more information.

The iShares Currency Hedged MSCI Canada ETF (the “Fund”) seeks to track the investment results of an index composed of large- and mid-capitalization Canadian equities while mitigating exposure to fluctuations between the value of the Canadian dollar and the U.S. dollar, as represented by the MSCI Canada 100% Hedged to USD Index (the “Index”).

The Index sells forward the non-U.S. dollar currencies in which the constituent securities are denominated in an amount equal to those securities at a one-month forward rate to effectively create a “hedge” against fluctuations in the relative value of the Canadian dollar in relation to the U.S. dollar. In order to replicate the hedging component of the Index, the Fund enters into foreign currency forward contracts designed to offset the Fund’s exposure to the Canadian dollar.

10 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® CURRENCY HEDGED MSCI CANADA ETF

The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund currently seeks to achieve its investment objective by investing a substantial portion of its assets in one underlying fund, the iShares MSCI Canada ETF. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 6.92%, net of fees, while the total return for the Index was 7.09%.

As represented by the Index, Canadian stocks posted solid gains for the reporting period, performing in line with the broad global equity market when measured in U.S. dollars. Economic growth in Canada remained muted during the reporting period, reflecting a continued downturn in the country’s energy production. In particular, the Canadian economy contracted in the second quarter of 2016 as wildfires in northern Alberta curtailed oil and natural gas production in the area. It was the largest quarterly contraction for the Canadian economy since the 2008-09 financial crisis.

On the positive side, economic growth in the U.S. — Canada’s largest trading partner — has been generally stronger than many other regions of the world. In addition, the housing market in Canada remained robust during the reporting period, though the sharp increase in housing prices in selected cities has led to concerns about a housing bubble.

From a sector perspective, nine of the ten sectors in the Index posted positive returns for the reporting period in U.S. dollar terms. The financials sector, which represented more than 40% of the Index on average during the reporting period, had the largest positive impact on the Index’s performance. Banks and real estate stocks contributed the most to the outperformance in the financials sector. Other leading sectors included materials, led by the metals and mining industry, and energy, which held up for the reporting period despite the downturn in production late in the reporting period. The only sector to decline for the reporting period was healthcare.

In terms of currency performance, the Canadian dollar appreciated by 1% against the U.S. dollar, reflecting firmer commodity prices during the reporting period. The Canadian dollar’s positive performance meant hedging activity was a modest detractor from the Index’s return. A fully hedged investor seeks to bypass the currency impact — both on the upside and on the downside — related to holding foreign-currency-denominated securities. The Index’s hedging activity offset the positive impact of the Canadian dollar’s performance relative to the U.S. dollar, resulting in an Index return that was relatively close to Canadian equities’ return measured in Canadian dollars.

ALLOCATION BY SECTOR¹

As of 8/31/16

Sector Percentage of
Total  Investments  ²

Financials3	40.72	%
Energy	22.03
Materials	11.40
Industrials	7.55
Consumer Discretionary	5.03
Consumer Staples	5.00
Information Technology	2.58
Telecommunication Services	2.45
Utilities	1.61
Real Estate3	0.83
Health Care	0.80
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS¹

As of 8/31/16

Security Percentage of
Total  Investments  ²

Royal Bank of Canada	7.88	%
Toronto-Dominion Bank (The)	7.05
Bank of Nova Scotia (The)	5.45
Canadian National Railway Co.	4.26
Suncor Energy Inc.	3.85
Bank of Montreal	3.63
Enbridge Inc.	3.12
TransCanada Corp.	3.08
Canadian Natural Resources Ltd.	2.90
Canadian Imperial Bank of Commerce/Canada	2.67
TOTAL	43.89	%

¹  Table shown is for the iShares MSCI Canada ETF, the underlying fund in which the Fund invests.

²  Excludes money market funds.

³  Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 11

Management’s Discussion of Fund Performance

iSHARES^® CURRENCY HEDGED MSCI JAPAN ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		(12.91)%		(12.98)%		(12.65)%		(12.91)%		(12.98)%		(12.65)%
Since Inception		4.47%		4.43%		3.91%		11.96%		11.86%		10.42%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 1/31/14. The first day of secondary market trading was 2/4/14.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 20 for more information.

Shareholder Expenses
Actual							Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b			Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b			Annualized Expense Ratio a
$	1,000.00	$	1,038.20	$	0.00	c	$	1,000.00	$	1,025.10	$	0.00	c		0.00%	d

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

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 20 for more information.

^c  Rounds to less than $0.01.

^d  Rounds to less than 0.01%.

The iShares Currency Hedged MSCI Japan ETF (the “Fund”) seeks to track the investment results of an index composed of large- and mid-capitalization Japanese equities while mitigating exposure to fluctuations between the value of the Japanese yen and the U.S. dollar, as represented by the MSCI Japan 100% Hedged to USD Index (the “Index”).

The Index sells forward the non-U.S. dollar currencies in which the constituent securities are denominated in an amount equal to those securities at a one-month forward rate to effectively create a “hedge” against fluctuations in the relative value of the Japanese yen in relation to the U.S. dollar. In order to replicate the hedging component of the Index, the Fund enters into foreign currency forward contracts designed to offset the Fund’s exposure to the Japanese yen.

12 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® CURRENCY HEDGED MSCI JAPAN ETF

The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund currently seeks to achieve its investment objective by investing a substantial portion of its assets in one underlying fund, the iShares MSCI Japan ETF. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was -12.91%, net of fees, while the total return for the Index was -12.65%.

As represented by the Index, Japanese stocks declined for the reporting period. The Index’s negative return was driven primarily by continued weakness in the Japanese economy, which grew by just 0.8% for the 12 months ended June 30, 2016 (the most recent data available). Japanese economic growth remained muted despite increased economic stimulus efforts from the Bank of Japan during the reporting period. In addition to maintaining its government bond purchase program, the Bank of Japan introduced negative interest rates in January 2016. The Japanese government also announced plans for a substantial fiscal stimulus package late in the reporting period.

The financials sector detracted the most from the Index’s performance in U.S. dollar terms; in particular, banks struggled as negative interest rates constrained profit growth. The other two declining sectors in the Index were utilities and energy. At the other end of the spectrum, the industrials and telecommunication services sectors contributed positively to the Index’s performance in U.S. dollar terms. Machinery manufacturers led the advance in the industrials sector, while growing demand in the wireless industry paced the gain in the telecommunication services sector. Other leading contributors to the Index’s performance in U.S. dollar terms included the materials and consumer staples sectors.

In the currency market, the Japanese yen appreciated by 15% against the U.S dollar. The Japanese yen benefited from investors seeking to reduce risk in Japanese assets, as Japanese equities declined for the reporting period in local currency terms. The Japanese yen’s positive performance meant currency hedging activity was a large detractor from the Index’s return. A fully hedged investor seeks to bypass the currency impact — both on the upside and on the downside — related to holding foreign-currency-denominated securities. The Index’s hedging activity offset the positive impact of the Japanese yen’s performance relative to the U.S. dollar, resulting in an Index return that was relatively close to Japanese equities’ return measured in Japanese yen.

ALLOCATION BY SECTOR¹

As of 8/31/16

Sector Percentage of
Total Investments ²

Consumer Discretionary	21.18	%
Industrials	19.74
Financials3	13.00
Information Technology	10.53
Consumer Staples	8.01
Health Care	7.87
Telecommunication Services	6.22
Materials	5.93
Real Estate3	4.68
Utilities	2.07
Energy	0.77
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS¹

As of 8/31/16

Security Percentage of
Total Investments ²

Toyota Motor Corp.	5.51	%
Mitsubishi UFJ Financial Group Inc.	2.39
SoftBank Group Corp.	2.14
KDDI Corp.	1.84
Honda Motor Co. Ltd.	1.72
Sumitomo Mitsui Financial Group Inc.	1.62
Japan Tobacco Inc.	1.48
Mizuho Financial Group Inc.	1.41
Sony Corp.	1.36
NTT DOCOMO Inc.	1.20
TOTAL	20.67	%

¹  Table shown is for the iShares MSCI Japan ETF, the underlying fund in which the Fund invests.

²  Excludes money market funds.

³  Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 13

Management’s Discussion of Fund Performance

iSHARES^® CURRENCY HEDGED MSCI MEXICO ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		7.41%		7.50%		8.02%		7.41%		7.50%		8.02%
Since Inception		4.79%		4.86%		5.60%		5.65%		5.74%		6.58%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 6/29/15. The first day of secondary market trading was 7/1/15.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 20 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Annualized Expense Ratio a
$	1,000.00	$	1,076.10	$	0.16	$	1,000.00	$	1,025.00	$	0.15		0.03%

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

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 20 for more information.

The iShares Currency Hedged MSCI Mexico ETF (the “Fund”) seeks to track the investment results of an index composed of large-, mid- and small-capitalization Mexican equities while mitigating exposure to fluctuations between the value of the Mexican peso and the U.S. dollar, as represented by the MSCI Mexico Investable Market Index 25/50 100% Hedged to USD Index (the “Index”).

The Index sells forward the non-U.S. dollar currencies in which the constituent securities are denominated in an amount equal to those securities at a one-month forward rate to effectively create a “hedge” against fluctuations in the relative value of the Mexican peso in relation to the U.S. dollar. In order to replicate the hedging component of the Index, the Fund enters into foreign currency forward contracts designed to offset the Fund’s exposure to the Mexican peso.

14 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® CURRENCY HEDGED MSCI MEXICO ETF

The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund currently seeks to achieve its investment objective by investing a substantial portion of its assets in one underlying fund, the iShares MSCI Mexico Capped ETF. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 7.41%, net of fees, while the total return for the Index was 8.02%.

As represented by the Index, Mexican stocks advanced for the reporting period in local currency terms. The Mexican economy slowed during the reporting period, including a contraction in the second quarter of 2016 — the first quarterly contraction in three years. Declining industrial production and reduced energy output were the primary contributing factors to the recent economic weakness. Despite the economic slowdown, the Bank of Mexico raised interest rates three times during the reporting period to support the flagging Mexican peso. In financial markets, Mexico’s economic weakness was reflected by currency markets, resulting in the sharp decline in value of the Mexican peso relative to the U.S. dollar.

From a sector perspective, just two of the seven sectors in the Index declined for the reporting period — telecommunication services and consumer discretionary, which together represented approximately a quarter of the Index on average during the reporting period. Increased price competition and regulatory challenges weighed on the wireless telecommunication services industry, while media companies and retailers detracted the most in the consumer discretionary sector. On the positive side, the materials and financials sectors contributed the most to the Index’s performance during the reporting period. The metals and mining industry led the advance in the materials sector, while banks delivered solid gains in the financials sector. The consumer staples, industrials, and healthcare sectors also contributed to the Index’s performance for the reporting period.

In terms of currency performance, the Mexican peso depreciated by 13% against the U.S. dollar, reflecting Mexico’s comparatively low interest rates and rising inflation during the reporting period. The Mexican peso’s negative performance meant hedging activity was a significant contributor to the Index’s return. A fully hedged investor seeks to bypass the currency impact — both on the upside and on the downside — related to holding foreign-currency-denominated securities. The Index’s hedging activity offset the negative impact of the Mexican peso’s performance relative to the U.S. dollar, resulting in an Index return that was relatively close to Mexican equities’ return measured in Mexican pesos.

ALLOCATION BY SECTOR¹

As of 8/31/16

Sector Percentage of
Total Investments ²

Consumer Staples	27.18	%
Financials3	15.54
Materials	14.71
Industrials	13.89
Telecommunication Services	10.89
Consumer Discretionary	10.74
Real Estate3	6.37
Health Care	0.68
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS¹

As of 8/31/16

Security Percentage of
Total Investments ²

America Movil SAB de CV	9.95	%
Fomento Economico Mexicano SAB de CV	8.73
Grupo Financiero Banorte SAB de CV	6.80
Grupo Televisa SAB	6.72
Wal-Mart de Mexico SAB de CV	5.95
Cemex SAB de CV CPO	5.68
Grupo Mexico SAB de CV Series B	4.53
Fibra Uno Administracion SA de CV	2.98
Grupo Bimbo SAB de CV	2.80
Alfa SAB de CV	2.75
TOTAL	56.89	%

¹  Table shown is for the iShares MSCI Mexico Capped ETF, the underlying fund in which the Fund invests.

²  Excludes money market funds.

³  Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 15

Management’s Discussion of Fund Performance

iSHARES^® CURRENCY HEDGED MSCI SOUTH KOREA ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		13.67%		14.17%		14.21%		13.67%		14.17%		14.21%
Since Inception		4.00%		4.08%		4.76%		4.72%		4.81%		5.59%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 6/29/15. The first day of secondary market trading was 7/1/15.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 20 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Annualized Expense Ratio a
$	1,000.00	$	1,090.50	$	0.00	$	1,000.00	$	1,025.20	$	0.00		0.00%

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

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 20 for more information.

The iShares Currency Hedged MSCI South Korea ETF (the “Fund”) seeks to track the investment results of an index composed of large- and mid-capitalization South Korean equities while mitigating exposure to fluctuations between the value of the South Korean won and the U.S. dollar, as represented by the MSCI Korea 25/50 100% Hedged to USD Index (the “Index”).

The Index sells forward the non-U.S. dollar currencies in which the constituent securities are denominated in an amount equal to those securities at a one-month forward rate to effectively create a “hedge” against fluctuations in the relative value of the South Korean won in relation to the U.S. dollar. In order to replicate the hedging component of the Index, the Fund enters into foreign currency forward contracts designed to offset the Fund’s exposure to the South Korean won.

16 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® CURRENCY HEDGED MSCI SOUTH KOREA ETF

The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund currently seeks to achieve its investment objective by investing a substantial portion of its assets in one underlying fund, the iShares MSCI South Korea Capped ETF. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 13.67%, net of fees, while the total return for the Index was 14.21%.

As represented by the Index, South Korean stocks posted solid gains for the reporting period and outpaced the broad global equity market. The Index’s solid return for the reporting period was driven in part by an improving economic environment in South Korea. The South Korean economy grew by 3.3% for the 12 months ended June 30, 2016 (the most recent data available), up from 2.2% for the prior 12 months. Nonetheless, the country’s economic growth rate remained below its long-term historical average, as growth in South Korea’s export-oriented economy has been hit by declining global demand. As a result, the Bank of Korea reduced short-term interest rates in June 2016 — the central bank’s fifth rate cut since mid-2014 — to stimulate economic activity. The improving South Korean economy and more accommodative interest rate policy provided a favorable backdrop for equity market performance.

Every sector in the Index posted a positive return for the reporting period in U.S. dollar terms. Information technology, which represented more than a third of the Index on average during the reporting period, contributed the most to the Index’s performance. The technology hardware, storage, and peripherals industry led the advance in the information technology sector, although the internet software and services industry also contributed meaningfully. Other leading contributors to the Index’s performance included the materials and financials sectors. The industrials and telecommunication services sectors were minor contributors during the reporting period.

In terms of currency performance, the South Korean won appreciated by 6% against the U.S. dollar for the reporting period, as China’s economy stabilized and the Fed kept interest rates low, which helped the South Korean economy and the South Korean won. The South Korean won’s positive performance meant hedging activity detracted from the Index’s return. A fully hedged investor seeks to bypass the currency impact — both on the upside and on the downside — related to holding foreign-currency-denominated securities. The Index’s hedging activity offset the positive impact of the South Korean won’s performance relative to the U.S. dollar, resulting in an Index return that was relatively close to South Korean equities’ return measured in the South Korean won.

ALLOCATION BY SECTOR¹

As of 8/31/16

Sector Percentage of
Total Investments ²

Information Technology	34.01	%
Consumer Discretionary	14.49
Financials	13.66
Industrials	11.49
Consumer Staples	9.51
Materials	8.12
Utilities	2.52
Health Care	2.46
Energy	2.43
Telecommunication Services	1.31
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS¹

As of 8/31/16

Security Percentage of
Total Investments ²

Samsung Electronics Co. Ltd.	21.53	%
NAVER Corp.	3.60
SK Hynix Inc.	3.24
Hyundai Motor Co.	3.05
Hyundai Mobis Co. Ltd.	2.72
Shinhan Financial Group Co. Ltd.	2.67
POSCO	2.48
KB Financial Group Inc.	2.31
Korea Electric Power Corp.	2.29
KT&G Corp.	2.11
TOTAL	46.00	%

¹  Table shown is for the iShares MSCI South Korea Capped ETF, the underlying fund in which the Fund invests.

²  Excludes money market funds.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 17

Management’s Discussion of Fund Performance

iSHARES^® EDGE MSCI MIN VOL GLOBAL CURRENCY HEDGED ETF

Performance as of August 31, 2016

	Cumulative Total Returns
	NAV		MARKET		INDEX
Since Inception		7.51%		7.81%		7.33%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 10/29/15. The first day of secondary market trading was 11/2/15.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 20 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Annualized Expense Ratio a
$	1,000.00	$	1,086.60	$	0.16	$	1,000.00	$	1,025.00	$	0.15		0.03%

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

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 20 for more information.

The iShares Edge MSCI Min Vol Global Currency Hedged ETF (the “Fund”) (formerly the iShares Currency Hedged MSCI ACWI Minimum Volatility ETF) seeks to track the investment results of an index composed of developed and emerging market equities that, in the aggregate, have lower volatility characteristics relative to the broader developed and emerging equity markets while mitigating exposure to fluctuations between the value of the component currencies and the U.S. dollar, as represented by the MSCI ACWI Minimum Volatility (USD) 100% Hedged to USD Index (the “Index”).

The Index sells forward the non-U.S. dollar currencies in which the constituent securities are denominated in an amount equal to those securities at a one-month forward rate to effectively create a “hedge” against fluctuations in the relative value of the component currencies in relation to the U.S. dollar. In order to replicate the hedging component of the Index, the Fund enters into foreign currency forward contracts designed to offset the Fund’s exposure to the component currencies.

18 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® EDGE MSCI MIN VOL GLOBAL CURRENCY HEDGED ETF

The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund currently seeks to achieve its investment objective by investing a substantial portion of its assets in one underlying fund, the iShares Edge MSCI Min Vol Global ETF (formerly the iShares MSCI All Country World Minimum Volatility ETF). For the period from October 29, 2015 (inception date of the Fund) through August 31, 2016 (the “reporting period”), the total return for the Fund was 7.51%, net of fees, while the total return for the Index was 7.33%.

The Index delivered a positive return for the reporting period and performed in line with the broader global stock market, as represented by the MSCI ACWI Index.

From a country perspective, the U.S., which represented approximately 58% of the Index on average for the reporting period, made the most significant contribution to Index performance. The U.S. stock market generally performed well, supported by accommodative Fed policy. Although U.S. economic growth was muted, it was stronger than many economies elsewhere in the world. Canada and Taiwan were also positive contributors to the Index’s return for the reporting period. On the downside, Japan detracted from Index performance for the reporting period as the country’s economy continued to struggle despite significant economic stimulus measures from the Japanese government.

For the reporting period, the U.S. dollar’s performance was mixed relative to other major currencies. The British pound fell approximately 17% relative to the U.S. dollar during the reporting period, as British voters elected to leave the European Union. Meanwhile, the Japanese yen, the Australian dollar, and the euro gained about 15% and 6% relative to the U.S. dollar, respectively, while the euro was little changed against the U.S. dollar.

On balance, the U.S. dollar’s modest overall decline relative to the component currencies in the Index meant hedging activity detracted from the Index’s total return for the reporting period. A weaker U.S. dollar typically increases returns for U.S. investors with international investments denominated in stronger foreign currencies. However, a fully hedged investor seeks to bypass the currency impact — both on the upside and on the downside — related to holding foreign-currency-denominated securities. The Index’s hedging activity offset the positive impact of global currencies’ performance relative to the U.S. dollar for the reporting period.

ALLOCATION BY SECTOR¹

As of 8/31/16

Sector Percentage of
Total Investments  ²

Health Care	16.75	%
Consumer Staples	15.71
Financials3	15.50
Information Technology	10.02
Consumer Discretionary	9.28
Telecommunication Services	9.09
Utilities	8.39
Industrials	8.21
Materials	3.04
Real Estate3	2.34
Energy	1.67
TOTAL	100.00	%

TEN LARGEST COUNTRIES¹

As of 8/31/16

Country Percentage of
Total Investments  ²

United States	58.09	%
Japan	12.31
Canada	4.18
Switzerland	4.13
Taiwan	3.73
China	3.44
Hong Kong	3.25
United Kingdom	2.66
Singapore	1.02
South Korea	0.96
TOTAL	93.77	%

¹  Table shown is for the iShares Edge MSCI Min Vol Global ETF, the underlying fund in which the Fund invests.

²  Excludes money market funds.

³  Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 19

About Fund Performance

Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.ishares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.

Shareholder Expenses

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested on March 1, 2016 and held through August 31, 2016, is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.

Actual Expenses — The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number corresponding to your Fund under the heading entitled “Expenses Paid During Period.”

Hypothetical Example for Comparison Purposes — The table also provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

20 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® ADAPTIVE CURRENCY HEDGED MSCI JAPAN ETF

August 31, 2016

Security	Shares		Value
INVESTMENT COMPANIES — 99.91%
EXCHANGE-TRADED FUNDS — 99.91%
iShares MSCI Japan ETFa		286,366	$	3,516,574
				3,516,574
TOTAL INVESTMENT COMPANIES
(Cost: $3,442,828)				3,516,574
SHORT-TERM INVESTMENTS — 0.04%
MONEY MARKET FUNDS — 0.04%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		1,425		1,425
				1,425
TOTAL SHORT-TERM INVESTMENTS
(Cost: $1,425)				1,425

	Value
TOTAL INVESTMENTS IN SECURITIES — 99.95%
(Cost: $3,444,253)d	$	3,517,999
Other Assets, Less Liabilities — 0.05%		1,684
NET ASSETS — 100.00%	$	3,519,683

^a  Affiliated issuer. See Schedule 1.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $3,455,238. Net unrealized appreciation was $62,761, of which $62,761 represented gross unrealized appreciation on securities and $  — represented gross unrealized depreciation on securities.

Schedule 1 — Affiliates (Note 2)

Investments in issuers considered to be affiliates of the Fund (excluding affiliated money market funds) during the year ended August 31, 2016, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

Affiliated issuer	Shares held at beginning of year		Shares purchased		Shares sold			Shares held at end of year		Value at end of year		Dividend income		Net realized gain (loss)
iShares MSCI Japan ETF		—		312,021		(25,655	)		286,366	$	3,516,574	$	27,519	$	(16,329	)

Schedule 2 — Forward Currency Contracts (Note 5)

Forward currency contracts outstanding as of August 31, 2016 were as follows:

Currency purchased			Currency sold			Counterparty	Settlement date		Unrealized appreciation (depreciation)
	USD	2,582,962		JPY	264,627,000	BNP		09/06/2016	$	25,057
	USD	2,616,940		JPY	270,229,000	BNP		10/05/2016		1,241
										26,298
	JPY	264,627,000		USD	2,558,988	BNP		09/06/2016		(1,083	)
										(1,083	)
						Net unrealized appreciation			$	25,215

Counterparties:

BNP — BNP Paribas SA

Currency abbreviations:

JPY — Japanese Yen

USD — United States Dollar

SCHEDULES OF INVESTMENTS 21

Schedule of Investments (Continued)

iSHARES^® ADAPTIVE CURRENCY HEDGED MSCI JAPAN ETF

August 31, 2016

Schedule 3 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2			Level 3		Total
Investments:
Assets:
Exchange-traded funds	$	3,516,574	$	—		$	—	$	3,516,574
Money market funds		1,425		—			—		1,425
Total	$	3,517,999	$	—		$	—	$	3,517,999
Derivative financial instrumentsa:
Assets:
Forward currency contracts	$	—	$	26,298		$	—	$	26,298
Liabilities:
Forward currency contracts		—		(1,083	)		—		(1,083	)
Total	$	—	$	25,215		$	—	$	25,215

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

22 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® CURRENCY HEDGED MSCI AUSTRALIA ETF

August 31, 2016

Security	Shares		Value
INVESTMENT COMPANIES — 99.59%
EXCHANGE-TRADED FUNDS — 99.59%
iShares MSCI Australia ETFa		488,097	$	9,869,321
				9,869,321
TOTAL INVESTMENT COMPANIES
(Cost: $9,164,743)				9,869,321
SHORT-TERM INVESTMENTS — 0.05%
MONEY MARKET FUNDS — 0.05%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		5,105		5,105
				5,105
TOTAL SHORT-TERM INVESTMENTS
(Cost: $5,105)				5,105

	Value
TOTAL INVESTMENTS IN SECURITIES — 99.64%
(Cost: $9,169,848)d	$	9,874,426
Other Assets, Less Liabilities — 0.36%		35,601
NET ASSETS — 100.00%	$	9,910,027

^a  Affiliated issuer. See Schedule 1.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $9,261,830. Net unrealized appreciation was $612,596, of which $704,578 represented gross unrealized appreciation on securities and $91,982 represented gross unrealized depreciation on securities.

Schedule 1 — Affiliates (Note 2)

Investments in issuers considered to be affiliates of the Fund (excluding affiliated money market funds) during the year ended August 31, 2016, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

Affiliated issuer	Shares held at beginning of year		Shares purchased		Shares sold			Shares held at end of year		Value at end of year		Dividend income		Net realized gain (loss)
iShares MSCI Australia ETF		125,611		564,595		(202,109	)		488,097	$	9,869,321	$	197,134	$	93,350

Schedule 2 — Forward Currency Contracts (Note 5)

Forward currency contracts outstanding as of August 31, 2016 were as follows:

Currency purchased			Currency sold			Counterparty	Settlement date		Unrealized appreciation (depreciation)
	USD	10,133,774		AUD	13,466,000	BNP		09/06/2016	$	14,399
	USD	10,126,459		AUD	13,437,000	BNP		10/05/2016		36,057
										50,456
	AUD	13,466,000		USD	10,156,248	BNP		09/06/2016		(36,874	)
	AUD	127,000		USD	95,377	BNP		10/05/2016		(8	)
										(36,882	)
						Net unrealized appreciation			$	13,574

Counterparties:

BNP — BNP Paribas SA

Currency abbreviations:

AUD — Australian Dollar

USD — United States Dollar

SCHEDULES OF INVESTMENTS 23

Schedule of Investments (Continued)

iSHARES^® CURRENCY HEDGED MSCI AUSTRALIA ETF

August 31, 2016

Schedule 3 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2			Level 3		Total
Investments:
Assets:
Exchange-traded funds	$	9,869,321	$	—		$	—	$	9,869,321
Money market funds		5,105		—			—		5,105
Total	$	9,874,426	$	—		$	—	$	9,874,426
Derivative financial instrumentsa:
Assets:
Forward currency contracts	$	—	$	50,456		$	—	$	50,456
Liabilities:
Forward currency contracts		—		(36,882	)		—		(36,882	)
Total	$	—	$	13,574		$	—	$	13,574

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

24 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® CURRENCY HEDGED MSCI CANADA ETF

August 31, 2016

Security	Shares		Value
INVESTMENT COMPANIES — 99.44%
EXCHANGE-TRADED FUNDS — 99.44%
iShares MSCI Canada ETFa		416,192	$	10,533,820
				10,533,820
TOTAL INVESTMENT COMPANIES
(Cost: $9,527,542)				10,533,820
SHORT-TERM INVESTMENTS — 0.05%
MONEY MARKET FUNDS — 0.05%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		5,101		5,101
				5,101
TOTAL SHORT-TERM INVESTMENTS
(Cost: $5,101)				5,101

	Value
TOTAL INVESTMENTS IN SECURITIES — 99.49%
(Cost: $9,532,643)d	$	10,538,921
Other Assets, Less Liabilities — 0.51%		53,819
NET ASSETS — 100.00%	$	10,592,740

^a  Affiliated issuer. See Schedule 1.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $9,652,009. Net unrealized appreciation was $886,912, of which $886,912 represented gross unrealized appreciation on securities and $  — represented gross unrealized depreciation on securities.

Schedule 1 — Affiliates (Note 2)

Investments in issuers considered to be affiliates of the Fund (excluding affiliated money market funds) during the year ended August 31, 2016, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

Affiliated issuer	Shares held at beginning of year		Shares purchased		Shares sold			Shares held at end of year		Value at end of year		Dividend income		Net realized gain (loss)
iShares MSCI Canada ETF		97,216		376,643		(57,667	)		416,192	$	10,533,820	$	113,292	$	(181,713	)

Schedule 2 — Forward Currency Contracts (Note 5)

Forward currency contracts outstanding as of August 31, 2016 were as follows:

Currency purchased			Currency sold			Counterparty	Settlement date		Unrealized appreciation (depreciation)
	USD	1,679,996		CAD	2,176,000	BNP		09/06/2016	$	20,655
	CAD	11,000		USD	8,377	BNP		10/05/2016		12
	USD	10,584,700		CAD	13,807,000	BNP		10/05/2016		54,391
										75,058
	CAD	13,835,000		USD	10,605,449	BNP		09/06/2016		(55,367	)
	USD	8,869,195		CAD	11,659,000	BNP		09/06/2016		(21,546	)
	USD	78,512		CAD	103,000	BNP		10/05/2016		(44	)
										(76,957	)
						Net unrealized depreciation			$	(1,899	)

Counterparties:

BNP — BNP Paribas SA

Currency abbreviations:

CAD — Canadian Dollar

USD — United States Dollar

SCHEDULES OF INVESTMENTS 25

Schedule of Investments (Continued)

iSHARES^® CURRENCY HEDGED MSCI CANADA ETF

August 31, 2016

Schedule 3 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2			Level 3		Total
Investments:
Assets:
Exchange-traded funds	$	10,533,820	$	—		$	—	$	10,533,820
Money market funds		5,101		—			—		5,101
Total	$	10,538,921	$	—		$	—	$	10,538,921
Derivative financial instrumentsa:
Assets:
Forward currency contracts	$	—	$	75,058		$	—	$	75,058
Liabilities:
Forward currency contracts		—		(76,957	)		—		(76,957	)
Total	$	—	$	(1,899	)	$	—	$	(1,899	)

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

26 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® CURRENCY HEDGED MSCI JAPAN ETF

August 31, 2016

Security	Shares		Value
INVESTMENT COMPANIES — 98.83%
EXCHANGE-TRADED FUNDS — 98.83%
iShares MSCI Japan ETFa,b		38,311,015	$	470,459,264
				470,459,264
TOTAL INVESTMENT COMPANIES
(Cost: $489,793,636)				470,459,264
SHORT-TERM INVESTMENTS — 2.43%
MONEY MARKET FUNDS — 2.43%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%c,d,e		11,486,790		11,486,790
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		78,476		78,476
				11,565,266
TOTAL SHORT-TERM INVESTMENTS
(Cost: $11,565,266)				11,565,266

	Value
TOTAL INVESTMENTS IN SECURITIES — 101.26%
(Cost: $501,358,902)f	$	482,024,530
Other Assets, Less Liabilities — (1.26)%		(6,009,148	)
NET ASSETS — 100.00%	$	476,015,382

^a  Affiliated issuer. See Schedule 1.

^b  All or a portion of this security represents a security on loan. See Note 1.

^c  Affiliated money market fund.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

^e  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^f  The cost of investments for federal income tax purposes was $506,147,282. Net unrealized depreciation was $24,122,752, of which $  — represented gross unrealized appreciation on securities and $24,122,752 represented gross unrealized depreciation on securities.

Schedule 1 — Affiliates (Note 2)

Investments in issuers considered to be affiliates of the Fund (excluding affiliated money market funds) during the year ended August 31, 2016, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

Affiliated issuer	Shares held at beginning of year		Shares purchased		Shares sold			Shares held at end of year		Value at end of year		Dividend income		Net realized gain (loss)
iShares MSCI Japan ETF		60,536,739		119,359,588		(141,585,312	)		38,311,015	$	470,459,264	$	10,089,855	$	(33,955,130	)

SCHEDULES OF INVESTMENTS 27

Schedule of Investments (Continued)

iSHARES^® CURRENCY HEDGED MSCI JAPAN ETF

August 31, 2016

Schedule 2 — Forward Currency Contracts (Note 5)

Forward currency contracts outstanding as of August 31, 2016 were as follows:

Currency purchased			Currency sold			Counterparty	Settlement date		Unrealized appreciation (depreciation)
	USD	46,728,638		JPY	4,771,625,000	BNP		09/06/2016	$	605,737
	USD	289,763,849		JPY	29,656,414,000	BNP		10/05/2016		2,702,780
	USD	231,407,870		JPY	23,708,847,000	CITI		10/05/2016		1,916,638
										5,225,155
	JPY	39,863,304,000		USD	391,241,083	BNP		09/06/2016		(5,919,261	)
	JPY	24,491,553,000		USD	238,778,020	CITI		09/06/2016		(2,040,748	)
	USD	335,397,631		JPY	35,091,679,000	BNP		09/06/2016		(3,801,290	)
	USD	234,144,866		JPY	24,491,553,000	CITI		09/06/2016		(2,592,406	)
	JPY	1,229,006,000		USD	11,901,047	BNP		10/05/2016		(4,808	)
	JPY	3,842,942,000		USD	37,369,727	CITI		10/05/2016		(171,735	)
										(14,530,248	)
						Net unrealized depreciation			$	(9,305,093	)

Counterparties:

BNP — BNP Paribas SA

CITI — Citibank N.A. London

Currency abbreviations:

JPY — Japanese Yen

USD — United States Dollar

Schedule 3 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2			Level 3		Total
Investments:
Assets:
Exchange-traded funds	$	470,459,264	$	—		$	—	$	470,459,264
Money market funds		11,565,266		—			—		11,565,266
Total	$	482,024,530	$	—		$	—	$	482,024,530
Derivative financial instrumentsa:
Assets:
Forward currency contracts	$	—	$	5,225,155		$	—	$	5,225,155
Liabilities:
Forward currency contracts		—		(14,530,248	)		—		(14,530,248	)
Total	$	—	$	(9,305,093	)	$	—	$	(9,305,093	)

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

28 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® CURRENCY HEDGED MSCI MEXICO ETF

August 31, 2016

Security	Shares		Value
INVESTMENT COMPANIES — 99.10%
EXCHANGE-TRADED FUNDS — 99.10%
iShares MSCI Mexico Capped ETFa		23,115	$	1,166,614
				1,166,614
TOTAL INVESTMENT COMPANIES
(Cost: $1,310,603)				1,166,614
SHORT-TERM INVESTMENTS — 0.06%
MONEY MARKET FUNDS — 0.06%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		640		640
				640
TOTAL SHORT-TERM INVESTMENTS
(Cost: $640)				640

	Value
TOTAL INVESTMENTS IN SECURITIES — 99.16%
(Cost: $1,311,243)d	$	1,167,254
Other Assets, Less Liabilities — 0.84%		9,930
NET ASSETS — 100.00%	$	1,177,184

^a  Affiliated issuer. See Schedule 1.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $1,319,054. Net unrealized depreciation was $151,800, of which $  — represented gross unrealized appreciation on securities and $151,800 represented gross unrealized depreciation on securities.

Schedule 1 — Affiliates (Note 2)

Investments in issuers considered to be affiliates of the Fund (excluding affiliated money market funds) during the year ended August 31, 2016, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

Affiliated issuer	Shares held at beginning of year		Shares purchased		Shares sold			Shares held at end of year		Value at end of year		Dividend income		Net realized gain (loss)
iShares MSCI Mexico Capped ETF		45,769		9,204		(31,858	)		23,115	$	1,166,614	$	45,068	$	(140,022	)

Schedule 2 — Forward Currency Contracts (Note 5)

Forward currency contracts outstanding as of August 31, 2016 were as follows:

Currency purchased			Currency sold			Counterparty	Settlement date		Unrealized appreciation (depreciation)
	MXN	79,000		USD	4,188	BNP		09/06/2016	$	11
	USD	36,687		MXN	690,000	BNP		09/06/2016		12
	USD	1,175,360		MXN	21,981,000	BNP		10/05/2016		10,168
										10,191
	MXN	21,981,000		USD	1,178,546	BNP		09/06/2016		(10,196	)
	USD	1,131,532		MXN	21,370,000	BNP		09/06/2016		(4,342	)
	USD	7,768		MXN	147,000	BNP		10/05/2016		(24	)
										(14,562	)
						Net unrealized depreciation			$	(4,371	)

Counterparties:

BNP — BNP Paribas SA

Currency abbreviations:

MXN — Mexican Peso

USD — United States Dollar

SCHEDULES OF INVESTMENTS 29

Schedule of Investments (Continued)

iSHARES^® CURRENCY HEDGED MSCI MEXICO ETF

August 31, 2016

Schedule 3 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2			Level 3		Total
Investments:
Assets:
Exchange-traded funds	$	1,166,614	$	—		$	—	$	1,166,614
Money market funds		640		—			—		640
Total	$	1,167,254	$	—		$	—	$	1,167,254
Derivative financial instrumentsa:
Assets:
Forward currency contracts	$	—	$	10,191		$	—	$	10,191
Liabilities:
Forward currency contracts		—		(14,562	)		—		(14,562	)
Total	$	—	$	(4,371	)	$	—	$	(4,371	)

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

30 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® CURRENCY HEDGED MSCI SOUTH KOREA ETF

August 31, 2016

Security	Shares		Value
INVESTMENT COMPANIES — 99.97%
EXCHANGE-TRADED FUNDS — 99.97%
iShares MSCI South Korea Capped ETFa		219,077	$	12,349,370
				12,349,370
TOTAL INVESTMENT COMPANIES
(Cost: $11,482,708)				12,349,370
SHORT-TERM INVESTMENTS — 0.05%
MONEY MARKET FUNDS — 0.05%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		6,146		6,146
				6,146
TOTAL SHORT-TERM INVESTMENTS
(Cost: $6,146)				6,146

	Value
TOTAL INVESTMENTS IN SECURITIES — 100.02%
(Cost: $11,488,854)d	$	12,355,516
Other Assets, Less Liabilities — (0.02)%		(2,058	)
NET ASSETS — 100.00%	$	12,353,458

^a  Affiliated issuer. See Schedule 1.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $11,507,797. Net unrealized appreciation was $847,719, of which $847,719 represented gross unrealized appreciation on securities and $  — represented gross unrealized depreciation on securities.

Schedule 1 — Affiliates (Note 2)

Investments in issuers considered to be affiliates of the Fund (excluding affiliated money market funds) during the year ended August 31, 2016, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

Affiliated issuer	Shares held at beginning of year		Shares purchased		Shares sold			Shares held at end of year		Value at end of year		Dividend income		Net realized gain (loss)
iShares MSCI South Korea Capped ETF		47,236		923,069		(751,228	)		219,077	$	12,349,370	$	913,030	$	(2,697,781	)

SCHEDULES OF INVESTMENTS 31

Schedule of Investments (Continued)

iSHARES^® CURRENCY HEDGED MSCI SOUTH KOREA ETF

August 31, 2016

Schedule 2 — Forward Currency Contracts (Note 5)

Forward currency contracts outstanding as of August 31, 2016 were as follows:

Currency purchased			Currency sold			Counterparty	Settlement date		Unrealized appreciation (depreciation)
	USD	5,137		KRW	5,696,000	JPM		09/06/2016	$	31
	USD	87,534		KRW	97,513,000	MS		09/06/2016		121
	KRW	42,862,000		USD	38,388	JPM		10/05/2016		15
										167
	KRW	13,678,050,000		USD	12,261,811	RBS		09/06/2016		(471	)
	KRW	57,536,000		USD	51,648	SSB		09/06/2016		(72	)
	USD	12,084,369		KRW	13,632,377,000	SCB		09/06/2016		(136,027	)
	USD	12,254,121		KRW	13,678,050,000	RBS		10/05/2016		(984	)
	USD	232,497		KRW	259,932,000	SCB		10/05/2016		(394	)
										(137,948	)
					Net unrealized depreciation				$	(137,781	)

Counterparties:

JPM — JPMorgan Chase Bank N.A.

MS — Morgan Stanley and Co. International PLC

RBS — Royal Bank of Scotland PLC

SCB — Standard Chartered Bank, London

SSB — State Street Bank London

Currency abbreviations:

KRW — South Korean Won

USD — United States Dollar

Schedule 3 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2			Level 3		Total
Investments:
Assets:
Exchange-traded funds	$	12,349,370	$	—		$	—	$	12,349,370
Money market funds		6,146		—			—		6,146
Total	$	12,355,516	$	—		$	—	$	12,355,516
Derivative financial instrumentsa:
Assets:
Forward currency contracts	$	—	$	167		$	—	$	167
Liabilities:
Forward currency contracts		—		(137,948	)		—		(137,948	)
Total	$	—	$	(137,781	)	$	—	$	(137,781	)

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

32 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® EDGE MSCI MIN VOL GLOBAL CURRENCY HEDGED ETF

August 31, 2016

Security	Shares		Value
INVESTMENT COMPANIES — 99.88%
EXCHANGE-TRADED FUNDS — 99.88%
iShares Edge MSCI Min Vol Global ETFa		17,315	$	1,313,170
				1,313,170
TOTAL INVESTMENT COMPANIES
(Cost: $1,226,360)				1,313,170
SHORT-TERM INVESTMENTS — 0.06%
MONEY MARKET FUNDS — 0.06%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		801		801
				801
TOTAL SHORT-TERM INVESTMENTS
(Cost: $801)				801

	Value
TOTAL INVESTMENTS IN SECURITIES — 99.94%
(Cost: $1,227,161)d	$	1,313,971
Other Assets, Less Liabilities — 0.06%		832
NET ASSETS — 100.00%	$	1,314,803

^a  Affiliated issuer. See Schedule 1.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $1,227,395. Net unrealized appreciation was $86,576, of which $86,576 represented gross unrealized appreciation on securities and $  — represented gross unrealized depreciation on securities.

Schedule 1 — Affiliates (Note 2)

Investments in issuers considered to be affiliates of the Fund (excluding affiliated money market funds) during the year ended August 31, 2016, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

Affiliated issuer	Shares held at beginning of year		Shares purchased		Shares sold			Shares held at end of year		Value at end of year		Dividend income		Net realized gain (loss)
iShares Edge MSCI Min Vol Global ETF		—		36,793		(19,478	)		17,315	$	1,313,170	$	57,465	$	106,792

Schedule 2 — Forward Currency Contracts (Note 5)

Forward currency contracts outstanding as of August 31, 2016 were as follows:

Currency purchased			Currency sold			Counterparty	Settlement date		Unrealized appreciation (depreciation)
	DKK	22,704		USD	3,402	BNP		09/06/2016	$	2
	EUR	18,000		USD	20,076	BNP		09/06/2016		5
	GBP	56,000		USD	73,352	BNP		09/06/2016		188
	ILS	79,000		USD	20,839	BNP		09/06/2016		78
	INR	651,408		USD	9,701	BNP		09/06/2016		19
	INR	338,000		USD	5,041	MS		09/06/2016		3
	KRW	68,527,000		USD	61,336	BNP		09/06/2016		93
	SGD	40,000		USD	29,319	BNP		09/06/2016		40
	TWD	4,379,000		USD	137,683	BNP		09/06/2016		287
	USD	6,906		CAD	9,000	BNP		09/06/2016		43
	USD	55,798		CAD	73,000	MS		09/06/2016		131
	USD	111,208		CHF	109,000	BNP		09/06/2016		364
	USD	56,035		CHF	55,000	MS		09/06/2016		105
	USD	12,473		CLP	8,310,000	BNP		09/06/2016		269

SCHEDULES OF INVESTMENTS 33

Schedule of Investments (Continued)

iSHARES^® EDGE MSCI MIN VOL GLOBAL CURRENCY HEDGED ETF

August 31, 2016

Currency purchased			Currency sold			Counterparty	Settlement date		Unrealized appreciation (depreciation)
	USD	6,627		CLP	4,440,000	MS		09/06/2016	$	106
	USD	151		DKK	1,000	BNP		09/06/2016		1
	USD	73,860		GBP	56,000	BNP		09/06/2016		319
	USD	163,147		HKD	1,265,000	BNP		09/06/2016		73
	USD	7,483		JPY	765,000	BNP		09/06/2016		89
	USD	167,488		JPY	17,213,000	MS		09/06/2016		1,106
	USD	1,913		KRW	2,131,000	MS		09/06/2016		3
	USD	29,615		SGD	40,000	BNP		09/06/2016		256
	USD	66,918		TWD	2,123,000	MS		09/06/2016		28
	CAD	6,000		USD	4,573	BNP		10/05/2016		3
	CLP	50,000		USD	73	BNP		10/05/2016		—
	ILS	1,000		USD	265	BNP		10/05/2016		—
	SGD	1,000		USD	734	BNP		10/05/2016		—
	USD	59,630		CAD	78,000	BNP		10/05/2016		141
	USD	55,118		CHF	54,000	BNP		10/05/2016		104
	USD	6,519		CLP	4,398,000	BNP		10/05/2016		76
	USD	87,563		HKD	679,000	BNP		10/05/2016		5
	USD	173,426		JPY	17,797,000	BNP		10/05/2016		1,159
										5,096
	CAD	152,000		USD	116,191	BNP		09/06/2016		(281	)
	CAD	73,000		USD	56,487	MS		09/06/2016		(820	)
	CHF	109,000		USD	111,074	BNP		09/06/2016		(231	)
	CHF	55,000		USD	56,854	MS		09/06/2016		(924	)
	CLP	8,310,000		USD	12,314	BNP		09/06/2016		(110	)
	CLP	4,440,000		USD	6,692	MS		09/06/2016		(171	)
	DKK	11,000		USD	1,667	MS		09/06/2016		(18	)
	EUR	9,000		USD	10,156	MS		09/06/2016		(116	)
	GBP	28,000		USD	36,930	MS		09/06/2016		(160	)
	HKD	1,354,000		USD	174,559	BNP		09/06/2016		(13	)
	HKD	685,000		USD	88,343	MS		09/06/2016		(38	)
	ILS	40,000		USD	10,643	MS		09/06/2016		(52	)
	JPY	35,270,000		USD	343,226	BNP		09/06/2016		(2,304	)
	JPY	17,213,000		USD	171,221	MS		09/06/2016		(4,839	)
	KRW	481,000		USD	432	BNP		09/06/2016		(1	)
	KRW	35,534,000		USD	31,860	MS		09/06/2016		(7	)
	SGD	20,000		USD	14,779	MS		09/06/2016		(100	)
	TWD	2,280,000		USD	72,050	MS		09/06/2016		(213	)
	USD	108,782		CAD	143,000	BNP		09/06/2016		(264	)
	USD	3,240		DKK	21,704	BNP		09/06/2016		(13	)
	USD	1,648		DKK	11,000	MS		09/06/2016		(1	)
	USD	19,991		EUR	18,000	BNP		09/06/2016		(90	)
	USD	10,038		EUR	9,000	MS		09/06/2016		(2	)
	USD	36,674		GBP	28,000	MS		09/06/2016		(97	)
	USD	11,473		HKD	89,000	BNP		09/06/2016		—
	USD	88,298		HKD	685,000	MS		09/06/2016		(6	)
	USD	20,693		ILS	79,000	BNP		09/06/2016		(224	)
	USD	10,551		ILS	40,000	MS		09/06/2016		(40	)
	USD	9,660		INR	651,408	BNP		09/06/2016		(61	)
	USD	5,035		INR	338,000	MS		09/06/2016		(9	)
	USD	329,791		JPY	34,505,000	BNP		09/06/2016		(3,737	)
	USD	61,194		KRW	69,008,000	BNP		09/06/2016		(666	)
	USD	29,889		KRW	33,403,000	MS		09/06/2016		(54	)
	USD	14,657		SGD	20,000	MS		09/06/2016		(22	)
	USD	137,470		TWD	4,379,000	BNP		09/06/2016		(500	)
	USD	4,932		TWD	157,000	MS		09/06/2016		(15	)
	GBP	1,000		USD	1,315	BNP		10/05/2016		—
	INR	13,000		USD	193	BNP		10/05/2016		—
	JPY	1,052,000		USD	10,188	BNP		10/05/2016		(5	)
	KRW	384,000		USD	344	BNP		10/05/2016		—

34 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® EDGE MSCI MIN VOL GLOBAL CURRENCY HEDGED ETF

August 31, 2016

Currency purchased			Currency sold			Counterparty	Settlement date		Unrealized appreciation (depreciation)
	TWD	24,000		USD	758	BNP		10/05/2016	$	(1	)
	USD	1,756		DKK	11,704	BNP		10/05/2016		(1	)
	USD	10,051		EUR	9,000	BNP		10/05/2016		(2	)
	USD	36,703		GBP	28,000	BNP		10/05/2016		(95	)
	USD	10,292		ILS	39,000	BNP		10/05/2016		(39	)
	USD	5,003		INR	337,408	BNP		10/05/2016		(10	)
	USD	31,431		KRW	35,124,000	BNP		10/05/2016		(39	)
	USD	14,658		SGD	20,000	BNP		10/05/2016		(21	)
	USD	71,068		TWD	2,256,000	BNP		10/05/2016		(140	)
										(16,552	)
					Net unrealized depreciation				$	(11,456	)

Counterparties:

BNP — BNP Paribas SA

MS — Morgan Stanley and Co. International PLC

Currency abbreviations:

CAD — Canadian Dollar

CHF — Swiss Franc

CLP — Chilean Peso

DKK — Danish Krone

EUR — Euro

GBP — British Pound

HKD — Hong Kong Dollar

ILS — Israeli Shekel

INR — Indian Rupee

JPY — Japanese Yen

KRW — South Korean Won

SGD — Singapore Dollar

TWD — Taiwan New Dollar

USD — United States Dollar

Schedule 3 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2			Level 3		Total
Investments:
Assets:
Exchange-traded funds	$	1,313,170	$	—		$	—	$	1,313,170
Money market funds		801		—			—		801
Total	$	1,313,971	$	—		$	—	$	1,313,971
Derivative financial instrumentsa:
Assets:
Forward currency contracts	$	—	$	5,096		$	—	$	5,096
Liabilities:
Forward currency contracts		—		(16,552	)		—		(16,552	)
Total	$	—	$	(11,456	)	$	—	$	(11,456	)

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 35

Statements of Assets and Liabilities

iSHARES^® TRUST

August 31, 2016

	iShares Adaptive Currency Hedged MSCI Japan ETF			iShares Currency Hedged MSCI Australia ETF			iShares Currency Hedged MSCI Canada ETF
ASSETS
Investments, at cost:
Affiliated (Note 2)	$	3,444,253		$	9,169,848		$	9,532,643
Total cost of investments	$	3,444,253		$	9,169,848		$	9,532,643
Investments in securities, at fair value (Note 1):
Affiliated (Note 2)	$	3,517,999		$	9,874,426		$	10,538,921
Total fair value of investments		3,517,999			9,874,426			10,538,921
Receivables:
Investment securities sold		—			21,972			55,971
Dividends and interest		—			310			1
Unrealized appreciation on forward currency contracts (Note 1)		26,298			50,456			75,058
Total Assets		3,544,297			9,947,164			10,669,951
LIABILITIES
Payables:
Investment securities purchased		23,531			—			—
Investment advisory fees (Note 2)		—			255			254
Unrealized depreciation on forward currency contracts (Note 1)		1,083			36,882			76,957
Total Liabilities		24,614			37,137			77,211
NET ASSETS	$	3,519,683		$	9,910,027		$	10,592,740
Net assets consist of:
Paid-in capital	$	3,666,266		$	9,827,717		$	9,986,988
Undistributed net investment income		34			307			—
Accumulated net realized loss		(245,578	)		(636,149	)		(398,627	)
Net unrealized appreciation		98,961			718,152			1,004,379
NET ASSETS	$	3,519,683		$	9,910,027		$	10,592,740
Shares outstandinga		150,000			450,000			450,000
Net asset value per share	$	23.46		$	22.02		$	23.54

^a  No par value, unlimited number of shares authorized.

See notes to financial statements.

36 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Continued)

iSHARES^® TRUST

August 31, 2016

	iShares Currency Hedged MSCI Japan ETF			iShares Currency Hedged MSCI Mexico ETF			iShares Currency Hedged MSCI South Korea ETF
ASSETS
Investments, at cost:
Affiliated (Note 2)	$	501,358,902		$	1,311,243		$	11,488,854
Total cost of investments	$	501,358,902		$	1,311,243		$	11,488,854
Investments in securities, at fair value (including securities on loana) (Note 1):
Affiliated (Note 2)	$	482,024,530		$	1,167,254		$	12,355,516
Total fair value of investments		482,024,530			1,167,254			12,355,516
Receivables:
Investment securities sold		13,961,171			14,331			135,722
Dividends and interest		13,806			—			1
Capital shares redeemed		807,758			—			—
Unrealized appreciation on forward currency contracts (Note 1)		5,225,155			10,191			167
Total Assets		502,032,420			1,191,776			12,491,406
LIABILITIES
Payables:
Collateral for securities on loan (Note 1)		11,486,790			—			—
Investment advisory fees (Note 2)		—			30			—
Unrealized depreciation on forward currency contracts (Note 1)		14,530,248			14,562			137,948
Total Liabilities		26,017,038			14,592			137,948
NET ASSETS	$	476,015,382		$	1,177,184		$	12,353,458
Net assets consist of:
Paid-in capital	$	612,796,532		$	1,218,072		$	11,505,605
Undistributed net investment income		12,325			24			133
Undistributed net realized gain (accumulated net realized loss)		(108,154,010	)		107,448			118,839
Net unrealized appreciation (depreciation)		(28,639,465	)		(148,360	)		728,881
NET ASSETS	$	476,015,382		$	1,177,184		$	12,353,458
Shares outstandingb		19,250,000			50,000			500,000
Net asset value per share	$	24.73		$	23.54		$	24.71

^a  Securities on loan with values of $11,167,432, $  — and $  —, respectively. See Note 1.

^b  No par value, unlimited number of shares authorized.

See notes to financial statements.

FINANCIAL STATEMENTS 37

Statements of Assets and Liabilities (Continued)

iSHARES^® TRUST

August 31, 2016

	iShares Edge MSCI Min Vol Global Currency Hedged ETF
ASSETS
Investments, at cost:
Affiliated (Note 2)	$	1,227,161
Total cost of investments	$	1,227,161
Investments in securities, at fair value (Note 1):
Affiliated (Note 2)	$	1,313,971
Total fair value of investments		1,313,971
Receivables:
Investment securities sold		12,350
Unrealized appreciation on forward currency contracts (Note 1)		5,096
Total Assets		1,331,417
LIABILITIES
Payables:
Investment advisory fees (Note 2)		62
Unrealized depreciation on forward currency contracts (Note 1)		16,552
Total Liabilities		16,614
NET ASSETS	$	1,314,803
Net assets consist of:
Paid-in capital	$	1,281,680
Accumulated net realized loss		(42,231	)
Net unrealized appreciation		75,354
NET ASSETS	$	1,314,803
Shares outstandinga		50,000
Net asset value per share	$	26.30

^a  No par value, unlimited number of shares authorized.

See notes to financial statements.

38 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations

iSHARES^® TRUST

Year ended August 31, 2016

	iShares Adaptive Currency Hedged MSCI Japan ETFa			iShares Currency Hedged MSCI Australia ETF			iShares Currency Hedged MSCI Canada ETF
NET INVESTMENT INCOME
Dividends — affiliated (Note 2)	$	27,523		$	197,145		$	113,302
Securities lending income — affiliated — net (Note 2)		—			5,236			5,198
Total investment income		27,523			202,381			118,500
EXPENSES
Investment advisory fees (Note 2)		10,889			37,368			39,216
Total expenses		10,889			37,368			39,216
Less investment advisory fees waived (Note 2)		(10,889	)		(35,580	)		(37,319	)
Net expenses		—			1,788			1,897
Net investment income		27,523			200,593			116,603
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated (Note 2)		(16,329	)		(144,298	)		(181,713	)
In-kind redemptions — affiliated (Note 2)		—			237,648			—
Foreign currency transactions		(229,249	)		(439,576	)		(192,283	)
Net realized loss		(245,578	)		(346,226	)		(373,996	)
Net change in unrealized appreciation/depreciation on:
Investments		73,746			981,888			1,238,036
Forward currency contracts		25,215			(41,292	)		(26,530	)
Net change in unrealized appreciation/depreciation		98,961			940,596			1,211,506
Net realized and unrealized gain (loss)		(146,617	)		594,370			837,510
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(119,094	)	$	794,963		$	954,113

^a  For the period from January 5, 2016 (commencement of operations) to August 31, 2016.

See notes to financial statements.

FINANCIAL STATEMENTS 39

Statements of Operations (Continued)

iSHARES^® TRUST

Year ended August 31, 2016

	iShares Currency Hedged MSCI Japan ETF			iShares Currency Hedged MSCI Mexico ETF			iShares Currency Hedged MSCI South Korea ETF
NET INVESTMENT INCOME
Dividends — affiliated (Note 2)	$	10,090,946		$	45,072		$	913,051
Securities lending income — affiliated — net (Note 2)		27,595			14			14
Total investment income		10,118,541			45,086			913,065
EXPENSES
Investment advisory fees (Note 2)		3,405,632			13,033			77,005
Total expenses		3,405,632			13,033			77,005
Less investment advisory fees waived (Note 2)		(3,381,038	)		(12,404	)		(77,005	)
Net expenses		24,594			629			—
Net investment income		10,093,947			44,457			913,065
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated (Note 2)		(26,355,243	)		(34,834	)		(118,656	)
In-kind redemptions — affiliated (Note 2)		(7,599,887	)		(105,188	)		(2,579,125	)
Foreign currency transactions		(124,052,481	)		223,909			331,021
Net realized gain (loss)		(158,007,611	)		83,887			(2,366,760	)
Net change in unrealized appreciation/depreciation on:
Investments		22,615,528			37,503			1,182,788
Forward currency contracts		11,454,918			(37,241	)		(113,956	)
Net change in unrealized appreciation/depreciation		34,070,446			262			1,068,832
Net realized and unrealized gain (loss)		(123,937,165	)		84,149			(1,297,928	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(113,843,218	)	$	128,606		$	(384,863	)

See notes to financial statements.

40 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Continued)

iSHARES^® TRUST

Year ended August 31, 2016

	iShares Edge MSCI Min Vol Global Currency Hedged ETFa
NET INVESTMENT INCOME
Dividends — affiliated (Note 2)	$	57,469
Total investment income		57,469
EXPENSES
Investment advisory fees (Note 2)		8,014
Total expenses		8,014
Less investment advisory fees waived (Note 2)		(7,381	)
Net expenses		633
Net investment income		56,836
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated (Note 2)		2,168
In-kind redemptions — affiliated (Note 2)		104,624
Foreign currency transactions		(44,989	)
Net realized gain		61,803
Net change in unrealized appreciation/depreciation on:
Investments		86,810
Forward currency contracts		(11,456	)
Net change in unrealized appreciation/depreciation		75,354
Net realized and unrealized gain		137,157
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	193,993

^a  For the period from October 29, 2015 (commencement of operations) to August 31, 2016.

See notes to financial statements.

FINANCIAL STATEMENTS 41

Statements of Changes in Net Assets

iSHARES^® TRUST

	iShares Adaptive Currency Hedged MSCI Japan ETF			iShares Currency Hedged MSCI Australia ETF
	Period from January 5, 2016a to August 31, 2016			Year ended August 31, 2016			Period from June 29, 2015a to August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	27,523		$	200,593		$	(192	)
Net realized gain (loss)		(245,578	)		(346,226	)		126,618
Net change in unrealized appreciation/depreciation		98,961			940,596			(222,444	)
Net increase (decrease) in net assets resulting from operations		(119,094	)		794,963			(96,018	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(27,489	)		(200,286	)		—
From net realized gain		—			(181,301	)		—
Total distributions to shareholders		(27,489	)		(381,587	)		—
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		5,994,465			9,340,734			2,448,481
Cost of shares redeemed		(2,328,199	)		(2,196,546	)		—
Net increase in net assets from capital share transactions		3,666,266			7,144,188			2,448,481
INCREASE IN NET ASSETS		3,519,683			7,557,564			2,352,463
NET ASSETS
Beginning of period		—			2,352,463			—
End of period	$	3,519,683		$	9,910,027		$	2,352,463
Undistributed net investment income included in net assets at end of period	$	34		$	307		$	—
SHARES ISSUED AND REDEEMED
Shares sold		250,000			450,000			100,000
Shares redeemed		(100,000	)		(100,000	)		—
Net increase in shares outstanding		150,000			350,000			100,000

^a  Commencement of operations.

See notes to financial statements.

42 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares Currency Hedged MSCI Canada ETF						iShares Currency Hedged MSCI Japan ETF
	Year ended August 31, 2016			Period from June 29, 2015a to August 31, 2015			Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	116,603		$	(202	)	$	10,093,947		$	5,605,381
Net realized gain (loss)		(373,996	)		117,704			(158,007,611	)		46,603,390
Net change in unrealized appreciation/depreciation		1,211,506			(207,127	)		34,070,446			(62,987,806	)
Net increase (decrease) in net assets resulting from operations		954,113			(89,625	)		(113,843,218	)		(10,779,035	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(116,603	)		—			(10,081,622	)		(5,605,381	)
From net realized gain		(142,133	)		—			(12,890,747	)		(2,733,951	)
Return of capital		(507	)		—			—			—
Total distributions to shareholders		(259,243	)		—			(22,972,369	)		(8,339,332	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		7,551,188			2,436,307			1,294,488,952			1,067,701,151
Cost of shares redeemed		—			—			(1,416,739,199	)		(346,032,554	)
Net increase (decrease) in net assets from capital share transactions		7,551,188			2,436,307			(122,250,247	)		721,668,597
INCREASE (DECREASE) IN NET ASSETS		8,246,058			2,346,682			(259,065,834	)		702,550,230
NET ASSETS
Beginning of period		2,346,682			—			735,081,216			32,530,986
End of period	$	10,592,740		$	2,346,682		$	476,015,382		$	735,081,216
Undistributed net investment income included in net assets at end of period	$	—		$	—		$	12,325		$	—
SHARES ISSUED AND REDEEMED
Shares sold		350,000			100,000			51,000,000			35,700,000
Shares redeemed		—			—			(56,700,000	)		(12,050,000	)
Net increase (decrease) in shares outstanding		350,000			100,000			(5,700,000	)		23,650,000

^a  Commencement of operations.

See notes to financial statements.

FINANCIAL STATEMENTS 43

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares Currency Hedged MSCI Mexico ETF						iShares Currency Hedged MSCI South Korea ETF
	Year ended August 31, 2016			Period from June 29, 2015a to August 31, 2015			Year ended August 31, 2016			Period from June 29, 2015a to August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	44,457		$	(177	)	$	913,065		$	(73	)
Net realized gain (loss)		83,887			108,771			(2,366,760	)		194,224
Net change in unrealized appreciation/depreciation		262			(148,622	)		1,068,832			(339,951	)
Net increase (decrease) in net assets resulting from operations		128,606			(40,028	)		(384,863	)		(145,800	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(44,433	)		—			(912,932	)		—
From net realized gain		(141,495	)		—			(48,148	)		—
Total distributions to shareholders		(185,928	)		—			(961,080	)		—
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		—			2,443,348			45,164,809			7,094,442
Cost of shares redeemed		(1,168,814	)		—			(33,735,309	)		(4,678,741	)
Net increase (decrease) in net assets from capital share transactions		(1,168,814	)		2,443,348			11,429,500			2,415,701
INCREASE (DECREASE) IN NET ASSETS		(1,226,136	)		2,403,320			10,083,557			2,269,901
NET ASSETS
Beginning of period		2,403,320			—			2,269,901			—
End of period	$	1,177,184		$	2,403,320		$	12,353,458		$	2,269,901
Undistributed net investment income included in net assets at end of period	$	24		$	—		$	133		$	—
SHARES ISSUED AND REDEEMED
Shares sold		—			100,000			1,900,000			300,000
Shares redeemed		(50,000	)		—			(1,500,000	)		(200,000	)
Net increase (decrease) in shares outstanding		(50,000	)		100,000			400,000			100,000

^a  Commencement of operations.

See notes to financial statements.

44 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares Edge MSCI Min Vol Global Currency Hedged ETF
	Period from October 29, 2015a to August 31, 2016
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	56,836
Net realized gain		61,803
Net change in unrealized appreciation/depreciation		75,354
Net increase in net assets resulting from operations		193,993
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(56,955	)
Total distributions to shareholders		(56,955	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		2,501,061
Cost of shares redeemed		(1,323,296	)
Net increase in net assets from capital share transactions		1,177,765
INCREASE IN NET ASSETS		1,314,803
NET ASSETS
Beginning of period		—
End of period	$	1,314,803
SHARES ISSUED AND REDEEMED
Shares sold		100,000
Shares redeemed		(50,000	)
Net increase in shares outstanding		50,000

^a  Commencement of operations.

See notes to financial statements.

FINANCIAL STATEMENTS 45

Financial Highlights

iSHARES^® TRUST

(For a share outstanding throughout the period)

iShares Adaptive Currency Hedged MSCI Japan ETF

	Period from Jan. 5, 2016a to Aug. 31, 2016
Net asset value, beginning of period	$	24.92
Income from investment operations:
Net investment incomeb		0.23
Net realized and unrealized lossc		(1.51	)
Total from investment operations		(1.28	)
Less distributions from:
Net investment income		(0.18	)
Total distributions		(0.18	)
Net asset value, end of period	$	23.46
Total return		(5.06	)%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	3,520
Ratio of expenses to average net assetse,f		0.00	%
Ratio of expenses to average net assets prior to waived feese,f		0.62	%
Ratio of net investment income to average net assetse		1.57	%
Portfolio turnover rateg,h		2	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout the period.

^c The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  The Fund indirectly bears its proportionate share of fees and expenses incurred by the underlying fund in which the Fund is invested. This ratio does not include these indirect fees and expenses.

^g  Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

^h  Portfolio turnover rate excludes the portfolio activity of the underlying fund in which the Fund is invested. See page 119 for the portfolio turnover rates of the underlying fund.

See notes to financial statements.

46 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

iShares Currency Hedged MSCI Australia ETF

	Year ended Aug. 31, 2016			Period from Jun. 29, 2015a to Aug. 31, 2015
Net asset value, beginning of period	$	23.52		$	24.48
Income from investment operations:
Net investment income (loss)b		0.72			(0.00	)c
Net realized and unrealized gain (loss)d		0.49			(0.96	)
Total from investment operations		1.21			(0.96	)
Less distributions from:
Net investment income		(0.90	)		—
Net realized gain		(1.81	)		—
Total distributions		(2.71	)		—
Net asset value, end of period	$	22.02		$	23.52
Total return		5.70	%		(3.92	)%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	9,910		$	2,352
Ratio of expenses to average net assetsf,g		0.03	%		0.04	%
Ratio of expenses to average net assets prior to waived feesf,g		0.62	%		0.62	%
Ratio of net investment income (loss) to average net assetsf		3.33	%		(0.04	)%
Portfolio turnover rateh,i		15	%		0	%j

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c Rounds to less than $0.01.

^d  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^e  Not annualized.

^f  Annualized for periods of less than one year.

^g  The Fund indirectly bears its proportionate share of fees and expenses incurred by the underlying fund in which the Fund is invested. This ratio does not include these indirect fees and expenses.

^h  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

ⁱ  Portfolio turnover rates exclude the portfolio activity of the underlying fund in which the Fund is invested. See page 117 for the portfolio turnover rates of the underlying fund.

^j  Rounds to less than 1%.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 47

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

iShares Currency Hedged MSCI Canada ETF

	Year ended Aug. 31, 2016			Period from Jun. 29, 2015a to Aug. 31, 2015
Net asset value, beginning of period	$	23.47		$	24.36
Income from investment operations:
Net investment income (loss)b		0.41			(0.00	)c
Net realized and unrealized gain (loss)d		1.07			(0.89	)
Total from investment operations		1.48			(0.89	)
Less distributions from:
Net investment income		(0.46	)		—
Net realized gain		(0.95	)		—
Return of capital		(0.00	)c		—
Total distributions		(1.41	)		—
Net asset value, end of period	$	23.54		$	23.47
Total return		6.92	%		(3.69	)%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	10,593		$	2,347
Ratio of expenses to average net assetsf,g		0.03	%		0.05	%
Ratio of expenses to average net assets prior to waived feesf,g		0.62	%		0.62	%
Ratio of net investment income (loss) to average net assetsf		1.84	%		(0.05	)%
Portfolio turnover rateh,i		13	%		0	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  Rounds to less than $0.01.

^d  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^e  Not annualized.

^f  Annualized for periods of less than one year.

^g  The Fund indirectly bears its proportionate share of fees and expenses incurred by the underlying fund in which the Fund is invested. This ratio does not include these indirect fees and expenses.

^h  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

ⁱ  Portfolio turnover rates exclude the portfolio activity of the underlying fund in which the Fund is invested. See page 118 for the portfolio turnover rates of the underlying fund.

See notes to financial statements.

48 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

iShares Currency Hedged MSCI Japan ETF

	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Period from Jan. 31, 2014a to Aug. 31, 2014
Net asset value, beginning of period	$	29.46		$	25.02		$	23.53
Income from investment operations:
Net investment incomeb		0.41			0.43			0.13
Net realized and unrealized gain (loss)c		(4.11	)		4.58			1.53
Total from investment operations		(3.70	)		5.01			1.66
Less distributions from:
Net investment income		(0.44	)		(0.32	)		(0.17	)
Net realized gain		(0.59	)		(0.25	)		(0.00	)d
Total distributions		(1.03	)		(0.57	)		(0.17	)
Net asset value, end of period	$	24.73		$	29.46		$	25.02
Total return		(12.91	)%		20.08	%		7.05	%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	476,015		$	735,081		$	32,531
Ratio of expenses to average net assetsf,g		0.00	%h		0.01	%		0.01	%
Ratio of expenses to average net assets prior to waived feesf,g		0.53	%		0.53	%		0.53	%
Ratio of net investment income to average net assetsf		1.57	%		1.39	%		0.94	%
Portfolio turnover ratei,j		11	%		12	%		1	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Rounds to less than $0.01.

^e  Not annualized.

^f  Annualized for periods of less than one year.

^g  The Fund indirectly bears its proportionate share of fees and expenses incurred by the underlying fund in which the Fund is invested. This ratio does not include these indirect fees and expenses.

^h  Rounds to less than 0.01%.

ⁱ  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

^j  Portfolio turnover rates exclude the portfolio activity of the underlying fund in which the Fund is invested. See page 119 for the portfolio turnover rates of the underlying fund.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 49

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

iShares Currency Hedged MSCI Mexico ETF

	Year ended Aug. 31, 2016			Period from Jun. 29, 2015a to Aug. 31, 2015
Net asset value, beginning of period	$	24.03		$	24.43
Income from investment operations:
Net investment income (loss)b		0.49			(0.00	)c
Net realized and unrealized gain (loss)d		1.15			(0.40	)
Total from investment operations		1.64			(0.40	)
Less distributions from:
Net investment income		(0.71	)		—
Net realized gain		(1.42	)		—
Total distributions		(2.13	)		—
Net asset value, end of period	$	23.54		$	24.03
Total return		7.41	%		(1.64	)%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	1,177		$	2,403
Ratio of expenses to average net assetsf,g		0.03	%		0.04	%
Ratio of expenses to average net assets prior to waived feesf,g		0.62	%		0.62	%
Ratio of net investment income (loss) to average net assetsf		2.11	%		(0.04	)%
Portfolio turnover rateh,i		22	%		0	%j

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  Rounds to less than $0.01.

^d  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^e  Not annualized.

^f  Annualized for periods of less than one year.

^g  The Fund indirectly bears its proportionate share of fees and expenses incurred by the underlying fund in which the Fund is invested. This ratio does not include these indirect fees and expenses.

^h  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

ⁱ  Portfolio turnover rates exclude the portfolio activity of the underlying fund in which the Fund is invested. See page 120 for the portfolio turnover rates of the underlying fund.

^j  Rounds to less than 1%.

See notes to financial statements.

50 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

iShares Currency Hedged MSCI South Korea ETF

	Year ended Aug. 31, 2016			Period from Jun. 29, 2015a to Aug. 31, 2015
Net asset value, beginning of period	$	22.70		$	24.64
Income from investment operations:
Net investment income (loss)b		2.12			(0.00	)c
Net realized and unrealized gain (loss)d		0.92			(1.94	)
Total from investment operations		3.04			(1.94	)
Less distributions from:
Net investment income		(0.55	)		—
Net realized gain		(0.48	)		—
Total distributions		(1.03	)		—
Net asset value, end of period	$	24.71		$	22.70
Total return		13.67	%		(7.87	)%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	12,353		$	2,270
Ratio of expenses to average net assetsf,g		0.00	%		0.02	%
Ratio of expenses to average net assets prior to waived feesf,g		0.77	%		0.77	%
Ratio of net investment income (loss) to average net assetsf		9.13	%		(0.02	)%
Portfolio turnover rateh,i		21	%		2	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  Rounds to less than $0.01.

^d  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^e  Not annualized.

^f  Annualized for periods of less than one year.

^g  The Fund indirectly bears its proportionate share of fees and expenses incurred by the underlying fund in which the Fund is invested. This ratio does not include these indirect fees and expenses.

^h  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

ⁱ  Portfolio turnover rates exclude the portfolio activity of the underlying fund in which the Fund is invested. See page 121 for the portfolio turnover rates of the underlying fund.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 51

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout the period)

iShares Edge MSCI Min Vol Global Currency Hedged ETF

	Period from Oct. 29, 2015a to Aug. 31, 2016
Net asset value, beginning of period	$	25.01
Income from investment operations:
Net investment incomeb		0.57
Net realized and unrealized gainc		1.29
Total from investment operations		1.86
Less distributions from:
Net investment income		(0.57	)
Total distributions		(0.57	)
Net asset value, end of period	$	26.30
Total return		7.51	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	1,315
Ratio of expenses to average net assetse,f		0.03	%
Ratio of expenses to average net assets prior to waived feese,f		0.38	%
Ratio of net investment income to average net assetse		2.70	%
Portfolio turnover rateg,h		4	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout the period.

^c  The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  The Fund indirectly bears its proportionate share of fees and expenses incurred by the underlying fund in which the Fund is invested. This ratio does not include these indirect fees and expenses.

^g  Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

^h Portfolio turnover rate excludes the portfolio activity of the underlying fund in which the Fund is invested. See page 116 for the portfolio turnover rates of the underlying fund.

See notes to financial statements.

52 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements

iSHARES^® TRUST

iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999.

These financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):

iShares ETF	Diversification Classification
Adaptive Currency Hedged MSCI Japan a	Non-diversified
Currency Hedged MSCI Australia	Non-diversified
Currency Hedged MSCI Canada	Non-diversified
Currency Hedged MSCI Japan	Non-diversified
Currency Hedged MSCI Mexico	Non-diversified
Currency Hedged MSCI South Korea	Non-diversified
Edge MSCI Min Vol Global Currency Hedgedb,c	Non-diversified

^a  The Fund commenced operations on January 5, 2016.

^b  The Fund commenced operations on October 29, 2015.

^c  Formerly the iShares Currency Hedged MSCI ACWI Minimum Volatility ETF.

The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective. Currently each Fund seeks to achieve its investment objective by investing a substantial portion of its assets in an exchange-traded fund of iShares, Inc. (an “underlying fund”), an affiliate of the Funds. The financial statements and schedules of investments for the underlying funds can be found elsewhere in this report and should be read in conjunction with the Funds’ financial statements.

Pursuant to the Trust’s organizational documents, the Funds’ officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.

SECURITY VALUATION

Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant

NOTES TO FINANCIAL STATEMENTS 53

Notes to Financial Statements (Continued)

iSHARES^® TRUST

to policies and procedures developed by the Global Valuation Committee and approved by the Board of Trustees of the Trust (the “Board”).

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

• Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”).

• Forward currency contracts are valued based on that day’s prevailing forward exchange rate for the underlying currencies. Interpolated forward exchange rates are used for contracts with interim settlement dates for which quotations are not available.

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such factors are reported to the Board on a quarterly basis.

The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Trust’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements in market values, and reviews of market related activity.

Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.

Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and is not necessarily an indication of the risk associated with investing in the instrument. The three levels of the fair value hierarchy are as follows:

• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and

• Level 3 — Unobservable inputs for the asset or liability, including the Global Valuation Committee’s assumptions used in determining the fair value of investments.

54 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2016 are reflected in tax reclaims receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.

FOREIGN CURRENCY TRANSLATION

The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.

Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes.

Each Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for federal income tax purposes. However, each Fund has elected to treat realized gains (losses) from certain foreign currency contracts as capital gain (loss) for federal income tax purposes.

FOREIGN TAXES

The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their statements of operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “other foreign taxes”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of August 31, 2016, if any, are disclosed in the Funds’ statements of assets and liabilities.

DISTRIBUTIONS TO SHAREHOLDERS

Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.

