2021 Prospectus - iShares
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Table of Contents
JUNE 29, 2021
2021 Prospectus
iShares Trust
• iShares Core 5-10 Year USD Bond ETF | IMTB | NYSE ARCA
The Securities and Exchange Commission (“SEC”) has not approved or disapproved
these securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.iShares®
iShares Trust
iShares U.S. ETF Trust
Supplement dated August 24, 2021 (the “Supplement”)
to the Summary Prospectus (the “Summary Prospectus”),
Prospectus (the “Prospectus”) and
Statement of Additional Information (“SAI”)
for each of the Funds listed in Appendix A (each, a “Fund”)
The information in this Supplement updates information in, and
should be read in conjunction with, each Fund’s Summary
Prospectus, Prospectus and SAI.
References to the name of the Underlying Index in the Summary
Prospectus, Prospectus, and SAI for each Fund except for the
BlackRock Short Maturity Bond ETF and BlackRock Short Maturity
Municipal Bond ETF are hereby revised as follows:
Former Underlying Index Name New Underlying Index Name
Bloomberg Barclays 2021 Term Bloomberg 2021 Term High
High Yield and Income Index Yield and Income Index
Bloomberg Barclays 2022 Term Bloomberg 2022 Term High
High Yield and Income Index Yield and Income Index
Bloomberg Barclays 2023 Maturity Bloomberg 2023 Maturity
Corporate Index Corporate Index
Bloomberg Barclays 2023 Maturity Bloomberg 2023 Maturity High
High Quality Corporate Index Quality Corporate Index
Bloomberg Barclays 2023 Term Bloomberg 2023 Term High
High Yield and Income Index Yield and Income Index
Bloomberg Barclays 2024 Term Bloomberg 2024 Term High
High Yield and Income Index Yield and Income Index
Bloomberg Barclays 2025 Term Bloomberg 2025 Term High
High Yield and Income Index Yield and Income Index
Bloomberg Barclays 2026 Term Bloomberg 2026 Term High
High Yield and Income Index Yield and Income Index
Bloomberg Barclays 2027 Term Bloomberg 2027 Term High
High Yield and Income Index Yield and Income Index
Bloomberg Barclays December Bloomberg December 2021
2021 Maturity Corporate Index Maturity Corporate Index
Bloomberg Barclays December Bloomberg December 2022
2022 Maturity Corporate Index Maturity Corporate IndexFormer Underlying Index Name New Underlying Index Name Bloomberg Barclays December Bloomberg December 2023 2023 Maturity Corporate Index Maturity Corporate Index Bloomberg Barclays December Bloomberg December 2024 2024 Maturity Corporate Index Maturity Corporate Index Bloomberg Barclays December Bloomberg December 2025 2025 Maturity Corporate Index Maturity Corporate Index Bloomberg Barclays December Bloomberg December 2026 2026 Maturity Corporate Index Maturity Corporate Index Bloomberg Barclays December Bloomberg December 2027 2027 Maturity Corporate Index Maturity Corporate Index Bloomberg Barclays December Bloomberg December 2028 2028 Maturity Corporate Index Maturity Corporate Index Bloomberg Barclays December Bloomberg December 2029 2029 Maturity Corporate Index Maturity Corporate Index Bloomberg Barclays December Bloomberg December 2030 2030 Maturity Corporate Index Maturity Corporate Index Bloomberg Barclays December Bloomberg December 2031 2031 Maturity Corporate Index Maturity Corporate Index Bloomberg Barclays Global Bloomberg Global Aggregate ex Aggregate ex USD 10% Issuer USD 10% Issuer Capped Capped (Hedged) Index (Hedged) Index Bloomberg Barclays MSCI Global Bloomberg MSCI Global Green Green Bond Select (USD Hedged) Bond Select (USD Hedged) Index Index Bloomberg Barclays MSCI US Bloomberg MSCI US Aggregate Aggregate ESG Focus Index ESG Focus Index Bloomberg Barclays MSCI US Bloomberg MSCI US Corporate Corporate 1-5 Year ESG Focus 1-5 Year ESG Focus Index Index Bloomberg Barclays MSCI US Bloomberg MSCI US Corporate Corporate ESG Focus Index ESG Focus Index Bloomberg Barclays MSCI US High Bloomberg MSCI US High Yield Yield Choice ESG Screened Index Choice ESG Screened Index Bloomberg Barclays MSCI US Bloomberg MSCI US Universal Universal Choice ESG Screened Choice ESG Screened Index Index Bloomberg Barclays U.S. Agency Bloomberg U.S. Agency Bond Bond Index Index
Former Underlying Index Name New Underlying Index Name Bloomberg Barclays U.S. CMBS Bloomberg U.S. CMBS (ERISA (ERISA Only) Index Only) Index Bloomberg Barclays U.S. Bloomberg U.S. Convertible Cash Convertible Cash Pay Bond > Pay Bond > $250MM Index $250MM Index Bloomberg Barclays U.S. Corporate Bloomberg U.S. Corporate Aaa - Aaa - A Capped Index A Capped Index Bloomberg Barclays U.S. Fixed Bloomberg U.S. Fixed Income Income Balanced Risk Index Balanced Risk Index Bloomberg Barclays U.S. GNMA Bloomberg U.S. GNMA Bond Bond Index Index Bloomberg Barclays U.S. Bloomberg U.S. Government/ Government/Credit Bond Index Credit Bond Index Bloomberg Barclays U.S. Bloomberg U.S. Intermediate Intermediate Government/Credit Government/Credit Bond Index Bond Index Bloomberg Barclays U.S. Treasury Bloomberg U.S. Treasury Inflation Protected Securities Inflation Protected Securities (TIPS) Index (Series-L) (TIPS) Index (Series-L) Bloomberg Barclays U.S. Treasury Bloomberg U.S. Treasury Inflation-Protected Securities Inflation-Protected Securities (TIPS) 0-5 Years Index (Series-L) (TIPS) 0-5 Years Index (Series-L) Bloomberg Barclays U.S. Universal Bloomberg U.S. Universal 10+ Year Index 10+ Year Index Bloomberg Barclays U.S. Universal Bloomberg U.S. Universal 1-5 Year Index 1-5 Year Index Bloomberg Barclays U.S. Universal Bloomberg U.S. Universal Index Index Bloomberg Barclays U.S. Aggregate Bloomberg U.S. Aggregate Bond Bond Index Index Bloomberg Barclays US Floating Bloomberg US Floating Rate Rate Note < 5 Years Index Note < 5 Years Index Bloomberg Barclays US High Yield Bloomberg US High Yield Fallen Fallen Angel 3% Capped Index Angel 3% Capped Index Bloomberg Barclays U.S. MBS Index Bloomberg U.S. MBS Index Bloomberg Barclays U.S. Treasury Bloomberg U.S. Treasury Floating Rate Bond Index Floating Rate Bond Index Bloomberg Barclays U.S. Universal Bloomberg U.S. Universal 5-10 Year Index 5-10 Year Index
