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INTERIM REPORT AND UNAUDITED FINANCIAL STATEMENTSiSHARES IV PLC

FOR THE PERIOD FROM 1 JUNE 2016

TO 30 NOVEMBER 2016

iSHARES IV PLC

i S H A R E S I V P L C I N T E R I M R E P O R T [ 1 ]

Contents

General information 3

Background 5

Half yearly management report

Investment Manager’s report 11

Financial instruments and risks 22

Significant related party transactions 39

Financial Statements

Unaudited financial statements of the Company

Condensed income statement 42

Condensed statement of changes in net assets attributable to redeemable participating shareholders 42

Condensed balance sheet 43

Notes to the unaudited financial statements of the Company 44

Unaudited condensed Fund primary statements, schedules of investments, schedules of material purchases and sales, and notes

iShares $ Short Duration Corp Bond UCITS ETF 46

iShares $ Short Duration High Yield Corp Bond UCITS ETF 70

iShares $ Treasury Bond 20+yr UCITS ETF 84

iShares $ Ultrashort Bond UCITS ETF 89

iShares € Govt Bond 20yr Target Duration UCITS ETF 98

iShares € Ultrashort Bond UCITS ETF 102

iShares £ Ultrashort Bond UCITS ETF 112

iShares Ageing Population UCITS ETF 119

iShares Automation & Robotics UCITS ETF 127

iShares Digitalisation UCITS ETF 134

iShares Edge MSCI Europe Momentum Factor UCITS ETF 141

iShares Edge MSCI Europe Multifactor UCITS ETF 148

iShares Edge MSCI Europe Quality Factor UCITS ETF 155

iShares Edge MSCI Europe Size Factor UCITS ETF 162

iShares Edge MSCI Europe Value Factor UCITS ETF 171

iShares Edge MSCI USA Momentum Factor UCITS ETF 178

iShares Edge MSCI USA Multifactor UCITS ETF 184

iShares Edge MSCI USA Quality Factor UCITS ETF 190

iShares Edge MSCI USA Size Factor UCITS ETF 196

iShares Edge MSCI USA Value Factor UCITS ETF 204

iShares Edge MSCI World Momentum Factor UCITS ETF 210

iShares Edge MSCI World Multifactor UCITS ETF 221

iShares Edge MSCI World Quality Factor UCITS ETF 233

iShares Edge MSCI World Size Factor UCITS ETF 243

iShares Edge MSCI World Value Factor UCITS ETF 263

iShares Fallen Angels High Yield Corp Bond UCITS ETF 274

iShares Healthcare Innovation UCITS ETF 284

iShares iBonds Sep 2018 $ Corp UCITS ETF 291

iShares MSCI China A UCITS ETF 302

iShares MSCI EM SRI UCITS ETF 312

iShares MSCI EMU Large Cap UCITS ETF 320

iSHARES IV PLC

[ 2 ] i S H A R E S I V P L C I N T E R I M R E P O R T

Contents (continued)

Financial Statements (continued)

Unaudited condensed Fund primary statements, schedules of investments, schedules of material purchases and sales,

and notes (continued):

iShares MSCI EMU Mid Cap UCITS ETF 327

iShares MSCI France UCITS ETF 334

iShares MSCI Japan SRI EUR Hedged UCITS ETF (Acc) 339

iShares MSCI USA SRI UCITS ETF 344

iShares TA-25 Israel UCITS ETF 350

iShares US Equity Buyback Achievers UCITS ETF 354

iShares US Mortgage Backed Securities UCITS ETF 360

Notes to the unaudited financial statements of the Funds 365

Supplementary Information 371

Glossary 387

Disclaimers 388

This interim report and unaudited financial statements (the “Report and Accounts”) may be translated into other languages. Any such translation shall only contain the same information and have the same meaning as the English language Report and Accounts. To the extent that there is any inconsistency between the English language Report and Accounts and the Report and Accounts in another language, the English language Report and Accounts will prevail, except to the extent (and only to the extent) that it is required by law of any jurisdiction where the shares are sold, that in an action based upon disclosure in a Report and Accounts in a language other than English, the language of the Report and Accounts on which such action is based shall prevail. Any disputes as to the terms of the Report and Accounts, regardless of the language of the Report and Accounts, shall be governed by and construed in accordance with the laws of Ireland.

iSHARES IV PLC


General information

Board of Directors1 Sub-Investment Managers2

Paul McNaughton (Chairman) (Irish) BlackRock Financial Management Inc.

Paul McGowan (Irish) 40 East 52nd Street

Barry O’Dwyer (Irish) New York

Karen Prooth (British) NY 10022

Teresa O’Flynn (Irish) United States

Audit Committee Members BlackRock (Singapore) Limited

Paul McGowan (Chairman) 20 Anson Road

Paul McNaughton #18-01

Singapore 079912

Nomination Committee Members Singapore

Paul McNaughton (Chairman)

Paul McGowan Depositary

Barry O'Dwyer State Street Custodial Services (Ireland) Limited

78 Sir John Rogerson’s Quay

Manager Dublin 2

BlackRock Asset Management Ireland Limited Ireland

J.P. Morgan House

International Financial Services Centre PRC Sub-Custodian3

Dublin 1 The Hong Kong and Shanghai Banking Corporation Limited

Ireland 1 Queen's Road Central

Hong Kong

Administrator China

State Street Fund Services (Ireland) Limited

78 Sir John Rogerson’s Quay RQFII Custodian3

Dublin 2 HSBC Bank (China) Co Ltd

Ireland 33th Floor, HSBC Building

Shanghai ifc

Registrar 8 Century Avenue

State Street Fund Services (Ireland) Limited Pudong

78 Sir John Rogerson’s Quay Shanghai

Dublin 2 China 200120

Ireland

Registered office of the Company

Company Secretary J.P. Morgan House

Sanne International Financial Services Centre

Fourth Floor Dublin 1

76 Lower Baggot Street Ireland

Dublin 2

Ireland

Legal Advisors to the Company

Investment Manager and Promoter William Fry

BlackRock Advisors (UK) Limited 2 Grand Canal Square

12 Throgmorton Avenue Dublin 2

London EC2N 2DL Ireland

England

1 All Directors are non-executive Directors. 2 The Investment Manager has sub-delegated the investment decision making in respect of iShares $ Short Duration Corp Bond UCITS ETF, iShares $ Short Duration High Yield Corp Bond UCITS ETF, iShares $ Treasury Bond 20+yr UCITS ETF, iShares $ Ultrashort Bond UCITS ETF, iShares € Govt Bond 20yr Target Duration UCITS ETF, iShares € Ultrashort Bond UCITS ETF, iShares £ Ultrashort Bond UCITS ETF, iShares Fallen Angels High Yield Corp Bond UCITS ETF, iShares iBonds Sep 2018 $ Corp UCITS ETF and iShares US Mortgage Backed Securities UCITS ETF. 3 PRC Sub-Custodian and RQFII Custodian relate to iShares MSCI China A UCITS ETF only.

iSHARES IV PLC


General information (continued)