NOTES TO FINANCIAL STATEMENTS 55

Notes to Financial Statements (Continued)

iSHARES^® TRUST

LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Funds. Any additional required collateral is delivered to the Funds and any excess collateral is returned by the Funds on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

On July 23, 2014, the U.S. Securities and Exchange Commission (the “SEC”) adopted amendments to Rule 2a-7 under the 1940 Act, which governs the operations of U.S. money market funds. When implemented in October 2016, the change may affect the Funds with regard to the reinvestment of cash collateral received for securities on loan. The Funds may be exposed to additional risk from reinvesting the cash collateral in money market funds that do not maintain a fixed NAV per share of $1.00.

Any cash received as collateral for securities on loan may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates. As of August 31, 2016, any securities on loan were collateralized by cash and/or U.S. government obligations. Cash collateral received was invested in money market funds managed by BFA and is disclosed in the schedules of investments. The securities on loan for each Fund are also disclosed in its schedule of investments. The total value of any securities on loan as of August 31, 2016 and the total value of the related collateral are disclosed in the statements of assets and liabilities. Income earned by the Funds from securities lending is disclosed in the statements of operations.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities lent. Each Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.

Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (“MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, a Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, the borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.

56 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

The following table is a summary of securities lending agreements which are subject to offset under an MSLA as of August 31, 2016:

iShares ETF and Counterparty	Market Value of Securities on Loan		Cash Collateral Received  a		Net Amount
Currency Hedged MSCI Japan
Deutsche Bank Securities Inc.	$	2,320,920	$	2,320,920	$	—
Goldman Sachs & Co.		8,846,512		8,846,512		—
	$	11,167,432	$	11,167,432	$	—

^a  Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s statement of assets and liabilities.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Agreement with the Trust, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.

For its investment advisory services to the iShares Adaptive Currency Hedged MSCI Japan ETF, BFA is entitled to an annual investment advisory fee of 0.62% based on the average daily net assets of the Fund. In addition, the Fund indirectly pays its pro rata share of fees and expenses attributable to its investments in other investment companies (“acquired fund fees and expenses”). BFA has contractually agreed to waive a portion of its investment advisory fee for the Fund through December 31, 2020 in an amount equal to the acquired fund fees and expenses, if any, attributable to the Fund’s investments in the iShares MSCI Japan ETF (“EWJ”). BFA has contractually agreed to reduce the investment advisory fee for the Fund through December 31, 2020 so that the investment advisory fee is equal to the acquired fund fees and expenses that would have been experienced by the Fund related to its investments in EWJ, after taking into account any fee waivers by EWJ.

For its investment advisory services to the iShares Currency Hedged MSCI Australia ETF, BFA is entitled to an annual investment advisory fee of 0.62% based on the average daily net assets of the Fund. In addition, the Fund indirectly pays acquired fund fees and expenses. BFA has contractually agreed to waive a portion of its investment advisory fee for the Fund through December 31, 2020 in an amount equal to the acquired fund fees and expenses, if any, attributable to the Fund’s investments in the iShares MSCI Australia ETF (“EWA”). BFA has contractually agreed to reduce the investment advisory fee for the Fund through December 31, 2017 so that the investment advisory fee is equal to the acquired fund fees and expenses that would have been experienced by the Fund related to its investments in EWA, after taking into account any fee waivers by EWA, plus 0.03%.

For its investment advisory services to the iShares Currency Hedged MSCI Canada ETF, BFA is entitled to an annual investment advisory fee of 0.62% based on the average daily net assets of the Fund. In addition, the Fund indirectly pays acquired fund fees and expenses. BFA has contractually agreed to waive a portion of its investment advisory fee for the Fund through December 31, 2020 in an amount equal to the acquired fund fees and expenses, if any, attributable to the Fund’s investments in the iShares MSCI Canada ETF (“EWC”). BFA has contractually agreed to reduce the investment advisory fee for the Fund through December 31, 2017 so that the investment advisory fee is equal to the acquired fund fees and expenses that would have been experienced by the Fund related to its investments in EWC, after taking into account any fee waivers by EWC, plus 0.03%.

For its investment advisory services to the iShares Currency Hedged MSCI Japan ETF, BFA is entitled to an annual investment advisory fee of 0.53% based on the average daily net assets of the Fund. In addition, the Fund indirectly pays acquired fund fees

NOTES TO FINANCIAL STATEMENTS 57

Notes to Financial Statements (Continued)

iSHARES^® TRUST

and expenses. The total of the investment advisory fee and acquired fund fees and expenses is a fund’s total annual operating expenses. BFA has contractually agreed to waive a portion of its investment advisory fee for the Fund through December 31, 2020 in an amount equal to the acquired fund fees and expenses, if any, attributable to the Fund’s investments in other iShares funds, provided that the waiver be no greater than the Fund’s investment advisory fee of 0.53%. BFA has also contractually agreed to waive an additional portion of its investment advisory fee for the Fund through December 31, 2020 such that the Fund’s total annual operating expenses after fee waivers will be equal to the greater of the acquired fund fees and expenses or 0.48%.

For its investment advisory services to the iShares Currency Hedged MSCI Mexico ETF, BFA is entitled to an annual investment advisory fee of 0.62% based on the average daily net assets of the Fund. In addition, the Fund indirectly pays acquired fund fees and expenses. BFA has contractually agreed to waive a portion of its investment advisory fee for the Fund through December 31, 2020 in an amount equal to the acquired fund fees and expenses, if any, attributable to the Fund’s investments in the iShares MSCI Mexico Capped ETF (“EWW”). BFA has contractually agreed to reduce the investment advisory fee through December 31, 2017 so that the investment advisory fee is equal to the acquired fund fees and expenses that would have been experienced by the Fund related to its investments in EWW, after taking into account any fee waivers by EWW, plus 0.03%.

For its investment advisory services to the iShares Currency Hedged MSCI South Korea ETF, BFA is entitled to an annual investment advisory fee of 0.77% based on the average daily net assets of the Fund. In addition, the Fund indirectly pays acquired fund fees and expenses. BFA has contractually agreed to waive a portion of its investment advisory fee for the Fund through December 31, 2020 in an amount equal to the acquired fund fees and expenses, if any, attributable to the Fund’s investments in the iShares MSCI South Korea Capped ETF (“EWY”). BFA has contractually agreed to reduce the investment advisory fee for the Fund through December 31, 2017 so that the investment advisory fee is equal to the acquired fund fees and expenses that would have been experienced by the Fund related to its investments in EWY, after taking into account any fee waivers by EWY, plus 0.03%. Additionally, BFA has contractually agreed to a reduction in the investment advisory fee through December 31, 2017 of 0.03%.

For its investment advisory services to the iShares Edge MSCI Min Vol Global Currency Hedged ETF, BFA is entitled to an annual investment advisory fee of 0.38% based on the average daily net assets of the Fund. In addition, the Fund indirectly pays acquired fund fees and expenses. BFA has contractually agreed to waive a portion of its investment advisory fee for the Fund through December 31, 2020 in an amount equal to the acquired fund fees and expenses, if any, attributable to the Fund’s investments in the iShares Edge MSCI Min Vol Global ETF (“ACWV”). BFA has contractually agreed to reduce the investment advisory fee for the Fund through December 31, 2017 so that the investment advisory fee is equal to the acquired fund fees and expenses that would have been experienced by the Fund related to its investments in ACWV, after taking into account any fee waivers by ACWV, plus 0.03%.

The SEC has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by BFA, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the “collateral investment fees”). Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Funds retain a portion of securities lending income and remit the remaining portion to BTC as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, each Fund retains 80% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in a given calendar year exceeds the aggregate

58 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

securities lending income generated across the iShares ETF Complex in the calendar year 2013, each Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 85% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.

For the year ended August 31, 2016, the total of securities lending agent services and collateral investment fees paid were as follows:

iShares ETF	Fees Paid to BTC
Currency Hedged MSCI Australia	$	1,583
Currency Hedged MSCI Canada		1,407
Currency Hedged MSCI Japan		10,265
Currency Hedged MSCI Mexico		5
Currency Hedged MSCI South Korea		6

BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.

Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends – affiliated” in the statements of operations.

The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.

Certain trustees and officers of the Trust are also officers of BTC and/or BFA.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2016 were as follows:

iShares ETF	Purchases		Sales
Adaptive Currency Hedged MSCI Japan	$	61,298	$	293,584
Currency Hedged MSCI Australia		934,905		1,760,560
Currency Hedged MSCI Canada		801,302		1,360,879
Currency Hedged MSCI Japan		67,543,667		185,226,426
Currency Hedged MSCI Mexico		457,207		446,311
Currency Hedged MSCI South Korea		2,968,632		2,037,344
Edge MSCI Min Vol Global Currency Hedged		107,506		155,503

NOTES TO FINANCIAL STATEMENTS 59

Notes to Financial Statements (Continued)

iSHARES^® TRUST

In-kind transactions (see Note 4) for the year ended August 31, 2016 were as follows:

iShares ETF	In-kind Purchases		In-kind Sales
Adaptive Currency Hedged MSCI Japan	$	3,691,443	$	—
Currency Hedged MSCI Australia		9,465,548		2,188,455
Currency Hedged MSCI Canada		7,677,642		—
Currency Hedged MSCI Japan		1,320,597,099		1,454,827,119
Currency Hedged MSCI Mexico		—		1,160,654
Currency Hedged MSCI South Korea		44,638,921		33,965,617
Edge MSCI Min Vol Global Currency Hedged		2,499,735		1,332,170

4. CAPITAL SHARE TRANSACTIONS

Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the statements of changes in net assets.

The consideration for the purchase of Creation Units of a fund in the Trust generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Trust may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Trust’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Proceeds from shares sold” in the statements of changes in net assets.

5. FORWARD CURRENCY CONTRACTS

Each Fund may enter into forward currency contracts for the purpose of hedging against the effects of foreign currencies on the value of such Fund’s assets that are denominated in a non-U.S. currency. A forward currency contract is an obligation to purchase or sell a currency against another currency at a specified future date at an agreed upon price and quantity. Forward currency contracts are traded over-the-counter (“OTC”) and not on an organized exchange. The contract is marked-to-market daily and the change in market value is recorded as unrealized appreciation or depreciation. When the contract is closed, a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed is recorded. Losses may arise if there are unfavorable movements in the value of a foreign currency relative to the U.S. dollar or if the counterparties do not meet the terms of the agreement. The Fund’s use of forward currency contracts also involves the risks of imperfect correlation between the value of its currency positions and its other investments or the Fund failing to close out its position due to an illiquid market.

60 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

The following table shows the value of forward currency contracts held as of August 31, 2016 and the related locations in the statements of assets and liabilities, presented by risk exposure category:

Assets
	iShares Adaptive Currency Hedged MSCI Japan ETF		iShares Currency Hedged MSCI Australia ETF		iShares Currency Hedged MSCI Canada ETF
Forward currency contracts:
Unrealized appreciation on forward currency contracts/Net assets consist of – net unrealized appreciation (depreciation)	$	26,298	$	50,456	$	75,058
	iShares Currency Hedged MSCI Japan ETF		iShares Currency Hedged MSCI Mexico ETF		iShares Currency Hedged MSCI South Korea ETF
Forward currency contracts:
Unrealized appreciation on forward currency contracts/Net assets consist of – net unrealized appreciation (depreciation)	$	5,225,155	$	10,191	$	167
	iShares Edge MSCI Min Vol Global Currency Hedged ETF
Forward currency contracts:
Unrealized appreciation on forward currency contracts/Net assets consist of – net unrealized appreciation (depreciation)	$	5,096

NOTES TO FINANCIAL STATEMENTS 61

Notes to Financial Statements (Continued)

iSHARES^® TRUST

Liabilities
	iShares Adaptive Currency Hedged MSCI Japan ETF		iShares Currency Hedged MSCI Australia ETF		iShares Currency Hedged MSCI Canada ETF
Forward currency contracts:
Unrealized depreciation on forward currency contracts/Net assets consist of – net unrealized appreciation (depreciation)	$	1,083	$	36,882	$	76,957
	iShares Currency Hedged MSCI Japan ETF		iShares Currency Hedged MSCI Mexico ETF		iShares Currency Hedged MSCI South Korea ETF
Forward currency contracts:
Unrealized depreciation on forward currency contracts/Net assets consist of – net unrealized appreciation (depreciation)	$	14,530,248	$	14,562	$	137,948
	iShares Edge MSCI Min Vol Global Currency Hedged ETF
Forward currency contracts:
Unrealized depreciation on forward currency contracts/Net assets consist of – net unrealized appreciation (depreciation)	$	16,552

The following table shows the realized and unrealized gains (losses) on forward currency contracts held during the year ended August 31, 2016 and the related locations in the statements of operations, presented by risk exposure category:

	Net Realized Gain (Loss)
	iShares Adaptive Currency Hedged MSCI Japan ETF			iShares Currency Hedged MSCI Australia ETF			iShares Currency Hedged MSCI Canada ETF
Forward currency contracts:
Foreign currency transactions	$	(229,249	)	$	(439,576	)	$	(192,283	)

62 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

	iShares Currency Hedged MSCI Japan ETF			iShares Currency Hedged MSCI Mexico ETF			iShares Currency Hedged MSCI South Korea ETF
Forward currency contracts:
Foreign currency transactions	$	(124,052,481	)	$	223,909		$	331,021
	iShares Edge MSCI Min Vol Global Currency Hedged ETF
Forward currency contracts:
Foreign currency transactions	$	(44,989	)
	Net Change in Unrealized Appreciation/Depreciation
	iShares Adaptive Currency Hedged MSCI Japan ETF			iShares Currency Hedged MSCI Australia ETF			iShares Currency Hedged MSCI Canada ETF
Forward currency contracts:
Forward currency contracts	$	25,215		$	(41,292	)	$	(26,530	)
	iShares Currency Hedged MSCI Japan ETF			iShares Currency Hedged MSCI Mexico ETF			iShares Currency Hedged MSCI South Korea ETF
Forward currency contracts:
Forward currency contracts	$	11,454,918		$	(37,241	)	$	(113,956	)
	iShares Edge MSCI Min Vol Global Currency Hedged ETF
Forward currency contracts:
Forward currency contracts	$	(11,456	)

NOTES TO FINANCIAL STATEMENTS 63

Notes to Financial Statements (Continued)

iSHARES^® TRUST

The following table shows the average quarter-end balances of outstanding forward currency contracts for the year ended August 31, 2016:

	iShares Adaptive Currency Hedged MSCI Japan ETF		iShares Currency Hedged MSCI Australia ETF		iShares Currency Hedged MSCI Canada ETF
Average amounts purchased in U.S. dollars	$	1,483,447	$	6,883,301	$	6,911,986
Average amounts sold in U.S. dollars	$	3,317,666	$	13,518,985	$	13,721,230
	iShares Currency Hedged MSCI Japan ETF		iShares Currency Hedged MSCI Mexico ETF		iShares Currency Hedged MSCI South Korea ETF
Average amounts purchased in U.S. dollars	$	893,926,569	$	2,143,618	$	20,153,613
Average amounts sold in U.S. dollars	$	1,530,953,241	$	4,288,850	$	24,928,795
	iShares Edge MSCI Min Vol Global Currency Hedged ETF
Average amounts purchased in U.S. dollars	$	1,236,424
Average amounts sold in U.S. dollars	$	2,164,994

The Funds’ risk of loss from counterparty credit risk on OTC derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by the Funds. In order to better define their contractual rights and to secure rights that will help the Funds to mitigate their counterparty risk, the Funds may enter into an International Swaps and Derivatives Association, Inc. master agreement (“ISDA Master Agreement”) or similar agreement with their derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Funds and a counterparty that governs OTC derivatives and foreign exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy or insolvency.

The collateral requirements under an ISDA Master Agreement are typically calculated by netting the mark-to-market amount for each transaction under such agreement, and comparing that amount to the value of any collateral currently pledged by the parties. Forward currency contracts held by the Funds generally do not require collateral. To the extent amounts due to the Funds from the counterparty are not fully collateralized, contractually or otherwise, the Funds bear the risk of loss from counterparty non-performance. The Funds attempt to mitigate counterparty risk by only entering into agreements with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.

For financial reporting purposes, the Funds do not offset financial assets and financial liabilities that are subject to netting arrangements in the statements of assets and liabilities.

64 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

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The following table presents the exposure of the open forward currency contracts that are subject to potential offset in the statements of assets and liabilities as of August 31, 2016:

	Derivative Assets Subject to Offsetting		Derivatives Available for Offset			Net Amount of Derivative Assets
iShares Adaptive Currency Hedged MSCI Japan ETF
Forward currency contracts	$	26,298	$	(1,083	)	$	25,215
iShares Currency Hedged MSCI Australia ETF
Forward currency contracts	$	50,456	$	(36,882	)	$	13,574
iShares Currency Hedged MSCI Canada ETF
Forward currency contracts	$	75,058	$	(75,058	)	$	—
iShares Currency Hedged MSCI Japan ETF
Forward currency contracts	$	5,225,155	$	(5,225,155	)	$	—
iShares Currency Hedged MSCI Mexico ETF
Forward currency contracts	$	10,191	$	(10,191	)	$	—
iShares Currency Hedged MSCI South Korea ETF
Forward currency contracts	$	167	$	—		$	167
iShares Edge MSCI Min Vol Global Currency Hedged ETF
Forward currency contracts	$	5,096	$	(5,096	)	$	—

	Derivative Liabilities Subject to Offsetting		Derivatives Available for Offset			Net Amount of Derivative Liabilities
iShares Adaptive Currency Hedged MSCI Japan ETF
Forward currency contracts	$	1,083	$	(1,083	)	$	—
iShares Currency Hedged MSCI Australia ETF
Forward currency contracts	$	36,882	$	(36,882	)	$	—
iShares Currency Hedged MSCI Canada ETF
Forward currency contracts	$	76,957	$	(75,058	)	$	1,899
iShares Currency Hedged MSCI Japan ETF
Forward currency contracts	$	14,530,248	$	(5,225,155	)	$	9,305,093
iShares Currency Hedged MSCI Mexico ETF
Forward currency contracts	$	14,562	$	(10,191	)	$	4,371

NOTES TO FINANCIAL STATEMENTS 65

Notes to Financial Statements (Continued)

iSHARES^® TRUST

	Derivative Liabilities Subject to Offsetting		Derivatives Available for Offset			Net Amount of Derivative Liabilities
iShares Currency Hedged MSCI South Korea ETF
Forward currency contracts	$	137,948	$	—		$	137,948
iShares Edge MSCI Min Vol Global Currency Hedged ETF
Forward currency contracts	$	16,552	$	(5,096	)	$	11,456

6. PRINCIPAL RISKS

In the normal course of business, each Fund’s investment activities expose it to various types of risk associated with the financial instruments and markets in which it invests. The significant types of financial risks each Fund is exposed to include market risk and credit risk. Each Fund’s prospectus provides details of these and other types of risk.

BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.

MARKET RISK

Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss each Fund may suffer through holding market positions in the face of market movements. Each Fund is exposed to market risk by virtue of its direct and/or indirect investment in equity and financial derivative instruments. The fair value of securities held by the Funds may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of each Fund’s exposure to market risk is the market value of the investments held as shown in the Fund’s schedule of investments.

A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its schedule of investments.

Investing in the securities of non-U.S. issuers, whether directly or indirectly, involves certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets; and the risk of war. These risks are heightened for investments in issuers from countries with less developed markets.

When a fund concentrates its investments in issuers located in a single country, whether directly or indirectly, it assumes the risk that economic, political and social conditions in that country may have a significant impact on its investment performance.

66 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

CREDIT RISK

Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of each Fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its statement of assets and liabilities.

7. INCOME TAX INFORMATION

Each Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.

U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or NAV per share. The following permanent differences as of August 31, 2016, attributable to the use of equalization and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:

iShares ETF	Paid-in Capital			Undistributed Net Investment Income/Distributions in Excess of Net Investment Income		Undistributed Net Realized Gain/Accumulated Net Realized Loss
Currency Hedged MSCI Australia	$	235,048		$	—	$	(235,048	)
Currency Hedged MSCI Japan		(31,996,572	)		—		31,996,572
Currency Hedged MSCI Mexico		(56,462	)		—		56,462
Currency Hedged MSCI South Korea		(2,469,626	)		—		2,469,626
Edge MSCI Min Vol Global Currency Hedged		103,915			119		(104,034	)

The tax character of distributions paid during the years ended August 31, 2016 and August 31, 2015 was as follows:

iShares ETF	2016		2015
Adaptive Currency Hedged MSCI Japan
Ordinary income	$	27,489		N/A
Currency Hedged MSCI Australia
Ordinary income	$	272,691		N/A
Long-term capital gain		108,896		N/A
	$	381,587		N/A

NOTES TO FINANCIAL STATEMENTS 67

Notes to Financial Statements (Continued)

iSHARES^® TRUST

iShares ETF	2016		2015
Currency Hedged MSCI Canada
Ordinary income	$	173,335		N/A
Long-term capital gain		85,401		N/A
Return of capital		507		N/A
	$	259,243		N/A
Currency Hedged MSCI Japan
Ordinary income	$	16,497,459	$	6,413,768
Long-term capital gain		6,474,910		1,925,564
	$	22,972,369	$	8,339,332
Currency Hedged MSCI Mexico
Ordinary income	$	100,924		N/A
Long-term capital gain		85,004		N/A
	$	185,928		N/A
Currency Hedged MSCI South Korea
Ordinary income	$	949,986		N/A
Long-term capital gain		11,094		N/A
	$	961,080		N/A
Edge MSCI Min Vol Global Currency Hedged
Ordinary income	$	56,955		N/A

As of August 31, 2016, the tax components of accumulated net earnings (losses) were as follows:

iShares ETF	Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Capital Loss Carryforwards			Net Unrealized Gains (Losses) a			Qualified Late-Year Losses b			Total
Adaptive Currency Hedged MSCI Japan	$	34	$	—	$	(209,378	)	$	62,761		$	—		$	(146,583	)
Currency Hedged MSCI Australia		307		—		(10,541	)		612,595			(520,051	)		82,310
Currency Hedged MSCI Canada		—		—		(28,659	)		886,912			(252,501	)		605,752
Currency Hedged MSCI Japan		12,325		—		(4,396,799	)		(24,122,752	)		(108,273,924	)		(136,781,150	)
Currency Hedged MSCI Mexico		59,596		51,316		—			(151,800	)		—			(40,888	)
Currency Hedged MSCI South Korea		133		—		—			847,720			—			847,853
Edge MSCI Min Vol Global Currency Hedged		—		—		(2,905	)		86,165			(50,137	)		33,123

^a The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains (losses) on certain foreign currency contracts.

^b  The Funds have elected to defer certain qualified late-year losses and recognize such losses in the next taxable year.

68 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

As of August 31, 2016, the following Funds had non-expiring capital loss carryforwards available to offset future realized capital gains as follows:

iShares ETF	Non- Expiring
Adaptive Currency Hedged MSCI Japan	$	209,378
Currency Hedged MSCI Australia		10,541
Currency Hedged MSCI Canada		28,659
Currency Hedged MSCI Japan		4,396,799
Edge MSCI Min Vol Global Currency Hedged		2,905

Management has analyzed tax laws and regulations and their application to the Funds as of August 31, 2016, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

8. SUBSEQUENT EVENTS

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

NOTES TO FINANCIAL STATEMENTS 69

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees of

iShares Trust:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of iShares Adaptive Currency Hedged MSCI Japan ETF, iShares Currency Hedged MSCI Australia ETF, iShares Currency Hedged MSCI Canada ETF, iShares Currency Hedged MSCI Japan ETF, iShares Currency Hedged MSCI Mexico ETF, iShares Currency Hedged MSCI South Korea ETF and iShares Edge MSCI Min Vol Global Currency Hedged ETF (the “Funds”) at August 31, 2016, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2016 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 21, 2016

70 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Tax Information (Unaudited)

iSHARES^® TRUST

The following maximum amounts are hereby designated as qualified dividend income for individuals for the fiscal year ended August 31, 2016:

iShares ETF	Qualified Dividend Income
Adaptive Currency Hedged MSCI Japan	$	27,519
Currency Hedged MSCI Australia		152,474
Currency Hedged MSCI Canada		94,839
Currency Hedged MSCI Japan		9,367,073
Currency Hedged MSCI Mexico		45,068
Currency Hedged MSCI South Korea		297,255
Edge MSCI Min Vol Global Currency Hedged		41,593

For corporate shareholders, the percentage of income dividends paid by the iShares Edge MSCI Min Vol Global Currency Hedged ETF during the fiscal year ended August 31, 2016 that qualified for the dividends-received deduction was 56.41%.

For the fiscal year ended August 31, 2016, the following Funds intend to pass through to their shareholders foreign source income earned and foreign taxes paid by the underlying funds:

iShares ETF	Foreign Source Income Earned		Foreign Taxes Paid
Adaptive Currency Hedged MSCI Japan	$	32,229	$	4,710
Currency Hedged MSCI Australia		202,208		5,074
Currency Hedged MSCI Canada		142,524		29,232
Currency Hedged MSCI Japan		11,486,522		1,499,106
Currency Hedged MSCI Mexico		45,525		456
Currency Hedged MSCI South Korea		567,273		91,536

The following Funds hereby designate the following amounts as 20% rate long-term capital gain dividends for the fiscal year ended August 31, 2016.

iShares ETF	Long-Term Capital Gain
Currency Hedged MSCI Australia	$	108,896
Currency Hedged MSCI Canada		85,401
Currency Hedged MSCI Japan		6,474,910
Currency Hedged MSCI Mexico		145,631
Currency Hedged MSCI South Korea		148,482

The following Funds hereby designate the following amounts as short-term capital gain dividends for the fiscal year ended August 31, 2016.

iShares ETF	Short-Term Capital Gain
Currency Hedged MSCI Australia	$	72,405
Currency Hedged MSCI Canada		56,732
Currency Hedged MSCI Japan		6,415,837
Currency Hedged MSCI Mexico		56,491
Currency Hedged MSCI South Korea		37,054

TAX INFORMATION 71

Board Review and Approval of Investment Advisory

Contract

iSHARES^® TRUST

iShares Currency Hedged MSCI Japan ETF

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on April 28, 2016 and May 9, 2016. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 17, 2016, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 21-23, 2016, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA, including the additional information management provided at the request of the Independent Trustees. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential enhancements and adjustments to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Fund, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:

Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of Broadridge’s proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.

The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were within range of the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.

In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the “last quarter” period ended December 31, 2015, to that of such relevant comparison funds for the same periods.

The Board noted that the Fund seeks to track its own underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative

72 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

performance information, including additional detailed information on certain specific iShares funds requested by the Board, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.

Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, product design and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 21-23, 2016 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.

Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Costs of Services Provided to the Fund and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock of the Fund, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.

Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 73

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

Advisory Contract for the Fund did not provide for any breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that to the extent that the Fund invests in the unhedged iShares MSCI Japan ETF (“EWJ”), Fund shareholders would benefit from breakpoints in EWJ’s investment advisory fee rates as the assets of EWJ, on an aggregated basis with the assets of other iShares funds, increase. The Board further noted that should material economies of scale exist in the future that are not otherwise shared, a breakpoint structure for the Fund may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.

Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue periodically, determined to approve the continuance of the Advisory Contract for the coming year.

Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded exchange traded fund, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.

Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.

Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.

74 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited)

iSHARES^® TRUST

Section 19(a) Notices

The amounts and sources of distributions reported are estimates and are provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report these distributions for federal income tax purposes.

	Total Cumulative Distributions for the Fiscal Year								% Breakdown of the Total Cumulative Distributions for the Fiscal Year
iShares ETF	Net Investment Income		Net Realized Capital Gains		Return of Capital		Total Per Share		Net Investment Income			Net Realized Capital Gains			Return of Capital			Total Per Share
Currency Hedged MSCI Australia	$	0.902075	$	1.813010	$	—	$	2.715085		33	%		67	%		—	%		100	%
Currency Hedged MSCI Canada		0.464782		0.947554		—		1.412336		33			67			—			100
Currency Hedged MSCI Japan		0.437943		0.587279		—		1.025222		43			57			—			100
Currency Hedged MSCI Mexico		0.711311		1.414950		—		2.126261		33			67			—			100
Currency Hedged MSCI South Korea		0.553292		0.481480		—		1.034772		53			47			—			100

Premium/Discount Information

The Premium/Discount Information section is intended to present information about the differences between the daily market price on secondary markets for shares of a fund and that fund’s NAV. NAV is the price at which a fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of a fund generally is determined using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of such fund are listed for trading, as of the time that the fund’s NAV is calculated. A fund’s Market Price may be at, above or below its NAV. The NAV of a fund will fluctuate with changes in the fair value of its portfolio holdings. The Market Price of a fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.

Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of a fund on a given day, generally at the time the NAV is calculated. A premium is the amount that a fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that a fund is trading below the reported NAV, expressed as a percentage of the NAV.

The following information shows the frequency of distributions of premiums and discounts for each of the Funds (except for the iShares Adaptive Currency Hedged MSCI Japan ETF, which commenced operations on January 5, 2016 and the iShares Edge MSCI Min Vol Global Currency Hedged ETF, which commenced operations on October 29, 2015). The information shown for each Fund is for five calendar years (or from the inception date of such Fund if less than five years) through the date of the most recent calendar quarter-end. The specific periods covered for each Fund are disclosed in the table for such Fund.

SUPPLEMENTAL INFORMATION 75

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

Each line in the table shows the number of trading days in which the Fund traded within the premium/discount range indicated. The number of trading days in each premium/discount range is also shown as a percentage of the total number of trading days in the period covered by each table. All data presented here represents past performance, which cannot be used to predict future results.

iShares Adaptive Currency Hedged MSCI Japan ETF

Period Covered: January 5, 2016 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 2.0% and Less than 2.5%		2		1.61	%
Greater than 1.5% and Less than 2.0%		1		0.81
Greater than 1.0% and Less than 1.5%		7		5.65
Greater than 0.5% and Less than 1.0%		21		16.93
Between 0.5% and –0.5%		63		50.80
Less than –0.5% and Greater than –1.0%		17		13.71
Less than –1.0% and Greater than –1.5%		6		4.84
Less than –1.5% and Greater than –2.0%		4		3.23
Less than –2.0%		3		2.42
		124		100.00	%

iShares Currency Hedged MSCI Australia ETF

Period Covered: June 29, 2015 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 2.0%		97		38.04	%
Greater than 1.5% and Less than 2.0%		3		1.18
Greater than 1.0% and Less than 1.5%		1		0.39
Greater than 0.5% and Less than 1.0%		1		0.39
Between 0.5% and –0.5%		144		56.47
Less than –0.5% and Greater than –1.0%		7		2.75
Less than –1.0%		2		0.78
		255		100.00	%

iShares Currency Hedged MSCI Canada ETF

Period Covered: June 29, 2015 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 1.0%		15		5.88	%
Greater than 0.5% and Less than 1.0%		3		1.18
Between 0.5% and –0.5%		237		92.94
		255		100.00	%

76 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares Currency Hedged MSCI Japan ETF

Period Covered: January 31, 2014 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 0.5% and Less than 1.0%		1		0.16	%
Between 0.5% and –0.5%		608		99.84
		609		100.00	%

iShares Currency Hedged MSCI Mexico ETF

Period Covered: June 29, 2015 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 1.0%		7		2.75	%
Greater than 0.5% and Less than 1.0%		9		3.53
Between 0.5% and –0.5%		238		93.33
Less than –0.5%		1		0.39
		255		100.00	%

iShares Currency Hedged MSCI South Korea ETF

Period Covered: June 29, 2015 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 1.0%		1		0.39	%
Greater than 0.5% and Less than 1.0%		1		0.39
Between 0.5% and –0.5%		251		98.44
Less than –0.5% and Greater than –1.0%		2		0.78
		255		100.00	%

iShares Edge MSCI Min Vol Global Currency Hedged ETF

Period Covered: October 29, 2015 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 1.5% and Less than 2.0%		1		0.59	%
Greater than 1.0% and Less than 1.5%		3		1.78
Greater than 0.5% and Less than 1.0%		15		8.88
Between 0.5% and –0.5%		119		70.40
Less than –0.5% and Greater than –1.0%		27		15.98
Less than –1.0% and Greater than –1.5%		3		1.78
Less than –1.5%		1		0.59
		169		100.00	%

SUPPLEMENTAL INFORMATION 77

Trustee and Officer Information

iSHARES^® TRUST

The Board of Trustees has responsibility for the overall management and operations of the Funds, including general supervision of the duties performed by BFA and other service providers. Each Trustee serves until he or she resigns, is removed, dies, retires or becomes incapacitated. Each officer shall hold office until his or her successor is elected and qualifies or until his or her death, or his or her resignation or removal. Trustees who are not “interested persons” (as defined in the 1940 Act) of the Trust are referred to as independent trustees (“Independent Trustees”).

The registered investment companies advised by BFA or its affiliates (the “BlackRock-advised Funds”) are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Trustee also serves as a Director of iShares, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 333 funds (as of August 31, 2016) within the Exchange-Traded Fund Complex. With the exception of Robert S. Kapito, Mark Wiedman and Benjamin Archibald, the address of each Trustee and officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito, Mr. Wiedman and Mr. Archibald is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52^nd Street, New York, NY 10055. The Board has designated Cecilia H. Herbert as its Independent Board Chair. Additional information about the Funds’ Trustees and officers may be found in the Funds’ combined Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-iShares (1-800-474-2737).

Interested Trustees

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Robert S. Kapitoa (59)	Trustee (since 2009).	President and Director, BlackRock, Inc. (since 2006); Vice Chairman of BlackRock, Inc. and Head of BlackRock, Inc.’s Portfolio Management Group (since its formation in 1998) and BlackRock, Inc.’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983).	Director of iShares, Inc. (since 2009); Trustee of iShares U.S. ETF Trust (since 2011).
Mark Wiedmanb (45)	Trustee (since 2013).	Managing Director, BlackRock, Inc. (since 2007); Global Head of iShares (since 2011); Head of Corporate Strategy, BlackRock, Inc. (2009-2011).	Director of iShares, Inc. (since 2013); Trustee of iShares U.S. ETF Trust (since 2013); Director of PennyMac Financial Services, Inc. (since 2008).

^a  Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc.

^b  Mark Wiedman is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc. and its affiliates.

78 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Independent Trustees^c

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Cecilia H. Herbert (67)	Trustee (since 2005); Independent Board Chair (since 2016); Nominating and Governance Committee Chair (since 2016).	Director (1998-2013) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010) of the Thacher School; Member (since 1992) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco; Trustee and Member of the Investment Committee, WNET, the New York public media company (since 2011).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Independent Board Chair of iShares, Inc. and iShares U.S. ETF Trust (since 2016); Director of Forward Funds (23 portfolios) (since 2009); Director of Salient MF Trust (4 portfolios) (since 2015).
Jane D. Carlin (60)	Trustee (since 2015); Risk Committee Chair (since 2016).	Managing Director and Global Head of Financial Holding Company Governance & Assurance and the Global Head of Operational Risk Management of Morgan Stanley (2006-2012).	Director of iShares, Inc. (since 2015); Trustee of iShares U.S. ETF Trust (since 2015); Director of PHH Corporation (mortgage solutions) (since 2012).
Charles A. Hurty (72)	Trustee (since 2005); Audit Committee Chair (since 2006).	Retired; Partner, KPMG LLP (1968-2001).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (2 portfolios) (since 2002).
John E. Kerrigan (61)	Trustee (since 2005); Securities Lending Committee Chair (since 2016).	Chief Investment Officer, Santa Clara University (since 2002).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011).
John E. Martinez (55)	Trustee (since 2003); Fixed Income Plus Committee Chair (since 2016).	Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005).	Director of iShares, Inc. (since 2003); Trustee of iShares U.S. ETF Trust (since 2011).

TRUSTEE AND OFFICER INFORMATION 79

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Independent Trustees^c (Continued)

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Madhav V. Rajan (52)	Trustee (since 2011); Equity Plus Committee Chair and 15(c) Committee Chair (since 2016).	Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (2007-2008).	Director of iShares, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011); Director, Cavium, Inc. (since 2013).

^c  Robert H. Silver served as an Independent Trustee until March 31, 2016.

80 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Officers^d

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years
Martin Small (41)	President (since 2016).	Managing Director, BlackRock, Inc. (since January 2010); Head of U.S. iShares (since 2015); Co-Head of the U.S. Financial Markets Advisory Group, BlackRock, Inc. (2008-2014).
Jack Gee (56)	Treasurer and Chief Financial Officer (since 2008).	Managing Director, BlackRock, Inc. (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director of Fund Administration of Intermediary Investor Business, BGI (2004-2009).
Benjamin Archibald (41)	Secretary (since 2015).	Managing Director, BlackRock, Inc. (since 2014); Director, BlackRock, Inc. (2010-2013); Secretary of the BlackRock-advised Mutual Funds (since 2012).
Steve Messinger (54)	Executive Vice President (since 2016).	Managing Director, BlackRock, Inc. (2007-2014 and since 2016); Managing Director, Beacon Consulting Group (2014-2016).
Charles Park (49)	Chief Compliance Officer (since 2006).	Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex (since 2014); Chief Compliance Officer, BFA (since 2006).
Scott Radell (47)	Executive Vice President (since 2012).	Managing Director, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005).
Amy Schioldager (53)	Executive Vice President (since 2007).	Senior Managing Director, BlackRock, Inc. (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006).

^d Manish Mehta served as President until October 15, 2016.

TRUSTEE AND OFFICER INFORMATION 81

Additional Financial Information

August 31, 2016

iShares, Inc.

iShares Edge MSCI Min Vol Global ETF  |  ACWV  |  NYSE Arca

iShares MSCI Australia ETF I  |  EWA  |  NYSE Arca

iShares MSCI Canada ETF I  |  EWC  |  NYSE Arca

iShares MSCI Japan ETF I  |  EWJ  |  NYSE Arca

iShares MSCI Mexico Capped ETF I  |  EWW  |  NYSE Arca

iShares MSCI South Korea Capped ETF I  |  EWY  |  NYSE Arca

Schedule of Investments

iSHARES^® EDGE MSCI MIN VOL GLOBAL ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.48%
BELGIUM — 0.28%
Proximus SADP		146,540	$	4,476,819
UCB SA		55,372		4,539,568
				9,016,387
CANADA — 4.16%
Agnico Eagle Mines Ltd.		326,453		16,538,494
BCE Inc.		258,451		12,069,123
Fairfax Financial Holdings Ltd.		14,397		8,144,310
First Capital Realty Inc.		176,501		2,985,067
Franco-Nevada Corp.		273,254		19,083,316
Goldcorp Inc.		719,339		10,943,185
Intact Financial Corp.		217,476		15,776,354
RioCan REIT		172,460		3,619,945
Rogers Communications Inc. Class B		87,338		3,738,350
Shaw Communications Inc. Class B		642,550		12,845,613
Silver Wheaton Corp.		457,291		11,585,193
TELUS Corp.		284,776		9,337,345
Thomson Reuters Corp.		226,036		9,356,362
				136,022,657
CHILE — 0.38%
Aguas Andinas SA Series A		4,706,520		2,828,086
Banco de Chile		43,753,864		4,856,957
Empresas COPEC SA		533,602		4,687,253
				12,372,296
CHINA — 3.42%
Agricultural Bank of China Ltd. Class H		7,327,000		3,013,263
ANTA Sports Products Ltd.a		1,293,000		3,500,564
Beijing Capital International Airport Co. Ltd. Class H		1,796,000		2,025,977
China Construction Bank Corp. Class H		13,050,000		9,757,953
China Huishan Dairy Holdings Co. Ltd.a		7,758,000		2,980,480
China Medical System Holdings Ltd.a		1,347,000		2,257,518
China Mobile Ltd.		2,245,000		27,726,948
China Unicom Hong Kong Ltd.		1,724,000		1,953,648
CITIC Ltd.a		4,310,000		6,789,983
COSCO Pacific Ltd.a		1,724,000		1,866,968
CSPC Pharmaceutical Group Ltd.		6,034,000		5,857,611

Security	Shares		Value
Guangdong Investment Ltd.		6,034,000	$	9,334,837
Hengan International Group Co. Ltd.a		862,000		7,295,620
Industrial & Commercial Bank of China Ltd. Class H		3,017,000		1,917,531
Jiangsu Expressway Co. Ltd. Class H		1,796,000		2,523,789
Semiconductor Manufacturing International Corp.a,b		22,412,000		2,455,951
Shandong Weigao Group Medical Polymer Co. Ltd. Class H		3,592,000		2,324,664
Shenzhou International Group Holdings Ltd.a		898,000		5,898,488
Sino Biopharmaceutical Ltd.		5,172,000		3,320,535
Sun Art Retail Group Ltd.a		4,094,500		2,634,036
Zhejiang Expressway Co. Ltd. Class H		2,694,000		3,004,235
Zijin Mining Group Co. Ltd. Class H		10,344,000		3,440,554
				111,881,153
COLOMBIA — 0.06%
Corp. Financiera Colombiana SA		140,016		1,846,782
				1,846,782
CZECH REPUBLIC — 0.05%
Komercni Banka AS		44,567		1,505,834
				1,505,834
DENMARK — 0.14%
William Demant Holding A/Sa,b		222,893		4,649,580
				4,649,580
EGYPT — 0.07%
Commercial International Bank Egypt SAE		386,196		2,126,264
				2,126,264
GERMANY — 0.21%
MAN SE		64,650		6,715,084
				6,715,084
HONG KONG — 3.23%
Cheung Kong Infrastructure Holdings Ltd.		898,000		7,542,424
CLP Holdings Ltd.		2,245,000		23,023,786
Hang Seng Bank Ltd.a		1,080,500		18,958,462
HK Electric Investments & HK Electric Investments Ltd.a,c		4,490,000		4,214,033

SCHEDULES OF INVESTMENTS 83

Schedule of Investments (Continued)

iSHARES^® EDGE MSCI MIN VOL GLOBAL ETF

August 31, 2016

Security	Shares		Value
HKT Trust & HKT Ltd.		4,490,000	$	6,193,702
Hong Kong & China Gas Co. Ltd.a		4,234,046		8,078,626
Link REIT		1,347,000		9,794,153
MTR Corp. Ltd.		2,469,500		13,498,798
Power Assets Holdings Ltd.a		898,000		8,590,144
Yue Yuen Industrial Holdings Ltd.		1,347,000		5,730,622
				105,624,750
INDIA — 0.25%
Wipro Ltd. ADRa		785,942		8,110,921
				8,110,921
INDONESIA — 0.88%
Bank Central Asia Tbk PT		11,206,000		12,713,931
Hanjaya Mandala Sampoerna Tbk PT		10,131,500		3,039,832
Kalbe Farma Tbk PT		23,549,400		3,186,670
Telekomunikasi Indonesia Persero Tbk PT		22,017,000		6,987,680
Unilever Indonesia Tbk PT		853,100		2,935,847
				28,863,960
IRELAND — 0.20%
Kerry Group PLC Class A		52,582		4,461,343
Ryanair Holdings PLC ADR		30,432		2,209,667
				6,671,010
ISRAEL — 0.78%
Azrieli Group Ltd.a		77,431		3,377,378
Bank Hapoalim BM		651,110		3,487,183
Bank Leumi le-Israel BMb		570,507		2,132,511
Mizrahi Tefahot Bank Ltd.		258,451		3,112,056
Nice Ltd.		56,719		3,866,881
Teva Pharmaceutical Industries Ltd.		184,612		9,355,412
				25,331,421
JAPAN — 12.25%
ABC-Mart Inc.		44,900		2,821,579
Ajinomoto Co. Inc.		172,400		3,655,177
ANA Holdings Inc.		1,796,000		4,884,370
Astellas Pharma Inc.		673,500		10,291,166
Benesse Holdings Inc.		134,700		3,107,209
Canon Inc.		763,300		21,872,879
Chugai Pharmaceutical Co. Ltd.		89,800		2,817,238
Eisai Co. Ltd.		89,800		5,235,114
FamilyMart Co. Ltd.a		88,000		6,304,249
FUJIFILM Holdings Corp.		89,800		3,374,608

Security	Shares		Value
Japan Airlines Co. Ltd.		224,500	$	6,830,391
Japan Prime Realty Investment Corp.		1,347		5,957,872
Japan Real Estate Investment Corp.		1,347		7,917,784
Japan Retail Fund Investment Corp.		4,041		9,075,500
Kakaku.com Inc.		224,500		3,754,870
Keikyu Corp.		898,000		8,317,146
Kintetsu Group Holdings Co. Ltd.		449,000		1,710,311
Konami Holdings Corp.		89,800		3,173,191
Kyowa Hakko Kirin Co. Ltd.		140,700		1,996,883
Lawson Inc.		134,700		9,454,459
M3 Inc.		86,200		2,579,291
McDonald’s Holdings Co. Japan Ltd.a		134,700		3,719,275
Miraca Holdings Inc.		89,800		4,258,413
Mitsubishi Tanabe Pharma Corp.		404,100		7,501,059
Nagoya Railroad Co. Ltd.		898,000		4,401,663
Nippon Building Fund Inc.		1,010		6,180,983
Nippon Prologis REIT Inc.		2,694		6,467,059
Nippon Telegraph & Telephone Corp.		359,200		15,786,950
Nissin Foods Holdings Co. Ltd.		89,800		4,983,342
Nitori Holdings Co. Ltd.		95,900		9,725,828
Nomura Real Estate Master Fund Inc.		4,041		6,668,910
Nomura Research Institute Ltd.		192,300		6,506,985
NTT Data Corp.		224,500		11,698,700
NTT DOCOMO Inc.		517,200		13,015,629
Oracle Corp. Japan		44,900		2,613,216
Oriental Land Co. Ltd./Japan		134,700		7,890,437
Otsuka Corp.		89,800		3,806,961
Otsuka Holdings Co. Ltd.		493,900		21,406,233
Park24 Co. Ltd.		134,700		3,939,358
Recruit Holdings Co. Ltd.		449,000		17,081,404
Sankyo Co. Ltd.		89,800		3,116,759
Santen Pharmaceutical Co. Ltd.		646,500		8,137,893
Secom Co. Ltd.		224,500		17,042,336
Shimadzu Corp.		50,000		782,617
Shimamura Co. Ltd.		44,900		5,196,046
Shionogi & Co. Ltd.		44,900		2,005,057
Showa Shell Sekiyu KK		179,600		1,531,466
Suntory Beverage & Food Ltd.		224,500		8,909,678
Taisho Pharmaceutical Holdings Co. Ltd.		44,900		4,115,164

84 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® EDGE MSCI MIN VOL GLOBAL ETF

August 31, 2016

Security	Shares		Value
Takeda Pharmaceutical Co. Ltd.		673,500	$	29,691,690
Tobu Railway Co. Ltd.		1,347,000		6,537,381
Toho Co. Ltd./Tokyo		134,700		3,926,335
TonenGeneral Sekiyu KK		449,000		4,145,550
Toyo Suisan Kaisha Ltd.		134,700		5,515,101
United Urban Investment Corp.		4,741		8,447,492
USS Co. Ltd.		134,700		2,153,950
Yamato Holdings Co. Ltd.		269,400		6,358,970
				400,397,177
MALAYSIA — 0.93%
Axiata Group Bhda		3,241,500		4,388,074
Hong Leong Bank Bhd		628,600		2,027,392
IHH Healthcare Bhd		1,349,900		2,176,882
Malayan Banking Bhda		2,340,600		4,513,252
Maxis Bhda		2,969,200		4,597,849
Petronas Dagangan Bhd		269,400		1,554,422
Public Bank Bhda		1,529,560		7,467,708
Telekom Malaysia Bhd		2,116,100		3,569,011
				30,294,590
PHILIPPINES — 0.55%
Aboitiz Equity Ventures Inc.		2,881,720		4,638,459
Bank of the Philippine Islands		1,323,179		2,995,931
BDO Unibank Inc.		3,021,310		7,411,433
Jollibee Foods Corp.		369,050		1,940,492
PLDT Inc.		28,015		1,097,873
				18,084,188
POLAND — 0.05%
Polski Koncern Naftowy ORLEN SA		91,408		1,519,046
				1,519,046
QATAR — 0.31%
Doha Bank QSC		118,921		1,226,327
Qatar National Bank SAQ		201,732		9,030,254
				10,256,581
SINGAPORE — 1.01%
Singapore Airlines Ltd.a		1,035,600		7,978,721
Singapore Press Holdings Ltd.a		1,439,500		3,982,034
Singapore Telecommunications Ltd.		6,034,000		17,798,496
StarHub Ltd.a		1,260,100		3,384,060
				33,143,311
SOUTH KOREA — 0.96%
CJ Korea Express Corp.a,b		13,792		2,486,271
Dongbu Insurance Co. Ltd.		47,410		2,870,112

Security	Shares		Value
Hyundai Department Store Co. Ltd.		16,378	$	1,843,443
Kangwon Land Inc.		143,523		5,078,011
Kia Motors Corp.		76,287		2,870,170
KT&G Corp.		12,661		1,328,553
NAVER Corp.		1,608		1,218,619
S-1 Corp.		32,756		3,025,891
Samsung Fire & Marine Insurance Co. Ltd.		14,223		3,444,135
Samsung Life Insurance Co. Ltd.		24,567		2,269,418
SK Telecom Co. Ltd.		24,998		4,898,711
				31,333,334
SWITZERLAND — 4.11%
Chocoladefabriken Lindt & Sprungli AG Registered		116		7,991,492
Givaudan SA Registered		898		1,858,057
Kuehne + Nagel International AG Registered		78,011		10,901,135
Nestle SA Registered		440,482		35,102,275
Novartis AG Registered		223,791		17,629,050
Roche Holding AG		81,950		20,000,621
Schindler Holding AG Registered		34,480		6,520,161
Sonova Holding AG Registered		79,735		11,044,663
Swiss Prime Site AG Registeredb		62,146		5,471,100
Swisscom AG Registered		37,497		17,932,767
				134,451,321
TAIWAN — 3.71%
Asia Cement Corp.		4,041,000		3,610,480
Asustek Computer Inc.		898,000		7,598,777
Chang Hwa Commercial Bank Ltd.		8,091,630		4,067,427
Chicony Electronics Co. Ltd.		906,504		2,242,655
Chunghwa Telecom Co. Ltd.		6,735,000		24,197,224
Delta Electronics Inc.		449,000		2,334,820
Far EasTone Telecommunications Co. Ltd.		2,694,000		6,274,298
First Financial Holding Co. Ltd.		16,909,328		8,686,344
Formosa Petrochemical Corp.		1,796,000		5,252,637
Hon Hai Precision Industry Co. Ltd.		2,694,000		7,471,423
Hua Nan Financial Holdings Co. Ltd.		10,998,487		5,667,269
Mega Financial Holding Co. Ltd.		8,980,000		6,112,983
Quanta Computer Inc.		898,000		1,661,260
Synnex Technology International Corp.		2,357,250		2,488,706

SCHEDULES OF INVESTMENTS 85

Schedule of Investments (Continued)

iSHARES^® EDGE MSCI MIN VOL GLOBAL ETF

August 31, 2016

Security	Shares		Value
Taiwan Business Bankb		7,214,593	$	1,928,105
Taiwan Cooperative Financial Holding Co. Ltd.		13,964,538		6,139,371
Taiwan Mobile Co. Ltd.		3,143,000		11,044,405
Taiwan Semiconductor Manufacturing Co. Ltd.		2,245,000		12,452,372
WPG Holdings Ltd.		1,796,000		2,136,714
				121,367,270
THAILAND — 0.74%
Advanced Info Service PCL NVDR		1,647,500		7,876,854
Bangkok Dusit Medical Services PCL NVDR		4,681,200		3,178,004
BTS Group Holdings PCL NVDR		11,481,400		3,001,738
Bumrungrad Hospital PCL NVDRa		583,700		2,866,606
CP ALL PCL NVDR		2,116,100		3,805,441
Krung Thai Bank PCL NVDR		6,483,000		3,558,435
				24,287,078
UNITED ARAB EMIRATES — 0.28%
DP World Ltd.		92,306		1,707,661
Emirates Telecommunications Group Co. PJSC		460,632		2,476,786
First Gulf Bank PJSC		565,119		1,800,085
National Bank of Abu Dhabi PJSC		1,222,095		3,034,359
				9,018,891
UNITED KINGDOM — 2.65%
AstraZeneca PLC		39,150		2,517,076
Capita PLC		153,436		2,079,884
Compass Group PLC		480,565		9,075,886
Fresnillo PLC		373,246		7,850,771
GlaxoSmithKline PLC		527,544		11,324,245
Inmarsat PLC		502,546		5,074,600
Kingfisher PLC		1,458,504		7,088,759
Next PLC		49,134		3,555,380
Randgold Resources Ltd.		122,451		11,466,741
Reckitt Benckiser Group PLC		84,045		8,094,819
Royal Mail PLC		802,953		5,405,363
SABMiller PLC		52,151		3,003,928
Sky PLC		351,696		3,910,630
TUI AG		440,051		6,126,436
				86,574,518
UNITED STATES — 57.82%
Abbott Laboratories		426,421		17,918,210
Accenture PLC Class A		30,619		3,521,185

Security	Shares		Value
Adobe Systems Inc.b		25,860	$	2,645,737
Advance Auto Parts Inc.		10,805		1,700,491
Alleghany Corp.b		18,384		9,857,501
Allergan PLCb		7,327		1,718,475
Allstate Corp. (The)		28,345		1,954,671
Altria Group Inc.		317,444		20,979,874
American Capital Agency Corp.		571,168		11,029,254
American Tower Corp.		87,338		9,902,382
American Water Works Co. Inc.		98,268		7,270,849
AmerisourceBergen Corp.		216,129		18,796,739
Annaly Capital Management Inc.		1,777,013		19,031,809
ANSYS Inc.b		146,109		13,893,505
Arch Capital Group Ltd.b		219,379		17,756,536
AT&T Inc.		947,769		38,744,797
Automatic Data Processing Inc.		517,200		46,449,732
AutoZone Inc.b		39,599		29,374,538
AvalonBay Communities Inc.		142,230		24,891,672
Axis Capital Holdings Ltd.		171,538		9,755,366
Baxter International Inc.		202,139		9,445,955
Becton Dickinson and Co.		144,385		25,586,466
Berkshire Hathaway Inc. Class Bb		134,179		20,192,598
Bristol-Myers Squibb Co.		301,269		17,289,828
Broadridge Financial Solutions Inc.		102,147		7,078,787
Campbell Soup Co.		124,559		7,563,222
Cardinal Health Inc.		54,923		4,375,715
CH Robinson Worldwide Inc.		149,474		10,376,485
Charter Communications Inc.b		7,327		1,884,578
Chipotle Mexican Grill Inc.a,b		18,438		7,628,354
Church & Dwight Co. Inc.		213,435		21,219,708
Cintas Corp.		109,397		12,855,241
Cisco Systems Inc.		185,959		5,846,551
Clorox Co. (The)		179,644		23,540,550
Coca-Cola Co. (The)		429,707		18,662,175
Colgate-Palmolive Co.		437,034		32,489,108
Comcast Corp. Class A		38,701		2,525,627
Consolidated Edison Inc.		462,894		34,832,773
Costco Wholesale Corp.		40,526		6,568,859
CR Bard Inc.		93,204		20,583,171
Crown Castle International Corp.		103,440		9,803,009
CVS Health Corp.		50,858		4,750,137
Darden Restaurants Inc.		33,762		2,081,090
DaVita HealthCare Partners Inc.b		161,655		10,447,763
Dollar General Corp.		100,388		7,369,483
Dollar Tree Inc.b		58,616		4,847,543
Dominion Resources Inc./VA		309,458		22,949,405

86 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® EDGE MSCI MIN VOL GLOBAL ETF

August 31, 2016

Security	Shares		Value
Duke Energy Corp.		310,751	$	24,754,425
eBay Inc.b		103,560		3,330,490
Ecolab Inc.		25,651		3,156,356
Eli Lilly & Co.		276,271		21,480,070
EMC Corp.		203,528		5,900,277
Equity Residential		124,990		8,108,101
Essex Property Trust Inc.		13,050		2,963,655
Everest Re Group Ltd.		63,632		12,305,156
Eversource Energy		72,043		3,888,161
Expeditors International of Washington Inc.		230,077		11,653,400
Express Scripts Holding Co.b		124,721		9,067,217
Exxon Mobil Corp.		330,577		28,806,480
F5 Networks Inc.b		15,947		1,957,175
Federal Realty Investment Trust		102,578		16,309,902
Fidelity National Information Services Inc.		117,232		9,300,015
FNF Group		50,858		1,916,838
Foot Locker Inc.		77,149		5,064,060
Gartner Inc.b		138,351		12,589,941
General Mills Inc.		737,872		52,256,095
Genuine Parts Co.		36,635		3,766,811
Henry Schein Inc.b		96,975		15,883,535
Hershey Co. (The)		248,687		24,841,344
Home Depot Inc. (The)		51,720		6,936,686
Hormel Foods Corp.		137,058		5,243,839
Intel Corp.		77,580		2,784,346
International Business Machines Corp.		77,431		12,302,237
JB Hunt Transport Services Inc.		45,914		3,645,112
JM Smucker Co. (The)		82,752		11,733,406
Johnson & Johnson		411,605		49,120,941
Kellogg Co.		337,042		27,708,223
Kimberly-Clark Corp.		128,438		16,447,770
L Brands Inc.		36,635		2,791,953
Laboratory Corp. of America Holdingsb		100,866		13,811,581
Lowe’s Companies Inc.		62,926		4,817,615
Macerich Co. (The)		92,306		7,558,938
Markel Corp.b		7,327		6,822,243
Marsh & McLennan Companies Inc.		290,063		19,616,961
McCormick & Co. Inc./MD		186,192		18,984,136
McDonald’s Corp.		296,097		34,246,579
McKesson Corp.		46,363		8,559,537
Merck & Co. Inc.		388,762		24,410,366

Security	Shares		Value
Microsoft Corp.		39,652	$	2,278,404
Motorola Solutions Inc.		193,950		14,932,210
Newmont Mining Corp.		208,173		7,960,536
NextEra Energy Inc.		36,007		4,354,687
Nordstrom Inc.		53,013		2,675,036
O’Reilly Automotive Inc.b		31,032		8,687,408
Occidental Petroleum Corp.		90,941		6,988,816
OGE Energy Corp.		56,892		1,771,048
Oracle Corp.		66,374		2,735,936
Patterson Companies Inc.		137,322		6,316,812
Paychex Inc.		515,045		31,247,780
People’s United Financial Inc.		501,684		8,152,365
PepsiCo Inc.		284,029		30,320,096
Pfizer Inc.		527,544		18,358,531
PG&E Corp.		357,521		22,144,851
Procter & Gamble Co. (The)		461,601		40,302,383
Public Storage		88,685		19,860,119
QUALCOMM Inc.		79,304		5,001,703
Realty Income Corp.a		99,490		6,539,478
RenaissanceRe Holdings Ltd.		57,768		6,914,830
Republic Services Inc.		397,382		20,075,739
Reynolds American Inc.		59,909		2,969,689
Ross Stores Inc.		58,185		3,621,434
SBA Communications Corp. Class Ab		54,737		6,248,229
SCANA Corp.		37,066		2,618,713
Sherwin-Williams Co. (The)		5,172		1,467,348
Simon Property Group Inc.		19,785		4,263,074
Southern Co. (The)		913,720		46,901,248
Starbucks Corp.		200,846		11,293,571
Stericycle Inc.b		21,119		1,815,812
Stryker Corp.		122,027		14,113,643
Synopsys Inc.b		245,239		14,540,220
Sysco Corp.		65,081		3,375,101
Target Corp.		278,857		19,572,973
TJX Companies Inc. (The)		306,872		23,764,168
Travelers Companies Inc. (The)		112,922		13,404,971
UDR Inc.		256,655		9,285,778
United Parcel Service Inc. Class B		157,746		17,229,018
UnitedHealth Group Inc.		86,440		11,760,162
Varian Medical Systems Inc.b		167,941		16,144,168
Ventas Inc.		111,222		8,082,503
Verizon Communications Inc.		663,309		34,710,960
VF Corp.		31,894		1,979,023
Visa Inc. Class A		133,179		10,774,181

SCHEDULES OF INVESTMENTS 87

Schedule of Investments (Continued)

iSHARES^® EDGE MSCI MIN VOL GLOBAL ETF

August 31, 2016

Security	Shares		Value
VMware Inc. Class Aa,b		72,408	$	5,309,679
Wal-Mart Stores Inc.		274,978		19,644,428
Waste Management Inc.		405,571		25,932,210
Waters Corp.b		21,161		3,328,837
WEC Energy Group Inc.		322,412		19,306,031
Wells Fargo & Co.		134,041		6,809,283
Welltower Inc.		211,639		16,243,293
WR Berkley Corp.		166,366		9,877,149
Xcel Energy Inc.		448,929		18,567,703
				1,889,402,845
TOTAL COMMON STOCKS
(Cost: $2,911,439,571)				3,250,868,249
PREFERRED STOCKS — 0.06%
COLOMBIA — 0.06%
Grupo Aval Acciones y Valores SA		4,452,979		1,884,428
				1,884,428
TOTAL PREFERRED STOCKS
(Cost: $1,884,552)				1,884,428
SHORT-TERM INVESTMENTS — 2.78%
MONEY MARKET FUNDS — 2.78%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%d,e,f		88,500,685		88,500,685

Security	Shares		Value
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%d,e		2,334,558	$	2,334,558
				90,835,243
TOTAL SHORT-TERM INVESTMENTS
(Cost: $90,835,243)				90,835,243
TOTAL INVESTMENTS IN SECURITIES — 102.32%
(Cost: $3,004,159,366)g				3,343,587,920
Other Assets, Less Liabilities — (2.32)%				(75,899,575	)
NET ASSETS — 100.00%			$	3,267,688,345

ADR — American Depositary Receipts

NVDR — Non-Voting Depositary Receipts

^a  All or a portion of this security represents a security on loan. See Note 1.

^b  Non-income earning security.

^c  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^d  Affiliated money market fund.

^e  The rate quoted is the annualized seven-day yield of the fund at period end.

^f  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^g  The cost of investments for federal income tax purposes was $3,036,426,937. Net unrealized appreciation was $307,160,983, of which $386,437,288 represented gross unrealized appreciation on securities and $79,276,305 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	3,250,868,249	$	—	$	—	$	3,250,868,249
Preferred stocks		1,884,428		—		—		1,884,428
Money market funds		90,835,243		—		—		90,835,243
Total	$	3,343,587,920	$	—	$	—	$	3,343,587,920

See notes to financial statements.

88 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI AUSTRALIA ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 98.92%
AIRLINES — 0.14%
Qantas Airways Ltd.		957,903	$	2,332,516
				2,332,516
BANKS — 32.00%
Australia & New Zealand Banking Group Ltd.		5,436,525		109,908,606
Bank of Queensland Ltd.		710,269		5,631,620
Bendigo & Adelaide Bank Ltd.		860,550		7,101,277
Commonwealth Bank of Australia		3,196,233		172,496,937
National Australia Bank Ltd.		4,929,085		101,279,803
Westpac Banking Corp.		6,215,784		137,621,626
				534,039,869
BEVERAGES — 1.17%
Coca-Cola Amatil Ltd.		1,067,486		7,846,194
Treasury Wine Estates Ltd.		1,375,710		11,610,868
				19,457,062
BIOTECHNOLOGY — 4.15%
CSL Ltd.		852,520		69,260,927
				69,260,927
CAPITAL MARKETS — 3.01%
ASX Ltd.		360,802		13,869,877
Macquarie Group Ltd.		570,763		34,616,837
Platinum Asset Management Ltd.		436,183		1,763,636
				50,250,350
CHEMICALS — 0.87%
Incitec Pivot Ltd.		3,145,051		6,736,442
Orica Ltd.		696,069		7,721,411
				14,457,853
COMMERCIAL SERVICES & SUPPLIES — 1.64%
Brambles Ltd.		2,955,462		27,364,916
				27,364,916
CONSTRUCTION & ENGINEERING — 0.25%
CIMIC Group Ltd.		184,405		4,103,639
				4,103,639
CONSTRUCTION MATERIALS — 1.22%
Boral Ltd.		1,386,101		6,885,800
James Hardie Industries PLC		830,446		13,537,204
				20,423,004
CONTAINERS & PACKAGING — 1.55%
Amcor Ltd./Australia		2,158,225		25,952,233
				25,952,233

Security	Shares		Value
DIVERSIFIED FINANCIAL SERVICES — 1.75%
AMP Ltd.		5,511,911	$	21,789,435
Challenger Ltd./Australia		1,064,764		7,354,055
				29,143,490
DIVERSIFIED TELECOMMUNICATION SERVICES — 2.56%
Telstra Corp. Ltd.		7,973,840		31,521,821
TPG Telecom Ltd.		632,687		5,796,297
Vocus Communications Ltd.		939,548		5,430,044
				42,748,162
ELECTRIC UTILITIES — 0.26%
AusNet Services		3,297,967		4,263,171
				4,263,171
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) — 9.27%
Dexus Property Group		1,803,980		13,178,197
Goodman Group		3,314,072		18,904,350
GPT Group (The)		3,350,867		13,422,779
Mirvac Group		6,899,048		12,029,157
Scentre Group		9,921,668		37,059,462
Stockland		4,457,900		16,249,129
Vicinity Centres		6,270,918		15,599,732
Westfield Corp.		3,678,915		28,257,171
				154,699,977
FOOD & STAPLES RETAILING — 6.56%
Wesfarmers Ltd.		2,098,442		66,931,472
Woolworths Ltd.		2,382,900		42,461,506
				109,392,978
GAS UTILITIES — 0.86%
APA Group		2,076,708		14,421,334
				14,421,334
HEALTH CARE EQUIPMENT & SUPPLIES — 0.68%
Cochlear Ltd.		106,616		11,289,934
				11,289,934
HEALTH CARE PROVIDERS & SERVICES — 2.19%
Healthscope Ltd.		3,234,229		7,437,898
Ramsay Health Care Ltd.		263,629		16,438,883
Sonic Healthcare Ltd.		734,934		12,703,816
				36,580,597
HOTELS, RESTAURANTS & LEISURE — 2.46%
Aristocrat Leisure Ltd.		1,009,328		11,454,267
Crown Resorts Ltd.		678,889		6,699,178
Domino’s Pizza Enterprises Ltd.		114,369		6,505,862
Flight Centre Travel Group Ltd.a		103,436		2,864,622
Tabcorp Holdings Ltd.		1,550,000		5,789,567

SCHEDULES OF INVESTMENTS 89

Schedule of Investments (Continued)

iSHARES^® MSCI AUSTRALIA ETF

August 31, 2016

Security	Shares		Value
Tatts Group Ltd.		2,729,815	$	7,816,570
				41,130,066
INSURANCE — 4.27%
Insurance Australia Group Ltd.		4,531,117		18,933,813
Medibank Pvt Ltd.		5,132,931		10,377,094
QBE Insurance Group Ltd.		2,555,498		19,052,205
Suncorp Group Ltd.		2,397,647		22,902,813
				71,265,925
IT SERVICES — 0.39%
Computershare Ltd.		869,070		6,453,120
				6,453,120
MEDIA — 0.26%
REA Group Ltd.		98,233		4,327,003
				4,327,003
METALS & MINING — 10.40%
Alumina Ltd.		4,563,838		4,561,838
BHP Billiton Ltd.		5,984,626		91,888,976
Fortescue Metals Group Ltd.		2,901,753		10,685,985
Newcrest Mining Ltd.b		1,428,425		23,821,701
Rio Tinto Ltd.		790,486		28,278,682
South32 Ltd.b		9,921,753		14,316,857
				173,554,039
MULTI-UTILITIES — 1.59%
AGL Energy Ltd.		1,257,405		17,529,807
DUET Group		4,534,940		8,963,659
				26,493,466
MULTILINE RETAIL — 0.25%
Harvey Norman Holdings Ltd.		1,037,200		4,193,753
				4,193,753
OIL, GAS & CONSUMABLE FUELS — 4.71%
Caltex Australia Ltd.		486,082		12,402,446
Oil Search Ltd.		2,553,557		12,896,530
Origin Energy Ltd.		3,267,527		12,917,039
Santos Ltd.		2,976,722		9,932,973
Woodside Petroleum Ltd.		1,412,905		30,401,313
				78,550,301
PROFESSIONAL SERVICES — 0.44%
Seek Ltd.		609,936		7,366,449
				7,366,449
REAL ESTATE MANAGEMENT & DEVELOPMENT — 0.64%
LendLease Group		1,031,056		10,708,985
				10,708,985

Security	Shares		Value
ROAD & RAIL — 0.76%
Aurizon Holdings Ltd.		3,824,313	$	12,617,577
				12,617,577
TRANSPORTATION INFRASTRUCTURE — 2.62%
Sydney Airport		2,036,065		11,139,893
Transurban Group		3,793,185		32,669,815
				43,809,708
TOTAL COMMON STOCKS
(Cost: $1,945,199,873)				1,650,652,404
SHORT-TERM INVESTMENTS — 0.17%
MONEY MARKET FUNDS — 0.17%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%c,d,e		2,407,298		2,407,298
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		532,214		532,214
				2,939,512
TOTAL SHORT-TERM INVESTMENTS
(Cost: $2,939,512)				2,939,512
TOTAL INVESTMENTS IN SECURITIES — 99.09%
(Cost: $1,948,139,385)f				1,653,591,916
Other Assets, Less Liabilities — 0.91%				15,110,415
NET ASSETS — 100.00%			$	1,668,702,331

^a  All or a portion of this security represents a security on loan. See Note 1.

^b  Non-income earning security.

^c  Affiliated money market fund.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

^e  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^f  The cost of investments for federal income tax purposes was $2,019,125,044. Net unrealized depreciation was $365,533,128, of which $87,206,313 represented gross unrealized appreciation on securities and $452,739,441 represented gross unrealized depreciation on securities.

90 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI AUSTRALIA ETF

August 31, 2016

Schedule 1 — Futures Contracts (Note 5)

Futures contracts outstanding as of August 31, 2016 were as follows:

Issue	Number of long (short) contracts		Expiration date		Exchange		Initial notional value		Current notional value		Unrealized appreciation (depreciation)
ASX SPI 200 Index		172		Sep. 2016		Sydney Futures	$	17,327,052	$	17,483,314	$	156,262

Schedule 2 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	1,650,652,404	$	—	$	—	$	1,650,652,404
Money market funds		2,939,512		—		—		2,939,512
Total	$	1,653,591,916	$	—	$	—	$	1,653,591,916
Derivative financial instrumentsa:
Assets:
Futures contracts	$	156,262	$	—	$	—	$	156,262
Total	$	156,262	$	—	$	—	$	156,262

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 91

Schedule of Investments

iSHARES^® MSCI CANADA ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.73%
AEROSPACE & DEFENSE — 0.60%
Bombardier Inc. Class Ba		5,093,928	$	8,347,201
CAE Inc.		710,990		10,133,389
				18,480,590
AUTO COMPONENTS — 1.53%
Linamar Corp.		128,369		5,295,019
Magna International Inc. Class A		1,044,399		42,037,050
				47,332,069
BANKS — 27.61%
Bank of Montreal		1,693,807		112,287,895
Bank of Nova Scotia (The)		3,164,953		168,397,065
Canadian Imperial Bank of Commerce/Canada		1,039,033		82,438,425
National Bank of Canada		888,103		31,197,491
Royal Bank of Canada		3,917,249		243,415,503
Toronto-Dominion Bank (The)		4,880,454		217,677,808
				855,414,187
CAPITAL MARKETS — 4.31%
Brookfield Asset Management Inc. Class A		2,273,163		76,664,352
CI Financial Corp.		650,580		12,728,470
IGM Financial Inc.		254,919		7,208,182
Thomson Reuters Corp.		890,697		36,868,834
				133,469,838
CHEMICALS — 2.59%
Agrium Inc.		345,520		33,276,100
Methanex Corp.		236,844		6,875,796
Potash Corp. of Saskatchewan Inc.		2,209,562		40,013,104
				80,165,000
CONSTRUCTION & ENGINEERING — 0.54%
SNC-Lavalin Group Inc.		394,432		16,804,808
				16,804,808
CONTAINERS & PACKAGING — 0.45%
CCL Industries Inc. Class B		73,195		13,960,633
				13,960,633
DIVERSIFIED FINANCIAL SERVICES — 0.77%
Element Financial Corp.		1,018,117		10,592,048
Onex Corp.		219,131		13,376,169
				23,968,217
DIVERSIFIED TELECOMMUNICATION SERVICES — 1.13%
BCE Inc.		388,753		18,153,955
TELUS Corp.		511,624		16,775,324
				34,929,279

Security	Shares		Value
ELECTRIC UTILITIES — 1.06%
Fortis Inc./Canada		745,709	$	23,444,607
Hydro One Ltd.b		470,522		9,402,909
				32,847,516
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) — 0.64%
H&R REIT		366,035		6,505,801
RioCan REIT		419,510		8,805,537
Smart REIT		171,292		4,626,797
				19,938,135
FOOD & STAPLES RETAILING — 4.27%
Alimentation Couche-Tard Inc. Class B		1,105,205		56,968,114
Empire Co. Ltd. Class A		434,489		7,142,965
George Weston Ltd.		134,502		11,573,702
Jean Coutu Group PJC Inc. (The) Class A		217,075		3,211,330
Loblaw Companies Ltd.		590,027		32,085,993
Metro Inc.		623,911		21,179,830
				132,161,934
FOOD PRODUCTS — 0.72%
Saputo Inc.		672,452		22,345,876
				22,345,876
HOTELS, RESTAURANTS & LEISURE — 0.90%
Restaurant Brands International Inc.		582,794		27,792,707
				27,792,707
INSURANCE — 7.92%
Fairfax Financial Holdings Ltd.		60,498		34,223,410
Great-West Lifeco Inc.		784,554		18,728,121
Industrial Alliance Insurance & Financial Services Inc.		269,707		9,607,946
Intact Financial Corp.		345,795		25,084,995
Manulife Financial Corp.		5,194,231		70,824,125
Power Corp. of Canada		982,921		20,766,412
Power Financial Corp.		657,666		15,142,784
Sun Life Financial Inc.		1,612,387		50,852,158
				245,229,951
IT SERVICES — 0.89%
CGI Group Inc. Class Aa		568,916		27,677,229
				27,677,229
MEDIA — 0.70%
Shaw Communications Inc. Class B		1,083,979		21,670,492
				21,670,492

92 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI CANADA ETF

August 31, 2016

Security	Shares		Value
METALS & MINING — 8.14%
Agnico Eagle Mines Ltd.		581,712	$	29,470,216
Barrick Gold Corp.		3,072,041		52,189,927
Eldorado Gold Corp.		1,766,062		5,653,337
First Quantum Minerals Ltd.		1,815,855		13,756,792
Franco-Nevada Corp.		469,270		32,772,539
Goldcorp Inc.		2,193,985		33,376,731
Kinross Gold Corp.a		3,275,695		13,082,308
Silver Wheaton Corp.		1,160,524		29,401,180
Teck Resources Ltd. Class B		1,492,752		24,176,655
Turquoise Hill Resources Ltd.a		2,652,743		8,168,196
Yamana Gold Inc.		2,496,856		10,105,030
				252,152,911
MULTI-UTILITIES — 0.54%
Atco Ltd./Canada Class I		199,889		7,329,492
Canadian Utilities Ltd. Class A		330,579		9,473,549
				16,803,041
MULTILINE RETAIL — 1.33%
Canadian Tire Corp. Ltd. Class A		183,179		18,754,190
Dollarama Inc.		302,689		22,354,761
				41,108,951
OIL, GAS & CONSUMABLE FUELS — 21.97%
AltaGas Ltd.		428,325		11,079,875
ARC Resources Ltd.		924,837		16,127,640
Cameco Corp.		1,043,552		9,623,855
Canadian Natural Resources Ltd.		2,888,730		89,674,915
Cenovus Energy Inc.		2,195,444		31,708,901
Crescent Point Energy Corp.		1,335,957		20,160,778
Enbridge Inc.		2,444,444		96,358,099
Encana Corp.		2,239,886		21,373,707
Husky Energy Inc.		927,853		11,399,711
Imperial Oil Ltd.		782,145		23,850,937
Inter Pipeline Ltd.		887,590		19,293,523
Keyera Corp.		481,576		14,861,486
Pembina Pipeline Corp.		1,016,470		30,570,410
Peyto Exploration & Development Corp.		432,120		12,413,096
PrairieSky Royalty Ltd.		545,627		10,687,561
Seven Generations Energy Ltd. Class Aa		568,518		13,085,815
Suncor Energy Inc.		4,382,694		118,782,515
Tourmaline Oil Corp.a		547,363		15,385,654
TransCanada Corp.		2,101,110		95,234,947
Veresen Inc.		809,964		7,975,866
Vermilion Energy Inc.		298,004		10,763,621
				680,412,912

Security	Shares		Value
PAPER & FOREST PRODUCTS — 0.19%
West Fraser Timber Co. Ltd.		177,947	$	5,987,851
				5,987,851
PHARMACEUTICALS — 0.80%
Valeant Pharmaceuticals International Inc.a,c		853,349		24,773,494
				24,773,494
REAL ESTATE MANAGEMENT & DEVELOPMENT — 0.18%
First Capital Realty Inc.		332,907		5,630,278
				5,630,278
ROAD & RAIL — 6.14%
Canadian National Railway Co.		2,050,161		131,677,198
Canadian Pacific Railway Ltd.		382,694		58,583,202
				190,260,400
SOFTWARE — 1.36%
Constellation Software Inc./Canada		50,191		21,888,104
Open Text Corp.		319,057		20,057,026
				41,945,130
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 0.32%
BlackBerry Ltd.a,c		1,310,053		9,934,856
				9,934,856
TEXTILES, APPAREL & LUXURY GOODS — 0.56%
Gildan Activewear Inc.		590,864		17,387,492
				17,387,492
TRADING COMPANIES & DISTRIBUTORS — 0.25%
Finning International Inc.		442,859		7,850,997
				7,850,997
WIRELESS TELECOMMUNICATION SERVICES — 1.32%
Rogers Communications Inc. Class B		953,225		40,801,125
				40,801,125
TOTAL COMMON STOCKS
(Cost: $3,630,921,052)				3,089,237,899
SHORT-TERM INVESTMENTS — 0.27%
MONEY MARKET FUNDS — 0.27%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%d,e,f		7,205,616		7,205,616
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%d,e		1,204,076		1,204,076
				8,409,692

SCHEDULES OF INVESTMENTS 93

Schedule of Investments (Continued)

iSHARES^® MSCI CANADA ETF

August 31, 2016

	Value
TOTAL SHORT-TERM INVESTMENTS
(Cost: $8,409,692)	$	8,409,692
TOTAL INVESTMENTS IN SECURITIES — 100.00%
(Cost: $3,639,330,744)g		3,097,647,591
Other Assets, Less Liabilities — 0.00%		146,000
NET ASSETS — 100.00%	$	3,097,793,591

^a  Non-income earning security.