References to the name of the benchmark index in the Summary Prospectus, Prospectus and SAI for each of the BlackRock Short Maturity Bond ETF and BlackRock Short Maturity Municipal Bond ETF are revised as follows: Former Benchmark Index Name New Benchmark Index Name Bloomberg Barclays Short-Term Bloomberg Short-Term Government/Corporate Index Government/Corporate Index Bloomberg Barclays Municipal Bloomberg Municipal Bond: Bond: 1 Year (1-2) Index 1 Year (1-2) Index
Appendix A
iShares Trust Funds
Supplement to the Summary Prospectus, Prospectus and SAI each
dated as of March 1, 2021:
iShares Core Total USD Bond Market ETF
iShares iBonds Mar 2023 Term Corporate ex-Financials ETF
Supplement to the Summary Prospectus and Prospectus both dated
as of March 1, 2021, and to the SAI dated as of March 1, 2021 (as
revised April 1, 2021):
iShares 0-5 Year TIPS Bond ETF
iShares Aaa - A Rated Corporate Bond ETF
iShares CMBS ETF
iShares Convertible Bond ETF
iShares Core 1-5 Year USD Bond ETF
iShares Core International Aggregate Bond ETF
iShares ESG Advanced High Yield Corporate Bond ETF
iShares Fallen Angels USD Bond ETF
iShares Global Green Bond ETF
iShares GNMA Bond ETF
iShares iBonds Dec 2021 Term Corporate ETF
iShares iBonds Dec 2022 Term Corporate ETF
iShares iBonds Dec 2023 Term Corporate ETF
iShares iBonds Dec 2024 Term Corporate ETF
iShares iBonds Dec 2025 Term Corporate ETF
iShares iBonds Dec 2026 Term Corporate ETF
iShares iBonds Dec 2027 Term Corporate ETF
iShares iBonds Dec 2028 Term Corporate ETF
iShares iBonds Dec 2029 Term Corporate ETF
iShares iBonds Dec 2030 Term Corporate ETF
iShares iBonds Mar 2023 Term Corporate ETF
iShares TIPS Bond ETF
iShares Treasury Floating Rate Bond ETF
iShares U.S. Fixed Income Balanced Risk Factor ETF
Supplement to the Summary Prospectus, Prospectus and SAI each
dated as of March 1, 2021 (as revised April 1, 2021):
iShares iBonds 2021 Term High Yield and Income ETF
iShares iBonds 2022 Term High Yield and Income ETF
iShares iBonds 2023 Term High Yield and Income ETF
iShares iBonds 2024 Term High Yield and Income ETF
iShares iBonds 2025 Term High Yield and Income ETFiShares iBonds 2026 Term High Yield and Income ETF
iShares Floating Rate Bond ETF
Supplement to the Summary Prospectus, Prospectus and SAI each
dated as of June 29, 2021:
iShares Agency Bond ETF
iShares Core 5-10 Year USD Bond ETF
iShares Core 10+ Year USD Bond ETF
iShares Core U.S. Aggregate Bond ETF
iShares ESG Advanced Total USD Bond Market ETF
iShares ESG Aware 1-5 Year USD Corporate Bond ETF
iShares ESG Aware U.S. Aggregate Bond ETF
iShares ESG Aware USD Corporate Bond ETF
iShares Government/Credit Bond ETF
iShares Intermediate Government/Credit Bond ETF
iShares MBS ETF
Supplement to the Summary Prospectus dated as of June 23, 2021,
Prospectus and SAI each dated as of June 15, 2021:
iShares iBonds Dec 2031 Term Corporate ETF
Supplement to the Summary Prospectus dated as of July 1, 2021 (as
revised July 7, 2021), Prospectus dated as of June 23, 2021 (as
revised July 7, 2021) and SAI dated as of June 23, 2021:
iShares iBonds 2027 Term High Yield and Income ETF
iShares U.S. ETF Trust Funds
Supplement to the Summary Prospectus and Prospectus both dated
as of March 1, 2021, and to the SAI dated as of March 1, 2021 (as
revised April 27, 2021):
BlackRock Short Maturity Bond ETF
BlackRock Short Maturity Municipal Bond ETF
If you have any questions, please call 1-800-iShares (1-800-474-2737).
iShares® is a registered trademark of BlackRock Fund Advisors and its affiliates.
IS-A-BBG-0821
PLEASE RETAIN THIS SUPPLEMENT
FOR FUTURE REFERENCE[THIS PAGE INTENTIONALLY LEFT BLANK]
Table of Contents
Table of Contents
Fund Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
More Information About the Fund . . . . . . . . . 1
A Further Discussion of Principal Risks . . 2
A Further Discussion of Other Risks . . . . . . 17
Portfolio Holdings Information . . . . . . . . . . . . . 21
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Shareholder Information . . . . . . . . . . . . . . . . . . . . 25
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Index Provider . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Disclaimers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
BLOOMBERG® is a trademark of Bloomberg Finance L.P. and its affiliates (collectively, “Bloomberg”).
BARCLAYS® is a trademark of Barclays Bank PLC (collectively with its affiliates, “Barclays”), used under license.
“Bloomberg Barclays U.S. Universal 5-10 Year Index” is a trademark of Bloomberg and its licensors and has
been licensed for use for certain purposes by BlackRock Fund Advisors or its affiliates. iShares® and
BlackRock® are registered trademarks of BlackRock Fund Advisors and its affiliates.
iTable of Contents
iSHARES® CORE 5-10 YEAR USD BOND ETF
Ticker: IMTB Stock Exchange: NYSE Arca
Investment Objective
The iShares Core 5-10 Year USD Bond ETF (the “Fund”) seeks to track the investment
results of an index composed of U.S. dollar-denominated bonds that are rated either
investment-grade or high yield with remaining effective maturities between five and ten
years.