Independent Auditors Paying Agent in Switzerland

PricewaterhouseCoopers State Street Bank International GmbH

Chartered Accountants and Registered Auditors Munich, Zurich Branch

One Spencer Dock Beethovenstrasse 19

North Wall Quay CH-8027 Zurich

Dublin 1 Switzerland

Ireland

German Paying and Information Agent

Representative in Switzerland Commerzbank AG

BlackRock Asset Management Schweiz AG Theodor-Heuss-Allee 50

Bahnhofstrasse 39 60486 Frankfurt am Main

8001 Zurich Germany

Switzerland

Austrian Paying and Information Agent

Paying Agent UniCredit Bank Austria AG

Citibank N.A., London Branch Attn: 8398/Custody

Citigroup Centre Julius Tandler Platz 3

25 Canada Square 1090 Vienna

Canary Wharf Austria

London E14 5LB

England

The Company is duly registered with the Comisión Nacional de Mercado de Valores in Spain under number 1042.

iSHARES IV PLC

Background


iShares IV public limited company (the "Company") is organised as an open-ended investment Company with variable capital. The Company was

incorporated in Ireland on 3 July 2009 with limited liability and segregated liability between its Funds and is organised under the laws of Ireland

as a Public Limited Company (“plc”) pursuant to the Companies Act 2014 and the European Communities (Undertaking in Collective Investment

in Transferable Securities) Regulations, 2011 (as amended) (the "UCITS Regulations") and is regulated by the Central Bank of Ireland (the "CBI").

The Company is structured as an umbrella Fund and comprises separate Funds (“Funds”) of the Company.

The term “Fund” shall be deemed to mean either a Fund of the Company, or if the context so requires, the Manager or its delegate acting for the

account of the relevant Fund. The term “BlackRock” is used to represent BlackRock Advisors (UK) Limited. The investment objectives and

policies of each Fund are set out in the prospectus and the relevant supplemental prospectus.

Changes to the Company

The TER discount applied to iShares $ Ultrashort Bond UCITS ETF, iShares £ Ultrashort Bond UCITS ETF and iShares € Ultrashort Bond UCITS

ETF was permanently discounted to 0.09% from 6 June 2016.

iShares Fallen Angels High Yield Corp Bond UCITS ETF launched on 22 June 2016. This was reflected in the addendum to the prospectus that

was issued on 22 June 2016.

In response to the CBI publishing the Central Bank (Supervision and Enforcement) Act, 2013 (Section 48(1)) Investor Money Regulations 2015 for

Fund Service Providers (the “Investor Money Regulations” or “IMR”) in March 2015 (effective from 1 July 2016), the Manager undertook, together

with State Street Custodial Services (Ireland) Limited, a review of the way in which subscription, distribution and redemption monies are

channelled to and from the Company.

As a result of this review, subscription and redemption monies will (effective from 23 May 2016), be channelled through an umbrella cash

collection account in the name of the Company, and in respect of any Funds considered to be highly leveraged, Fund cash collection accounts in

the name of the relevant Fund(s). Pending issue of the Shares and /or payment of subscription proceeds to an account in the name of the

Company or the relevant Fund(s), and pending payment of redemption proceeds or distributions, the relevant investor will be an unsecured

creditor of the relevant Fund in respect of amounts paid by or due to it. An Addendum issued on 4 July 2016 includes this change. For the

avoidance of doubt, none of the Funds of the Company are considered highly leveraged.

iShares Sustainable MSCI Emerging Markets SRI UCITS ETF and iShares Sustainable MSCI USA SRI UCITS ETF launched on 11 July 2016. On 22

November 2016, the Fund names changed to iShares MSCI EM SRI UCITS ETF and iShares MSCI USA SRI UCITS ETF respectively.

iShares Ageing Population UCITS ETF, iShares Automation & Robotics UCITS ETF, iShares Digitalisation UCITS ETF and iShares Healthcare

Innovation UCITS ETF launched on 12 September 2016.

On 14 September 2016, the Brazilian Tax Authorities issued Normative Instruction 1658/16 amending the list of countries considered to be ‘low

tax jurisdictions’ to include Curacao, Saint Martin and Ireland and exclude the Netherlands Antilles and Saint Kitts and Nevis. The changes are

effective from 1 October 2016 onwards. As a consequence, Brazilian Capital Gains Tax (“CGT”) and increased income withholding tax (“WHT”)

rates on interest on capital distributions will apply to the Brazilian securities held in the following Funds, iShares MSCI EM SRI UCITS ETF,

iShares Automation & Robotics UCITS ETF, iShares Ageing Population UCITS ETF, and iShares Digitalisation UCITS ETF. From 1 October

onwards, capital gains are subject to CGT, which is currently being accounted for through a levy on primary market redemptions, as permitted

under the “Duties and Charges” definition within the prospectus.

iShares Edge MSCI USA Momentum Factor UCITS ETF, iShares Edge MSCI USA Quality Factor UCITS ETF, iShares Edge MSCI USA Size Factor

UCITS ETF and iShares Edge MSCI USA Value Factor UCITS ETF launched on 14 October 2016.

On 2 November 2016, the Board of Directors of the Company notified shareholders of their intention to launch multiple share classes within

most of the existing Funds of the Company and also other Funds across the Irish iShares range and an amendment to the definition of ‘Duties

and Charges’.

iSHARES IV PLC

Background (continued)


Changes to the Company (continued)

The following name changes to the Funds and changes to benchmark index names as detailed below were effective from 22 November 2016.

Existing Fund Name New Fund Name

iShares $ Short Duration Corporate Bond UCITS ETF iShares $ Short Duration Corp Bond UCITS ETF

iShares $ Short Duration High Yield Corporate Bond UCITS ETF iShares $ Short Duration High Yield Corp Bond UCITS ETF

iShares Euro Government Bond 20yr Target Duration UCITS ETF iShares € Govt Bond 20yr Target Duration UCITS ETF

iShares Euro Ultrashort Bond UCITS ETF iShares € Ultrashort Bond UCITS ETF

iShares Fallen Angels High Yield Corporate Bond UCITS ETF iShares Fallen Angels High Yield Corp Bond UCITS ETF

iShares iBonds Sep 2018 USD Corporate UCITS ETF iShares iBonds Sep 2018 $ Corp UCITS ETF

iShares Sustainable MSCI Emerging Markets SRI UCITS ETF iShares MSCI EM SRI UCITS ETF

iShares Sustainable MSCI Japan SRI EUR Hedged UCITS ETF iShares MSCI Japan SRI EUR Hedged UCITS ETF (Acc)

iShares Sustainable MSCI USA SRI UCITS ETF iShares MSCI USA SRI UCITS ETF

Fund Benchmark Name Updated Benchmark Name

iShares $ Treasury Bond 20+yr UCITS ETF Barclays U.S. 20+ Year Treasury Bond Index ICE U.S. Treasury 20+ Years Bond Index

iShares Fallen Angels High Yield Corp

Bond UCITS ETF

Barclays Global Corporate ex EM Fallen

Angels 3% Issuer Capped Index

Bloomberg Barclays Global Corporate ex

EM Fallen Angels 3% Issuer Capped Index

iShares iBonds Sep 2018 $ Corp

UCITS ETF

Barclays September 2018 Maturity

US Corporate Index

Bloomberg Barclays September 2018

Maturity US Corporate Index

iShares US Mortgage Backed Securities

UCITS ETF

Barclays US Mortgage Backed

Securities Index

Bloomberg Barclays US Mortgage

Backed Securities Index

The prospectus previously stated that the TERs of iShares € Ultrashort Bond UCITS ETF, iShares $ Ultrashort Bond UCITS ETF and iShares $

Ultrashort Bond UCITS ETF were reduced temporarily. This change has been made permanent from 22 November 2016 and the TERs have

decreased from 0.20% to 0.09%. On 22 November 2016, a revised prospectus was issued to reflect the changes listed above.