^b  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^c  All or a portion of this security represents a security on loan. See Note 1.

^d  Affiliated money market fund.

^e  The rate quoted is the annualized seven-day yield of the fund at period end.

^f  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^g  The cost of investments for federal income tax purposes was $3,685,447,722. Net unrealized depreciation was $587,800,131, of which $175,980,261 represented gross unrealized appreciation on securities and $763,780,392 represented gross unrealized depreciation on securities.

Schedule 1 — Futures Contracts (Note 5)

Futures contracts outstanding as of August 31, 2016 were as follows:

Issue	Number of long (short) contracts		Expiration date		Exchange		Initial notional value		Current notional value		Unrealized appreciation (depreciation)
S&P/TSX 60 Index		59		Sep. 2016		Montreal	$	7,279,820	$	7,645,425	$	365,605

Schedule 2 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	3,089,237,899	$	—	$	—	$	3,089,237,899
Money market funds		8,409,692		—		—		8,409,692
Total	$	3,097,647,591	$	—	$	—	$	3,097,647,591
Derivative financial instrumentsa:
Assets:
Futures contracts	$	365,605	$	—	$	—	$	365,605
Total	$	365,605	$	—	$	—	$	365,605

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

94 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI JAPAN ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.65%
AIR FREIGHT & LOGISTICS — 0.29%
Yamato Holdings Co. Ltd.		1,714,500	$	40,469,394
				40,469,394
AIRLINES — 0.23%
ANA Holdings Inc.		5,715,000		15,542,413
Japan Airlines Co. Ltd.		571,500		17,387,833
				32,930,246
AUTO COMPONENTS — 3.20%
Aisin Seiki Co. Ltd.		952,500		44,984,411
Bridgestone Corp.		3,098,800		106,503,930
Denso Corp.		2,286,000		94,414,773
Koito Manufacturing Co. Ltd.		571,500		27,211,655
NGK Spark Plug Co. Ltd.		952,500		17,818,799
NHK Spring Co. Ltd.		762,000		7,175,405
NOK Corp.		571,500		11,602,939
Stanley Electric Co. Ltd.		762,000		19,470,837
Sumitomo Electric Industries Ltd.		3,619,500		53,661,751
Sumitomo Rubber Industries Ltd.		762,000		11,300,894
Toyoda Gosei Co. Ltd.		381,000		8,774,032
Toyota Industries Corp.		762,000		36,466,380
Yokohama Rubber Co. Ltd. (The)		571,500		9,287,876
				448,673,682
AUTOMOBILES — 10.09%
Fuji Heavy Industries Ltd.		2,857,500		113,211,534
Honda Motor Co. Ltd.		7,810,500		239,370,474
Isuzu Motors Ltd.		2,857,500		32,888,807
Mazda Motor Corp.		2,667,000		43,975,139
Mitsubishi Motors Corp.		3,238,500		14,809,402
Nissan Motor Co. Ltd.		11,811,000		115,900,469
Suzuki Motor Corp.		1,714,500		56,837,826
Toyota Motor Corp.		12,763,500		769,746,343
Yamaha Motor Co. Ltd.		1,333,500		27,331,367
				1,414,071,361
BANKS — 7.92%
Aozora Bank Ltd.		5,715,000		20,222,265
Bank of Kyoto Ltd. (The)		1,905,000		13,776,188
Chiba Bank Ltd. (The)		3,810,000		22,579,688
Chugoku Bank Ltd. (The)		762,000		9,385,488
Concordia Financial Group Ltd.a		5,524,500		28,499,765

Security	Shares		Value
Fukuoka Financial Group Inc.		3,810,000	$	16,133,611
Hachijuni Bank Ltd. (The)		1,905,000		10,074,298
Hiroshima Bank Ltd. (The)		1,976,000		8,233,731
Iyo Bank Ltd. (The)		1,143,000		7,370,629
Japan Post Bank Co. Ltd.		1,905,000		22,395,514
Joyo Bank Ltd. (The)		3,810,000		15,139,073
Kyushu Financial Group Inc.		1,714,600		10,161,452
Mitsubishi UFJ Financial Group Inc.		61,150,580		333,494,873
Mizuho Financial Group Inc.		113,538,080		197,252,313
Resona Holdings Inc.		10,477,500		47,933,030
Seven Bank Ltd.		2,667,000		9,437,057
Shinsei Bank Ltd.		8,007,000		12,772,804
Shizuoka Bank Ltd. (The)		2,661,000		21,918,809
Sumitomo Mitsui Financial Group Inc.		6,477,000		226,743,530
Sumitomo Mitsui Trust Holdings Inc.		15,422,320		55,212,308
Suruga Bank Ltd.		762,000		18,130,053
Yamaguchi Financial Group Inc.		322,000		3,399,468
				1,110,265,947
BEVERAGES — 1.07%
Asahi Group Holdings Ltd.		1,905,000		62,361,193
Kirin Holdings Co. Ltd.		4,000,500		65,227,856
Suntory Beverage & Food Ltd.		571,500		22,680,983
				150,270,032
BUILDING PRODUCTS — 1.41%
Asahi Glass Co. Ltd.		5,715,000		36,355,876
Daikin Industries Ltd.		1,143,000		105,962,459
LIXIL Group Corp.		1,333,500		26,905,926
TOTO Ltd.		762,000		28,952,096
				198,176,357
CAPITAL MARKETS — 1.26%
Daiwa Securities Group Inc.		7,620,000		44,525,818
Japan Exchange Group Inc.		2,476,500		38,691,197
Nomura Holdings Inc.		17,335,500		81,670,510
SBI Holdings Inc./Japan		952,510		11,308,380
				176,195,905
CHEMICALS — 4.15%
Air Water Inc.		309,000		5,711,877
Asahi Kasei Corp.		5,745,000		48,454,952
Daicel Corp.		1,333,500		17,004,752
Hitachi Chemical Co. Ltd.		571,500		12,321,216

SCHEDULES OF INVESTMENTS 95

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN ETF

August 31, 2016

Security	Shares		Value
JSR Corp.		952,500	$	13,932,736
Kaneka Corp.		1,905,000		15,525,837
Kansai Paint Co. Ltd.		1,143,000		25,183,903
Kuraray Co. Ltd.		1,714,500		24,498,777
Mitsubishi Chemical Holdings Corp.		6,286,500		39,675,421
Mitsubishi Gas Chemical Co. Inc.		1,905,000		12,892,155
Mitsui Chemicals Inc.		3,838,000		18,367,187
Nippon Paint Holdings Co. Ltd.		762,000		27,294,533
Nitto Denko Corp.		764,400		52,204,008
Shin-Etsu Chemical Co. Ltd.		1,905,000		139,861,459
Sumitomo Chemical Co. Ltd.		7,620,000		34,919,321
Taiyo Nippon Sanso Corp.		571,500		5,801,470
Teijin Ltd.		3,810,000		14,218,205
Toray Industries Inc.		7,620,000		73,404,244
				581,272,053
COMMERCIAL SERVICES & SUPPLIES — 1.03%
Dai Nippon Printing Co. Ltd.		1,905,000		19,375,067
Park24 Co. Ltd.		571,500		16,713,757
Secom Co. Ltd.		952,500		72,306,569
Sohgo Security Services Co. Ltd.		381,000		19,043,554
Toppan Printing Co. Ltd.		1,905,000		16,980,809
				144,419,756
CONSTRUCTION & ENGINEERING — 0.94%
JGC Corp.		952,500		15,111,447
Kajima Corp.		3,869,000		25,996,568
Obayashi Corp.		3,048,000		28,141,731
Shimizu Corp.		2,180,000		19,453,183
Taisei Corp.		5,715,000		42,986,127
				131,689,056
CONSTRUCTION MATERIALS — 0.12%
Taiheiyo Cement Corp.		5,715,000		17,349,156
				17,349,156
CONSUMER FINANCE — 0.23%
Acom Co. Ltd.a		1,905,000		9,116,595
AEON Financial Service Co. Ltd.		571,570		10,526,812
Credit Saison Co. Ltd.		762,000		13,120,530
				32,763,937
CONTAINERS & PACKAGING — 0.10%
Toyo Seikan Group Holdings Ltd.		762,000		14,129,801
				14,129,801

Security	Shares		Value
DIVERSIFIED CONSUMER SERVICES — 0.06%
Benesse Holdings Inc.		381,000	$	8,788,766
				8,788,766
DIVERSIFIED FINANCIAL SERVICES — 0.72%
Mitsubishi UFJ Lease & Finance Co. Ltd.		2,286,000		10,718,906
ORIX Corp.		6,286,500		90,406,233
				101,125,139
DIVERSIFIED TELECOMMUNICATION SERVICES — 1.04%
Nippon Telegraph & Telephone Corp.		3,305,300		145,268,950
				145,268,950
ELECTRIC UTILITIES — 1.26%
Chubu Electric Power Co. Inc.		3,048,000		41,225,427
Chugoku Electric Power Co. Inc. (The)		1,333,500		16,012,056
Hokuriku Electric Power Co.		762,000		9,105,544
Kansai Electric Power Co. Inc. (The)a		3,429,000		29,395,217
Kyushu Electric Power Co. Inc.		2,095,500		19,509,513
Shikoku Electric Power Co. Inc.		762,000		7,263,808
Tohoku Electric Power Co. Inc.		2,095,500		26,276,053
Tokyo Electric Power Co. Holdings Inc.a		6,858,000		27,648,146
				176,435,764
ELECTRICAL EQUIPMENT — 1.77%
Fuji Electric Co. Ltd.		2,069,000		9,441,369
Mabuchi Motor Co. Ltd.		201,700		10,705,593
Mitsubishi Electric Corp.		9,525,000		124,363,247
Nidec Corp.		1,143,000		103,011,998
				247,522,207
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 4.81%
Alps Electric Co. Ltd.		952,500		21,483,855
Hamamatsu Photonics KK		762,000		23,979,407
Hirose Electric Co. Ltd.		190,560		24,465,962
Hitachi High-Technologies Corp.		381,000		14,126,118
Hitachi Ltd.		22,860,000		109,620,148
Keyence Corp.		216,926		152,111,401
Kyocera Corp.		1,524,000		72,431,807
Murata Manufacturing Co. Ltd.		952,500		128,046,720
Nippon Electric Glass Co. Ltd.		1,905,500		9,561,121

96 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN ETF

August 31, 2016

Security	Shares		Value
Omron Corp.		952,500	$	32,322,473
Shimadzu Corp.		908,000		14,212,327
TDK Corp.		571,500		40,886,547
Yaskawa Electric Corp.		1,143,000		16,840,837
Yokogawa Electric Corp.		1,143,000		14,641,804
				674,730,527
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) — 1.52%
Daiwa House Residential Investment Corp.b		5,715		16,122,560
Japan Prime Realty Investment Corp.		3,810		16,851,888
Japan Real Estate Investment Corp.		5,715		33,593,271
Japan Retail Fund Investment Corp.		11,440		25,692,580
Nippon Building Fund Inc.		7,620		46,632,764
Nippon Prologis REIT Inc.		7,620		18,292,125
Nomura Real Estate Master Fund Inc.		19,050		31,438,440
United Urban Investment Corp.		13,335		23,760,241
				212,383,869
FOOD & STAPLES RETAILING — 2.01%
Aeon Co. Ltd.		3,048,000		41,917,919
FamilyMart Co. Ltd.b		381,000		27,294,533
Lawson Inc.		381,000		26,742,012
Seven & I Holdings Co. Ltd.		3,619,580		152,607,806
Sundrug Co. Ltd.		190,500		13,813,023
Tsuruha Holdings Inc.		190,500		18,675,206
				281,050,499
FOOD PRODUCTS — 1.71%
Ajinomoto Co. Inc.		2,667,000		56,544,990
Calbee Inc.		381,000		13,831,440
Kikkoman Corp.		733,000		23,066,805
MEIJI Holdings Co. Ltd.		571,556		51,444,737
NH Foods Ltd.		684,000		14,978,102
Nisshin Seifun Group Inc.		952,575		13,473,362
Nissin Foods Holdings Co. Ltd.		381,000		21,143,133
Toyo Suisan Kaisha Ltd.		381,000		15,599,507
Yakult Honsha Co. Ltd.		381,000		16,815,053
Yamazaki Baking Co. Ltd.		571,500		12,989,767
				239,886,896

Security	Shares		Value
GAS UTILITIES — 0.67%
Osaka Gas Co. Ltd.		9,525,000	$	37,506,961
Toho Gas Co. Ltd.		1,905,000		16,188,862
Tokyo Gas Co. Ltd.		9,525,000		40,840,504
				94,536,327
HEALTH CARE EQUIPMENT & SUPPLIES — 1.73%
CYBERDYNE Inc.a,b		571,500		9,000,566
Hoya Corp.		1,905,000		73,835,211
Olympus Corp.		1,333,500		43,639,943
Sysmex Corp.		762,000		49,137,526
Terumo Corp.		1,714,500		66,716,899
				242,330,145
HEALTH CARE PROVIDERS & SERVICES — 0.40%
Alfresa Holdings Corp.		762,000		14,225,571
Medipal Holdings Corp.		762,000		12,052,323
Miraca Holdings Inc.		381,000		18,067,434
Suzuken Co. Ltd./Aichi Japan		381,040		11,047,894
				55,393,222
HEALTH CARE TECHNOLOGY — 0.20%
M3 Inc.		952,500		28,500,870
				28,500,870
HOTELS, RESTAURANTS & LEISURE — 0.49%
McDonald’s Holdings Co. Japan Ltd.b		381,000		10,519,998
Oriental Land Co. Ltd./Japan		991,700		58,091,655
				68,611,653
HOUSEHOLD DURABLES — 3.23%
Casio Computer Co. Ltd.b		1,143,000		16,144,661
Iida Group Holdings Co. Ltd.		762,080		14,278,639
Nikon Corp.		1,714,500		25,178,378
Panasonic Corp.		10,477,515		107,474,679
Rinnai Corp.		190,500		17,864,843
Sekisui Chemical Co. Ltd.		1,912,000		26,729,366
Sekisui House Ltd.		2,857,500		46,024,991
Sharp Corp./Japana,b		7,058,000		9,757,761
Sony Corp.		5,905,500		189,836,975
				453,290,293
HOUSEHOLD PRODUCTS — 0.33%
Unicharm Corp.		1,905,000		46,282,835
				46,282,835
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS — 0.13%
Electric Power Development Co. Ltd.		762,000		18,608,904
				18,608,904

SCHEDULES OF INVESTMENTS 97

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN ETF

August 31, 2016

Security	Shares		Value
INDUSTRIAL CONGLOMERATES — 0.61%
Keihan Holdings Co. Ltd.		1,905,000	$	12,358,051
Seibu Holdings Inc.		762,000		12,516,440
Toshiba Corp.a		19,050,000		60,261,614
				85,136,105
INSURANCE — 2.82%
Dai-ichi Life Insurance Co. Ltd. (The)		5,144,600		71,597,155
Japan Post Holdings Co. Ltd.		2,095,500		27,451,080
MS&AD Insurance Group Holdings Inc.		2,476,540		70,691,588
Sompo Japan Nipponkoa Holdings Inc.		1,714,550		54,966,383
Sony Financial Holdings Inc.		762,000		10,468,429
T&D Holdings Inc.		2,857,500		32,612,547
Tokio Marine Holdings Inc.		3,238,500		127,241,881
				395,029,063
INTERNET & DIRECT MARKETING RETAIL — 0.47%
Rakuten Inc.		4,381,500		55,237,357
Start Today Co. Ltd.		231,600		10,758,815
				65,996,172
INTERNET SOFTWARE & SERVICES — 0.33%
Kakaku.com Inc.		762,000		12,744,816
Mixi Inc.		190,500		6,768,381
Yahoo Japan Corp.		6,667,500		27,202,446
				46,715,643
IT SERVICES — 0.90%
Fujitsu Ltd.		9,525,000		48,363,997
Nomura Research Institute Ltd.		610,640		20,662,638
NTT Data Corp.		571,500		29,780,877
Obic Co. Ltd.		381,000		19,522,405
Otsuka Corp.		190,500		8,076,014
				126,405,931
LEISURE PRODUCTS — 0.90%
Bandai Namco Holdings Inc.		952,598		26,026,412
Sankyo Co. Ltd.		190,500		6,611,834
Sega Sammy Holdings Inc.		952,500		13,011,867
Shimano Inc.		381,000		55,399,430
Yamaha Corp.		762,000		24,716,102
				125,765,645
MACHINERY — 5.35%
Amada Holdings Co. Ltd.		1,524,000		15,942,070
FANUC Corp.		952,500		162,349,060

Security	Shares		Value
Hino Motors Ltd.		1,143,000	$	12,663,779
Hitachi Construction Machinery Co. Ltd.		571,500		10,707,855
Hoshizaki Corp.		201,800		16,134,635
IHI Corp.		7,620,000		23,279,548
JTEKT Corp.		1,143,000		17,769,072
Kawasaki Heavy Industries Ltd.		7,620,000		22,321,845
Komatsu Ltd.		4,381,500		95,796,996
Kubota Corp.		4,953,000		72,641,765
Kurita Water Industries Ltd.		571,500		13,033,968
Makita Corp.		571,500		41,052,303
Minebea Co. Ltd.		1,714,500		17,404,409
Mitsubishi Heavy Industries Ltd.		15,240,000		66,361,444
Nabtesco Corp.		571,500		14,746,783
NGK Insulators Ltd.		1,333,500		28,929,995
NSK Ltd.		2,095,500		21,596,201
SMC Corp./Japan		265,600		74,825,581
Sumitomo Heavy Industries Ltd.		2,168,000		10,647,692
THK Co. Ltd.		572,100		11,211,357
				749,416,358
MARINE — 0.19%
Mitsui OSK Lines Ltd.		5,715,000		13,205,250
Nippon Yusen KK		7,620,000		13,849,857
				27,055,107
MEDIA — 0.57%
Dentsu Inc.		955,900		52,584,435
Hakuhodo DY Holdings Inc.		952,500		10,350,558
Toho Co. Ltd./Tokyo		571,500		16,658,505
				79,593,498
METALS & MINING — 1.43%
Hitachi Metals Ltd.		1,143,000		13,835,124
JFE Holdings Inc.		2,527,250		39,251,966
Kobe Steel Ltd.		15,240,000		14,144,535
Maruichi Steel Tube Ltd.		190,500		6,574,999
Mitsubishi Materials Corp.		5,715,000		16,133,611
Nippon Steel & Sumitomo Metal Corp.		3,820,370		81,109,223
Sumitomo Metal Mining Co. Ltd.		2,297,000		29,135,824
				200,185,282

98 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN ETF

August 31, 2016

Security	Shares		Value
MULTILINE RETAIL — 0.65%
Don Quijote Holdings Co. Ltd.		571,500	$	18,675,207
Isetan Mitsukoshi Holdings Ltd.		1,524,060		13,879,872
J Front Retailing Co. Ltd.		1,143,000		12,906,888
Marui Group Co. Ltd.		952,500		11,612,148
Ryohin Keikaku Co. Ltd.		113,600		20,493,798
Takashimaya Co. Ltd.		1,905,000		13,941,944
				91,509,857
OIL, GAS & CONSUMABLE FUELS — 0.77%
Idemitsu Kosan Co. Ltd.		381,000		6,950,713
INPEX Corp.		4,572,000		39,710,782
JX Holdings Inc.		9,906,095		37,053,881
Showa Shell Sekiyu KK		762,000		6,497,646
TonenGeneral Sekiyu KK		1,905,000		17,588,582
				107,801,604
PAPER & FOREST PRODUCTS — 0.11%
Oji Holdings Corp.		3,810,000		15,323,246
				15,323,246
PERSONAL PRODUCTS — 1.39%
Kao Corp.		2,286,000		118,836,197
Kose Corp.		190,500		17,091,314
Pola Orbis Holdings Inc.		190,500		15,212,742
Shiseido Co. Ltd.		1,714,500		43,113,206
				194,253,459
PHARMACEUTICALS — 5.51%
Astellas Pharma Inc.		10,096,550		154,276,572
Chugai Pharmaceutical Co. Ltd.		1,143,000		35,858,607
Daiichi Sankyo Co. Ltd.		2,857,569		65,599,629
Eisai Co. Ltd.		1,159,400		67,590,100
Hisamitsu Pharmaceutical Co. Inc.		208,400		9,328,486
Kyowa Hakko Kirin Co. Ltd.		1,333,500		18,925,683
Mitsubishi Tanabe Pharma Corp.		952,500		17,680,669
Ono Pharmaceutical Co. Ltd.		1,913,900		49,903,691
Otsuka Holdings Co. Ltd.		1,905,000		82,565,041
Santen Pharmaceutical Co. Ltd.		1,714,500		21,581,467
Shionogi & Co. Ltd.		1,524,000		68,055,842
Sumitomo Dainippon Pharma Co. Ltd.		762,000		12,759,549

Security	Shares		Value
Taisho Pharmaceutical Holdings Co. Ltd.		190,500	$	17,459,661
Takeda Pharmaceutical Co. Ltd.		3,429,000		151,169,720
				772,754,717
PROFESSIONAL SERVICES — 0.36%
Recruit Holdings Co. Ltd.		1,333,500		50,730,628
				50,730,628
REAL ESTATE MANAGEMENT & DEVELOPMENT — 3.15%
Aeon Mall Co. Ltd.		571,500		8,044,704
Daito Trust Construction Co. Ltd.		381,000		56,117,707
Daiwa House Industry Co. Ltd.		2,667,000		68,882,781
Hulic Co. Ltd.		1,333,500		12,634,311
Mitsubishi Estate Co. Ltd.		6,021,000		113,917,891
Mitsui Fudosan Co. Ltd.		4,297,000		92,557,800
Nomura Real Estate Holdings Inc.		571,500		9,315,503
NTT Urban Development Corp.		571,500		5,243,423
Sumitomo Realty & Development Co. Ltd.		1,905,000		50,288,611
Tokyo Tatemono Co. Ltd.		952,500		11,188,548
Tokyu Fudosan Holdings Corp.		2,286,000		12,730,082
				440,921,361
ROAD & RAIL — 3.97%
Central Japan Railway Co.		711,800		116,918,664
East Japan Railway Co.		1,598,700		136,940,900
Hankyu Hanshin Holdings Inc.		1,143,000		36,908,397
Keikyu Corp.		1,909,000		17,680,882
Keio Corp.		3,810,000		31,898,874
Keisei Electric Railway Co. Ltd.		958,000		11,521,748
Kintetsu Group Holdings Co. Ltd.		7,887,000		30,042,809
Nagoya Railroad Co. Ltd.		3,810,000		18,675,207
Nippon Express Co. Ltd.		3,810,000		18,049,016
Odakyu Electric Railway Co. Ltd.		2,262,000		23,224,672
Tobu Railway Co. Ltd.		5,715,000		27,736,549
Tokyu Corp.		5,715,000		42,654,614
West Japan Railway Co.		762,000		43,627,051
				555,879,383

SCHEDULES OF INVESTMENTS 99

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN ETF

August 31, 2016

Security	Shares		Value
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 0.64%
Rohm Co. Ltd.		381,000	$	19,043,554
Tokyo Electron Ltd.		762,052		70,049,697
				89,093,251
SOFTWARE — 1.30%
GungHo Online Entertainment Inc.b		1,905,000		4,530,671
Konami Holdings Corp.		473,400		16,728,158
Nexon Co. Ltd.		762,000		10,438,962
Nintendo Co. Ltd.		541,300		118,663,678
Oracle Corp. Japan		190,500		11,087,253
Trend Micro Inc./Japan		571,500		20,277,517
				181,726,239
SPECIALTY RETAIL — 1.33%
ABC-Mart Inc.		190,500		11,971,286
Fast Retailing Co. Ltd.		256,300		90,046,329
Hikari Tsushin Inc.		43,400		3,902,161
Nitori Holdings Co. Ltd.		381,000		38,639,629
Shimamura Co. Ltd.		108,100		12,509,856
USS Co. Ltd.		952,500		15,231,160
Yamada Denki Co. Ltd.		3,048,000		14,262,406
				186,562,827
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 2.51%
Brother Industries Ltd.		1,143,000		19,183,526
Canon Inc.		5,143,550		147,391,910
FUJIFILM Holdings Corp.		2,095,500		78,747,122
Konica Minolta Inc.		2,095,500		18,881,481
NEC Corp.		13,321,000		33,870,769
Ricoh Co. Ltd.		3,048,000		27,493,440
Seiko Epson Corp.		1,333,500		25,552,250
				351,120,498
TEXTILES, APPAREL & LUXURY GOODS — 0.11%
ASICS Corp.		762,000		15,448,485
				15,448,485
TOBACCO — 1.47%
Japan Tobacco Inc.		5,334,000		206,687,021
				206,687,021
TRADING COMPANIES & DISTRIBUTORS — 3.33%
ITOCHU Corp.		7,239,000		85,452,884
Marubeni Corp.		7,810,500		38,941,121
Mitsubishi Corp.		7,239,000		150,854,783
Mitsui & Co. Ltd.		8,191,500		109,051,051
Sumitomo Corp.		5,524,500		59,926,418

Security	Shares		Value
Toyota Tsusho Corp.		952,500	$	21,787,741
				466,013,998
TRANSPORTATION INFRASTRUCTURE — 0.20%
Japan Airport Terminal Co. Ltd.b		190,500		7,514,284
Kamigumi Co. Ltd.		1,905,000		16,501,958
Mitsubishi Logistics Corp.		260,000		4,009,281
				28,025,523
WIRELESS TELECOMMUNICATION SERVICES — 5.16%
KDDI Corp.		8,763,000		257,209,532
NTT DOCOMO Inc.		6,667,500		167,791,391
SoftBank Group Corp.		4,572,000		298,626,500
				723,627,423
TOTAL COMMON STOCKS
(Cost: $15,240,138,759)				13,966,201,873
SHORT-TERM INVESTMENTS — 0.37%
MONEY MARKET FUNDS — 0.37%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%c,d,e		50,929,509		50,929,509
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		1,192,177		1,192,177
				52,121,686
TOTAL SHORT-TERM INVESTMENTS
(Cost: $52,121,686)				52,121,686
TOTAL INVESTMENTS IN SECURITIES — 100.02%
(Cost: $15,292,260,445)f				14,018,323,559
Other Assets, Less Liabilities — (0.02)%				(3,143,895	)
NET ASSETS — 100.00%			$	14,015,179,664

^a  Non-income earning security.

^b  All or a portion of this security represents a security on loan. See Note 1.

^c  Affiliated money market fund.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

^e  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^f  The cost of investments for federal income tax purposes was $15,497,563,488. Net unrealized depreciation was $1,479,239,929, of which $802,415,561 represented gross unrealized appreciation on securities and $2,281,655,490 represented gross unrealized depreciation on securities.

100 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN ETF

August 31, 2016

Schedule 1 — Futures Contracts (Note 5)

Futures contracts outstanding as of August 31, 2016 were as follows:

Issue	Number of long (short) contracts		Expiration date		Exchange		Initial notional value		Current notional value		Unrealized appreciation (depreciation)
TOPIX Index		358		Sep. 2016		Osaka Securities	$	45,381,361	$	46,050,080	$	668,719

Schedule 2 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	13,966,201,873	$	—	$	—	$	13,966,201,873
Money market funds		52,121,686		—		—		52,121,686
Total	$	14,018,323,559	$	—	$	—	$	14,018,323,559
Derivative financial instrumentsa:
Assets:
Futures contracts	$	668,719	$	—	$	—	$	668,719
Total	$	668,719	$	—	$	—	$	668,719

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 101

Schedule of Investments

iSHARES^® MSCI MEXICO CAPPED ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.61%
AIRLINES — 1.46%
Controladora Vuela Cia. de Aviacion SAB de CV Class Aa,b		5,630,400	$	9,978,434
Grupo Aeromexico SAB de CVa,b		4,627,243		9,267,361
				19,245,795
AUTO COMPONENTS — 0.27%
Rassini SAB de CV		751,499		3,531,523
				3,531,523
BANKS — 12.62%
Banregio Grupo Financiero SAB de CVb		2,027,500		11,517,866
Grupo Financiero Banorte SAB de CV		16,637,178		89,240,081
Grupo Financiero Inbursa SAB de CV Series O		18,518,492		32,191,138
Grupo Financiero Interacciones SA de CV Series O		1,058,500		5,433,657
Grupo Financiero Santander Mexico SAB de CV Series B		14,660,050		27,876,918
				166,259,660
BEVERAGES — 11.56%
Arca Continental SAB de CV		3,426,929		21,282,148
Coca-Cola Femsa SAB de CV Series L		2,221,047		16,485,333
Fomento Economico Mexicano SAB de CV		12,549,310		114,547,475
				152,314,956
BUILDING PRODUCTS — 0.23%
Elementia SAB de CVa,b,c		2,445,609		2,975,882
Urbi Desarrollos Urbanos SAB de CVa,b		29,674,089		16
				2,975,898
CAPITAL MARKETS — 0.54%
Bolsa Mexicana de Valores SAB de CV		3,855,987		7,056,494
				7,056,494
CHEMICALS — 1.51%
Mexichem SAB de CV		8,637,774		19,821,960
				19,821,960
CONSTRUCTION MATERIALS — 5.66%
Cemex SAB de CV CPOa		90,373,832		74,574,127
				74,574,127

Security	Shares		Value
CONSUMER FINANCE — 2.02%
Credito Real SAB de CV SOFOM ERb		2,469,774	$	4,827,308
Gentera SAB de CV		8,723,606		16,856,584
Unifin Financiera SAB de CV SOFOM ENRb		1,685,848		4,918,499
				26,602,391
DIVERSIFIED TELECOMMUNICATION SERVICES — 0.94%
Axtel SAB de CV CPOa,b		12,615,777		3,383,151
Telesites SAB de CVa		15,318,246		8,978,857
				12,362,008
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) — 5.50%
Concentradora Fibra Hotelera Mexicana SA de CVb		5,560,190		4,137,268
Fibra Shop Portafolios Inmobiliarios SAPI de CV		4,656,294		4,167,992
Fibra Uno Administracion SA de CV		20,254,400		39,030,141
Macquarie Mexico Real Estate Management SA de CV		7,438,400		9,634,687
PLA Administradora Industrial S. de RL de CVb		5,631,100		9,415,632
Prologis Property Mexico SA de CV		3,677,800		6,135,920
				72,521,640
FOOD & STAPLES RETAILING — 6.89%
Grupo Comercial Chedraui SA de CV		3,259,400		7,842,425
La Comer SAB de CVa,b		5,358,055		4,861,472
Wal-Mart de Mexico SAB de CV		34,343,333		78,119,423
				90,823,320
FOOD PRODUCTS — 6.41%
Gruma SAB de CV Series B		1,754,030		23,263,121
Grupo Bimbo SAB de CV		12,966,104		36,756,908
Grupo Herdez SAB de CVb		2,444,244		5,239,863
Grupo Lala SAB de CV		5,466,300		11,411,331
Industrias Bachoco SAB de CV Series B		1,758,000		7,760,123
				84,431,346
HOTELS, RESTAURANTS & LEISURE — 1.53%
Alsea SAB de CV		4,573,366		16,399,282
Hoteles City Express SAB de CVa		3,860,090		3,713,051
				20,112,333

102 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI MEXICO CAPPED ETF

August 31, 2016

Security	Shares		Value
HOUSEHOLD DURABLES — 0.47%
Consorcio ARA SAB de CV		10,103,119	$	3,678,486
Corpovael SAB de CV		3,192,675		2,560,062
				6,238,548
HOUSEHOLD PRODUCTS — 2.21%
Kimberly-Clark de Mexico SAB de CV Series A		12,184,054		29,122,270
				29,122,270
INDUSTRIAL CONGLOMERATES — 4.18%
Alfa SAB de CV		22,240,151		36,055,712
Grupo Carso SAB de CV Series A1		4,688,033		19,036,613
				55,092,325
INSURANCE — 0.30%
Qualitas Controladora SAB de CV		2,659,900		3,955,577
				3,955,577
MACHINERY — 0.29%
Grupo Rotoplas SAB de CVb		2,048,100		3,796,888
				3,796,888
MEDIA — 6.93%
Grupo Televisa SAB		16,208,297		88,159,392
TV Azteca SAB de CV CPOb		16,992,239		3,106,895
				91,266,287
METALS & MINING — 7.49%
Grupo Mexico SAB de CV Series B		23,833,986		59,443,651
Industrias CH SAB de CV Series Ba,b		1,523,183		6,897,158
Industrias Penoles SAB de CV		1,161,203		26,809,135
Minera Frisco SAB de CV Series A1a,b		7,177,203		5,534,458
				98,684,402
MULTILINE RETAIL — 1.50%
El Puerto de Liverpool SAB de CV Series C1		1,570,290		17,042,146
Grupo Famsa SAB de CV Series Aa,b		5,158,887		2,690,345
				19,732,491
PHARMACEUTICALS — 0.67%
Genomma Lab Internacional SAB de CV Series Ba,b		7,946,693		8,886,398
				8,886,398

Security	Shares		Value
REAL ESTATE MANAGEMENT & DEVELOPMENT — 0.84%
Corp Inmobiliaria Vesta SAB de CVb		5,038,449	$	7,193,683
Grupo GICSA SA de CVa		5,590,960		3,852,003
				11,045,686
TRANSPORTATION INFRASTRUCTURE — 7.68%
Grupo Aeroportuario del Centro Norte SAB de CVb		1,912,492		11,709,848
Grupo Aeroportuario del Pacifico SAB de CV Series B		2,860,749		28,313,740
Grupo Aeroportuario del Sureste SAB de CV Series B		1,674,355		25,445,315
OHL Mexico SAB de CVa		7,158,100		10,083,461
Promotora y Operadora de Infraestructura SAB de CV		2,145,325		25,681,935
				101,234,299
WIRELESS TELECOMMUNICATION SERVICES — 9.91%
America Movil SAB de CV		218,880,918		130,618,040
				130,618,040
TOTAL COMMON STOCKS
(Cost: $1,750,709,240)				1,312,306,662
SHORT-TERM INVESTMENTS — 1.61%
MONEY MARKET FUNDS — 1.61%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%d,e,f		19,391,449		19,391,449
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%d,e		1,875,747		1,875,747
				21,267,196
TOTAL SHORT-TERM INVESTMENTS
(Cost: $21,267,196)				21,267,196

SCHEDULES OF INVESTMENTS 103

Schedule of Investments (Continued)

iSHARES^® MSCI MEXICO CAPPED ETF

August 31, 2016

	Value
TOTAL INVESTMENTS IN SECURITIES — 101.22%
(Cost: $1,771,976,436)g	$	1,333,573,858
Other Assets, Less Liabilities — (1.22)%		(16,055,848	)
NET ASSETS — 100.00%	$	1,317,518,010

CPO  —  Certificates of Participation (Ordinary)

^a  Non-income earning security.

^b  All or a portion of this security represents a security on loan. See Note 1.

^c  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^d  Affiliated money market fund.

^e  The rate quoted is the annualized seven-day yield of the fund at period end.

^f  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^g  The cost of investments for federal income tax purposes was $1,830,645,702. Net unrealized depreciation was $497,071,844, of which $9,038,476 represented gross unrealized appreciation on securities and $506,110,320 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	1,312,306,646	$	—	$	16	$	1,312,306,662
Money market funds		21,267,196		—		—		21,267,196
Total	$	1,333,573,842	$	—	$	16	$	1,333,573,858

See notes to financial statements.

104 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI SOUTH KOREA CAPPED ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 97.30%
AEROSPACE & DEFENSE — 0.80%
Korea Aerospace Industries Ltd. Class A		363,051	$	27,578,852
				27,578,852
AIR FREIGHT & LOGISTICS — 0.57%
Hyundai Glovis Co. Ltd.		119,252		19,625,778
				19,625,778
AIRLINES — 0.23%
Korean Air Lines Co. Ltd.a		281,546		7,966,615
				7,966,615
AUTO COMPONENTS — 4.05%
Hankook Tire Co. Ltd.		465,651		23,303,431
Hanon Systems		1,258,676		13,207,631
Hyundai Mobis Co. Ltd.		401,703		93,850,791
Hyundai Wia Corp.		116,668		9,521,783
				139,883,636
AUTOMOBILES — 4.76%
Hyundai Motor Co.		882,073		105,215,882
Kia Motors Corp.		1,569,462		59,048,369
				164,264,251
BANKS — 8.05%
BNK Financial Group Inc.		1,736,236		13,780,887
DGB Financial Group Inc.		1,198,207		9,822,073
Hana Financial Group Inc.		1,779,780		46,769,107
Industrial Bank of Korea		1,629,832		17,175,360
KB Financial Group Inc.		2,285,417		79,733,382
Shinhan Financial Group Co. Ltd.		2,506,061		92,151,122
Woori Bank		1,949,837		18,536,567
				277,968,498
BEVERAGES — 0.19%
Lotte Chilsung Beverage Co. Ltd.		4,837		6,511,513
				6,511,513
BIOTECHNOLOGY — 1.27%
Celltrion Inc.a,b		456,170		43,694,131
				43,694,131
BUILDING PRODUCTS — 0.41%
KCC Corp.		38,279		14,161,513
				14,161,513

Security	Shares		Value
CAPITAL MARKETS — 1.48%
Korea Investment Holdings Co. Ltd.		273,327	$	9,829,967
Mirae Asset Daewoo Co. Ltd.b		1,284,053		9,155,355
Mirae Asset Securities Co. Ltd.		512,240		10,819,060
NH Investment & Securities Co. Ltd.		1,010,619		9,154,486
Samsung Securities Co. Ltd.		387,599		12,184,166
				51,143,034
CHEMICALS — 4.05%
Hanwha Chemical Corp.		693,887		15,931,396
Hyosung Corp.b		137,969		16,333,550
Kumho Petrochemical Co. Ltd.b		134,277		8,297,476
LG Chem Ltd.		275,571		66,853,772
Lotte Chemical Corp.		96,270		23,139,336
OCI Co. Ltd.a,b		118,625		9,298,498
				139,854,028
COMMERCIAL SERVICES & SUPPLIES — 0.61%
KEPCO Plant Service & Engineering Co. Ltd.b		160,770		9,285,729
S-1 Corp.		128,981		11,914,837
				21,200,566
CONSTRUCTION & ENGINEERING — 1.74%
Daelim Industrial Co. Ltd.		184,866		13,446,307
Daewoo Engineering & Construction Co. Ltd.a,b		1,045,422		5,700,597
GS Engineering & Construction Corp.a,b		354,822		9,148,998
Hyundai Development Co.- Engineering & Construction		370,996		15,521,940
Hyundai Engineering & Construction Co. Ltd.		469,835		16,244,071
				60,061,913
CONSUMER FINANCE — 0.28%
Samsung Card Co. Ltd.		246,367		9,777,345
				9,777,345
DIVERSIFIED TELECOMMUNICATION SERVICES — 0.60%
KT Corp.		206,382		5,849,032
LG Uplus Corp.		1,408,439		14,715,977
				20,565,009
ELECTRIC UTILITIES — 2.29%
Korea Electric Power Corp.		1,518,164		78,971,760
				78,971,760

SCHEDULES OF INVESTMENTS 105

Schedule of Investments (Continued)

iSHARES^® MSCI SOUTH KOREA CAPPED ETF

August 31, 2016

Security	Shares		Value
ELECTRICAL EQUIPMENT — 0.25%
Doosan Heavy Industries & Construction Co. Ltd.		347,407	$	8,615,070
				8,615,070
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 2.82%
LG Display Co. Ltd.		1,409,203		37,978,969
LG Innotek Co. Ltd.		105,341		7,794,289
Samsung Electro-Mechanics Co. Ltd.		358,195		17,090,559
Samsung SDI Co. Ltd.		334,418		34,641,506
				97,505,323
FOOD & STAPLES RETAILING — 1.32%
BGF retail Co. Ltd.b		66,836		12,138,377
Dongsuh Cos. Inc.		266,840		7,382,972
E-MART Inc.		125,616		17,743,964
GS Retail Co. Ltd.		197,243		8,331,969
				45,597,282
FOOD PRODUCTS — 1.34%
CJ CheilJedang Corp.		50,904		17,782,160
Lotte Confectionery Co. Ltd.		44,474		6,760,846
Orion Corp./Republic of Korea		23,533		15,681,631
Ottogi Corp.		9,749		6,111,705
				46,336,342
GAS UTILITIES — 0.23%
Korea Gas Corp.		206,658		7,867,831
				7,867,831
HOTELS, RESTAURANTS & LEISURE — 0.91%
Kangwon Land Inc.		730,634		25,850,683
Paradise Co. Ltd.b		381,731		5,734,524
				31,585,207
HOUSEHOLD DURABLES — 1.88%
Coway Co. Ltd.		335,694		25,109,309
Hanssem Co. Ltd.		74,134		9,773,720
LG Electronics Inc.b		653,211		30,170,733
				65,053,762
INDUSTRIAL CONGLOMERATES — 5.04%
CJ Corp.		94,630		16,210,161
Hanwha Corp.		315,133		10,358,408
LG Corp.		578,667		34,201,036
Samsung C&T Corp.		451,777		61,384,947
SK Holdings Co. Ltd.		273,672		52,034,497
				174,189,049

Security	Shares		Value
INSURANCE — 3.83%
Dongbu Insurance Co. Ltd.		317,394	$	19,214,435
Hanwha Life Insurance Co. Ltd.		1,611,475		8,194,675
Hyundai Marine & Fire Insurance Co. Ltd.		425,305		12,892,654
Samsung Fire & Marine Insurance Co. Ltd.		202,281		48,982,843
Samsung Life Insurance Co. Ltd.		463,973		42,860,286
				132,144,893
INTERNET SOFTWARE & SERVICES — 4.02%
Kakao Corp.b		200,173		14,595,574
NAVER Corp.		163,813		124,145,278
				138,740,852
IT SERVICES — 0.89%
Samsung SDS Co. Ltd.		213,601		30,651,265
				30,651,265
MACHINERY — 1.18%
Hyundai Heavy Industries Co. Ltd.a,b		256,417		31,620,931
Samsung Heavy Industries Co. Ltd.a,b		1,068,709		9,278,119
				40,899,050
MEDIA — 0.47%
Cheil Worldwide Inc.		518,911		7,399,718
CJ E&M Corp.		140,048		8,729,449
				16,129,167
METALS & MINING — 3.80%
Hyundai Steel Co.		502,024		23,097,606
Korea Zinc Co. Ltd.		53,195		22,828,527
POSCO		412,024		85,361,026
				131,287,159
MULTILINE RETAIL — 1.01%
Hyundai Department Store Co. Ltd.		104,407		11,751,640
Lotte Shopping Co. Ltd.		73,544		13,389,625
Shinsegae Inc.		53,776		9,814,723
				34,955,988
OIL, GAS & CONSUMABLE FUELS — 2.43%
GS Holdings Corp.		335,103		14,846,716
S-Oil Corp.		288,682		18,304,769
SK Innovation Co. Ltd.		388,127		50,647,963
				83,799,448

106 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI SOUTH KOREA CAPPED ETF

August 31, 2016

Security	Shares		Value
PERSONAL PRODUCTS — 3.97%
AmorePacific Corp.		191,129	$	66,166,631
AmorePacific Group		175,029		22,761,619
LG Household & Health Care Ltd.		56,314		48,031,044
				136,959,294
PHARMACEUTICALS — 1.19%
Hanmi Pharm Co. Ltd.b		33,437		17,813,075
Hanmi Science Co. Ltd.		81,949		9,848,579
Yuhan Corp.		51,840		13,413,309
				41,074,963
ROAD & RAIL — 0.26%
CJ Korea Express Corp.a		49,208		8,870,680
				8,870,680
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 3.24%
SK Hynix Inc.		3,421,971		111,866,227
				111,866,227
SOFTWARE — 0.76%
NCsoft Corp.		108,834		26,354,421
				26,354,421
SPECIALTY RETAIL — 0.39%
Hotel Shilla Co. Ltd.b		223,118		13,567,175
				13,567,175
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 21.50%
Samsung Electronics Co. Ltd.		510,968		742,392,969
				742,392,969
TOBACCO — 2.10%
KT&G Corp.		691,555		72,566,758
				72,566,758
TRADING COMPANIES & DISTRIBUTORS — 0.38%
Posco Daewoo Corp.		346,753		7,121,654
SK Networks Co. Ltd.		1,039,901		5,903,653
				13,025,307
WIRELESS TELECOMMUNICATION SERVICES — 0.71%
SK Telecom Co. Ltd.		125,749		24,642,293
				24,642,293
TOTAL COMMON STOCKS
(Cost: $1,717,677,521)				3,359,906,217

Security	Shares		Value
PREFERRED STOCKS — 2.57%
AUTOMOBILES — 0.99%
Hyundai Motor Co.		151,054	$	12,978,451
Hyundai Motor Co. Series 2		236,838		21,347,282
				34,325,733
CHEMICALS — 0.26%
LG Chem Ltd.		54,980		8,875,695
				8,875,695
PERSONAL PRODUCTS — 0.59%
AmorePacific Corp.		61,227		12,080,663
LG Household & Health Care Ltd.		15,909		8,118,584
				20,199,247
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 0.73%
Samsung Electronics Co. Ltd.		21,367		25,372,115
				25,372,115
TOTAL PREFERRED STOCKS
(Cost: $51,604,678)				88,772,790
RIGHTS — 0.00%
INDUSTRIAL CONGLOMERATES — 0.00%
Hanwha Corp.a		73,648		—
				—
TOTAL RIGHTS
(Cost: $0)				—
SHORT-TERM INVESTMENTS — 3.88%
MONEY MARKET FUNDS — 3.88%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%c,d,e		129,185,165		129,185,165
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		4,717,300		4,717,300
				133,902,465
TOTAL SHORT-TERM INVESTMENTS
(Cost: $133,902,465)				133,902,465

SCHEDULES OF INVESTMENTS 107

Schedule of Investments (Continued)

iSHARES^® MSCI SOUTH KOREA CAPPED ETF

August 31, 2016

	Value
TOTAL INVESTMENTS IN SECURITIES — 103.75%
(Cost: $1,903,184,664)f	$	3,582,581,472
Other Assets, Less Liabilities — (3.75)%		(129,611,284	)
NET ASSETS — 100.00%	$	3,452,970,188

^a  Non-income earning security.

^b  All or a portion of this security represents a security on loan. See Note 1.

^c  Affiliated money market fund.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

^e  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^f  The cost of investments for federal income tax purposes was $2,498,105,253. Net unrealized appreciation was $1,084,476,219, of which $1,749,647,521 represented gross unrealized appreciation on securities and $665,171,302 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2			Level 3		Total
Investments:
Assets:
Common stocks	$	3,359,906,217	$	—		$	—	$	3,359,906,217
Preferred stocks		88,772,790		—			—		88,772,790
Rights		—		0	a		—		0	a
Money market funds		133,902,465		—			—		133,902,465
Total	$	3,582,581,472	$	0	a	$	—	$	3,582,581,472

^a  Rounds to less than $1.

The iShares MSCI South Korea Capped ETF had transfers from Level 2 to Level 1 during the year ended August 31, 2016 in the amount of $34,531,387, resulting from the resumption of trading after a temporary suspension.

See notes to financial statements.

108 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities

iSHARES^®, INC.

August 31, 2016

	iShares Edge MSCI Min Vol Global ETF			iShares MSCI Australia ETF			iShares MSCI Canada ETF
ASSETS
Investments, at cost:
Unaffiliated	$	2,913,324,123		$	1,945,199,873		$	3,630,921,052
Affiliated (Note 2)		90,835,243			2,939,512			8,409,692
Total cost of investments	$	3,004,159,366		$	1,948,139,385		$	3,639,330,744
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated	$	3,252,752,677		$	1,650,652,404		$	3,089,237,899
Affiliated (Note 2)		90,835,243			2,939,512			8,409,692
Total fair value of investments		3,343,587,920			1,653,591,916			3,097,647,591
Foreign currency, at valueb		4,569,273			12,664,844			6,261,201
Foreign currency pledged to broker, at valueb		—			741,169			55,203
Receivables:
Investment securities sold		24,977			1,220,874			13,521,199
Dividends and interest		7,886,481			12,041,753			4,197,809
Futures variation margin		—			156,262			365,605
Tax reclaims		1,381,304			—			—
Total Assets		3,357,449,955			1,680,416,818			3,122,048,608
LIABILITIES
Payables:
Investment securities purchased		487,063			8,593,786			15,791,361
Collateral for securities on loan (Note 1)		88,500,685			2,407,298			7,205,616
Foreign taxes (Note 1)		182,769			—			—
Securities related to in-kind transactions (Note 4)		24,977			—			—
Investment advisory fees (Note 2)		566,116			713,403			1,258,040
Total Liabilities		89,761,610			11,714,487			24,255,017
NET ASSETS	$	3,267,688,345		$	1,668,702,331		$	3,097,793,591
Net assets consist of:
Paid-in capital	$	2,995,832,616		$	2,218,813,450		$	4,127,424,948
Undistributed net investment income		16,401,105			11,677,105			4,768,460
Accumulated net realized loss		(83,905,963	)		(267,089,352	)		(492,941,872	)
Net unrealized appreciation (depreciation)		339,360,587			(294,698,872	)		(541,457,945	)
NET ASSETS	$	3,267,688,345		$	1,668,702,331		$	3,097,793,591
Shares outstandingc		43,100,000			82,200,000			122,300,000
Net asset value per share	$	75.82		$	20.30		$	25.33

^a  Securities on loan with values of $84,045,570, $2,291,038 and $6,580,021, respectively. See Note 1.

^b  Cost of foreign currency including currency pledged to broker: if any: $4,573,576, $13,565,434 and $6,422,555, respectively.

^c  $0.001 par value, number of shares authorized: 500 million, 627.8 million and 340.2 million, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 109

Statements of Assets and Liabilities (Continued)

iSHARES^®, INC.

August 31, 2016

	iShares MSCI Japan ETF			iShares MSCI Mexico Capped ETF			iShares MSCI South Korea Capped ETF
ASSETS
Investments, at cost:
Unaffiliated	$	15,240,138,759		$	1,750,709,240		$	1,769,282,199
Affiliated (Note 2)		52,121,686			21,267,196			133,902,465
Total cost of investments	$	15,292,260,445		$	1,771,976,436		$	1,903,184,664
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated	$	13,966,201,873		$	1,312,306,662		$	3,448,679,007
Affiliated (Note 2)		52,121,686			21,267,196			133,902,465
Total fair value of investments		14,018,323,559			1,333,573,858			3,582,581,472
Foreign currency, at valueb		42,965,019			3,586,695			75
Foreign currency pledged to broker, at valueb		1,976,219			—			—
Receivables:
Investment securities sold		16,957,367			46,507,552			135,128,614
Due from custodian (Note 4)		—			560,403			—
Dividends and interest		20,446,401			438,937			1,170,425
Capital shares sold		399,825			—			11,383,623
Futures variation margin		668,719			—			—
Tax reclaims		195,329			—			—
Total Assets		14,101,932,438			1,384,667,445			3,730,264,209
LIABILITIES
Payables:
Investment securities purchased		30,000,049			47,008,839			146,284,635
Collateral for securities on loan (Note 1)		50,929,509			19,391,449			129,185,165
Capital shares redeemed		—			226,203			—
Foreign taxes (Note 1)		—			—			1,767
Investment advisory fees (Note 2)		5,823,216			522,944			1,822,454
Total Liabilities		86,752,774			67,149,435			277,294,021
NET ASSETS	$	14,015,179,664		$	1,317,518,010		$	3,452,970,188
Net assets consist of:
Paid-in capital	$	16,477,764,467		$	2,030,725,239		$	3,150,569,222
Undistributed (distributions in excess of) net investment income		41,500,905			(3,342,828	)		(111,718,391	)
Accumulated net realized loss		(1,230,622,922	)		(271,221,596	)		(1,264,998,693	)
Net unrealized appreciation (depreciation)		(1,273,462,786	)		(438,642,805	)		1,679,118,050
NET ASSETS	$	14,015,179,664		$	1,317,518,010		$	3,452,970,188
Shares outstandingc		1,143,000,000			26,100,000			60,700,000
Net asset value per share	$	12.26		$	50.48		$	56.89

^a  Securities on loan with values of $48,250,480, $17,567,116 and $123,330,973, respectively. See Note 1.

^b  Cost of foreign currency including currency pledged to broker: if any: $45,200,166, $3,648,057 and $75, respectively.

^c  $0.001 par value, number of shares authorized: 2.5246 billion, 255 million and 200 million, respectively.

See notes to financial statements.

110 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations

iSHARES^® , INC.

Year ended August 31, 2016

	iShares Edge MSCI Min Vol Global ETF			iShares MSCI Australia ETF			iShares MSCI Canada ETF
NET INVESTMENT INCOME
Dividends — unaffiliateda	$	69,357,815		$	69,441,901		$	60,851,453
Dividends — affiliated (Note 2)		11,411			2,197			2,828
Interest — unaffiliated		8			519			—
Securities lending income — affiliated — net (Note 2)		575,676			157,133			65,737
		69,944,910			69,601,750			60,920,018
Less: Other foreign taxes (Note 1)		(182,790	)		—			—
Total investment income		69,762,120			69,601,750			60,920,018
EXPENSES
Investment advisory fees (Note 2)		8,421,949			6,860,963			11,048,003
Total expenses		8,421,949			6,860,963			11,048,003
Less investment advisory fees waived (Note 2)		(3,236,389	)		—			—
Net expenses		5,185,560			6,860,963			11,048,003
Net investment income		64,576,560			62,740,787			49,872,015
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		(54,696,684	)		(60,541,800	)		(104,863,544	)
In-kind redemptions — unaffiliated		85,379,701			37,627,276			42,803,485
Futures contracts		—			(586,986	)		153,782
Foreign currency transactions		189,724			1,236,047			153,434
Net realized gain (loss)		30,872,741			(22,265,463	)		(61,752,843	)
Net change in unrealized appreciation/depreciation on:
Investments		252,854,812			136,736,563			236,582,911
Futures contracts		—			463,491			505,658
Translation of assets and liabilities in foreign currencies		18,367			29,717			3,804
Net change in unrealized appreciation/depreciation		252,873,179			137,229,771			237,092,373
Net realized and unrealized gain		283,745,920			114,964,308			175,339,530
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	348,322,480		$	177,705,095		$	225,211,545

^a  Net of foreign withholding tax of $3,439,235, $1,551,150 and $10,501,831, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 111

Statements of Operations (Continued)

iSHARES^®, INC.

Year ended August 31, 2016

	iShares MSCI Japan ETF			iShares MSCI Mexico Capped ETF			iShares MSCI South Korea Capped ETF
NET INVESTMENT INCOME
Dividends — unaffiliateda	$	346,056,818		$	28,068,274		$	48,314,067
Dividends — affiliated (Note 2)		9,016			1,532			13,156
Interest — unaffiliated		—			—			468
Securities lending income — affiliated — net (Note 2)		1,519,660			461,018			7,872,475
		347,585,494			28,530,824			56,200,166
Less: Other foreign taxes (Note 1)		—			—			(2,244	)
Total investment income		347,585,494			28,530,824			56,197,922
EXPENSES
Investment advisory fees (Note 2)		83,098,869			5,958,256			20,701,322
Total expenses		83,098,869			5,958,256			20,701,322
Net investment income		264,486,625			22,572,568			35,496,600
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		(390,769,068	)		(91,088,205	)		(72,519,064	)
In-kind redemptions — unaffiliated		559,560,407			(13,710,609	)		—
Futures contracts		(10,002,525	)		—			—
Foreign currency transactions		20,246,854			(626,134	)		77,121
Net realized gain (loss)		179,035,668			(105,424,948	)		(72,441,943	)
Net change in unrealized appreciation/depreciation on:
Investments		(337,992,956	)		13,849,595			641,612,621
Futures contracts		3,526,516			—			—
Translation of assets and liabilities in foreign currencies		(1,083,600	)		(71,612	)		(222,879	)
Net change in unrealized appreciation/depreciation		(335,550,040	)		13,777,983			641,389,742
Net realized and unrealized gain (loss)		(156,514,372	)		(91,646,965	)		568,947,799
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	107,972,253		$	(69,074,397	)	$	604,444,399

^a  Net of foreign withholding tax of $38,357,610, $400,584 and $9,288,413, respectively.

See notes to financial statements.

112 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets

iSHARES^® , INC.

	iShares Edge MSCI Min Vol Global ETF						iShares MSCI Australia ETF
	Year ended August 31, 2016			Year ended August 31, 2015			Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	64,576,560		$	44,309,164		$	62,740,787		$	89,352,838
Net realized gain (loss)		30,872,741			43,296,827			(22,265,463	)		(42,403,229	)
Net change in unrealized appreciation/depreciation		252,873,179			(88,854,431	)		137,229,771			(586,867,702	)
Net increase (decrease) in net assets resulting from operations		348,322,480			(1,248,440	)		177,705,095			(539,918,093	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(59,015,735	)		(39,259,118	)		(59,291,158	)		(88,722,742	)
Total distributions to shareholders		(59,015,735	)		(39,259,118	)		(59,291,158	)		(88,722,742	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		1,225,242,572			1,101,077,585			683,182,993			286,641,003
Cost of shares redeemed		(362,492,946	)		(227,950,517	)		(360,957,779	)		(477,049,572	)
Net increase (decrease) in net assets from capital share transactions		862,749,626			873,127,068			322,225,214			(190,408,569	)
INCREASE (DECREASE) IN NET ASSETS		1,152,056,371			832,619,510			440,639,151			(819,049,404	)
NET ASSETS
Beginning of year		2,115,631,974			1,283,012,464			1,228,063,180			2,047,112,584
End of year	$	3,267,688,345		$	2,115,631,974		$	1,668,702,331		$	1,228,063,180
Undistributed net investment income included in net assets at end of year	$	16,401,105		$	10,644,923		$	11,677,105		$	6,449,210
SHARES ISSUED AND REDEEMED
Shares sold		16,900,000			15,700,000			35,400,000			12,800,000
Shares redeemed		(5,100,000	)		(3,200,000	)		(19,000,000	)		(22,400,000	)
Net increase (decrease) in shares outstanding		11,800,000			12,500,000			16,400,000			(9,600,000	)

See notes to financial statements.

FINANCIAL STATEMENTS 113

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.

	iShares MSCI Canada ETF						iShares MSCI Japan ETF
	Year ended August 31, 2016			Year ended August 31, 2015			Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	49,872,015		$	51,171,586		$	264,486,625		$	198,077,924
Net realized gain (loss)		(61,752,843	)		(185,598	)		179,035,668			433,991,900
Net change in unrealized appreciation/depreciation		237,092,373			(888,177,701	)		(335,550,040	)		(336,921,644	)
Net increase (decrease) in net assets resulting from operations		225,211,545			(837,191,713	)		107,972,253			295,148,180
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(46,033,306	)		(56,091,045	)		(261,611,433	)		(187,336,932	)
Total distributions to shareholders		(46,033,306	)		(56,091,045	)		(261,611,433	)		(187,336,932	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		1,347,709,468			422,191,995			3,254,831,968			8,592,356,336
Cost of shares redeemed		(360,548,208	)		(1,384,361,375	)		(8,233,815,497	)		(4,281,553,914	)
Net increase (decrease) in net assets from capital share transactions		987,161,260			(962,169,380	)		(4,978,983,529	)		4,310,802,422
INCREASE (DECREASE) IN NET ASSETS		1,166,339,499			(1,855,452,138	)		(5,132,622,709	)		4,418,613,670
NET ASSETS
Beginning of year		1,931,454,092			3,786,906,230			19,147,802,373			14,729,188,703
End of year	$	3,097,793,591		$	1,931,454,092		$	14,015,179,664		$	19,147,802,373
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	4,768,460		$	415,638		$	41,500,905		$	(21,895,543	)
SHARES ISSUED AND REDEEMED
Shares sold		57,300,000			14,300,000			279,600,000			697,200,000
Shares redeemed		(15,400,000	)		(48,900,000	)		(712,200,000	)		(366,600,000	)
Net increase (decrease) in shares outstanding		41,900,000			(34,600,000	)		(432,600,000	)		330,600,000

See notes to financial statements.

114 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.

	iShares MSCI Mexico Capped ETF						iShares MSCI South Korea Capped ETF
	Year ended August 31, 2016			Year ended August 31, 2015			Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	22,572,568		$	23,159,039		$	35,496,600		$	33,901,757
Net realized loss		(105,424,948	)		(218,038,852	)		(72,441,943	)		(284,471,604	)
Net change in unrealized appreciation/depreciation		13,777,983			(502,228,529	)		641,389,742			(1,094,121,115	)
Net increase (decrease) in net assets resulting from operations		(69,074,397	)		(697,108,342	)		604,444,399			(1,344,690,962	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(31,509,179	)		(30,297,965	)		(75,311,690	)		(50,182,957	)
Total distributions to shareholders		(31,509,179	)		(30,297,965	)		(75,311,690	)		(50,182,957	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		1,471,785,156			862,520,515			456,857,078			649,650,453
Cost of shares redeemed		(1,260,625,873	)		(2,203,323,997	)		(693,973,908	)		(985,441,132	)
Net increase (decrease) in net assets from capital share transactions		211,159,283			(1,340,803,482	)		(237,116,830	)		(335,790,679	)
INCREASE (DECREASE) IN NET ASSETS		110,575,707			(2,068,209,789	)		292,015,879			(1,730,664,598	)
NET ASSETS
Beginning of year		1,206,942,303			3,275,152,092			3,160,954,309			4,891,618,907
End of year	$	1,317,518,010		$	1,206,942,303		$	3,452,970,188		$	3,160,954,309
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	(3,342,828	)	$	597,098		$	(111,718,391	)	$	(78,505,763	)
SHARES ISSUED AND REDEEMED
Shares sold		28,200,000			14,400,000			8,900,000			10,650,000
Shares redeemed		(25,000,000	)		(37,300,000	)		(13,850,000	)		(18,650,000	)
Net increase (decrease) in shares outstanding		3,200,000			(22,900,000	)		(4,950,000	)		(8,000,000	)

See notes to financial statements.

FINANCIAL STATEMENTS 115

Financial Highlights

iSHARES^® , INC.

(For a share outstanding throughout each period)

	iShares Edge MSCI Min Vol Global ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Period from Oct. 18, 2011a to Aug. 31, 2012
Net asset value, beginning of period	$	67.59		$	68.25		$	59.99		$	55.65		$	50.02
Income from investment operations:
Net investment incomeb		1.79			1.70			1.72			1.68			1.49
Net realized and unrealized gain (loss)c		8.07			(0.89	)		8.18			4.20			4.67
Total from investment operations		9.86			0.81			9.90			5.88			6.16
Less distributions from:
Net investment income		(1.63	)		(1.47	)		(1.64	)		(1.54	)		(0.53	)
Total distributions		(1.63	)		(1.47	)		(1.64	)		(1.54	)		(0.53	)
Net asset value, end of period	$	75.82		$	67.59		$	68.25		$	59.99		$	55.65
Total return		14.76	%		1.15	%		16.70	%		10.69	%		12.41	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	3,267,688		$	2,115,632		$	1,283,012		$	1,007,760		$	578,776
Ratio of expenses to average net assetse		0.20	%		0.20	%		0.20	%		0.20	%		0.23	%
Ratio of expenses to average net assets prior to waived feese		0.32	%		0.33	%		0.33	%		0.34	%		0.34	%
Ratio of net investment income to average net assetse		2.49	%		2.41	%		2.67	%		2.83	%		3.17	%
Portfolio turnover ratef		24	%		22	%		24	%		13	%		22	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rates exclude portfolio securities received or delivered in Creation Units but include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rates for the years ended August 31, 2016, August 31, 2015, August 31, 2014, August 31, 2013 and the period ended August 31, 2012 were 23%, 22%, 23%, 13% and 22%, respectively. See Note 4.

See notes to financial statements.

116 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Australia ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	18.66		$	27.15		$	23.61		$	23.39		$	24.18
Income from investment operations:
Net investment incomea		0.84			1.23			1.10			1.02			1.04
Net realized and unrealized gain (loss)b		1.59			(8.49	)		3.43			0.64			(0.72	)
Total from investment operations		2.43			(7.26	)		4.53			1.66			0.32
Less distributions from:
Net investment income		(0.79	)		(1.23	)		(0.99	)		(1.44	)		(1.11	)
Total distributions		(0.79	)		(1.23	)		(0.99	)		(1.44	)		(1.11	)
Net asset value, end of year	$	20.30		$	18.66		$	27.15		$	23.61		$	23.39
Total return		13.36	%		(27.31	)%		19.76	%		7.06	%		1.84	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	1,668,702		$	1,228,063		$	2,047,113		$	1,916,849		$	2,493,699
Ratio of expenses to average net assets		0.48	%		0.48	%		0.48	%		0.51	%		0.53	%
Ratio of net investment income to average net assets		4.41	%		5.37	%		4.28	%		4.05	%		4.61	%
Portfolio turnover ratec		7	%		9	%		6	%		6	%		9	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 117

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Canada ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	24.02		$	32.93		$	27.34		$	27.52		$	29.89
Income from investment operations:
Net investment incomea		0.51			0.54			0.59			0.60			0.53
Net realized and unrealized gain (loss)b		1.29			(8.85	)		5.62			(0.10	)		(2.33	)
Total from investment operations		1.80			(8.31	)		6.21			0.50			(1.80	)
Less distributions from:
Net investment income		(0.49	)		(0.60	)		(0.62	)		(0.68	)		(0.57	)
Total distributions		(0.49	)		(0.60	)		(0.62	)		(0.68	)		(0.57	)
Net asset value, end of year	$	25.33		$	24.02		$	32.93		$	27.34		$	27.52
Total return		7.73	%		(25.48	)%		23.00	%		1.84	%		(5.87	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	3,097,794		$	1,931,454		$	3,786,906		$	3,428,223		$	4,254,544
Ratio of expenses to average net assets		0.48	%		0.48	%		0.48	%		0.51	%		0.53	%
Ratio of net investment income to average net assets		2.18	%		1.92	%		1.97	%		2.12	%		1.94	%
Portfolio turnover ratec		4	%		5	%		6	%		7	%		5	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

118 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Japan ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	12.15		$	11.83		$	10.97		$	9.02		$	9.80
Income from investment operations:
Net investment incomea		0.18			0.15			0.15			0.13			0.18
Net realized and unrealized gain (loss)b		0.11			0.30			0.88			1.97			(0.77	)
Total from investment operations		0.29			0.45			1.03			2.10			(0.59	)
Less distributions from:
Net investment income		(0.18	)		(0.13	)		(0.17	)		(0.15	)		(0.19	)
Total distributions		(0.18	)		(0.13	)		(0.17	)		(0.15	)		(0.19	)
Net asset value, end of year	$	12.26		$	12.15		$	11.83		$	10.97		$	9.02
Total return		2.44	%		3.84	%		9.39	%		23.46	%		(5.96	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	14,015,180		$	19,147,802		$	14,729,189		$	10,461,942		$	4,629,034
Ratio of expenses to average net assets		0.48	%		0.48	%		0.48	%		0.50	%		0.53	%
Ratio of net investment income to average net assets		1.53	%		1.20	%		1.31	%		1.18	%		1.95	%
Portfolio turnover ratec		4	%		2	%		2	%		4	%		3	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 119

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Mexico Capped ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	52.70		$	71.51		$	61.93		$	60.96		$	58.39
Income from investment operations:
Net investment incomea		0.93			0.68			1.06			0.75			0.73
Net realized and unrealized gain (loss)b		(1.82	)		(18.56	)		9.61			0.85			2.76
Total from investment operations		(0.89	)		(17.88	)		10.67			1.60			3.49
Less distributions from:
Net investment income		(1.33	)		(0.93	)		(1.09	)		(0.63	)		(0.92	)
Total distributions		(1.33	)		(0.93	)		(1.09	)		(0.63	)		(0.92	)
Net asset value, end of year	$	50.48		$	52.70		$	71.51		$	61.93		$	60.96
Total return		(1.68	)%		(25.10	)%		17.42	%		2.53	%		6.13	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	1,317,518		$	1,206,942		$	3,275,152		$	2,217,052		$	1,182,700
Ratio of expenses to average net assets		0.48	%		0.48	%		0.48	%		0.50	%		0.53	%
Ratio of net investment income to average net assets		1.82	%		1.10	%		1.61	%		1.09	%		1.26	%
Portfolio turnover ratec		8	%		13	%		19	%		32	%		10	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

120 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI South Korea Capped ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	48.15		$	66.42		$	57.67		$	55.97		$	56.74
Income from investment operations:
Net investment incomea		0.56			0.46			0.25			0.23			0.23
Net realized and unrealized gain (loss)b		9.38			(18.07	)		9.40			1.83			(0.63	)
Total from investment operations		9.94			(17.61	)		9.65			2.06			(0.40	)
Less distributions from:
Net investment income		(1.20	)		(0.66	)		(0.90	)		(0.36	)		(0.37	)
Total distributions		(1.20	)		(0.66	)		(0.90	)		(0.36	)		(0.37	)
Net asset value, end of year	$	56.89		$	48.15		$	66.42		$	57.67		$	55.97
Total return		20.92	%		(26.58	)%		16.83	%		3.65	%		(0.62	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	3,452,970		$	3,160,954		$	4,891,619		$	3,376,516		$	2,669,551
Ratio of expenses to average net assets		0.64	%		0.62	%		0.62	%		0.61	%		0.61	%
Ratio of net investment income to average net assets		1.09	%		0.81	%		0.39	%		0.40	%		0.42	%
Portfolio turnover ratec		22	%		24	%		13	%		13	%		12	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  Portfolio turnover rates include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units solely for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rates for the years ended August 31, 2016, August 31, 2015, August 31, 2014, August 31, 2013, and August 31, 2012 were 10%, 10%, 10%, 11%, and 8%, respectively. See Note 4.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 121

Notes to Financial Statements

iSHARES^®, INC.

iShares, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Company was incorporated under the laws of the State of Maryland on September 1, 1994 pursuant to Articles of Incorporation as subsequently amended and restated.

These financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):

iShares ETF	Diversification Classification
Edge MSCI Min Vol Globala	Diversified
MSCI Australia	Non-diversified
MSCI Canada	Diversified
MSCI Japan	Diversified
MSCI Mexico Capped	Non-diversified
MSCI South Korea Capped	Non-diversified

^a Formerly the iShares MSCI All Country World Minimum Volatility ETF.

The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.

Pursuant to the Company’s organizational documents, the Funds’ officers and directors are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.

SECURITY VALUATION

Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Directors of the Company (the “Board”).

• Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price.

122 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

• Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”).

• Futures contracts are valued at that day’s last reported settlement price on the exchange where the contract is traded.

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such factors are reported to the Board on a quarterly basis.

The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Company’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements in market values, and reviews of market related activity.

Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.

Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and is not necessarily an indication of the risk associated with investing in the instrument. The three levels of the fair value hierarchy are as follows:

• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and

• Level 3 — Unobservable inputs for the asset or liability, including the Global Valuation Committee’s assumptions used in determining the fair value of investments.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Company’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.

NOTES TO FINANCIAL STATEMENTS 123

Notes to Financial Statements (Continued)

iSHARES^®, INC.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2016 are reflected in tax reclaims receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.

FOREIGN CURRENCY TRANSLATION

The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.

Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes.

FOREIGN TAXES

The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their statements of operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “other foreign taxes”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of August 31, 2016, if any, are disclosed in the Funds’ statements of assets and liabilities.

DISTRIBUTIONS TO SHAREHOLDERS

Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.

LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Funds. Any additional required collateral is delivered to the Funds and any excess collateral is returned by the Funds on the next business

124 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

On July 23, 2014, the U.S. Securities and Exchange Commission (the “SEC”) adopted amendments to Rule 2a-7 under the 1940 Act, which governs the operations of U.S. money market funds. When implemented in October 2016, the change may affect the Funds with regard to the reinvestment of cash collateral received for securities on loan. The Funds may be exposed to additional risk from reinvesting the cash collateral in money market funds that do not maintain a fixed NAV per share of $1.00.

Any cash received as collateral for securities on loan may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates. As of August 31, 2016, any securities on loan were collateralized by cash and/or U.S. government obligations. Cash collateral received was invested in money market funds managed by BFA and is disclosed in the schedules of investments. The securities on loan for each Fund are also disclosed in its schedule of investments. The total value of any securities on loan as of August 31, 2016 and the total value of the related collateral are disclosed in the statements of assets and liabilities. Income earned by the Funds from securities lending is disclosed in the statements of operations.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities lent. Each Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.

Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (“MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, a Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, the borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.

NOTES TO FINANCIAL STATEMENTS 125

Notes to Financial Statements (Continued)

iSHARES^®, INC.

The following table is a summary of securities lending agreements which are subject to offset under an MSLA as of August 31, 2016:

iShares ETF and Counterparty	Market Value of Securities on Loan		Cash Collateral Received  a		Net Amount
Edge MSCI Min Vol Global
Barclays Capital Inc.	$	772,165	$	772,165	$	—
Citigroup Global Markets Inc.		1,205,030		1,205,030		—
Credit Suisse Securities (USA) LLC		4,756,496		4,756,496		—
Deutsche Bank AG		56,985		56,985		—
Deutsche Bank Securities Inc.		1,758,307		1,758,307		—
Goldman Sachs & Co.		13,486,466		13,486,466		—
Jefferies LLC		1,807,220		1,807,220		—
JPMorgan Clearing Corp.		14,959		14,959		—
Macquarie Capital (USA) Inc.		4,372,632		4,372,632		—
Merrill Lynch, Pierce, Fenner & Smith		8,870,236		8,870,236		—
Morgan Stanley & Co. International PLC		10,181,363		10,181,363		—
Morgan Stanley & Co. LLC		22,118,376		22,118,376		—
Nomura Securities International Inc.		1,646,283		1,646,283		—
SG Americas Securities LLC		172,805		172,805		—
State Street Bank & Trust Company		12,564,540		12,564,540		—
UBS Securities LLC		261,707		261,707		—
	$	84,045,570	$	84,045,570	$	—
MSCI Australia
UBS Securities LLC	$	2,291,038	$	2,291,038	$	—
	$	2,291,038	$	2,291,038	$	—
MSCI Canada
Credit Suisse Securities (USA) LLC	$	4,344,011	$	4,344,011	$	—
Goldman Sachs & Co.		2,236,010		2,236,010		—
	$	6,580,021	$	6,580,021	$	—
MSCI Japan
Barclays Capital Inc.	$	321,280	$	321,280	$	—
BNP Paribas Prime Brokerage Inc.		629,961		629,961		—
Citigroup Global Markets Inc.		1,173,089		1,173,089		—
Credit Suisse Securities (USA) LLC		2,170,197		2,170,197		—
Deutsche Bank Securities Inc.		2,901,503		2,901,503		—
Goldman Sachs & Co.		11,949,208		11,949,208		—
Merrill Lynch, Pierce, Fenner & Smith		2,830,430		2,830,430		—
Morgan Stanley & Co. LLC		20,226,761		20,226,761		—
Nomura Securities International Inc.		5,365,346		5,365,346		—
UBS Securities LLC		682,705		682,705		—
	$	48,250,480	$	48,250,480	$	—

126 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

iShares ETF and Counterparty	Market Value of Securities on Loan		Cash Collateral Received  a		Net Amount
MSCI Mexico Capped
Credit Suisse Securities (USA) LLC	$	1,208,128	$	1,208,128	$	—
Deutsche Bank Securities Inc.		244,026		244,026		—
Goldman Sachs & Co.		6,827,593		6,827,593		—
Morgan Stanley & Co. LLC		8,248,431		8,248,431		—
UBS Securities LLC		1,038,938		1,038,938		—
	$	17,567,116	$	17,567,116	$	—
MSCI South Korea Capped
Citigroup Global Markets Inc.	$	18,772,789	$	18,772,789	$	—
Credit Suisse Securities (USA) LLC		13,980,131		13,980,131		—
Deutsche Bank Securities Inc.		565,561		565,561		—
Goldman Sachs & Co.		26,238,560		26,238,560		—
HSBC Bank PLC		6,180,774		6,180,774		—
JPMorgan Clearing Corp.		5,840,970		5,840,970		—
Merrill Lynch, Pierce, Fenner & Smith		27,293,438		27,293,438		—
Morgan Stanley & Co. LLC		18,707,882		18,707,882		—
Nomura Securities International Inc.		731,182		731,182		—
UBS Securities LLC		5,019,686		5,019,686		—
	$	123,330,973	$	123,330,973	$	—

^a  Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s statement of assets and liabilities.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Agreement with the Company, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.