Fees and Expenses
The following table describes the fees and expenses that you will incur if you buy, hold
and sell shares of the Fund. The investment advisory agreement between iShares Trust
(the “Trust”) and BlackRock Fund Advisors (“BFA”) (the “Investment Advisory
Agreement”) provides that BFA will pay all operating expenses of the Fund, except the
management fees, interest expenses, taxes, expenses incurred with respect to the
acquisition and disposition of portfolio securities and the execution of portfolio
transactions, including brokerage commissions, distribution fees or expenses, litigation
expenses and any extraordinary expenses. The Fund may incur “Acquired Fund Fees
and Expenses.” Acquired Fund Fees and Expenses reflect the Fund’s pro rata share of
the fees and expenses incurred by investing in other investment companies. The
impact of Acquired Fund Fees and Expenses is included in the total returns of the Fund.
Acquired Fund Fees and Expenses are not included in the calculation of the ratio of
expenses to average net assets shown in the Financial Highlights section of the Fund’s
prospectus (the “Prospectus”). BFA, the investment adviser to the Fund, has
contractually agreed to waive a portion of its management fees in an amount equal to
the Acquired Fund Fees and Expenses, if any, attributable to investments by the Fund
in other registered investment companies advised by BFA or its affiliates, through
February 28, 2026. The contractual waiver may be terminated prior to February 28,
2026 only upon written agreement of the Trust and BFA.
You may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples below.
Annual Fund Operating Expenses
(ongoing expenses that you pay each year as a
percentage of the value of your investments)
Total Annual
Fund
Distribution Total Annual Operating
and Acquired Fund Fund Expenses
Management Service (12b-1) Other Fees Operating After
Fees Fees Expenses1 and Expenses Expenses Fee Waiver Fee Waiver
0.06% None 0.00% 0.01% 0.07% (0.01)% 0.06%
1
The amount rounded to 0.00%.
S-1Table of Contents
Example. This Example is intended to help you compare the cost of owning shares of
the Fund with the cost of investing in other funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and then sell all of your
shares at the end of those periods. The Example also assumes that your investment
has a 5% return each year and that the Fund’s operating expenses remain the same.
Although your actual costs may be higher or lower, based on these assumptions, your
costs would be:
1 Year 3 Years 5 Years 10 Years
$6 $19 $34 $85
Portfolio Turnover. The Fund may pay investment-grade and high yield U.S.
transaction costs, such as commissions, corporate bonds, mortgage-backed
when it buys and sells securities (or pass-through securities (“MBS”),
“turns over” its portfolio). A higher commercial mortgage-backed securities
portfolio turnover rate may indicate (“CMBS”), asset-backed securities
higher transaction costs and may result (“ABS”), Eurodollar bonds (i.e., U.S.
in higher taxes when Fund shares are dollar-denominated bonds issued by
held in a taxable account. These costs, foreign issuers outside the U.S.), bonds
which are not reflected in the Annual registered with the SEC or exempt from
Fund Operating Expenses or in the registration at the time of issuance, or
Example, affect the Fund’s offered pursuant to Rule 144A under the
performance. During the most recent Securities Act of 1933, as amended (the
fiscal year, the Fund’s portfolio turnover “1933 Act”) with or without registration
rate was 384% of the average value of rights (“Rule 144A Bonds”) and
its portfolio. emerging market bonds. The Underlying
Index is a subset of the Bloomberg
Principal Investment Barclays U.S. Universal Index.
Strategies As of February 28, 2021, a significant
The Fund seeks to track the investment portion of the Underlying Index is
results of the Bloomberg Barclays U.S. represented by MBS and U.S. Treasury
Universal 5-10 Year Index (the securities. A significant portion of the
“Underlying Index”), which measures Underlying Index is composed of MBS
the performance of U.S. dollar- that include 20-year and 30-year
denominated taxable bonds that are mortgages. These MBS are included in
rated either investment-grade or high the Underlying Index because their
yield (as determined by Bloomberg effective duration has historically been
Index Services Limited (the “Index more consistent with the duration of
Provider” or “Bloomberg”)) with non-callable 5-10 year bonds due to
remaining effective maturities between prepayments. The components of the
five and ten years. The Underlying Index Underlying Index are likely to change
includes U.S. Treasury bonds, over time. The securities in the
government-related bonds (i.e., U.S. and Underlying Index must be denominated
non-U.S. agencies, sovereign, in U.S. dollars and non-convertible.
supranational and local authority debt), Excluded from the Underlying Index are
S-2Table of Contents
tax-exempt municipal securities, coupon may invest up to 10% of its assets in
issues that have been stripped from certain futures, options and swap
bonds, structured notes, private contracts, cash and cash equivalents,
placements (excluding Rule 144A including shares of money market funds
Bonds) and inflation-linked bonds. advised by BFA or its affiliates
BFA uses a “passive” or indexing (“BlackRock Cash Funds”), as well as in
approach to try to achieve the Fund’s securities not included in the Underlying
investment objective. Unlike many Index, but which BFA believes will help
investment companies, the Fund does the Fund track the Underlying Index.
not try to “beat” the index it tracks and From time to time when conditions
does not seek temporary defensive warrant, however, the Fund may invest
positions when markets decline or at least 80% of its assets in the
appear overvalued. component securities of the Underlying
Index and may invest up to 20% of its
Indexing may eliminate the chance that assets in certain futures, options and
the Fund will substantially outperform swap contracts, cash and cash
the Underlying Index but also may equivalents, including shares of
reduce some of the risks of active BlackRock Cash Funds, as well as in
management, such as poor security securities not included in the Underlying
selection. Indexing seeks to achieve Index, but which BFA believes will help
lower costs and better after-tax the Fund track the Underlying Index. The
performance by aiming to keep portfolio Fund seeks to track the investment
turnover low in comparison to actively results of the Underlying Index before
managed investment companies. fees and expenses of the Fund.