As of 18 November 2016, the Company Secretary changed from Chartered Corporate Services, Taney Hill, Eglinton Terrace, Dundrum, Dublin 14

to Sanne, Fourth Floor, 76 Lower Baggot Street, Dublin 2.

Securities Financing Transactions Regulation (Regulation (EU) 2015/2365) (“SFTR”) came into force on 12 January 2016 and, amongst other

requirements, introduces new disclosure requirements in the Funds' annual and half-yearly reports published after 13 January 2017 detailing

the Funds’ use of securities financing transactions and total return swaps ("TRS"). As a result, additional disclosures have been included in the

Supplementary Information section to the Interim Report.

Brexit

In a United Kingdom (“UK”) referendum held on 23 June 2016, the electorate of the UK resolved to leave the European Union. For further details

on the possible impact of the results of the referendum please refer to the Investment Manager’s report and the Financial Instruments and

Risk: Market Risk section.

Renminbi qualified foreign institutional investor

Under current law issued from the Peoples Republic of China (“PRC”) and subject to minor exceptions, investors based in certain jurisdictions

outside the PRC may apply to the China Securities Regulatory Commission (“CSRC”) for status as a Renminbi Qualified Foreign Institutional

Investor (“RQFII”). Once an entity is licensed as a RQFII, it will be eligible to apply for a certain amount of RQFII Quota (investment quota issued

by China’s State Administration of Foreign Exchange (“SAFE”) to invest directly in China A Shares).

The Investment Manager has been licensed as a RQFII and as at 11 March 2015 has been granted an allocation of RQFII Quota for allocation

across multiple funds under its management.

iSHARES IV PLC



Renminbi qualified foreign institutional investor (continued)

The capacity of iShares MSCI China A UCITS ETF to make investments in China A shares depends on several factors, including sufficient RQFII

Quota being granted by SAFE to the Investment Manager (including any additional RQFII Quota when needed) and allocated by the Investment

Manager for use by the Fund, as well as the ability of the Investment Manager to maintain its RQFII Licence. The Investment Manager has the

flexibility to allocate its RQFII Quota across multiple funds under its management from time to time. As such, the Fund will not have exclusive

use of a specified amount of RQFII Quota and will rely on the Investment Manager’s management and allocation of such quota between different

Funds.

Fund Details

There were 38 Funds in operation at 30 November 2016. The investment objective of the Funds is to provide investors with a total return, taking

into account the capital and income returns, which reflect the total returns of the respective benchmark listed in the table below:

Fund Benchmark Index

Investment Management Approach*

iShares $ Short Duration Corp Bond UCITS ETF Markit iBoxx USD Liquid Investment Grade 0-5 Index Non-replicating

iShares $ Short Duration High Yield Corp Bond UCITS ETF Markit iBoxx USD Liquid High Yield 0-5 Capped Index Non-replicating

iShares $ Treasury Bond 20+yr UCITS ETF** ICE U.S. Treasury 20+ Years Bond Index Non-replicating

iShares $ Ultrashort Bond UCITS ETF Markit iBoxx USD Liquid Investment Grade Ultrashort Index Non-replicating

iShares € Govt Bond 20yr Target Duration UCITS ETF Markit iBoxx EUR Eurozone 20yr Target Duration Index Non-replicating

iShares € Ultrashort Bond UCITS ETF Markit iBoxx EUR Liquid Investment Grade Ultrashort Index Non-replicating

iShares £ Ultrashort Bond UCITS ETF Markit iBoxx GBP Liquid Investment Grade Ultrashort Index Non-replicating

iShares Ageing Population UCITS ETF iSTOXX® FactSet Ageing Population Index Non-replicating

iShares Automation & Robotics UCITS ETF iSTOXX® FactSet Automation & Robotics Index Non-replicating

iShares Digitalisation UCITS ETF iSTOXX® FactSet Digitalisation Index Non-replicating

iShares Edge MSCI Europe Momentum Factor UCITS ETF MSCI Europe Momentum Index Non-replicating

iShares Edge MSCI Europe Multifactor UCITS ETF MSCI Europe Diversified Multiple-Factor Index Non-replicating

iShares Edge MSCI Europe Quality Factor UCITS ETF MSCI Europe Sector Neutral Quality Index Non-replicating

iShares Edge MSCI Europe Size Factor UCITS ETF MSCI Europe Mid-Cap Equal Weighted Index Non-replicating

iShares Edge MSCI Europe Value Factor UCITS ETF MSCI Europe Enhanced Value Index Non-replicating

iShares Edge MSCI USA Momentum Factor UCITS ETF MSCI USA Momentum Index Non-replicating

iShares Edge MSCI USA Multifactor UCITS ETF MSCI USA Diversified Multiple-Factor Index Non-replicating

iShares Edge MSCI USA Quality Factor UCITS ETF MSCI USA Sector Neutral Quality Index Non-replicating

iShares Edge MSCI USA Size Factor UCITS ETF MSCI USA Mid-Cap Equal Weighted Index Non-replicating

iShares Edge MSCI USA Value Factor UCITS ETF MSCI USA Enhanced Value Index Non-replicating

iShares Edge MSCI World Momentum Factor UCITS ETF MSCI World Momentum Index Non-replicating

iShares Edge MSCI World Multifactor UCITS ETF MSCI World Diversified Multiple-Factor Index Non-replicating

iShares Edge MSCI World Quality Factor UCITS ETF MSCI World Sector Neutral Quality Index Non-replicating

iShares Edge MSCI World Size Factor UCITS ETF MSCI World Mid-Cap Equally Weighted Index Non-replicating

iShares Edge MSCI World Value Factor UCITS ETF MSCI World Enhanced Value Index Non-replicating

iShares Fallen Angels High Yield Corp Bond UCITS ETF** Bloomberg Barclays Global Corporate ex EM Fallen Angels Non-replicating

3% Issuer Capped Index

iShares Healthcare Innovation UCITS ETF iSTOXX® FactSet Breakthrough Healthcare Index Non-replicating

iShares iBonds Sep 2018 $ Corp UCITS ETF** Bloomberg Barclays September 2018 Maturity Non-replicating

US Corporate Index

iShares MSCI China A UCITS ETF MSCI China A International Index Non-replicating

iShares MSCI EM SRI UCITS ETF MSCI EM SRI Index Replicating

iShares MSCI EMU Large Cap UCITS ETF MSCI EMU Large Cap Index Replicating

* Please refer to the Investment Manager’s report for further information on the meaning of replicating and non-replicating Funds. ** Benchmark index name changed during the period.

iSHARES IV PLC



Fund Details (continued)

Fund Benchmark Index

Investment Management Approach*

iShares MSCI EMU Mid Cap UCITS ETF MSCI EMU Mid Cap Index Replicating

iShares MSCI France UCITS ETF MSCI France Index Replicating

iShares MSCI Japan SRI EUR Hedged UCITS ETF (Acc) MSCI Japan SRI 100% Hedged to EUR Index Replicating

iShares MSCI USA SRI UCITS ETF MSCI USA SRI Index Replicating

iShares TA-25 Israel UCITS ETF TA-25 Net USD Index Replicating

iShares US Equity Buyback Achievers UCITS ETF Nasdaq US Buyback AchieversTM Select Index Non-replicating

iShares US Mortgage Backed Securities UCITS ETF** Bloomberg Barclays US Mortgage Backed Securities Index Non-replicating

* Please refer to the Investment Manager’s report for further information on replicating and non-replicating Funds. ** Benchmark index name changed during the period.