For its investment advisory services to the iShares Edge MSCI Min Vol Global ETF, BFA is entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:

Investment Advisory Fee			Aggregate Average Daily Net Assets
	0.350	%	First $30 billion
	0.320		Over $30 billion, up to and including $60  billion
	0.280		Over $60 billion, up to and including $90  billion
	0.252		Over $90 billion

In addition, the iShares Edge MSCI Min Vol Global ETF indirectly pays its pro rata share of fees and expenses attributable to its investments in other investment companies (“acquired fund fees and expenses”). The total of the investment advisory fee and acquired fund fees and expenses are a fund’s total annual operating expenses. BFA has contractually agreed to waive a portion of its investment advisory fee for the Fund through December 31, 2018 in an amount equal to the acquired fund fees and expenses attributable to the Fund’s investments in other iShares funds, if any. BFA has also contractually agreed to waive an

NOTES TO FINANCIAL STATEMENTS 127

Notes to Financial Statements (Continued)

iSHARES^®, INC.

additional portion of its investment advisory fee for the Fund through December 31, 2018 in order to limit total annual operating expenses after fee waiver to 0.20% of average daily net assets.

For its investment advisory services to each of the iShares MSCI Australia, iShares MSCI Canada, iShares MSCI Japan and iShares MSCI Mexico Capped ETFs, BFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:

Investment Advisory Fee			Aggregate Average Daily Net Assets
	0.59	%	First $7 billion
	0.54		Over $7 billion, up to and including $11 billion
	0.49		Over $11 billion, up to and including $24  billion
	0.44		Over $24 billion, up to and including $48  billion
	0.40		Over $48 billion, up to and including $72  billion
	0.36		Over $72 billion

For its investment advisory services to the iShares MSCI South Korea Capped ETF, BFA is entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:

Investment Advisory Fee			Aggregate Average Daily Net Assets
	0.74	%	First $2 billion
	0.69		Over $2 billion, up to and including $4  billion
	0.64		Over $4 billion, up to and including $8 billion
	0.57		Over $8 billion, up to and including $16 billion
	0.51		Over $16 billion, up to and including $24 billiona
	0.48		Over $24 billion, up to and including $32 billiona
	0.45		Over $32 billion

^a Breakpoint level was added or amended effective July 1, 2016.

The SEC has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by BFA, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the “collateral investment fees”). Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Funds retain a portion of securities lending income and remit the remaining portion to BTC as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, each Fund retains 80% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in a given calendar year exceeds the aggregate securities lending income generated across the iShares ETF Complex in the calendar year 2013, each Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 85% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.

128 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

For the year ended August 31, 2016, the total of securities lending agent services and collateral investment fees paid were as follows:

iShares ETF	Fees Paid to BTC
Edge MSCI Min Vol Global	$	161,675
MSCI Australia		37,510
MSCI Canada		20,957
MSCI Japan		380,477
MSCI Mexico Capped		122,423
MSCI South Korea Capped		1,936,391

BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.

Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.

For the year ended August 31, 2016, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:

iShares ETF	Purchases		Sales
Edge MSCI Min Vol Global	$	95,803,211	$	20,722,967
MSCI Australia		3,509,440		330,509
MSCI Japan		65,611,003		29,810,840
MSCI South Korea Capped		47,735,183		996,458

Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends – affiliated” in the statements of operations.

The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.

Certain directors and officers of the Company are also officers of BTC and/or BFA.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2016 were as follows:

iShares ETF	Purchases		Sales
Edge MSCI Min Vol Global	$	842,690,220	$	622,702,748
MSCI Australia		121,458,445		104,877,891
MSCI Canada		137,544,140		103,563,021
MSCI Japan		723,169,041		858,299,041
MSCI Mexico Capped		117,967,514		104,703,749
MSCI South Korea Capped		718,274,361		997,129,986

NOTES TO FINANCIAL STATEMENTS 129

Notes to Financial Statements (Continued)

iSHARES^®, INC.

In-kind transactions (see Note 4) for the year ended August 31, 2016 were as follows:

iShares ETF	In-kind Purchases		In-kind Sales
Edge MSCI Min Vol Global	$	998,852,158	$	341,395,189
MSCI Australia		664,430,715		357,382,556
MSCI Canada		1,311,430,660		356,055,799
MSCI Japan		3,169,238,535		7,993,604,312
MSCI Mexico Capped		1,452,334,569		1,252,645,516

4. CAPITAL SHARE TRANSACTIONS

Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the statements of changes in net assets.

The consideration for the purchase of Creation Units of a fund in the Company generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Company may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Company’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Proceeds from shares sold” in the statements of changes in net assets.

From time to time, settlement of securities related to in-kind contributions or in-kind redemptions may be delayed. In such cases, securities related to in-kind contributions are reflected as “Due from custodian” and securities related to in-kind redemptions are reflected as “Securities related to in-kind transactions” in the statements of assets and liabilities.

5. FUTURES CONTRACTS

Each Fund may purchase or sell futures contracts in an effort to help such Fund track its underlying index. A futures contract is a standardized, exchange-traded agreement to buy or sell a financial instrument at a set price on a future date. Upon entering into a futures contract, the Fund is required to pledge to the executing broker which holds segregated from its own assets, an amount of cash, U.S. government securities or other high-quality debt and equity securities equal to the minimum initial margin requirements of the exchange on which the contract is traded. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as margin variation and are recorded by the Fund as unrealized appreciation or depreciation. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Losses may arise if the value of a futures contract decreases due to an unfavorable change in the market rates or values of the underlying instrument during the term of the contract or if the counterparty does not perform under the contract. The use of futures contracts also involves the risk of an imperfect correlation in the movements in the price of futures contracts and the assets underlying such contracts.

130 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

The following table shows the value of futures contracts held as of August 31, 2016 and the related locations in the statements of assets and liabilities, presented by risk exposure category:

Assets
	iShares MSCI Australia ETF		iShares MSCI Canada ETF		iShares MSCI Japan ETF
Equity contracts:
Variation margin/Net assets consist of – net unrealized appreciation (depreciation)a	$	156,262	$	365,605	$	668,719

^a Represents cumulative appreciation of futures contracts as reported in the schedules of investments.

The following table shows the realized and unrealized gains (losses) on futures contracts held during the year ended August 31, 2016 and the related locations in the statements of operations, presented by risk exposure category:

	Net Realized Gain (Loss)
	iShares MSCI Australia ETF			iShares MSCI Canada ETF		iShares MSCI Japan ETF
Equity contracts:
Futures contracts	$	(586,986	)	$	153,782	$	(10,002,525	)

	Net Change in Unrealized Appreciation/Depreciation
	iShares MSCI Australia ETF		iShares MSCI Canada ETF		iShares MSCI Japan ETF
Equity contracts:
Futures contracts	$	463,491	$	505,658	$	3,526,516

The following table shows the average quarter-end balances of open futures contracts for the year ended August 31, 2016 :

	iShares MSCI Australia ETF		iShares MSCI Canada ETF		iShares MSCI Japan ETF
Average value of contracts purchased	$	15,052,432	$	6,140,151	$	102,414,104

6. PRINCIPAL RISKS

In the normal course of business, each Fund’s investment activities expose it to various types of risk associated with the financial instruments and markets in which it invests. The significant types of financial risks each Fund is exposed to include market risk and credit risk. Each Fund’s prospectus provides details of these and other types of risk.

BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.

NOTES TO FINANCIAL STATEMENTS 131

Notes to Financial Statements (Continued)

iSHARES^®, INC.

MARKET RISK

Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss each Fund may suffer through holding market positions in the face of market movements. Each Fund is exposed to market risk by virtue of its direct and/or indirect investment in equity and financial derivative instruments. The fair value of securities held by the Funds may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of each Fund’s exposure to market risk is the market value of the investments held as shown in the Fund’s schedule of investments.

A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its schedule of investments.

Investing in the securities of non-U.S. issuers, whether directly or indirectly, involves certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets; and the risk of war. These risks are heightened for investments in issuers from countries with less developed markets.

The economies and markets of European countries are often closely connected and interdependent, and events in one European country can have an adverse impact on other European countries. The European financial markets have experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of several European countries. Responses to the financial problems by European governments, central banks and others, including austerity measures and reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In addition, the United Kingdom has voted to withdraw from the European Union. The referendum may introduce significant new uncertainties and instability in the financial markets as the United Kingdom negotiates its exit from the European Union.

When a fund concentrates its investments in issuers located in a single country, whether directly or indirectly, it assumes the risk that economic, political and social conditions in that country may have a significant impact on its investment performance.

CREDIT RISK

Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of each Fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its statement of assets and liabilities.

132 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

7. INCOME TAX INFORMATION

Each Fund is treated as an entity separate from the Company’s other funds for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.

U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or NAV per share. The following permanent differences as of August 31, 2016, attributable to the characterization of corporate actions, passive foreign investment companies, the expiration of capital loss carryforwards, distributions paid in excess of taxable income, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:

iShares ETF	Paid-in Capital			Undistributed Net Investment Income/Distributions in Excess of Net Investment Income		Undistributed Net Realized Gain/Accumulated Net Realized Loss
Edge MSCI Min Vol Global	$	82,629,920		$	195,357	$	(82,825,277	)
MSCI Australia		794,334			1,778,266		(2,572,600	)
MSCI Canada		14,451,637			514,113		(14,965,750	)
MSCI Japan		319,965,190			60,521,256		(380,486,446	)
MSCI Mexico Capped		(70,029,874	)		4,996,685		65,033,189
MSCI South Korea Capped		(5,788,592	)		6,602,462		(813,870	)

The tax character of distributions paid during the years ended August 31, 2016 and August 31, 2015 was as follows:

iShares ETF	2016		2015
Edge MSCI Min Vol Global
Ordinary income	$	59,015,735	$	39,259,118
MSCI Australia
Ordinary income	$	59,291,158	$	88,722,742
MSCI Canada
Ordinary income	$	46,033,306	$	56,091,045
MSCI Japan
Ordinary income	$	261,611,433	$	187,336,932
MSCI Mexico Capped
Ordinary income	$	31,509,179	$	30,297,965
MSCI South Korea Capped
Ordinary income	$	75,311,690	$	50,182,957

NOTES TO FINANCIAL STATEMENTS 133

Notes to Financial Statements (Continued)

iSHARES^®, INC.

As of August 31, 2016, the tax components of accumulated net earnings (losses) were as follows:

iShares ETF	Undistributed Ordinary Income		Capital Loss Carryforwards			Net Unrealized Gains  (Losses) a			Qualified Late-Year Losses b			Total
Edge MSCI Min Vol Global	$	22,600,779	$	(24,755,016	)	$	307,093,016		$	(33,083,050	)	$	271,855,729
MSCI Australia		28,782,364		(197,019,706	)		(365,684,531	)		(16,189,246	)		(550,111,119	)
MSCI Canada		6,212,407		(384,093,913	)		(587,574,923	)		(64,174,928	)		(1,029,631,357	)
MSCI Japan		70,548,120		(800,811,113	)		(1,478,765,829	)		(253,555,981	)		(2,462,584,803	)
MSCI Mexico Capped		3,502,609		(169,297,369	)		(497,312,071	)		(50,100,398	)		(713,207,229	)
MSCI South Korea Capped		—		(714,496,784	)		1,084,197,461			(67,299,711	)		302,400,966

^a  The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the characterization of corporate actions, tax deferral of losses on wash sales, the timing and recognition of partnership income and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies.

^b  The Funds have elected to defer certain qualified late-year losses and recognize such losses in the next taxable year.

As of August 31, 2016, the following Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:

iShares ETF	Non- Expiring  a		Expiring 2017		Expiring 2018		Expiring 2019		Total
Edge MSCI Min Vol Global	$	24,755,016	$	—	$	—	$	—	$	24,755,016
MSCI Australia		137,537,973		24,006,125		23,348,244		12,127,364		197,019,706
MSCI Canada		272,374,434		27,886,883		68,928,677		14,903,919		384,093,913
MSCI Japan		371,710,340		116,295,478		173,577,101		139,228,194		800,811,113
MSCI Mexico Capped		134,670,245		8,973,988		2,789,471		22,863,665		169,297,369
MSCI South Korea Capped		348,410,462		60,990,953		226,591,665		78,503,704		714,496,784

^a  Must be utilized prior to losses subject to expiration.

The Funds may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Funds may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.

Management has analyzed tax laws and regulations and their application to the Funds as of August 31, 2016, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

8. SUBSEQUENT EVENTS

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

At the meeting of the Board held on September 28-29, 2016, the Board approved a one-for-four reverse stock split for the iShares MSCI Japan ETF, effective after the close of trading on November 4, 2016. The impact of the stock split will be to decrease the number of shares outstanding by a factor of four, while increasing the NAV per share by a factor of four, resulting in no effect on the net assets of the Fund.

134 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

iShares, Inc.:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of iShares Edge MSCI Min Vol Global ETF, iShares MSCI Australia ETF, iShares MSCI Canada ETF, iShares MSCI Japan ETF, iShares MSCI Mexico Capped ETF and iShares MSCI South Korea Capped ETF (the “Funds”) at August 31, 2016, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2016 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 21, 2016

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 135

Notes:

136 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 137

Notes:

138 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

For more information visit www.iShares.com or call 1-800-474-2737

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

Investing involves risk, including possible loss of principal.

The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.

A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.

The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily basis on the Funds’ website.

©2016 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.

iS-AR-801-0816

AUGUST 31, 2016

2016 ANNUAL REPORT

iShares Trust

^Ø  iShares Adaptive Currency Hedged MSCI Eurozone ETF  |  DEZU  |  BATS

^Ø  iShares Currency Hedged MSCI Eurozone ETF  |  HEZU  |  NYSE Arca

^Ø  iShares Currency Hedged MSCI Germany ETF  |  HEWG  |  NYSE Arca

^Ø  iShares Currency Hedged MSCI Italy ETF  |  HEWI  |  NYSE Arca

^Ø  iShares Currency Hedged MSCI Spain ETF  |  HEWP  |  NYSE Arca

^Ø  iShares Currency Hedged MSCI Switzerland ETF  |  HEWL  |  NYSE Arca

Table of Contents

Management’s Discussions of Fund Performance	5
About Fund Performance	18
Shareholder Expenses	18
Schedules of Investments	19
iShares Adaptive Currency Hedged MSCI Eurozone ETF	19
iShares Currency Hedged MSCI Eurozone ETF	21
iShares Currency Hedged MSCI Germany ETF	23
iShares Currency Hedged MSCI Italy ETF	25
iShares Currency Hedged MSCI Spain ETF	27
iShares Currency Hedged MSCI Switzerland ETF	29
Financial Statements	31
Financial Highlights	38
Notes to Financial Statements	44
Report of Independent Registered Public Accounting Firm	59
Tax Information	60
Board Review and Approval of Investment Advisory Contract	61
Supplemental Information	65
Trustee and Officer Information	68
Additional Financial Information	71
Schedules of Investments	72
iShares MSCI Eurozone ETF	72
iShares MSCI Germany ETF	76
iShares MSCI Italy Capped ETF	79
iShares MSCI Spain Capped ETF	81
iShares MSCI Switzerland Capped ETF	83
Financial Statements	85
Financial Highlights	92
Notes to Financial Statements	97
Report of Independent Registered Public Accounting Firm	109

Management’s Discussion of Fund Performance

iSHARES^® TRUST

GLOBAL EQUITY MARKET OVERVIEW

Global equity markets advanced for the 12 months ended August 31, 2016 (the “reporting period”). The MSCI ACWI, a broad global equity index that includes both developed and emerging markets, returned 7.24% for the reporting period.

Early in the reporting period, global stock markets were volatile but generally declined overall amid lower energy prices and weaker global economic growth, including slowdowns in stronger developed economies such as the U.S. and U.K. In response, many of the world’s central banks took more aggressive actions to stimulate economic activity, including expanded quantitative easing measures and negative interest rates.

In the U.S., the Federal Reserve Bank (the “Fed”) postponed plans to raise its short-term interest rate target until December 2015, when it ended a seven-year period of near-zero interest rates by increasing the federal funds target interest rate from a range of 0%-0.25% to a range of 0.25%-0.50%. It was the Fed’s first interest rate hike since June 2006.

After bottoming in mid-February 2016, global equity markets reversed course, rallying through the end of the reporting period. Central bank stimulus activity and a recovery in energy prices helped global equity markets rebound, as did signs of stabilization in China, which had experienced a marked economic slowdown that put downward pressure on its currency. Despite the overall upward trend in global equity markets, geopolitical factors — including the “Brexit” referendum in the U.K. (an affirmative vote to leave the European Union), terrorist attacks in France, and an attempted coup in Turkey — contributed to increased equity market volatility late in the reporting period.

Among developed countries, the U.S. was among the best-performing markets, returning approximately 12% for the reporting period. Although employment growth remained robust, other segments of the U.S. economy struggled, leading to three consecutive quarters of growth below a 1.5% annual rate. As a result, the Fed — which was expected to raise short-term interest rates further in 2016 — held rates steady through the first eight months of the year. Stable Fed monetary policy, as well as the relative strength of the U.S. economy compared with other regions of the globe, provided a favorable backdrop for U.S. equity market performance.

Equity markets in the Asia/Pacific region gained approximately 6% for the reporting period. New Zealand and Australia were the leading markets in the region, benefiting from improving economic growth during the reporting period, while the laggards included Singapore and Japan. In particular, the Japanese equity market declined by more than 12%, but a strong rally in the Japanese yen (which appreciated by 15% against the U.S. dollar) helped offset the overall market decline, resulting in a 3% gain in U.S. dollar terms.

European stock markets declined by approximately 3% for the reporting period. Markets in Italy and Spain, which were adversely affected by political instability and struggling banking sectors, declined the most, while Belgium and Portugal performed best. In the U.K., the equity market advanced by about 13%, but a sharp decline in the British pound in the wake of the Brexit vote led to negative returns in U.S. dollar terms.

Emerging markets stocks outperformed developed markets, advancing by nearly 12% for the reporting period in U.S. dollar terms. Latin American equity markets generated the best returns, led by rebounding markets in Peru and Brazil, while stock markets in Eastern Europe lagged.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 5

Management’s Discussion of Fund Performance

iSHARES^® ADAPTIVE CURRENCY HEDGED MSCI EUROZONE ETF

Performance as of August 31, 2016

	Cumulative Total Returns
	NAV		MARKET		INDEX
Since Inception		(0.75)%		(0.13)%		(0.36)%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 1/5/16. The first day of secondary market trading was 1/7/16.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 18 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Annualized Expense Ratio a
$	1,000.00	$	1,072.00	$	0.16	$	1,000.00	$	1,025.00	$	0.15		0.03%

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

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 18 for more information.

The iShares Adaptive Currency Hedged MSCI Eurozone ETF (the “Fund”) seeks to track the investment results of an index composed of large- and mid-capitalization equities from developed market countries which use the euro as their official currency while dynamically hedging currency risk for a U.S. dollar based investor, as represented by the MSCI EMU Adaptive Hedge to USD Index (the “Index”).

The Index applies a methodology, based on a hedge ratio as calculated by MSCI Inc., that sells the total value or a portion of the total value of each non-U.S. dollar currency in which the constituent securities are denominated in the form of a one-month currency contract to create a “hedge” against fluctuations in the relative value of the currencies in relation to the U.S. dollar. The hedge ratio is based on four commonly used indicators for measuring currency risk. The overall effect, since the four indicators are equally weighted, is that each foreign currency represented by constituent weights in the Index can be unhedged, 25% hedged, 50% hedged, 75% hedged or fully hedged relative to the U.S. dollar. In order to replicate the hedging component of the Index, the Fund enters into foreign currency forward contracts designed to offset the Fund’s exposure to the component currencies.

6 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® ADAPTIVE CURRENCY HEDGED MSCI EUROZONE ETF

The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund currently seeks to achieve its investment objective by investing a substantial portion of its assets in one underlying fund, the iShares MSCI Eurozone ETF. For the period from January 5, 2016 (inception date of the Fund) through August 31, 2016 (the “reporting period”), the total return for the Fund was -0.75%, net of fees, while the total return for the Index was -0.36%.

Eurozone stocks, as represented by the Index, declined modestly for the reporting period. The euro-area economy grew at a 0.3% annual rate in the second quarter of 2016, while the unemployment rate was 10.1% in July 2016, the latest period for which data were available. Consumer prices in the Eurozone were flat for the reporting period. To head off potential deflation and stimulate growth, the European Central Bank cut interest rates to 0% in March of 2016 and announced a corporate asset purchase program aimed at lowering long-term corporate borrowing costs.

Germany, France, and the Netherlands, which accounted for approximately 73% of the Index on average during the reporting period, were the leading contributors to the Index’s performance. On the downside, equities in Italy and Spain were hard hit by the crisis in the banking sector, and they were leading detractors from the Index’s return in U.S. dollar terms.

From a sector standpoint, stocks in the industrials and materials sectors contributed the most to the Index’s performance during the reporting period despite slower industrial production and restrained manufacturing activity in the Eurozone. The consumer staples, energy, and information technology sectors were other sources of strength. Financials detracted the most from the Index’s return for the reporting period, driven by banks, which struggled with the difficult economic environment, negative interest rates, and poor performance on the European Banking Authority’s stress tests. Telecommunication services and healthcare stocks also detracted from the Index’s return.

Although the euro was little changed relative to the U.S. dollar during the reporting period, the currency hedging portion of the Index had a negative impact on the Index’s return. The adaptive currency hedging component of the Index utilizes a hedge ratio that modifies currency exposure based on the difference in interest rates, relative valuation, currency momentum, and currency volatility. During the reporting period, the hedge ratio fluctuated in a range of 25% to 75% of the Index’s non-U.S. currency exposure, measuring 50% at the end of the reporting period.

ALLOCATION BY SECTOR¹

As of 8/31/16

Sector Percentage of
Total Investments ²

Financials 3	17.46	%
Industrials	15.12
Consumer Discretionary	13.74
Consumer Staples	12.22
Materials	8.30
Health Care	7.93
Information Technology	7.56
Utilities	5.48
Energy	5.28
Telecommunication Services	4.73
Real Estate 3	2.18
TOTAL	100.00	%

TEN LARGEST COUNTRIES¹

As of 8/31/16

Country Percentage of
Total Investments ²

France	32.00	%
Germany	30.03
Netherlands	10.85
Spain	10.03
Italy	6.54
Belgium	4.42
Finland	3.21
Ireland	1.60
Austria	0.59
Portugal	0.51
TOTAL	99.78	%

¹ Table shown is for the iShares MSCI Eurozone ETF, the underlying fund in which the Fund invests.

² Excludes money market funds.

³ Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 7

Management’s Discussion of Fund Performance

iSHARES^® CURRENCY HEDGED MSCI EUROZONE ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		(1.02)%		(1.06)%		(0.96)%		(1.02)%		(1.06)%		(0.96)%
Since Inception		2.29%		2.29%		2.88%		4.99%		4.99%		6.26%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 7/9/14. The first day of secondary market trading was 7/10/14.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 18 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Annualized Expense Ratio a
$	1,000.00	$	1,084.00	$	0.16	$	1,000.00	$	1,025.00	$	0.15		0.03%

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

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 18 for more information.

The iShares Currency Hedged MSCI Eurozone ETF (the “Fund”) seeks to track the investment results of an index composed of large- and mid-capitalization equities from developed market countries which use the euro as their official currency while mitigating exposure to fluctuations between the value of the euro and the U.S. dollar, as represented by the MSCI EMU 100% Hedged to USD Index (the “Index”).

The Index sells forward the non-U.S. dollar currencies in which the constituent securities are denominated in an amount equal to those securities at a one-month forward rate to effectively create a “hedge” against fluctuations in the relative value of the euro in relation to the U.S. dollar. In order to replicate the hedging component of the Index, the Fund enters into foreign currency forward contracts designed to offset the Fund’s exposure to the euro.

8 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® CURRENCY HEDGED MSCI EUROZONE ETF

The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund currently seeks to achieve its investment objective by investing a substantial portion of its assets in one underlying fund, the iShares MSCI Eurozone ETF. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was -1.02%, net of fees, while the total return for the Index was -0.96%.

Eurozone stocks, as represented by the Index, declined for the reporting period. The euro-area economy grew at a 0.3% annual rate in the second quarter of 2016, while the unemployment rate was 10.1% in July 2016, the latest period for which data were available. Consumer prices in the Eurozone rose 0.2% for the year ended in August 2016. To head off potential deflation and stimulate growth, the European Central Bank cut interest rates to 0% in March of 2016 and announced a corporate asset purchase program aimed at lowering long-term corporate borrowing costs.

Equities in Italy, Spain, and France, which together accounted for approximately 50% of the Index on average during the reporting period, were especially hard hit by the crisis in the banking sector, and they were leading detractors from the Index’s return in U.S. dollar terms. The Netherlands, Belgium, and Germany were the leading contributors to performance.

From a sector standpoint, financials detracted the most from the Index’s return for the reporting period, driven by banks, which struggled with the difficult economic environment, negative interest rates, and poor performance on the European Banking Authority’s stress tests. Healthcare, telecommunication services, and consumer discretionary stocks also detracted from the Index’s return.

Stocks in the consumer staples sector contributed the most to the Index’s performance during the reporting period, led by the food, beverages, and tobacco industry and the household and personal products industry. The information technology, industrials, materials, and energy sectors were other sources of strength.

In currency markets, the euro was little changed relative to the U.S. dollar during the reporting period, as monetary policy in the U.S. and the Eurozone was relatively stable. The Index’s hedging activity had a positive impact on the Index’s return for the reporting period. A fully hedged investor seeks to bypass the currency impact — both on the upside and on the downside — related to holding foreign-currency-denominated securities. The Index’s hedging activity offset the negative impact of the euro’s performance relative to the U.S. dollar, resulting in an Index return that was relatively close to Eurozone equities’ return measured in euros.

ALLOCATION BY SECTOR¹

As of 8/31/16

Sector Percentage of
Total Investments  ²

Financials 3	17.46	%
Industrials	15.12
Consumer Discretionary	13.74
Consumer Staples	12.22
Materials	8.30
Health Care	7.93
Information Technology	7.56
Utilities	5.48
Energy	5.28
Telecommunication Services	4.73
Real Estate 3	2.18
TOTAL	100.00	%

TEN LARGEST COUNTRIES¹

As of 8/31/16

Country Percentage of
Total Investments  ²

France	32.00	%
Germany	30.03
Netherlands	10.85
Spain	10.03
Italy	6.54
Belgium	4.42
Finland	3.21
Ireland	1.60
Austria	0.59
Portugal	0.51
TOTAL	99.78	%

¹ Table shown is for the iShares MSCI Eurozone ETF, the underlying fund in which the Fund invests.

² Excludes money market funds.

³ Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 9

Management’s Discussion of Fund Performance

iSHARES^® CURRENCY HEDGED MSCI GERMANY ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		3.50%		3.50%		3.55%		3.50%		3.50%		3.55%
Since Inception		4.75%		4.73%		4.93%		12.73%		12.67%		13.22%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 1/31/14. The first day of secondary market trading was 2/4/14.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 18 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Annualized Expense Ratio a
$	1,000.00	$	1,130.50	$	0.21	$	1,000.00	$	1,024.90	$	0.20		0.04%

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

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 18 for more information.

The iShares Currency Hedged MSCI Germany ETF (the “Fund”) seeks to track the investment results of an index composed of large-and mid-capitalization German equities while mitigating exposure to fluctuations between the value of the euro and the U.S. dollar, as represented by the MSCI Germany 100% Hedged to USD Index (the “Index”).

The Index sells forward the non-U.S. dollar currencies in which the constituent securities are denominated in an amount equal to those securities at a one-month forward rate to effectively create a “hedge” against fluctuations in the relative value of the euro in relation to the U.S. dollar. In order to replicate the hedging component of the Index, the Fund enters into foreign currency forward contracts designed to offset the Fund’s exposure to the euro.

10 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® CURRENCY HEDGED MSCI GERMANY ETF

The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund currently seeks to achieve its investment objective by investing a substantial portion of its assets in one underlying fund, the iShares MSCI Germany ETF. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 3.50%, net of fees, while the total return for the Index was 3.55%.

German equities, as represented by the Index, produced positive returns in U.S. dollar terms. The German economy expanded at a 3.1% annual rate in the second quarter of 2016, while the unemployment rate was 4.2% in July 2016, the lowest level in more than 35 years. In addition, corporate profits and consumer confidence improved over the course of the reporting period. At the same time, German inflation ran at just a 0.4% annual rate in August 2016, well below the European Central Bank’s (“ECB’s”) stated inflation target of 2%. To head off potential deflation and stimulate growth, the ECB cut interest rates to 0% in March 2016 and announced a corporate asset purchase program aimed at lowering long-term corporate borrowing costs.

Stocks in the information technology sector contributed the most to the Index’s performance during the reporting period in U.S. dollar terms, led by the software and semiconductors industries. In the industrials sector, industrial conglomerates helped Index performance the most, followed by transportation and machinery companies. The consumer staples and materials sectors were other sources of strength.

At the other end of the spectrum, financials stocks detracted the most from the Index’s return for the reporting period in U.S. dollar terms. Capital market companies and banks were the main sources of weakness, as they struggled with the poor outlook for growth, currency and financial market uncertainty, and the low level of interest rates in the wake of the Brexit vote. Healthcare, consumer discretionary, and utilities stocks were other sources of weakness.

In currency markets, the euro was little changed relative to the U.S. dollar during the reporting period, as monetary policy in the U.S. and the Eurozone was relatively stable. The Index’s hedging activity had a positive impact on the Index’s return for the reporting period. A fully hedged investor seeks to bypass the currency impact — both on the upside and on the downside — related to holding foreign-currency-denominated securities. The Index’s hedging activity offset the negative impact of the euro’s performance relative to the U.S. dollar, resulting in an Index return that was relatively close to Eurozone equities’ return measured in euros.

ALLOCATION BY SECTOR¹

As of 8/31/16

Sector Percentage of
Total Investments  ²

Consumer Discretionary	19.53	%
Materials	14.26
Health Care	14.15
Industrials	14.08
Financials 3	13.29
Information Technology	9.94
Telecommunication Services	5.12
Consumer Staples	4.48
Real Estate 3	2.77
Utilities	2.38
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS¹

As of 8/31/16

Security Percentage of
Total Investments  ²

Siemens AG Registered	8.22	%
Bayer AG Registered	7.97
SAP SE	7.77
BASF SE	6.72
Allianz SE Registered	6.13
Daimler AG Registered	6.00
Deutsche Telekom AG Registered	4.85
Linde AG	2.86
adidas AG	2.81
Deutsche Post AG Registered	2.77
TOTAL	56.10	%

¹ Table shown is for the iShares MSCI Germany ETF, the underlying fund in which the Fund invests.

² Excludes money market funds.

³ Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 11

Management’s Discussion of Fund Performance

iSHARES^® CURRENCY HEDGED MSCI ITALY ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		(19.68)%		(19.89)%		(19.33)%		(19.68)%		(19.89)%		(19.33)%
Since Inception		(17.40)%		(17.41)%		(18.21)%		(20.12)%		(20.13)%		(20.95)%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 6/29/15. The first day of secondary market trading was 7/1/15.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 18 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Annualized Expense Ratio a
$	1,000.00	$	1,014.50	$	0.00	$	1,000.00	$	1,025.20	$	0.00		0.00%

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

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 18 for more information.

The iShares Currency Hedged MSCI Italy ETF (the “Fund”) seeks to track the investment results of an index composed of large-and mid-capitalization Italian equities while mitigating exposure to fluctuations between the value of the euro and the U.S. dollar, as represented by the MSCI Italy 25/50 100% Hedged to USD Index (the “Index”).

The Index sells forward the non-U.S. dollar currencies in which the constituent securities are denominated in an amount equal to those securities at a one-month forward rate to effectively create a “hedge” against fluctuations in the relative value of the euro in relation to the U.S. dollar. In order to replicate the hedging component of the Index, the Fund enters into foreign currency forward contracts designed to offset the Fund’s exposure to the euro.

12 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® CURRENCY HEDGED MSCI ITALY ETF

The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund currently seeks to achieve its investment objective by investing a substantial portion of its assets in one underlying fund, the iShares MSCI Italy Capped ETF. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was -19.68%, net of fees, while the total return for the Index was -19.33%.

Italian stocks, as measured by the Index, declined during the reporting period. The Italian economy expanded at a 0.8% annual rate in the second quarter of 2016, while the unemployment rate was 11.4% in July 2016, the latest period for which data were available. Consumer prices in Italy declined 0.1% for the year ended in August 2016, well below the European Central Bank’s (“ECB’s”) stated inflation target of 2%. To head off potential deflation and stimulate growth, the ECB cut interest rates to 0% in March 2016 and announced a corporate asset purchase program aimed at lowering long-term corporate borrowing costs.

The financials sector, which made up about 38% of the Index on average during the reporting period, detracted the most from the Index’s performance in U.S. dollar terms. Underperformance in this sector was driven by Italian banks, which faced a number of challenges, including large exposure to non-performing loans and a need to raise capital to meet reserve requirements, which led to poor performance on the European Banking Authority’s stress tests. They faced additional challenges in the form of low interests rates and a difficult macroeconomic environment. Consumer discretionary, energy, and telecommunication services stocks were other detractors.

At the other end of the spectrum, utilities stocks contributed the most to the Index’s performance for the reporting period in U.S. dollar terms. Electric utilities in particular tend to be capital intensive businesses, which benefited from the ECB’s decision to purchase corporate bonds.

In currency markets, the euro was little changed relative to the U.S. dollar during the reporting period, as monetary policy in the U.S. and the Eurozone was relatively stable. The Index’s hedging activity had a positive impact on the Index’s return for the reporting period. A fully hedged investor seeks to bypass the currency impact — both on the upside and on the downside — related to holding foreign-currency-denominated securities. The Index’s hedging activity offset the negative impact of the euro’s performance relative to the U.S. dollar, resulting in an Index return that was relatively close to Eurozone equities’ return measured in euros.

ALLOCATION BY SECTOR¹

As of 8/31/16

Sector Percentage of
Total Investments  ²

Financials	31.60	%
Utilities	21.13
Energy	18.91
Industrials	13.65
Consumer Discretionary	10.23
Telecommunication Services	4.48
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS¹

As of 8/31/16

Security Percentage of
Total Investments  ²

Eni SpA	14.73	%
Enel SpA	12.77
Intesa Sanpaolo SpA	11.34
Assicurazioni Generali SpA	4.98
UniCredit SpA	4.70
Atlantia SpA	4.41
Snam SpA	4.40
Terna Rete Elettrica Nazionale SpA	3.96
CNH Industrial NV	3.83
Luxottica Group SpA	3.70
TOTAL	68.82	%

¹  Table shown is for the iShares MSCI Italy Capped ETF, the underlying fund in which the Fund invests.

²  Excludes money market funds.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 13

Management’s Discussion of Fund Performance

iSHARES^® CURRENCY HEDGED MSCI SPAIN ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		(12.51)%		(12.63)%		(11.84)%		(12.51)%		(12.63)%		(11.84)%
Since Inception		(14.05)%		(14.05)%		(14.45)%		(16.31)%		(16.31)%		(16.68)%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 6/29/15. The first day of secondary market trading was 7/1/15.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 18 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Annualized Expense Ratio a
$	1,000.00	$	1,064.20	$	0.16	$	1,000.00	$	1,025.00	$	0.15		0.03%

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

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 18 for more information.

The iShares Currency Hedged MSCI Spain ETF (the “Fund”) seeks to track the investment results of an index composed of large-and mid-capitalization Spanish equities while mitigating exposure to fluctuations between the value of the euro and the U.S. dollar, as represented by the MSCI Spain 25/50 100% Hedged to USD Index (the “Index”).

The Index sells forward the non-U.S. dollar currencies in which the constituent securities are denominated in an amount equal to those securities at a one-month forward rate to effectively create a “hedge” against fluctuations in the relative value of the euro in relation to the U.S. dollar. In order to replicate the hedging component of the Index, the Fund enters into foreign currency forward contracts designed to offset the Fund’s exposure to the euro.

The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the

14 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® CURRENCY HEDGED MSCI SPAIN ETF

Index. The Fund currently seeks to achieve its investment objective by investing a substantial portion of its assets in one underlying fund, the iShares MSCI Spain Capped ETF. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was -12.51%, net of fees, while the total return for the Index was -11.84%.

Spanish stock prices, as measured by the Index, declined during the reporting period. Spain’s currency, the euro, was little changed relative to the U.S. dollar and had little effect on Index performance.

The Spanish economy grew at a 3.2% annual rate in the second quarter of 2016, while the unemployment rate fell to 20% in June 2016, the latest period for which data were available. Consumer prices in Spain declined 0.1% for the year ended in August 2016, well below the European Central Bank’s (“ECB’s”) stated inflation target of 2%. To head off potential deflation and stimulate growth, the ECB cut interest rates to 0% in March 2016 and announced a corporate asset purchase program aimed at lowering long-term corporate borrowing costs.

The financials sector, which made up about 38% of the Index on average during the reporting period, detracted the most from the Index’s performance. Underperformance in this sector was driven by Spanish banks, which performed poorly on the European Banking Authority’s stress tests due to concerns about exposure to non-performing loans and the need to raise capital to meet reserve requirements. Additional challenges included low interests rates and a difficult macroeconomic environment. Telecommunication services stocks also detracted from the Index’s return.

Conversely, utilities stocks contributed the most to the Index’s performance for the reporting period, with electric and gas utilities companies as sources of strength. Consumer discretionary stocks also contributed to performance, benefiting from the upturn in the Spanish economy in general and retail sales activity in particular. Information technology, healthcare, industrials, and consumer staples were other sector contributors to Index performance during the reporting period.

In currency markets, the euro was little changed relative to the U.S. dollar during the reporting period, as monetary policy in the U.S. and the Eurozone was relatively stable. The Index’s hedging activity had a positive impact on the Index’s return for the reporting period. A fully hedged investor seeks to bypass the currency impact — both on the upside and on the downside — related to holding foreign-currency-denominated securities. The Index’s hedging activity offset the negative impact of the euro’s performance relative to the U.S. dollar, resulting in an Index return that was relatively close to Eurozone equities’ return measured in euros.

ALLOCATION BY SECTOR¹

As of 8/31/16

Sector Percentage of
Total Investments  ²

Financials	35.38	%
Utilities	18.48
Industrials	16.17
Telecommunication Services	9.14
Consumer Discretionary	7.45
Energy	4.46
Information Technology	4.38
Health Care	2.58
Consumer Staples	1.96
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS¹

As of 8/31/16

Security Percentage of
Total Investments  ²

Banco Santander SA	14.41	%
Telefonica SA	9.14
Banco Bilbao Vizcaya Argentaria SA	7.83
Industria de Diseno Textil SA	7.45
Iberdrola SA	6.64
Repsol SA	4.45
Amadeus IT Holding SA Class A	4.38
Abertis Infraestructuras SA	3.84
Aena SA	3.62
Red Electrica Corp. SA	3.49
TOTAL	65.25	%

¹  Table shown is for the iShares MSCI Spain Capped ETF, the underlying fund in which the Fund invests.

²  Excludes money market funds.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 15

Management’s Discussion of Fund Performance

iSHARES^® CURRENCY HEDGED MSCI SWITZERLAND ETF

Performance as of August 31, 2016

	Average Annual Total Returns						Cumulative Total Returns
	NAV		MARKET		INDEX		NAV		MARKET		INDEX
1 Year		0.63%		0.47%		0.53%		0.63%		0.47%		0.53%
Since Inception		0.64%		0.64%		0.07%		0.75%		0.75%		0.08%

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 6/29/15. The first day of secondary market trading was 7/1/15.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 18 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period a,b		Annualized Expense Ratio a
$	1,000.00	$	1,085.40	$	0.16	$	1,000.00	$	1,025.00	$	0.15		0.03%

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

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 18 for more information.

The iShares Currency Hedged MSCI Switzerland ETF (the “Fund”) seeks to track the investment results of an index composed of large-and mid-capitalization Swiss equities while mitigating exposure to fluctuations between the value of the Swiss franc and the U.S. dollar, as represented by the MSCI Switzerland 25/50 100% Hedged to USD Index (the “Index”).

The Index sells forward the non-U.S. dollar currencies in which the constituent securities are denominated in an amount equal to those securities at a one-month forward rate to effectively create a “hedge” against fluctuations in the relative value of the Swiss franc in relation to the U.S. dollar. In order to replicate the hedging component of the Index, the Fund enters into foreign currency forward contracts designed to offset the Fund’s exposure to the Swiss franc.

16 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® CURRENCY HEDGED MSCI SWITZERLAND ETF

The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund currently seeks to achieve its investment objective by investing a substantial portion of its assets in one underlying fund, the iShares MSCI Switzerland Capped ETF. For the 12-month reporting period ended August 31, 2016, the total return for the Fund was 0.63%, net of fees, while the total return for the Index was 0.53%.

Swiss stocks, as represented by the Index, rose slightly during the reporting period. The Swiss economy grew at a 2.0% annual rate in the second quarter of 2016. Measures of Swiss consumer confidence declined during the reporting period, while retail sales activity also fell. In addition, the Swiss economy experienced deflation during the reporting period, with consumer prices declining 0.1% for the 12 months ended in August 2016. On a positive note, the unemployment rate remained comparatively low at 3.2% in August. To stimulate growth and head off deflation, the Swiss central bank maintained negative interest rates throughout the reporting period.

Healthcare stocks, which represented about 31% of the Index on average, was the largest detractor from the Index’s performance for the reporting period. Within the sector, the pharmaceuticals industry detracted from the Index’s return. The financials sector also detracted, as the Swiss diversified capital markets industry struggled with negative interest rates, the poor outlook for growth, concerns about ongoing restructuring, and a need to raise capital to meet reserve requirements. Consumer discretionary, energy, and telecommunication services stocks also weighed on the Index’s performance.

The leading contributor to the Index’s return for the reporting period was the consumer staples sector, led by food products companies. Other contributions came from the materials and industrials sectors. Among industrials stocks, electrical equipment and building products companies helped the most. In the materials sector, specialty chemical and fertilizer companies were leading sources of strength.

The Swiss franc depreciated by approximately 2% relative to the U.S. dollar for the reporting period, as the currency stabilized at a slightly lower value after the prior reporting period’s one-day 30% appreciation in January 2015. The Index’s hedging activity had a positive impact on the Index’s return for the reporting period. A fully hedged investor seeks to bypass the currency impact — both on the upside and on the downside — related to holding foreign-currency-denominated securities. The Index’s hedging activity offset the negative impact of the Swiss franc’s performance relative to the U.S. dollar, resulting in an Index return that was relatively close to Swiss equities’ return measured in Swiss francs.

ALLOCATION BY SECTOR¹

As of 8/31/16

Sector Percentage of
Total Investments  ²

Health Care	29.83	%
Consumer Staples	22.48
Financials 3	18.13
Industrials	11.65
Materials	10.74
Consumer Discretionary	4.91
Telecommunication Services	1.38
Real Estate 3	0.88
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS¹

As of 8/31/16

Security Percentage of
Total Investments  ²

Nestle SA Registered	19.51	%
Novartis AG Registered	12.86
Roche Holding AG	12.45
UBS Group AG	4.52
ABB Ltd. Registered	4.27
Syngenta AG Registered	4.01
Zurich Insurance Group AG	3.72
Swiss Re AG	2.96
Cie. Financiere Richemont SA Class A Registered	2.93
LafargeHolcim Ltd. Registered	2.54
TOTAL	69.77	%

¹ Table shown is for the iShares MSCI Switzerland Capped ETF, the underlying fund in which the Fund invests.

² Excludes money market funds.

³ Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 17

About Fund Performance

Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.ishares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.

Shareholder Expenses

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested on March 1, 2016 and held through August 31, 2016, is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.

Actual Expenses — The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number corresponding to your Fund under the heading entitled “Expenses Paid During Period.”

Hypothetical Example for Comparison Purposes — The table also provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

18 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® ADAPTIVE CURRENCY HEDGED MSCI EUROZONE ETF

August 31, 2016

Security	Shares		Value
INVESTMENT COMPANIES — 100.03%
EXCHANGE-TRADED FUNDS — 100.03%
iShares MSCI Eurozone ETFa		67,434	$	2,306,917
				2,306,917
TOTAL INVESTMENT COMPANIES
(Cost: $2,303,703)				2,306,917
SHORT-TERM INVESTMENTS — 0.05%
MONEY MARKET FUNDS — 0.05%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		1,092		1,092
				1,092
TOTAL SHORT-TERM INVESTMENTS
(Cost: $1,092)				1,092

	Value
TOTAL INVESTMENTS IN SECURITIES — 100.08%
(Cost: $2,304,795)d	$	2,308,009
Other Assets, Less Liabilities — (0.08)%		(1,875	)
NET ASSETS — 100.00%	$	2,306,134

^a  Affiliated issuer. See Schedule 1.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $2,305,833. Net unrealized appreciation was $2,176, of which $2,176 represented gross unrealized appreciation on securities and $  — represented gross unrealized depreciation on securities.

Schedule 1 — Affiliates (Note 2)

Investments in issuers considered to be affiliates of the Fund (excluding affiliated money market funds) from January 5, 2016 (commencement of operations) to August 31, 2016, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

Affiliated issuer	Shares held at beginning of period		Shares purchased		Shares sold			Shares held at end of period		Value at end of period		Dividend income		Net realized gain (loss)
iShares MSCI Eurozone ETF		—		72,409		(4,975	)		67,434	$	2,306,917	$	56,723	$	(6,414	)

Schedule 2 — Forward Currency Contracts (Note 5)

Forward currency contracts outstanding as of August 31, 2016 were as follows:

Currency purchased			Currency sold			Counterparty	Settlement date		Unrealized appreciation (depreciation)
	EUR	1,012,000		USD	1,126,611	BNP		09/06/2016	$	2,381
	USD	1,134,431		EUR	1,014,000	BNP		09/06/2016		3,208
	EUR	495,000		USD	552,522	BNP		10/05/2016		419
										6,008
	EUR	2,000		USD	2,237	BNP		09/06/2016		(5	)
	USD	1,128,074		EUR	1,012,000	BNP		10/05/2016		(2,385	)
										(2,390	)
					Net unrealized appreciation				$	3,618

Counterparties:

BNP — BNP Paribas SA

Currency abbreviations:

EUR — Euro

USD — United States Dollar

SCHEDULES OF INVESTMENTS 19

Schedule of Investments (Continued)

iSHARES^® ADAPTIVE CURRENCY HEDGED MSCI EUROZONE ETF

August 31, 2016

Schedule 3 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2			Level 3		Total
Investments:
Assets:
Exchange-Traded Funds	$	2,306,917	$	—		$	—	$	2,306,917
Money market funds		1,092		—			—		1,092
Total	$	2,308,009	$	—		$	—	$	2,308,009
Derivative financial instrumentsa:
Assets:
Forward currency contracts	$	—	$	6,008		$	—	$	6,008
Liabilities:
Forward currency contracts		—		(2,390	)		—		(2,390	)
Total	$	—	$	3,618		$	—	$	3,618

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

20 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® CURRENCY HEDGED MSCI EUROZONE ETF

August 31, 2016

Security	Shares		Value
INVESTMENT COMPANIES — 99.88%
EXCHANGE-TRADED FUNDS — 99.88%
iShares MSCI Eurozone ETFa,b		39,282,725	$	1,343,862,022
				1,343,862,022
TOTAL INVESTMENT COMPANIES
(Cost: $1,508,834,684)				1,343,862,022
SHORT-TERM INVESTMENTS — 0.61%
MONEY MARKET FUNDS — 0.61%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%c,d,e		7,434,000		7,434,000
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		763,278		763,278
				8,197,278
TOTAL SHORT-TERM INVESTMENTS
(Cost: $8,197,278)				8,197,278

	Value
TOTAL INVESTMENTS IN SECURITIES — 100.49%
(Cost: $1,517,031,962)f	$	1,352,059,300
Other Assets, Less Liabilities — (0.49)%		(6,654,032	)
NET ASSETS — 100.00%	$	1,345,405,268

^a  All or a portion of this security represents a security on loan. See Note 1.

^b  Affiliated issuer. See Schedule 1.

^c  Affiliated money market fund.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

^e  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^f  The cost of investments for federal income tax purposes was $1,529,770,294. Net unrealized depreciation was $177,710,994, of which $  — represented gross unrealized appreciation on securities and $177,710,994 represented gross unrealized depreciation on securities.

Schedule 1 — Affiliates (Note 2)

Investments in issuers considered to be affiliates of the Fund (excluding affiliated money market funds) during the year ended August 31, 2016, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

Affiliated issuer	Shares held at beginning of year		Shares purchased		Shares sold			Shares held at end of year		Value at end of year		Dividend income		Net realized gain (loss)
iShares MSCI Eurozone ETF		43,268,307		58,303,108		(62,288,690	)		39,282,725	$	1,343,862,022	$	48,179,268	$	(105,560,123	)

SCHEDULES OF INVESTMENTS 21

Schedule of Investments (Continued)

iSHARES^® CURRENCY HEDGED MSCI EUROZONE ETF

August 31, 2016

Schedule 2 — Forward Currency Contracts (Note 5)

Forward currency contracts outstanding as of August 31, 2016 were as follows:

Currency purchased			Currency sold			Counterparty	Settlement date		Unrealized appreciation (depreciation)
	USD	95,748,251		EUR	85,507,000	BNP		09/06/2016	$	356,259
	USD	16,663,679		EUR	14,761,000	CITI		09/06/2016		196,241
	USD	785,720,657		EUR	702,741,000	BNP		10/05/2016		721,408
	USD	532,742,065		EUR	476,737,345	CITI		10/05/2016		200,975
										1,474,883
	EUR	802,586,000		USD	897,563,402	BNP		09/06/2016		(2,194,863	)
	EUR	544,374,345		USD	607,755,906	CITI		09/06/2016		(449,447	)
	USD	796,398,694		EUR	717,079,000	BNP		09/06/2016		(3,577,853	)
	USD	588,135,620		EUR	529,613,345	CITI		09/06/2016		(2,703,402	)
	USD	17,398,149		EUR	15,595,000	BNP		10/05/2016		(22,299	)
										(8,947,864	)
					Net unrealized depreciation				$	(7,472,981	)

Counterparties:

BNP — BNP Paribas SA

CITI — Citibank N.A. London

Currency abbreviations:

EUR — Euro

USD — United States Dollar

Schedule 3 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2			Level 3		Total
Investments:
Assets:
Exchange-Traded Funds	$	1,343,862,022	$	—		$	—	$	1,343,862,022
Money market funds		8,197,278		—			—		8,197,278
Total	$	1,352,059,300	$	—		$	—	$	1,352,059,300
Derivative financial instrumentsa:
Assets:
Forward currency contracts	$	—	$	1,474,883		$	—	$	1,474,883
Liabilities:
Forward currency contracts		—		(8,947,864	)		—		(8,947,864	)
Total	$	—	$	(7,472,981	)	$	—	$	(7,472,981	)

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

22 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® CURRENCY HEDGED MSCI GERMANY ETF

August 31, 2016

Security	Shares		Value
INVESTMENT COMPANIES — 99.89%
EXCHANGE-TRADED FUNDS — 99.89%
iShares MSCI Germany ETFa,b		18,777,370	$	492,154,868
				492,154,868
TOTAL INVESTMENT COMPANIES
(Cost: $562,435,671)				492,154,868
SHORT-TERM INVESTMENTS — 1.31%
MONEY MARKET FUNDS — 1.31%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%c,d,e		6,071,330		6,071,330
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		382,382		382,382
				6,453,712
TOTAL SHORT-TERM INVESTMENTS
(Cost: $6,453,712)				6,453,712

	Value
TOTAL INVESTMENTS IN SECURITIES — 101.20%
(Cost: $568,889,383)f	$	498,608,580
Other Assets, Less Liabilities — (1.20)%		(5,907,961	)
NET ASSETS — 100.00%	$	492,700,619

^a  All or a portion of this security represents a security on loan. See Note 1.

^b  Affiliated issuer. See Schedule 1.

^c  Affiliated money market fund.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

^e  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^f  The cost of investments for federal income tax purposes was $572,434,350. Net unrealized depreciation was $73,825,770, of which $  — represented gross unrealized appreciation on securities and $73,825,770 represented gross unrealized depreciation on securities.

Schedule 1 — Affiliates (Note 2)

Investments in issuers considered to be affiliates of the Fund (excluding affiliated money market funds) during the year ended August 31, 2016, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

Affiliated issuer	Shares held at beginning of year		Shares purchased		Shares sold			Shares held at end of year		Value at end of year		Dividend income		Net realized gain (loss)
iShares MSCI Germany ETF		66,150,454		16,431,701		(63,804,785	)		18,777,370	$	492,154,868	$	13,513,803	$	(190,825,120	)

SCHEDULES OF INVESTMENTS 23

Schedule of Investments (Continued)

iSHARES^® CURRENCY HEDGED MSCI GERMANY ETF

August 31, 2016

Schedule 2 — Forward Currency Contracts (Note 5)

Forward currency contracts outstanding as of August 31, 2016 were as follows:

Currency purchased			Currency sold			Counterparty	Settlement date		Unrealized appreciation (depreciation)
	USD	65,601,975		EUR	58,598,000	BNP		09/06/2016	$	229,783
	USD	3,283,471		EUR	2,899,000	CITI		09/06/2016		49,334
	USD	302,708,979		EUR	270,740,000	BNP		10/05/2016		277,932
	USD	178,312,133		EUR	159,567,000	CITI		10/05/2016		67,268
										624,317
	EUR	431,082,000		USD	483,964,569	BNP		09/06/2016		(3,047,558	)
	EUR	174,654,000		USD	194,971,936	CITI		09/06/2016		(127,151	)
	USD	413,502,570		EUR	372,484,000	BNP		09/06/2016		(2,042,250	)
	USD	190,733,928		EUR	171,755,000	CITI		09/06/2016		(876,720	)
	USD	13,818,576		EUR	12,388,000	BNP		10/05/2016		(19,483	)
										(6,113,162	)
					Net unrealized depreciation				$	(5,488,845	)

Counterparties:

BNP — BNP Paribas SA

CITI — Citibank N.A. London

Currency abbreviations:

EUR — Euro

USD — United States Dollar

Schedule 3 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2			Level 3		Total
Investments:
Assets:
Exchange-Traded Funds	$	492,154,868	$	—		$	—	$	492,154,868
Money market funds		6,453,712		—			—		6,453,712
Total	$	498,608,580	$	—		$	—	$	498,608,580
Derivative financial instrumentsa:
Assets:
Forward currency contracts	$	—	$	624,317		$	—	$	624,317
Liabilities:
Forward currency contracts		—		(6,113,162	)		—		(6,113,162	)
Total	$	—	$	(5,488,845	)	$	—	$	(5,488,845	)

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

24 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® CURRENCY HEDGED MSCI ITALY ETF

August 31, 2016

Security	Shares		Value
INVESTMENT COMPANIES — 99.94%
EXCHANGE-TRADED FUNDS — 99.94%
iShares MSCI Italy Capped ETFa,b		621,544	$	7,017,232
				7,017,232
TOTAL INVESTMENT COMPANIES
(Cost: $9,308,792)				7,017,232
SHORT-TERM INVESTMENTS — 45.52%
MONEY MARKET FUNDS — 45.52%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%c,d,e		3,194,430		3,194,430
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		1,552		1,552
				3,195,982
TOTAL SHORT-TERM INVESTMENTS
(Cost: $3,195,982)				3,195,982

	Value
TOTAL INVESTMENTS IN SECURITIES — 145.46%
(Cost: $12,504,774)f	$	10,213,214
Other Assets, Less Liabilities — (45.46)%		(3,192,122	)
NET ASSETS — 100.00%	$	7,021,092

^a  All or a portion of this security represents a security on loan. See Note 1.

^b  Affiliated issuer. See Schedule 1.

^c  Affiliated money market fund.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

^e  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^f  The cost of investments for federal income tax purposes was $12,529,414. Net unrealized depreciation was $2,316,200, of which $  — represented gross unrealized appreciation on securities and $2,316,200 represented gross unrealized depreciation on securities.

Schedule 1 — Affiliates (Note 2)

Investments in issuers considered to be affiliates of the Fund (excluding affiliated money market funds) during the year ended August 31, 2016, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

Affiliated issuer	Shares held at beginning of year		Shares purchased		Shares sold			Shares held at end of year		Value at end of year		Dividend income		Net realized gain (loss)
iShares MSCI Italy Capped ETF		5,794,622		3,789,220		(8,962,298	)		621,544	$	7,017,232	$	847,557	$	(10,614,328	)

SCHEDULES OF INVESTMENTS 25

Schedule of Investments (Continued)

iSHARES^® CURRENCY HEDGED MSCI ITALY ETF

August 31, 2016

Schedule 2 — Forward Currency Contracts (Note 5)

Forward currency contracts outstanding as of August 31, 2016 were as follows:

Currency purchased			Currency sold			Counterparty	Settlement date		Unrealized appreciation (depreciation)
	EUR	7,065,000		USD	7,877,765	BNP		09/06/2016	$	3,981
	EUR	9,521,000		USD	10,619,581	CITI		09/06/2016		2,090
	USD	1,059,219		EUR	946,000	BNP		09/06/2016		3,857
										9,928
	EUR	194,000		USD	216,876	BNP		09/06/2016		(449	)
	EUR	778,000		USD	878,021	CITI		09/06/2016		(10,081	)
	USD	7,027,487		EUR	6,313,000	BNP		09/06/2016		(15,324	)
	USD	11,437,040		EUR	10,299,000	CITI		09/06/2016		(52,571	)
	USD	6,975,232		EUR	6,246,000	BNP		10/05/2016		(1,884	)
										(80,309	)
					Net unrealized depreciation				$	(70,381	)

Counterparties:

BNP — BNP Paribas SA

CITI — Citibank N.A. London

Currency abbreviations:

EUR — Euro

USD — United States Dollar

Schedule 3 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2			Level 3		Total
Investments:
Assets:
Exchange-Traded Funds	$	7,017,232	$	—		$	—	$	7,017,232
Money market funds		3,195,982		—			—		3,195,982
Total	$	10,213,214	$	—		$	—	$	10,213,214
Derivative financial instrumentsa:
Assets:
Forward currency contracts	$	—	$	9,928		$	—	$	9,928
Liabilities:
Forward currency contracts		—		(80,309	)		—		(80,309	)
Total	$	—	$	(70,381	)	$	—	$	(70,381	)

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

26 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® CURRENCY HEDGED MSCI SPAIN ETF

August 31, 2016

Security	Shares		Value
INVESTMENT COMPANIES — 99.89%
EXCHANGE-TRADED FUNDS — 99.89%
iShares MSCI Spain Capped ETFa,b		602,289	$	15,960,659
				15,960,659
TOTAL INVESTMENT COMPANIES
(Cost: $19,333,365)				15,960,659
SHORT-TERM INVESTMENTS — 34.32%
MONEY MARKET FUNDS — 34.32%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%c,d,e		5,477,420		5,477,420
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		5,406		5,406
				5,482,826
TOTAL SHORT-TERM INVESTMENTS
(Cost: $5,482,826)				5,482,826

	Value
TOTAL INVESTMENTS IN SECURITIES — 134.21%
(Cost: $24,816,191)f	$	21,443,485
Other Assets, Less Liabilities — (34.21)%		(5,465,755	)
NET ASSETS — 100.00%	$	15,977,730

^a  All or a portion of this security represents a security on loan. See Note 1.

^b  Affiliated issuer. See Schedule 1.

^c  Affiliated money market fund.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

^e  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^f  The cost of investments for federal income tax purposes was $24,825,804. Net unrealized depreciation was $3,382,319, of which $  — represented gross unrealized appreciation on securities and $3,382,319 represented gross unrealized depreciation on securities.

Schedule 1 — Affiliates (Note 2)

Investments in issuers considered to be affiliates of the Fund (excluding affiliated money market funds) during the year ended August 31, 2016, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

Affiliated issuer	Shares held at beginning of year		Shares purchased		Shares sold			Shares held at end of year		Value at end of year		Dividend income		Net realized gain (loss)
iShares MSCI Spain Capped ETF		1,803,521		1,695,957		(2,897,189	)		602,289	$	15,960,659	$	2,038,299	$	(10,269,421	)

SCHEDULES OF INVESTMENTS 27

Schedule of Investments (Continued)

iSHARES^® CURRENCY HEDGED MSCI SPAIN ETF

August 31, 2016

Schedule 2 — Forward Currency Contracts (Note 5)

Forward currency contracts outstanding as of August 31, 2016 were as follows:

Currency purchased			Currency sold			Counterparty	Settlement date		Unrealized appreciation (depreciation)
	EUR	7,576,000		USD	8,447,551	BNP		09/06/2016	$	4,269
	USD	2,200,544		EUR	1,965,000	BNP		09/06/2016		8,381
	USD	2,465,366		EUR	2,205,000	BNP		10/05/2016		2,263
	USD	13,179,500		EUR	11,794,000	CITI		10/05/2016		4,972
										19,885
	EUR	2,638,000		USD	2,946,184	BNP		09/06/2016		(3,219	)
	EUR	13,448,000		USD	15,032,764	CITI		09/06/2016		(30,115	)
	USD	9,162,855		EUR	8,249,000	BNP		09/06/2016		(39,766	)
	USD	14,934,004		EUR	13,448,000	CITI		09/06/2016		(68,645	)
	USD	224,254		EUR	201,000	BNP		10/05/2016		(274	)
										(142,019	)
					Net unrealized depreciation				$	(122,134	)

Counterparties:

BNP — BNP Paribas SA

CITI — Citibank N.A. London

Currency abbreviations:

EUR — Euro

USD — United States Dollar

Schedule 3 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2			Level 3		Total
Investments:
Assets:
Exchange-Traded Funds	$	15,960,659	$	—		$	—	$	15,960,659
Money market funds		5,482,826		—			—		5,482,826
Total	$	21,443,485	$	—		$	—	$	21,443,485
Derivative financial instrumentsa:
Assets:
Forward currency contracts	$	—	$	19,885		$	—	$	19,885
Liabilities:
Forward currency contracts		—		(142,019	)		—		(142,019	)
Total	$	—	$	(122,134	)	$	—	$	(122,134	)

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

28 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® CURRENCY HEDGED MSCI SWITZERLAND ETF

August 31, 2016

Security	Shares		Value
INVESTMENT COMPANIES — 99.71%
EXCHANGE-TRADED FUNDS — 99.71%
iShares MSCI Switzerland Capped ETFa		154,512	$	4,663,172
				4,663,172
TOTAL INVESTMENT COMPANIES
(Cost: $4,840,255)				4,663,172
SHORT-TERM INVESTMENTS — 0.05%
MONEY MARKET FUNDS — 0.05%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		2,325		2,325
				2,325
TOTAL SHORT-TERM INVESTMENTS
(Cost: $2,325)				2,325

	Value
TOTAL INVESTMENTS IN SECURITIES — 99.76%
(Cost: $4,842,580)d	$	4,665,497
Other Assets, Less Liabilities — 0.24%		11,137
NET ASSETS — 100.00%	$	4,676,634

^a  Affiliated issuer. See Schedule 1.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $4,861,135. Net unrealized depreciation was $195,638, of which $  — represented gross unrealized appreciation on securities and $195,638 represented gross unrealized depreciation on securities.

Schedule 1 — Affiliates (Note 2)

Investments in issuers considered to be affiliates of the Fund (excluding affiliated money market funds) during the year ended August 31, 2016, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

Affiliated issuer	Shares held at beginning of year		Shares purchased		Shares sold			Shares held at end of year		Value at end of year		Dividend income		Net realized gain (loss)
iShares MSCI Switzerland Capped ETF		115,520		218,823		(179,831	)		154,512	$	4,663,172	$	61,637	$	(301,157	)

Schedule 2 — Forward Currency Contracts (Note 5)

Forward currency contracts outstanding as of August 31, 2016 were as follows:

Currency purchased			Currency sold			Counterparty	Settlement date		Unrealized appreciation (depreciation)
	USD	4,669,062		CHF	4,576,000	BNP		09/06/2016	$	15,663
	USD	4,681,243		CHF	4,584,000	BNP		10/05/2016		11,129
										26,792
	CHF	4,576,000		USD	4,665,949	BNP		09/06/2016		(12,550	)
										(12,550	)
					Net unrealized appreciation				$	14,242

Counterparties:

BNP — BNP Paribas SA

Currency abbreviations:

CHF — Swiss Franc

USD — United States Dollar

SCHEDULES OF INVESTMENTS 29

Schedule of Investments (Continued)

iSHARES^® CURRENCY HEDGED MSCI SWITZERLAND ETF

August 31, 2016

Schedule 3 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2			Level 3		Total
Investments:
Assets:
Exchange-Traded Funds	$	4,663,172	$	—		$	—	$	4,663,172
Money market funds		2,325		—			—		2,325
Total	$	4,665,497	$	—		$	—	$	4,665,497
Derivative financial instrumentsa:
Assets:
Forward currency contracts	$	—	$	26,792		$	—	$	26,792
Liabilities:
Forward currency contracts		—		(12,550	)		—		(12,550	)
Total	$	—	$	14,242		$	—	$	14,242

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

30 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities

iSHARES^® TRUST

August 31, 2016

	iShares Adaptive Currency Hedged MSCI Eurozone ETF			iShares Currency Hedged MSCI Eurozone ETF			iShares Currency Hedged MSCI Germany ETF
ASSETS
Investments, at cost:
Affiliated (Note 2)	$	2,304,795		$	1,517,031,962		$	568,889,383
Total cost of investments	$	2,304,795		$	1,517,031,962		$	568,889,383
Investments in securities, at fair value (including securities on loana) (Note 1):
Affiliated (Note 2)	$	2,308,009		$	1,352,059,300		$	498,608,580
Total fair value of investments		2,308,009			1,352,059,300			498,608,580
Foreign currency, at valueb		—			89			—
Receivables:
Investment securities sold		—			8,155,969			5,562,979
Dividends and interest		—			4,872			11,279
Capital shares redeemed		—			128,043			95,116
Unrealized appreciation on forward currency contracts (Note 1)		6,008			1,474,883			624,317
Total Assets		2,314,017			1,361,823,156			504,902,271
LIABILITIES
Payables:
Investment securities purchased		5,435			—			—
Collateral for securities on loan (Note 1)		—			7,434,000			6,071,330
Investment advisory fees (Note 2)		58			36,024			17,160
Unrealized depreciation on forward currency contracts (Note 1)		2,390			8,947,864			6,113,162
Total Liabilities		7,883			16,417,888			12,201,652
NET ASSETS	$	2,306,134		$	1,345,405,268		$	492,700,619
Net assets consist of:
Paid-in capital	$	2,386,044		$	1,573,038,234		$	579,031,952
Undistributed net investment		—			—			10,715
Accumulated net realized loss		(86,742	)		(55,187,323	)		(10,572,401	)
Net unrealized appreciation (depreciation)		6,832			(172,445,643	)		(75,769,647	)
NET ASSETS	$	2,306,134		$	1,345,405,268		$	492,700,619
Shares outstandingc		100,000			54,400,000			20,500,000
Net asset value per share	$	23.06		$	24.73		$	24.03

^a  Securities on loan with values of $  —, $7,266,204 and $5,915,597, respectively. See Note 1.

^b  Cost of foreign currency: $  —, $89 and $  —, respectively.

^c  No par value, unlimited number of shares authorized.

See notes to financial statements.

FINANCIAL STATEMENTS 31

Statements of Assets and Liabilities (Continued)

iSHARES^® TRUST

August 31, 2016

	iShares Currency Hedged MSCI Italy ETF			iShares Currency Hedged MSCI Spain ETF			iShares Currency Hedged MSCI Switzerland ETF
ASSETS
Investments, at cost:
Affiliated (Note 2)	$	12,504,774		$	24,816,191		$	4,842,580
Total cost of investments	$	12,504,774		$	24,816,191		$	4,842,580
Investments in securities, at fair value (including securities on loana) (Note 1):
Affiliated (Note 2)	$	10,213,214		$	21,443,485		$	4,665,497
Total fair value of investments		10,213,214			21,443,485			4,665,497
Receivables:
Investment securities sold		70,456			128,573			—
Dividends and interest		2,233			5,728			1
Unrealized appreciation on forward currency contracts (Note 1)		9,928			19,885			26,792
Total Assets		10,295,831			21,597,671			4,692,290
LIABILITIES
Payables:
Investment securities purchased		—			—			2,988
Collateral for securities on loan (Note 1)		3,194,430			5,477,420			—
Investment advisory fees (Note 2)		—			502			118
Unrealized depreciation on forward currency contracts (Note 1)		80,309			142,019			12,550
Total Liabilities		3,274,739			5,619,941			15,656
NET ASSETS	$	7,021,092		$	15,977,730		$	4,676,634
Net assets consist of:
Paid-in capital	$	8,647,902		$	20,406,698		$	4,876,827
Undistributed net investment		—			6,792			—
Undistributed net realized gain (accumulated net realized loss)		735,131			(940,920	)		(37,352	)
Net unrealized depreciation		(2,361,941	)		(3,494,840	)		(162,841	)
NET ASSETS	$	7,021,092		$	15,977,730		$	4,676,634
Shares outstandingb		400,000			850,000			200,000
Net asset value per share	$	17.55		$	18.80		$	23.38

^a  Securities on loan with values of $3,148,781, $5,379,500 and $  —, respectively. See Note 1.

^b  No par value, unlimited number of shares authorized.

See notes to financial statements.

32 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations

iSHARES^® TRUST

Year ended August 31, 2016

	iShares Adaptive Currency Hedged MSCI Eurozone ETFa			iShares Currency Hedged MSCI Eurozone ETF			iShares Currency Hedged MSCI Germany ETF
NET INVESTMENT INCOME
Dividends — affiliated (Note 2)	$	56,726		$	48,181,895		$	13,514,921
Securities lending income — affiliated — net (Note 2)		14			67,367			60,115
Total investment income		56,740			48,249,262			13,575,036
EXPENSES
Investment advisory fees (Note 2)		9,219			12,202,742			5,221,751
Total expenses		9,219			12,202,742			5,221,751
Less investment advisory fees waived (Note 2)		(8,773	)		(11,612,778	)		(4,736,386	)
Net expenses		446			589,964			485,365
Net investment income		56,294			47,659,298			13,089,671
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated (Note 2)		(6,414	)		(40,452,563	)		(19,786,227	)
In-kind redemptions — affiliated (Note 2)		—			(65,107,560	)		(171,038,893	)
Foreign currency transactions		(80,328	)		(34,883,582	)		(25,699,994	)
Net realized loss		(86,742	)		(140,443,705	)		(216,525,114	)
Net change in unrealized appreciation/depreciation on:
Investments		3,214			(47,538,091	)		135,422,849
Forward currency contracts		3,618			43,465,631			48,751,072
Net change in unrealized appreciation/depreciation		6,832			(4,072,460	)		184,173,921
Net realized and unrealized loss		(79,910	)		(144,516,165	)		(32,351,193	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(23,616	)	$	(96,856,867	)	$	(19,261,522	)

^a  For the period from January 5, 2016 (commencement of operations) to August 31, 2016.

See notes to financial statements.

FINANCIAL STATEMENTS 33

Statements of Operations (Continued)

iSHARES^® TRUST

Year ended August 31, 2016

	iShares Currency Hedged MSCI Italy ETF			iShares Currency Hedged MSCI Spain ETF			iShares Currency Hedged MSCI Switzerland ETF
NET INVESTMENT INCOME
Dividends — affiliated (Note 2)	$	819,207		$	2,038,358		$	61,641
Securities lending income — affiliated — net (Note 2)		24,334			8,950			260
Total investment income		843,541			2,047,308			61,901
EXPENSES
Investment advisory fees (Note 2)		275,384			313,690			21,946
Total expenses		275,384			313,690			21,946
Less investment advisory fees waived (Note 2)		(275,384	)		(298,517	)		(20,886	)
Net expenses		—			15,173			1,060
Net investment income		843,541			2,032,135			60,841
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated (Note 2)		(1,126,057	)		(2,050,344	)		(67,308	)
In-kind redemptions — affiliated (Note 2)		(9,488,271	)		(8,219,077	)		(233,849	)
Foreign currency transactions		4,282,678			31,017			97,931
Net realized loss		(6,331,650	)		(10,238,404	)		(203,226	)
Net change in unrealized appreciation/depreciation on:
Investments		(1,114,771	)		(2,539,680	)		(13,189	)
Forward currency contracts		129,640			156,295			27,212
Net change in unrealized appreciation/depreciation		(985,131	)		(2,383,385	)		14,023
Net realized and unrealized loss		(7,316,781	)		(12,621,789	)		(189,203	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(6,473,240	)	$	(10,589,654	)	$	(128,362	)

See notes to financial statements.

34 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets

iSHARES^® TRUST

	iShares Adaptive Currency Hedged MSCI Eurozone ETF			iShares Currency Hedged MSCI Eurozone ETF
	Period from January 5, 2016a to August 31, 2016			Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	56,294		$	47,659,298		$	28,061,785
Net realized gain (loss)		(86,742	)		(140,443,705	)		8,798,991
Net change in unrealized appreciation/depreciation		6,832			(4,072,460	)		(168,339,138	)
Net decrease in net assets resulting from operations		(23,616	)		(96,856,867	)		(131,478,362	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(56,294	)		(47,659,298	)		(28,061,785	)
From net realized gain		—			(9,722,494	)		(377,624	)
Return of capital		(187	)		(92,382	)		(75,340	)
Total distributions to shareholders		(56,481	)		(57,474,174	)		(28,514,749	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		4,763,965			1,776,524,922			1,912,908,525
Cost of shares redeemed		(2,377,734	)		(1,839,555,179	)		(193,878,775	)
Net increase (decrease) in net assets from capital share transactions		2,386,231			(63,030,257	)		1,719,029,750
INCREASE (DECREASE) IN NET ASSETS		2,306,134			(217,361,298	)		1,559,036,639
NET ASSETS
Beginning of period		—			1,562,766,566			3,729,927
End of period	$	2,306,134		$	1,345,405,268		$	1,562,766,566
SHARES ISSUED AND REDEEMED
Shares sold		200,000			69,900,000			67,750,000
Shares redeemed		(100,000	)		(75,850,000	)		(7,550,000	)
Net increase (decrease) in shares outstanding		100,000			(5,950,000	)		60,200,000

^a  Commencement of operations.

See notes to financial statements.

FINANCIAL STATEMENTS 35

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares Currency Hedged MSCI Germany ETF						iShares Currency Hedged MSCI Italy ETF
	Year ended August 31, 2016			Year ended August 31, 2015			Year ended August 31, 2016			Period from June 29, 2015a to August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	13,089,671		$	34,550,522		$	843,541		$	(52	)
Net realized gain (loss)		(216,525,114	)		21,209,722			(6,331,650	)		(76,431	)
Net change in unrealized appreciation/depreciation		184,173,921			(255,803,201	)		(985,131	)		(1,376,810	)
Net decrease in net assets resulting from operations		(19,261,522	)		(200,042,957	)		(6,473,240	)		(1,453,293	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(13,078,956	)		(34,550,522	)		(843,541	)		—
From net realized gain		(11,292,542	)		(5,009,894	)		(2,008,894	)		—
Return of capital		—			(144,343	)		—			—
Total distributions to shareholders		(24,371,498	)		(39,704,759	)		(2,852,435	)		—
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		288,603,554			2,138,974,349			42,843,202			87,298,372
Cost of shares redeemed		(1,499,256,808	)		(204,234,908	)		(112,341,514	)		—
Net increase (decrease) in net assets from capital share transactions		(1,210,653,254	)		1,934,739,441			(69,498,312	)		87,298,372
INCREASE (DECREASE) IN NET ASSETS		(1,254,286,274	)		1,694,991,725			(78,823,987	)		85,845,079
NET ASSETS
Beginning of period		1,746,986,893			51,995,168			85,845,079			—
End of period	$	492,700,619		$	1,746,986,893		$	7,021,092		$	85,845,079
Undistributed net investment income included in net assets at end of period	$	10,715		$	—		$	—		$	—
SHARES ISSUED AND REDEEMED
Shares sold		12,300,000			78,750,000			1,950,000			3,650,000
Shares redeemed		(64,550,000	)		(8,200,000	)		(5,200,000	)		—
Net increase (decrease) in shares outstanding		(52,250,000	)		70,550,000			(3,250,000	)		3,650,000

^a  Commencement of operations.