BFA uses a representative sampling The Fund may lend securities
indexing strategy to manage the Fund. representing up to one-third of the value
“Representative sampling” is an of the Fund’s total assets (including the
indexing strategy that involves investing value of any collateral received).
in a representative sample of securities
that collectively has an investment The Underlying Index is sponsored by
profile similar to that of an applicable Bloomberg, which is independent of the
underlying index. The securities Fund and BFA. The Index Provider
selected are expected to have, in the determines the composition and relative
aggregate, investment characteristics weightings of the securities in the
(based on factors such as market value Underlying Index and publishes
and industry weightings), fundamental information regarding the market value
characteristics (such as return of the Underlying Index.
variability, duration, maturity, credit Industry Concentration Policy. The
ratings and yield) and liquidity measures Fund will concentrate its investments
similar to those of an applicable (i.e., hold 25% or more of its total
underlying index. The Fund may or may assets) in a particular industry or group
not hold all of the securities in the of industries to approximately the same
Underlying Index. extent that the Underlying Index is
The Fund generally will invest at least concentrated. For purposes of this
90% of its assets in the component limitation, securities of the U.S.
securities of the Underlying Index and government (including its agencies and
S-3Table of Contents
instrumentalities), repurchase forward to create or redeem, Fund
agreements collateralized by U.S. shares may be more likely to trade at a
government securities, and securities of premium or discount to NAV and
state or municipal governments and possibly face trading halts or delisting.
their political subdivisions are not Call Risk. During periods of falling
considered to be issued by members of interest rates, an issuer of a callable
any industry. bond held by the Fund may “call” or
Summary of Principal Risks repay the security before its stated
maturity, and the Fund may have to
As with any investment, you could lose reinvest the proceeds in securities with
all or part of your investment in the lower yields, which would result in a
Fund, and the Fund’s performance could decline in the Fund’s income, or in
trail that of other investments. The Fund securities with greater risks or with
is subject to certain risks, including the other less favorable features.
principal risks noted below, any of
which may adversely affect the Fund’s Concentration Risk. The Fund may be
net asset value per share (“NAV”), susceptible to an increased risk of loss,
trading price, yield, total return and including losses due to adverse events
ability to meet its investment objective. that affect the Fund’s investments more
The order of the below risk factors does than the market as a whole, to the
not indicate the significance of any extent that the Fund’s investments are
particular risk factor. concentrated in the securities and/or
other assets of a particular issuer or
Asset Class Risk. Securities and other issuers, country, group of countries,
assets in the Underlying Index or in the region, market, industry, group of
Fund’s portfolio may underperform in industries, sector, market segment or
comparison to the general financial asset class.
markets, a particular financial market or
other asset classes. Credit Risk. Debt issuers and other
counterparties may be unable or
Authorized Participant Concentration unwilling to make timely interest and/or
Risk. Only an Authorized Participant (as principal payments when due or
defined in the Creations and otherwise honor their obligations.
Redemptions section of the Prospectus) Changes in an issuer’s credit rating or
may engage in creation or redemption the market’s perception of an issuer’s
transactions directly with the Fund, and creditworthiness may also adversely
none of those Authorized Participants is affect the value of the Fund’s
obligated to engage in creation and/or investment in that issuer. The degree of
redemption transactions. The Fund has credit risk depends on an issuer’s or
a limited number of institutions that counterparty’s financial condition and
may act as Authorized Participants on on the terms of an obligation.
an agency basis (i.e., on behalf of other
market participants). To the extent that Cybersecurity Risk. Failures or
Authorized Participants exit the breaches of the electronic systems of
business or are unable to proceed with the Fund, the Fund’s adviser, distributor,
creation or redemption orders with the Index Provider and other service
respect to the Fund and no other providers, market makers, Authorized
Authorized Participant is able to step Participants or the issuers of securities
S-4Table of Contents
in which the Fund invests have the which may include those bonds rated
ability to cause disruptions, negatively below “BBB-” by Standard & Poor’s®
impact the Fund’s business operations Global Ratings, a subsidiary of S&P
and/or potentially result in financial Global (“S&P Global Ratings”) and Fitch
losses to the Fund and its shareholders. Ratings, Inc. (“Fitch”) or below “Baa3”
While the Fund has established business by Moody’s Investors Service, Inc.
continuity plans and risk management (“Moody’s”)), or are unrated, may be
systems seeking to address system deemed speculative, may involve
breaches or failures, there are inherent greater levels of risk than higher-rated
limitations in such plans and systems. securities of similar maturity and may
Furthermore, the Fund cannot control be more likely to default.
the cybersecurity plans and systems of Income Risk. The Fund’s income may
the Fund’s Index Provider and other decline if interest rates fall. This decline
service providers, market makers, in income can occur because the Fund
Authorized Participants or issuers of may subsequently invest in lower-
securities in which the Fund invests. yielding bonds as bonds in its portfolio
Extension Risk. During periods of rising mature, are near maturity or are called,
interest rates, certain debt obligations bonds in the Underlying Index are
may be paid off substantially more substituted, or the Fund otherwise
slowly than originally anticipated and needs to purchase additional bonds.
the value of those securities may fall Index-Related Risk. There is no
sharply, resulting in a decline in the guarantee that the Fund’s investment
Fund’s income and potentially in the results will have a high degree of
value of the Fund’s investments. correlation to those of the Underlying
Geographic Risk. A natural disaster Index or that the Fund will achieve its
could occur in a geographic region in investment objective. Market
which the Fund invests, which could disruptions and regulatory restrictions
adversely affect the economy or the could have an adverse effect on the
business operations of companies in the Fund’s ability to adjust its exposure to
specific geographic region, causing an the required levels in order to track the
adverse impact on the Fund’s Underlying Index. Errors in index data,
investments in, or which are exposed to, index computations or the construction
the affected region. of the Underlying Index in accordance
High Portfolio Turnover Risk. High with its methodology may occur from
portfolio turnover (considered by the time to time and may not be identified
Fund to mean higher than 100% and corrected by the Index Provider for
annually) may result in increased a period of time or at all, which may
transaction costs to the Fund, including have an adverse impact on the Fund and
brokerage commissions, dealer mark- its shareholders. Unusual market
ups and other transaction costs on the conditions may cause the Index
sale of the securities and on Provider to postpone a scheduled
reinvestment in other securities. rebalance, which could cause the
Underlying Index to vary from its normal
High Yield Securities Risk. Securities or expected composition.