All figures relating to each Fund are shown in the relevant functional currency. The financial statements of the Company are presented in

British Pounds. These Funds are Exchange Traded Funds (“ETFs”), which provide the flexibility of a share with the diversification of a Fund. They

can be bought and sold like any other share listed on a stock exchange, but provide instant exposure to many companies or various financial

instruments relevant to the Fund and its benchmark index.

Stock exchange listings

The Company maintained a primary listing on the London Stock Exchange (“LSE”).

As at 30 November 2016, the Funds are listed and traded on the following exchanges:

Fund Base

Currency*

London Stock

Exchange Borsa Italiana

Deutsche Börse**

NYSE Euronext Amsterdam

SIX Swiss

Exchange

iShares $ Short Duration Corp Bond UCITS ETF $ � - � � �

iShares $ Short Duration High Yield Corp Bond UCITS ETF $ � � � � �

iShares $ Treasury Bond 20+yr UCITS ETF $ � - � - �

iShares $ Ultrashort Bond UCITS ETF $ � - � � �

iShares € Govt Bond 20yr Target Duration UCITS ETF € � - � - �

iShares € Ultrashort Bond UCITS ETF € � � � � �

iShares £ Ultrashort Bond UCITS ETF £ � - - - -

iShares Ageing Population UCITS ETF $ � � � - �

iShares Automation & Robotics UCITS ETF $ � � � - �

iShares Digitalisation UCITS ETF $ � � � - �

iShares Edge MSCI Europe Momentum Factor UCITS ETF € � � � - �

iShares Edge MSCI Europe Multifactor UCITS ETF € " � " - �

iShares Edge MSCI Europe Quality Factor UCITS ETF € � � � - �

iShares Edge MSCI Europe Size Factor UCITS ETF € � � � - �

iShares Edge MSCI Europe Value Factor UCITS ETF € � � � - �

iShares Edge MSCI USA Momentum Factor UCITS ETF $ � - � - �

iShares Edge MSCI USA Multifactor UCITS ETF $ " � " - �

iShares Edge MSCI USA Quality Factor UCITS ETF $ � - � - �

iShares Edge MSCI USA Size Factor UCITS ETF $ � - � - �

iShares Edge MSCI USA Value Factor UCITS ETF $ � - � - �

* All $, £ and € base currency Funds are denominated in United States Dollar, British Pound and Euro respectively. ** Funds trade on the Deutsche Börse Xetra XTF Funds Platform of the Frankfurt Stock Exchange.

iSHARES IV PLC



Stock exchange listings (continued)

Fund Base

Currency*

London Stock

Exchange Borsa Italiana

Deutsche Börse**

NYSE Euronext Amsterdam

SIX Swiss

Exchange

iShares Edge MSCI World Momentum Factor UCITS ETF $ " � " - �

iShares Edge MSCI World Multifactor UCITS ETF $ � � � - �

iShares Edge MSCI World Quality Factor UCITS ETF $ � � � - �

iShares Edge MSCI World Size Factor UCITS ETF $ � � � - �

iShares Edge MSCI World Value Factor UCITS ETF $ � � � - �

iShares Fallen Angels High Yield Corp Bond UCITS ETF $ � � � - �

iShares Healthcare Innovation UCITS ETF $ � � � - �

iShares iBonds Sep 2018 $ Corp UCITS ETF $ � - - - -

iShares MSCI China A UCITS ETF $ � - � - �

iShares MSCI EM SRI UCITS ETF $ � - � - �

iShares MSCI EMU Large Cap UCITS ETF € � � � - �

iShares MSCI EMU Mid Cap UCITS ETF € � � � - �

iShares MSCI France UCITS ETF € � - � - �

iShares MSCI Japan SRI EUR Hedged UCITS ETF (Acc) € � - � - -

iShares MSCI USA SRI UCITS ETF $ � - � - �

iShares TA-25 Israel UCITS ETF $ " - � - �

iShares US Equity Buyback Achievers UCITS ETF $ � - � - �

iShares US Mortgage Backed Securities UCITS ETF $ � - � - �

* All $, £ and € base currency Funds are denominated in United States Dollar, British Pound and Euro respectively. ** Funds trade on the Deutsche Börse Xetra XTF Funds Platform of the Frankfurt Stock Exchange.

Transactions with connected parties

In accordance with the requirements of the CBI, the Manager shall ensure that any transactions carried out between the Funds and the

Manager or Depositary to the Funds, the delegates or sub-delegates of the Manager or Depositary (excluding any non-group company sub-

custodians appointed by a Depositary) and any associated or group company of the Manager, Depositary, delegate or sub-delegate (“Connected

Parties”) must be conducted at arm’s length and in the best interests of the shareholders.

The board of directors of the Manager are satisfied that there are arrangements in place, as evidenced by written procedures, to ensure that

the obligations set out above are applied to all transactions with Connected Parties and that transactions with Connected Parties entered into

during the period complied with this obligation.

Total expense ratio

The total expense ratio (“TER”) shown below expresses the sum of all fees, operating costs and expenses, with the exception of direct trading

costs, charged to each Fund’s assets as a percentage of the average Fund assets based on a twelve month period ended 30 November 2016.

Fund Unaudited TER (%)

iShares $ Short Duration Corp Bond UCITS ETF 0.20

iShares $ Short Duration High Yield Corp Bond UCITS ETF 0.45

iShares $ Treasury Bond 20+yr UCITS ETF 0.20

iSHARES IV PLC


[ 1 0 ] i S H A R E S I V P L C I N T E R I M R E P O R T

Total expense ratio (continued)

Fund Unaudited TER (%)