See notes to financial statements.

36 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares Currency Hedged MSCI Spain ETF						iShares Currency Hedged MSCI Switzerland ETF
	Year ended August 31, 2016			Period from June 29, 2015a to August 31, 2015			Year ended August 31, 2016			Period from June 29, 2015a to August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	2,032,135		$	(278	)	$	60,841		$	(214	)
Net realized gain (loss)		(10,238,404	)		50,234			(203,226	)		112,237
Net change in unrealized appreciation/depreciation		(2,383,385	)		(1,111,455	)		14,023			(176,864	)
Net decrease in net assets resulting from operations		(10,589,654	)		(1,061,499	)		(128,362	)		(64,841	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(2,025,343	)		—			(60,841	)		—
From net realized gain		(1,013,906	)		—			(206,309	)		—
Total distributions to shareholders		(3,039,249	)		—			(267,150	)		—
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		40,843,491			57,886,201			6,041,729			3,765,606
Cost of shares redeemed		(68,061,560	)		—			(4,670,348	)		—
Net increase (decrease) in net assets from capital share transactions		(27,218,069	)		57,886,201			1,371,381			3,765,606
INCREASE (DECREASE) IN NET ASSETS		(40,846,972	)		56,824,702			975,869			3,700,765
NET ASSETS
Beginning of period		56,824,702			—			3,700,765			—
End of period	$	15,977,730		$	56,824,702		$	4,676,634		$	3,700,765
Undistributed net investment income included in net assets at end of period	$	6,792		$	—		$	—		$	—
SHARES ISSUED AND REDEEMED
Shares sold		2,000,000			2,500,000			250,000			150,000
Shares redeemed		(3,650,000	)		—			(200,000	)		—
Net increase (decrease) in shares outstanding		(1,650,000	)		2,500,000			50,000			150,000

^a  Commencement of operations.

See notes to financial statements.

FINANCIAL STATEMENTS 37

Financial Highlights

iSHARES^® TRUST

(For a share outstanding throughout the period)

iShares Adaptive Currency Hedged MSCI Eurozone ETF

	Period from Jan. 5, 2016a to Aug. 31, 2016
Net asset value, beginning of period	$	23.86
Income from investment operations:
Net investment incomeb		0.56
Net realized and unrealized lossc		(0.80	)
Total from investment operations		(0.24	)
Less distributions from:
Net investment income		(0.56	)
Return of capital		(0.00	)d
Total distributions		(0.56	)
Net asset value, end of period	$	23.06
Total return		(0.75	)%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	2,306
Ratio of expenses to average net assetsf,g		0.03	%
Ratio of expenses to average net assets prior to waived feesf,g		0.62	%
Ratio of net investment income to average net assetsf		3.79	%
Portfolio turnover rateh,i		4	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout the period.

^c  The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d Rounds to less than $0.01.

^e  Not annualized.

^f  Annualized for periods of less than one year.

^g  The Fund indirectly bears its proportionate share of fees and expenses incurred by the underlying fund in which the Fund is invested. This ratio does not include these indirect fees and expenses.

^h  Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

ⁱ  Portfolio turnover rate excludes the portfolio activity of the underlying fund in which the Fund is invested. See page 92 for the portfolio turnover rates of the underlying fund.

See notes to financial statements.

38 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

iShares Currency Hedged MSCI Eurozone  ETF

	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Period from Jul. 9, 2014a to Aug. 31, 2014
Net asset value, beginning of period	$	25.90		$	24.87		$	25.14
Income from investment operations:
Net investment income (loss)b		0.60			1.17			(0.00	)c
Net realized and unrealized gain (loss)d		(0.93	)		0.65			(0.27	)
Total from investment operations		(0.33	)		1.82			(0.27	)
Less distributions from:
Net investment income		(0.71	)		(0.63	)		—
Net realized gain		(0.13	)		(0.16	)		—
Return of capital		(0.00	)c		(0.00	)c		—
Total distributions		(0.84	)		(0.79	)		—
Net asset value, end of period	$	24.73		$	25.90		$	24.87
Total return		(1.02	)%		7.27	%		(1.11	)%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	1,345,405		$	1,562,767		$	3,730
Ratio of expenses to average net assetsf,g		0.03	%		0.03	%		0.04	%
Ratio of expenses to average net assets prior to waived feesf,g		0.62	%		0.62	%		0.62	%
Ratio of net investment income (loss) to average net assetsf		2.42	%		4.15	%		(0.04	)%
Portfolio turnover rateh,i		12	%		21	%		0	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  Rounds to less than $0.01.

^d  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^e  Not annualized.

^f  Annualized for periods of less than one year.

^g  The Fund indirectly bears its proportionate share of fees and expenses incurred by the underlying fund in which the Fund is invested. This ratio does not include these indirect fees and expenses.

^h  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

ⁱ  Portfolio turnover rates exclude the portfolio activity of the underlying fund in which the Fund is invested. See page 92 for the portfolio turnover rates of the underlying fund.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 39

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

iShares Currency Hedged MSCI Germany ETF

	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Period from Jan. 31, 2014a to Aug. 31, 2014
Net asset value, beginning of period	$	24.01		$	23.63		$	23.68
Income from investment operations:
Net investment incomeb		0.31			0.99			1.04
Net realized and unrealized gain (loss)c		0.46			0.68			(0.59	)
Total from investment operations		0.77			1.67			0.45
Less distributions from:
Net investment income		(0.54	)		(0.46	)		(0.50	)
Net realized gain		(0.21	)		(0.83	)		(0.00	)d
Return of capital		—			(0.00	)d		—
Total distributions		(0.75	)		(1.29	)		(0.50	)
Net asset value, end of period	$	24.03		$	24.01		$	23.63
Total return		3.50	%		7.00	%		1.79	%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	492,701		$	1,746,987		$	51,995
Ratio of expenses to average net assetsf,g		0.05	%		0.05	%		0.06	%
Ratio of expenses to average net assets prior to waived feesf,g		0.53	%		0.53	%		0.53	%
Ratio of net investment income to average net assetsf		1.33	%		3.69	%		7.36	%
Portfolio turnover rateh,i		11	%		21	%		4	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Rounds to less than $0.01.

^e  Not annualized.

^f  Annualized for periods of less than one year.

^g  The Fund indirectly bears its proportionate share of fees and expenses incurred by the underlying fund in which the Fund is invested. This ratio does not include these indirect fees and expenses.

^h  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

ⁱ  Portfolio turnover rates exclude the portfolio activity of the underlying fund in which the Fund is invested. See page 93 for the portfolio turnover rates of the underlying fund.

See notes to financial statements.

40 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

iShares Currency Hedged MSCI Italy ETF

	Year ended Aug. 31, 2016			Period from Jun. 29, 2015a to Aug. 31, 2015
Net asset value, beginning of period	$	23.52		$	23.65
Income from investment operations:
Net investment income (loss)b		0.41			(0.00	)c
Net realized and unrealized gain (loss)d		(4.93	)		(0.13	)
Total from investment operations		(4.52	)		(0.13	)
Less distributions from:
Net investment income		(0.70	)		—
Net realized gain		(0.75	)		—
Total distributions		(1.45	)		—
Net asset value, end of period	$	17.55		$	23.52
Total return		(19.68	)%		(0.55	)%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	7,021		$	85,845
Ratio of expenses to average net assetsf,g		0.00	%		0.00	%h
Ratio of expenses to average net assets prior to waived feesf,g		0.62	%		0.62	%
Ratio of net investment income (loss) to average net assetsf		1.90	%		(0.00	)%h
Portfolio turnover ratei,j		12	%		0	%k

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  Rounds to less than $0.01.

^d  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^e  Not annualized.

^f  Annualized for periods of less than one year.

^g  The Fund indirectly bears its proportionate share of fees and expenses incurred by the underlying fund in which the Fund is invested. This ratio does not include these indirect fees and expenses.

^h  Rounds to less than 0.01%.

ⁱ  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

^j  Portfolio turnover rates exclude the portfolio activity of the underlying fund in which the Fund is invested. See page 94 for the portfolio turnover rates of the underlying fund.

^k  Rounds to less than 1%.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 41

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

iShares Currency Hedged MSCI Spain ETF

	Year ended Aug. 31, 2016			Period from Jun. 29, 2015a to Aug. 31, 2015
Net asset value, beginning of period	$	22.73		$	23.77
Income from investment operations:
Net investment income (loss)b		0.80			(0.00	)c
Net realized and unrealized lossd		(3.61	)		(1.04	)
Total from investment operations		(2.81	)		(1.04	)
Less distributions from:
Net investment income		(0.81	)		—
Net realized gain		(0.31	)		—
Total distributions		(1.12	)		—
Net asset value, end of period	$	18.80		$	22.73
Total return		(12.51	)%		(4.33	)%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	15,978		$	56,825
Ratio of expenses to average net assetsf,g		0.03	%		0.03	%
Ratio of expenses to average net assets prior to waived feesf,g		0.62	%		0.62	%
Ratio of net investment income (loss) to average net assetsf		4.02	%		(0.03	)%
Portfolio turnover rateh,i		15	%		0	%j

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  Rounds to less than $0.01.

^d  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^e  Not annualized.

^f  Annualized for periods of less than one year.

^g  The Fund indirectly bears its proportionate share of fees and expenses incurred by the underlying fund in which the Fund is invested. This ratio does not include these indirect fees and expenses.

^h  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

ⁱ  Portfolio turnover rates exclude the portfolio activity of the underlying fund in which the Fund is invested. See page 95 for the portfolio turnover rates of the underlying fund.

^j  Rounds to less than 1%.

See notes to financial statements.

42 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)

iShares Currency Hedged MSCI Switzerland ETF

	Year ended Aug. 31, 2016			Period from Jun. 29, 2015a to Aug. 31, 2015
Net asset value, beginning of period	$	24.67		$	24.64
Income from investment operations:
Net investment income (loss)b		0.41			(0.00	)c
Net realized and unrealized gain (loss)d		(0.27	)		0.03
Total from investment operations		0.14			0.03
Less distributions from:
Net investment income		(0.61	)		—
Net realized gain		(0.82	)		—
Total distributions		(1.43	)		—
Net asset value, end of period	$	23.38		$	24.67
Total return		0.63	%		0.12	%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	4,677		$	3,701
Ratio of expenses to average net assetsf,g		0.03	%		0.04	%
Ratio of expenses to average net assets prior to waived feesf,g		0.62	%		0.62	%
Ratio of net investment income (loss) to average net assetsf		1.72	%		(0.04	)%
Portfolio turnover rateh,i		19	%		1	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  Rounds to less than $0.01.

^d  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^e  Not annualized.

^f  Annualized for periods of less than one year.

^g  The Fund indirectly bears its proportionate share of fees and expenses incurred by the underlying fund in which the Fund is invested. This ratio does not include these indirect fees and expenses.

^h  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

ⁱ  Portfolio turnover rates exclude the portfolio activity of the underlying fund in which the Fund is invested. See page 96 for the portfolio turnover rates of the underlying fund.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 43

Notes to Financial Statements

iSHARES^® TRUST

iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999.

These financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):

iShares ETF	Diversification Classification
Adaptive Currency Hedged MSCI Eurozonea	Non-diversified
Currency Hedged MSCI Eurozone	Non-diversified
Currency Hedged MSCI Germany	Non-diversified
Currency Hedged MSCI Italy	Non-diversified
Currency Hedged MSCI Spain	Non-diversified
Currency Hedged MSCI Switzerland	Non-diversified

^a  The Fund commenced operations on January 5, 2016.

The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective. Currently each Fund seeks to achieve its investment objective by investing a substantial portion of its assets in an exchange-traded fund of iShares, Inc. (an “underlying fund”), an affiliate of the Funds. The financial statements and schedules of investments for the underlying funds can be found elsewhere in this report and should be read in conjunction with the Funds’ financial statements.

Pursuant to the Trust’s organizational documents, the Funds’ officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.

SECURITY VALUATION

Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant

44 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

to policies and procedures developed by the Global Valuation Committee and approved by the Board of Trustees of the Trust (the “Board”).

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

• Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”).

• Forward currency contracts are valued based on that day’s prevailing forward exchange rate for the underlying currencies. Interpolated forward exchange rates values are used for contracts with interim settlement dates for which quotations are not available.

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such factors are reported to the Board on a quarterly basis.

The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Trust’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements in market values, and reviews of market related activity.

Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.

Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and is not necessarily an indication of the risk associated with investing in the instrument. The three levels of the fair value hierarchy are as follows:

• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and

• Level 3 — Unobservable inputs for the asset or liability, including the Global Valuation Committee’s assumptions used in determining the fair value of investments.

NOTES TO FINANCIAL STATEMENTS 45

Notes to Financial Statements (Continued)

iSHARES^® TRUST

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2016 are reflected in tax reclaims receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.

FOREIGN CURRENCY TRANSLATION

The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.

Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes.

Each Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for federal income tax purposes. However, each Fund has elected to treat realized gains (losses) from certain foreign currency contracts as capital gain (loss) for federal income tax purposes.

FOREIGN TAXES

The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their statements of operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “other foreign taxes”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of August 31, 2016, if any, are disclosed in the Funds’ statements of assets and liabilities.

DISTRIBUTIONS TO SHAREHOLDERS

Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.

46 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Funds. Any additional required collateral is delivered to the Funds and any excess collateral is returned by the Funds on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

On July 23, 2014, the U.S. Securities and Exchange Commission (the “SEC”) adopted amendments to Rule 2a-7 under the 1940 Act, which governs the operations of U.S. money market funds. When implemented in October 2016, the change may affect the Funds with regard to the reinvestment of cash collateral received for securities on loan. The Funds may be exposed to additional risk from reinvesting the cash collateral in money market funds that do not maintain a fixed NAV per share of $1.00.

Any cash received as collateral for securities on loan may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates. As of August 31, 2016, any securities on loan were collateralized by cash and/or U.S. government obligations. Cash collateral received was invested in money market funds managed by BFA and is disclosed in the schedules of investments. The securities on loan for each Fund are also disclosed in its schedule of investments. The total value of any securities on loan as of August 31, 2016 and the total value of the related collateral are disclosed in the statements of assets and liabilities. Income earned by the Funds from securities lending is disclosed in the statements of operations.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities lent. Each Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.

Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (“MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, a Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, the borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.

NOTES TO FINANCIAL STATEMENTS 47

Notes to Financial Statements (Continued)

iSHARES^® TRUST

The following table is a summary of securities lending agreements which are subject to offset under an MSLA as of August 31, 2016:

iShares ETF and Counterparty	Market Value of Securities on Loan		Cash Collateral Received  a		Net Amount
Currency Hedged MSCI Eurozone
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending)	$	7,266,204	$	7,266,204	$	—
Currency Hedged MSCI Germany
Goldman Sachs & Co.	$	5,915,597	$	5,915,597	$	—
Currency Hedged MSCI Italy
Citigroup Global Markets Inc.	$	2,917,336	$	2,917,336	$	—
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending)		231,445		231,445		—
	$	3,148,781	$	3,148,781	$	—
Currency Hedged MSCI Spain
Citigroup Global Markets Inc.	$	948,700	$	948,700	$	—
Deutsche Bank Securities Inc.		4,430,800		4,430,800		—
	$	5,379,500	$	5,379,500	$	—

^a  Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s statement of assets and liabilities.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Agreement with the Trust, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.

For its investment advisory services to each of the iShares Adaptive Currency Hedged MSCI Eurozone ETF and the iShares Currency Hedged Eurozone ETF, BFA is entitled to an annual investment advisory fee of 0.62% based on the average daily net assets of each Fund. In addition, each Fund indirectly pays its pro rata share of fees and expenses attributable to its investments in other investment companies (“acquired fund fees and expenses”). BFA has contractually agreed to waive a portion of its investment advisory fee for each Fund through December 31, 2020 in an amount equal to the acquired fund fees and expenses, if any, attributable to each Fund’s investments in the iShares MSCI Eurozone ETF (“EZU”). BFA has contractually agreed to reduce the investment advisory fee for each Fund through December 31, 2020 so that the investment advisory fee is equal to the acquired fund fees and expenses that would have been experienced by each Fund related to its investments in EZU, after taking into account any fee waivers by EZU, plus 0.03%

For its investment advisory services to the iShares Currency Hedged MSCI Germany ETF, BFA is entitled to an annual investment advisory fee of 0.53% based on the average daily net assets of the Fund. In addition, the Fund indirectly pays acquired fund fees and expenses. BFA has contractually agreed to waive a portion of its investment advisory fee for the Fund through December 31, 2020 in an amount equal to the acquired fund fees and expenses attributable to the Fund’s investments in other iShares funds, if any.

48 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

For its investment advisory services to the iShares Currency Hedged MSCI Italy ETF, BFA is entitled to an annual investment advisory fee of 0.62% based on the average daily net assets of the Fund. In addition, the Fund indirectly pays acquired fund fees and expenses. BFA has contractually agreed to waive a portion of its investment advisory fee for the Fund through December 31, 2020 in an amount equal to the acquired fund fees and expenses, if any, attributable to the Fund’s investments in the iShares MSCI Italy Capped ETF (“EWI”). BFA has contractually agreed to reduce the investment advisory fee for the Fund through December 31, 2017 so that the investment advisory fee is equal to the acquired fund fees and expenses that would have been experienced by the Fund related to its investments in EWI, after taking into account any fee waivers by EWI, plus 0.03%. Additionally, BFA has contractually agreed to a reduction in the investment advisory fee through December 31, 2017 of 0.03%.

For its investment advisory services to the iShares Currency Hedged MSCI Spain ETF, BFA is entitled to an annual investment advisory fee of 0.62% based on the average daily net assets of the Fund. In addition, the Fund indirectly pays acquired fund fees and expenses. BFA has contractually agreed to waive a portion of its investment advisory fee for the Fund through December 31, 2020 in an amount equal to the acquired fund fees and expenses, if any, attributable to the Fund’s investments in the iShares MSCI Spain Capped ETF (“EWP”). BFA has contractually agreed to reduce the investment advisory fee for the Fund through December 31, 2017 so that the investment advisory fee is equal to the acquired fund fees and expenses that would have been experienced by the Fund related to its investments in EWP, after taking into account any fee waivers by EWP, plus 0.03%.

For its investment advisory services to the iShares Currency Hedged MSCI Switzerland ETF, BFA is entitled to an annual investment advisory fee of 0.62% based on the average daily net assets of the Fund. In addition, the Fund indirectly pays acquired fund fees and expenses. BFA has contractually agreed to waive a portion of its investment advisory fees for the Fund through December 31, 2020 in an amount equal to the acquired fund fees and expenses, if any, attributable to the Fund’s investments in the iShares MSCI Switzerland ETF (“EWL”). BFA has contractually agreed to reduce the investment advisory fee for the Fund through December 31, 2017 so that the investment advisory fee is equal to the acquired fund fees and expenses that would have been experienced by the Fund related to its investments in EWL, after taking into account any fee waivers by EWL, plus 0.03%.

The SEC has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by BFA, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the “collateral investment fees”). Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Funds retain a portion of securities lending income and remit the remaining portion to BTC as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, each Fund retains 80% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in a given calendar year exceeds the aggregate securities lending income generated across the iShares ETF Complex in the calendar year 2013, each Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 85% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.

NOTES TO FINANCIAL STATEMENTS 49

Notes to Financial Statements (Continued)

iSHARES^® TRUST

For the year ended August 31, 2016, the total of securities lending agent services and collateral investment fees paid were as follows:

iShares ETF	Fees Paid to BTC
Adaptive Currency Hedged MSCI Eurozone	$	4
Currency Hedged MSCI Eurozone		21,044
Currency Hedged MSCI Germany		18,262
Currency Hedged MSCI Italy		6,610
Currency Hedged MSCI Spain		2,521
Currency Hedged MSCI Switzerland		82

BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.

Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends – affiliated” in the statements of operations.

The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.

Certain trustees and officers of the Trust are also officers of BTC and/or BFA.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2016 were as follows:

iShares ETF	Purchases		Sales
Adaptive Currency Hedged MSCI Eurozone	$	89,808	$	164,621
Currency Hedged MSCI Eurozone		234,516,566		242,083,213
Currency Hedged MSCI Germany		134,636,818		110,322,002
Currency Hedged MSCI Italy		9,596,384		5,735,432
Currency Hedged MSCI Spain		7,647,237		9,211,089
Currency Hedged MSCI Switzerland		720,961		694,237

In-kind transactions (see Note 4) for the year ended August 31, 2016 were as follows:

iShares ETF	In-kind Purchases		In-kind Sales
Adaptive Currency Hedged MSCI Eurozone	$	2,384,929	$	–
Currency Hedged MSCI Eurozone		1,797,644,782		1,851,642,315
Currency Hedged MSCI Germany		288,188,144		1,507,348,778
Currency Hedged MSCI Italy		42,567,108		113,413,746
Currency Hedged MSCI Spain		40,961,404		68,394,569
Currency Hedged MSCI Switzerland		6,009,060		4,734,112

50 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

4. CAPITAL SHARE TRANSACTIONS

Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the statements of changes in net assets.

The consideration for the purchase of Creation Units of a fund in the Trust generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Trust may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Trust’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Proceeds from shares sold” in the statements of changes in net assets.

5. FORWARD CURRENCY CONTRACTS

Each Fund may enter into forward currency contracts for the purpose of hedging against the effects of foreign currencies on the value of such Fund’s assets that are denominated in a non-U.S. currency. A forward currency contract is an obligation to purchase or sell a currency against another currency at a specified future date at an agreed upon price and quantity. Forward currency contracts are traded over-the-counter (“OTC”) and not on an organized exchange. The contract is marked-to-market daily and the change in market value is recorded as unrealized appreciation or depreciation. When the contract is closed, a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed is recorded. Losses may arise if there are unfavorable movements in the value of a foreign currency relative to the U.S. dollar or if the counterparties do not meet the terms of the agreement. The Fund’s use of forward currency contracts also involves the risks of imperfect correlation between the value of its currency positions and its other investments or the Fund failing to close out its position due to an illiquid market.

NOTES TO FINANCIAL STATEMENTS 51

Notes to Financial Statements (Continued)

iSHARES^® TRUST

The following table shows the value of forward currency contracts held as of August 31, 2016 and the related locations in the statements of assets and liabilities, presented by risk exposure category:

Assets
	iShares Adaptive Currency Hedged MSCI Eurozone ETF		iShares Currency Hedged MSCI Eurozone ETF		iShares Currency Hedged MSCI Germany ETF
Forward currency contracts:
Unrealized appreciation on forward currency contracts/Net assets consist of – net unrealized appreciation (depreciation)	$	6,008	$	1,474,883	$	624,317
	iShares Currency Hedged MSCI Italy ETF		iShares Currency Hedged MSCI Spain ETF		iShares Currency Hedged MSCI Switzerland ETF
Forward currency contracts:
Unrealized appreciation on forward currency contracts/Net assets consist of – net unrealized depreciation	$	9,928	$	19,885	$	26,792
Liabilities
	iShares Adaptive Currency Hedged MSCI Eurozone ETF		iShares Currency Hedged MSCI Eurozone ETF		iShares Currency Hedged MSCI Germany ETF
Forward currency contracts:
Unrealized appreciation on forward currency contracts/Net assets consist of – net unrealized appreciation (depreciation)	$	2,390	$	8,947,864	$	6,113,162
	iShares Currency Hedged MSCI Italy ETF		iShares Currency Hedged MSCI Spain ETF		iShares Currency Hedged MSCI Switzerland ETF
Forward currency contracts:
Unrealized depreciation on forward currency contracts/Net assets consist of – net unrealized depreciation	$	80,309	$	142,019	$	12,550

52 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

The following table shows the realized and unrealized gains (losses) on forward currency contracts held during the year ended August 31, 2016 and the related locations in the statements of operations, presented by risk exposure category:

	Net Realized Gain (Loss)
	iShares Adaptive Currency Hedged MSCI Eurozone ETF			iShares Currency Hedged MSCI Eurozone ETF			iShares Currency Hedged MSCI Germany ETF
Forward currency contracts:
Foreign currency transactions	$	(80,328	)	$	(34,883,582	)	$	(25,699,994	)
	iShares Currency Hedged MSCI Italy ETF			iShares Currency Hedged MSCI Spain ETF			iShares Currency Hedged MSCI Switzerland ETF
Forward currency contracts:
Foreign currency transactions	$	4,282,678		$	31,017		$	97,931
	Net Change in Unrealized Appreciation/Depreciation
	iShares Adaptive Currency Hedged MSCI Eurozone ETF			iShares Currency Hedged MSCI Eurozone ETF			iShares Currency Hedged MSCI Germany ETF
Forward currency contracts:
Forward currency contracts	$	3,618		$	43,465,631		$	48,751,072
	iShares Currency Hedged MSCI Italy ETF			iShares Currency Hedged MSCI Spain ETF			iShares Currency Hedged MSCI Switzerland ETF
Forward currency contracts:
Forward currency contracts	$	129,640		$	156,295		$	27,212

The following table shows the average quarter-end balances of outstanding forward currency contracts for the year ended August 31, 2016:

	iShares Adaptive Currency Hedged MSCI Eurozone ETF		iShares Currency Hedged MSCI Eurozone ETF		iShares Currency Hedged MSCI Germany ETF
Average amounts purchased in U.S. dollars	$	1,548,276	$	2,145,942,388	$	1,400,428,624
Average amounts sold in U.S. dollars	$	2,499,095	$	3,954,780,978	$	2,420,804,218

	iShares Currency Hedged MSCI Italy ETF		iShares Currency Hedged MSCI Spain ETF		iShares Currency Hedged MSCI Switzerland ETF
Average amounts purchased in U.S. dollars	$	76,710,700	$	46,259,816	$	4,034,477
Average amounts sold in U.S. dollars	$	129,694,855	$	96,609,292	$	7,950,020

NOTES TO FINANCIAL STATEMENTS 53

Notes to Financial Statements (Continued)

iSHARES^® TRUST

The Funds’ risk of loss from counterparty credit risk on OTC derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by the Funds. In order to better define their contractual rights and to secure rights that will help the Funds to mitigate their counterparty risk, the Funds may enter into an International Swaps and Derivatives Association, Inc. master agreement (“ISDA Master Agreement”) or similar agreement with their derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Funds and a counterparty that governs OTC derivatives and foreign exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy or insolvency.

The collateral requirements under an ISDA Master Agreement are typically calculated by netting the mark-to-market amount for each transaction under such agreement, and comparing that amount to the value of any collateral currently pledged by the parties. Forward currency contracts held by the Funds generally do not require collateral. To the extent amounts due to the Funds from the counterparty are not fully collateralized, contractually or otherwise, the Funds bear the risk of loss from counterparty non-performance. The Funds attempt to mitigate counterparty risk by only entering into agreements with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.

For financial reporting purposes, the Funds do not offset financial assets and financial liabilities that are subject to netting arrangements in the statements of assets and liabilities.

The following table presents the exposure of the open forward currency contracts that are subject to potential offset in the statements of assets and liabilities as of August 31, 2016:

	Derivative Assets Subject to Offsetting		Derivatives Available for Offset			Net Amount of Derivative Assets
iShares Adaptive Currency Hedged MSCI Eurozone ETF
Forward currency contracts	$	6,008	$	(2,390	)	$	3,618
iShares Currency Hedged MSCI Eurozone ETF
Forward currency contracts	$	1,474,883	$	(1,474,883	)	$	—
iShares Currency Hedged MSCI Germany ETF
Forward currency contracts	$	624,317	$	(624,317	)	$	—
iShares Currency Hedged MSCI Italy ETF
Forward currency contracts	$	9,928	$	(9,928	)	$	—
iShares Currency Hedged MSCI Spain ETF
Forward currency contracts	$	19,885	$	(19,885	)	$	—
iShares Currency Hedged MSCI Switzerland ETF
Forward currency contracts	$	26,792	$	(12,550	)	$	14,242

54 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

	Derivative Liabilities Subject to Offsetting		Derivatives Available for Offset			Net Amount of Derivative Liabilities
iShares Adaptive Currency Hedged MSCI Eurozone ETF
Forward currency contracts	$	2,390	$	(2,390	)	$	—
iShares Currency Hedged MSCI Eurozone ETF
Forward currency contracts	$	8,947,864	$	(1,474,883	)	$	7,472,981
iShares Currency Hedged MSCI Germany ETF
Forward currency contracts	$	6,113,162	$	(624,317	)	$	5,488,845
iShares Currency Hedged MSCI Italy ETF
Forward currency contracts	$	80,309	$	(9,928	)	$	70,381
iShares Currency Hedged MSCI Spain ETF
Forward currency contracts	$	142,019	$	(19,885	)	$	122,134
iShares Currency Hedged MSCI Switzerland ETF
Forward currency contracts	$	12,550	$	(12,550	)	$	—

6. PRINCIPAL RISKS

In the normal course of business, each Fund’s investment activities expose it to various types of risk associated with the financial instruments and markets in which it invests. The significant types of financial risks each Fund is exposed to include market risk and credit risk. Each Fund’s prospectus provides details of these and other types of risk.

BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.

MARKET RISK

Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss each Fund may suffer through holding market positions in the face of market movements. Each Fund is exposed to market risk by virtue of its direct and/or indirect investment in equity and financial derivative instruments. The fair value of securities held by the Funds may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of each Fund’s exposure to market risk is the market value of the investments held as shown in the Fund’s schedule of investments.

A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its schedule of investments.

Investing in the securities of non-U.S. issuers, whether directly or indirectly, involves certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient

NOTES TO FINANCIAL STATEMENTS 55

Notes to Financial Statements (Continued)

iSHARES^® TRUST

securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of a Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets; and the risk of war. These risks are heightened for investments in issuers from countries with less developed markets.

When a fund concentrates its investments in issuers located in a single country, whether directly or indirectly, it assumes the risk that economic, political and social conditions in that country may have a significant impact on its investment performance.

CREDIT RISK

Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of each Fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its statement of assets and liabilities.

7. INCOME TAX INFORMATION

Each Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.

U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or NAV per share. The following permanent differences as of August 31, 2016, attributable to realized gains (losses) from in-kind redemptions and the use of equalization, were reclassified to the following accounts:

iShares ETF	Paid-in Capital			Undistributed Net Realized Gain/Accumulated Net Realized Loss
Currency Hedged MSCI Eurozone	$	(83,798,500	)	$	83,798,500
Currency Hedged MSCI Germany		(196,113,099	)		196,113,099
Currency Hedged MSCI Italy		(9,152,106	)		9,152,106
Currency Hedged MSCI Spain		(10,261,156	)		10,261,156
Currency Hedged MSCI Switzerland		(260,160	)		260,160

56 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

The tax character of distributions paid during the years ended August 31, 2016 and August 31, 2015 was as follows:

iShares ETF	2016		2015
Adaptive Currency Hedged MSCI Eurozone
Ordinary income	$	56,294		N/A
Return of capital		187		N/A
	$	56,481
Currency Hedged MSCI Eurozone
Ordinary income	$	51,552,269	$	28,212,726
Long-term capital gain		5,829,523		226,683
Return of capital		92,382		75,340
	$	57,474,174	$	28,514,749
Currency Hedged MSCI Germany
Ordinary income	$	14,278,563	$	36,553,274
Long-term capital gain		10,092,935		3,007,142
Return of capital		—		144,343
	$	24,371,498	$	39,704,759
Currency Hedged MSCI Italy
Ordinary income	$	1,661,470	$	—
Long-term capital gain		1,190,965		—
	$	2,852,435	$	—
Currency Hedged MSCI Spain
Ordinary income	$	2,430,906	$	—
Long-term capital gain		608,343		—
	$	3,039,249	$	—
Currency Hedged MSCI Switzerland
Ordinary income	$	143,140	$	—
Long-term capital gain		124,010		—
	$	267,150	$	—

NOTES TO FINANCIAL STATEMENTS 57

Notes to Financial Statements (Continued)

iSHARES^® TRUST

As of August 31, 2016, the tax components of accumulated net earnings (losses) were as follows:

iShares ETF	Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Capital Loss Carryforwards			Net Unrealized Gains  (Losses) a			Qualified Late-Year Losses  b			Total
Adaptive Currency Hedged MSCI Eurozone	$	—	$	—	$	(82,085	)	$	2,175		$	—		$	(79,910	)
Currency Hedged MSCI Eurozone		—		—		—			(177,710,994	)		(49,921,972	)		(227,632,966	)
Currency Hedged MSCI Germany		10,715		—		—			(73,825,770	)		(12,516,278	)		(86,331,333	)
Currency Hedged MSCI Italy		334,084		355,306		—			(2,316,200	)		—			(1,626,810	)
Currency Hedged MSCI Spain		6,792		—		—			(3,382,319	)		(1,053,441	)		(4,428,968	)
Currency Hedged MSCI Switzerland		—		—		—			(195,638	)		(4,555	)		(200,193	)

^a  The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains (losses) on certain forward currency contracts.

^b  The Funds have elected to defer certain qualified late-year losses and recognize such losses in the next taxable year

As of August 31, 2016, the following Fund had non-expiring capital loss carryforwards available to offset future realized capital gains as follows:

iShares ETF	Non- Expiring
Adaptive Currency Hedged MSCI Eurozone	$	82,085

For the year ended August 31, 2016, the following Funds utilized their capital loss carryforwards as follows:

iShares ETF	Utilized
Currency Hedged MSCI Italy	$	124,334
Currency Hedged MSCI Spain		202,455

Management has analyzed tax laws and regulations and their application to the Funds as of August 31, 2016, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

8. SUBSEQUENT EVENTS

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

58 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees of

iShares Trust:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of iShares Adaptive Currency Hedged MSCI Eurozone ETF, iShares Currency Hedged MSCI Eurozone ETF, iShares Currency Hedged MSCI Germany ETF, iShares Currency Hedged MSCI Italy ETF, iShares Currency Hedged MSCI Spain ETF and iShares Currency Hedged MSCI Switzerland ETF (the “Funds”) at August 31, 2016, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2016 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 21, 2016

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 59

Tax Information (Unaudited)

iSHARES^® TRUST

The following maximum amounts are hereby designated as qualified dividend income for individuals for the fiscal year ended August 31, 2016:

iShares ETF	Qualified Dividend Income
Adaptive Currency Hedged MSCI Eurozone	$	56,316
Currency Hedged MSCI Eurozone		47,938,525
Currency Hedged MSCI Germany		13,510,437
Currency Hedged MSCI Italy		757,590
Currency Hedged MSCI Spain		2,003,404
Currency Hedged MSCI Switzerland		61,638

For the fiscal year ended August 31, 2016, the following Funds intend to pass through to their shareholders foreign source income earned and foreign taxes paid by the underlying funds:

iShares ETF	Foreign Source Income Earned		Foreign Taxes Paid
Adaptive Currency Hedged MSCI Eurozone	$	66,473	$	9,751
Currency Hedged MSCI Eurozone		56,506,952		8,327,684
Currency Hedged MSCI Germany		15,891,549		2,512,907
Currency Hedged MSCI Italy		955,592		157,867
Currency Hedged MSCI Spain		2,211,733		173,434
Currency Hedged MSCI Switzerland		71,963		10,325

The following Funds hereby designate the following amounts as 20% rate long-term capital gain dividends for the fiscal year ended August 31, 2016:

iShares ETF	Long-Term Capital Gain
Currency Hedged MSCI Eurozone	$	5,829,523
Currency Hedged MSCI Germany		10,092,935
Currency Hedged MSCI Italy		2,217,486
Currency Hedged MSCI Spain		608,343
Currency Hedged MSCI Switzerland		136,138

The following Funds hereby designate the following amounts as short-term capital gain dividends for the fiscal year ended August 31, 2016:

iShares ETF	Short-Term Capital Gain
Currency Hedged MSCI Eurozone	$	3,892,971
Currency Hedged MSCI Germany		1,199,607
Currency Hedged MSCI Italy		817,929
Currency Hedged MSCI Spain		405,563
Currency Hedged MSCI Switzerland		82,299

60 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory

Contract

iSHARES^® TRUST

iShares Currency Hedged MSCI Eurozone ETF and iShares Currency Hedged MSCI Germany ETF

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on April 28, 2016 and May 9, 2016. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 17, 2016, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 21-23, 2016, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA, including the additional information management provided at the request of the Independent Trustees. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential enhancements and adjustments to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:

Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of each Fund in comparison with the same information for other exchange traded funds (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising such Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of Broadridge’s proprietary ETF methodology used by Broadridge to determine the applicable Peer Groups. The Board further noted that due to the limitations in providing comparable funds in the various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.

The Board also noted that the investment advisory fee rates and overall expenses (net of waivers and reimbursements) for the Funds were higher than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group, excluding iShares funds. The Board further noted that each Fund’s pricing reflects the use of currency hedging strategies, as compared to certain of its respective competitor funds as determined by Broadridge, which are not currency hedged.

In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as any particular Fund, Broadridge also provided, and the Board reviewed, a comparison of such Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the “last quarter” period ended December 31, 2015, to that of such relevant comparison funds for the same periods.

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 61

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

The Board noted that each Fund seeks to track its own underlying index and that, during the year, the Board received periodic reports on each Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including additional detailed information on certain specific iShares funds requested by the Board, was also considered. The Board noted that each Fund generally performed in line with its underlying index over the relevant periods.

Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, product design and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds, as well as the resources available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 21-23, 2016 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.

Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.

Costs of Services Provided to the Funds and Profits Realized by BFA and its Affiliates — The Board reviewed information about the profitability to BlackRock of the Funds, on a Fund-by-Fund basis and in the aggregate, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analyses and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.

Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision

62 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Funds did not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase. However, the Board noted that to the extent that iShares Currency Hedged MSCI Eurozone ETF invests in the unhedged iShares MSCI Eurozone ETF (“EZU”) and iShares Currency Hedged MSCI Germany ETF invests in the unhedged iShares MSCI Germany ETF (“EWG”), the shareholders of each Fund would benefit from breakpoints in EZU’s and EWG’s respective investment advisory fee rates as the assets of EZU and EWG, on an aggregated basis with the assets of other iShares funds, increase. The Board further noted that should material economies of scale exist in the future that are not otherwise shared, a breakpoint structure for the Funds may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.

Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue periodically, determined to approve the continuance of the Advisory Contract for the coming year.

Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objectives and strategies as the Funds and that track the same respective indexes as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different and generally more extensive services provided to the Funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded exchange traded funds, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.

Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 63

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.

Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of each Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.

64 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited)

iSHARES^® TRUST

Section 19(a) Notices

The amounts and sources of distributions reported are estimates and are provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report these distributions for federal income tax purposes.

	Total Cumulative Distributions for the Fiscal Year								% Breakdown of the Total Cumulative Distributions for the Fiscal Year
iShares ETF	Net Investment Income		Net Realized Capital Gains		Return of Capital		Total Per Share		Net Investment Income			Net Realized Capital Gains			Return of Capital			Total Per Share
Adaptive Currency Hedged MSCI Eurozone	$	0.564810	$	—	$	0.000001	$	0.564811		100	%		—	%		0	%a		100	%
Currency Hedged MSCI Eurozone		0.707225		0.135980		—		0.843205		84			16			—			100
Currency Hedged MSCI Germany		0.538227		0.214484		—		0.752711		72			28			—			100
Currency Hedged MSCI Italy		0.710986		0.735163		—		1.446149		49			51			—			100
Currency Hedged MSCI Spain		0.807121		0.311972		—		1.119093		72			28			—			100
Currency Hedged MSCI Switzerland		0.610828		0.824268		—		1.435096		43			57			—			100

^a  Rounds to less than 1%.

Premium/Discount Information

The Premium/Discount Information section is intended to present information about the differences between the daily market price on secondary markets for shares of a fund and that fund’s NAV. NAV is the price at which a fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of a fund generally is determined using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of such fund are listed for trading, as of the time that the fund’s NAV is calculated. A fund’s Market Price may be at, above or below its NAV. The NAV of a fund will fluctuate with changes in the fair value of its portfolio holdings. The Market Price of a fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.

Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of a fund on a given day, generally at the time the NAV is calculated. A premium is the amount that a fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that a fund is trading below the reported NAV, expressed as a percentage of the NAV.

The following information shows the frequency of distributions of premiums and discounts for each of the Funds. The information shown for each Fund is for five calendar years (or from the inception date of such Fund if less than five years) through the date of the most recent calendar quarter-end. The specific periods covered for each Fund are disclosed in the table for such Fund.

SUPPLEMENTAL INFORMATION 65

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

Each line in the table shows the number of trading days in which the Fund traded within the premium/discount range indicated. The number of trading days in each premium/discount range is also shown as a percentage of the total number of trading days in the period covered by each table. All data presented here represents past performance, which cannot be used to predict future results.

iShares Adaptive Currency Hedged MSCI Eurozone ETF

Period Covered: January 5, 2016 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 2.5%		1		0.81	%
Greater than 2.0% and Less than 2.5%		1		0.81
Greater than 1.5% and Less than 2.0%		2		1.61
Greater than 1.0% and Less than 1.5%		5		4.03
Greater than 0.5% and Less than 1.0%		19		15.32
Between 0.5% and –0.5%		62		50.01
Less than –0.5% and Greater than –1.0%		19		15.32
Less than –1.0% and Greater than –1.5%		10		8.06
Less than –1.5%		5		4.03
		124		100.00	%

iShares Currency Hedged MSCI Eurozone ETF

Period Covered: July 9, 2014 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 0.5%		1		0.20	%
Between 0.5% and –0.5%		499		99.80
		500		100.00	%

iShares Currency Hedged MSCI Germany ETF

Period Covered: January 31, 2014 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 0.5% and Less than 1.0%		3		0.49	%
Between 0.5% and –0.5%		606		99.51
		609		100.00	%

66 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares Currency Hedged MSCI Italy ETF

Period Covered: June 29, 2015 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 2.5%		4		1.57	%
Greater than 2.0% and Less than 2.5%		1		0.39
Greater than 1.5% and Less than 2.0%		1		0.39
Greater than 1.0% and Less than 1.5%		1		0.39
Greater than 0.5% and Less than 1.0%		5		1.96
Between 0.5% and –0.5%		243		95.30
		255		100.00	%

iShares Currency Hedged MSCI Spain ETF

Period Covered: June 29, 2015 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 1.0%		5		1.96	%
Greater than 0.5% and Less than 1.0%		3		1.18
Between 0.5% and –0.5%		246		96.47
Less than –0.5% and Greater than –1.0%		1		0.39
		255		100.00	%

iShares Currency Hedged MSCI Switzerland ETF

Period Covered: June 29, 2015 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Between 0.5% and –0.5%		255		100.00	%
		255		100.00	%

SUPPLEMENTAL INFORMATION 67

Trustee and Officer Information

iSHARES^® TRUST

The Board of Trustees has responsibility for the overall management and operations of the Funds, including general supervision of the duties performed by BFA and other service providers. Each Trustee serves until he or she resigns, is removed, dies, retires or becomes incapacitated. Each officer shall hold office until his or her successor is elected and qualifies or until his or her death, or his or her resignation or removal. Trustees who are not “interested persons” (as defined in the 1940 Act) of the Trust are referred to as independent trustees (“Independent Trustees”).

The registered investment companies advised by BFA or its affiliates (the “BlackRock-advised Funds”) are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Trustee also serves as a Director of iShares, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 333 funds (as of August 31, 2016) within the Exchange-Traded Fund Complex. With the exception of Robert S. Kapito, Mark Wiedman and Benjamin Archibald, the address of each Trustee and officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito, Mr. Wiedman and Mr. Archibald is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52^nd Street, New York, NY 10055. The Board has designated Cecilia H. Herbert as its Independent Board Chair. Additional information about the Funds’ Trustees and officers may be found in the Funds’ combined Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-iShares (1-800-474-2737).

Interested Trustees

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Robert S. Kapitoa (59)	Trustee (since 2009).	President and Director, BlackRock, Inc. (since 2006); Vice Chairman of BlackRock, Inc. and Head of BlackRock, Inc.’s Portfolio Management Group (since its formation in 1998) and BlackRock, Inc.’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983).	Director of iShares, Inc. (since 2009); Trustee of iShares U.S. ETF Trust (since 2011).
Mark Wiedmanb (45)	Trustee (since 2013).	Managing Director, BlackRock, Inc. (since 2007); Global Head of iShares (since 2011); Head of Corporate Strategy, BlackRock, Inc. (2009-2011).	Director of iShares, Inc. (since 2013); Trustee of iShares U.S. ETF Trust (since 2013); Director of PennyMac Financial Services, Inc. (since 2008).

^a  Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc.

^b  Mark Wiedman is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc. and its affiliates.

68 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Independent Trustees^c

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Cecilia H. Herbert (67)	Trustee (since 2005); Independent Board Chair (since 2016); Nominating and Governance Committee Chair (since 2016).	Director (1998-2013) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010) of the Thacher School; Member (since 1992) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco; Trustee and Member of the Investment Committee, WNET, the New York public media company (since 2011).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Independent Board Chair of iShares, Inc. and iShares U.S. ETF Trust (since 2016); Director of Forward Funds (23 portfolios) (since 2009); Director of Salient MF Trust (4 portfolios) (since 2015).
Jane D. Carlin (60)	Trustee (since 2015); Risk Committee Chair (since 2016).	Managing Director and Global Head of Financial Holding Company Governance & Assurance and the Global Head of Operational Risk Management of Morgan Stanley (2006-2012).	Director of iShares, Inc. (since 2015); Trustee of iShares U.S. ETF Trust (since 2015); Director of PHH Corporation (mortgage solutions) (since 2012).
Charles A. Hurty (72)	Trustee (since 2005); Audit Committee Chair (since 2006).	Retired; Partner, KPMG LLP (1968-2001).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (2 portfolios) (since 2002).
John E. Kerrigan (61)	Trustee (since 2005); Securities Lending Committee Chair (since 2016).	Chief Investment Officer, Santa Clara University (since 2002).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011).
John E. Martinez (55)	Trustee (since 2003); Fixed Income Plus Committee Chair (since 2016).	Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005).	Director of iShares, Inc. (since 2003); Trustee of iShares U.S. ETF Trust (since 2011).

TRUSTEE AND OFFICER INFORMATION 69

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Independent Trustees^c (Continued)

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Madhav V. Rajan (52)	Trustee (since 2011); Equity Plus Committee Chair and 15(c) Committee Chair (since 2016).	Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (2007-2008).	Director of iShares, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011); Director, Cavium, Inc. (since 2013).

^c  Robert H. Silver served as an Independent Trustee until March 31, 2016.

Officers^d

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years
Martin Small (41)	President (since 2016).	Managing Director, BlackRock, Inc. (since January 2010); Head of U.S. iShares (since 2015); Co-Head of the U.S. Financial Markets Advisory Group, BlackRock, Inc. (2008-2014).
Jack Gee (56)	Treasurer and Chief Financial Officer (since 2008).	Managing Director, BlackRock, Inc. (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director of Fund Administration of Intermediary Investor Business, BGI (2004-2009).
Benjamin Archibald (41)	Secretary (since 2015).	Managing Director, BlackRock, Inc. (since 2014); Director, BlackRock, Inc. (2010-2013); Secretary of the BlackRock-advised Mutual Funds (since 2012).
Steve Messinger (54)	Executive Vice President (since 2016).	Managing Director, BlackRock, Inc. (2007-2014 and since 2016); Managing Director, Beacon Consulting Group (2014-2016).
Charles Park (49)	Chief Compliance Officer (since 2006).	Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex (since 2014); Chief Compliance Officer, BFA (since 2006).
Scott Radell (47)	Executive Vice President (since 2012).	Managing Director, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005).
Amy Schioldager (53)	Executive Vice President (since 2007).	Senior Managing Director, BlackRock, Inc. (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006).

^d  Manish Mehta served as President until October 15, 2016.

70 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Additional Financial Information

August 31, 2016

iShares, Inc.

iShares MSCI Eurozone ETF  |  EZU  |  BATS

iShares MSCI Germany ETF  |  EWG  |  NYSE Arca

iShares MSCI Italy Capped ETF  |  EWI  |  NYSE Arca

iShares MSCI Spain Capped ETF  |  EWP  |  NYSE Arca

iShares MSCI Switzerland Capped ETF  |  EWL  |  NYSE Arca

Schedule of Investments

iSHARES^® MSCI EUROZONE ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 97.72%
AUSTRIA — 0.58%
Andritz AG		164,980	$	8,405,479
Erste Group Bank AG		660,571		18,528,871
IMMOEAST AG Escrowa		105,078		1
IMMOFINANZ AG Escrowa		68,575		1
OMV AG		332,219		9,294,619
Raiffeisen Bank International AGa		262,054		3,718,328
Voestalpine AG		254,213		8,400,455
				48,347,754
BELGIUM — 4.40%
Ageas		451,557		15,575,475
Anheuser-Busch InBev SA/NV		1,795,894		222,119,542
Colruyt SA		157,482		8,630,335
Groupe Bruxelles Lambert SA		179,467		15,724,660
KBC Group NVa		559,645		33,078,760
Proximus SADP		339,892		10,383,751
Solvay SA		165,012		18,085,989
Telenet Group Holding NVa,b		121,310		5,680,656
UCB SA		283,730		23,261,064
Umicore SA		213,497		12,588,188
				365,128,420
FINLAND — 3.20%
Elisa OYJ		320,163		11,246,576
Fortum OYJ		1,004,240		15,479,649
Kone OYJ Class B		751,880		37,725,138
Metso OYJ		250,108		6,991,797
Neste OYJ		290,346		12,074,737
Nokia OYJ		13,039,606		73,195,185
Nokian Renkaat OYJ		255,855		9,224,102
Orion OYJ Class B		228,046		8,620,288
Sampo OYJ Class A		996,678		42,725,808
Stora Enso OYJ Class R		1,229,379		10,837,378
UPM-Kymmene OYJ		1,191,393		23,897,709
Wartsila OYJ Abp		329,857		13,548,903
				265,567,270
FRANCE — 31.90%
Accor SA		396,091		14,930,591
Aeroports de Paris		67,087		6,911,425
Air Liquide SA		768,742		84,188,768
Airbus Group SE		1,315,933		76,637,252
Alstom SAa		342,918		9,057,345
ArcelorMittala		4,127,866		24,324,889

Security	Shares		Value
Arkema SA		150,372	$	13,403,163
Atos SE		195,141		19,171,401
AXA SA		4,337,257		90,912,224
BNP Paribas SA		2,366,291		120,189,940
Bollore SA		1,925,506		6,943,992
Bouygues SA		460,814		14,591,167
Bureau Veritas SA		597,366		12,787,375
Capgemini SA		364,424		35,449,300
Carrefour SA		1,229,477		30,905,763
Casino Guichard Perrachon SAb		125,050		6,176,122
Christian Dior SE		121,333		20,945,857
Cie. de Saint-Gobain		1,095,018		47,953,717
Cie. Generale des Etablissements Michelin Class B		409,135		43,425,721
CNP Assurances		372,844		5,992,127
Credit Agricole SA		2,357,571		22,292,562
Danone SA		1,315,471		99,788,309
Dassault Systemes		286,931		24,133,870
Edenred		463,645		10,079,823
Eiffage SA		127,087		9,936,324
Electricite de France SA		561,472		7,178,893
Engie SA		3,289,954		52,361,196
Essilor International SA		458,327		58,116,036
Eurazeo SA		94,026		5,695,797
Eutelsat Communications SA		387,908		7,528,163
Fonciere des Regions		72,769		6,788,449
Gecina SA		90,851		14,191,232
Groupe Eurotunnel SE Registered		1,047,824		11,506,752
Hermes International		59,618		25,138,857
ICADE		80,928		6,235,437
Iliad SA		59,592		12,268,598
Imerys SA		80,108		5,636,043
Ingenico Group SA		123,699		13,300,286
JCDecaux SA		168,549		5,781,818
Kering		169,577		32,097,826
Klepierre		493,022		23,067,817
L’Oreal SA		565,049		106,575,853
Lagardere SCA		266,844		6,498,220
Legrand SA		597,278		35,728,862
LVMH Moet Hennessy Louis Vuitton SE		623,230		105,298,319
Natixis SA		2,097,371		9,264,361
Orange SA		4,431,182		67,563,252
Pernod Ricard SA		474,209		54,346,637

72 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (Continued)

iSHARES^® MSCI EUROZONE ETF

August 31, 2016

Security	Shares		Value
Peugeot SAa		1,080,996	$	15,922,354
Publicis Groupe SA		422,085		31,284,951
Remy Cointreau SA		51,967		4,527,813
Renault SA		429,795		35,092,320
Rexel SA		677,326		10,866,721
Safran SA		699,802		48,853,049
Sanofi		2,604,131		200,327,140
Schneider Electric SE		1,248,414		84,940,783
SCOR SE		356,985		10,486,485
SES SA		814,856		18,686,360
SFR Group SA		243,800		6,476,041
Societe BIC SA		65,562		9,554,620
Societe Generale SA		1,747,151		63,523,530
Sodexo SA		211,063		24,412,155
STMicroelectronics NV		1,422,820		10,622,010
Suez		745,661		11,265,455
Technip SA		244,725		14,437,627
Thales SA		237,330		20,519,640
Total SA		4,975,277		236,886,816
Unibail-Rodamco SE		223,173		61,145,467
Valeo SA		534,304		27,605,798
Veolia Environnement SA		1,035,515		21,987,746
Vinci SA		1,119,140		84,745,562
Vivendi SA		2,589,484		50,124,553
Wendel SA		64,784		7,356,013
Zodiac Aerospace		454,020		10,315,556
				2,645,264,296
GERMANY — 28.14%
adidas AG		421,425		69,911,450
Allianz SE Registered		1,020,799		151,834,909
Axel Springer SE		99,034		5,036,255
BASF SE		2,052,066		166,612,031
Bayer AG Registered		1,847,814		197,506,437
Bayerische Motoren Werke AG		739,216		64,225,744
Beiersdorf AG		226,447		21,036,438
Brenntag AG		346,664		18,837,665
Commerzbank AG		2,363,272		16,597,978
Continental AG		245,689		51,416,203
Covestro AGc		156,675		8,145,506
Daimler AG Registered		2,153,971		148,928,929
Deutsche Bank AG Registereda		3,084,897		45,386,949
Deutsche Boerse AGa		440,933		37,617,409
Deutsche Lufthansa AG Registered		534,165		6,214,002

Security	Shares		Value
Deutsche Post AG Registered		2,165,525	$	68,496,605
Deutsche Telekom AG Registered		7,201,270		120,065,546
Deutsche Wohnen AG Bearer		756,701		28,401,529
E.ON SE		4,480,413		41,202,905
Evonik Industries AG		354,499		11,897,993
Fraport AG Frankfurt Airport Services Worldwide		94,583		5,268,142
Fresenius Medical Care AG & Co. KGaA		490,010		43,299,676
Fresenius SE & Co. KGaA		914,120		66,604,145
GEA Group AG		409,805		21,960,653
Hannover Rueck SE		135,619		13,835,776
HeidelbergCement AG		314,851		29,199,886
Henkel AG & Co. KGaA		230,976		25,892,152
HOCHTIEF AG		45,864		6,157,815
HUGO BOSS AG		149,307		9,104,410
Infineon Technologies AG		2,531,318		42,556,640
K+S AG Registered		427,055		8,927,618
Lanxess AG		203,740		10,855,629
Linde AG		414,797		70,937,019
MAN SE		83,691		8,692,840
Merck KGaA		289,064		30,372,279
METRO AG		396,997		11,761,328
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen Registered		368,429		66,495,208
Osram Licht AG		199,848		10,447,933
ProSiebenSat.1 Media SE Registered		491,000		21,086,574
QIAGEN NVa		495,635		13,104,794
RTL Group SAa		88,189		7,410,733
RWE AGa		1,097,554		17,926,499
SAP SE		2,194,888		192,533,177
Siemens AG Registered		1,709,313		203,796,055
Symrise AG		277,813		20,424,423
Telefonica Deutschland Holding AG		1,646,578		6,755,997
ThyssenKrupp AG		826,415		19,232,160
United Internet AG Registeredd		276,457		11,349,335
Volkswagen AG		73,151		10,628,008
Vonovia SE		1,040,332		40,420,175
Zalando SEa,c		193,833		7,401,494
				2,333,811,056

SCHEDULES OF INVESTMENTS 73

Schedule of Investments  (Continued)

iSHARES^® MSCI EUROZONE ETF

August 31, 2016

Security	Shares		Value
IRELAND — 1.60%
Bank of Irelanda		61,301,643	$	13,791,484
CRH PLC		1,842,252		62,272,348
Irish Bank Resolution Corp. Ltd.a		446,666		5
Kerry Group PLC Class A		358,478		30,415,221
Paddy Power Betfair PLC		180,312		21,518,119
Ryanair Holdings PLC		42,432		566,631
Ryanair Holdings PLC ADR		53,355		3,874,107
				132,437,915
ITALY — 6.34%
Assicurazioni Generali SpA		2,606,559		33,094,812
Atlantia SpA		924,633		23,747,407
CNH Industrial NV		2,242,410		16,358,513
Enel SpA		17,212,846		75,878,018
Eni SpA		5,670,283		85,508,819
EXOR SpA		248,850		10,213,219
Ferrari NV		277,300		13,342,006
Fiat Chrysler Automobiles NV		2,001,600		13,810,395
Intesa Sanpaolo SpA		28,261,118		67,043,464
Leonardo-Finmeccanica SpAa		977,801		11,140,729
Luxottica Group SpA		378,746		18,244,068
Mediobanca SpA		1,268,589		9,395,721
Poste Italiane SpAc		1,139,781		7,933,941
Prysmian SpA		440,350		10,848,523
Saipem SpAa		13,519,949		6,187,265
Snam SpA		5,528,234		30,600,626
Telecom Italia SpA/Milanoa		22,862,714		20,714,423
Tenaris SA		1,051,127		14,422,927
Terna Rete Elettrica Nazionale SpA		3,468,803		17,895,164
UniCredit SpA		11,643,519		29,904,123
Unione di Banche Italiane SpA		1,998,832		5,369,590
UnipolSai SpA		2,507,908		4,181,392
				525,835,145
NETHERLANDS — 10.82%
ABN AMRO Group NVc		518,972		10,649,738
Aegon NV		4,066,294		16,638,932
AerCap Holdings NVa,b		377,500		15,088,675
Akzo Nobel NV		555,771		37,498,393
Altice NV Class Aa,b		793,399		13,188,442
Altice NV Class Ba		273,806		4,545,299
ASML Holding NV		822,751		87,391,201
Boskalis Westminster		196,755		7,023,302
Gemalto NV		179,893		12,512,215

Security	Shares		Value
Heineken Holding NV		225,786	$	18,120,859
Heineken NV		516,067		46,039,024
ING Groep NV		8,654,512		108,149,110
Koninklijke Ahold Delhaize NV		2,896,055		69,234,922
Koninklijke DSM NV		407,108		28,333,986
Koninklijke KPN NV		7,631,209		24,877,319
Koninklijke Philips NV		2,083,231		60,417,940
Koninklijke Vopak NV		159,189		8,059,906
NN Group NV		708,111		21,037,459
NXP Semiconductors NVa		657,670		57,888,113
OCI NVa		211,228		3,691,152
Randstad Holding NV		266,796		12,561,758
RELX NV		2,219,996		39,313,058
Unilever NV CVA		3,639,965		166,680,582
Wolters Kluwer NV		679,963		28,493,729
				897,435,114
PORTUGAL — 0.51%
EDP — Energias de Portugal SA		5,185,635		17,355,372
Galp Energia SGPS SA		1,092,079		15,848,420
Jeronimo Martins SGPS SA		556,901		8,971,890
				42,175,682
SPAIN — 10.00%
Abertis Infraestructuras SA		1,438,186		22,240,700
ACS Actividades de Construccion y Servicios SA		449,947		12,731,163
Aena SAc		152,825		21,573,961
Amadeus IT Holding SA Class A		986,998		45,284,365
Banco Bilbao Vizcaya Argentaria SA		14,560,351		90,456,100
Banco de Sabadell SA		11,911,398		16,118,570
Banco Popular Espanol SA		7,432,784		10,041,528
Banco Santander SA		32,274,329		144,500,976
Bankia SA		10,480,570		8,824,583
Bankinter SA		1,559,132		11,419,108
CaixaBank SA		5,997,034		16,116,894
Distribuidora Internacional de Alimentacion SA		1,411,361		8,606,167
Enagas SA		428,279		12,556,907
Endesa SA		713,863		14,517,878
Ferrovial SA		1,102,445		21,689,927
Gas Natural SDG SA		795,011		16,385,124
Grifols SA		670,449		14,180,065
Iberdrola SA		12,195,681		80,139,305
Industria de Diseno Textil SA		2,448,023		86,606,774

74 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (Continued)

iSHARES^® MSCI EUROZONE ETF

August 31, 2016

Security	Shares		Value
International Consolidated Airlines Group SA		1,852,513	$	9,309,318
Mapfre SA		2,508,207		6,768,685
Red Electrica Corp. SA		961,723		20,677,942
Repsol SA		2,495,797		33,467,498
Telefonica SA		10,035,912		100,932,749
Zardoya Otis SA		439,955		4,140,497
Zardoya Otis SA Newa		19,957		187,818
				829,474,602
UNITED KINGDOM — 0.23%
Coca-Cola European Partners PLCa		484,355		18,557,084
				18,557,084
TOTAL COMMON STOCKS
(Cost: $9,664,562,825)				8,104,034,338
PREFERRED STOCKS — 1.97%
GERMANY — 1.80%
Bayerische Motoren Werke AG		123,717		9,258,093
Fuchs Petrolub SE		156,916		7,126,921
Henkel AG & Co. KGaA		399,688		52,372,167
Porsche Automobil Holding SE		341,953		17,300,110
Schaeffler AG		367,811		5,685,932
Volkswagen AG		415,123		57,561,706
				149,304,929
ITALY — 0.17%
Intesa Sanpaolo SpA		2,136,401		4,725,519
Telecom Italia SpA/Milano		13,270,531		9,710,491
				14,436,010
TOTAL PREFERRED STOCKS
(Cost: $228,669,382)				163,740,939

Security	Shares		Value
SHORT-TERM INVESTMENTS — 0.24%
MONEY MARKET FUNDS — 0.24%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%e,f,g		19,587,492	$	19,587,492
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%e,f		326,934		326,934
				19,914,426
TOTAL SHORT-TERM INVESTMENTS
(Cost: $19,914,426)				19,914,426
TOTAL INVESTMENTS IN SECURITIES — 99.93%
(Cost: $9,913,146,633)h				8,287,689,703
Other Assets, Less Liabilities — 0.07%				5,901,145
NET ASSETS — 100.00%			$	8,293,590,848

ADR  —  American Depositary Receipts

^a  Non-income earning security.

^b  All or a portion of this security represents a security on loan. See Note 1.

^c  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^d  This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

^e  Affiliated money market fund.

^f  The rate quoted is the annualized seven-day yield of the fund at period end.

^g  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^h  The cost of investments for federal income tax purposes was $10,078,274,967. Net unrealized depreciation was $1,790,585,264, of which $233,608,157 represented gross unrealized appreciation on securities and $2,024,193,421 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	8,103,846,513	$	187,818	$	7	$	8,104,034,338
Preferred stocks		163,740,939		—		—		163,740,939
Money market funds		19,914,426		—		—		19,914,426
Total	$	8,287,501,878	$	187,818	$	7	$	8,287,689,703

See notes to financial statements.

SCHEDULES OF INVESTMENTS 75

Schedule of Investments

iSHARES^® MSCI GERMANY ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 93.45%
AIR FREIGHT & LOGISTICS — 2.75%
Deutsche Post AG Registered		3,126,637	$	98,897,044
				98,897,044
AIRLINES — 0.24%
Deutsche Lufthansa AG Registered		751,214		8,738,957
				8,738,957
AUTO COMPONENTS — 2.06%
Continental AG		354,537		74,195,207
				74,195,207
AUTOMOBILES — 8.97%
Bayerische Motoren Werke AG		1,067,355		92,735,640
Daimler AG Registered		3,103,305		214,567,369
Volkswagen AG		104,719		15,214,479
				322,517,488
BANKS — 0.67%
Commerzbank AG		3,430,766		24,095,313
				24,095,313
CAPITAL MARKETS — 3.29%
Deutsche Bank AG Registereda		4,444,910		65,396,318
Deutsche Boerse AGa		621,733		53,042,037
				118,438,355
CHEMICALS — 11.96%
BASF SE		2,960,569		240,375,512
Covestro AGb		228,548		11,882,170
Evonik Industries AG		525,789		17,646,972
K+S AG Registered		616,620		12,890,489
Lanxess AG		294,866		15,710,984
Linde AG		598,815		102,407,084
Symrise AG		397,508		29,224,232
				430,137,443
CONSTRUCTION & ENGINEERING — 0.25%
HOCHTIEF AG		66,874		8,978,670
				8,978,670
CONSTRUCTION MATERIALS — 1.17%
HeidelbergCement AG		454,339		42,136,270
				42,136,270

Security	Shares		Value
DIVERSIFIED TELECOMMUNICATION SERVICES — 5.09%
Deutsche Telekom AG Registered		10,393,452	$	173,288,252
Telefonica Deutschland Holding AG		2,396,548		9,833,164
				183,121,416
ELECTRICAL EQUIPMENT — 0.42%
Osram Licht AG		286,715		14,989,288
				14,989,288
FOOD & STAPLES RETAILING — 0.47%
METRO AG		574,318		17,014,593
				17,014,593
HEALTH CARE PROVIDERS & SERVICES — 4.41%
Fresenius Medical Care AG & Co. KGaA		705,544		62,345,312
Fresenius SE & Co. KGaA		1,319,783		96,161,356
				158,506,668
HOUSEHOLD PRODUCTS — 1.04%
Henkel AG & Co. KGaA		334,925		37,544,718
				37,544,718
INDUSTRIAL CONGLOMERATES — 8.17%
Siemens AG Registered		2,465,642		293,970,802
				293,970,802
INSURANCE — 9.25%
Allianz SE Registered		1,473,052		219,103,582
Hannover Rueck SE		194,647		19,857,780
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen Registered		519,178		93,702,855
				332,664,217
INTERNET & DIRECT MARKETING RETAIL — 0.30%
Zalando SEa,b		278,389		10,630,256
				10,630,256
INTERNET SOFTWARE & SERVICES — 0.45%
United Internet AG Registeredc		396,516		16,278,094
				16,278,094
LIFE SCIENCES TOOLS & SERVICES — 0.52%
QIAGEN NVa		713,948		18,877,079
				18,877,079
MACHINERY — 1.21%
GEA Group AG		589,567		31,593,749
MAN SE		113,296		11,767,860
				43,361,609

76 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (Continued)

iSHARES^® MSCI GERMANY ETF

August 31, 2016

Security	Shares		Value
MEDIA — 1.33%
Axel Springer SE		139,232	$	7,080,476
ProSiebenSat.1 Media SE Registered		705,023		30,278,044
RTL Group SAa		124,979		10,502,285
				47,860,805
METALS & MINING — 0.77%
ThyssenKrupp AG		1,185,502		27,588,760
				27,588,760
MULTI-UTILITIES — 2.36%
E.ON SE		6,448,471		59,301,618
RWE AGa		1,577,038		25,757,976
				85,059,594
PERSONAL PRODUCTS — 0.84%
Beiersdorf AG		324,854		30,178,236
				30,178,236
PHARMACEUTICALS — 9.14%
Bayer AG Registered		2,665,303		284,885,004
Merck KGaA		416,635		43,776,308
				328,661,312
REAL ESTATE MANAGEMENT & DEVELOPMENT — 2.76%
Deutsche Wohnen AG Bearer		1,087,301		40,810,056
Vonovia SE		1,501,726		58,346,786
				99,156,842
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 1.71%
Infineon Technologies AG		3,647,519		61,322,265
				61,322,265
SOFTWARE — 7.73%
SAP SE		3,167,642		277,862,095
				277,862,095
TEXTILES, APPAREL & LUXURY GOODS — 3.16%
adidas AG		606,857		100,673,318
HUGO BOSS AG		215,405		13,134,919
				113,808,237
TRADING COMPANIES & DISTRIBUTORS — 0.75%
Brenntag AG		498,084		27,065,803
				27,065,803
TRANSPORTATION INFRASTRUCTURE — 0.21%
Fraport AG Frankfurt Airport Services Worldwide		134,194		7,474,419
				7,474,419
TOTAL COMMON STOCKS
(Cost: $4,066,137,228)				3,361,131,855

Security	Shares		Value
PREFERRED STOCKS — 5.97%
AUTO COMPONENTS — 0.23%
Schaeffler AG		536,318	$	8,290,855
				8,290,855
AUTOMOBILES — 3.37%
Bayerische Motoren Werke AG		175,876		13,161,298
Porsche Automobil Holding SE		493,715		24,978,063
Volkswagen AG		597,865		82,901,042
				121,040,403
CHEMICALS — 0.28%
Fuchs Petrolub SE		223,870		10,167,885
				10,167,885
HOUSEHOLD PRODUCTS — 2.09%
Henkel AG & Co. KGaA		574,442		75,270,643
				75,270,643
TOTAL PREFERRED STOCKS
(Cost: $296,945,544)				214,769,786
SHORT-TERM INVESTMENTS — 0.00%
MONEY MARKET FUNDS — 0.00%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%d,e		33,859		33,859
				33,859
TOTAL SHORT-TERM INVESTMENTS
(Cost: $33,859)				33,859
TOTAL INVESTMENTS IN SECURITIES — 99.42%
(Cost: $4,363,116,631)f				3,575,935,500
Other Assets, Less Liabilities — 0.58%				20,966,456
NET ASSETS — 100.00%			$	3,596,901,956

^a  Non-income earning security.

^b  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^c  This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

^d  Affiliated money market fund.

^e  The rate quoted is the annualized seven-day yield of the fund at period end.

^f  The cost of investments for federal income tax purposes was $4,423,862,208. Net unrealized depreciation was $847,926,708, of which $154,447,231 represented gross unrealized appreciation on securities and $1,002,373,939 represented gross unrealized depreciation on securities.

SCHEDULES OF INVESTMENTS 77

Schedule of Investments  (Continued)

iSHARES^® MSCI GERMANY ETF

August 31, 2016

Schedule 1 — Futures Contracts (Note 5)

Futures contracts outstanding as of August 31, 2016 were as follows:

Issue	Number of long (short) contracts		Expiration date		Exchange		Initial notional value		Current notional value		Unrealized appreciation (depreciation)
DAX Index		69		Sep. 2016		Eurex	$	18,358,049	$	20,385,082	$	2,027,033

Schedule 2 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	3,361,131,855	$	—	$	—	$	3,361,131,855
Preferred stocks		214,769,786		—		—		214,769,786
Money market funds		33,859		—		—		33,859
Total	$	3,575,935,500	$	—	$	—	$	3,575,935,500
Derivative financial instrumentsa:
Assets:
Futures contracts	$	2,027,033	$	—	$	—	$	2,027,033
Total	$	2,027,033	$	—	$	—	$	2,027,033

^a  Shown at the unrealized appreciation (depreciation) on the contracts.

See notes to financial statements.

78 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI ITALY CAPPED ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 97.93%
AEROSPACE & DEFENSE — 2.67%
Leonardo-Finmeccanica SpAa		1,079,864	$	12,303,600
				12,303,600
AUTOMOBILES — 6.53%
Ferrari NV		306,645		14,753,910
Fiat Chrysler Automobiles NVb		2,225,989		15,358,607
				30,112,517
BANKS — 20.09%
Intesa Sanpaolo SpA		22,036,800		52,277,600
Mediobanca SpA		1,559,218		11,548,245
UniCredit SpA		8,431,531		21,654,754
Unione di Banche Italiane SpA		2,664,510		7,157,843
				92,638,442
DIVERSIFIED FINANCIAL SERVICES — 2.65%
EXOR SpA		297,482		12,209,157
				12,209,157
DIVERSIFIED TELECOMMUNICATION SERVICES — 3.23%
Telecom Italia SpA/Milanoa		16,419,595		14,876,731
				14,876,731
ELECTRIC UTILITIES — 16.73%
Enel SpA		13,354,884		58,871,272
Terna Rete Elettrica Nazionale SpA		3,542,928		18,277,567
				77,148,839
ELECTRICAL EQUIPMENT — 2.74%
Prysmian SpA		513,438		12,649,129
				12,649,129
ENERGY EQUIPMENT & SERVICES — 4.18%
Saipem SpAa		7,661,030		3,505,991
Tenaris SA		1,147,701		15,748,057
				19,254,048
GAS UTILITIES — 4.40%
Snam SpA		3,662,220		20,271,614
				20,271,614
INSURANCE — 8.04%
Assicurazioni Generali SpA		1,807,388		22,947,942
Poste Italiane SpAc		1,093,234		7,609,930
UnipolSai SpA		3,918,375		6,533,040
				37,090,912

Security	Shares		Value
MACHINERY — 3.83%
CNH Industrial NV		2,420,364	$	17,656,698
				17,656,698
OIL, GAS & CONSUMABLE FUELS — 14.73%
Eni SpA		4,503,372		67,911,605
				67,911,605
TEXTILES, APPAREL & LUXURY GOODS — 3.70%
Luxottica Group SpA		354,171		17,060,298
				17,060,298
TRANSPORTATION INFRASTRUCTURE — 4.41%
Atlantia SpA		791,948		20,339,650
				20,339,650
TOTAL COMMON STOCKS
(Cost: $665,169,600)				451,523,240
PREFERRED STOCKS — 2.06%
BANKS — 0.81%
Intesa Sanpaolo SpA		1,681,094		3,718,423
				3,718,423
DIVERSIFIED TELECOMMUNICATION SERVICES — 1.25%
Telecom Italia SpA/Milano		7,885,573		5,770,137
				5,770,137
TOTAL PREFERRED STOCKS
(Cost: $12,958,023)				9,488,560
SHORT-TERM INVESTMENTS — 3.21%
MONEY MARKET FUNDS — 3.21%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%d,e,f		14,628,660		14,628,660
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%d,e		160,632		160,632
				14,789,292
TOTAL SHORT-TERM INVESTMENTS
(Cost: $14,789,292)				14,789,292

SCHEDULES OF INVESTMENTS 79

Schedule of Investments  (Continued)

iSHARES^® MSCI ITALY CAPPED ETF

August 31, 2016

	Value
TOTAL INVESTMENTS IN SECURITIES — 103.20%
(Cost: $692,916,915)g	$	475,801,092
Other Assets, Less Liabilities — (3.20)%		(14,770,470	)
NET ASSETS — 100.00%	$	461,030,622

^a  Non-income earning security.

^b  All or a portion of this security represents a security on loan. See Note 1.

^c  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^d  Affiliated money market fund.

^e  The rate quoted is the annualized seven-day yield of the fund at period end.

^f  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^g  The cost of investments for federal income tax purposes was $701,459,658. Net unrealized depreciation was $225,658,566, of which $5,370,438 represented gross unrealized appreciation on securities and $231,029,004 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	451,523,240	$	—	$	—	$	451,523,240
Preferred stocks		9,488,560		—		—		9,488,560
Money market funds		14,789,292		—		—		14,789,292
Total	$	475,801,092	$	—	$	—	$	475,801,092

See notes to financial statements.