that are rated below investment-grade
(commonly referred to as “junk bonds,”
S-5Table of Contents
Infectious Illness Risk. An outbreak of and may adversely affect the liquidity of
an infectious respiratory illness, COVID- certain fixed-income investments,
19, caused by a novel coronavirus has including those held by the Fund. The
resulted in travel restrictions, disruption historically low interest rate
of healthcare systems, prolonged environment heightens the risks
quarantines, cancellations, supply chain associated with rising interest rates.
disruptions, lower consumer demand, Issuer Risk. The performance of the
layoffs, ratings downgrades, defaults Fund depends on the performance of
and other significant economic impacts. individual securities to which the Fund
Certain markets have experienced has exposure. The Fund may be
temporary closures, extreme volatility, adversely affected if an issuer of
severe losses, reduced liquidity and underlying securities held by the Fund is
increased trading costs. These events unable or unwilling to repay principal or
will have an impact on the Fund and its interest when due. Changes in the
investments and could impact the financial condition or credit rating of an
Fund’s ability to purchase or sell issuer of those securities may cause the
securities or cause elevated tracking value of the securities to decline.
error and increased premiums or
discounts to the Fund’s NAV. Other Management Risk. As the Fund will not
infectious illness outbreaks in the future fully replicate the Underlying Index, it is
may result in similar impacts. subject to the risk that BFA’s
investment strategy may not produce
Interest Rate Risk. During periods of the intended results.
very low or negative interest rates, the
Fund may be unable to maintain positive Market Risk. The Fund could lose
returns or pay dividends to Fund money over short periods due to short-
shareholders. Very low or negative term market movements and over
interest rates may magnify interest rate longer periods during more prolonged
risk. Changing interest rates, including market downturns. Local, regional or
rates that fall below zero, may have global events such as war, acts of
unpredictable effects on markets, result terrorism, the spread of infectious
in heightened market volatility and illness or other public health issues,
detract from the Fund’s performance to recessions, or other events could have a
the extent the Fund is exposed to such significant impact on the Fund and its
interest rates. Additionally, under investments and could result in
certain market conditions in which increased premiums or discounts to the
interest rates are low and the market Fund’s NAV.
prices for portfolio securities have Market Trading Risk. The Fund faces
increased, the Fund may have a very low numerous market trading risks,
or even negative yield. A low or negative including the potential lack of an active
yield would cause the Fund to lose market for Fund shares, losses from
money in certain conditions and over trading in secondary markets, periods of
certain time periods. An increase in high volatility and disruptions in the
interest rates will generally cause the creation/redemption process. ANY OF
value of securities held by the Fund to THESE FACTORS, AMONG OTHERS,
decline, may lead to heightened MAY LEAD TO THE FUND’S SHARES
volatility in the fixed-income markets
S-6Table of Contents
TRADING AT A PREMIUM OR DISCOUNT may cause the Fund to have to reinvest
TO NAV. in securities with lower yields or higher
Money Market Instruments Risk. The risk of default, resulting in a decline in
value of money market instruments may the Fund’s income or return potential.
be affected by changing interest rates Risk of Investing in Russia. Investing
and by changes in the credit ratings of in Russian securities involves significant
the investments. If a significant amount risks, including legal, regulatory,
of the Fund’s assets are invested in currency and economic risks that are
money market instruments, it will be specific to Russia. In addition, investing
more difficult for the Fund to achieve its in Russian securities involves risks
investment objective. An investment in associated with the settlement of
a money market fund is not insured or portfolio transactions and loss of the
guaranteed by the Federal Deposit Fund’s ownership rights in its portfolio
Insurance Corporation (“FDIC”) or any securities as a result of the system of
other government agency. It is possible share registration and custody in
to lose money by investing in a money Russia. A number of jurisdictions,
market fund. Money market funds other including the U.S., Canada and the
than government money market funds European Union (the “EU”), have
or retail money market funds “float” imposed economic sanctions on certain
their NAV instead of using a stable Russian individuals and Russian
$1.00 per share price. corporate entities. Additionally, Russia
Operational Risk. The Fund is exposed is alleged to have participated in state-
to operational risks arising from a sponsored cyberattacks against foreign
number of factors, including, but not companies and foreign governments.
limited to, human error, processing and Actual and threatened responses to
communication errors, errors of the such activity, including purchasing
Fund’s service providers, counterparties restrictions, sanctions, tariffs or
or other third-parties, failed or cyberattacks on the Russian
inadequate processes and technology government or Russian companies, may
or systems failures. The Fund and BFA impact Russia’s economy and Russian
seek to reduce these operational risks issuers of securities in which the Fund
through controls and procedures. invests.
However, these measures do not Risk of Investing in Saudi Arabia. The
address every possible risk and may be ability of foreign investors (such as the
inadequate to address significant Fund) to invest in the securities of Saudi
operational risks. Arabian issuers is relatively new. Such
Passive Investment Risk. The Fund is ability could be restricted by the Saudi
not actively managed, and BFA generally Arabian government at any time, and
does not attempt to take defensive unforeseen risks could materialize with
positions under any market conditions, respect to foreign ownership in such
including declining markets. securities. The economy of Saudi Arabia
is dominated by petroleum exports. A
Prepayment Risk. During periods of sustained decrease in petroleum prices
falling interest rates, issuers of certain could have a negative impact on all
debt obligations may repay principal aspects of the economy. Investments in
prior to the security’s maturity, which the securities of Saudi Arabian issuers
S-7Table of Contents
involve risks not typically associated or region’s security may cause
with investments in securities of issuers uncertainty in its markets and may
in more developed countries that may adversely affect its economy and the
negatively affect the value of the Fund’s Fund’s investments.
investments. Such heightened risks may Tracking Error Risk. The Fund may be
include, among others, expropriation subject to tracking error, which is the
and/or nationalization of assets, divergence of the Fund’s performance
restrictions on and government from that of the Underlying Index.