iShares $ Ultrashort Bond UCITS ETF 0.09*

iShares € Govt Bond 20yr Target Duration UCITS ETF 0.15

iShares € Ultrashort Bond UCITS ETF 0.09*

iShares £ Ultrashort Bond UCITS ETF 0.09*

iShares Ageing Population UCITS ETF** 0.40

iShares Automation & Robotics UCITS ETF** 0.40

iShares Digitalisation UCITS ETF** 0.40

iShares Edge MSCI Europe Momentum Factor UCITS ETF 0.25

iShares Edge MSCI Europe Multifactor UCITS ETF 0.45

iShares Edge MSCI Europe Quality Factor UCITS ETF 0.25

iShares Edge MSCI Europe Size Factor UCITS ETF 0.25

iShares Edge MSCI Europe Value Factor UCITS ETF 0.25

iShares Edge MSCI USA Momentum Factor UCITS ETF** 0.20

iShares Edge MSCI USA Multifactor UCITS ETF 0.35

iShares Edge MSCI USA Quality Factor UCITS ETF** 0.20

iShares Edge MSCI USA Size Factor UCITS ETF** 0.20

iShares Edge MSCI USA Value Factor UCITS ETF** 0.20

iShares Edge MSCI World Momentum Factor UCITS ETF 0.30

iShares Edge MSCI World Multifactor UCITS ETF 0.50

iShares Edge MSCI World Quality Factor UCITS ETF 0.30

iShares Edge MSCI World Size Factor UCITS ETF 0.30

iShares Edge MSCI World Value Factor UCITS ETF 0.30

iShares Fallen Angels High Yield Corp Bond UCITS ETF** 0.50

iShares Healthcare Innovation UCITS ETF** 0.40

iShares iBonds Sep 2018 $ Corp UCITS ETF 0.10

iShares MSCI China A UCITS ETF 0.65

iShares MSCI EM SRI UCITS ETF** 0.35

iShares MSCI EMU Large Cap UCITS ETF 0.49

iShares MSCI EMU Mid Cap UCITS ETF 0.49

iShares MSCI France UCITS ETF 0.25

iShares MSCI Japan SRI EUR Hedged UCITS ETF (Acc) 0.35

iShares MSCI USA SRI UCITS ETF** 0.30

iShares TA-25 Israel UCITS ETF 0.60

iShares US Equity Buyback Achievers UCITS ETF 0.55

iShares US Mortgage Backed Securities UCITS ETF 0.28

* The TER for this Fund is permanently discounted from 0.20% to 0.09%, the TER shown is the effective TER. ** As this Fund launched during the period, the fees, operating costs and expenses used to calculate the TER have been annualised.

Unclaimed dividends

In accordance with the prospectus, any dividend which has remained unclaimed for twelve years from the date of its declaration shall be

forfeited and cease to remain owing by the Company to investors and become the property of the relevant Fund.

iSHARES IV PLC


INVESTMENT MANAGER’S REPORT

i S H A R E S I V P L C I N T E R I M R E P O R T [ 1 1 ]

INVESTMENT OBJECTIVE

The investment objective of the Funds is to provide investors with a total return, taking into account the capital and income returns, which

reflect the total returns of the respective benchmark listed in the Background section

FUND PERFORMANCE*

The performance of the Funds for the period under review is shown below:

Fund return for the period

ended 30/11/2016

Benchmark return for the period

ended 30/11/2016


ended 30/11/2015


ended 30/11/2015

Fund % % % %

iShares $ Short Duration Corp Bond UCITS ETF 0.23 0.32 0.18 0.23

iShares $ Short Duration High Yield Corp Bond UCITS ETF 4.51 4.79 (4.72) (4.56)

iShares $ Treasury Bond 20+yr UCITS ETF (6.36) (6.29) (0.54) (0.45)

iShares $ Ultrashort Bond UCITS ETF 0.53 0.60 0.20 0.23

iShares € Govt Bond 20yr Target Duration UCITS ETF (0.42) (0.39) (3.37) (3.43)

iShares € Ultrashort Bond UCITS ETF 0.04 0.04 0.00 0.01

iShares £ Ultrashort Bond UCITS ETF 0.54 0.57 0.34 0.33

iShares Ageing Population UCITS ETF** (1.44) (1.41) N/A N/A

iShares Automation & Robotics UCITS ETF** 1.01 0.82 N/A N/A

iShares Digitalisation UCITS ETF** (6.02) (5.93) N/A N/A

iShares Edge MSCI Europe Momentum Factor UCITS ETF 0.32 0.82 (1.48) (1.18)

iShares Edge MSCI Europe Multifactor UCITS ETF*** (1.52) (1.38) 11.05 11.27

iShares Edge MSCI Europe Quality Factor UCITS ETF (4.29) (4.14) 0.32 0.53

iShares Edge MSCI Europe Size Factor UCITS ETF (0.43) (0.29) (1.21) (1.04)

iShares Edge MSCI Europe Value Factor UCITS ETF 2.21 2.31 (6.64) (6.63)

iShares Edge MSCI USA Momentum Factor UCITS ETF** (0.92) (0.94) N/A N/A

iShares Edge MSCI USA Multifactor UCITS ETF*** 8.70 8.73 5.82 5.85

iShares Edge MSCI USA Quality Factor UCITS ETF** 2.30 2.27 N/A N/A

iShares Edge MSCI USA Size Factor UCITS ETF** 5.21 5.25 N/A N/A

iShares Edge MSCI USA Value Factor UCITS ETF** 7.03 7.00 N/A N/A

iShares Edge MSCI World Momentum Factor UCITS ETF 0.72 0.76 (2.28) (2.24)

iShares Edge MSCI World Multifactor UCITS ETF*** 2.56 2.74 6.61 6.73

iShares Edge MSCI World Quality Factor UCITS ETF 0.84 0.83 (1.24) (1.17)

iShares Edge MSCI World Size Factor UCITS ETF 2.60 2.81 (5.31) (5.46)

iShares Edge MSCI World Value Factor UCITS ETF 5.90 5.98 (8.76) (8.79)

iShares Fallen Angels High Yield Corp Bond UCITS ETF** 2.53 2.95 N/A N/A

iShares Healthcare Innovation UCITS ETF** (9.87) (9.80) N/A N/A

iShares iBonds Sep 2018 $ Corp UCITS ETF 0.69 0.79 0.05 0.11

iShares MSCI China A UCITS ETF 8.26 8.12 (29.92) (28.62)

iShares MSCI EM SRI UCITS ETF** (1.26) (1.12) N/A N/A

iShares MSCI EMU Large Cap UCITS ETF 0.93 0.99 (1.32) (1.21)

* Fund performance is shown net of fees and expenses (TER). ** As this Fund launched during the period, performance figures are shown from launch date to period end date. ***As this Fund launched during the prior year, performance figures are shown from launch date to 30 November 2015.

iSHARES IV PLC


INVESTMENT MANAGER’S REPORT (continued)


FUND PERFORMANCE* (continued)


ended 30/11/2016


ended 30/11/2016


ended 30/11/2015


ended 30/11/2015

Fund % % % %

iShares MSCI EMU Mid Cap UCITS ETF 1.67 1.80 0.78 0.96

iShares MSCI France UCITS ETF 2.68 2.52 (0.44) (0.56)

iShares MSCI Japan SRI EUR Hedged UCITS ETF (Acc)**** 3.65 3.80 N/A N/A

iShares MSCI USA SRI UCITS ETF** 4.84 4.86 N/A N/A

iShares TA-25 Israel UCITS ETF**** 0.20 0.36 N/A N/A

iShares US Equity Buyback Achievers UCITS ETF 14.93 15.13 (4.24) (4.07)

iShares US Mortgage Backed Securities UCITS ETF**** (0.60) (0.59) N/A N/A

* Fund performance is shown net of fees and expenses (TER). ** As this Fund launched during the period, performance figures are shown from launch date to period end date. ***As this Fund launched during the prior year, performance figures are shown from launch date to 30 November 2015. **** As these Funds launched between 30 November 2015 and 31 May 2016 there are no comparatives.

The Fund return figures are the aggregated net monthly returns and are based on the average published pricing net asset value (“NAV”) for the

financial period under review. Due to accounting policy requirements under Irish accounting standards which apply to the financial statements,

there may be slight differences between the NAV per share as recorded in the financial statements and the published pricing NAV per share.

The returns are net of management fees.

Past performance may not necessarily be repeated and future performance may vary.

TRACKING ERROR

Realised tracking error is the annualised standard deviation of the difference in monthly returns between a Fund and its benchmark index.

Tracking error shows the consistency of the returns relative to the benchmark index over a defined period of time.