80 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI SPAIN CAPPED ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.92%
AIRLINES — 1.69%
International Consolidated Airlines Group SA		2,012,166	$	10,111,612
				10,111,612
BANKS — 33.55%
Banco Bilbao Vizcaya Argentaria SA		7,560,897		46,972,031
Banco de Sabadell SA		11,737,046		15,882,636
Banco Popular Espanol SAa		8,783,063		11,865,726
Banco Santander SA		19,289,793		86,365,666
Bankia SA		12,375,849		10,420,398
Bankinter SA		1,869,290		13,690,711
CaixaBank SA		5,981,413		16,074,912
				201,272,080
BIOTECHNOLOGY — 2.58%
Grifols SA		731,594		15,473,288
				15,473,288
CONSTRUCTION & ENGINEERING — 5.69%
ACS Actividades de Construccion y Servicios SA		507,589		14,362,132
Ferrovial SA		1,006,594		19,804,117
				34,166,249
DIVERSIFIED TELECOMMUNICATION SERVICES — 9.13%
Telefonica SA		5,446,598		54,777,295
				54,777,295
ELECTRIC UTILITIES — 12.85%
Endesa SA		807,004		16,412,093
Iberdrola SA		6,057,035		39,801,515
Red Electrica Corp. SA		972,154		20,902,218
				77,115,826
FOOD & STAPLES RETAILING — 1.96%
Distribuidora Internacional de Alimentacion SA		1,930,736		11,773,200
				11,773,200
GAS UTILITIES — 5.61%
Enagas SA		542,255		15,898,621
Gas Natural SDG SA		862,550		17,777,098
				33,675,719

Security	Shares		Value
INSURANCE — 1.81%
Mapfre SA		4,017,284	$	10,841,103
				10,841,103
IT SERVICES — 4.38%
Amadeus IT Holding SA Class A		572,090		26,248,009
				26,248,009
MACHINERY — 1.32%
Zardoya Otis SA		801,035		7,538,687
Zardoya Otis SA Newb		40,528		381,414
				7,920,101
OIL, GAS & CONSUMABLE FUELS — 4.45%
Repsol SA		1,991,923		26,710,778
				26,710,778
SPECIALTY RETAIL — 7.44%
Industria de Diseno Textil SA		1,262,107		44,651,139
				44,651,139
TRANSPORTATION INFRASTRUCTURE — 7.46%
Abertis Infraestructuras SA		1,489,801		23,038,896
Aena SAc		153,712		21,699,176
				44,738,072
TOTAL COMMON STOCKS
(Cost: $916,608,506)				599,474,471
SHORT-TERM INVESTMENTS — 0.01%
MONEY MARKET FUNDS — 0.01%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%d,e,f		61,979		61,979
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%d,e		7,135		7,135
				69,114
TOTAL SHORT-TERM INVESTMENTS
(Cost: $69,114)				69,114

SCHEDULES OF INVESTMENTS 81

Schedule of Investments  (Continued)

iSHARES^® MSCI SPAIN CAPPED ETF

August 31, 2016

	Value
TOTAL INVESTMENTS IN SECURITIES — 99.93%
(Cost: $916,677,620)g	$	599,543,585
Other Assets, Less Liabilities — 0.07%		400,311
NET ASSETS — 100.00%	$	599,943,896

^a  All or a portion of this security represents a security on loan. See Note 1.

^b  Non-income earning security.

^c  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^d  Affiliated money market fund.

^e  The rate quoted is the annualized seven-day yield of the fund at period end.

^f  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^g  The cost of investments for federal income tax purposes was $925,765,070. Net unrealized depreciation was $326,221,485, of which $19,165,386 represented gross unrealized appreciation on securities and $345,386,871 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	599,093,057	$	381,414	$	—	$	599,474,471
Money market funds		69,114		—		—		69,114
Total	$	599,162,171	$	381,414	$	—	$	599,543,585

See notes to financial statements.

82 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI SWITZERLAND CAPPED ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 98.83%
BIOTECHNOLOGY — 1.92%
Actelion Ltd. Registered		125,911	$	20,977,691
				20,977,691
BUILDING PRODUCTS — 1.87%
Geberit AG Registered		46,722		20,399,713
				20,399,713
CAPITAL MARKETS — 8.92%
Credit Suisse Group AG Registered		1,869,062		24,367,904
Julius Baer Group Ltd.		296,313		12,433,958
Partners Group Holding AG		25,514		11,711,174
UBS Group AG		3,373,437		48,822,222
				97,335,258
CHEMICALS — 8.10%
EMS-Chemie Holding AG Registered		15,702		8,365,983
Givaudan SA Registered		10,893		22,538,771
Sika AG Bearer		3,002		14,317,207
Syngenta AG Registered		99,209		43,245,855
				88,467,816
CONSTRUCTION MATERIALS — 2.51%
LafargeHolcim Ltd. Registered		515,859		27,379,825
				27,379,825
DIVERSIFIED FINANCIAL SERVICES — 0.51%
Pargesa Holding SA Bearer		80,454		5,551,658
				5,551,658
DIVERSIFIED TELECOMMUNICATION SERVICES — 1.36%
Swisscom AG Registered		31,089		14,868,171
				14,868,171
ELECTRICAL EQUIPMENT — 4.22%
ABB Ltd. Registered		2,123,878		46,063,651
				46,063,651
FOOD PRODUCTS — 22.22%
Aryzta AG		138,299		5,514,788
Barry Callebaut AG Registered		5,469		7,035,587
Chocoladefabriken Lindt & Sprungli AG Participation Certificates		1,572		9,111,536
Chocoladefabriken Lindt & Sprungli AG Registered		151		10,402,718
Nestle SA Registered		2,641,866		210,531,889
				242,596,518
HEALTH CARE EQUIPMENT & SUPPLIES — 0.98%
Sonova Holding AG Registered		77,171		10,689,505
				10,689,505

Security	Shares		Value
INSURANCE — 8.49%
Baloise Holding AG Registered		75,934	$	9,042,062
Swiss Life Holding AG Registered		46,440		11,627,134
Swiss Re AG		378,377		31,963,046
Zurich Insurance Group AG		156,680		40,088,903
				92,721,145
LIFE SCIENCES TOOLS & SERVICES — 1.29%
Lonza Group AG Registered		74,112		14,059,821
				14,059,821
MACHINERY — 1.83%
Schindler Holding AG Participation Certificates		64,521		12,154,941
Schindler Holding AG Registered		41,380		7,824,949
				19,979,890
MARINE — 1.02%
Kuehne + Nagel International AG Registered		79,822		11,154,201
				11,154,201
PHARMACEUTICALS — 25.29%
Galenica AG Registered		2,554		2,965,868
Novartis AG Registered		1,761,318		138,747,151
Roche Holding AG		550,639		134,388,308
				276,101,327
PROFESSIONAL SERVICES — 2.58%
Adecco Group AG Registered		217,083		12,505,112
SGS SA Registered		7,125		15,670,577
				28,175,689
REAL ESTATE MANAGEMENT & DEVELOPMENT — 0.87%
Swiss Prime Site AG Registered		108,323		9,536,349
				9,536,349
SPECIALTY RETAIL — 0.62%
Dufry AG Registereda,b		57,621		6,744,099
				6,744,099
TEXTILES, APPAREL & LUXURY GOODS — 4.23%
Cie. Financiere Richemont SA Class A Registered		547,761		31,581,762
Swatch Group AG (The) Bearera		38,397		9,890,877
Swatch Group AG (The) Registered		92,926		4,724,089
				46,196,728
TOTAL COMMON STOCKS (Cost: $1,181,526,260)				1,078,999,055

SCHEDULES OF INVESTMENTS 83

Schedule of Investments  (Continued)

iSHARES^® MSCI SWITZERLAND CAPPED ETF

August 31, 2016

Security	Shares		Value
SHORT-TERM INVESTMENTS — 0.42%
MONEY MARKET FUNDS — 0.42%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%c,d,e		4,549,701	$	4,549,701
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		51,921		51,921
				4,601,622
TOTAL SHORT-TERM INVESTMENTS (Cost: $4,601,622)				4,601,622
TOTAL INVESTMENTS IN SECURITIES — 99.25% (Cost: $1,186,127,882)f				1,083,600,677
Other Assets, Less Liabilities —0.75%				8,134,297
NET ASSETS — 100.00%			$	1,091,734,974

^a  All or a portion of this security represents a security on loan. See Note 1.

^b  Non-income earning security.

^c  Affiliated money market fund.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

^e  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^f  The cost of investments for federal income tax purposes was $1,195,429,793. Net unrealized depreciation was $111,829,116, of which $57,234,094 represented gross unrealized appreciation on securities and $169,063,210 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	1,078,999,055	$	—	$	—	$	1,078,999,055
Money market funds		4,601,622		—		—		4,601,622
Total	$	1,083,600,677	$	—	$	—	$	1,083,600,677

See notes to financial statements.

SCHEDULES OF INVESTMENTS 84

Statements of Assets and Liabilities

iSHARES^®, INC.

August 31, 2016

	iShares MSCI Eurozone ETF			iShares MSCI Germany ETF			iShares MSCI Italy Capped ETF
ASSETS
Investments, at cost:
Unaffiliated	$	9,893,232,207		$	4,363,082,772		$	678,127,623
Affiliated (Note 2)		19,914,426			33,859			14,789,292
Total cost of investments	$	9,913,146,633		$	4,363,116,631		$	692,916,915
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated	$	8,267,775,277		$	3,575,901,641		$	461,011,800
Affiliated (Note 2)		19,914,426			33,859			14,789,292
Total fair value of investments		8,287,689,703			3,575,935,500			475,801,092
Foreign currency, at valueb		7,777,222			7,138,177			274,164
Receivables:
Investment securities sold		12,368,834			3,433,545			8,998,652
Dividends and interest		2,539,554			118			5,606
Capital shares sold		—			95,404			—
Futures variation margin		—			2,027,033			—
Tax reclaims		10,963,116			13,484,537			325
Foreign withholding tax claims (Note 8)		6,488,796			—			—
Total Assets		8,327,827,225			3,602,114,314			485,079,839
LIABILITIES
Payables:
Investment securities purchased		10,756,009			3,349,774			8,871,757
Due to broker for foreign currency pledged for futures, at valueb		—			291,311			—
Collateral for securities on loan (Note 1)		19,587,492			—			14,628,660
Capital shares redeemed		—			—			334,795
Securities related to in-kind transactions (Note 4)		284,025			—			—
Professional fees (Note 8)		37,876			—			—
Investment advisory fees (Note 2)		3,570,975			1,571,273			214,005
Total Liabilities		34,236,377			5,212,358			24,049,217
NET ASSETS	$	8,293,590,848		$	3,596,901,956		$	461,030,622
Net assets consist of:
Paid-in capital	$	10,372,614,001		$	4,578,810,943		$	873,867,863
Undistributed net investment income		25,909,364			—			—
Undistributed net realized loss		(479,192,573	)		(196,440,259	)		(195,721,236	)
Net unrealized depreciation		(1,625,739,944	)		(785,468,728	)		(217,116,005	)
NET ASSETS	$	8,293,590,848		$	3,596,901,956		$	461,030,622
Shares outstandingc		242,500,000			137,400,000			40,800,000
Net asset value per share	$	34.20		$	26.18		$	11.30

^a  Securities on loan with values of $15,270,066, $  — and $13,826,444, respectively. See Note 1.

^b  Cost of foreign currency including currency pledged to broker: $7,834,199, $6,950,722 and $274,509, respectively.

^c  $0.001 par value, number of shares authorized: 1 billion, 482.2 million and 295.4 million, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 85

Statements of Assets and Liabilities  (Continued)

iSHARES^®, INC.

August 31, 2016

	iShares MSCI Spain Capped ETF			iShares MSCI Switzerland Capped ETF
ASSETS
Investments, at cost:
Unaffiliated	$	916,608,506		$	1,181,526,260
Affiliated (Note 2)		69,114			4,601,622
Total cost of investments	$	916,677,620		$	1,186,127,882
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated	$	599,474,471		$	1,078,999,055
Affiliated (Note 2)		69,114			4,601,622
Total fair value of investments		599,543,585			1,083,600,677
Foreign currency, at valueb		409,280			1,331,240
Receivables:
Investment securities sold		5,258,014			3,763,089
Interest		83			603
Tax reclaims		92,780			11,948,504
Total Assets		605,303,742			1,100,644,113
LIABILITIES
Payables:
Investment securities purchased		5,029,593			3,899,247
Collateral for securities on loan (Note 1)		61,979			4,549,701
Investment advisory fees (Note 2)		268,274			460,191
Total Liabilities		5,359,846			8,909,139
NET ASSETS	$	599,943,896		$	1,091,734,974
Net assets consist of:
Paid-in capital	$	1,041,272,779		$	1,284,734,064
Undistributed net investment income		7,780,534			510,619
Undistributed net realized loss		(131,970,464	)		(90,474,348	)
Net unrealized depreciation		(317,138,953	)		(103,035,361	)
NET ASSETS	$	599,943,896		$	1,091,734,974
Shares outstandingc		22,650,000			36,125,000
Net asset value per share	$	26.49		$	30.22

^a  Securities on loan with values of $57,746 and $4,294,436, respectively. See Note 1.

^b  Cost of foreign currency: $414,535 and $1,337,666, respectively.

^c  $0.001 par value, number of shares authorized: 127.8 million and 318.625 million, respectively.

See notes to financial statements.

86 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations

iSHARES^®, INC.

Year ended August 31, 2016

	iShares MSCI Eurozone ETF			iShares MSCI Germany ETF			iShares MSCI Italy Capped ETF
NET INVESTMENT INCOME
Dividends — unaffiliateda	$	360,570,216		$	121,067,906		$	26,672,459
Dividends — affiliated (Note 2)		9,930			4,746			1,256
Miscellaneous income		21,311			—			—
Securities lending income — affiliated — net (Note 2)		2,829,291			181,203			183,065
Foreign withholding tax claims (Note 8)		6,488,910			—			—
Total investment income		369,919,658			121,253,855			26,856,780
EXPENSES
Investment advisory fees (Note 2)		56,101,620			24,428,612			4,260,265
Professional fees (Note 8)		37,876			—			—
Total expenses		56,139,496			24,428,612			4,260,265
Net investment income		313,780,162			96,825,243			22,596,515
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		(179,288,298	)		(61,776,838	)		(77,931,236	)
In-kind redemptions — unaffiliated		(173,841,776	)		(135,895,299	)		(90,275,907	)
Futures contracts		—			(4,686,193	)		—
Foreign currency transactions		(566,326	)		(217,870	)		(187,840	)
Net realized loss		(353,696,400	)		(202,576,200	)		(168,394,983	)
Net change in unrealized appreciation/depreciation on:
Investments		(558,743,796	)		32,258,427			(101,935,060	)
Futures contracts		—			4,372,096			—
Translation of assets and liabilities in foreign currencies		(228,923	)		160,391			(7,346	)
Net change in unrealized appreciation/depreciation		(558,972,719	)		36,790,914			(101,942,406	)
Net realized and unrealized loss		(912,669,119	)		(165,785,286	)		(270,337,389	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(598,888,957	)	$	(68,960,043	)	$	(247,740,874	)

^a  Net of foreign withholding tax of $53,367,824, $18,202,301 and $4,290,513, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 87

Statements of Operations  (Continued)

iSHARES^®, INC.

Year ended August 31, 2016

	iShares MSCI Spain Capped ETF			iShares MSCI Switzerland Capped ETF
NET INVESTMENT INCOME
Dividends — unaffiliateda	$	44,033,583		$	35,938,842
Dividends — affiliated (Note 2)		1,202			1,696
Miscellaneous income		21,620			—
Securities lending income — affiliated — net (Note 2)		144,962			326,153
Total investment income		44,201,367			36,266,691
EXPENSES
Investment advisory fees (Note 2)		5,289,563			5,530,695
Total expenses		5,289,563			5,530,695
Net investment income		38,911,804			30,735,996
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		(72,886,367	)		(37,591,234	)
In-kind redemptions — unaffiliated		(209,893,862	)		26,285,223
Foreign currency transactions		205,873			(48,918	)
Net realized loss		(282,574,356	)		(11,354,929	)
Net change in unrealized appreciation/depreciation on:
Investments		23,014,708			(51,746,339	)
Translation of assets and liabilities in foreign currencies		(25,025	)		(163,061	)
Net change in unrealized appreciation/depreciation		22,989,683			(51,909,400	)
Net realized and unrealized loss		(259,584,673	)		(63,264,329	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(220,672,869	)	$	(32,528,333	)

^a  Net of foreign withholding tax of $3,903,490 and $5,011,622, respectively.

See notes to financial statements.

88 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets

iSHARES^®, INC.

	iShares MSCI Eurozone ETF						iShares MSCI Germany ETF
	Year ended August 31, 2016			Year ended August 31, 2015			Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	313,780,162		$	225,781,969		$	96,825,243		$	121,304,245
Net realized gain (loss)		(353,696,400	)		48,868,113			(202,576,200	)		126,916,177
Net change in unrealized appreciation/depreciation		(558,972,719	)		(1,145,598,692	)		36,790,914			(857,695,814	)
Net decrease in net assets resulting from operations		(598,888,957	)		(870,948,610	)		(68,960,043	)		(609,475,392	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(293,025,178	)		(233,277,080	)		(97,625,093	)		(127,874,456	)
Total distributions to shareholders		(293,025,178	)		(233,277,080	)		(97,625,093	)		(127,874,456	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		5,702,626,726			5,243,729,213			800,372,366			3,934,318,439
Cost of shares redeemed		(6,651,737,571	)		(2,707,524,817	)		(3,643,941,594	)		(1,387,346,200	)
Net increase (decrease) in net assets from capital share transactions		(949,110,845	)		2,536,204,396			(2,843,569,228	)		2,546,972,239
INCREASE (DECREASE) IN NET ASSETS		(1,841,024,980	)		1,431,978,706			(3,010,154,364	)		1,809,622,391
NET ASSETS
Beginning of year		10,134,615,828			8,702,637,122			6,607,056,320			4,797,433,929
End of year	$	8,293,590,848		$	10,134,615,828		$	3,596,901,956		$	6,607,056,320
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	25,909,364		$	5,210,075		$	—		$	(4,090,809	)
SHARES ISSUED AND REDEEMED
Shares sold		161,500,000			136,000,000			32,400,000			135,600,000
Shares redeemed		(200,200,000	)		(72,500,000	)		(145,800,000	)		(50,400,000	)
Net increase (decrease) in shares outstanding		(38,700,000	)		63,500,000			(113,400,000	)		85,200,000

See notes to financial statements.

FINANCIAL STATEMENTS 89

Statements of Changes in Net Assets  (Continued)

iSHARES^®, INC.

	iShares MSCI Italy Capped ETF						iShares MSCI Spain Capped ETF
	Year ended August 31, 2016			Year ended August 31, 2015			Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	22,596,515		$	24,227,811		$	38,911,804		$	65,134,793
Net realized loss		(168,394,983	)		(44,864,340	)		(282,574,356	)		(29,776,219	)
Net change in unrealized appreciation/depreciation		(101,942,406	)		(76,897,587	)		22,989,683			(436,158,087	)
Net decrease in net assets resulting from operations		(247,740,874	)		(97,534,116	)		(220,672,869	)		(400,799,513	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(22,347,848	)		(24,941,571	)		(41,241,786	)		(77,875,309	)
Return of capital		(780,522	)		—			—			—
Total distributions to shareholders		(23,128,370	)		(24,941,571	)		(41,241,786	)		(77,875,309	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		265,361,545			342,752,870			42,497,240			635,385,021
Cost of shares redeemed		(610,898,923	)		(699,700,191	)		(846,729,289	)		(963,657,247	)
Net decrease in net assets from capital share transactions		(345,537,378	)		(356,947,321	)		(804,232,049	)		(328,272,226	)
DECREASE IN NET ASSETS		(616,406,622	)		(479,423,008	)		(1,066,146,704	)		(806,947,048	)
NET ASSETS
Beginning of year		1,077,437,244			1,556,860,252			1,666,090,600			2,473,037,648
End of year	$	461,030,622		$	1,077,437,244		$	599,943,896		$	1,666,090,600
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	—		$	(60,827	)	$	7,780,534		$	9,904,643
SHARES ISSUED AND REDEEMED
Shares sold		17,850,000			23,100,000			1,500,000			18,075,000
Shares redeemed		(50,100,000	)		(47,250,000	)		(30,975,000	)		(26,850,000	)
Net decrease in shares outstanding		(32,250,000	)		(24,150,000	)		(29,475,000	)		(8,775,000	)

See notes to financial statements.

90 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets  (Continued)

iSHARES^®, INC.

	iShares MSCI Switzerland Capped ETF
	Year ended August 31, 2016			Year ended August 31, 2015
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	30,735,996		$	28,397,908
Net realized gain (loss)		(11,354,929	)		173,784,011
Net change in unrealized appreciation/depreciation		(51,909,400	)		(251,839,482	)
Net decrease in net assets resulting from operations		(32,528,333	)		(49,657,563	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(29,917,479	)		(28,746,817	)
Total distributions to shareholders		(29,917,479	)		(28,746,817	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		179,880,379			875,666,580
Cost of shares redeemed		(225,863,531	)		(669,255,531	)
Net increase (decrease) in net assets from capital share transactions		(45,983,152	)		206,411,049
INCREASE (DECREASE) IN NET ASSETS		(108,428,964	)		128,006,669
NET ASSETS
Beginning of year		1,200,163,938			1,072,157,269
End of year	$	1,091,734,974		$	1,200,163,938
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	510,619		$	(258,980	)
SHARES ISSUED AND REDEEMED
Shares sold		5,875,000			25,875,000
Shares redeemed		(7,375,000	)		(20,125,000	)
Net increase (decrease) in shares outstanding		(1,500,000	)		5,750,000

See notes to financial statements.

FINANCIAL STATEMENTS 91

Financial Highlights

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Eurozone ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	36.04		$	39.98		$	34.64		$	29.09		$	31.55
Income from investment operations:
Net investment incomea		0.92	b		0.96			1.18			0.92			1.02
Net realized and unrealized gain (loss)c		(1.84	)		(3.95	)		5.10			5.55			(2.38	)
Total from investment operations		(0.92	)		(2.99	)		6.28			6.47			(1.36	)
Less distributions from:
Net investment income		(0.92	)		(0.95	)		(0.94	)		(0.92	)		(1.10	)
Total distributions		(0.92	)		(0.95	)		(0.94	)		(0.92	)		(1.10	)
Net asset value, end of year	$	34.20		$	36.04		$	39.98		$	34.64		$	29.09
Total return		(2.53	)%b		(7.62	)%		18.02	%		22.43	%		(3.99	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	8,293,591		$	10,134,616		$	8,702,637		$	3,539,980		$	794,226
Ratio of expenses to average net assets		0.48	%		0.48	%		0.48	%		0.50	%		0.53	%
Ratio of expenses to average net assets excluding professional fees for foreign withholding tax claims (Notes 8)		0.48	%		n/a			n/a			n/a			n/a
Ratio of net investment income to average net assets		2.69	%b		2.50	%		2.89	%		2.74	%		3.55	%
Portfolio turnover rated		4	%		5	%		7	%		5	%		7	%

^a  Based on average shares outstanding throughout each period.

^b  Reflects the positive effect of foreign withholding tax claims, net of the associated professional fees (See Note 8), which resulted in the following increases for the year ended August 31, 2016:

• Net investment income per share by $0.02.

• Total return by 0.08%.

• Ratio of net investment income to average net assets by 0.06%.

^c  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

92 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights  (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Germany ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	26.34		$	28.97		$	25.61		$	21.34		$	21.02
Income from investment operations:
Net investment incomea		0.49			0.58			0.59			0.46			0.56
Net realized and unrealized gain (loss)b		(0.04	)		(2.70	)		3.40			4.24			0.34
Total from investment operations		0.45			(2.12	)		3.99			4.70			0.90
Less distributions from:
Net investment income		(0.61	)		(0.51	)		(0.63	)		(0.43	)		(0.58	)
Total distributions		(0.61	)		(0.51	)		(0.63	)		(0.43	)		(0.58	)
Net asset value, end of year	$	26.18		$	26.34		$	28.97		$	25.61		$	21.34
Total return		1.81	%		(7.50	)%		15.41	%		22.11	%		4.55	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	3,596,902		$	6,607,056		$	4,797,434		$	4,655,875		$	2,797,029
Ratio of expenses to average net assets		0.48	%		0.48	%		0.48	%		0.51	%		0.53	%
Ratio of net investment income to average net assets		1.90	%		2.03	%		1.95	%		1.88	%		2.72	%
Portfolio turnover ratec		3	%		3	%		6	%		4	%		4	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 93

Financial Highlights  (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Italy Capped ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	14.75		$	16.02		$	13.06		$	11.78		$	13.58
Income from investment operations:
Net investment incomea		0.33			0.35			0.41			0.36			0.41
Net realized and unrealized gain (loss)b		(3.41	)		(1.25	)		2.89			1.23			(1.79	)
Total from investment operations		(3.08	)		(0.90	)		3.30			1.59			(1.38	)
Less distributions from:
Net investment income		(0.36	)		(0.37	)		(0.34	)		(0.30	)		(0.42	)
Return of capital		(0.01	)		—			—			(0.01	)		(0.00	)c
Total distributions		(0.37	)		(0.37	)		(0.34	)		(0.31	)		(0.42	)
Net asset value, end of year	$	11.30		$	14.75		$	16.02		$	13.06		$	11.78
Total return		(20.97	)%		(5.66	)%		25.20	%		13.58	%		(9.98	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	461,031		$	1,077,437		$	1,556,860		$	717,122		$	196,212
Ratio of expenses to average net assets		0.48	%		0.48	%		0.48	%		0.50	%		0.53	%
Ratio of net investment income to average net assets		2.54	%		2.34	%		2.49	%		2.78	%		3.41	%
Portfolio turnover rated		16	%		22	%		24	%		45	%		14	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  Rounds to less than $0.01.

^d  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

94 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights  (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Spain Capped ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	31.96		$	40.61		$	30.44		$	26.28		$	35.89
Income from investment operations:
Net investment incomea		1.00			1.32			1.80			1.33			2.12
Net realized and unrealized gain (loss)b		(5.40	)		(8.35	)		9.53			4.07			(8.93	)
Total from investment operations		(4.40	)		(7.03	)		11.33			5.40			(6.81	)
Less distributions from:
Net investment income		(1.07	)		(1.62	)		(1.16	)		(1.24	)		(2.80	)
Total distributions		(1.07	)		(1.62	)		(1.16	)		(1.24	)		(2.80	)
Net asset value, end of year	$	26.49		$	31.96		$	40.61		$	30.44		$	26.28
Total return		(13.82	)%		(17.63	)%		37.39	%		20.88	%		(19.36	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	599,944		$	1,666,091		$	2,473,038		$	417,778		$	195,093
Ratio of expenses to average net assets		0.48	%		0.48	%		0.48	%		0.51	%		0.53	%
Ratio of net investment income to average net assets		3.53	%		3.70	%		4.48	%		4.45	%		7.60	%
Portfolio turnover ratec		9	%		15	%		15	%		24	%		17	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 95

Financial Highlights  (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Switzerland Capped ETF
	Year ended Aug. 31, 2016			Year ended Aug. 31, 2015			Year ended Aug. 31, 2014			Year ended Aug. 31, 2013			Year ended Aug. 31, 2012
Net asset value, beginning of year	$	31.90		$	33.64		$	29.36		$	23.85		$	24.67
Income from investment operations:
Net investment incomea		0.81			0.83			0.80			0.67			0.63
Net realized and unrealized gain (loss)b		(1.70	)		(1.77	)		4.27			5.44			(0.80	)
Total from investment operations		(0.89	)		(0.94	)		5.07			6.11			(0.17	)
Less distributions from:
Net investment income		(0.79	)		(0.80	)		(0.79	)		(0.60	)		(0.65	)
Total distributions		(0.79	)		(0.80	)		(0.79	)		(0.60	)		(0.65	)
Net asset value, end of year	$	30.22		$	31.90		$	33.64		$	29.36		$	23.85
Total return		(2.76	)%		(2.92	)%		17.21	%		25.71	%		(0.53	)%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	1,091,735		$	1,200,164		$	1,072,157		$	902,860		$	554,570
Ratio of expenses to average net assets		0.48	%		0.48	%		0.48	%		0.51	%		0.53	%
Ratio of net investment income to average net assets		2.68	%		2.49	%		2.41	%		2.38	%		2.73	%
Portfolio turnover ratec		6	%		7	%		5	%		13	%		8	%

^a  Based on average shares outstanding throughout each period.

^b  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^c  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

96 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements

iSHARES^®, INC.

iShares, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Company was incorporated under the laws of the State of Maryland on September 1, 1994 pursuant to Articles of Incorporation as subsequently amended and restated.

These financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):

iShares ETF	Diversification Classification
MSCI Eurozone	Diversified
MSCI Germany	Non-diversified
MSCI Italy Capped	Non-diversified
MSCI Spain Capped	Non-diversified
MSCI Switzerland Capped	Non-diversified

The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.

Pursuant to the Company’s organizational documents, the Funds’ officers and directors are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.

SECURITY VALUATION

Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Directors of the Company (the “Board”).

• Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price.

NOTES TO FINANCIAL STATEMENTS 97

Notes to Financial Statements  (Continued)

iSHARES^®, INC.

• Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”).

• Futures contracts are valued at that day’s last reported settlement price on the exchange where the contract is traded.

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such factors are reported to the Board on a quarterly basis.

The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Company’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements in market values, and reviews of market related activity.

Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.

Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and is not necessarily an indication of the risk associated with investing in the instrument. The three levels of the fair value hierarchy are as follows:

• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and

• Level 3 — Unobservable inputs for the asset or liability, including the Global Valuation Committee’s assumptions used in determining the fair value of investments.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Company’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.

98 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements  (Continued)

iSHARES^®, INC.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2016 are reflected in tax reclaims receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.

FOREIGN CURRENCY TRANSLATION

The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.

Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes.

FOREIGN TAXES

The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their statements of operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “other foreign taxes”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of August 31, 2016, if any, are disclosed in the Funds’ statements of assets and liabilities.

DISTRIBUTIONS TO SHAREHOLDERS

Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.

LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Funds. Any additional required collateral is delivered to the Funds and any excess collateral is returned by the Funds on the next

NOTES TO FINANCIAL STATEMENTS 99

Notes to Financial Statements  (Continued)

iSHARES^®, INC.

business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

On July 23, 2014, the U.S. Securities and Exchange Commission (the “SEC”) adopted amendments to Rule 2a-7 under the 1940 Act, which governs the operations of U.S. money market funds. When implemented in October 2016, the change may affect the Funds with regard to the reinvestment of cash collateral received for securities on loan. The Funds may be exposed to additional risk from reinvesting the cash collateral in money market funds that do not maintain a fixed NAV per share of $1.00.

Any cash received as collateral for securities on loan may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates. As of August 31, 2016, any securities on loan were collateralized by cash and/or U.S. government obligations. Cash collateral received was invested in money market funds managed by BFA and is disclosed in the schedules of investments. The securities on loan for each Fund are also disclosed in its schedule of investments. The total value of any securities on loan as of August 31, 2016 and the total value of the related collateral are disclosed in the statements of assets and liabilities. Income earned by the Funds from securities lending is disclosed in the statements of operations.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities lent. Each Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.

Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (“MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, a Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, the borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.

100 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements  (Continued)

iSHARES^®, INC.

The following table is a summary of securities lending agreements which are subject to offset under an MSLA as of August 31, 2016:

iShares ETF and Counterparty	Market Value of Securities on Loan		Cash Collateral Received  a		Net Amount b
MSCI Eurozone
Goldman Sachs & Co.	$	4,611,471	$	4,611,471	$	—
Merrill Lynch, Pierce, Fenner & Smith		531,601		531,601		—
Morgan Stanley & Co. LLC		1,238,857		1,223,004		(15,853	)
National Financial Services LLC		6,677,748		6,677,748		—
State Street Bank & Trust Company		645,739		645,739		—
UBS Securities LLC		1,564,650		1,564,650		—
	$	15,270,066	$	15,254,213	$	(15,853	)
MSCI Italy Capped
Deutsche Bank Securities Inc.	$	27,088	$	27,088	$	—
Wells Fargo Securities LLC		13,799,356		13,799,356		—
	$	13,826,444	$	13,826,444	$	—
MSCI Spain Capped
UBS Securities LLC	$	57,746	$	57,746	$	—
	$	57,746	$	57,746	$	—
MSCI Switzerland Capped
JPMorgan Clearing Corp.	$	911,886	$	911,886	$	—
State Street Bank & Trust Company		3,382,550		3,382,550		—
	$	4,294,436	$	4,294,436	$	—

^a  Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s statement of assets and liabilities.

^b  Additional collateral is delivered to the Funds on the next business day in accordance with the MSLA. The net amount would be subject to the borrower default indemnity in the event of default by a counterparty.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Agreement with the Company, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.

For its investment advisory services to each Fund, BFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:

Investment Advisory Fee			Aggregate Average Daily Net Assets
	0.59	%	First $7 billion
	0.54		Over $7 billion, up to and including $11 billion
	0.49		Over $11 billion, up to and including $24  billion
	0.44		Over $24 billion, up to and including $48  billion
	0.40		Over $48 billion, up to and including $72  billion
	0.36		Over $72 billion

NOTES TO FINANCIAL STATEMENTS 101

Notes to Financial Statements  (Continued)

iSHARES^®, INC.

The SEC has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by BFA, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the “collateral investment fees”). Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Funds retain a portion of securities lending income and remit the remaining portion to BTC as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, each Fund retains 80% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in a given calendar year exceeds the aggregate securities lending income generated across the iShares ETF Complex in the calendar year 2013, each Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 85% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.

For the year ended August 31, 2016, the total of securities lending agent services and collateral investment fees paid were as follows:

iShares ETF	Fees Paid to BTC
MSCI Eurozone	$	710,939
MSCI Germany		49,438
MSCI Italy Capped		47,213
MSCI Spain Capped		34,326
MSCI Switzerland Capped		81,689

BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.

Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.

For the year ended August 31, 2016, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:

iShares ETF	Purchases		Sales
MSCI Eurozone	$	23,364,421	$	29,426,428
MSCI Germany		4,004,205		6,399,331
MSCI Italy Capped		8,617,298		4,426,292
MSCI Spain Capped		15,349,772		4,661,847
MSCI Switzerland Capped		13,043,506		7,416,866

102 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements  (Continued)

iSHARES^®, INC.

Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends—affiliated” in the statements of operations.

The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.

Certain directors and officers of the Company are also officers of BTC and/or BFA.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2016 were as follows:

iShares ETF	Purchases		Sales
MSCI Eurozone	$	663,505,658	$	429,886,543
MSCI Germany		182,093,185		178,774,180
MSCI Italy Capped		142,302,471		161,427,913
MSCI Spain Capped		103,403,465		204,249,271
MSCI Switzerland Capped		68,284,891		74,263,708

In-kind transactions (see Note 4) for the year ended August 31, 2016 were as follows:

iShares ETF	In-kind Purchases		In-kind Sales
MSCI Eurozone	$	5,330,745,117	$	6,501,707,629
MSCI Germany		780,355,626		3,619,336,473
MSCI Italy Capped		249,483,858		583,956,966
MSCI Spain Capped		37,005,789		760,904,216
MSCI Switzerland Capped		175,015,591		219,047,030

4. CAPITAL SHARE TRANSACTIONS

Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the statements of changes in net assets.

The consideration for the purchase of Creation Units of a fund in the Company generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Company may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Company’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Proceeds from shares sold” in the statements of changes in net assets.

NOTES TO FINANCIAL STATEMENTS 103

Notes to Financial Statements  (Continued)

iSHARES^®, INC.

From time to time, settlement of securities related to in-kind contributions or in-kind redemptions may be delayed. In such cases, securities related to in-kind contributions are reflected as “Due from custodian” and securities related to in-kind redemptions are reflected as “Securities related to in-kind transactions” in the statements of assets and liabilities.

5. FUTURES CONTRACTS

Each Fund may purchase or sell futures contracts in an effort to help such Fund track its underlying index. A futures contract is a standardized, exchange-traded agreement to buy or sell a financial instrument at a set price on a future date. Upon entering into a futures contract, the Fund is required to pledge to the executing broker which holds segregated from its own assets, an amount of cash, U.S. government securities or other high-quality debt and equity securities equal to the minimum initial margin requirements of the exchange on which the contract is traded. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as margin variation and are recorded by the Fund as unrealized appreciation or depreciation. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Losses may arise if the value of a futures contract decreases due to an unfavorable change in the market rates or values of the underlying instrument during the term of the contract or if the counterparty does not perform under the contract. The use of futures contracts also involves the risk of an imperfect correlation in the movements in the price of futures contracts and the assets underlying such contracts.

The following table shows the value of futures contracts held by the iShares MSCI Germany ETF as of August 31, 2016 and the related locations in the statements of assets and liabilities, presented by risk exposure category:

	Assets
Equity contracts:
Variation margin / Net assets consist of — net unrealized depreciationa	$	2,027,033

^a  Represents cumulative appreciation of futures contracts as reported in the schedule of investments.

The following table shows the realized and unrealized gains (losses) on futures contracts held by the iShares MSCI Germany ETF during the year ended August 31, 2016 and the related locations in the statements of operations, presented by risk exposure category:

	Net Realized Gain (Loss)			Net Change in Unrealized Appreciation/Depreciation
Equity contracts:
Futures contracts	$	(4,686,193	)	$	4,372,096

The following table shows the average quarter-end balances of open futures contracts for the iShares MSCI Germany ETF for the year ended August 31, 2016:

Average value of contracts purchased $ 26,820,835

6. PRINCIPAL RISKS

In the normal course of business, each Fund’s investment activities expose it to various types of risk associated with the financial instruments and markets in which it invests. The significant types of financial risks each Fund is exposed to include market risk and credit risk. Each Fund’s prospectus provides details of these and other types of risk.

104 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements  (Continued)

iSHARES^®, INC.

BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.

MARKET RISK

Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss each Fund may suffer through holding market positions in the face of market movements. Each Fund is exposed to market risk by virtue of its direct and/or indirect investment in equity and financial derivative instruments. The fair value of securities held by the Funds may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of each Fund’s exposure to market risk is the market value of the investments held as shown in the Fund’s schedule of investments.

A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its schedule of investments.

Investing in the securities of non-U.S. issuers, whether directly or indirectly, involves certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets; and the risk of war. These risks are heightened for investments in issuers from countries with less developed markets.

The economies and markets of European countries are often closely connected and interdependent, and events in one European country can have an adverse impact on other European countries. The European financial markets have experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of several European countries. Responses to the financial problems by European governments, central banks and others, including austerity measures and reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In addition, the United Kingdom has voted to withdraw from the European Union. The referendum may introduce significant new uncertainties and instability in the financial markets as the United Kingdom negotiates its exit from the European Union.

When a fund concentrates its investments in issuers located in a single country, whether directly or indirectly, it assumes the risk that economic, political and social conditions in that country may have a significant impact on its investment performance.

CREDIT RISK

Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to issuer and counterparty

NOTES TO FINANCIAL STATEMENTS 105

Notes to Financial Statements  (Continued)

iSHARES^®, INC.

credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of each Fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its statement of assets and liabilities.

7. INCOME TAX INFORMATION

Each Fund is treated as an entity separate from the Company’s other funds for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.

U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or NAV per share. The following permanent differences as of August 31, 2016, attributable to passive foreign investment companies, the expiration of capital loss carryforwards, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:

iShares ETF	Paid-in Capital			Undistributed Net Investment Income/Distributions in Excess of Net Investment Income			Undistributed Net Realized Gain/Accumulated Net Realized Loss
MSCI Eurozone	$	(310,744,940	)	$	(55,695	)	$	310,800,635
MSCI Germany		(247,167,146	)		4,890,659			242,276,487
MSCI Italy Capped		(114,953,402	)		(187,840	)		115,141,242
MSCI Spain Capped		(270,057,391	)		205,873			269,851,518
MSCI Switzerland Capped		23,342,740			(48,918	)		(23,293,822	)

The tax character of distributions paid during the years ended August 31, 2016 and August 31, 2015 was as follows:

iShares ETF	2016		2015
MSCI Eurozone
Ordinary income	$	293,025,178	$	233,277,080
MSCI Germany
Ordinary income	$	97,625,093	$	127,874,456
MSCI Italy Capped
Ordinary income	$	22,347,848	$	24,941,571
Return of capital		780,522		—
	$	23,128,370	$	24,941,571
MSCI Spain Capped
Ordinary income	$	41,241,786	$	77,875,309
MSCI Switzerland Capped
Ordinary income	$	29,917,479	$	28,746,817

106 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements  (Continued)

iSHARES^®, INC.

As of August 31, 2016, the tax components of accumulated net earnings (losses) were as follows:

iShares ETF	Undistributed Ordinary Income		Capital Loss Carryforwards			Net Unrealized Gains (Losses) a			Qualified Late-Year Losses b			Total
MSCI Eurozone	$	19,617,289	$	(219,593,909	)	$	(1,784,406,457	)	$	(94,640,076	)	$	(2,079,023,153	)
MSCI Germany		—		(129,902,809	)		(848,241,338	)		(3,764,840	)		(981,908,987	)
MSCI Italy Capped		—		(99,044,255	)		(225,658,748	)		(88,134,238	)		(412,837,241	)
MSCI Spain Capped		7,780,534		(81,371,519	)		(326,226,403	)		(41,511,495	)		(441,328,883	)
MSCI Switzerland Capped		618,789		(48,149,768	)		(112,337,272	)		(33,130,839	)		(192,999,090	)

^a  The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales, the realization for tax purposes of unrealized gains (losses) on certain futures contracts, the foreign withholding tax reclaims, and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies.

^b  The Funds have elected to defer certain qualified late-year losses and recognize such losses in the next taxable year.

As of August 31, 2016, the following Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:

iShares ETF	Non- Expiring  a		Expiring 2017		Expiring 2018		Expiring 2019		Total
MSCI Eurozone	$	94,683,428	$	26,644,200	$	68,035,542	$	30,230,739	$	219,593,909
MSCI Germany		41,405,856		27,790,050		28,490,949		32,215,954		129,902,809
MSCI Italy Capped		68,671,316		2,743,650		18,169,627		9,459,662		99,044,255
MSCI Spain Capped		51,684,017		5,946,927		15,120,672		8,619,903		81,371,519
MSCI Switzerland Capped		15,786,844		2,837,786		22,569,380		6,955,758		48,149,768

^a  Must be utilized prior to losses subject to expiration.

The Funds may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Funds may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.

Management has analyzed tax laws and regulations and their application to the Funds as of August 31, 2016, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

8. FOREIGN WITHHOLDING TAX CLAIMS

The iShares MSCI Eurozone ETF intends to file claims to recover taxes withheld by Finland on dividend income on the basis that Finland had purportedly violated certain provisions in the Treaty on the Functioning of the European Union. The Fund has recorded a receivable for all recoverable taxes withheld by Finland based upon recent favorable determinations issued by the Finnish Tax Authority. Withholding tax claims may be for the current year and potentially for a limited number of prior calendar years, depending upon the member state’s statute of limitation on taxes. The Fund continues to evaluate developments in Finland for potential impact to the receivables recorded. Such foreign withholding tax claims are disclosed in the statement of assets and liabilities and statement of operations. Professional fees associated with the filing of these claims resulting in the recovery of foreign withholding taxes were approved by the Board as appropriate expenses of the Fund.

NOTES TO FINANCIAL STATEMENTS 107

Notes to Financial Statements  (Continued)

iSHARES^®, INC.

The Internal Revenue Service has issued guidance to address U.S. income tax liabilities attributable to fund shareholders resulting from the recovery of foreign taxes withheld in prior calendar years. These withheld foreign taxes were passed through to shareholders in the form of foreign tax credits in the year the taxes were withheld. Assuming there are sufficient foreign taxes paid in the current year, the Fund will be able to offset the prior years’ withholding taxes recovered against the foreign taxes paid in the current year. Accordingly, no federal income tax liability is recorded by the Fund.

9. SUBSEQUENT EVENTS

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

At the meeting of the Board held on September 28-29, 2016, the Board approved a one-for-two reverse stock split for the iShares MSCI Italy Capped ETF, effective after the close of trading on November 4, 2016. The impact of the stock split will be to decrease the number of shares outstanding by a factor of two, while increasing the NAV per share by a factor of two, resulting in no effect on the net assets of the Fund.

108 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

iShares, Inc.:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of iShares MSCI Eurozone ETF, iShares MSCI Germany ETF, iShares MSCI Italy Capped ETF, iShares MSCI Spain Capped ETF and iShares MSCI Switzerland Capped ETF (the “Funds”) at August 31, 2016, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2016 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 21, 2016

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 109

Notes:

110 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

For more information visit www.iShares.com or call 1-800-474-2737

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

Investing involves risk, including possible loss of principal.

The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.

A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.

The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily basis on the Funds’ website.

©2016 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.

iS-AR-814-0816

AUGUST 31, 2016

2016 ANNUAL REPORT

iShares Trust

^Ø  iShares MSCI EAFE ESG Optimized ETF  |  ESGD  |  NASDAQ

^Ø  iShares MSCI Global Impact ETF  |  MPCT  |  NASDAQ

Table of Contents

Management’s Discussions of Fund Performance	5
About Fund Performance	10
Shareholder Expenses	10
Schedules of Investments	11
iShares MSCI EAFE ESG Optimized ETF	11
iShares MSCI Global Impact ETF	18
Financial Statements	21
Financial Highlights	24
Notes to Financial Statements	26
Report of Independent Registered Public Accounting Firm	35
Tax Information	36
Board Review and Approval of Investment Advisory Contract	37
Supplemental Information	42
Trustee and Officer Information	43

Management’s Discussion of Fund Performance

iSHARES^® TRUST

GLOBAL EQUITY MARKET OVERVIEW

Global equity markets advanced for the five months ended August 31, 2016 (the “reporting period”). The MSCI ACWI, a broad global equity index that includes both developed and emerging markets, returned 5.70% for the reporting period.

The broad rise in global stock markets for the reporting period was driven in part by increased economic stimulus actions from many of the world’s central banks, including expanded quantitative easing measures and negative interest rates. A recovery in energy prices also provided a tailwind for global equity markets, as did signs of stabilization in China, which had experienced a marked economic slowdown that put downward pressure on its currency.

Despite the overall upward trend, global equity markets experienced some meaningful volatility during the reporting period. Stocks fell sharply around the world in late June 2016 in the wake of the “Brexit” referendum, the U.K.’s affirmative vote to leave the European Union. Other geopolitical factors — including terrorist attacks in France, an attempted coup in Turkey, and renewed signs of conflict in the Ukraine — contributed to global equity market volatility late in the reporting period.

Among developed countries, equity markets in the Asia/Pacific region performed best, gaining approximately 7% for the reporting period. New Zealand was the leading performer in the region, benefiting from improving economic growth during the reporting period. Markets in Australia and Japan also fared well, although the advance in the Japanese market resulted from a sharp rally in the Japanese yen, which appreciated by 16% against the U.S. dollar for the reporting period. Singapore was the only market in the region to decline for the reporting period.

The U.S. equity market returned approximately 6% for the reporting period. Although employment growth remained robust, other segments of the U.S. economy struggled, leading to uneven economic growth. As a result, the U.S. Federal Reserve Bank (the “Fed”) — which raised short-term interest rates in late 2015 and was expected to continue doing so in 2016 — held rates steady during the reporting period. Stable Fed monetary policy, as well as the relative strength of the U.S. economy compared with other regions of the globe, provided a favorable backdrop for U.S. equity market performance.

European stock markets returned approximately 2% for the reporting period. The European Central Bank expanded its quantitative easing measures and maintained a negative interest rate policy, but economic activity across Europe remained muted. Equity markets in Spain, which was adversely affected by political instability and a struggling banking sector, and Denmark declined the most, while Norway and Switzerland performed best. In the U.K., the equity market advanced by 12% for the reporting period, but a sharp decline in the British pound in the wake of the Brexit vote erased most of those gains in U.S. dollar terms.

Emerging markets stocks outperformed developed markets, advancing by 9% for the reporting period in U.S. dollar terms. Latin American equity markets generated the best returns, led by rebounding markets in Peru and Brazil, while stock markets in Eastern Europe lagged the other countries in the region.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 5

Management’s Discussion of Fund Performance

iSHARES^® MSCI EAFE ESG OPTIMIZED ETF

Performance as of August 31, 2016

	Cumulative Total Returns
	NAV		MARKET		INDEX
Since Inception		9.79%		10.20%		9.91%

The inception date of the Fund was 6/28/16. The first day of secondary market trading was 6/30/16.

For the fiscal period ended 8/31/16, the Fund did not have six months of performance and therefore line graphs are not presented.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 10 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account  Value (6/28/16) a		Ending Account Value (8/31/16)		Expenses Paid During Period b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period b		Annualized Expense Ratio
$	1,000.00	$	1,097.90	$	0.73	$	1,000.00	$	1,023.10	$	2.03		0.40%

^a  The beginning of the period (commencement of operations) is June 28, 2016.

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (64 days for actual and 184 days for hypothetical expenses) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 10 for more information.

The iShares MSCI EAFE ESG Optimized ETF (the “Fund”) (formerly the iShares MSCI EAFE ESG Select ETF) seeks to track the investment results of an index composed of large- and mid-capitalization developed market equities, excluding the U.S. and Canada that have positive environmental, social and governance characteristics, as represented by the MSCI EAFE ESG Focus Index (formerly the MSCI EAFE ESG Select Index) (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from June 28, 2016 (inception date of the Fund) through August 31, 2016 (the “reporting period”), the total return for the Fund was 9.79%, net of fees, while the total return for the Index was 9.91%.

As represented by the Index, stocks of EAFE-region companies with positive environmental, social and governance (“ESG”) characteristics delivered solid returns in the reporting period, outperforming broader global markets. Foreign currency translation effects were minimal, as the decline of the British pound was nearly offset by the rise of the Japanese yen while the euro was unchanged relative to the U.S. dollar.

Japan, which represented approximately 24% of the Index on average, was the largest contributor to the Index’s performance for the reporting period. Japanese ESG stocks received a boost from Japan’s public pension fund, which announced plans to create new ESG-themed stock indexes. Overall, Japanese stocks advanced in the reporting period, helped by the Bank of Japan’s stimulus initiatives.

The United Kingdom, which represented approximately 19% of the Index on average, also contributed meaningfully to the Index’s return for the reporting period. In September 2015, the governor of the Bank of England helped ESG stocks by calling for increased socially responsible investing. Overall, United Kingdom stocks advanced during the reporting period. The reporting period began with stocks rebounding after sharp losses following the U.K.’s vote to leave the European Union. Germany was also a significant contributor to the Index’s performance during the reporting period, due in part to strength in its industrials sector. In addition, growing worldwide demand for energy and manufacturing software boosted Germany’s information technology sector. ESG stocks in France also contributed to the Index’s return for the reporting period.

6 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI EAFE ESG OPTIMIZED ETF

On the downside, Denmark was a minor detractor from the Index’s performance for the reporting period.

ALLOCATION BY SECTOR

As of 8/31/16

Sector	Percentage of Total Investments*
Financials**		19.31	%
Industrials		15.14
Consumer Discretionary		11.91
Health Care		11.69
Consumer Staples		11.47
Materials		8.20
Information Technology		5.43
Telecommunication Services		4.98
Real Estate**		4.10
Energy		4.04
Utilities		3.73
TOTAL		100.00	%

TEN LARGEST COUNTRIES

As of 8/31/16

Country	Percentage of Total Investments*
Japan		23.11	%
United Kingdom		18.99
France		9.72
Switzerland		9.17
Germany		9.09
Australia		7.36
Hong Kong		3.41
Netherlands		3.28
Spain		3.15
Sweden		2.76
TOTAL		90.04	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 7

Management’s Discussion of Fund Performance

iSHARES^® MSCI GLOBAL IMPACT ETF

Performance as of August 31, 2016

	Cumulative Total Returns
	NAV		MARKET		INDEX
Since Inception		2.38%		6.71%		2.45%

The inception date of the Fund was 4/20/16. The first day of secondary market trading was 4/22/16.

For the fiscal period ended 8/31/16, the Fund did not have six months of performance and therefore line graphs are not presented.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 10 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account  Value (4/20/16) a		Ending Account Value (8/31/16)		Expenses Paid During Period b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period b		Annualized Expense Ratio
$	1,000.00	$	1,023.80	$	1.80	$	1,000.00	$	1,022.70	$	2.49		0.49%

^a  The beginning of the period (commencement of operations) is April 20, 2016.

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (133 days for actual and 184 days for hypothetical expenses) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 10 for more information.

The iShares MSCI Global Impact ETF (the “Fund”) (formerly the iShares Sustainable MSCI Global Impact ETF) seeks to track the investment results of an index composed of positive impact companies that derive a majority of their revenue from products and services that address at least one of the world’s major social and environmental challenges as identified by the United Nations Sustainable Development Goals, as represented by the MSCI ACWI Sustainable Impact Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from April 20, 2016 (inception date of the Fund) through August 31, 2016 (the “reporting period”), the total return for the Fund was 2.38%, net of fees, while the total return for the Index was 2.45%.

As represented by the Index, stocks of positive-impact companies posted a modest positive return for the reporting period, performing in line with broader global markets. Foreign currency effects were minimal, as the decline of the British pound was nearly offset by the rise of the Japanese yen, while the euro was unchanged against the U.S. dollar.

Denmark was the largest contributor to the Index’s performance during the reporting period. Growth in Denmark’s wind power industry aided Index returns, as wind power equipment makers benefited from rising demand amid falling costs and ambitious renewable power targets set by the 2015 Paris climate agreement. Danish stocks overall rose for the reporting period.

Positive-impact stocks of Belgium also aided the Index’s performance in the reporting period. Growing demand from the automotive and rechargeable battery industries boosted Belgium’s materials technology industry. Overall, Belgian stocks recorded a gain for the reporting period. Also contributing to the Index’s performance were positive-impact companies in Switzerland, Australia, and Brazil. The Swiss biotechnology industry aided the Index’s return as it benefited from attractive valuations. In Australia, booming housing and infrastructure markets boosted the country’s construction and property industry. Brazil also contributed to the Index’s performance, as did South Korea, Japan, and the U.S.

8 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI GLOBAL IMPACT ETF

Conversely, positive-impact companies in the United Kingdom detracted from the Index’s return for the reporting period. Overall, United Kingdom stocks fell modestly. Positive-impact stocks in Austria also detracted from the Index’s performance in the reporting period, as Austrian stocks overall declined.

ALLOCATION BY SECTOR

As of 8/31/16

Sector	Percentage of Total Investments*
Industrials		20.04	%
Consumer Staples		20.03
Health Care		19.59
Consumer Discretionary		12.70
Information Technology		12.35
Utilities		5.42
Real Estate**		4.48
Materials		3.94
Financials**		1.45
TOTAL		100.00	%

TEN LARGEST COUNTRIES

As of 8/31/16

Country	Percentage of Total Investments*
United States		37.08	%
Japan		14.80
France		11.88
Denmark		6.38
United Kingdom		5.48
Switzerland		5.21
China		4.69
Belgium		3.94
South Korea		1.91
Taiwan		1.70
TOTAL		93.07	%

* Excludes money market funds.

** Reflects the GICS industry classification system effective after the close of 8/31/16 which newly defines Real Estate as a separate sector from Financials. Any references to performance and average weights for the financials sector in management’s commentary includes real estate.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 9

About Fund Performance

Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.ishares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.

Shareholder Expenses

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested on March 1, 2016 (or commencement of operations, as applicable) and held through August 31, 2016, is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.

Actual Expenses — The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number corresponding to your Fund under the heading entitled “Expenses Paid During Period.”

Hypothetical Example for Comparison Purposes — The table also provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

10 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI EAFE ESG OPTIMIZED ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.29%
AUSTRALIA — 7.33%
Alumina Ltd.		5,215	$	5,213
Amcor Ltd./Australia		626		7,528
AMP Ltd.		1,536		6,072
APA Group		1,021		7,090
Aristocrat Leisure Ltd.		348		3,949
Aurizon Holdings Ltd.		1,141		3,765
Australia & New Zealand Banking Group Ltd.		1,611		32,569
Boral Ltd.		238		1,182
Brambles Ltd.		1,472		13,629
Caltex Australia Ltd.		257		6,557
Commonwealth Bank of Australia		723		39,019
CSL Ltd.		199		16,167
Dexus Property Group		1,410		10,300
Goodman Group		1,428		8,146
GPT Group (The)		1,626		6,513
Healthscope Ltd.		2,607		5,995
Insurance Australia Group Ltd.		1,857		7,760
LendLease Group		676		7,021
Macquarie Group Ltd.		221		13,404
Mirvac Group		6,282		10,953
National Australia Bank Ltd.		1,428		29,342
Newcrest Mining Ltd.a		601		10,023
Oil Search Ltd.		850		4,293
Origin Energy Ltd.		1,006		3,977
Ramsay Health Care Ltd.		135		8,418
Santos Ltd.		1,317		4,395
Scentre Group		1,215		4,538
Sonic Healthcare Ltd.		268		4,633
South32 Ltd.a		4,742		6,843
Stockland		3,458		12,604
Sydney Airport		248		1,357
Tabcorp Holdings Ltd.		1,701		6,354
Tatts Group Ltd.		1,850		5,297
Telstra Corp. Ltd.		1,354		5,353
Transurban Group		1,410		12,144
Wesfarmers Ltd.		486		15,501
Westpac Banking Corp.		1,838		40,695
Woodside Petroleum Ltd.		591		12,716
Woolworths Ltd.		450		8,019
				409,334

Security	Shares		Value
AUSTRIA — 0.28%
Erste Group Bank AG		201	$	5,638
OMV AG		349		9,764
				15,402
BELGIUM — 1.27%
Anheuser-Busch InBev SA/NV		427		52,812
KBC Group NVa		202		11,940
Umicore SA		109		6,427
				71,179
DENMARK — 2.10%
AP Moeller – Maersk A/S Class A		6		8,539
Carlsberg A/S Class B		98		9,173
Chr Hansen Holding A/S		99		5,994
Coloplast A/S Class B		126		9,569
Genmab A/Sa		25		3,988
ISS A/S		182		7,359
Novo Nordisk A/S Class B		930		43,518
Novozymes A/S Class B		171		7,403
Pandora A/S		66		8,197
Vestas Wind Systems A/S		165		13,666
				117,406
FINLAND — 0.91%
Kone OYJ Class B		184		9,232
Neste OYJ		276		11,478
Nokia OYJ		2,575		14,454
UPM-Kymmene OYJ		281		5,637
Wartsila OYJ Abp		241		9,899
				50,700
FRANCE — 9.69%
Accor SA		104		3,920
Air Liquide SA		170		18,618
Airbus Group SE		268		15,608
ArcelorMittala		601		3,542
Atos SE		76		7,467
AXA SA		1,069		22,407
BNP Paribas SA		419		21,282
Capgemini SA		104		10,117
Carrefour SA		276		6,938
Casino Guichard Perrachon SA		103		5,087
Cie. de Saint-Gobain		262		11,474
Cie. Generale des Etablissements Michelin Class B		113		11,994
CNP Assurances		322		5,175
Danone SA		372		28,219

SCHEDULES OF INVESTMENTS 11

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE ESG OPTIMIZED ETF

August 31, 2016

Security	Shares		Value
Eiffage SA		67	$	5,238
Engie SA		610		9,708
Essilor International SA		137		17,372
Eurazeo SA		82		4,967
Imerys SA		92		6,473
Kering		44		8,328
L’Oreal SA		167		31,498
Legrand SA		164		9,810
LVMH Moet Hennessy Louis Vuitton SE		130		21,964
Natixis SA		1,257		5,552
Orange SA		870		13,265
Pernod Ricard SA		126		14,440
Peugeot SAa		353		5,199
Renault SA		145		11,839
Rexel SA		176		2,824
Sanofi		531		40,848
Schneider Electric SE		389		26,467
Societe BIC SA		37		5,392
Societe Generale SA		323		11,744
Suez		317		4,789
Technip SA		93		5,487
Total SA		1,084		51,612
Unibail-Rodamco SE		66		18,083
Valeo SA		40		2,067
Veolia Environnement SA		157		3,334
Vinci SA		186		14,085
Vivendi SA		606		11,730
Wendel SA		44		4,996
				540,959
GERMANY — 8.71%
adidas AG		140		23,225
Allianz SE Registered		256		38,078
BASF SE		502		40,758
Bayer AG Registered		374		39,976
Bayerische Motoren Werke AG		186		16,160
Brenntag AG		134		7,281
Continental AG		50		10,464
Daimler AG Registered		478		33,050
Deutsche Bank AG Registereda		584		8,592
Deutsche Boerse AGa		181		15,442
Deutsche Post AG Registered		617		19,516
Deutsche Telekom AG Registered		1,266		21,108
Deutsche Wohnen AG Bearer		99		3,716
E.ON SE		900		8,277
HeidelbergCement AG		124		11,500

Security	Shares		Value
Henkel AG & Co. KGaA		70	$	7,847
Infineon Technologies AG		212		3,564
Linde AG		82		14,023
Merck KGaA		134		14,079
METRO AG		91		2,696
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen Registered		105		18,951
Osram Licht AG		105		5,489
ProSiebenSat.1 Media SE Registered		173		7,430
RWE AGa		290		4,737
SAP SE		585		51,316
Siemens AG Registered		443		52,817
Vonovia SE		163		6,333
				486,425
HONG KONG — 3.40%
AIA Group Ltd.		5,200		32,882
BOC Hong Kong Holdings Ltd.		3,500		12,251
Cheung Kong Property Holdings Ltd.		1,000		7,026
CK Hutchison Holdings Ltd.		1,500		19,280
CLP Holdings Ltd.		1,500		15,383
Hang Seng Bank Ltd.		1,100		19,301
HKT Trust & HKT Ltd.		4,000		5,518
Hong Kong Exchanges and Clearing Ltd.		600		14,674
Hysan Development Co. Ltd.		2,000		9,656
Link REIT		500		3,635
MTR Corp. Ltd.		3,500		19,132
PCCW Ltd.		6,000		3,806
Sands China Ltd.b		2,000		7,864
Swire Pacific Ltd. Class A		1,000		11,048
Swire Properties Ltd.		3,000		8,451
				189,907
IRELAND — 0.44%
CRH PLC		556		18,794
Paddy Power Betfair PLC		49		5,848
				24,642
ISRAEL — 0.77%
Bank Hapoalim BM		1,938		10,379
Bank Leumi le-Israel BMa		1,466		5,480
Mobileye NVa		100		4,889
Teva Pharmaceutical Industries Ltd.		436		22,095
				42,843
ITALY — 1.71%
Assicurazioni Generali SpA		604		7,669
CNH Industrial NV		1,129		8,236

12 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE ESG OPTIMIZED ETF

August 31, 2016

Security	Shares		Value
Enel SpA		4,596	$	20,260
EXOR SpA		146		5,992
Intesa Sanpaolo SpA		7,157		16,979
Snam SpA		2,608		14,436
Telecom Italia SpA/Milanoa		6,875		6,229
Terna Rete Elettrica Nazionale SpA		1,606		8,285
UniCredit SpA		2,808		7,212
				95,298
JAPAN — 23.02%
Aeon Co. Ltd.		400		5,501
AEON Financial Service Co. Ltd.		200		3,683
Aisin Seiki Co. Ltd.		200		9,446
Ajinomoto Co. Inc.		500		10,601
Asahi Glass Co. Ltd.		1,000		6,361
Asahi Group Holdings Ltd.		200		6,547
Asahi Kasei Corp.		1,000		8,434
ASICS Corp.		200		4,055
Astellas Pharma Inc.		1,200		18,336
Bridgestone Corp.		200		6,874
Canon Inc.		400		11,462
Central Japan Railway Co.		100		16,426
Chugai Pharmaceutical Co. Ltd.		300		9,412
Concordia Financial Group Ltd.a		1,300		6,706
Dai Nippon Printing Co. Ltd.		1,000		10,171
Dai-ichi Life Insurance Co. Ltd. (The)		600		8,350
Daiichi Sankyo Co. Ltd.		400		9,183
Daikin Industries Ltd.		200		18,541
Daiwa House Industry Co. Ltd.		400		10,331
Daiwa Securities Group Inc.		1,000		5,843
Denso Corp.		400		16,521
Dentsu Inc.		100		5,501
East Japan Railway Co.		200		17,132
Eisai Co. Ltd.		200		11,660
FANUC Corp.		100		17,045
Fuji Heavy Industries Ltd.		300		11,886
FUJIFILM Holdings Corp.		200		7,516
Fujitsu Ltd.		1,000		5,078
Hitachi Chemical Co. Ltd.		300		6,468
Hitachi Ltd.		3,000		14,386
Hitachi Metals Ltd.		500		6,052
Honda Motor Co. Ltd.		1,000		30,647
Hoya Corp.		200		7,752
Hulic Co. Ltd.		500		4,737
Idemitsu Kosan Co. Ltd.		300		5,473
INPEX Corp.		700		6,080

Security	Shares		Value
Japan Exchange Group Inc.		400	$	6,249
JFE Holdings Inc.		400		6,213
JX Holdings Inc.		2,100		7,855
Kajima Corp.		1,000		6,719
Kansai Paint Co. Ltd.		300		6,610
Kawasaki Heavy Industries Ltd.		2,000		5,859
KDDI Corp.		1,000		29,352
Keio Corp.		1,000		8,372
Kintetsu Group Holdings Co. Ltd.		1,000		3,809
Kirin Holdings Co. Ltd.		600		9,783
Kobe Steel Ltd.		6,000		5,569
Komatsu Ltd.		700		15,305
Kubota Corp.		700		10,266
Kuraray Co. Ltd.		400		5,716
Kyocera Corp.		100		4,753
Kyowa Hakko Kirin Co. Ltd.		500		7,096
Lawson Inc.		100		7,019
Mazda Motor Corp.		300		4,947
Miraca Holdings Inc.		100		4,742
Mitsubishi Chemical Holdings Corp.		800		5,049
Mitsubishi Electric Corp.		1,000		13,057
Mitsubishi Estate Co. Ltd.		1,000		18,920
Mitsubishi Heavy Industries Ltd.		2,000		8,709
Mitsubishi Materials Corp.		2,000		5,646
Mitsubishi UFJ Financial Group Inc.		5,600		30,541
Mitsui & Co. Ltd.		900		11,981
Mitsui Chemicals Inc.		1,000		4,786
Mizuho Financial Group Inc.		10,100		17,547
MS&AD Insurance Group Holdings Inc.		300		8,563
Murata Manufacturing Co. Ltd.		100		13,443
Nabtesco Corp.		200		5,161
NEC Corp.		3,000		7,628
NGK Insulators Ltd.		200		4,339
NGK Spark Plug Co. Ltd.		300		5,612
Nidec Corp.		100		9,012
Nintendo Co. Ltd.		100		21,922
Nippon Express Co. Ltd.		1,000		4,737
Nippon Steel & Sumitomo Metal Corp.		400		8,492
Nippon Telegraph & Telephone Corp.		400		17,580
Nippon Yusen KK		3,000		5,453
Nissan Motor Co. Ltd.		1,300		12,757
Nitto Denko Corp.		100		6,829
Nomura Holdings Inc.		1,400		6,596
Nomura Research Institute Ltd.		100		3,384
NTT Data Corp.		100		5,211

SCHEDULES OF INVESTMENTS 13

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE ESG OPTIMIZED ETF

August 31, 2016

Security	Shares		Value
NTT DOCOMO Inc.		800	$	20,132
Odakyu Electric Railway Co. Ltd.		1,000		10,267
Omron Corp.		200		6,787
Oriental Land Co. Ltd./Japan		100		5,858
ORIX Corp.		700		10,067
Osaka Gas Co. Ltd.		2,000		7,875
Otsuka Holdings Co. Ltd.		200		8,668
Panasonic Corp.		1,200		12,309
Rakuten Inc.		500		6,303
Resona Holdings Inc.		1,500		6,862
Secom Co. Ltd.		100		7,591
Sekisui Chemical Co. Ltd.		600		8,388
Sekisui House Ltd.		400		6,443
Seven & I Holdings Co. Ltd.		300		12,649
Shimizu Corp.		1,000		8,923
Shin-Etsu Chemical Co. Ltd.		200		14,684
Shiseido Co. Ltd.		200		5,029
SoftBank Group Corp.		400		26,127
Sohgo Security Services Co. Ltd.		100		4,998
Sompo Japan Nipponkoa Holdings Inc.		300		9,618
Sony Corp.		600		19,287
Sumitomo Chemical Co. Ltd.		2,000		9,165
Sumitomo Electric Industries Ltd.		200		2,965
Sumitomo Metal Mining Co. Ltd.		1,000		12,684
Sumitomo Mitsui Financial Group Inc.		600		21,004
Sumitomo Mitsui Trust Holdings Inc.		2,000		7,160
Suntory Beverage & Food Ltd.		100		3,969
Suzuken Co. Ltd./Aichi Japan		200		5,799
Sysmex Corp.		100		6,448
T&D Holdings Inc.		600		6,848
Taisei Corp.		1,000		7,522
Takeda Pharmaceutical Co. Ltd.		400		17,634
TDK Corp.		100		7,154
Teijin Ltd.		2,000		7,464
Terumo Corp.		200		7,783
Tokio Marine Holdings Inc.		400		15,716
Tokyo Electron Ltd.		100		9,192
Tokyo Gas Co. Ltd.		2,000		8,575
Toray Industries Inc.		1,000		9,633
TOTO Ltd.		100		3,799
Toyota Motor Corp.		1,200		72,370
Toyota Tsusho Corp.		200		4,575
West Japan Railway Co.		100		5,725
Yamada Denki Co. Ltd.		1,400		6,551
Yamaha Corp.		200		6,487

Security	Shares		Value
Yamaha Motor Co. Ltd.		200	$	4,099
Yamato Holdings Co. Ltd.		200		4,721
Yaskawa Electric Corp.		400		5,894
Yokogawa Electric Corp.		500		6,405
				1,285,592
NETHERLANDS — 3.27%
Akzo Nobel NV		187		12,617
ASML Holding NV		216		22,943
Gemalto NV		86		5,982
Heineken NV		140		12,490
ING Groep NV		1,405		17,557
Koninklijke Ahold Delhaize NV		478		11,427
Koninklijke DSM NV		87		6,055
Koninklijke KPN NV		1,670		5,444
Koninklijke Philips NV		509		14,762
Koninklijke Vopak NV		117		5,924
NXP Semiconductors NVa		122		10,738
RELX NV		853		15,106
Unilever NV CVA		737		33,749
Wolters Kluwer NV		188		7,878
				182,672
NEW ZEALAND — 0.22%
Fletcher Building Ltd.		900		6,921
Ryman Healthcare Ltd.		800		5,572
				12,493
NORWAY — 0.80%
DNB ASA		438		5,319
Norsk Hydro ASA		2,284		9,699
Orkla ASA		1,272		11,636
Statoil ASA		657		10,381
Telenor ASA		431		7,518
				44,553
PORTUGAL — 0.22%
EDP – Energias de Portugal SA		2,002		6,700
Galp Energia SGPS SA		387		5,616
				12,316
SINGAPORE — 1.21%
CapitaLand Ltd.		4,200		9,461
CapitaLand Mall Trust		5,300		8,400
City Developments Ltd.		1,100		6,853
DBS Group Holdings Ltd.		1,000		10,999
Jardine Matheson Holdings Ltd.		100		5,985
Keppel Corp. Ltd.		900		3,421
Singapore Telecommunications Ltd.		4,900		14,453

14 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE ESG OPTIMIZED ETF

August 31, 2016

Security	Shares		Value
United Overseas Bank Ltd.		600	$	7,929
				67,501
SPAIN — 3.14%
Amadeus IT Holding SA Class A		278		12,755
Banco Bilbao Vizcaya Argentaria SA		4,181		25,974
Banco de Sabadell SA		3,472		4,698
Banco Santander SA		6,614		29,613
CaixaBank SA		2,398		6,445
Ferrovial SA		485		9,542
Gas Natural SDG SA		262		5,400
Iberdrola SA		3,333		21,902
Industria de Diseno Textil SA		649		22,960
Red Electrica Corp. SA		64		1,376
Repsol SA		994		13,329
Telefonica SA		2,117		21,291
				175,285
SWEDEN — 2.75%
Assa Abloy AB		545		11,020
Atlas Copco AB Class A		349		9,881
Atlas Copco AB Class B		224		5,749
Boliden AB		494		10,443
Hennes & Mauritz AB Class B		515		15,673
Lundin Petroleum ABa		247		4,340
Nordea Bank AB		1,696		16,553
Sandvik AB		547		5,929
Skandinaviska Enskilda Banken AB Class A		876		8,550
Skanska AB Class B		376		8,229
Svenska Cellulosa AB SCA Class B		403		12,364
Svenska Handelsbanken AB Class A		690		8,891
Swedbank AB Class A		446		10,240
Telefonaktiebolaget LM Ericsson Class B		1,448		10,308
Telia Co. AB		1,627		7,336
Volvo AB Class B		747		8,018
				153,524
SWITZERLAND — 9.13%
ABB Ltd. Registered		1,166		25,289
Actelion Ltd. Registered		62		10,330
Adecco Group AG Registered		118		6,797
Chocoladefabriken Lindt & Sprungli AG Participation Certificates		1		5,796
Cie. Financiere Richemont SA Class A Registered		260		14,991
Credit Suisse Group AG Registered		779		10,156
Geberit AG Registered		18		7,859

Security	Shares		Value
Givaudan SA Registered		7	$	14,484
Kuehne + Nagel International AG Registered		69		9,642
LafargeHolcim Ltd. Registered		277		14,702
Lonza Group AG Registered		50		9,486
Nestle SA Registered		1,502		119,695
Novartis AG Registered		1,010		79,562
Roche Holding AG		328		80,051
SGS SA Registered		7		15,396
Sika AG Bearer		2		9,538
Swiss Re AG		107		9,039
Swisscom AG Registered		17		8,130
Syngenta AG Registered		36		15,693
UBS Group AG		1,605		23,228
Zurich Insurance Group AG		79		20,213
				510,077
UNITED KINGDOM — 18.92%
3i Group PLC		62		499
Aberdeen Asset Management PLC		1,319		5,538
Anglo American PLCa		833		8,507
Antofagasta PLC		927		6,006
ARM Holdings PLC		779		17,304
Ashtead Group PLC		375		6,213
Associated British Foods PLC		206		8,205
AstraZeneca PLC		644		41,405
Aviva PLC		2,208		12,389
BAE Systems PLC		1,103		7,779
Barclays PLC		7,433		16,769
Barratt Developments PLC		917		5,933
Berkeley Group Holdings PLC		134		4,689
BP PLC		9,007		50,477
British Land Co. PLC (The)		1,317		11,436
BT Group PLC		4,121		20,852
Bunzl PLC		345		10,655
Burberry Group PLC		328		5,602
Capita PLC		524		7,103
Centrica PLC		2,553		7,777
Cobham PLC		3,278		6,942
Coca-Cola European Partners PLCa		179		6,858
Coca-Cola HBC AG		350		7,674
Compass Group PLC		752		14,202
Croda International PLC		195		8,453
DCC PLC		71		6,444
Diageo PLC		1,703		47,028
easyJet PLC		304		4,400

SCHEDULES OF INVESTMENTS 15

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE ESG OPTIMIZED ETF

August 31, 2016

Security	Shares		Value
Experian PLC		207	$	4,105
Fresnillo PLC		200		4,207
GKN PLC		1,606		6,541
GlaxoSmithKline PLC		2,385		51,196
Glencore PLC		6,649		15,157
Hammerson PLC		1,513		11,493
HSBC Holdings PLC		8,009		59,192
InterContinental Hotels Group PLC		193		8,243
Intertek Group PLC		148		6,767
Investec PLC		562		3,318
ITV PLC		2,520		6,624
J Sainsbury PLC		1,639		5,158
Johnson Matthey PLC		201		8,787
Kingfisher PLC		1,981		9,628
Land Securities Group PLC		618		8,855
Legal & General Group PLC		5,300		14,598
Lloyds Banking Group PLC		27,056		21,031
London Stock Exchange Group PLC		139		5,015
Marks & Spencer Group PLC		1,397		6,307
Mediclinic International PLC		396		5,300
Meggitt PLC		942		5,778
Mondi PLC		270		5,478
National Grid PLC		2,097		28,741
Next PLC		74		5,355
Old Mutual PLC		2,951		7,502
Pearson PLC		416		4,716
Persimmon PLC		154		3,679
Petrofac Ltd.		443		4,824
Prudential PLC		1,598		28,537
Reckitt Benckiser Group PLC		299		28,798
RELX PLC		1,105		20,912
Rolls-Royce Holdings PLC		826		8,330
RSA Insurance Group PLC		1,140		7,404
SABMiller PLC		503		28,973
Schroders PLC		254		9,261
Segro PLC		1,660		9,853
Shire PLC		420		26,189
Sky PLC		580		6,449
SSE PLC		862		16,980
Standard Chartered PLCa		1,771		14,891
Standard Life PLC		1,079		5,151
Taylor Wimpey PLC		2,280		4,817
Tesco PLCa		3,880		8,453
Travis Perkins PLC		300		6,542
TUI AG		388		5,402

Security	Shares		Value
Unilever PLC		618	$	28,563
United Utilities Group PLC		480		6,107
Vodafone Group PLC		14,445		43,484
Whitbread PLC		140		7,650
William Hill PLC		1,160		4,834
Wm Morrison Supermarkets PLC		1,912		4,933
Wolseley PLC		194		11,129
WPP PLC		1,232		28,334
				1,056,710
TOTAL COMMON STOCKS (Cost: $5,063,004)				5,544,818
PREFERRED STOCKS — 0.35%
GERMANY — 0.35%
Bayerische Motoren Werke AG		83		6,211
Henkel AG & Co. KGaA		102		13,365
				19,576
TOTAL PREFERRED STOCKS (Cost: $17,155)				19,576
SHORT-TERM INVESTMENTS — 0.25%
MONEY MARKET FUNDS — 0.25%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%c,d,e		12,430		12,430
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		1,692		1,692
				14,122
TOTAL SHORT-TERM INVESTMENTS (Cost: $14,122)				14,122

16 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EAFE ESG OPTIMIZED ETF

August 31, 2016

	Value
TOTAL INVESTMENTS IN SECURITIES — 99.89% (Cost: $5,094,281)f	$	5,578,516
Other Assets, Less Liabilities — 0.11%		5,947
NET ASSETS — 100.00%	$	5,584,463

^a Non-income earning security.