intervention in international trade, Tracking error may occur because of
confiscatory taxation, political differences between the securities and
instability, including authoritarian and/ other instruments held in the Fund’s
or military involvement in governmental portfolio and those included in the
decision making, armed conflict, crime Underlying Index, pricing
and instability as a result of religious, differences (including, as applicable,
ethnic and/or socioeconomic unrest. differences between a security’s price
There remains the possibility that at the local market close and the Fund’s
instability in the larger Middle East valuation of a security at the time of
region could adversely impact the calculation of the Fund’s NAV),
economy of Saudi Arabia, and there is transaction costs incurred by the Fund,
no assurance of political stability in the Fund’s holding of uninvested cash,
Saudi Arabia. differences in timing of the accrual of or
Risk of Investing in the U.S. Certain the valuation of distributions, the
changes in the U.S. economy, such as requirements to maintain pass-through
when the U.S. economy weakens or tax treatment, portfolio transactions
when its financial markets decline, may carried out to minimize the distribution
have an adverse effect on the securities of capital gains to shareholders,
to which the Fund has exposure. acceptance of custom baskets, changes
Securities Lending Risk. The Fund may to the Underlying Index or the costs to
engage in securities lending. Securities the Fund of complying with various new
lending involves the risk that the Fund or existing regulatory requirements. This
may lose money because the borrower risk may be heightened during times of
of the loaned securities fails to return increased market volatility or other
the securities in a timely manner or at unusual market conditions. Tracking
all. The Fund could also lose money in error also may result because the Fund
the event of a decline in the value of incurs fees and expenses, while the
collateral provided for loaned securities Underlying Index does not.
or a decline in the value of any U.S. Agency Debt Risk. The Fund
investments made with cash collateral. invests in unsecured bonds or
These events could also trigger adverse debentures issued or guaranteed by the
tax consequences for the Fund. U.S. government or one of its agencies
Security Risk. Some countries and or sponsored entities. Certain debt
regions in which the Fund invests have issuances by U.S. government agencies
experienced security concerns, such as or sponsored entities, including, among
terrorism and strained international others, the Federal National Mortgage
relations. Incidents involving a country’s Association (“Fannie Mae”) the Federal
Home Loan Mortgage Corporation
S-8Table of Contents
(“Freddie Mac”), the Federal Home Loan would expose the Fund to possible
Banks (“FHLB”), and the Tennessee losses.
Valley Authority (“TVA”), are backed only U.S. Treasury Obligations Risk. U.S.
by the general creditworthiness and Treasury obligations may differ from
reputation of the U.S. government other securities in their interest rates,
agency or sponsored entity and not the maturities, times of issuance and other
full faith and credit of the U.S. characteristics and may provide
government and, as a result, are subject relatively lower returns than those of
to additional credit risk. To the extent other securities. Similar to other
that the U.S. government has provided issuers, changes to the financial
support to a U.S. agency or sponsored condition or credit rating of the U.S.
entity in the past, there can be no government may cause the value of the
assurance that the U.S. government will Fund’s U.S. Treasury obligations to
provide support in the future if it is not decline.
obligated to do so. Government
National Mortgage Association (“Ginnie Valuation Risk. The price the Fund
Mae”) securities and certain foreign could receive upon the sale of a security
government debt issuances guaranteed or other asset may differ from the
by the U.S. government are backed by Fund’s valuation of the security or other
the full faith and credit of the U.S. asset and from the value used by the
government. Underlying Index, particularly for
securities or other assets that trade in
U.S. Agency Mortgage-Backed low volume or volatile markets or that
Securities Risk. The Fund invests in are valued using a fair value
MBS issued or guaranteed by the U.S. methodology as a result of trade
government or one of its agencies or suspensions or for other reasons. In
sponsored entities, some of which may addition, the value of the securities or
not be backed by the full faith and credit other assets in the Fund’s portfolio may
of the U.S. government. MBS represent change on days or during time periods
interests in “pools” of mortgages and when shareholders will not be able to
are subject to interest rate, purchase or sell the Fund’s shares.
prepayment, and extension risk. MBS Authorized Participants who purchase or
react differently to changes in interest redeem Fund shares on days when the
rates than other bonds, and the prices Fund is holding fair-valued securities
of MBS may reflect adverse economic may receive fewer or more shares, or
and market conditions. Small lower or higher redemption proceeds,
movements in interest rates (both than they would have received had the
increases and decreases) may quickly Fund not fair-valued securities or used a
and significantly reduce the value of different valuation methodology. The
certain MBS. MBS are also subject to Fund’s ability to value investments may
the risk of default on the underlying be impacted by technological issues or
mortgage loans, particularly during errors by pricing services or other third-
periods of economic downturn. Default party service providers.
or bankruptcy of a counterparty to a
to-be-announced (“TBA”) transaction
S-9Table of Contents
Performance Information
The bar chart and table that follow show how the Fund has performed on a calendar
year basis and provide an indication of the risks of investing in the Fund. Both assume
that all dividends and distributions have been reinvested in the Fund. Past performance
(before and after taxes) does not necessarily indicate how the Fund will perform in the
future. If BFA had not waived certain Fund fees during certain periods, the Fund’s
returns would have been lower.
Year by Year Returns1 (Years Ended December 31)
12%
8.82%
9%
6.37%
6%
3.89%
3%
0.07%
0%
2017 2018 2019 2020
1
The Fund’s year-to-date return as of March 31, 2021 was -2.36%
The best calendar quarter return during the periods shown above was 3.42% in the 1st
quarter of 2019; the worst was -1.57% in the 1st quarter of 2018.
Updated performance information, including the Fund’s current NAV, may be obtained
by visiting our website at www.iShares.com or by calling 1-800-iShares (1-800-474-
2737) (toll free).
Average Annual Total Returns
(for the periods ended December 31, 2020)
Since Fund
One Year Inception
(Inception Date: 11/1/2016)
Return Before Taxes 6.37% 4.01%
Return After Taxes on Distributions2 5.23% 2.80%
Return After Taxes on Distributions and Sale of Fund Shares2 3.76% 2.53%
Bloomberg Barclays U.S. Universal 5-10 Year Index (Index returns
do not reflect deductions for fees, expenses, or taxes) 6.60% 4.12%
2
After-tax returns in the table above are calculated using the historical highest individual
U.S. federal marginal income tax rates and do not reflect the impact of state or local taxes.
Actual after-tax returns depend on an investor’s tax situation and may differ from those
shown, and after-tax returns shown are not relevant to tax-exempt investors or investors
who hold shares through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts (“IRAs”). Fund returns after taxes on distributions and sales of Fund
shares are calculated assuming that an investor has sufficient capital gains of the same
character from other investments to offset any capital losses from the sale of Fund shares.