Anticipated tracking error is based on the expected volatility of differences between the returns of a Fund and the returns of its benchmark

index.

For physically replicating funds, the investment management approach is to buy a portfolio of securities that as far as practicable consist of the

securities that make up the benchmark index, in similar proportion to the weights represented in the benchmark index.

For non-replicating funds, the investment management approach aims to match the main risk characteristics of the benchmark index by

investing in a portfolio that is primarily made up of securities that represent the benchmark index. The objective is to generate a return which is

as close as practicable to the total return of the index net of transaction costs and gross of fees and other costs.

Cash management, efficient portfolio management techniques including securities lending, transaction costs from rebalancing and currency

hedging can have an impact on tracking error as well as the return differential between a Fund and its benchmark index. Importantly, these

impacts can be either positive or negative depending on the underlying circumstances.

In addition to the above, the Funds may also have a tracking error due to withholding tax suffered by the Funds on any income received from its

investments. The level and quantum of tracking error arising due to withholding taxes depends on various factors such as any reclaims filed on

behalf of the Funds with various tax authorities, any benefits obtained by the Funds under a tax treaty or any securities lending activities carried

out by the Funds.

iSHARES IV PLC




TRACKING ERROR (continued)

The table below shows the anticipated tracking error of the Funds (disclosed in the prospectus on an ex ante basis) against the realised

tracking error of the Funds as at 30 November 2016. Realised tracking error is calculated using data from the preceding 36 month observation

period. Where a Fund has not been trading for 36 months, the annualised tracking error since inception has been presented.

Anticipated

Tracking Error Realised

Tracking Error

Fund % %

iShares $ Short Duration Corp Bond UCITS ETF Up to 0.30 0.09

iShares $ Short Duration High Yield Corp Bond UCITS ETF Up to 0.45 0.20

iShares $ Treasury Bond 20+yr UCITS ETF* Up to 0.10 0.06

iShares $ Ultrashort Bond UCITS ETF Up to 0.10 0.05

iShares € Govt Bond 20yr Target Duration UCITS ETF* Up to 0.20 0.06

iShares € Ultrashort Bond UCITS ETF Up to 0.10 0.06

iShares £ Ultrashort Bond UCITS ETF Up to 0.10 0.05

iShares Ageing Population UCITS ETF* Up to 0.45 0.12

iShares Automation & Robotics UCITS ETF* Up to 0.40 0.36

iShares Digitalisation UCITS ETF* Up to 0.50 0.07

iShares Edge MSCI Europe Momentum Factor UCITS ETF* Up to 0.20 0.26

iShares Edge MSCI Europe Multifactor UCITS ETF* Up to 0.25 0.23

iShares Edge MSCI Europe Quality Factor UCITS ETF* Up to 0.20 0.17

iShares Edge MSCI Europe Size Factor UCITS ETF* Up to 0.20 0.22

iShares Edge MSCI Europe Value Factor UCITS ETF* Up to 0.20 0.21

iShares Edge MSCI USA Momentum Factor UCITS ETF* Up to 0.15 0.08

iShares Edge MSCI USA Multifactor UCITS ETF* Up to 0.25 0.04

iShares Edge MSCI USA Quality Factor UCITS ETF* Up to 0.15 0.08

iShares Edge MSCI USA Size Factor UCITS ETF* Up to 0.15 0.08

iShares Edge MSCI USA Value Factor UCITS ETF* Up to 0.15 0.41

iShares Edge MSCI World Momentum Factor UCITS ETF* Up to 0.20 0.11

iShares Edge MSCI World Multifactor UCITS ETF* Up to 0.25 0.08

iShares Edge MSCI World Quality Factor UCITS ETF* Up to 0.20 0.12

iShares Edge MSCI World Size Factor UCITS ETF* Up to 0.20 0.22

iShares Edge MSCI World Value Factor UCITS ETF* Up to 0.20 0.11

iShares Fallen Angels High Yield Corp Bond UCITS ETF* Up to 0.25 0.07

iShares Healthcare Innovation UCITS ETF* Up to 0.60 0.24

iShares iBonds Sep 2018 $ Corp UCITS ETF* Up to 0.40 0.15

iShares MSCI China A UCITS ETF* Up to 2.50 2.07

iShares MSCI EM SRI UCITS ETF* Up to 0.50 0.24

iShares MSCI EMU Large Cap UCITS ETF Up to 0.25 0.25

iShares MSCI EMU Mid Cap UCITS ETF Up to 0.30 0.28

iShares MSCI France UCITS ETF* Up to 0.40 0.41

iShares MSCI Japan SRI EUR Hedged UCITS ETF (Acc)* Up to 0.20 0.07

iShares MSCI USA SRI UCITS ETF* Up to 0.10 0.02

iShares TA-25 Israel UCITS ETF* Up to 0.40** 2.76

iShares US Equity Buyback Achievers UCITS ETF* Up to 0.15 0.11

iShares US Mortgage Backed Securities UCITS ETF* Up to 0.30 0.27

*The realised tracking error is normally computed from 36 months of returns. The Fund's return history is too short to give a statistically significant tracking error. **From January 2017 the anticipated tracking error has been revised to 1.5%.

iSHARES IV PLC




CALENDAR YEAR PERFORMANCE

The performance of the Funds, on a calendar year basis, is shown below:

2016 2015 2014 2013 01/01/2016 01/01/2015 01/01/2014 01/01/2013 Launch to 30/11/2016 to 31/12/2015 to 31/12/2014 to 31/12/2013 Date Fund Benchmark Fund Benchmark Fund Benchmark Fund Benchmark

Fund* % % % % % % % %

iShares $ Short Duration Corp Bond

UCITS ETF Oct-13 1.94 2.17 1.03 1.17 1.33 1.59 0.53 0.54

iShares $ Short Duration High Yield Corp Bond

UCITS ETF Oct-13 9.94 10.62 (3.76) (3.48) 0.19 0.32 1.72 1.65

iShares $ Treasury Bond 20+yr UCITS ETF Jan-15 1.79 1.97 (7.91) (7.77) N/A N/A N/A N/A

iShares $ Ultrashort Bond UCITS ETF Oct-13 1.06 1.25 0.48 0.57 0.23 0.46 0.11 0.15

iShares € Govt Bond 20yr Target Duration

UCITS ETF Jan-15 12.13 12.19 (6.30) (6.31) N/A N/A N/A N/A

iShares € Ultrashort Bond UCITS ETF Oct-13 0.19 0.18 0.15 0.17 0.55 0.68 0.09 0.11

iShares £ Ultrashort Bond UCITS ETF Oct-13 0.83 0.89 0.66 0.67 0.71 0.88 0.16 0.18