^b All or a portion of this security represents a security on loan. See Note 1.

^c Affiliated money market fund.

^d The rate quoted is the annualized seven-day yield of the fund at period end.

^e All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^f The cost of investments for federal income tax purposes was $5,101,296. Net unrealized appreciation was $477,220, of which $517,310 represented gross unrealized appreciation on securities and $40,090 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	5,544,818	$	—	$	—	$	5,544,818
Preferred stocks		19,576		—		—		19,576
Money market funds		14,122		—		—		14,122
Total	$	5,578,516	$	—	$	—	$	5,578,516

See notes to financial statements.

SCHEDULES OF INVESTMENTS 17

Schedule of Investments

iSHARES^® MSCI GLOBAL IMPACT ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.47%
AUSTRALIA — 1.38%
CSL Ltd.		1,308	$	106,265
GPT Group (The)		7,188		28,793
Mirvac Group		40,536		70,679
				205,737
BELGIUM — 3.92%
Umicore SA		9,894		583,369
				583,369
BRAZIL — 0.74%
BRF SA		6,600		109,905
				109,905
CHINA — 4.66%
Beijing Enterprises Water Group Ltd.		132,000		92,064
China Everbright International Ltd.		30,000		38,367
China Huishan Dairy Holdings Co. Ltd.a		7,000		2,689
China Longyuan Power Group Corp. Ltd.		102,000		85,737
China Vanke Co. Ltd. Class H		84,000		215,503
GCL-Poly Energy Holdings Ltd.		1,722,000		244,200
Luye Pharma Group Ltd.b		3,500		2,224
Shui On Land Ltd.		48,000		13,614
				694,398
DENMARK — 6.35%
Genmab A/Sb		18		2,871
Novo Nordisk A/S Class B		8,364		391,378
Vestas Wind Systems A/S		6,648		550,634
				944,883
FRANCE — 11.81%
Danone SA		4,464		338,628
Fonciere des Regions		216		20,150
Klepierre		1,122		52,497
Schneider Electric SE		8,742		594,796
Suez		39,234		592,748
Unibail-Rodamco SE		582		159,458
				1,758,277
HONG KONG — 1.39%
Swire Properties Ltd.		15,600		43,944
WH Group Ltd.c		206,500		162,394
				206,338

Security	Shares		Value
INDONESIA — 0.61%
Bank Rakyat Indonesia Persero Tbk PT		86,100	$	75,617
Indofood CBP Sukses Makmur Tbk PT		11,200		8,422
Unilever Indonesia Tbk PT		1,800		6,195
				90,234
JAPAN — 14.72%
Chugai Pharmaceutical Co. Ltd.		1,200		37,647
East Japan Railway Co.		6,600		565,341
NH Foods Ltd.		9,000		197,080
Nippon Prologis REIT Inc.		6		14,403
Nissin Foods Holdings Co. Ltd.		600		33,296
Sekisui House Ltd.		37,200		599,171
Shionogi & Co. Ltd.		1,200		53,587
Sysmex Corp.		600		38,691
Terumo Corp.		1,800		70,044
TOTO Ltd.		4,800		182,376
Toyo Suisan Kaisha Ltd.		1,200		49,132
Unicharm Corp.		3,500		85,034
Yakult Honsha Co. Ltd.		600		26,480
Yokogawa Electric Corp.		18,600		238,266
				2,190,548
MALAYSIA — 0.03%
PPB Group Bhd		1,200		4,758
				4,758
MEXICO — 0.25%
Gruma SAB de CV Series B		1,590		21,088
Kimberly-Clark de Mexico SAB de CV Series A		6,600		15,775
				36,863
NORWAY — 0.36%
Marine Harvest ASA		3,510		54,200
				54,200
PHILIPPINES — 0.21%
Energy Development Corp.		261,000		32,096
				32,096
SINGAPORE — 0.29%
CapitaLand Commercial Trusta		16,800		19,045
CapitaLand Mall Trust		15,600		24,725
				43,770
SOUTH AFRICA — 0.23%
Pioneer Foods Group Ltd.		819		9,462
Tiger Brands Ltd.		936		24,270
				33,732

18 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI GLOBAL IMPACT ETF

August 31, 2016

Security	Shares		Value
SOUTH KOREA — 1.90%
Ottogi Corp.		7	$	4,388
Samsung SDI Co. Ltd.		2,694		279,065
				283,453
SWEDEN — 1.40%
Svenska Cellulosa AB SCA Class B		6,780		208,004
				208,004
SWITZERLAND — 5.19%
ABB Ltd. Registered		26,820		581,685
Actelion Ltd. Registered		450		74,973
Geberit AG Registered		264		115,267
				771,925
TAIWAN — 1.69%
Simplo Technology Co. Ltd.		42,000		138,321
Uni-President Enterprises Corp.		60,000		113,456
				251,777
UNITED KINGDOM — 5.45%
Berkeley Group Holdings PLC		6,120		214,171
Pearson PLC		52,614		596,403
				810,574
UNITED STATES — 36.89%
AbbVie Inc.		9,090		582,669
Akamai Technologies Inc.b		4,146		227,615
Amgen Inc.		2,358		401,001
BioMarin Pharmaceutical Inc.b		414		38,870
Cadence Design Systems Inc.b		6,816		173,399
Celgene Corp.b		2,838		302,928
Citrix Systems Inc.b		3,708		323,338
Colgate-Palmolive Co.		2,394		177,970
Digital Realty Trust Inc.		1,410		139,717
Edwards Lifesciences Corp.b		642		73,933
Gilead Sciences Inc.		7,572		593,493
Hormel Foods Corp.		2,088		79,887
Incyte Corp.b		390		31,629
JM Smucker Co. (The)		540		76,567
Kimberly-Clark Corp.		2,562		328,090
Procter & Gamble Co. (The)		6,852		598,248
Rockwell Automation Inc.		1,932		223,977
ServiceNow Inc.a,b		1,446		105,081
Tesla Motors Inc.a,b		2,220		470,662
United Therapeutics Corp.b		444		54,292
Vertex Pharmaceuticals Inc.b		468		44,231
VMware Inc. Class Aa,b		1,350		98,995
WhiteWave Foods Co. (The)b		1,170		64,853

Security	Shares		Value
Whole Foods Market Inc.		5,412	$	164,417
Xylem Inc./NY		2,250		114,435
				5,490,297
TOTAL COMMON STOCKS
(Cost: $14,662,885)				14,805,138
SHORT-TERM INVESTMENTS — 3.28%
MONEY MARKET FUNDS — 3.28%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%d,e,f		488,730		488,730
				488,730
TOTAL SHORT-TERM INVESTMENTS
(Cost: $488,730)				488,730
TOTAL INVESTMENTS IN SECURITIES — 102.75%
(Cost: $15,151,615)g				15,293,868
Other Assets, Less Liabilities — (2.75)%				(409,953	)
NET ASSETS — 100.00%			$	14,883,915

^a  All or a portion of this security represents a security on loan. See Note 1.

^b  Non-income earning security.

^c  This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^d  Affiliated money market fund.

^e  The rate quoted is the annualized seven-day yield of the fund at period end.

^f  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^g  The cost of investments for federal income tax purposes was $15,225,175. Net unrealized appreciation was $68,693, of which $623,345 represented gross unrealized appreciation on securities and $554,652 represented gross unrealized depreciation on securities.

SCHEDULES OF INVESTMENTS 19

Schedule of Investments (Continued)

iSHARES^® MSCI GLOBAL IMPACT ETF

August 31, 2016

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	14,805,138	$	—	$	—	$	14,805,138
Money market funds		488,730		—		—		488,730
Total	$	15,293,868	$	—	$	—	$	15,293,868

See notes to financial statements.

20 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities

iSHARES^® TRUST

August 31, 2016

	iShares MSCI EAFE ESG Optimized ETF			iShares MSCI Global Impact ETF
ASSETS
Investments, at cost:
Unaffiliated	$	5,080,159		$	14,662,885
Affiliated (Note 2)		14,122			488,730
Total cost of investments	$	5,094,281		$	15,151,615
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated	$	5,564,394		$	14,805,138
Affiliated (Note 2)		14,122			488,730
Total fair value of investments		5,578,516			15,293,868
Foreign currency, at valueb		6,883			63,357
Receivables:
Investment securities sold		250,832			2,213,871
Dividends and interest		12,518			32,857
Capital shares sold		—			2,491,084
Tax reclaims		249			7,266
Total Assets		5,848,998			20,102,303
LIABILITIES
Payables:
Investment securities purchased		250,207			4,640,333
Collateral for securities on loan (Note 1)		12,430			488,730
Capital shares redeemed		—			65,695
Due to custodian		—			17,401
Investment advisory fees (Note 2)		1,898			6,229
Total Liabilities		264,535			5,218,388
NET ASSETS	$	5,584,463		$	14,883,915
Net assets consist of:
Paid-in capital	$	5,087,416		$	14,792,521
Undistributed net investment income		16,231			80,692
Accumulated net realized loss		(3,374	)		(130,716	)
Net unrealized appreciation		484,190			141,418
NET ASSETS	$	5,584,463		$	14,883,915
Shares outstandingc		100,000			300,000
Net asset value per share	$	55.84		$	49.61

^a  Securities on loan with values of $11,850 and $476,928, respectively. See Note 1.

^b  Cost of foreign currency: $6,910 and $63,541, respectively.

^c  No par value, unlimited number of shares authorized.

See notes to financial statements.

FINANCIAL STATEMENTS 21

Statements of Operations

iSHARES^® TRUST

Period ended August 31, 2016

	iShares MSCI EAFE ESG Optimized ETFa			iShares MSCI Global Impact ETFb
NET INVESTMENT INCOME
Dividends — unaffiliatedc	$	19,799		$	167,672
Dividends — affiliated (Note 2)		1			14
Securities lending income — affiliated — net (Note 2)		2			4,036
Total investment income		19,802			171,722
EXPENSES
Investment advisory fees (Note 2)		3,835			25,930
Total expenses		3,835			25,930
Net investment income		15,967			145,792
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		(3,084	)		(126,511	)
In-kind redemptions — unaffiliated		—			172,369
Foreign currency transactions		(26	)		(1,568	)
Net realized gain (loss)		(3,110	)		44,290
Net change in unrealized appreciation/depreciation on:
Investments		484,235			142,253
Translation of assets and liabilities in foreign currencies		(45	)		(835	)
Net change in unrealized appreciation/depreciation		484,190			141,418
Net realized and unrealized gain		481,080			185,708
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	497,047		$	331,500

^a  For the period from June 28, 2016 (commencement of operations) to August 31, 2016.

^b  For the period from April 20, 2016 (commencement of operations) to August 31, 2016.

^c  Net of foreign withholding tax of $1,052 and $17,439, respectively.

See notes to financial statements.

22 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets

iSHARES^® TRUST

	iShares MSCI EAFE ESG Optimized ETF			iShares MSCI Global Impact ETF
	Period from June 28, 2016a to August 31, 2016			Period from April 20, 2016a to August 31, 2016
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	15,967		$	145,792
Net realized gain (loss)		(3,110	)		44,290
Net change in unrealized appreciation/depreciation		484,190			141,418
Net increase in net assets resulting from operations		497,047			331,500
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		—			(69,038	)
Total distributions to shareholders		—			(69,038	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		5,087,416			17,102,258
Cost of shares redeemed		—			(2,480,805	)
Net increase in net assets from capital share transactions		5,087,416			14,621,453
INCREASE IN NET ASSETS		5,584,463			14,883,915
NET ASSETS
Beginning of period		—			—
End of period	$	5,584,463		$	14,883,915
Undistributed net investment income included in net assets at end of period	$	16,231		$	80,692
SHARES ISSUED AND REDEEMED
Shares sold		100,000			350,000
Shares redeemed		—			(50,000	)
Net increase in shares outstanding		100,000			300,000

^a  Commencement of operations.

See notes to financial statements.

FINANCIAL STATEMENTS 23

Financial Highlights

iSHARES^® TRUST

(For a share outstanding throughout the period)

iShares MSCI EAFE ESG Optimized ETF

	Period from June 28, 2016a to Aug. 31, 2016
Net asset value, beginning of period	$	50.87
Income from investment operations:
Net investment incomeb		0.16
Net realized and unrealized gainc		4.81
Total from investment operations		4.97
Net asset value, end of period	$	55.84
Total return		9.79	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	5,584
Ratio of expenses to average net assetse		0.40	%
Ratio of net investment income to average net assetse		1.67	%
Portfolio turnover ratef		5	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout the period.

^c  The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

24 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout the period)

iShares MSCI Global Impact ETF

	Period from April 20, 2016a to Aug. 31, 2016
Net asset value, beginning of period	$	48.70
Income from investment operations:
Net investment incomeb		0.49
Net realized and unrealized gainc		0.65
Total from investment operations		1.14
Less distributions from:
Net investment income		(0.23	)
Total distributions		(0.23	)
Net asset value, end of period	$	49.61
Total return		2.38	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	14,884
Ratio of expenses to average net assetse		0.49	%
Ratio of net investment income to average net assetse		2.76	%
Portfolio turnover ratef		28	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout the period.

^c  The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rate excludes portfolio securities received or delivered in Creation Units but includes portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rate for the period ended August 31, 2016 was 28%. See Note 4.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 25

Notes to Financial Statements

iSHARES^® TRUST

iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999.

These financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):

iShares ETF	Former Name	Diversification Classification
MSCI EAFE ESG Optimizeda	iShares MSCI EAFE ESG Select ETF	Non-diversified
MSCI Global Impactb	iShares Sustainable MSCI Global Impact ETF	Non-diversified

^a  The Fund commenced operations on June 28, 2016.

^b  The Fund commenced operations on April 20, 2016.

The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.

Pursuant to the Trust’s organizational documents, the Funds’ officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.

SECURITY VALUATION

Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Trustees of the Trust (the “Board”).

• Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price.

• Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”).

26 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such factors are reported to the Board on a quarterly basis.

The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Trust’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements in market values, and reviews of market related activity.

Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.

Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and is not necessarily an indication of the risk associated with investing in the instrument. The three levels of the fair value hierarchy are as follows:

• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and

• Level 3 — Unobservable inputs for the asset or liability, including the Global Valuation Committee’s assumptions used in determining the fair value of investments.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2016 are reflected in tax reclaims receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified

NOTES TO FINANCIAL STATEMENTS 27

Notes to Financial Statements (Continued)

iSHARES^® TRUST

to capital gains. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.

FOREIGN CURRENCY TRANSLATION

The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.

Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes.

FOREIGN TAXES

The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their statements of operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “other foreign taxes”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of August 31, 2016, if any, are disclosed in the Funds’ statements of assets and liabilities.

DISTRIBUTIONS TO SHAREHOLDERS

Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.

LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Funds. Any additional required collateral is delivered to the Funds and any excess collateral is returned by the Funds on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

On July 23, 2014, the U.S. Securities and Exchange Commission (the “SEC”) adopted amendments to Rule 2a-7 under the 1940 Act, which governs the operations of U.S. money market funds. When implemented in October 2016, the change may affect

28 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

the Funds with regard to the reinvestment of cash collateral received for securities on loan. The Funds may be exposed to additional risk from reinvesting the cash collateral in money market funds that do not maintain a fixed NAV per share of $1.00.

Any cash received as collateral for securities on loan may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates. As of August 31, 2016, any securities on loan were collateralized by cash and/or U.S. government obligations. Cash collateral received was invested in money market funds managed by BFA and is disclosed in the schedules of investments. The securities on loan for each Fund are also disclosed in its schedule of investments. The total value of any securities on loan as of August 31, 2016 and the total value of the related collateral are disclosed in the statements of assets and liabilities. Income earned by the Funds from securities lending is disclosed in the statements of operations.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities lent. Each Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.

Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (“MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, a Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, the borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.

The following table is a summary of securities lending agreements which are subject to offset under an MSLA as of August 31, 2016:

iShares ETF and Counterparty	Market Value of Securities on Loan		Cash Collateral Received  a		Net Amount
MSCI EAFE ESG Optimized
Credit Suisse Securities (USA) LLC	$	7,471	$	7,471	$	—
JPMorgan Clearing Corp.		4,379		4,379		—
	$	11,850	$	11,850	$	—
MSCI Global Impact
BNP Paribas Prime Brokerage International Ltd.	$	380,187	$	380,187	$	—
Jefferies LLC		96,741		96,741		—
	$	476,928	$	476,928	$	—

^a  Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s statement of assets and liabilities.

NOTES TO FINANCIAL STATEMENTS 29

Notes to Financial Statements (Continued)

iSHARES^® TRUST

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Agreement with the Trust, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.

For its investment advisory services to each Fund, BFA is entitled to an annual investment advisory fee based on the average daily net assets of each Fund as follows:

iShares ETF	Investment Advisory Fee
MSCI EAFE ESG Optimized		0.40	%
MSCI Global Impact		0.49

The SEC has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by BFA, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the “collateral investment fees”). Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Funds retain a portion of securities lending income and remit the remaining portion to BTC as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, each Fund retains 80% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in a given calendar year exceeds the aggregate securities lending income generated across the iShares ETF Complex in the calendar year 2013, each Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 85% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.

For the period ended August 31, 2016, the total of securities lending agent services and collateral investment fees paid were as follows:

iShares ETF	Fees Paid to BTC
MSCI EAFE ESG Optimized	$	1
MSCI Global Impact		1,032

BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.

Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.

30 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

For the period ended August 31, 2016, the purchase and sales transactions executed by the iShares MSCI EAFE ESG Optimized ETF pursuant to Rule 17a-7 under the 1940 Act were $29,878 and $32,983, respectively.

Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends – affiliated” in the statements of operations.

The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.

Certain trustees and officers of the Trust are also officers of BTC and/or BFA.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the period ended August 31, 2016 were as follows:

iShares ETF	Purchases		Sales
MSCI EAFE ESG Optimized	$	294,524	$	258,551
MSCI Global Impact		7,837,177		4,104,083

In-kind transactions (see Note 4) for the period ended August 31, 2016 were as follows:

iShares ETF	In-kind Purchases		In-kind Sales
MSCI EAFE ESG Optimized	$	5,049,916	$	—
MSCI Global Impact		13,299,043		2,415,111

4. CAPITAL SHARE TRANSACTIONS

Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the statements of changes in net assets.

The consideration for the purchase of Creation Units of a fund in the Trust generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Trust may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Trust’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Proceeds from shares sold” in the statements of changes in net assets.

NOTES TO FINANCIAL STATEMENTS 31

Notes to Financial Statements (Continued)

iSHARES^® TRUST

5. PRINCIPAL RISKS

In the normal course of business, each Fund’s investment activities expose it to various types of risk associated with the financial instruments and markets in which it invests. The significant types of financial risks each Fund is exposed to include market risk and credit risk. Each Fund’s prospectus provides details of these and other types of risk.

BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.

MARKET RISK

Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss each Fund may suffer through holding market positions in the face of market movements. Each Fund is exposed to market risk by virtue of its direct and/or indirect investment in equity instruments. The fair value of securities held by the Funds may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of each Fund’s exposure to market risk is the market value of the investments held as shown in the Fund’s schedule of investments.

A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its schedule of investments.

Investing in the securities of non-U.S. issuers, whether directly or indirectly, involves certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of a Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets; and the risk of war. These risks are heightened for investments in issuers from countries with less developed markets.

The economies and markets of European countries are often closely connected and interdependent, and events in one European country can have an adverse impact on other European countries. The European financial markets have experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of several European countries. Responses to the financial problems by European governments, central banks and others, including austerity measures and reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In addition, the United Kingdom has voted to withdraw from the European Union. The referendum may introduce significant new uncertainties and instability in the financial markets as the United Kingdom negotiates its exit from the European Union.

CREDIT RISK

Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or

32 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of each Fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its statement of assets and liabilities.

6. INCOME TAX INFORMATION

Each Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.

U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or NAV per share. The following permanent differences as of August 31, 2016, attributable to passive foreign investment companies, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:

iShares ETF	Paid-in Capital		Undistributed Net Investment Income/Distributions in Excess of Net Investment Income		Undistributed Net Realized Gain/Accumulated Net Realized Loss
MSCI EAFE ESG Optimized	$	—	$	264	$	(264	)
MSCI Global Impact		171,068		3,938		(175,006	)

The tax character of distributions paid during the period ended August 31, 2016 was as follows:

iShares ETF	2016
MSCI Global Impact
Ordinary income	$	69,038

As of August 31, 2016, the tax components of accumulated net earnings (losses) were as follows:

iShares ETF	Undistributed Ordinary Income		Capital Loss Carryforwards			Net Unrealized Gains  (Losses) a		Total
MSCI EAFE ESG Optimized	$	23,247	$	(3,374	)	$	477,174	$	497,047
MSCI Global Impact		117,660		(94,440	)		68,174		91,394

^a  The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies.

NOTES TO FINANCIAL STATEMENTS 33

Notes to Financial Statements (Continued)

iSHARES^® TRUST

As of August 31, 2016, the Funds had non-expiring capital loss carryforwards available to offset future realized capital gains as follows:

iShares ETF	Non- Expiring
MSCI EAFE ESG Optimized	$	3,374
MSCI Global Impact		94,440

The Funds may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Funds may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.

Management has analyzed tax laws and regulations and their application to the Funds as of August 31, 2016, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

7. SUBSEQUENT EVENTS

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

34 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees of

iShares Trust:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of iShares MSCI EAFE ESG Optimized ETF and iShares MSCI Global Impact ETF (the “Funds”) at August 31, 2016, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2016 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 21, 2016

REPORT OF INDEPENDENT REGISTERED  PUBLIC ACCOUNTING FIRM 35

Tax Information (Unaudited)

iSHARES^® TRUST

The following maximum amounts are hereby designated as qualified dividend income for individuals for the fiscal year ended August 31, 2016:

iShares ETF	Qualified Dividend Income
MSCI EAFE ESG Optimized	$	17,741
MSCI Global Impact		128,143

For the fiscal year ended August 31, 2016, the iShares MSCI EAFE ESG Optimized ETF earned foreign source income of $20,851 and paid foreign taxes of $1,052 which it intends to pass through to its shareholders.

For corporate shareholders, the percentage of income dividends paid by the iShares MSCI Global Impact ETF during the fiscal year ended August 31, 2016 that qualified for the dividends-received deduction was 16.63%.

36 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory

Contract

iSHARES^® TRUST

I. iShares MSCI EAFE ESG Optimized ETF

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required to consider and approve the proposed Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the terms of the proposed Advisory Contract.

At a meeting held on May 17, 2016, the Board, including all of the Independent Trustees, approved the selection of BFA as investment adviser and approved the proposed Advisory Contract for the Fund, based on its review of qualitative and quantitative information provided by BFA. The Board also considered information previously provided by BFA, BlackRock Institutional Trust Company, N.A. (“BTC”), and BlackRock, Inc. (“BlackRock”), as applicable, at prior Board meetings. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review.

In selecting BFA and approving the Advisory Contract for the Fund, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and made the following conclusions:

Expenses of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of Broadridge’s proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.

The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were within range of the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.

Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the proposed investment advisory fee and expense level of the Fund supported the Board’s approval of the Advisory Contract.

Nature, Extent and Quality of Services to be Provided by BFA — The Board reviewed the scope of services to be provided by BFA under the Advisory Contract. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting iShares funds and their shareholders. The Board considered representations by BFA, BTC, and BlackRock that the scope and quality of services to be provided to the Fund would be similar to the scope and quality of services provided to other iShares funds. The Board also considered BFA’s compliance program and its compliance record with respect to other iShares funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 37

Board Review and Approval of Investment Advisory

Contracts (Continued)

iSHARES^® TRUST

appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons who will be responsible for the day-to-day management of the Fund, as well as the resources that will be available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures.

Based on the review of this information, the Board concluded that the nature, extent and quality of services to be provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the Advisory Contract.

Costs of Services to be Provided to the Fund and Profits to be Realized by BFA and Affiliates — The Board did not consider the profitability of the Fund to BFA based on the fees payable under the Advisory Contract or revenue to be received by BFA or its affiliates in connection with services to be provided to the Fund since the proposed relationship had not yet commenced. The Board noted that it expects to receive profitability information from BFA periodically following the Fund’s launch and will thus be in a position to evaluate whether any new or additional breakpoints or other adjustments in Fund fees would be appropriate.

Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets. The Board noted that it had previously received and considered information regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board noted that the Advisory Contract for the Fund did not provide for any breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that should material economies of scale exist in the future that are not otherwise shared, a breakpoint structure for the Fund may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.

Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue periodically, determined to approve the Advisory Contract.

Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA previously provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the iShares funds, including in terms of the different and generally more extensive services provided to the iShares funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded exchange traded fund, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee

38 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory

Contracts (Continued)

iSHARES^® TRUST

rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.

Other Benefits to BFA and/or its Affiliates — Except as noted below, the Board did not consider the “fallout” benefits or ancillary revenue to be received by BFA and/or its affiliates in connection with the services to be provided to the Fund by BFA since the proposed relationship had not yet commenced. However, the Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board considered the potential payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also considered the potential for revenue to BTC, the Fund’s securities lending agent, and its affiliates in the event of any loaning of portfolio securities of the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, will be reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the Advisory Contract.

Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services to be rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Fund and its shareholders to approve the Advisory Contract.

II. iShares MSCI Global Impact ETF

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required to consider and approve the proposed Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the terms of the proposed Advisory Contract.

At a meeting held on March 23-24, 2016, the Board, including all of the Independent Trustees, approved the selection of BFA as investment adviser and approved the proposed Advisory Contract for the Fund, based on its review of qualitative and quantitative information provided by BFA. The Board also considered information previously provided by BFA, BlackRock Institutional Trust Company, N.A. (“BTC”), and BlackRock, Inc. (“BlackRock”), as applicable, at prior Board meetings. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review.

In selecting BFA and approving the Advisory Contract for the Fund, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and made the following conclusions:

Expenses of the Fund — The Board reviewed statistical information prepared by Broadridge, an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of the Fund in comparison with the same information for other exchange traded funds (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 39

Board Review and Approval of Investment Advisory

Contracts (Continued)

iSHARES^® TRUST

funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of Broadridge’s proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.

The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were lower than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group.

Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the proposed investment advisory fee and expense level of the Fund supported the Board’s approval of the Advisory Contract.

Nature, Extent and Quality of Services to be Provided by BFA — The Board reviewed the scope of services to be provided by BFA under the Advisory Contract. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting iShares funds and their shareholders. The Board acknowledged that resources to support the iShares funds and their shareholders have been added or enhanced in recent years. The Board considered representations by BFA, BTC, and BlackRock that the scope and quality of services to be provided to the Fund would be similar to the scope and quality of services provided to other iShares funds. The Board also considered BFA’s compliance program and its compliance record with respect to other iShares funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons who will be responsible for the day-to-day management of the Fund, as well as the resources that will be available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures.

Based on the review of this information, the Board concluded that the nature, extent and quality of services to be provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the Advisory Contract.

Costs of Services to be Provided to the Fund and Profits to be Realized by BFA and its Affiliates — The Board did not consider the profitability of the Fund to BFA based on the fees payable under the Advisory Contract or revenue to be received by BFA or its affiliates in connection with services to be provided to the Fund since the proposed relationship had not yet commenced. The Board noted that it expects to receive profitability information from BFA periodically following the Fund’s launch and will thus be in a position to evaluate whether, in the future, any adjustments in the Fund’s fees would be appropriate.

Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets. The Board noted that it had previously received and considered information regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board noted that the Advisory Contract for the Fund did not provide for any breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board further noted that should material economies of scale exist in the future, a breakpoint structure for the Fund may be

40 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory

Contracts (Continued)

iSHARES^® TRUST

appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.

Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue periodically, determined to approve the Advisory Contract.

Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end and closed-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, separately managed accounts, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts that track the same index as the Fund. The Board further noted that BFA previously provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the iShares funds, including in terms of the different, generally more extensive services provided to the iShares funds, as well as other significant differences in the approach of BFA and its affiliates to the iShares funds, on one hand, and the Other Accounts, on the other. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded exchange traded fund, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure and the Fund expenses to be borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for the Other Accounts that are institutional clients of BFA (or its affiliates) and concluded that the differences appeared to be consistent with the factors discussed.

Other Benefits to BFA and/or its Affiliates — Except as noted below, the Board did not consider the “fallout” benefits or ancillary revenue to be received by BFA and/or its affiliates in connection with the services to be provided to the Fund by BFA since the proposed relationship had not yet commenced. However, the Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board considered the potential payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also considered the potential for revenue to BTC, the Fund’s securities lending agent, and its affiliates in the event of any loaning of portfolio securities of the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates will be reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that the existence of any such ancillary benefits would not alter the Board’s conclusion with respect to the appropriateness of approving the Advisory Contract.

Based on the considerations described above, the Board determined that the investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services to be rendered and that could not have been the product of arm’s-length bargaining and concluded that it is in the best interests of the Fund and its shareholders to approve the Advisory Contract.

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 41

Supplemental Information (Unaudited)

iSHARES^® TRUST

Premium/Discount Information

The Premium/Discount Information section is intended to present information about the differences between the daily market price on secondary markets for shares of a fund and that fund’s NAV. NAV is the price at which a fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of a fund generally is determined using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of such fund are listed for trading, as of the time that the fund’s NAV is calculated. A fund’s Market Price may be at, above or below its NAV. The NAV of a fund will fluctuate with changes in the fair value of its portfolio holdings. The Market Price of a fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.

Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of a fund on a given day, generally at the time the NAV is calculated. A premium is the amount that a fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that a fund is trading below the reported NAV, expressed as a percentage of the NAV.

The following information shows the frequency of distributions of premiums and discounts for each of the Funds. The information shown for each Fund is for five calendar years (or from the inception date of such Fund if less than five years) through the date of the most recent calendar quarter-end. The specific periods covered for each Fund are disclosed in the table for such Fund.

Each line in the table shows the number of trading days in which the Fund traded within the premium/discount range indicated. The number of trading days in each premium/discount range is also shown as a percentage of the total number of trading days in the period covered by each table. All data presented here represents past performance, which cannot be used to predict future results.

iShares MSCI EAFE ESG Optimized ETF

Period Covered: June 28, 2016 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 0.5%		1		50.00	%
Between 0.5% and –0.5%		1		50.00
		2		100.00	%

iShares MSCI Global Impact ETF

Period Covered: April 20, 2016 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 2.0%		5		9.80	%
Greater than 1.5% and Less than 2.0%		2		3.92
Greater than 1.0% and Less than 1.5%		2		3.92
Greater than 0.5% and Less than 1.0%		7		13.73
Between 0.5% and –0.5%		33		64.71
Less than –0.5% and Greater than –1.0%		2		3.92
		51		100.00	%

42 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee and Officer Information

iSHARES^® TRUST

The Board of Trustees has responsibility for the overall management and operations of the Funds, including general supervision of the duties performed by BFA and other service providers. Each Trustee serves until he or she resigns, is removed, dies, retires or becomes incapacitated. Each officer shall hold office until his or her successor is elected and qualifies or until his or her death, or his or her resignation or removal. Trustees who are not “interested persons” (as defined in the 1940 Act) of the Trust are referred to as independent trustees (“Independent Trustees”).

The registered investment companies advised by BFA or its affiliates (the “BlackRock-advised Funds”) are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Trustee also serves as a Director of iShares, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 333 funds (as of August 31, 2016) within the Exchange-Traded Fund Complex. With the exception of Robert S. Kapito, Mark Wiedman and Benjamin Archibald, the address of each Trustee and officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito, Mr. Wiedman and Mr. Archibald is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52^nd Street, New York, NY 10055. The Board has designated Cecilia H. Herbert as its Independent Board Chair. Additional information about the Funds’ Trustees and officers may be found in the Funds’ combined Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-iShares (1-800-474-2737).

Interested Trustees

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Robert S. Kapitoa (59)	Trustee (since 2009).	President and Director, BlackRock, Inc. (since 2006); Vice Chairman of BlackRock, Inc. and Head of BlackRock, Inc.’s Portfolio Management Group (since its formation in 1998) and BlackRock, Inc.’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983).	Director of iShares, Inc. (since 2009); Trustee of iShares U.S. ETF Trust (since 2011).
Mark Wiedmanb (45)	Trustee (since 2013).	Managing Director, BlackRock, Inc. (since 2007); Global Head of iShares (since 2011); Head of Corporate Strategy, BlackRock, Inc. (2009-2011).	Director of iShares, Inc. (since 2013); Trustee of iShares U.S. ETF Trust (since 2013); Director of PennyMac Financial Services, Inc. (since 2008).

^a  Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc.

^b  Mark Wiedman is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc. and its affiliates.

TRUSTEE AND OFFICER INFORMATION 43

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Independent Trustees^c

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Cecilia H. Herbert (67)	Trustee (since 2005); Independent Board Chair (since 2016); Nominating and Governance Committee Chair (since 2016).	Director (1998-2013) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010) of the Thacher School; Member (since 1992) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco; Trustee and Member of the Investment Committee, WNET, the New York public media company (since 2011).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Independent Board Chair of iShares, Inc. and iShares U.S. ETF Trust (since 2016); Director of Forward Funds (23 portfolios) (since 2009); Director of Salient MF Trust (4 portfolios) (since 2015).
Jane D. Carlin (60)	Trustee (since 2015); Risk Committee Chair (since 2016).	Managing Director and Global Head of Financial Holding Company Governance & Assurance and the Global Head of Operational Risk Management of Morgan Stanley (2006-2012).	Director of iShares, Inc. (since 2015); Trustee of iShares U.S. ETF Trust (since 2015); Director of PHH Corporation (mortgage solutions) (since 2012).
Charles A. Hurty (72)	Trustee (since 2005); Audit Committee Chair (since 2006).	Retired; Partner, KPMG LLP (1968-2001).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (2 portfolios) (since 2002).
John E. Kerrigan (61)	Trustee (since 2005); Securities Lending Committee Chair (since 2016).	Chief Investment Officer, Santa Clara University (since 2002).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011).
John E. Martinez (55)	Trustee (since 2003); Fixed Income Plus Committee Chair (since 2016).	Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005).	Director of iShares, Inc. (since 2003); Trustee of iShares U.S. ETF Trust (since 2011).

44 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Independent Trustees^c (Continued)

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Madhav V. Rajan (52)	Trustee (since 2011); Equity Plus Committee Chair and 15(c) Committee Chair (since 2016).	Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (2007-2008).	Director of iShares, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011); Director, Cavium, Inc. (since 2013).

^c  Robert H. Silver served as an Independent Trustee until March 31, 2016.

TRUSTEE AND OFFICER INFORMATION 45

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Officers^d

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years
Martin Small (41)	President (since 2016).	Managing Director, BlackRock, Inc. (since January 2010); Head of U.S. iShares (since 2015); Co-Head of the U.S. Financial Markets Advisory Group, BlackRock, Inc. (2008-2014).
Jack Gee (56)	Treasurer and Chief Financial Officer (since 2008).	Managing Director, BlackRock, Inc. (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director of Fund Administration of Intermediary Investor Business, BGI (2004-2009).
Benjamin Archibald (41)	Secretary (since 2015).	Managing Director, BlackRock, Inc. (since 2014); Director, BlackRock, Inc. (2010-2013); Secretary of the BlackRock-advised Mutual Funds (since 2012).
Steve Messinger (54)	Executive Vice President (since 2016).	Managing Director, BlackRock, Inc. (2007-2014 and since 2016); Managing Director, Beacon Consulting Group (2014-2016).
Charles Park (49)	Chief Compliance Officer (since 2006).	Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex (since 2014); Chief Compliance Officer, BFA (since 2006).
Scott Radell (47)	Executive Vice President (since 2012).	Managing Director, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005).
Amy Schioldager (53)	Executive Vice President (since 2007).	Senior Managing Director, BlackRock, Inc. (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006).

^d  Manish Mehta served as President until October 15, 2016.

46 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

For more information visit www.iShares.com or call 1-800-474-2737

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

Investing involves risk, including possible loss of principal.

The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.

A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.

The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily basis on the Funds’ website.

©2016 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.

iS-AR-817-0816

AUGUST 31, 2016

2016 ANNUAL REPORT

iShares Trust

^Ø  iShares Edge MSCI Multifactor Consumer Discretionary ETF  |  CNDF  |  BATS

^Ø  iShares Edge MSCI Multifactor Consumer Staples ETF  |  CNSF  |  BATS

^Ø  iShares Edge MSCI Multifactor Energy ETF  |  ERGF  |  BATS

^Ø  iShares Edge MSCI Multifactor Financials ETF  |  FNCF  |  BATS

^Ø  iShares Edge MSCI Multifactor Healthcare ETF  |  HCRF  |  BATS

^Ø  iShares Edge MSCI Multifactor Industrials ETF  |  INDF  |  BATS

^Ø  iShares Edge MSCI Multifactor Materials ETF  |  MATF  |  BATS

^Ø  iShares Edge MSCI Multifactor Technology ETF  |  TCHF  |  BATS

^Ø  iShares Edge MSCI Multifactor Utilities ETF  |  UTLF  |  BATS

Table of Contents

Management’s Discussions of Fund Performance	5
About Fund Performance	24
Shareholder Expenses	24
Schedules of Investments	25
iShares Edge MSCI Multifactor Consumer Discretionary ETF	25
iShares Edge MSCI Multifactor Consumer Staples ETF	27
iShares Edge MSCI Multifactor Energy ETF	29
iShares Edge MSCI Multifactor Financials ETF	30
iShares Edge MSCI Multifactor Healthcare ETF	32
iShares Edge MSCI Multifactor Industrials ETF	33
iShares Edge MSCI Multifactor Materials ETF	35
iShares Edge MSCI Multifactor Technology ETF	36
iShares Edge MSCI Multifactor Utilities ETF	38
Financial Statements	39
Financial Highlights	50
Notes to Financial Statements	59
Report of Independent Registered Public Accounting Firm	68
Tax Information	69
Board Review and Approval of Investment Advisory Contract	70
Supplemental Information	75
Trustee and Officer Information	79

Management’s Discussion of Fund Performance

iSHARES^® TRUST

DOMESTIC EQUITY MARKET OVERVIEW

The U.S. equity market rose for the abbreviated reporting period from May 10, 2016, to August 31, 2016 (the “reporting period”). The Russell 3000 Index, a broad U.S. equity index that includes stocks of all capitalization ranges, returned 6.76% for the reporting period.

The reporting period was characterized by volatility relating to the vote in June 2016 by the U.K. electorate to exit the European Union (“Brexit”). Stocks in the U.S. and around the globe declined sharply in the immediate aftermath of the vote, as investors confronted the resulting political, economic, and market uncertainty.

In response, many of the world’s central banks took aggressive actions to restore investor confidence and stimulate economic activity, including expanded quantitative easing measures and negative interest rates. In the U.S., the Federal Reserve Bank (the “Fed”), which had been expected to raise short-term interest rates further in 2016, held rates steady in the wake of the Brexit vote. Fed policymakers cited uncertainty in the economic outlook as a result of Brexit as among the reasons for not tightening monetary policy at their July policy meeting. Stable Fed interest rate policy, as well as the relative strength of the U.S. economy compared with other regions of the globe, provided a favorable backdrop for U.S. equity market performance.

In terms of the economy, U.S. gross domestic product (“GDP”) grew at a 1.1% annual rate during the three months ended in June, marking the third-consecutive quarter of GDP growth in the neighborhood of 1%. This sluggishness was evident in the service side of the economy, as the ISM Non-Manufacturing PMI Index declined in August 2016 to the lowest level since February 2010. Manufacturing activity also slowed in August, as measured by the ISM Purchasing Managers Index, with the new orders, production, and employment components of this index all declining. Against that backdrop, the unemployment rate stood at 4.9% in August, while inflation in the U.S., as measured by the Consumer Price Index, rose 0.8% for the year ended in July 2016.

In that environment, U.S. stock indexes reached new all-time highs in August 2016, before ultimately finishing the reporting period just short of record levels. But even as easy monetary policy helped stocks to new highs, U.S. corporate earnings actually declined year over year for the fifth consecutive quarter through June 2016. Rising stock prices and declining earnings meant that the ratio of the stock price-to-the last twelve months’ earnings (“P/E”) on the S&P 500 Index stood at 24.4 at the end of August 2016. By comparison, the long-term historical average P/E ratio for the S&P 500 was 15.6. Forward P/E ratios, which are based on future estimates of corporate earnings, were lower at 16.9, but still above long-term averages.

In terms of earnings by sector through the second quarter of 2016, the latest period for which data were available, five sectors reported year-over-year corporate earnings growth, while five reported declines. Consumer discretionary companies had the highest rate of growth, while energy sector earnings declined the most year over year. Turning to valuations by sector, the energy sector had the highest forward P/E ratio, while financials had the lowest at period-end.

Looking at market performance by capitalization, small-capitalization stocks outperformed those of medium- and large-sized companies in the U.S. for the abbreviated reporting period. Market performance by style was mixed, however, as value beat growth among large capitalization stocks, but the opposite was true among small-capitalization stocks.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 5

Management’s Discussion of Fund Performance

iSHARES^® EDGE MSCI MULTIFACTOR CONSUMER DISCRETIONARY ETF

Performance as of August 31, 2016

	Cumulative Total Returns
	NAV		MARKET		INDEX
Since Inception		3.39%		3.59%		3.54%

The inception date of the Fund was 5/10/16. The first day of secondary market trading was 5/12/16.

For the fiscal period ended 8/31/16, the Fund did not have six months of performance and therefore line graphs are not presented.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account  Value (5/10/16) a		Ending Account Value (8/31/16)		Expenses Paid During Period b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period b		Annualized Expense Ratio
$	1,000.00	$	1,033.90	$	1.10	$	1,000.00	$	1,023.40	$	1.78		0.35%

^a  The beginning of the period (commencement of operations) is May 10, 2016.

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (113 days for actual and 184 days for hypothetical expenses) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 24 for more information.

6 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® EDGE MSCI MULTIFACTOR CONSUMER DISCRETIONARY ETF

The iShares Edge MSCI Multifactor Consumer Discretionary ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the consumer discretionary sector that have favorable exposure to target style factors subject to constraints, as represented by the MSCI USA Consumer Discretionary Diversified Multiple-Factor Capped Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the reporting period from May 10, 2016 (inception date of the Fund) through August 31, 2016, the total return for the Fund was 3.39%, net of fees, while the total return for the Index was 3.54%.

The Index advanced for the reporting period but trailed the broad U.S. equity market. The Index’s research-based selection process focuses on four investment factors — value, quality, momentum, and size. Value refers to undervalued companies; quality refers to companies with consistent and stable earnings, healthy balance sheets, and strong fundamentals; momentum refers to stocks experiencing an upswing in price; and size refers to companies with a smaller market capitalization.

The Index underperformed the broad equity market as consumer spending was inconsistent during the reporting period despite strong job growth and low interest rates. For the year ended August 31, 2016, retail sales grew by 1.9%, below the long-term historical average.

Within the Index, specialty retailers contributed the most to performance for the reporting period, led by apparel retailers, specialty stores, and computer and electronics retailers. Other meaningful contributors to Index performance for the reporting period included internet retailers, which benefited from robust e-commerce growth, and household durables producers, which include companies that manufacture home furnishings and appliances.

On the downside, automobile manufacturers detracted from Index performance for the reporting period as vehicle sales slowed. Restaurants and leisure cruise lines also detracted from Index performance for the reporting period. Restaurants faced declining traffic in many locations, while weaker global demand and the rising supply of cruise ships on order weighed on the stocks of cruise lines.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Specialty Retail	29.22	%
Media	14.84
Internet & Direct Marketing Retail	10.11
Auto Components	9.03
Hotels, Restaurants & Leisure	7.62
Leisure Products	6.39
Textiles, Apparel & Luxury Goods	6.34
Multiline Retail	5.11
Household Durables	4.73
Automobiles	3.63
Distributors	2.98
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Amazon.com Inc.	9.56	%
Home Depot Inc. (The)	4.44
Comcast Corp. Class A	3.94
Walt Disney Co. (The)	3.71
General Motors Co.	3.63
O’Reilly Automotive Inc.	3.04
Ross Stores Inc.	3.01
Ulta Salon Cosmetics & Fragrance Inc.	2.75
Best Buy Co. Inc.	2.71
Omnicom Group Inc.	2.70
TOTAL	39.49	%

* Excludes money market funds.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 7

Management’s Discussion of Fund Performance

iSHARES^® EDGE MSCI MULTIFACTOR CONSUMER STAPLES ETF

Performance as of August 31, 2016

	Cumulative Total Returns
	NAV		MARKET		INDEX
Since Inception		1.07%		0.71%		1.23%

The inception date of the Fund was 5/10/16. The first day of secondary market trading was 5/12/16.

For the fiscal period ended 8/31/16, the Fund did not have six months of performance and therefore line graphs are not presented.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account  Value (5/10/16) a		Ending Account Value (8/31/16)		Expenses Paid During Period b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period b		Annualized Expense Ratio
$	1,000.00	$	1,010.70	$	1.09	$	1,000.00	$	1,023.40	$	1.78		0.35%

^a  The beginning of the period (commencement of operations) is May 10, 2016.

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (113 days for actual and 184 days for hypothetical expenses) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 24 for more information.

8 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® EDGE MSCI MULTIFACTOR CONSUMER STAPLES ETF

The iShares Edge MSCI Multifactor Consumer Staples ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the consumer Staples sector that have favorable exposure to target style factors subject to constraints, as represented by the MSCI USA Consumer Staples Diversified Multiple-Factor Capped Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the reporting period from May 10, 2016 (inception date of the Fund) through August 31, 2016, the total return for the Fund was 1.07%, net of fees, while the total return for the Index was 1.23%.

The Index advanced for the reporting period but trailed the broad U.S. equity market. The Index’s research-based selection process focuses on four investment factors — value, quality, momentum, and size. Value refers to undervalued companies; quality refers to companies with consistent and stable earnings, healthy balance sheets, and strong fundamentals; momentum refers to stocks experiencing an upswing in price; and size refers to companies with a smaller market capitalization.

The consumer staples sector is considered a defensive sector of the stock market with relatively stable revenues. Consequently, consumer staples stocks tend to outperform in periods of economic uncertainty. In addition, consumer staples stocks typically have relatively high dividend yields, which are attractive at a time when interest rates are hovering near historically low levels.

Investor demand for these characteristics helped the consumer staples sector become one of the top-performing sectors in the U.S. equity market for the year ended August 31, 2016. But the outperformance of consumer staples stocks led to high valuations relative to the rest of the market. As a result, demand for consumer staples stocks waned during the brief reporting period, leading to the Index’s underperformance compared with the overall stock market.

Within the Index, food products makers and household products companies contributed the most to performance for the reporting period. Tobacco stocks also contributed positively to Index performance, while food and staples retailers detracted from Index returns for the reporting period.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Food & Staples Retailing	27.84	%
Food Products	23.89
Beverages	19.70
Household Products	17.57
Tobacco	11.00
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Procter & Gamble Co. (The)	10.14	%
Wal-Mart Stores Inc.	7.97
Coca-Cola Co. (The)	7.49
CVS Health Corp.	7.11
Philip Morris International Inc.	6.18
PepsiCo Inc.	6.06
Altria Group Inc.	4.52
Sysco Corp.	3.63
Archer-Daniels-Midland Co.	3.62
Tyson Foods Inc. Class A	3.61
TOTAL	60.33	%

* Excludes money market funds.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 9

Management’s Discussion of Fund Performance

iSHARES^® EDGE MSCI MULTIFACTOR ENERGY ETF

Performance as of August 31, 2016

	Cumulative Total Returns
	NAV		MARKET		INDEX
Since Inception		2.19%		3.20%		2.44%

The inception date of the Fund was 5/10/16. The first day of secondary market trading was 5/12/16.

For the fiscal period ended 8/31/16, the Fund did not have six months of performance and therefore line graphs are not presented.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account  Value (5/10/16) a		Ending Account Value (8/31/16)		Expenses Paid During Period b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period b		Annualized Expense Ratio
$	1,000.00	$	1,021.90	$	1.09	$	1,000.00	$	1,023.40	$	1.78		0.35%

^a  The beginning of the period (commencement of operations) is May 10, 2016.

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (113 days for actual and 184 days for hypothetical expenses) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 24 for more information.

10 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® EDGE MSCI MULTIFACTOR ENERGY ETF

The iShares Edge MSCI Multifactor Energy ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the energy sector that have favorable exposure to target style factors subject to constraints, as represented by the MSCI USA Energy Diversified Multiple-Factor Capped Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the reporting period from May 10, 2016 (inception date of the Fund) through August 31, 2016, the total return for the Fund was 2.19%, net of fees, while the total return for the Index was 2.44%.

The Index advanced for the reporting period but trailed the broad U.S. equity market. The Index’s research-based selection process focuses on four investment factors — value, quality, momentum, and size. Value refers to undervalued companies; quality refers to companies with consistent and stable earnings, healthy balance sheets, and strong fundamentals; momentum refers to stocks experiencing an upswing in price; and size refers to companies with a smaller market capitalization.

The Index underperformed the broad equity market for the reporting period as concerns about oversupply and declining global demand weighed on the energy sector. Although the price of oil was unchanged for the reporting period, oil maintained a relatively high price compared with the prior year.

Within the Index, oil and gas refiners were among the leading contributors to performance for the reporting period. Oil refiners benefited from lower crude oil prices because crude oil is the raw material they use to produce gasoline and other refined petroleum products. Energy equipment and services stocks also fared well, benefiting from signs of increased drilling activity late in the reporting period.

Laggards within the Index during the reporting period included energy exploration and production companies. These stocks were hurt the most by declining energy prices as evaporating profit margins led companies to cut costs and curtail production.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Oil, Gas & Consumable Fuels	83.04	%
Energy Equipment & Services	16.96
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Exxon Mobil Corp.	23.38	%
Chevron Corp.	18.19
Schlumberger Ltd.	6.93
Spectra Energy Corp.	4.72
Phillips 66	4.59
Marathon Petroleum Corp.	4.53
Valero Energy Corp.	4.42
Concho Resources Inc.	4.22
National Oilwell Varco Inc.	3.49
EQT Corp.	3.37
TOTAL	77.84	%

* Excludes money market funds.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 11

Management’s Discussion of Fund Performance

iSHARES^® EDGE MSCI MULTIFACTOR FINANCIALS ETF

Performance as of August 31, 2016

	Cumulative Total Returns
	NAV		MARKET		INDEX
Since Inception		5.83%		5.71%		5.90%

The inception date of the Fund was 5/10/16. The first day of secondary market trading was 5/12/16.

For the fiscal period ended 8/31/16, the Fund did not have six months of performance and therefore line graphs are not presented.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account  Value (5/10/16) a		Ending Account Value (8/31/16)		Expenses Paid During Period b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period b		Annualized Expense Ratio
$	1,000.00	$	1,058.30	$	1.11	$	1,000.00	$	1,023.40	$	1.78		0.35%

^a  The beginning of the period (commencement of operations) is May 10, 2016.

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (113 days for actual and 184 days for hypothetical expenses) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 24 for more information.

12 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® EDGE MSCI MULTIFACTOR FINANCIALS ETF

The iShares Edge MSCI Multifactor Financials ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the financials sector that have favorable exposure to target style factors subject to constraints, as represented by the MSCI USA Financials Diversified Multiple-Factor Capped Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the reporting period from May 10, 2016 (inception date of the Fund) through August 31, 2016, the total return for the Fund was 5.83%, net of fees, while the total return for the Index was 5.90%.

The Index advanced for the reporting period and performed in line with the broad U.S. equity market. The Index’s research-based selection process focuses on four investment factors — value, quality, momentum, and size. Value refers to undervalued companies; quality refers to companies with consistent and stable earnings, healthy balance sheets, and strong fundamentals; momentum refers to stocks experiencing an upswing in price; and size refers to companies with a smaller market capitalization.

Insurance stocks, which represented approximately half of the Index on average during the reporting period, contributed the most to Index performance. Insurers benefited from increased expectations of a short-term interest rate increase from the U.S. Federal Reserve Bank (the “Fed”). Higher rates increase the investment income insurers receive on their premiums.

Banks, which represented approximately a quarter of the Index on average during the reporting period, also contributed positively to Index performance. A potential Fed rate hike would be beneficial for banks because they would see an increase in net interest margins, a key source of profitability. Other positive contributors to Index performance included diversified financial services stocks and consumer finance companies.

On the downside, real estate investment trusts (REITs) detracted from Index performance for the reporting period. REITs declined late in the reporting period as Fed rate hike expectations increased.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Insurance	52.02	%
Banks	26.56
Capital Markets	13.90
Diversified Financial Services	5.91
Consumer Finance	1.61
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

JPMorgan Chase & Co.	6.18	%
Wells Fargo & Co.	6.14
Berkshire Hathaway Inc. Class B	3.89
Bank of America Corp.	3.36
Travelers Companies Inc. (The)	3.35
Marsh & McLennan Companies Inc.	3.33
Aflac Inc.	3.21
Aon PLC	3.12
Huntington Bancshares Inc./OH	3.08
Allstate Corp. (The)	2.95
TOTAL	38.61	%

* Excludes money market funds.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 13

Management’s Discussion of Fund Performance

iSHARES^® EDGE MSCI MULTIFACTOR HEALTHCARE ETF

Performance as of August 31, 2016

	Cumulative Total Returns
	NAV		MARKET		INDEX
Since Inception		4.29%		4.37%		4.38%

The inception date of the Fund was 5/10/16. The first day of secondary market trading was 5/12/16.

For the fiscal period ended 8/31/16, the Fund did not have six months of performance and therefore line graphs are not presented.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account  Value (5/10/16) a		Ending Account Value (8/31/16)		Expenses Paid During Period b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period b		Annualized Expense Ratio
$	1,000.00	$	1,042.90	$	1.10	$	1,000.00	$	1,023.40	$	1.78		0.35%

^a  The beginning of the period (commencement of operations) is May 10, 2016.

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (113 days for actual and 184 days for hypothetical expenses) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 24 for more information.

14 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® EDGE MSCI MULTIFACTOR HEALTHCARE ETF

The iShares Edge MSCI Multifactor Healthcare ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the healthcare sector that have favorable exposure to target style factors subject to constraints, as represented by the MSCI USA Health Care Diversified Multiple-Factor Capped Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the reporting period from May 10, 2016 (inception date of the Fund) through August 31, 2016, the total return for the Fund was 4.29%, net of fees, while the total return for the Index was 4.38%.

The Index advanced for the reporting period but trailed the broad U.S. equity market. The Index’s research-based selection process focuses on four investment factors — value, quality, momentum, and size. Value refers to undervalued companies; quality refers to companies with consistent and stable earnings, healthy balance sheets, and strong fundamentals; momentum refers to stocks experiencing an upswing in price; and size refers to companies with a smaller market capitalization.

One factor behind the underperformance of healthcare stocks for the reporting period was political scrutiny regarding prescription drug pricing by pharmaceutical and biotechnology companies. Nonetheless, generally favorable earnings news across most segments of the healthcare sector contributed to the Index’s overall positive return.

Within the Index, healthcare equipment and supplies stocks contributed the most to performance for the reporting period. Growing demand, particularly in emerging markets, and a broad expansion in healthcare spending helped lift healthcare equipment and supplies stocks during the reporting period.

Pharmaceutical stocks, which represented 30% of the Index on average during the reporting period, also contributed positively to Index performance. Despite ongoing concerns about drug pricing, pharmaceutical stocks advanced due to solid earnings during the reporting period. Other contributors to Index performance for the reporting period included biotechnology firms and life sciences companies.

On the downside, healthcare services providers, which represented approximately a third of the Index on average for the reporting period, detracted from Index performance. Concerns about some health insurers withdrawing from Affordable Care Act exchanges put downward pressure on healthcare services stocks.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Health Care Providers & Services	32.11	%
Pharmaceuticals	28.67
Health Care Equipment & Supplies	18.78
Biotechnology	12.41
Life Sciences Tools & Services	8.03
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Johnson & Johnson	9.70	%
Pfizer Inc.	5.55
Gilead Sciences Inc.	5.55
Merck & Co. Inc.	3.97
Aetna Inc.	3.56
Edwards Lifesciences Corp.	3.14
Cigna Corp.	3.12
Intuitive Surgical Inc.	3.12
Anthem Inc.	3.01
Cardinal Health Inc.	2.92
TOTAL	43.64	%

* Excludes money market funds.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 15

Management’s Discussion of Fund Performance

iSHARES^® EDGE MSCI MULTIFACTOR INDUSTRIALS ETF

Performance as of August 31, 2016

	Cumulative Total Returns
	NAV		MARKET		INDEX
Since Inception		3.01%		3.45%		3.17%

The inception date of the Fund was 5/10/16. The first day of secondary market trading was 5/12/16.

For the fiscal period ended 8/31/16, the Fund did not have six months of performance and therefore line graphs are not presented.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account  Value (5/10/16) a		Ending Account Value (8/31/16)		Expenses Paid During Period b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period b		Annualized Expense Ratio
$	1,000.00	$	1,030.10	$	1.10	$	1,000.00	$	1,023.40	$	1.78		0.35%

^a  The beginning of the period (commencement of operations) is May 10, 2016.

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (113 days for actual and 184 days for hypothetical expenses) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 24 for more information.

16 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® EDGE MSCI MULTIFACTOR INDUSTRIALS ETF

The iShares Edge MSCI Multifactor Industrials ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the industrials sector that have favorable exposure to target style factors subject to constraints, as represented by the MSCI USA Industrials Diversified Multiple-Factor Capped Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the reporting period from May 10, 2016 (inception date of the Fund) through August 31, 2016, the total return for the Fund was 3.01%, net of fees, while the total return for the Index was 3.17%.

The Index advanced for the reporting period but trailed the broad U.S. equity market. The Index’s research-based selection process focuses on four investment factors — value, quality, momentum, and size. Value refers to undervalued companies; quality refers to companies with consistent and stable earnings, healthy balance sheets, and strong fundamentals; momentum refers to stocks experiencing an upswing in price; and size refers to companies with a smaller market capitalization.

Industrial stocks underperformed for the reporting period as slowing global economic growth weighed on manufacturing activity. For the 12 months ended August 31, 2016, industrial production declined by 1.1%, while factory capacity utilization contracted by 1%. However, data released in the latter half of the reporting period demonstrated modest improvement in industrial activity, providing some support for industrials stocks.

Within the Index, machinery manufacturers contributed the most to performance for the reporting period, benefiting from the recent increase in industrial production. Commercial and professional services companies, which include waste management companies and consulting firms, were also among the leading contributors to Index performance for the reporting period. Other top contributors to Index performance for the reporting period included industrial conglomerates, building products makers, and electrical equipment manufacturers.

On the downside, human resources and employment firms detracted from Index performance for the reporting period. Slowing employment growth early in the reporting period contributed to the decline in this segment of the Index.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Aerospace & Defense	19.42	%
Industrial Conglomerates	17.40
Machinery	16.22
Air Freight & Logistics	8.10
Professional Services	7.14
Airlines	6.69
Electrical Equipment	6.09
Commercial Services & Supplies	5.70
Road & Rail	5.68
Construction & Engineering	4.83
Building Products	2.73
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

General Electric Co.	13.59	%
Boeing Co. (The)	4.23
Northrop Grumman Corp.	3.93
3M Co.	3.81
Cummins Inc.	3.30
Stanley Black & Decker Inc.	3.12
Cintas Corp.	3.00
Equifax Inc.	2.93
Rockwell Automation Inc.	2.83
Acuity Brands Inc.	2.80
TOTAL	43.54	%

* Excludes money market funds.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 17

Management’s Discussion of Fund Performance

iSHARES^® EDGE MSCI MULTIFACTOR MATERIALS ETF

Performance as of August 31, 2016

	Cumulative Total Returns
	NAV		MARKET		INDEX
Since Inception		6.00%		6.75%		5.98%

The inception date of the Fund was 5/10/16. The first day of secondary market trading was 5/12/16.

For the fiscal period ended 8/31/16, the Fund did not have six months of performance and therefore line graphs are not presented.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account  Value (5/10/16) a		Ending Account Value (8/31/16)		Expenses Paid During Period b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period b		Annualized Expense Ratio
$	1,000.00	$	1,060.00	$	1.11	$	1,000.00	$	1,023.40	$	1.78		0.35%

^a  The beginning of the period (commencement of operations) is May 10, 2016.

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (113 days for actual and 184 days for hypothetical expenses) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 24 for more information.

18 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® EDGE MSCI MULTIFACTOR MATERIALS ETF

The iShares Edge MSCI Multifactor Materials ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the materials sector that have favorable exposure to target style factors subject to constraints, as represented by the MSCI USA Materials Diversified Multiple-Factor Capped Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the reporting period from May 10, 2016 (inception date of the Fund) through August 31, 2016, the total return for the Fund was 6.00%, net of fees, while the total return for the Index was 5.98%.

The Index advanced for the reporting period but trailed the broad U.S. equity market. The Index’s research-based selection process focuses on four investment factors — value, quality, momentum, and size. Value refers to undervalued companies; quality refers to companies with consistent and stable earnings, healthy balance sheets, and strong fundamentals; momentum refers to stocks experiencing an upswing in price; and size refers to companies with a smaller market capitalization.

Materials stocks benefited from a rebound in commodity prices throughout much of 2016. The Goldman Sachs Commodities Index was down fractionally for the reporting period, after rising for much of the calendar year. Although global economic growth remained muted, improving demand in many end markets aided the performance of materials stocks for the reporting period.

Chemicals stocks, which represented approximately 71% of the Index on average during the reporting period, contributed the most to Index performance. Two significant end markets for chemicals producers — vehicle manufacturing and construction — continued to strengthen during the reporting period, providing a tailwind for performance. In addition, agricultural chemicals companies benefited from increased merger and acquisition activity in the industry.

Paper packaging and gold mining stocks also contributed meaningfully to Index performance for the reporting period. On the downside, companies producing metal and glass containers and commodity chemicals detracted from Index performance for the reporting period.

ALLOCATION BY SECTOR

As of 8/31/16

Sector	Percentage of Total Investments*
Chemicals		68.94	%
Containers & Packaging		16.57
Metals & Mining		10.49
Construction Materials		4.00
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security	Percentage of Total Investments*
Dow Chemical Co. (The)		12.10	%
EI du Pont de Nemours & Co.		8.15
LyondellBasell Industries NV Class A		6.62
Monsanto Co.		5.81
Sherwin-Williams Co. (The)		5.60
Newmont Mining Corp.		5.52
International Paper Co.		5.41
Nucor Corp.		4.55
WestRock Co.		4.49
Mosaic Co. (The)		3.87
TOTAL		62.12	%

* Excludes money market funds.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 19

Management’s Discussion of Fund Performance

iSHARES^® EDGE MSCI MULTIFACTOR TECHNOLOGY ETF

Performance as of August 31, 2016

	Cumulative Total Returns
	NAV		MARKET		INDEX
Since Inception		14.34%		14.42%		14.47%

The inception date of the Fund was 5/10/16. The first day of secondary market trading was 5/12/16.

For the fiscal period ended 8/31/16, the Fund did not have six months of performance and therefore line graphs are not presented.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account  Value (5/10/16) a		Ending Account Value (8/31/16)		Expenses Paid During Period b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period b		Annualized Expense Ratio
$	1,000.00	$	1,143.40	$	1.16	$	1,000.00	$	1,023.40	$	1.78		0.35%

^a  The beginning of the period (commencement of operations) is May 10, 2016.

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (113 days for actual and 184 days for hypothetical expenses) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 24 for more information.

20 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® EDGE MSCI MULTIFACTOR TECHNOLOGY ETF

The iShares Edge MSCI Multifactor Technology ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the technology sector that have favorable exposure to target style factors subject to constraints, as represented by the MSCI USA Information Technology Diversified Multiple-Factor Capped Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the reporting period from May 10, 2016 (inception date of the Fund) through August 31, 2016, the total return for the Fund was 14.34%, net of fees, while the total return for the Index was 14.47%.

The Index posted strong gains for the reporting period and outperformed the broad U.S. equity market. The Index’s research-based selection process focuses on four investment factors — value, quality, momentum, and size. Value refers to undervalued companies; quality refers to companies with consistent and stable earnings, healthy balance sheets, and strong fundamentals; momentum refers to stocks experiencing an upswing in price; and size refers to companies with a smaller market capitalization.

Robust growth in smartphone usage, cloud computing, and online security helped fuel the rally in technology stocks during the reporting period. Relative valuations also attracted investors to the technology sector, particularly late in the reporting period as more defensive sectors of the market grew overvalued.

Within the Index, semiconductor manufacturers contributed the most to performance for the reporting period. Heightened demand for chips in products ranging from automobiles to handheld devices provided a favorable environment for semiconductor stocks. Furthermore, exponential growth in cloud computing increased demand for servers and data centers, which also helped drive growth in the semiconductor industry.

Software stocks, which represented approximately a quarter of the Index on average during the reporting period, contributed meaningfully to Index performance. Systems and application software companies led the segment’s advance, benefiting from demand for smartphone operating systems and online security. On the downside, information technology consulting firms were the only segment of the Index to detract from performance for the reporting period.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Software	23.28	%
IT Services	17.65
Technology Hardware, Storage & Peripherals	17.36
Semiconductors & Semiconductor Equipment	15.51
Internet Software & Services	12.14
Electronic Equipment, Instruments & Components	8.52
Communications Equipment	5.54
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Apple Inc.	11.74	%
Microsoft Corp.	8.11
Facebook Inc. Class A	4.96
Alphabet Inc. Class C	3.67
Alphabet Inc. Class A	3.51
Accenture PLC Class A	3.45
Hewlett Packard Enterprise Co.	3.25
NVIDIA Corp.	3.23
Symantec Corp.	2.71
Linear Technology Corp.	2.62
TOTAL	47.25	%

* Excludes money market funds.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 21

Management’s Discussion of Fund Performance

iSHARES^® EDGE MSCI MULTIFACTOR UTILITIES ETF

Performance as of August 31, 2016

	Cumulative Total Returns
	NAV		MARKET		INDEX
Since Inception		1.39%		1.03%		1.52%

The inception date of the Fund was 5/10/16. The first day of secondary market trading was 5/12/16.

For the fiscal period ended 8/31/16, the Fund did not have six months of performance and therefore line graphs are not presented.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 24 for more information.

Shareholder Expenses
Actual						Hypothetical 5% Return
Beginning Account  Value (5/10/16) a		Ending Account Value (8/31/16)		Expenses Paid During Period b		Beginning Account Value (3/1/16)		Ending Account Value (8/31/16)		Expenses Paid During Period b		Annualized Expense Ratio
$	1,000.00	$	1,013.90	$	1.09	$	1,000.00	$	1,023.40	$	1.78		0.35%

^a  The beginning of the period (commencement of operations) is May 10, 2016.

^b  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (113 days for actual and 184 days for hypothetical expenses) and divided by the number of days in the year (366 days). See “Shareholder Expenses” on page 24 for more information.

22 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® EDGE MSCI MULTIFACTOR UTILITIES ETF

The iShares Edge MSCI Multifactor Utilities ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks in the utilities sector that have favorable exposure to target style factors subject to constraints, as represented by the MSCI USA Utilities Diversified Multiple-Factor Capped Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the reporting period from May 10, 2016 (inception date of the Fund) through August 31, 2016, the total return for the Fund was 1.39%, net of fees, while the total return for the Index was 1.52%.

The Index advanced for the reporting period but trailed the broad U.S. equity market. The Index’s research-based selection process focuses on four investment factors — value, quality, momentum, and size. Value refers to undervalued companies; quality refers to companies with consistent and stable earnings, healthy balance sheets, and strong fundamentals; momentum refers to stocks experiencing an upswing in price; and size refers to companies with a smaller market capitalization.

The utilities sector is considered a defensive sector of the stock market with relatively stable revenues. Consequently, utilities stocks tend to outperform in periods of economic uncertainty. In addition, utilities stocks typically have relatively high dividend yields, which are attractive at a time when interest rates are hovering near historically low levels.

Investor demand for these characteristics helped the utilities sector become one of the top-performing sectors in the U.S. equity market for the year ended August 31, 2016. But the outperformance of utilities stocks led to high valuations relative to the rest of the market. As a result, demand for utilities stocks waned during the brief reporting period, leading to the Index’s underperformance compared with the overall stock market.

Electric utilities, which represented approximately two-thirds of the Index on average during the reporting period, contributed positively to Index performance for the reporting period. In contrast, natural gas utilities and multi-utilities, which deliver both electricity and natural gas, detracted from Index returns for the reporting period.

ALLOCATION BY SECTOR

As of 8/31/16

Sector Percentage of
Total  Investments*

Electric Utilities	64.04	%
Multi-Utilities	29.44
Gas Utilities	6.47
Water Utilities	0.05
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 8/31/16

Security Percentage of
Total  Investments*

Exelon Corp.	6.75	%
NextEra Energy Inc.	6.54
Duke Energy Corp.	6.38
Edison International	5.68
Consolidated Edison Inc.	5.60
Southern Co. (The)	5.26
Public Service Enterprise Group Inc.	5.19
Dominion Resources Inc./VA	4.88
Entergy Corp.	4.22
Xcel Energy Inc.	4.14
TOTAL	54.64	%

* Excludes money market funds.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 23

About Fund Performance

Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.ishares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.

Shareholder Expenses

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested on March 1, 2016 (or commencement of operations, as applicable) and held through August 31, 2016, is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.

Actual Expenses — The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number corresponding to your Fund under the heading entitled “Expenses Paid During Period.”

Hypothetical Example for Comparison Purposes — The table also provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

24 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® EDGE MSCI MULTIFACTOR CONSUMER DISCRETIONARY ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.79%
AUTO COMPONENTS — 9.01%
Autoliv Inc.		492	$	52,240
Delphi Automotive PLC		910		64,301
Goodyear Tire & Rubber Co. (The)		2,036		59,757
Lear Corp.		502		58,377
				234,675
AUTOMOBILES — 3.62%
General Motors Co.		2,956		94,356
				94,356
DISTRIBUTORS — 2.97%
Genuine Parts Co.		667		68,581
LKQ Corp.a,b		244		8,806
				77,387
HOTELS, RESTAURANTS & LEISURE — 7.61%
Carnival Corp.		1,225		58,555
Darden Restaurants Inc.		848		52,270
McDonald’s Corp.		486		56,211
Starbucks Corp.		551		30,983
				198,019
HOUSEHOLD DURABLES — 4.72%
Leggett & Platt Inc.		1,122		58,883
Whirlpool Corp.		358		63,953
				122,836
INTERNET & DIRECT MARKETING RETAIL — 10.09%
Amazon.com Inc.a,b		323		248,439
Priceline Group Inc. (The)b		10		14,167
				262,606
LEISURE PRODUCTS — 6.37%
Hasbro Inc.		682		55,747
Mattel Inc.		1,939		64,239
Polaris Industries Inc.		531		46,006
				165,992
MEDIA — 14.81%
Comcast Corp. Class A		1,569		102,393
Interpublic Group of Companies Inc. (The)		2,455		56,809
News Corp. Class A		3,728		52,416
Omnicom Group Inc.		814		70,110
Time Warner Inc.		96		7,527
Walt Disney Co. (The)		1,020		96,349
				385,604

Security	Shares		Value
MULTILINE RETAIL — 5.10%
Kohl’s Corp.		1,542	$	68,434
Nordstrom Inc.		1,275		64,336
				132,770
SPECIALTY RETAIL — 29.16%
Bed Bath & Beyond Inc.		1,254		58,148
Best Buy Co. Inc.		1,828		70,341
Dick’s Sporting Goods Inc.		874		51,216
Foot Locker Inc.		954		62,620
Gap Inc. (The)		2,338		58,146
Home Depot Inc. (The)		860		115,343
Lowe’s Companies Inc.		280		21,437
O’Reilly Automotive Inc.b		282		78,946
Ross Stores Inc.		1,258		78,298
Staples Inc.		6,335		54,228
TJX Companies Inc. (The)		506		39,185
Ulta Salon Cosmetics & Fragrance Inc.b		289		71,444
				759,352
TEXTILES, APPAREL & LUXURY GOODS — 6.33%
Coach Inc.		1,549		59,141
lululemon athletica Inc.b		168		12,853
Michael Kors Holdings Ltd.b		1,346		65,887
NIKE Inc. Class B		466		26,860
				164,741
TOTAL COMMON STOCKS
(Cost: $2,516,588)				2,598,338
SHORT-TERM INVESTMENTS — 0.40%
MONEY MARKET FUNDS — 0.40%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%c,d,e		9,028		9,028
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		1,397		1,397
				10,425
TOTAL SHORT-TERM INVESTMENTS
(Cost: $10,425)				10,425

SCHEDULES OF INVESTMENTS 25

Schedule of Investments (Continued)

iSHARES^® EDGE MSCI MULTIFACTOR CONSUMER DISCRETIONARY ETF

August 31, 2016

	Value
TOTAL INVESTMENTS IN SECURITIES — 100.19%
(Cost: $2,527,013)f	$	2,608,763
Other Assets, Less Liabilities — (0.19)%		(4,907	)
NET ASSETS — 100.00%	$	2,603,856

^a  All or a portion of this security represents a security on loan. See Note 1.

^b  Non-income earning security.

^c  Affiliated money market fund.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

^e  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^f  The cost of investments for federal income tax purposes was $2,532,146. Net unrealized appreciation was $76,617, of which $137,892 represented gross unrealized appreciation on securities and $61,275 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	2,598,338	$	—	$	—	$	2,598,338
Money market funds		10,425		—		—		10,425
Total	$	2,608,763	$	—	$	—	$	2,608,763

See notes to financial statements.

26 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® EDGE MSCI MULTIFACTOR CONSUMER STAPLES ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.80%
BEVERAGES — 19.66%
Coca-Cola Co. (The)		4,400	$	191,092
Dr Pepper Snapple Group Inc.		815		76,365
Molson Coors Brewing Co. Class B		786		80,424
PepsiCo Inc.		1,450		154,787
				502,668
FOOD & STAPLES RETAILING — 27.79%
Costco Wholesale Corp.		242		39,226
CVS Health Corp.		1,942		181,383
Kroger Co. (The)		2,676		85,605
Sysco Corp.		1,786		92,622
Wal-Mart Stores Inc.		2,849		203,533
Walgreens Boots Alliance Inc.		564		45,520
Whole Foods Market Inc.		2,064		62,704
				710,593
FOOD PRODUCTS — 23.84%
Archer-Daniels-Midland Co.		2,112		92,421
Campbell Soup Co.		1,081		65,638
Hormel Foods Corp.		1,860		71,164
Ingredion Inc.		535		73,273
JM Smucker Co. (The)		573		81,246
Kraft Heinz Co. (The)		220		19,688
McCormick & Co. Inc./MD		701		71,474
Mondelez International Inc. Class A		944		42,499
Tyson Foods Inc. Class A		1,221		92,271
				609,674
HOUSEHOLD PRODUCTS — 17.53%
Church & Dwight Co. Inc.		698		69,395
Clorox Co. (The)		577		75,610
Colgate-Palmolive Co.		437		32,487
Kimberly-Clark Corp.		95		12,166
Procter & Gamble Co. (The)		2,963		258,699
				448,357
TOBACCO — 10.98%
Altria Group Inc.		1,744		115,261
Philip Morris International Inc.		1,578		157,690
Reynolds American Inc.		158		7,832
				280,783
TOTAL COMMON STOCKS
(Cost: $2,537,286)				2,552,075

Security	Shares		Value
SHORT-TERM INVESTMENTS — 0.18%
MONEY MARKET FUNDS — 0.18%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%a,b		4,662	$	4,662
				4,662
TOTAL SHORT-TERM INVESTMENTS
(Cost: $4,662)				4,662
TOTAL INVESTMENTS IN SECURITIES — 99.98%
(Cost: $2,541,948)c				2,556,737
Other Assets, Less Liabilities — 0.02%				548
NET ASSETS — 100.00%			$	2,557,285

^a  Affiliated money market fund.

^b  The rate quoted is the annualized seven-day yield of the fund at period end.

^c  The cost of investments for federal income tax purposes was $2,544,505. Net unrealized appreciation was $12,232, of which $71,567 represented gross unrealized appreciation on securities and $59,335 represented gross unrealized depreciation on securities.

SCHEDULES OF INVESTMENTS 27

Schedule of Investments (Continued)

iSHARES^® EDGE MSCI MULTIFACTOR CONSUMER STAPLES ETF

August 31, 2016

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	2,552,075	$	—	$	—	$	2,552,075
Money market funds		4,662		—		—		4,662
Total	$	2,556,737	$	—	$	—	$	2,556,737

See notes to financial statements.