As a result, Fund returns after taxes on distributions and sales of Fund shares may exceed
Fund returns before taxes and/or returns after taxes on distributions.
S-10Table of Contents
Management Tax Information
Investment Adviser. BlackRock Fund The Fund intends to make distributions
Advisors. that may be taxable to you as ordinary
Portfolio Managers. James Mauro and income or capital gains, unless you are
Karen Uyehara (the “Portfolio investing through a tax-deferred
Managers”) are primarily responsible for arrangement such as a 401(k) plan or
the day-to-day management of the an IRA, in which case, your distributions
Fund. Each Portfolio Manager generally will be taxed when withdrawn.
supervises a portfolio management Payments to Broker-Dealers
team. Mr. Mauro and Ms. Uyehara have
been Portfolio Managers of the Fund
and Other Financial
since 2016 and 2021, respectively. Intermediaries
If you purchase shares of the Fund
Purchase and Sale of Fund through a broker-dealer or other
Shares financial intermediary (such as a bank),
The Fund is an exchange-traded fund BFA or other related companies may
(commonly referred to as an “ETF”). pay the intermediary for marketing
Individual shares of the Fund may only activities and presentations, educational
be bought and sold in the secondary training programs, conferences, the
market through a broker-dealer. development of technology platforms
Because ETF shares trade at market and reporting systems or other services
prices rather than at NAV, shares may related to the sale or promotion of the
trade at a price greater than NAV (a Fund. These payments may create a
premium) or less than NAV (a discount). conflict of interest by influencing the
An investor may incur costs attributable broker-dealer or other intermediary and
to the difference between the highest your salesperson to recommend the
price a buyer is willing to pay to Fund over another investment. Ask your
purchase shares of the Fund (bid) and salesperson or visit your financial
the lowest price a seller is willing to intermediary’s website for more
accept for shares of the Fund (ask) information.
when buying or selling shares in the
secondary market (the “bid-ask
spread”).
S-11Table of Contents
[THIS PAGE INTENTIONALLY LEFT BLANK]Table of Contents
More Information About the Fund
This Prospectus contains important information about investing in the Fund. Please
read this Prospectus carefully before you make any investment decisions. Additional
information regarding the Fund is available at www.iShares.com.
BFA is the investment adviser to the Fund. Shares of the Fund are listed for trading on
NYSE Arca, Inc. (“NYSE Arca”). The market price for a share of the Fund may be
different from the Fund’s most recent NAV.
ETFs are funds that trade like other publicly-traded securities. The Fund is designed to
track an index. Similar to shares of an index mutual fund, each share of the Fund
represents an ownership interest in an underlying portfolio of securities and other
instruments intended to track a market index. Unlike shares of a mutual fund, which
can be bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund at
NAV solely by Authorized Participants and only in aggregations of a specified number of
shares (“Creation Units”). Also unlike shares of a mutual fund, shares of the Fund are
listed on a national securities exchange and trade in the secondary market at market
prices that change throughout the day.
The Fund invests in a particular segment of the securities markets and seeks to track
the performance of a securities index that is not representative of the market as a
whole. The Fund is designed to be used as part of broader asset allocation strategies.
Accordingly, an investment in the Fund should not constitute a complete investment
program.
An index is a financial calculation, based on a grouping of financial instruments, and is
not an investment product, while the Fund is an actual investment portfolio. The
performance of the Fund and the Underlying Index may vary for a number of reasons,
including transaction costs, non-U.S. currency valuations, asset valuations, corporate
actions (such as mergers and spin-offs), timing variances and differences between the
Fund’s portfolio and the Underlying Index resulting from the Fund’s use of
representative sampling or from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index. From time to
time, the Index Provider may make changes to the methodology or other adjustments
to the Underlying Index. Unless otherwise determined by BFA, any such change or
adjustment will be reflected in the calculation of the Underlying Index performance on
a going-forward basis after the effective date of such change or adjustment. Therefore,
the Underlying Index performance shown for periods prior to the effective date of any
such change or adjustment will generally not be recalculated or restated to reflect
such change or adjustment.
“Tracking error” is the divergence of the Fund’s performance from that of the
Underlying Index. Because the Fund uses a representative sampling indexing strategy,
it can be expected to have a larger tracking error than if it used a replication indexing
strategy. “Replication” is an indexing strategy in which a fund invests in substantially all
1Table of Contents
of the securities in its underlying index in approximately the same proportions as in the
underlying index.
An investment in the Fund is not a bank deposit and it is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government agency, BFA or
any of its affiliates.
The Fund’s investment objective and the Underlying Index may be changed without
shareholder approval.
A Further Discussion of Principal Risks
The Fund is subject to various risks, including the principal risks noted below, any of
which may adversely affect the Fund’s NAV, trading price, yield, total return and ability
to meet its investment objective. You could lose all or part of your investment in the
Fund, and the Fund could underperform other investments. The order of the below risk
factors does not indicate the significance of any particular risk factor.
Asset Class Risk. The securities and other assets in the Underlying Index or in the
Fund’s portfolio may underperform in comparison to other securities or indexes that
track other countries, groups of countries, regions, industries, groups of industries,
markets, market segments, asset classes or sectors. Various types of securities,
currencies and indexes may experience cycles of outperformance and
underperformance in comparison to the general financial markets depending upon a
number of factors including, among other things, inflation, interest rates, productivity,
global demand for local products or resources, and regulation and governmental
controls. This may cause the Fund to underperform other investment vehicles that
invest in different asset classes.
Authorized Participant Concentration Risk. Only an Authorized Participant may
engage in creation or redemption transactions directly with the Fund, and none of
those Authorized Participants is obligated to engage in creation and/or redemption
transactions. The Fund has a limited number of institutions that may act as Authorized
Participants on an agency basis (i.e., on behalf of other market participants). To the
extent that Authorized Participants exit the business or are unable to proceed with
creation or redemption orders with respect to the Fund and no other Authorized
Participant is able to step forward to create or redeem Creation Units, Fund shares
may be more likely to trade at a premium or discount to NAV and possibly face trading
halts or delisting. Authorized Participant concentration risk may be heightened
because ETFs, such as the Fund, that invest in securities issued by non-U.S. issuers or
other securities or instruments that are less widely traded often involve greater
settlement and operational issues and capital costs for Authorized Participants, which
may limit the availability of Authorized Participants.