iShares Ageing Population UCITS ETF Sep-16 (1.44) (1.41) N/A N/A N/A N/A N/A N/A

iShares Automation & Robotics UCITS ETF Sep-16 1.01 0.82 N/A N/A N/A N/A N/A N/A

iShares Digitalisation UCITS ETF Sep-16 (6.02) (5.93) N/A N/A N/A N/A N/A N/A

iShares Edge MSCI Europe Momentum Factor

UCITS ETF Jan-15 (1.50) (1.09) 8.74 8.89 N/A N/A N/A N/A

iShares Edge MSCI Europe Multifactor

UCITS ETF Sep-15 (4.13) (3.85) 6.72 7.04 N/A N/A N/A N/A

iShares Edge MSCI Europe Quality Factor


iShares Edge MSCI Europe Size Factor


iShares Edge MSCI Europe Value Factor


iShares Edge MSCI USA Momentum Factor

UCITS ETF Oct-16 (0.92) (0.94) N/A N/A N/A N/A N/A N/A

iShares Edge MSCI USA Multifactor

UCITS ETF Sep-15 10.61 10.68 3.78 3.82 N/A N/A N/A N/A

iShares Edge MSCI USA Quality Factor UCITS

ETF Oct-16 2.30 2.27 N/A N/A N/A N/A N/A N/A

iShares Edge MSCI USA Size Factor

UCITS ETF Oct-16 5.21 5.25 N/A N/A N/A N/A N/A N/A

iShares Edge MSCI USA Value Factor

UCITS ETF Oct-16 7.03 7.00 N/A N/A N/A N/A N/A N/A

iShares Edge MSCI World Momentum Factor

UCITS ETF Oct-14 2.57 2.64 3.83 4.06 3.98 4.01 N/A N/A

iShares Edge MSCI World Multifactor

UCITS ETF Sep-15 2.72 3.03 5.11 5.25 N/A N/A N/A N/A

iShares Edge MSCI World Quality Factor

UCITS ETF Oct-14 3.42 3.40 2.48 2.63 2.59 2.69 N/A N/A

* Where a Fund's launch date is within a performance period, figures are shown from the launch to the year end.

iSHARES IV PLC




CALENDAR YEAR PERFORMANCE (continued)

The performance of the Funds, on a calendar year basis, is shown below:

2016 2015 2014 2013 01/01/2016 01/01/2015 01/01/2014 01/01/2013 Launch to 30/11/2016 to 31/12/2015 to 31/12/2014 to 31/12/2013 Date Fund Benchmark Fund Benchmark Fund Benchmark Fund Benchmark

Fund* % % % % % % % %

iShares Edge MSCI World Size Factor

UCITS ETF Oct-14 6.46 6.83 (0.08) (0.26) 1.98 2.04 N/A N/A

iShares Edge MSCI World Value Factor

UCITS ETF Oct-14 4.92 4.91 (3.27) (3.28) 0.80 0.86 N/A N/A

iShares Fallen Angels High Yield Corp Bond

UCITS ETF Jun-16 2.53 2.95 N/A N/A N/A N/A N/A N/A

iShares Healthcare Innovation UCITS ETF Sep-16 (9.87) (9.80) N/A N/A N/A N/A N/A N/A

iShares iBonds Sep 2018 $ Corp UCITS ETF Mar-15 2.24 2.44 0.58 0.66 N/A N/A N/A N/A

iShares MSCI China A UCITS ETF Apr-15 (11.81) (11.82) (18.74) (17.09) N/A N/A N/A N/A

iShares MSCI EM SRI UCITS ETF Jul-16 (1.26) (1.12) N/A N/A N/A N/A N/A N/A

iShares MSCI EMU Large Cap UCITS ETF Sep-13 (2.42) (2.65) 8.31 8.26 4.44 4.42 8.81 8.94

iShares MSCI EMU Mid Cap UCITS ETF Sep-13 (1.53) (1.37) 17.08 17.10 3.63 3.86 6.26 6.58

iShares MSCI France UCITS ETF Sep-14 2.61 1.80 11.98 11.27 (3.53) (3.72) N/A N/A

iShares MSCI Japan SRI EUR Hedged UCITS

ETF (Acc) May-16 7.54 7.67 N/A N/A N/A N/A N/A N/A

iShares MSCI Russia Capped Swap** Sep-10 N/A N/A N/A N/A N/A N/A 3.86 5.34

iShares MSCI USA SRI UCITS ETF Jul-16 4.84 4.86 N/A N/A N/A N/A N/A N/A

iShares S&P CNX Nifty India Swap** Sep-10 N/A N/A N/A N/A N/A N/A (7.50) (6.43)

iShares S&P GSCI Dynamic Roll

Agriculture Swap** Jan-12 N/A N/A N/A N/A N/A N/A (14.95) (14.22)

iShares S&P GSCI Dynamic Roll

Commodity Swap** Jan-12 N/A N/A N/A N/A N/A N/A (3.95) (3.17)

iShares S&P GSCI Dynamic Roll Energy Swap** Jan-12 N/A N/A N/A N/A N/A N/A (0.05) 0.75

iShares S&P GSCI Dynamic Roll Industrial

Metals Swap** Jan-12 N/A N/A N/A N/A N/A N/A (12.53) (11.85)

iShares TA-25 Israel UCITS ETF Jan-16 1.67 1.95 N/A N/A N/A N/A N/A N/A

iShares US Equity Buyback Achievers

UCITS ETF Feb-15 18.81 19.19 (5.47) (5.17) N/A N/A N/A N/A

iShares US Mortgage Backed Securities

UCITS ETF May-16 (0.42) (0.51) N/A N/A N/A N/A N/A N/A

* Where a Fund's launch date is within a performance period, figures are shown from the launch to the year end. ** Where a Fund's closure date is within a performance period, figures are shown from the start of the period to closure date.

The Fund return figures are the aggregated net monthly returns and are based on the average published pricing NAV for the financial period

under review. Due to accounting policy requirements under Irish accounting standards which apply to the financial statements, there may be

slight differences between the NAV per share as recorded in the financial statements and the published pricing NAV per share. The returns are

net of management fees.

Past performance may not necessarily be repeated and future performance may vary.

iSHARES IV PLC




MARKET REVIEW

Equities

Global equities

This market review summary covers iShares Edge MSCI World Momentum Factor UCITS ETF, iShares Edge MSCI World Multifactor UCITS

ETF, iShares Edge MSCI World Quality Factor UCITS ETF, iShares Edge MSCI World Size Factor UCITS ETF and iShares Edge MSCI World Value

Factor UCITS ETF.

Following a bout of volatility in June 2016 in the aftermath of the UK’s surprise vote to leave the European Union (“EU”), global equities

subsequently rallied to end the Company’s six month review period with modest positive returns.

Global equities began the review period on a mixed note as signs that US economic activity was picking up were largely offset by uncertainties

ahead of the UK’s EU membership referendum. Although opinion polls had suggested that the result could be close, global equity markets fell

sharply in the immediate aftermath of the public’s vote to leave the EU (“Brexit”). However, markets soon recovered their poise as investors

concluded that the ensuing uncertainty could convince central banks to maintain, or even expand, their stimulus programmes. Global equities’

firm tone extended into early September 2016; following the Bank of England’s (“BoE”) August 2016 decision to cut interest rates, the US

Federal Reserve (“Fed”) cited Brexit related uncertainty as a factor behind the decision to refrain from raising interest rates at its September

2016 meeting, despite the strength of the US labour market. Although firmer commodity prices, notably crude oil, reflecting more encouraging

news from China’s economy, also underpinned sentiment, signs that the Fed was gradually moving towards a rise in US interest rates before the

end of the year began to weigh on global stocks in October 2016, as did political uncertainties ahead of the US presidential election. Despite an

initial selloff on news of Donald Trump’s election success amid policy uncertainties, growing confidence that the President elect would embark

on a significant infrastructure improvement programme resulted in renewed strength in commodity markets, helping global equites to end the

review period on a firm note.