28 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® EDGE MSCI MULTIFACTOR ENERGY ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.24%
ENERGY EQUIPMENT & SERVICES — 16.83%
FMC Technologies Inc.a		2,547	$	71,825
Halliburton Co.		458		19,699
Helmerich & Payne Inc.		1,212		73,277
National Oilwell Varco Inc.		2,620		87,875
Schlumberger Ltd.		2,213		174,827
				427,503
OIL, GAS & CONSUMABLE FUELS — 82.41%
Chevron Corp.		4,560		458,645
Concho Resources Inc.a		824		106,461
ConocoPhillips		1,363		55,951
Continental Resources Inc./OKa,b		220		10,551
EOG Resources Inc.		482		42,652
EQT Corp.		1,189		85,014
Exxon Mobil Corp.		6,763		589,328
HollyFrontier Corp.		2,413		62,448
Kinder Morgan Inc./DE		847		18,507
Marathon Petroleum Corp.		2,688		114,267
Murphy Oil Corp.		2,233		59,666
Occidental Petroleum Corp.		888		68,243
Phillips 66		1,474		115,635
Pioneer Natural Resources Co.		10		1,791
Spectra Energy Corp.		3,342		119,042
Tesoro Corp.		982		74,062
Valero Energy Corp.		2,014		111,475
				2,093,738
TOTAL COMMON STOCKS
(Cost: $2,491,800)				2,521,241

Security	Shares		Value
SHORT-TERM INVESTMENTS — 0.48%
MONEY MARKET FUNDS — 0.48%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%c,d,e		11,330	$	11,330
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		992		992
				12,322
TOTAL SHORT-TERM INVESTMENTS
(Cost: $12,322)				12,322
TOTAL INVESTMENTS IN SECURITIES — 99.72%
(Cost: $2,504,122)f				2,533,563
Other Assets, Less Liabilities — 0.28%				7,098
NET ASSETS — 100.00%			$	2,540,661

^a  Non-income earning security.

^b  All or a portion of this security represents a security on loan. See Note 1.

^c  Affiliated money market fund.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

^e  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^f  The cost of investments for federal income tax purposes was $2,508,556. Net unrealized appreciation was $25,007, of which $68,014 represented gross unrealized appreciation on securities and $43,007 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	2,521,241	$	—	$	—	$	2,521,241
Money market funds		12,322		—		—		12,322
Total	$	2,533,563	$	—	$	—	$	2,533,563

See notes to financial statements.

SCHEDULES OF INVESTMENTS 29

Schedule of Investments

iSHARES^® EDGE MSCI MULTIFACTOR FINANCIALS ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.89%
BANKS — 26.53%
Bank of America Corp.		5,558	$	89,706
Citigroup Inc.		1,452		69,319
Citizens Financial Group Inc.		2,853		70,669
Fifth Third Bancorp.		534		10,765
Huntington Bancshares Inc./OH		8,228		82,362
JPMorgan Chase & Co.		2,446		165,105
People’s United Financial Inc.		2,813		45,711
U.S. Bancorp.		264		11,656
Wells Fargo & Co.		3,229		164,033
				709,326
CAPITAL MARKETS — 13.88%
Eaton Vance Corp. NVS		1,027		41,111
MSCI Inc.		788		71,014
Nasdaq Inc.		970		69,074
Raymond James Financial Inc.		1,151		66,954
SEI Investments Co.		1,219		56,196
T Rowe Price Group Inc.		960		66,758
				371,107
CONSUMER FINANCE — 1.61%
Navient Corp.		2,992		43,025
				43,025
DIVERSIFIED FINANCIAL SERVICES — 5.90%
Berkshire Hathaway Inc. Class Ba		690		103,838
Voya Financial Inc.		1,844		53,919
				157,757
INSURANCE — 51.97%
Aflac Inc.		1,154		85,604
Alleghany Corp.a		107		57,373
Allstate Corp. (The)		1,142		78,752
American International Group Inc.		70		4,188
Aon PLC		748		83,290
Arch Capital Group Ltd.a		869		70,337
Assurant Inc.		561		50,238
Axis Capital Holdings Ltd.		840		47,771
Cincinnati Financial Corp.		944		72,792
Everest Re Group Ltd.		317		61,301
FNF Group		1,875		70,669
Hartford Financial Services Group Inc. (The)		1,579		64,850
Lincoln National Corp.		1,430		68,683
Marsh & McLennan Companies Inc.		1,316		89,001
Principal Financial Group Inc.		1,536		75,371

Security	Shares		Value
Progressive Corp. (The)		2,190	$	71,306
Prudential Financial Inc.		77		6,112
Torchmark Corp.		1,018		65,844
Travelers Companies Inc. (The)		753		89,389
Unum Group		1,755		62,496
WR Berkley Corp.		887		52,661
XL Group Ltd.		1,788		61,203
				1,389,231
TOTAL COMMON STOCKS
(Cost: $2,545,624)				2,670,446
SHORT-TERM INVESTMENTS — 0.08%
MONEY MARKET FUNDS — 0.08%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		2,187		2,187
				2,187
TOTAL SHORT-TERM INVESTMENTS
(Cost: $2,187)				2,187
TOTAL INVESTMENTS IN SECURITIES — 99.97%
(Cost: $2,547,811)d				2,672,633
Other Assets, Less Liabilities — 0.03%				891
NET ASSETS — 100.00%			$	2,673,524

NVS — Non-Voting Shares

^a  Non-income earning security.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $2,548,379. Net unrealized appreciation was $124,254, of which $144,637 represented gross unrealized appreciation on securities and $20,383 represented gross unrealized depreciation on securities.

30 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® EDGE MSCI MULTIFACTOR FINANCIALS ETF

August 31, 2016

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	2,670,446	$	—	$	—	$	2,670,446
Money market funds		2,187		—		—		2,187
Total	$	2,672,633	$	—	$	—	$	2,672,633

See notes to financial statements.

SCHEDULES OF INVESTMENTS 31

Schedule of Investments

iSHARES^® EDGE MSCI MULTIFACTOR HEALTHCARE ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.97%
BIOTECHNOLOGY — 12.41%
AbbVie Inc.		652	$	41,793
Amgen Inc.		366		62,242
Biogen Inc.a		7		2,140
Celgene Corp.a		222		23,696
Gilead Sciences Inc.		1,872		146,727
United Therapeutics Corp.a		422		51,602
				328,200
HEALTH CARE EQUIPMENT & SUPPLIES — 18.77%
Abbott Laboratories		8		336
Cooper Companies Inc. (The)		370		68,790
DENTSPLY SIRONA Inc.		1,051		64,595
Edwards Lifesciences Corp.a		721		83,030
Intuitive Surgical Inc.a		120		82,371
Medtronic PLC		682		59,355
ResMed Inc.		1,044		69,624
Varian Medical Systems Inc.a		710		68,252
				496,353
HEALTH CARE PROVIDERS & SERVICES — 32.10%
Aetna Inc.		803		94,047
Anthem Inc.		636		79,551
Cardinal Health Inc.		968		77,121
Centene Corp.a		1,075		73,412
Cigna Corp.		644		82,600
Henry Schein Inc.a		381		62,404
Humana Inc.		139		24,841
Laboratory Corp. of America Holdingsa		510		69,834
MEDNAX Inc.a		856		56,299
Patterson Companies Inc.		796		36,616
Quest Diagnostics Inc.		809		67,001

Security	Shares		Value
UnitedHealth Group Inc.		504	$	68,569
Universal Health Services Inc. Class B		470		56,649
				848,944
LIFE SCIENCES TOOLS & SERVICES — 8.03%
Agilent Technologies Inc.		1,472		69,154
Mettler-Toledo International Inc.a		166		66,910
Thermo Fisher Scientific Inc.		28		4,261
Waters Corp.a		458		72,048
				212,373
PHARMACEUTICALS — 28.66%
Allergan PLCa		145		34,008
Bristol-Myers Squibb Co.		842		48,323
Eli Lilly & Co.		247		19,204
Johnson & Johnson		2,150		256,581
Mallinckrodt PLCa		958		71,409
Merck & Co. Inc.		1,672		104,985
Mylan NVa		1,807		76,545
Pfizer Inc.		4,220		146,856
				757,911
TOTAL COMMON STOCKS
(Cost: $2,559,130)				2,643,781
TOTAL INVESTMENTS IN SECURITIES — 99.97%
(Cost: $2,559,130)b				2,643,781
Other Assets, Less Liabilities — 0.03%				743
NET ASSETS — 100.00%			$	2,644,524

^a  Non-income earning security.

^b  The cost of investments for federal income tax purposes was $2,559,543. Net unrealized appreciation was $84,238, of which $139,269 represented gross unrealized appreciation on securities and $55,031 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	2,643,781	$	—	$	—	$	2,643,781
Total	$	2,643,781	$	—	$	—	$	2,643,781

See notes to financial statements.

32 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® EDGE MSCI MULTIFACTOR INDUSTRIALS ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.57%
AEROSPACE & DEFENSE — 19.34%
Boeing Co. (The)		846	$	109,515
General Dynamics Corp.		24		3,653
Honeywell International Inc.		580		67,692
L-3 Communications Holdings Inc.		471		70,094
Lockheed Martin Corp.		173		42,034
Northrop Grumman Corp.		479		101,582
Raytheon Co.		34		4,764
Rockwell Collins Inc.		458		38,330
United Technologies Corp.		610		64,922
				502,586
AIR FREIGHT & LOGISTICS — 8.06%
CH Robinson Worldwide Inc.		882		61,229
Expeditors International of Washington Inc.		1,302		65,946
FedEx Corp.		183		30,182
United Parcel Service Inc. Class B		478		52,207
				209,564
AIRLINES — 6.66%
American Airlines Group Inc.		1,694		61,492
Southwest Airlines Co.		1,410		52,001
United Continental Holdings Inc.a		1,182		59,585
				173,078
BUILDING PRODUCTS — 2.72%
AO Smith Corp.		732		70,623
				70,623
COMMERCIAL SERVICES & SUPPLIES — 5.68%
Cintas Corp.		661		77,674
Republic Services Inc.		1,383		69,869
				147,543
CONSTRUCTION & ENGINEERING — 4.81%
Fluor Corp.		1,210		62,799
Jacobs Engineering Group Inc.a		1,182		62,280
				125,079
ELECTRICAL EQUIPMENT — 6.06%
Acuity Brands Inc.		263		72,356
Eaton Corp. PLC		178		11,844
Rockwell Automation Inc.		632		73,268
				157,468
INDUSTRIAL CONGLOMERATES — 17.33%
3M Co.		550		98,582
General Electric Co.		11,262		351,825
				450,407

Security	Shares		Value
MACHINERY — 16.15%
AGCO Corp.		931	$	45,191
Caterpillar Inc.		98		8,031
Cummins Inc.		680		85,415
Fortive Corp.		182		9,586
Snap-on Inc.		391		59,936
Stanley Black & Decker Inc.		652		80,685
Wabtec Corp./DE		769		58,913
Xylem Inc./NY		1,414		71,916
				419,673
PROFESSIONAL SERVICES — 7.11%
Equifax Inc.		575		75,843
ManpowerGroup Inc.		743		53,095
Robert Half International Inc.		1,458		55,885
				184,823
ROAD & RAIL — 5.65%
AMERCO		95		32,653
JB Hunt Transport Services Inc.		752		59,701
Union Pacific Corp.		572		54,643
				146,997
TOTAL COMMON STOCKS
(Cost: $2,511,852)				2,587,841
SHORT-TERM INVESTMENTS — 0.17%
MONEY MARKET FUNDS — 0.17%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%b,c		4,328		4,328
				4,328
TOTAL SHORT-TERM INVESTMENTS
(Cost: $4,328)				4,328
TOTAL INVESTMENTS IN SECURITIES — 99.74%
(Cost: $2,516,180)d				2,592,169
Other Assets, Less Liabilities — 0.26%				6,829
NET ASSETS — 100.00%			$	2,598,998

^a  Non-income earning security.

^b  Affiliated money market fund.

^c  The rate quoted is the annualized seven-day yield of the fund at period end.

^d  The cost of investments for federal income tax purposes was $2,517,630. Net unrealized appreciation was $74,539, of which $113,365 represented gross unrealized appreciation on securities and $38,826 represented gross unrealized depreciation on securities.

SCHEDULES OF INVESTMENTS 33

Schedule of Investments (Continued)

iSHARES^® EDGE MSCI MULTIFACTOR INDUSTRIALS ETF

August 31, 2016

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	2,587,841	$	—	$	—	$	2,587,841
Money market funds		4,328		—		—		4,328
Total	$	2,592,169	$	—	$	—	$	2,592,169

See notes to financial statements.

34 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® EDGE MSCI MULTIFACTOR MATERIALS ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.67%
CHEMICALS — 68.71%
Air Products & Chemicals Inc.		559	$	86,992
Albemarle Corp.		1,161		92,845
Celanese Corp. Series A		1,377		88,720
Dow Chemical Co. (The)		6,000		321,840
Eastman Chemical Co.		1,356		92,059
Ecolab Inc.		748		92,041
EI du Pont de Nemours & Co.		3,115		216,804
LyondellBasell Industries NV Class A		2,230		175,925
Monsanto Co.		1,452		154,638
Mosaic Co. (The)		3,422		102,900
PPG Industries Inc.		716		75,810
Praxair Inc.		813		99,218
Sherwin-Williams Co. (The)		525		148,948
Valspar Corp. (The)		804		84,750
				1,833,490
CONSTRUCTION MATERIALS — 3.99%
Martin Marietta Materials Inc.		487		89,136
Vulcan Materials Co.		153		17,422
				106,558
CONTAINERS & PACKAGING — 16.52%
Avery Dennison Corp.		1,070		82,861
International Paper Co.		2,968		143,918
Packaging Corp. of America		1,201		94,435
WestRock Co.		2,495		119,510
				440,724

Security	Shares		Value
METALS & MINING — 10.45%
Alcoa Inc.		360	$	3,629
Freeport-McMoRan Inc.		730		7,511
Newmont Mining Corp.		3,841		146,880
Nucor Corp.		2,492		120,887
				278,907
TOTAL COMMON STOCKS
(Cost: $2,520,155)				2,659,679
SHORT-TERM INVESTMENTS — 0.10%
MONEY MARKET FUNDS — 0.10%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%a,b		2,596		2,596
				2,596
TOTAL SHORT-TERM INVESTMENTS
(Cost: $2,596)				2,596
TOTAL INVESTMENTS IN SECURITIES — 99.77%
(Cost: $2,522,751)c				2,662,275
Other Assets, Less Liabilities — 0.23%				6,241
NET ASSETS — 100.00%			$	2,668,516

^a  Affiliated money market fund.

^b  The rate quoted is the annualized seven-day yield of the fund at period end.

^c  The cost of investments for federal income tax purposes was $2,524,144. Net unrealized appreciation was $138,131, of which $174,592 represented gross unrealized appreciation on securities and $36,461 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	2,659,679	$	—	$	—	$	2,659,679
Money market funds		2,596		—		—		2,596
Total	$	2,662,275	$	—	$	—	$	2,662,275

See notes to financial statements.

SCHEDULES OF INVESTMENTS 35

Schedule of Investments

iSHARES^® EDGE MSCI MULTIFACTOR TECHNOLOGY ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.69%
COMMUNICATIONS EQUIPMENT — 5.53%
Cisco Systems Inc.		1,578	$	49,613
F5 Networks Inc.a		455		55,842
Juniper Networks Inc.		2,350		54,238
				159,693
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 8.49%
Arrow Electronics Inc.a,b		622		40,946
Avnet Inc.		873		36,387
Corning Inc.		3,319		75,308
Flextronics International Ltd.a		3,694		48,909
FLIR Systems Inc.		944		29,103
Trimble Navigation Ltd.a		540		14,796
				245,449
INTERNET SOFTWARE & SERVICES — 12.10%
Alphabet Inc. Class Aa		128		101,101
Alphabet Inc. Class Ca		138		105,853
Facebook Inc. Class Aa		1,133		142,894
				349,848
IT SERVICES — 17.60%
Accenture PLC Class A		864		99,360
Broadridge Financial Solutions Inc.		804		55,717
International Business Machines Corp.		271		43,056
MasterCard Inc. Class A		129		12,465
Paychex Inc.		1,201		72,865
Total System Services Inc.		1,066		52,501
Visa Inc. Class A		638		51,614
Western Union Co. (The)		2,962		63,742
Xerox Corp.		5,821		57,337
				508,657
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 15.46%
Intel Corp.		1,500		53,835
KLA-Tencor Corp.		26		1,801
Lam Research Corp.		804		75,029
Linear Technology Corp.		1,296		75,479
Marvell Technology Group Ltd.		3,005		37,262
NVIDIA Corp.		1,517		93,053
Qorvo Inc.a		657		37,731
QUALCOMM Inc.		52		3,280
Skyworks Solutions Inc.		929		69,545
				447,015

Security	Shares		Value
SOFTWARE — 23.20%
ANSYS Inc.a		230	$	21,871
CA Inc.		1,846		62,598
Cadence Design Systems Inc.a		2,040		51,897
Citrix Systems Inc.a		324		28,253
Intuit Inc.		666		74,226
Microsoft Corp.		4,067		233,690
Nuance Communications Inc.a		1,706		24,873
Oracle Corp.		827		34,089
Symantec Corp.		3,236		78,085
Synopsys Inc.a		1,032		61,187
				670,769
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 17.31%
Apple Inc.		3,189		338,353
Hewlett Packard Enterprise Co.		4,370		93,867
NetApp Inc.		1,969		68,108
				500,328
TOTAL COMMON STOCKS
(Cost: $2,568,543)				2,881,759
SHORT-TERM INVESTMENTS — 1.65%
MONEY MARKET FUNDS — 1.65%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.65%c,d,e		41,616		41,616
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%c,d		6,136		6,136
				47,752
TOTAL SHORT-TERM INVESTMENTS
(Cost: $47,752)				47,752

36 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® EDGE MSCI MULTIFACTOR TECHNOLOGY ETF

August 31, 2016

	Value
TOTAL INVESTMENTS IN SECURITIES — 101.34%
(Cost: $2,616,295)f	$	2,929,511
Other Assets, Less Liabilities — (1.34)%		(38,716	)
NET ASSETS — 100.00%	$	2,890,795

^a  Non-income earning security.

^b  All or a portion of this security represents a security on loan. See Note 1.

^c  Affiliated money market fund.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

^e  All or a portion of this security represents an investment of securities lending collateral. See Note 1.

^f  The cost of investments for federal income tax purposes was $2,616,305. Net unrealized appreciation was $313,206, of which $323,778 represented gross unrealized appreciation on securities and $10,572 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	2,881,759	$	—	$	—	$	2,881,759
Money market funds		47,752		—		—		47,752
Total	$	2,929,511	$	—	$	—	$	2,929,511

See notes to financial statements.

SCHEDULES OF INVESTMENTS 37

Schedule of Investments

iSHARES^® EDGE MSCI MULTIFACTOR UTILITIES ETF

August 31, 2016

Security	Shares		Value
COMMON STOCKS — 99.51%
ELECTRIC UTILITIES — 63.73%
Alliant Energy Corp.		2,254	$	85,539
American Electric Power Co. Inc.		1,502		96,984
Duke Energy Corp.		2,022		161,073
Edison International		1,970		143,259
Entergy Corp.		1,360		106,352
Eversource Energy		336		18,134
Exelon Corp.		5,008		170,272
FirstEnergy Corp.		3,178		104,016
NextEra Energy Inc.		1,364		164,962
OGE Energy Corp.		2,392		74,463
PG&E Corp.		1,052		65,161
Pinnacle West Capital Corp.		1,124		84,345
PPL Corp.		1,310		45,562
Southern Co. (The)		2,583		132,585
Westar Energy Inc.		1,063		58,401
Xcel Energy Inc.		2,526		104,475
				1,615,583
GAS UTILITIES — 6.44%
Atmos Energy Corp.		1,086		80,038
UGI Corp.		1,832		83,319
				163,357
MULTI-UTILITIES — 29.29%
Ameren Corp.		1,978		97,753
Consolidated Edison Inc.		1,877		141,244
Dominion Resources Inc./VA		1,661		123,180
DTE Energy Co.		138		12,820
NiSource Inc.		3,354		80,295
Public Service Enterprise Group Inc.		3,062		130,931

Security	Shares		Value
SCANA Corp.		1,245	$	87,959
Sempra Energy		438		45,828
WEC Energy Group Inc.		378		22,635
				742,645
WATER UTILITIES — 0.05%
American Water Works Co. Inc.		16		1,184
				1,184
TOTAL COMMON STOCKS
(Cost: $2,515,518)				2,522,769
SHORT-TERM INVESTMENTS — 0.15%
MONEY MARKET FUNDS — 0.15%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.27%a,b		3,777		3,777
				3,777
TOTAL SHORT-TERM INVESTMENTS
(Cost: $3,777)				3,777
TOTAL INVESTMENTS IN SECURITIES — 99.66%
(Cost: $2,519,295)c				2,526,546
Other Assets, Less Liabilities — 0.34%				8,641
NET ASSETS — 100.00%			$	2,535,187

^a  Affiliated money market fund.

^b  The rate quoted is the annualized seven-day yield of the fund at period end.

^c  The cost of investments for federal income tax purposes was $2,519,727. Net unrealized appreciation was $6,819, of which $33,940 represented gross unrealized appreciation on securities and $27,121 represented gross unrealized depreciation on securities.

Schedule 1 — Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of August 31, 2016. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.

	Level 1		Level 2		Level 3		Total
Investments:
Assets:
Common stocks	$	2,522,769	$	—	$	—	$	2,522,769
Money market funds		3,777		—		—		3,777
Total	$	2,526,546	$	—	$	—	$	2,526,546

See notes to financial statements.

38 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities

iSHARES^® TRUST

August 31, 2016

	iShares Edge MSCI Multifactor Consumer Discretionary ETF			iShares Edge MSCI Multifactor Consumer Staples ETF			iShares Edge MSCI Multifactor Energy ETF
ASSETS
Investments, at cost:
Unaffiliated	$	2,516,588		$	2,537,286		$	2,491,800
Affiliated (Note 2)		10,425			4,662			12,322
Total cost of investments	$	2,527,013		$	2,541,948		$	2,504,122
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated	$	2,598,338		$	2,552,075		$	2,521,241
Affiliated (Note 2)		10,425			4,662			12,322
Total fair value of investments		2,608,763			2,556,737			2,533,563
Receivables:
Investment securities sold		12,023			40,775			21,005
Dividends and interest		4,651			4,932			17,667
Total Assets		2,625,437			2,602,444			2,572,235
LIABILITIES
Payables:
Investment securities purchased		11,783			44,397			19,488
Collateral for securities on loan (Note 1)		9,028			—			11,330
Investment advisory fees (Note 2)		770			762			756
Total Liabilities		21,581			45,159			31,574
NET ASSETS	$	2,603,856		$	2,557,285		$	2,540,661
Net assets consist of:
Paid-in capital	$	2,526,438		$	2,536,958		$	2,503,368
Undistributed net investment income		6,848			10,281			16,034
Accumulated net realized loss		(11,180	)		(4,743	)		(8,182	)
Net unrealized appreciation		81,750			14,789			29,441
NET ASSETS	$	2,603,856		$	2,557,285		$	2,540,661
Shares outstandingb		100,000			100,000			100,000
Net asset value per share	$	26.04		$	25.57		$	25.41

^a  Securities on loan with values of $8,806, $  — and $10,551, respectively. See Note 1.

^b  No par value, unlimited number of shares authorized.

See notes to financial statements.

FINANCIAL STATEMENTS 39

Statements of Assets and Liabilities (Continued)

iSHARES^® TRUST

August 31, 2016

	iShares Edge MSCI Multifactor Financials ETF		iShares Edge MSCI Multifactor Healthcare ETF		iShares Edge MSCI Multifactor Industrials ETF
ASSETS
Investments, at cost:
Unaffiliated	$	2,545,624	$	2,559,130	$	2,511,852
Affiliated (Note 2)		2,187		—		4,328
Total cost of investments	$	2,547,811	$	2,559,130	$	2,516,180
Investments in securities, at fair value (Note 1):
Unaffiliated	$	2,670,446	$	2,643,781	$	2,587,841
Affiliated (Note 2)		2,187		—		4,328
Total fair value of investments		2,672,633		2,643,781		2,592,169
Cash		—		894		—
Receivables:
Investment securities sold		168,912		9,864		12,849
Dividends and interest		4,029		3,882		7,381
Total Assets		2,845,574		2,658,421		2,612,399
LIABILITIES
Payables:
Investment securities purchased		171,277		10,290		12,633
Due to custodian		—		2,808		—
Investment advisory fees (Note 2)		773		799		768
Total Liabilities		172,050		13,897		13,401
NET ASSETS	$	2,673,524	$	2,644,524	$	2,598,998
Net assets consist of:
Paid-in capital	$	2,533,479	$	2,541,255	$	2,533,796
Undistributed net investment income		7,699		4,414		7,196
Undistributed net realized gain (accumulated net realized loss)		7,524		14,204		(17,983	)
Net unrealized appreciation		124,822		84,651		75,989
NET ASSETS	$	2,673,524	$	2,644,524	$	2,598,998
Shares outstandinga		100,000		100,000		100,000
Net asset value per share	$	26.74	$	26.45	$	25.99

^a  No par value, unlimited number of shares authorized.

See notes to financial statements.

40 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Continued)

iSHARES^® TRUST

August 31, 2016

	iShares Edge MSCI Multifactor Materials ETF			iShares Edge MSCI Multifactor Technology ETF		iShares Edge MSCI Multifactor Utilities ETF
ASSETS
Investments, at cost:
Unaffiliated	$	2,520,155		$	2,568,543	$	2,515,518
Affiliated (Note 2)		2,596			47,752		3,777
Total cost of investments	$	2,522,751		$	2,616,295	$	2,519,295
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated	$	2,659,679		$	2,881,759	$	2,522,769
Affiliated (Note 2)		2,596			47,752		3,777
Total fair value of investments		2,662,275			2,929,511		2,526,546
Receivables:
Investment securities sold		7,311			13,098		6,264
Dividends and interest		5,641			4,060		12,798
Total Assets		2,675,227			2,946,669		2,545,608
LIABILITIES
Payables:
Investment securities purchased		5,919			13,409		9,652
Collateral for securities on loan (Note 1)		—			41,616		—
Investment advisory fees (Note 2)		792			849		769
Total Liabilities		6,711			55,874		10,421
NET ASSETS	$	2,668,516		$	2,890,795	$	2,535,187
Net assets consist of:
Paid-in capital	$	2,526,402		$	2,531,926	$	2,512,508
Undistributed net investment income		10,141			6,817		14,568
Undistributed net realized gain (accumulated net realized loss)		(7,551	)		38,836		860
Net unrealized appreciation		139,524			313,216		7,251
NET ASSETS	$	2,668,516		$	2,890,795	$	2,535,187
Shares outstandingb		100,000			100,000		100,000
Net asset value per share	$	26.69		$	28.91	$	25.35

^a  Securities on loan with values of $  —, $40,288 and $  —, respectively. See Note 1.

^b  No par value, unlimited number of shares authorized.

See notes to financial statements.

FINANCIAL STATEMENTS 41

Statements of Operations

iSHARES^® TRUST

Period ended August 31, 2016

	iShares Edge MSCI Multifactor Consumer Discretionary ETFa			iShares Edge MSCI Multifactor Consumer Staples ETFa			iShares Edge MSCI Multifactor Energy ETFa
NET INVESTMENT INCOME
Dividends — unaffiliated	$	16,753		$	19,971		$	35,798
Dividends — affiliated (Note 2)		3			5			3
Securities lending income — affiliated — net (Note 2)		10			—			—
Total investment income		16,766			19,976			35,801
EXPENSES
Investment advisory fees (Note 2)		2,711			2,752			2,751
Total expenses		2,711			2,752			2,751
Net investment income		14,055			17,224			33,050
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		(11,180	)		(4,743	)		(8,182	)
Net realized loss		(11,180	)		(4,743	)		(8,182	)
Net change in unrealized appreciation/depreciation		81,750			14,789			29,441
Net realized and unrealized gain		70,570			10,046			21,259
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	84,625		$	27,270		$	54,309

^a  For the period from May 10, 2016 (commencement of operations) to August 31, 2016.

See notes to financial statements.

42 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Continued)

iSHARES^® TRUST

Period ended August 31, 2016

	iShares Edge MSCI Multifactor Financials ETFa		iShares Edge MSCI Multifactor Healthcare ETFa		iShares Edge MSCI Multifactor Industrials ETFa
NET INVESTMENT INCOME
Dividends — unaffiliated	$	16,707	$	12,095	$	20,713
Dividends — affiliated (Note 2)		2		2		3
Securities lending income — affiliated — net (Note 2)		5		3		184
Total investment income		16,714		12,100		20,900
EXPENSES
Investment advisory fees (Note 2)		2,765		2,839		2,746
Total expenses		2,765		2,839		2,746
Net investment income		13,949		9,261		18,154
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		7,524		14,204		(17,983	)
Net realized gain (loss)		7,524		14,204		(17,983	)
Net change in unrealized appreciation/depreciation		124,822		84,651		75,989
Net realized and unrealized gain		132,346		98,855		58,006
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	146,295	$	108,116	$	76,160

^a  For the period from May 10, 2016 (commencement of operations) to August 31, 2016.

See notes to financial statements.

FINANCIAL STATEMENTS 43

Statements of Operations (Continued)

iSHARES^® TRUST

Period ended August 31, 2016

	iShares Edge MSCI Multifactor Materials ETFa			iShares Edge MSCI Multifactor Technology ETFa		iShares Edge MSCI Multifactor Utilities ETFa
NET INVESTMENT INCOME
Dividends — unaffiliated	$	21,200		$	13,478	$	30,427
Dividends — affiliated (Note 2)		3			3		3
Securities lending income — affiliated — net (Note 2)		—			3		—
Total investment income		21,203			13,484		30,430
EXPENSES
Investment advisory fees (Note 2)		2,817			2,922		2,804
Total expenses		2,817			2,922		2,804
Net investment income		18,386			10,562		27,626
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		(7,551	)		38,836		860
Net realized gain (loss)		(7,551	)		38,836		860
Net change in unrealized appreciation/depreciation		139,524			313,216		7,251
Net realized and unrealized gain		131,973			352,052		8,111
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	150,359		$	362,614	$	35,737

^a  For the period from May 10, 2016 (commencement of operations) to August 31, 2016.

See notes to financial statements.

44 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets

iSHARES^® TRUST

	iShares Edge MSCI  Multifactor Consumer Discretionary ETF			iShares Edge MSCI Multifactor Consumer Staples ETF
	Period from May 10, 2016a to August 31, 2016			Period from May 10, 2016a to August 31, 2016
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	14,055		$	17,224
Net realized loss		(11,180	)		(4,743	)
Net change in unrealized appreciation/depreciation		81,750			14,789
Net increase in net assets resulting from operations		84,625			27,270
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(7,207	)		(6,943	)
Total distributions to shareholders		(7,207	)		(6,943	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		2,526,438			2,536,958
Net increase in net assets from capital share transactions		2,526,438			2,536,958
INCREASE IN NET ASSETS		2,603,856			2,557,285
NET ASSETS
Beginning of period		—			—
End of period	$	2,603,856		$	2,557,285
Undistributed net investment income included in net assets at end of period	$	6,848		$	10,281
SHARES ISSUED
Shares sold		100,000			100,000
Net increase in shares outstanding		100,000			100,000

^a  Commencement of operations.

See notes to financial statements.

FINANCIAL STATEMENTS 45

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares Edge MSCI Multifactor Energy ETF			iShares Edge MSCI Multifactor Financials ETF
	Period from May 10, 2016a to August 31, 2016			Period from May 10, 2016a to August 31, 2016
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	33,050		$	13,949
Net realized gain (loss)		(8,182	)		7,524
Net change in unrealized appreciation/depreciation		29,441			124,822
Net increase in net assets resulting from operations		54,309			146,295
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(17,016	)		(6,250	)
Total distributions to shareholders		(17,016	)		(6,250	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		2,503,368			2,533,479
Net increase in net assets from capital share transactions		2,503,368			2,533,479
INCREASE IN NET ASSETS		2,540,661			2,673,524
NET ASSETS
Beginning of period		—			—
End of period	$	2,540,661		$	2,673,524
Undistributed net investment income included in net assets at end of period	$	16,034		$	7,699
SHARES ISSUED
Shares sold		100,000			100,000
Net increase in shares outstanding		100,000			100,000

^a  Commencement of operations.

See notes to financial statements.

46 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares Edge MSCI Multifactor Healthcare ETF			iShares Edge MSCI Multifactor Industrials ETF
	Period from May 10, 2016a to August 31, 2016			Period from May 10, 2016a to August 31, 2016
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	9,261		$	18,154
Net realized gain (loss)		14,204			(17,983	)
Net change in unrealized appreciation/depreciation		84,651			75,989
Net increase in net assets resulting from operations		108,116			76,160
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(4,847	)		(10,958	)
Total distributions to shareholders		(4,847	)		(10,958	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		2,541,255			2,533,796
Net increase in net assets from capital share transactions		2,541,255			2,533,796
INCREASE IN NET ASSETS		2,644,524			2,598,998
NET ASSETS
Beginning of period		—			—
End of period	$	2,644,524		$	2,598,998
Undistributed net investment income included in net assets at end of period	$	4,414		$	7,196
SHARES ISSUED
Shares sold		100,000			100,000
Net increase in shares outstanding		100,000			100,000

^a  Commencement of operations.

See notes to financial statements.

FINANCIAL STATEMENTS 47

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares Edge MSCI Multifactor Materials ETF			iShares Edge MSCI Multifactor Technology ETF
	Period from May 10, 2016a to August 31, 2016			Period from May 10, 2016a to August 31, 2016
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	18,386		$	10,562
Net realized gain (loss)		(7,551	)		38,836
Net change in unrealized appreciation/depreciation		139,524			313,216
Net increase in net assets resulting from operations		150,359			362,614
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(8,245	)		(3,745	)
Total distributions to shareholders		(8,245	)		(3,745	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		2,526,402			2,531,926
Net increase in net assets from capital share transactions		2,526,402			2,531,926
INCREASE IN NET ASSETS		2,668,516			2,890,795
NET ASSETS
Beginning of period		—			—
End of period	$	2,668,516		$	2,890,795
Undistributed net investment income included in net assets at end of period	$	10,141		$	6,817
SHARES ISSUED
Shares sold		100,000			100,000
Net increase in shares outstanding		100,000			100,000

^a  Commencement of operations.

See notes to financial statements.

48 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST

	iShares Edge MSCI Multifactor Utilities ETF
	Period from May 10, 2016a to August 31, 2016
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	27,626
Net realized gain		860
Net change in unrealized appreciation/depreciation		7,251
Net increase in net assets resulting from operations		35,737
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(13,058	)
Total distributions to shareholders		(13,058	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		2,512,508
Net increase in net assets from capital share transactions		2,512,508
INCREASE IN NET ASSETS		2,535,187
NET ASSETS
Beginning of period		—
End of period	$	2,535,187
Undistributed net investment income included in net assets at end of period	$	14,568
SHARES ISSUED
Shares sold		100,000
Net increase in shares outstanding		100,000

^a  Commencement of operations.

See notes to financial statements.

FINANCIAL STATEMENTS 49

Financial Highlights

iSHARES^® TRUST

(For a share outstanding throughout the period)

iShares Edge MSCI Multifactor Consumer Discretionary ETF

	Period from May 10, 2016a to Aug. 31, 2016
Net asset value, beginning of period	$	25.26
Income from investment operations:
Net investment incomeb		0.14
Net realized and unrealized gainc		0.71
Total from investment operations		0.85
Less distributions from:
Net investment income		(0.07	)
Total distributions		(0.07	)
Net asset value, end of period	$	26.04
Total return		3.39	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	2,604
Ratio of expenses to average net assetse		0.35	%
Ratio of net investment income to average net assetse		1.81	%
Portfolio turnover ratef		22	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout the period.

^c  The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

50 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout the period)

iShares Edge MSCI Multifactor Consumer Staples ETF

	Period from May 10, 2016a to Aug. 31, 2016
Net asset value, beginning of period	$	25.37
Income from investment operations:
Net investment incomeb		0.17
Net realized and unrealized gainc		0.10
Total from investment operations		0.27
Less distributions from:
Net investment income		(0.07	)
Total distributions		(0.07	)
Net asset value, end of period	$	25.57
Total return		1.07	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	2,557
Ratio of expenses to average net assetse		0.35	%
Ratio of net investment income to average net assetse		2.19	%
Portfolio turnover ratef		18	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout the period.

^c  The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 51

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout the period)

iShares Edge MSCI Multifactor Energy ETF

	Period from May 10, 2016a to Aug. 31, 2016
Net asset value, beginning of period	$	25.03
Income from investment operations:
Net investment incomeb		0.33
Net realized and unrealized gainc		0.22
Total from investment operations		0.55
Less distributions from:
Net investment income		(0.17	)
Total distributions		(0.17	)
Net asset value, end of period	$	25.41
Total return		2.19	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	2,541
Ratio of expenses to average net assetse		0.35	%
Ratio of net investment income to average net assetse		4.20	%
Portfolio turnover ratef		29	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout the period.

^c  The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

52 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout the period)

iShares Edge MSCI Multifactor Financials ETF

	Period from May 10, 2016a to Aug. 31, 2016
Net asset value, beginning of period	$	25.33
Income from investment operations:
Net investment incomeb		0.14
Net realized and unrealized gainc		1.33
Total from investment operations		1.47
Less distributions from:
Net investment income		(0.06	)
Total distributions		(0.06	)
Net asset value, end of period	$	26.74
Total return		5.83	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	2,674
Ratio of expenses to average net assetse		0.35	%
Ratio of net investment income to average net assetse		1.77	%
Portfolio turnover ratef		28	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout the period.

^c  The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 53

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout the period)

iShares Edge MSCI Multifactor Healthcare ETF

	Period from May 10, 2016a to Aug. 31, 2016
Net asset value, beginning of period	$	25.41
Income from investment operations:
Net investment incomeb		0.09
Net realized and unrealized gainc		1.00
Total from investment operations		1.09
Less distributions from:
Net investment income		(0.05	)
Total distributions		(0.05	)
Net asset value, end of period	$	26.45
Total return		4.29	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	2,645
Ratio of expenses to average net assetse		0.35	%
Ratio of net investment income to average net assetse		1.14	%
Portfolio turnover ratef		20	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout the period.

^c  The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

54 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout the period)

iShares Edge MSCI Multifactor Industrials ETF

	Period from May 10, 2016a to Aug. 31, 2016
Net asset value, beginning of period	$	25.34
Income from investment operations:
Net investment incomeb		0.18
Net realized and unrealized gainc		0.58
Total from investment operations		0.76
Less distributions from:
Net investment income		(0.11	)
Total distributions		(0.11	)
Net asset value, end of period	$	25.99
Total return		3.01	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	2,599
Ratio of expenses to average net assetse		0.35	%
Ratio of net investment income to average net assetse		2.31	%
Portfolio turnover ratef		26	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout the period.

^c  The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 55

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout the period)

iShares Edge MSCI Multifactor Materials ETF

	Period from May 10, 2016a to Aug. 31, 2016
Net asset value, beginning of period	$	25.26
Income from investment operations:
Net investment incomeb		0.18
Net realized and unrealized gainc		1.33
Total from investment operations		1.51
Less distributions from:
Net investment income		(0.08	)
Total distributions		(0.08	)
Net asset value, end of period	$	26.69
Total return		6.00	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	2,669
Ratio of expenses to average net assetse		0.35	%
Ratio of net investment income to average net assetse		2.28	%
Portfolio turnover ratef		26	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout the period.

^c  The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

56 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout the period)

iShares Edge MSCI Multifactor Technology ETF

	Period from May 10, 2016a to Aug. 31, 2016
Net asset value, beginning of period	$	25.32
Income from investment operations:
Net investment incomeb		0.11
Net realized and unrealized gainc		3.52
Total from investment operations		3.63
Less distributions from:
Net investment income		(0.04	)
Total distributions		(0.04	)
Net asset value, end of period	$	28.91
Total return		14.34	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	2,891
Ratio of expenses to average net assetse		0.35	%
Ratio of net investment income to average net assetse		1.27	%
Portfolio turnover ratef		20	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout the period.

^c  The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 57

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout the period)

iShares Edge MSCI Multifactor Utilities ETF

	Period from May 10, 2016a to Aug. 31, 2016
Net asset value, beginning of period	$	25.13
Income from investment operations:
Net investment incomeb		0.28
Net realized and unrealized gainc		0.07
Total from investment operations		0.35
Less distributions from:
Net investment income		(0.13	)
Total distributions		(0.13	)
Net asset value, end of period	$	25.35
Total return		1.39	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	2,535
Ratio of expenses to average net assetse		0.35	%
Ratio of net investment income to average net assetse		3.45	%
Portfolio turnover ratef		21	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout the period.

^c  The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

58 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements

iSHARES^® TRUST

iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999.

These financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):

iShares ETF	Diversification Classification
Edge MSCI Multifactor Consumer Discretionarya		Non-diversified
Edge MSCI Multifactor Consumer Staplesa		Non-diversified
Edge MSCI Multifactor Energya		Non-diversified
Edge MSCI Multifactor Financialsa		Non-diversified

iShares ETF	Diversification Classification
Edge MSCI Multifactor Healthcarea		Non-diversified
Edge MSCI Multifactor Industrialsa		Non-diversified
Edge MSCI Multifactor Materialsa		Non-diversified
Edge MSCI Multifactor Technologya		Non-diversified
Edge MSCI Multifactor Utilitiesa		Non-diversified

^a  The Fund commenced operations on May 10, 2016.

The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.

Pursuant to the Trust’s organizational documents, the Funds’ officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.

SECURITY VALUATION

Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Trustees of the Trust (the “Board”).

• Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price.

• Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”).

NOTES TO FINANCIAL STATEMENTS 59

Notes to Financial Statements (Continued)

iSHARES^® TRUST

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such factors are reported to the Board on a quarterly basis.

The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Trust’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements in market values, and reviews of market related activity.

Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.

Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and is not necessarily an indication of the risk associated with investing in the instrument. The three levels of the fair value hierarchy are as follows:

• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and

• Level 3 — Unobservable inputs for the asset or liability, including the Global Valuation Committee’s assumptions used in determining the fair value of investments.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of August 31, 2016 are reflected in tax reclaims receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified

60 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

to capital gains. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.

DISTRIBUTIONS TO SHAREHOLDERS

Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.

LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Funds. Any additional required collateral is delivered to the Funds and any excess collateral is returned by the Funds on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

On July 23, 2014, the U.S. Securities and Exchange Commission (the “SEC”) adopted amendments to Rule 2a-7 under the 1940 Act, which governs the operations of U.S. money market funds. When implemented in October 2016, the change may affect the Funds with regard to the reinvestment of cash collateral received for securities on loan. The Funds may be exposed to additional risk from reinvesting the cash collateral in money market funds that do not maintain a fixed NAV per share of $1.00.

Any cash received as collateral for securities on loan may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates. As of August 31, 2016, any securities on loan were collateralized by cash and/or U.S. government obligations. Cash collateral received was invested in money market funds managed by BFA and is disclosed in the schedules of investments. The securities on loan for each Fund are also disclosed in its schedule of investments. The total value of any securities on loan as of August 31, 2016 and the total value of the related collateral are disclosed in the statements of assets and liabilities. Income earned by the Funds from securities lending is disclosed in the statements of operations.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities lent. Each Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.

Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (“MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, a Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, the

NOTES TO FINANCIAL STATEMENTS 61

Notes to Financial Statements (Continued)

iSHARES^® TRUST

borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.

The following table is a summary of securities lending agreements which are subject to offset under an MSLA as of August 31, 2016:

iShares ETF and Counterparty	Market Value of Securities on Loan		Cash Collateral Received  a		Net Amount
Edge MSCI Multifactor Consumer Discretionary
JPMorgan Clearing Corp.	$	8,806	$	8,806	$	—
Edge MSCI Multifactor Energy
JPMorgan Clearing Corp.	$	10,551	$	10,551	$	—
Edge MSCI Multifactor Technology
JPMorgan Clearing Corp.	$	40,288	$	40,288	$	—

^a  Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s statement of assets and liabilities.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Agreement with the Trust, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.

For its investment advisory services to each Fund, BFA is entitled to an annual investment advisory fee of 0.35% based on the average daily net assets of each Fund.

The SEC has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by BFA, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the “collateral investment fees”). Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Funds retain a portion of securities lending income and remit the remaining portion to BTC as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, each Fund retains 71.5% of securities lending income and the amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in a given calendar year exceeds the aggregate securities lending income generated across the iShares ETF Complex in the calendar year 2013, each Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 75% of securities lending income and the amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees.

62 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

For the period ended August 31, 2016, the total of securities lending agent services and collateral investment fees paid were as follows:

iShares ETF	Fees Paid to BTC
Edge MSCI Multifactor Consumer Discretionary	$	6
Edge MSCI Multifactor Financials		3
Edge MSCI Multifactor Healthcare		1
Edge MSCI Multifactor Industrials		74
Edge MSCI Multifactor Technology		1

BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.

Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.

For the period ended August 31, 2016, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:

iShares ETF	Purchases		Sales
Edge MSCI Multifactor Consumer Discretionary	$	3,637	$	268
Edge MSCI Multifactor Consumer Staples		3,646		1,381
Edge MSCI Multifactor Energy		6,306		871
Edge MSCI Multifactor Financials		37,305		52,480
Edge MSCI Multifactor Healthcare		534		3,112
Edge MSCI Multifactor Industrials		3,586		843
Edge MSCI Multifactor Materials		—		2,573
Edge MSCI Multifactor Technology		1,574		849
Edge MSCI Multifactor Utilities		1,129		1,774

Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends – affiliated” in the statements of operations.

The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.

Certain trustees and officers of the Trust are also officers of BTC and/or BFA.

NOTES TO FINANCIAL STATEMENTS 63

Notes to Financial Statements (Continued)

iSHARES^® TRUST

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the period ended August 31, 2016 were as follows:

iShares ETF	Purchases		Sales
Edge MSCI Multifactor Consumer Discretionary	$	565,295	$	560,215
Edge MSCI Multifactor Consumer Staples		469,631		443,672
Edge MSCI Multifactor Energy		738,048		737,684
Edge MSCI Multifactor Financials		783,798		710,034
Edge MSCI Multifactor Healthcare		528,064		520,642
Edge MSCI Multifactor Industrials		650,620		650,831
Edge MSCI Multifactor Materials		686,586		681,533
Edge MSCI Multifactor Technology		544,183		542,652
Edge MSCI Multifactor Utilities		549,858		543,959

In-kind transactions (see Note 4) for the period ended August 31, 2016 were as follows:

iShares ETF	In-kind Purchases		In-kind Sales
Edge MSCI Multifactor Consumer Discretionary	$	2,522,688	$	—
Edge MSCI Multifactor Consumer Staples		2,533,208		—
Edge MSCI Multifactor Energy		2,499,618		—
Edge MSCI Multifactor Financials		2,464,335		—
Edge MSCI Multifactor Healthcare		2,537,505		—
Edge MSCI Multifactor Industrials		2,530,046		—
Edge MSCI Multifactor Materials		2,522,652		—
Edge MSCI Multifactor Technology		2,528,176		—
Edge MSCI Multifactor Utilities		2,508,758		—

4. CAPITAL SHARE TRANSACTIONS

Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the statements of changes in net assets.

The consideration for the purchase of Creation Units of a fund in the Trust generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Trust may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Trust’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Proceeds from shares sold” in the statements of changes in net assets.

64 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

5. PRINCIPAL RISKS

In the normal course of business, each Fund’s investment activities expose it to various types of risk associated with the financial instruments and markets in which it invests. The significant types of financial risks each Fund is exposed to include market risk and credit risk. Each Fund’s prospectus provides details of these and other types of risk.

BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.

MARKET RISK

Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss each Fund may suffer through holding market positions in the face of market movements. Each Fund is exposed to market risk by virtue of its direct and/or indirect investment in equity instruments. The fair value of securities held by the Funds may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of each Fund’s exposure to market risk is the market value of the investments held as shown in the Fund’s schedule of investments.

A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its schedule of investments.

When a fund concentrates its investments in securities within a single or limited number of market sectors, it assumes the risk that economic, political and social conditions affecting those market sectors may have a significant impact on its investment performance.

CREDIT RISK

Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of each Fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its statement of assets and liabilities.

6. INCOME TAX INFORMATION

Each Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.

NOTES TO FINANCIAL STATEMENTS 65

Notes to Financial Statements (Continued)

iSHARES^® TRUST

The tax character of distributions paid during the period ended August 31, 2016 was as follows:

iShares ETF	2016
Edge MSCI Multifactor Consumer Discretionary
Ordinary income	$	7,207
Edge MSCI Multifactor Consumer Staples
Ordinary income	$	6,943
Edge MSCI Multifactor Energy
Ordinary income	$	17,016
Edge MSCI Multifactor Financials
Ordinary income	$	6,250
Edge MSCI Multifactor Healthcare
Ordinary income	$	4,847
Edge MSCI Multifactor Industrials
Ordinary income	$	10,958
Edge MSCI Multifactor Materials
Ordinary income	$	8,245
Edge MSCI Multifactor Technology
Ordinary income	$	3,745
Edge MSCI Multifactor Utilities
Ordinary income	$	13,058

As of August 31, 2016, the tax components of accumulated net earnings (losses) were as follows:

iShares ETF	Undistributed Ordinary Income		Capital Loss Carryforwards			Net Unrealized Gains (Losses) a		Total
Edge MSCI Multifactor Consumer Discretionary	$	6,848	$	(6,047	)	$	76,617	$	77,418
Edge MSCI Multifactor Consumer Staples		10,281		(2,186	)		12,232		20,327
Edge MSCI Multifactor Energy		16,034		(3,748	)		25,007		37,293
Edge MSCI Multifactor Financials		15,791		—			124,254		140,045
Edge MSCI Multifactor Healthcare		19,031		—			84,238		103,269
Edge MSCI Multifactor Industrials		7,196		(16,533	)		74,539		65,202
Edge MSCI Multifactor Materials		10,141		(6,158	)		138,131		142,114
Edge MSCI Multifactor Technology		45,663		—			313,206		358,869
Edge MSCI Multifactor Utilities		15,860		—			6,819		22,679

^a  The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales.

66 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® TRUST

As of August 31, 2016, the following Funds had non-expiring capital loss carryforwards available to offset future realized capital gains as follows:

iShares ETF	Non- Expiring
Edge MSCI Multifactor Consumer Discretionary	$	6,047
Edge MSCI Multifactor Consumer Staples		2,186
Edge MSCI Multifactor Energy		3,748
Edge MSCI Multifactor Industrials		16,533
Edge MSCI Multifactor Materials		6,158

Management has analyzed tax laws and regulations and their application to the Funds as of August 31, 2016, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

7. SUBSEQUENT EVENTS

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

NOTES TO FINANCIAL STATEMENTS 67

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees of

iShares Trust:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of iShares Edge MSCI Multifactor Consumer Discretionary ETF, iShares Edge MSCI Multifactor Consumer Staples ETF, iShares Edge MSCI Multifactor Energy ETF, iShares Edge MSCI Multifactor Financials ETF, iShares Edge MSCI Multifactor Healthcare ETF, iShares Edge MSCI Multifactor Industrials ETF, iShares Edge MSCI Multifactor Materials ETF, iShares Edge MSCI Multifactor Technology ETF and iShares Edge MSCI Multifactor Utilities ETF (the “Funds”) at August 31, 2016, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2016 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 21, 2016

68 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Tax Information (Unaudited)

iSHARES^® TRUST

The following maximum amounts are hereby designated as qualified dividend income for individuals for the fiscal year ended August 31, 2016:

iShares ETF	Qualified Dividend Income
Edge MSCI Multifactor Consumer Discretionary	$	16,031
Edge MSCI Multifactor Consumer Staples		18,811
Edge MSCI Multifactor Energy		32,895
Edge MSCI Multifactor Financials		14,988
Edge MSCI Multifactor Healthcare		12,077

iShares ETF	Qualified Dividend Income
Edge MSCI Multifactor Industrials	$	18,471
Edge MSCI Multifactor Materials		19,756
Edge MSCI Multifactor Technology		13,115
Edge MSCI Multifactor Utilities		29,979

For corporate shareholders, the percentage of income dividends paid during the fiscal year ended August 31, 2016 that qualified for the dividends-received deduction were as follows:

iShares ETF	Dividends- Received Deduction
Edge MSCI Multifactor Consumer Discretionary		100.00	%
Edge MSCI Multifactor Consumer Staples		100.00
Edge MSCI Multifactor Energy		97.79
Edge MSCI Multifactor Financials		98.68
Edge MSCI Multifactor Healthcare		100.00

iShares ETF	Dividends- Received Deduction
Edge MSCI Multifactor Industrials		100.00	%
Edge MSCI Multifactor Materials		88.38
Edge MSCI Multifactor Technology		100.00
Edge MSCI Multifactor Utilities		100.00

TAX INFORMATION 69

Board Review and Approval of Investment Advisory

Contract

iSHARES^® TRUST

I. iShares Edge MSCI Multifactor Consumer Discretionary ETF and iShares Edge MSCI Multifactor Consumer Staples ETF

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required to consider and approve the proposed Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the terms of the proposed Advisory Contract.

At a meeting held on December 1-2, 2015, the Board, including all of the Independent Trustees, approved the selection of BFA as investment adviser and approved the proposed Advisory Contract for the Funds, based on its review of qualitative and quantitative information provided by BFA. The Board also considered information previously provided by BFA, BlackRock Institutional Trust Company, N.A. (“BTC”), and BlackRock, Inc. (“BlackRock”), as applicable, at prior Board meetings. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review.

In selecting BFA and approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and made the following conclusions:

Expenses of the Funds — The Board reviewed statistical information prepared by Broadridge, an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of the Funds in comparison with the same information for other exchange traded funds (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising each Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of Broadridge’s proprietary ETF methodology used by Broadridge to determine each Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.

The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Funds were at the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group.

Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the proposed investment advisory fee and expense level of each Fund supported the Board’s approval of the Advisory Contract.

Nature, Extent and Quality of Services to be Provided by BFA — The Board reviewed the scope of services to be provided by BFA under the Advisory Contract. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting iShares funds and their shareholders. The Board acknowledged that resources to support the iShares funds and their shareholders have been added or enhanced in recent years. The Board considered representations by BFA, BTC, and BlackRock that the scope and quality of services to be provided to the Funds would be similar to the scope and quality of services provided to other iShares funds. The Board also considered BFA’s compliance program and its compliance record with respect to other iShares funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance

70 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons who will be responsible for the day-to-day management of the Funds, as well as the resources that will be available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures.

Based on the review of this information, the Board concluded that the nature, extent and quality of services to be provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the Advisory Contract.

Costs of Services to be Provided to the Funds and Profits to be Realized by BFA and its Affiliates — The Board did not consider the profitability of the Funds to BFA based on the fees payable under the Advisory Contract or revenue to be received by BFA or its affiliates in connection with services to be provided to the Funds since the proposed relationship had not yet commenced. The Board noted that it expects to receive profitability information from BFA periodically following each Fund’s launch and will thus be in a position to evaluate whether, in the future, any adjustments in each Fund’s fees would be appropriate.

Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in each Fund’s assets. The Board noted that it had previously received and considered information regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board noted that the Advisory Contract for the Funds did not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase. However, the Board further noted that should material economies of scale exist in the future, a breakpoint structure for the Funds may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.

Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue periodically, determined to approve the Advisory Contract.

Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end and closed-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, separately managed accounts, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts that track the same indexes as the Funds. The Board further noted that BFA previously provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the iShares funds, including in terms of the different, generally more extensive services provided to the iShares funds, as well as other significant differences in the approach of BFA and its affiliates to the iShares funds, on one hand, and the Other Accounts, on the other. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded exchange traded funds, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure and the Funds’ expenses to be borne by BFA

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 71

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for the Other Accounts that are institutional clients of BFA (or its affiliates) and concluded that the differences appeared to be consistent with the factors discussed.

Other Benefits to BFA and/or its Affiliates — Except as noted below, the Board did not consider the “fallout” benefits or ancillary revenue to be received by BFA and/or its affiliates in connection with the services to be provided to the Funds by BFA since the proposed relationship had not yet commenced. However, the Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board considered the potential payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also considered the potential for revenue to BTC, the Funds’ securities lending agent, and its affiliates in the event of any loaning of portfolio securities of the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates will be reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that the existence of any such ancillary benefits would not alter the Board’s conclusion with respect to the appropriateness of approving the Advisory Contract.

Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services to be rendered and that could not have been the product of arm’s-length bargaining and concluded that it is in the best interests of each Fund and its shareholders to approve the Advisory Contract.

II. iShares Edge MSCI Multifactor Energy ETF, iShares Edge MSCI Multifactor Financials ETF, iShares Edge MSCI Multifactor Healthcare ETF, iShares Edge MSCI Multifactor Industrials ETF, iShares Edge MSCI Multifactor Materials ETF, iShares Edge MSCI Multifactor Technology ETF and iShares Edge MSCI Multifactor Utilities ETF

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required to consider and approve the proposed Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the terms of the proposed Advisory Contract.

At a meeting held on December 1-2, 2015, the Board, including all of the Independent Trustees, approved the selection of BFA as investment adviser and approved the proposed Advisory Contract for the Funds, based on its review of qualitative and quantitative information provided by BFA. The Board also considered information previously provided by BFA, BlackRock Institutional Trust Company, N.A. (“BTC”), and BlackRock, Inc. (“BlackRock”), as applicable, at prior Board meetings. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review.

In selecting BFA and approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and made the following conclusions:

Expenses of the Funds — The Board reviewed statistical information prepared by Broadridge, an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of the Funds in comparison with the same information for other exchange traded funds (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs

72 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising each Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of Broadridge’s proprietary ETF methodology used by Broadridge to determine each Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.

The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Funds were lower than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group.

Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the proposed investment advisory fee and expense level of each Fund supported the Board’s approval of the Advisory Contract.

Nature, Extent and Quality of Services to be Provided by BFA — The Board reviewed the scope of services to be provided by BFA under the Advisory Contract. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting iShares funds and their shareholders. The Board acknowledged that resources to support the iShares funds and their shareholders have been added or enhanced in recent years. The Board considered representations by BFA, BTC, and BlackRock that the scope and quality of services to be provided to the Funds would be similar to the scope and quality of services provided to other iShares funds. The Board also considered BFA’s compliance program and its compliance record with respect to other iShares funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons who will be responsible for the day-to-day management of the Funds, as well as the resources that will be available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures.

Based on the review of this information, the Board concluded that the nature, extent and quality of services to be provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the Advisory Contract.

Costs of Services to be Provided to the Funds and Profits to be Realized by BFA and its Affiliates — The Board did not consider the profitability of the Funds to BFA based on the fees payable under the Advisory Contract or revenue to be received by BFA or its affiliates in connection with services to be provided to the Funds since the proposed relationship had not yet commenced. The Board noted that it expects to receive profitability information from BFA periodically following each Fund’s launch and will thus be in a position to evaluate whether, in the future, any adjustments in each Fund’s fees would be appropriate.

Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in each Fund’s assets. The Board noted that it had previously received and considered information regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board noted that the Advisory Contract for the Funds did not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase.

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 73

Board Review and Approval of Investment Advisory

Contract (Continued)

iSHARES^® TRUST

However, the Board further noted that should material economies of scale exist in the future, a breakpoint structure for the Funds may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.

Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue periodically, determined to approve the Advisory Contract.

Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end and closed-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, separately managed accounts, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts that track the same indexes as the Funds. The Board further noted that BFA previously provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the iShares funds, including in terms of the different, generally more extensive services provided to the iShares funds, as well as other significant differences in the approach of BFA and its affiliates to the iShares funds, on one hand, and the Other Accounts, on the other. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded exchange traded funds, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure and the Funds’ expenses to be borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for the Other Accounts that are institutional clients of BFA (or its affiliates) and concluded that the differences appeared to be consistent with the factors discussed.

Other Benefits to BFA and/or its Affiliates — Except as noted below, the Board did not consider the “fallout” benefits or ancillary revenue to be received by BFA and/or its affiliates in connection with the services to be provided to the Funds by BFA since the proposed relationship had not yet commenced. However, the Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board considered the potential payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also considered the potential for revenue to BTC, the Funds’ securities lending agent, and its affiliates in the event of any loaning of portfolio securities of the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates will be reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that the existence of any such ancillary benefits would not alter the Board’s conclusion with respect to the appropriateness of approving the Advisory Contract.

Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services to be rendered and that could not have been the product of arm’s-length bargaining and concluded that it is in the best interests of each Fund and its shareholders to approve the Advisory Contract.

74 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited)

iSHARES^® TRUST

Premium/Discount Information

The Premium/Discount Information section is intended to present information about the differences between the daily market price on secondary markets for shares of a fund and that fund’s NAV. NAV is the price at which a fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of a fund generally is determined using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of such fund are listed for trading, as of the time that the fund’s NAV is calculated. A fund’s Market Price may be at, above or below its NAV. The NAV of a fund will fluctuate with changes in the fair value of its portfolio holdings. The Market Price of a fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.

Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of a fund on a given day, generally at the time the NAV is calculated. A premium is the amount that a fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that a fund is trading below the reported NAV, expressed as a percentage of the NAV.

The following information shows the frequency of distributions of premiums and discounts for each of the Funds. The information shown for each Fund is for five calendar years (or from the inception date of such Fund if less than five years) through the date of the most recent calendar quarter-end. The specific periods covered for each Fund is disclosed in the table for such Fund.

Each line in the table shows the number of trading days in which the Fund traded within the premium/discount range indicated. The number of trading days in each premium/discount range is also shown as a percentage of the total number of trading days in the period covered by each table. All data presented here represents past performance, which cannot be used to predict future results.

iShares Edge MSCI Multifactor Consumer Discretionary ETF

Period Covered: May 10, 2016 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 1.5% and Less than 2.0%		1		2.70	%
Greater than 1.0% and Less than 1.5%		1		2.70
Greater than 0.5% and Less than 1.0%		6		16.22
Between 0.5% and –0.5%		20		54.06
Less than –0.5% and Greater than –1.0%		4		10.81
Less than –1.0% and Greater than –1.5%		2		5.40
Less than –1.5%		3		8.11
		37		100.00	%

SUPPLEMENTAL INFORMATION 75

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares Edge MSCI Multifactor Consumer Staples ETF

Period Covered: May 10, 2016 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 1.5% and Less than 2.0%		1		2.70	%
Greater than 1.0% and Less than 1.5%		1		2.70
Greater than 0.5% and Less than 1.0%		6		16.22
Between 0.5% and -0.5%		22		59.46
Less than –0.5% and Greater than –1.0%		4		10.81
Less than –1.0%		3		8.11
		37		100.00	%

iShares Edge MSCI Multifactor Energy ETF

Period Covered: May 10, 2016 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 1.5% and Less than 2.0%		1		2.70	%
Greater than 1.0% and Less than 1.5%		1		2.70
Greater than 0.5% and Less than 1.0%		5		13.50
Between 0.5% and –0.5%		14		37.85
Less than –0.5% and Greater than –1.0%		6		16.22
Less than –1.0% and Greater than –1.5%		6		16.22
Less than –1.5% and Greater than –2.0%		1		2.70
Less than –2.0%		3		8.11
		37		100.00	%

iShares Edge MSCI Multifactor Financials ETF

Period Covered: May 10, 2016 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 1.5% and Less than 2.0%		1		2.70	%
Greater than 1.0% and Less than 1.5%		2		5.40
Greater than 0.5% and Less than 1.0%		7		18.93
Between 0.5% and –0.5%		14		37.85
Less than –0.5% and Greater than –1.0%		4		10.81
Less than –1.0% and Greater than –1.5%		5		13.50
Less than –1.5%		4		10.81
		37		100.00	%

76 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares Edge MSCI Multifactor Healthcare ETF

Period Covered: May 10, 2016 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 2.0%		1		2.70	%
Greater than 1.5% and Less than 2.0%		1		2.70
Greater than 1.0% and Less than 1.5%		2		5.40
Greater than 0.5% and Less than 1.0%		3		8.11
Between 0.5% and –0.5%		17		45.96
Less than –0.5% and Greater than –1.0%		8		21.62
Less than –1.0% and Greater than –1.5%		1		2.70
Less than –1.5% and Greater than –2.0%		1		2.70
Less than –2.0%		3		8.11
		37		100.00	%

iShares Edge MSCI Multifactor Industrials ETF

Period Covered: May 10, 2016 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 1.5%		1		2.70	%
Greater than 1.0% and Less than 1.5%		2		5.40
Greater than 0.5% and Less than 1.0%		3		8.11
Between 0.5% and –0.5%		21		56.75
Less than –0.5% and Greater than –1.0%		7		18.93
Less than –1.0%		3		8.11
		37		100.00	%

iShares Edge MSCI Multifactor Materials ETF

Period Covered: May 10, 2016 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 2.0%		2		5.40	%
Greater than 1.5% and Less than 2.0%		2		5.40
Greater than 1.0% and Less than 1.5%		2		5.40
Greater than 0.5% and Less than 1.0%		4		10.81
Between 0.5% and –0.5%		17		45.96
Less than –0.5% and Greater than –1.0%		3		8.11
Less than –1.0% and Greater than –1.5%		3		8.11
Less than –1.5% and Greater than –2.0%		1		2.70
Less than –2.0%		3		8.11
		37		100.00	%

SUPPLEMENTAL INFORMATION 77

Supplemental Information (Unaudited) (Continued)

iSHARES^® TRUST

iShares Edge MSCI Multifactor Technology ETF

Period Covered: May 10, 2016 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 1.0%		1		2.70	%
Greater than 0.5% and Less than 1.0%		3		8.11
Between 0.5% and –0.5%		21		56.75
Less than –0.5% and Greater than –1.0%		7		18.93
Less than –1.0% and Greater than –1.5%		1		2.70
Less than –1.5% and Greater than –2.0%		1		2.70
Less than –2.0%		3		8.11
		37		100.00	%

iShares Edge MSCI Multifactor Utilities ETF

Period Covered: May 10, 2016 through June 30, 2016

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 1.5% and Less than 2.0%		1		2.70	%
Greater than 1.0% and Less than 1.5%		2		5.40
Greater than 0.5% and Less than 1.0%		2		5.40
Between 0.5% and –0.5%		19		51.36
Less than –0.5% and Greater than –1.0%		6		16.22
Less than –1.0% and Greater than –1.5%		4		10.81
Less than –1.5%		3		8.11
		37		100.00	%

78 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee and Officer Information

iSHARES^® TRUST

The Board of Trustees has responsibility for the overall management and operations of the Funds, including general supervision of the duties performed by BFA and other service providers. Each Trustee serves until he or she resigns, is removed, dies, retires or becomes incapacitated. Each officer shall hold office until his or her successor is elected and qualifies or until his or her death, or his or her resignation or removal. Trustees who are not “interested persons” (as defined in the 1940 Act) of the Trust are referred to as independent trustees (“Independent Trustees”).

The registered investment companies advised by BFA or its affiliates (the “BlackRock-advised Funds”) are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Trustee also serves as a Director of iShares, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 333 funds (as of August 31, 2016) within the Exchange-Traded Fund Complex. With the exception of Robert S. Kapito, Mark Wiedman and Benjamin Archibald, the address of each Trustee and officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito, Mr. Wiedman and Mr. Archibald is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52^nd Street, New York, NY 10055. The Board has designated Cecilia H. Herbert as its Independent Board Chair. Additional information about the Funds’ Trustees and officers may be found in the Funds’ combined Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-iShares (1-800-474-2737).

Interested Trustees

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Robert S. Kapitoa (59)	Trustee (since 2009).	President and Director, BlackRock, Inc. (since 2006); Vice Chairman of BlackRock, Inc. and Head of BlackRock, Inc.’s Portfolio Management Group (since its formation in 1998) and BlackRock, Inc.’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983).	Director of iShares, Inc. (since 2009); Trustee of iShares U.S. ETF Trust (since 2011).
Mark Wiedmanb (45)	Trustee (since 2013).	Managing Director, BlackRock, Inc. (since 2007); Global Head of iShares (since 2011); Head of Corporate Strategy, BlackRock, Inc. (2009-2011).	Director of iShares, Inc. (since 2013); Trustee of iShares U.S. ETF Trust (since 2013); Director of PennyMac Financial Services, Inc. (since 2008).

^a  Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc.

^b  Mark Wiedman is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc. and its affiliates.

TRUSTEE AND OFFICER INFORMATION 79

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Independent Trustees^c

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Cecilia H. Herbert (67)	Trustee (since 2005); Independent Board Chair (since 2016); Nominating and Governance Committee Chair (since 2016).	Director (1998-2013) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010) of the Thacher School; Member (since 1992) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco; Trustee and Member of the Investment Committee, WNET, the New York public media company (since 2011).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Independent Board Chair of iShares, Inc. and iShares U.S. ETF Trust (since 2016); Director of Forward Funds (23 portfolios) (since 2009); Director of Salient MF Trust (4 portfolios) (since 2015).
Jane D. Carlin (60)	Trustee (since 2015); Risk Committee Chair (since 2016).	Managing Director and Global Head of Financial Holding Company Governance & Assurance and the Global Head of Operational Risk Management of Morgan Stanley (2006-2012).	Director of iShares, Inc. (since 2015); Trustee of iShares U.S. ETF Trust (since 2015); Director of PHH Corporation (mortgage solutions) (since 2012).
Charles A. Hurty (72)	Trustee (since 2005); Audit Committee Chair (since 2006).	Retired; Partner, KPMG LLP (1968-2001).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (2 portfolios) (since 2002).
John E. Kerrigan (61)	Trustee (since 2005); Securities Lending Committee Chair (since 2016).	Chief Investment Officer, Santa Clara University (since 2002).	Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011).
John E. Martinez (55)	Trustee (since 2003); Fixed Income Plus Committee Chair (since 2016).	Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005).	Director of iShares, Inc. (since 2003); Trustee of iShares U.S. ETF Trust (since 2011).

80 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Independent Trustees^c (Continued)

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held by Trustee During the Past 5 Years
Madhav V. Rajan (52)	Trustee (since 2011); Equity Plus Committee Chair and 15(c) Committee Chair (since 2016).	Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (2007-2008).	Director of iShares, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011); Director, Cavium, Inc. (since 2013).

^c  Robert H. Silver served as an Independent Trustee until March 31, 2016.

TRUSTEE AND OFFICER INFORMATION 81

Trustee and Officer Information (Continued)

iSHARES^® TRUST

Officers^d

Name (Age)	Position(s)	Principal Occupation(s) During the Past 5 Years
Martin Small (41)	President (since 2016).	Managing Director, BlackRock, Inc. (since January 2010); Head of U.S. iShares (since 2015); Co-Head of the U.S. Financial Markets Advisory Group, BlackRock, Inc. (2008-2014).
Jack Gee (56)	Treasurer and Chief Financial Officer (since 2008).	Managing Director, BlackRock, Inc. (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director of Fund Administration of Intermediary Investor Business, BGI (2004-2009).
Benjamin Archibald (41)	Secretary (since 2015).	Managing Director, BlackRock, Inc. (since 2014); Director, BlackRock, Inc. (2010-2013); Secretary of the BlackRock-advised Mutual Funds (since 2012).
Steve Messinger (54)	Executive Vice President (since 2016).	Managing Director, BlackRock, Inc. (2007-2014 and since 2016); Managing Director, Beacon Consulting Group (2014-2016).
Charles Park (49)	Chief Compliance Officer (since 2006).	Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex (since 2014); Chief Compliance Officer, BFA (since 2006).
Scott Radell (47)	Executive Vice President (since 2012).	Managing Director, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007); Credit Research Analyst, BGI (2003-2005).
Amy Schioldager (53)	Executive Vice President (since 2007).	Senior Managing Director, BlackRock, Inc. (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006).

^d  Manish Mehta served as President until October 15, 2016.

82 2016 iSHARES ANNUAL REPORT TO SHAREHOLDERS

For more information visit www.iShares.com or call 1-800-474-2737

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

Investing involves risk, including possible loss of principal.

The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.

A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.

The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily basis on the Funds’ website.

©2016 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.

iS-AR-818-0816

Item 2. Code of Ethics.

iShares Trust (the “Registrant”) adopted a new code of ethics on July 1, 2016 that applies to persons appointed by the Registrant’s Board of Trustees as the President and/or Chief Financial Officer, and any persons performing similar functions. For the fiscal year ended August 31, 2016, there were no amendments to any provision of the former and new codes of ethics, nor were there any waivers granted from any provision of the former and new codes of ethics. A copy of the new code of ethics is filed with this Form N-CSR under Item 12(a)(1).

Item 3. Audit Committee Financial Expert.

The Registrant’s Board of Trustees has determined that the Registrant has more than one audit committee financial expert, as that term is defined under Item 3(b) and 3(c), serving on its audit committee. The audit committee financial experts serving on the Registrant’s audit committee are Charles A. Hurty, John E. Kerrigan and Madhav V. Rajan, all of whom are independent, as that term is defined under Item 3(a)(2). Robert H. Silver resigned from the Board of Trustees effective March 31, 2016.

Item 4. Principal Accountant Fees and Services.

The principal accountant fees disclosed in items 4(a), 4(b), 4(c), 4(d) and 4(g) are for the fourty-five series of the Registrant for which the fiscal year-end is August 31, 2016 (the “Funds”), and whose annual financial statements are reported in Item 1.

(a) Audit Fees – The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the Funds’ annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were $453,890 for the fiscal year ended August 31, 2015 and $632,030 for the fiscal year ended August 31, 2016.

(b) Audit-Related Fees – There were no fees billed for the fiscal years ended August 31, 2015 and August 31, 2016 for assurance and related services by the principal accountant that were reasonably related to the performance of the audit of the Fund’s financial statements and are not reported under (a) of this Item.

(c) Tax Fees – The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for the review of the Funds’ tax returns and excise tax calculations, were $115,692 for the fiscal year ended August 31, 2015 and $170,145 for the fiscal year ended August 31, 2016.

(d) All Other Fees – There were no other fees billed for the fiscal years ended August 31, 2015 and August 31, 2016 for products and services provided by the principal accountant, other than the services reported in (a) through (c) of this Item.

(e) (1) The Registrant’s audit committee charter, as amended, provides that the audit committee is responsible for the approval, prior to appointment, of the engagement of the principal accountant to annually audit and provide their opinion on the Registrant’s financial statements. The audit committee must also approve, prior to appointment, the engagement of the principal accountant to provide non-audit services to the Registrant or to any entity controlling, controlled by or under common control with the Registrant’s investment adviser (“Adviser Affiliate”) that provides ongoing services to the Registrant, if the engagement relates directly to the operations and financial reporting of the Registrant.

(2) There were no services described in (b) through (d) above (including services required by the audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X) that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) None of the hours expended on the principal accountant’s engagement to audit the Funds’ financial statements for the fiscal year ended August 31, 2016 were attributable to work performed by persons other than the principal accountant’s full-time, permanent employees.

(g) The aggregate non-audit fees billed by the Registrant’s principal accountant for services rendered to the Funds, and rendered to the Registrant’s investment adviser, and any Adviser Affiliate that provides ongoing services to the Registrant for the last two fiscal years were $4,111,992 for the fiscal year ended August 31, 2015 and $5,025,678 for the fiscal year ended August 31, 2016.

(h) The Registrant’s audit committee has considered whether the provision of non-audit services rendered to the Registrant’s investment adviser and any Adviser Affiliate that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, if any, are compatible with maintaining the principal accountant’s independence, and has determined that the provision of these services do not compromise the principal accountant’s independence.

Item 5. Audit Committee of Listed Registrants.

The Registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act and has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Registrant’s audit committee members are Charles A. Hurty, John E. Kerrigan and Madhav V. Rajan. Robert H. Silver resigned from the Board of Trustees effective March 31, 2016.

Item 6. Investments.

(a) Schedules of investments are included as part of the reports to shareholders filed under Item 1 of this Form.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to the Registrant.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to the Registrant.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable to the Registrant.

Item 10. Submission of Matters to a Vote of Security Holders.

There were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.

Item 11. Controls and Procedures.

(a) The President (the Registrant’s Principal Executive Officer) and Chief Financial Officer (the Registrant’s Principal Financial Officer) have concluded that, based on their evaluation as of a date within 90 days of the filing date of this report, the disclosure controls and procedures of the Registrant (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are reasonably designed to achieve the purposes described in Section 4(a) of the attached certification.

(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a) (1) Code of Ethics for Senior Officers that is the subject of Item 2 is attached.

(a) (2) Section 302 Certifications are attached.

(a) (3) Not applicable to the Registrant.

(b) Section 906 Certifications are attached.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

iShares Trust

By: /s/ Martin Small

Martin Small, President (Principal Executive Officer)

Date: November 2, 2016

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By: /s/ Martin Small

Martin Small, President (Principal Executive Officer)

Date: November 2, 2016

By: /s/ Jack Gee

Jack Gee, Treasurer and Chief Financial Officer (Principal Financial Officer)

Date: November 2, 2016