Call Risk. During periods of falling interest rates, an issuer of a callable bond held by
the Fund may “call” or repay the security before its stated maturity, and the Fund may
have to reinvest the proceeds in securities with lower yields, which would result in a
decline in the Fund’s income, or in securities with greater risks or with other less
favorable features.
2Table of Contents
Concentration Risk. The Fund may be susceptible to an increased risk of loss,
including losses due to adverse events that affect the Fund’s investments more than
the market as a whole, to the extent that the Fund’s investments are concentrated in
the securities and/or other assets of a particular sovereign or quasi-sovereign entity or
entities, country, group of countries, region, market, industry, group of industries,
sector, market segment or asset class. The Fund may be more adversely affected by
the underperformance of those securities and/or other assets, may experience
increased price volatility and may be more susceptible to adverse economic, market,
political or regulatory occurrences affecting those securities and/or other assets than
a fund that does not concentrate its investments.
Credit Risk. Credit risk is the risk that the issuer or guarantor of a debt instrument or
the counterparty to a derivatives contract, repurchase agreement or loan of portfolio
securities will be unable or unwilling to make its timely interest and/or principal
payments when due or otherwise honor its obligations. There are varying degrees of
credit risk, depending on an issuer’s or counterparty’s financial condition and on the
terms of an obligation, which may be reflected in the issuer’s or counterparty’s credit
rating. There is the chance that the Fund’s portfolio holdings will have their credit
ratings downgraded or will default (i.e., fail to make scheduled interest or principal
payments), or that the market’s perception of an issuer’s creditworthiness may
worsen, potentially reducing the Fund’s income level or share price.
Cybersecurity Risk. With the increased use of technologies such as the internet to
conduct business, the Fund, Authorized Participants, service providers and the relevant
listing exchange are susceptible to operational, information security and related
“cyber” risks both directly and through their service providers. Similar types of
cybersecurity risks are also present for issuers of securities in which the Fund invests,
which could result in material adverse consequences for such issuers and may cause
the Fund’s investment in such issuers to lose value. Unlike many other types of risks
faced by the Fund, these risks typically are not covered by insurance. In general, cyber
incidents can result from deliberate attacks or unintentional events. Cyber incidents
include, but are not limited to, gaining unauthorized access to digital systems (e.g.,
through “hacking” or malicious software coding) for purposes of misappropriating
assets or sensitive information, corrupting data, or causing operational disruption.
Cyberattacks may also be carried out in a manner that does not require gaining
unauthorized access, such as causing denial-of-service attacks on websites (i.e.,
efforts to make network services unavailable to intended users). Recently, geopolitical
tensions may have increased the scale and sophistication of deliberate attacks,
particularly those from nation-states or from entities with nation-state backing.
Cybersecurity failures by, or breaches of, the systems of the Fund’s adviser, distributor
and other service providers (including, but not limited to, index and benchmark
providers, fund accountants, custodians, transfer agents and administrators), market
makers, Authorized Participants or the issuers of securities in which the Fund invests,
have the ability to cause disruptions and impact business operations, potentially
resulting in: financial losses, interference with the Fund’s ability to calculate its NAV,
disclosure of confidential trading information, impediments to trading, submission of
erroneous trades or erroneous creation or redemption orders, the inability of the Fund
or its service providers to transact business, violations of applicable privacy and other
3Table of Contents
laws, regulatory fines, penalties, reputational damage, reimbursement or other
compensation costs, or additional compliance costs. In addition, cyberattacks may
render records of Fund assets and transactions, shareholder ownership of Fund shares,
and other data integral to the functioning of the Fund inaccessible or inaccurate or
incomplete. Substantial costs may be incurred by the Fund in order to resolve or
prevent cyber incidents in the future. While the Fund has established business
continuity plans in the event of, and risk management systems to prevent, such cyber
incidents, there are inherent limitations in such plans and systems, including the
possibility that certain risks have not been identified and that prevention and
remediation efforts will not be successful or that cyberattacks will go undetected.
Furthermore, the Fund cannot control the cybersecurity plans and systems put in place
by service providers to the Fund, issuers in which the Fund invests, the Index Provider,
market makers or Authorized Participants. The Fund and its shareholders could be
negatively impacted as a result.
Extension Risk. During periods of rising interest rates, certain debt obligations may
be paid off substantially more slowly than originally anticipated and the value of those
securities may fall sharply, resulting in a decline in the Fund’s income and potentially in
the value of the Fund’s investments.
Geographic Risk. Some of the companies in which the Fund invests are located in
parts of the world that have historically been prone to natural disasters, such as
earthquakes, tornadoes, volcanic eruptions, droughts, floods, hurricanes or tsunamis,
and are economically sensitive to environmental events. Any such event may adversely
impact the economies of these geographic areas or business operations of companies
in these geographic areas, causing an adverse impact on the value of the Fund.
High Portfolio Turnover Risk. High portfolio turnover (considered by the Fund to
mean higher than 100% annually) may result in increased transaction costs to the
Fund, including brokerage commissions, dealer mark-ups and other transaction costs
on the sale of the securities and on reinvestment in other securities. These effects of
higher than normal portfolio turnover may adversely affect Fund performance.
High Yield Securities Risk. Securities that are rated below investment-grade
(commonly referred to as “junk bonds,” which may include those bonds rated below
“BBB-” by S&P Global Ratings and Fitch, or below “Baa3” by Moody’s), or are unrated,
may be deemed speculative, may involve greater levels of risk than higher-rated
securities of similar maturity and may be more likely to default.
The major risks of high yield securities investments include:
䡲 High yield securities may be issued by less creditworthy issuers. Issuers of high yield
securities may have a larger amount of outstanding debt relative to their assets than
issuers of investment-grade bonds. In the event of an issuer’s bankruptcy, claims of
other creditors may have priority over the claims of high yield securities holders,
leaving few or no assets available to repay high yield securities holders.
䡲 Prices of high yield securities are subject to extreme price fluctuations. Adverse
changes in an issuer’s industry and general economic conditions may have a greater
impact on the prices of high yield securities than on other higher rated fixed-income
securities. The credit rating of a high yield security does not necessarily address its
4You can also read