During the Company’s review period, World Momentum Factor equities posted positive returns but underperformed wider global equities,

weighed by relatively low exposure to certain outperforming financials such as JP Morgan Chase and relatively high exposure to certain

underperforming consumer staples companies, such as Altria Group.

World Quality Factor equities also posted positive returns and underperformed wider global equities, with returns hampered by exposure to

several underperforming healthcare stocks, including Novo Nordisk and Roche. World Size Factor and World Multifactor equities performed

broadly in line with their wider market counterparts. World Value Factor equities outperformed broader global equities, boosted by exposure to

selected outperforming financials such as Bank of America and specific consumer discretionary stocks such as Toyota Motor.

European equities

This market review summary covers iShares Edge MSCI Europe Momentum Factor UCITS ETF, iShares Edge MSCI Europe Multifactor UCITS

ETF, iShares Edge MSCI Europe Quality Factor UCITS ETF, iShares Edge MSCI Europe Size Factor UCITS ETF, iShares Edge MSCI Europe

Value Factor UCITS ETF, iShares MSCI EMU Large Cap UCITS ETF, iShares MSCI EMU Mid Cap UCITS ETF and iShares MSCI France UCITS

ETF.

European equities produced disappointing returns over the review period, underperforming compared to their global counterparts, weighed by

political and economic concerns in the wake of the Brexit vote.

European bourses began the six month review period on a nervous note, reflecting growing uncertainties ahead of the UK’s 23 June 2016

referendum. However, having broadly followed the gyrations of their UK and global peers in the aftermath of the ‘Leave’ vote, European equity

markets generally lagged behind their overseas counterparts’ rally. This reflected some concerns that Brexit would embolden Eurosceptic

parties across Europe, thereby raising political risks across the continent. Moreover, fears over the stability of some parts of the European

financial sector also mounted in the aftermath of the Brexit vote, with some Italian banks coming under scrutiny amid concern over their

capitalisation levels.

iSHARES IV PLC




MARKET REVIEW (continued)

Equities (continued)

European equities (continued)

Although firmer commodity prices lent support to large cap resource stocks across the region, while also helping to allay some lingering

concerns over deflationary risks, European stocks continued to underperform their overseas peers during the final weeks of the review period.

This largely reflected concerns that the region’s economic recovery could be faltering amid disappointing news that the Eurozone economy grew

by just 0.3% during the third quarter of 2016, matching its second quarter performance, compared to growth of 0.5% in the January to March

2016 period. European equities extended their poor relative performance during the final weeks of the review period; following Donald Trump’s

surprise US election victory in early November 2016, concerns grew that the sense of ‘anti establishment’ sentiment could heap further

pressure on Italian Prime Minister Matteo Renzi ahead of a December 2016 referendum over constitutional reform. Following the end of the

review period, these concerns would be vindicated as Prime Minister Renzi stepped down following the decisive ‘No’ vote.

Domestically focused EMU mid-caps outperformed their larger peers over the review period, helped by their lack of exposure to several

underperforming large cap financials, such as Italy’s Intesa Sanpaolo. French equities outperformed their wider European counterparts, helped

by the relatively strong performance of industrial gases group Air Liquide and personal care products maker L’Oreal. Europe Quality Factor

equities underperformed wider European indices, weighed by relatively large exposure to health care companies Novo Nordisk and

AstraZeneca. While Europe Size Factor equities performed generally in line with wider European indices, Europe Value Factor and Momentum

Factor outperformed. The former benefitted from exposure to industrial group Siemens and chemicals firm Bayer while the latter’s returns were

boosted by exposure to commodities group Glencore. Europe Multifactor equities underperformed, with exposure to real estate firm Unibail-

Rodamco detracting from returns.

US equities

This market review summary covers iShares Edge MSCI USA Momentum Factor UCITS ETF, iShares Edge MSCI USA Multifactor UCITS,

iShares Edge MSCI USA Quality Factor UCITS ETF, iShares Edge MSCI USA Size Factor UCITS ETF, iShares Edge MSCI USA Value Factor UCITS ETF, iShares MSCI USA SRI UCITS ETF and iShares US Equity Buyback Achievers UCITS ETF.

US stocks produced solid positive returns over the Company’s review period, outperforming their wider global counterparts. US equities’ gains

reflected a combination of optimism that the improving domestic economic environment would help to underpin corporate profits and some

element of ‘safe haven’ buying amid post Brexit political uncertainties in Europe.

US stocks began the review period on a firm note relative to their European peers. Despite signs that US economic activity was picking up

further from the lull around the turn of the calendar year, investors drew encouragement from statements by senior Fed officials suggesting

that they would adopt a patient approach before implementing any further rises in US interest rates. Although falling in sympathy with

European markets in the immediate aftermath of the surprise Brexit news, US stocks’ losses were relatively minor in nature, while their

subsequent rebound was more pronounced. In contrast to Europe’s woes, data showed that US economic activity was picking up; annualised

growth rose from 0.8% in the first quarter of 2016 to 1.4% during the April to June 2016 period. Against this more encouraging domestic

backdrop, comments from Fed officials suggesting that US policymakers were set to resist calls to raise interest rates until international

uncertainties, notably in Europe, abated gave further impetus to the rally in US stocks. Nevertheless, US markets lost some ground in October

2016 amid some mixed corporate trading updates that reflected how the strong US currency was impacting on overseas earnings. The growing

conviction that the strength of the US labour market could soon force the Fed’s hand, and political uncertainties ahead of the November 2016

US presidential elections, also weighed to some extent on US stocks. News that US economic growth rose to 3.2% on an annualised basis

during the third quarter of 2016, the strongest quarterly growth in two years, heightened expectations that the Fed could raise interest rates as

soon as December 2016. Despite this, as some greater clarity emerged over President elect Trump’s economic policies, particularly the

proposed infrastructure improvement programme and the planned tax cuts, US equities ended the review period on a firm note.

The Buyback Achiever index outperformed the wider US market, helped by exposure to a range of stock level outperformers, including industrial

firm Quanta Services and restaurant operator Wendy’s. US Multifactor equities performed relatively well, helped by strong returns from IT

consultancy & professional services firm Accenture.

iSHARES IV PLC






US equities (continued)

Since iShares MSCI USA SRI Fund launched in July 2016, SRI equities performed broadly in line with wider US stocks for the remainder of the

review period. Following their launches in early October 2016, iShares Edge MSCI USA Quality Factor UCITS ETF, iShares Edge MSCI USA Size

Factor UCITS ETF and iShares Edge MSCI USA Value Factor UCITS ETF produced positive returns. However, iShares Edge MSCI USA Momentum

Factor UCITS ETF produced negative returns, weighed by a slide in personal & household care products firm Proctor & Gamble

Japanese equities

This market review summary covers iShares MSCI Japan SRI EUR Hedged UCITS ETF (Acc).

Japanese equities generated positive returns over the Company’s review period, marginally outperforming relative to their international

counterparts. Although the effects of the strong Japanese Yen remained a concern for much of the period, optimism that the Far East region’s

economic prospects were gradually improving underpinned sentiment towards the Japanese market.

Japanese stocks broadly tracked the movements of their overseas peers early in the review period, suffering a short lived dip in response to the

surprise Brexit vote. Despite deepening concerns over the impact of ongoing Japanese Yen strength on exporters’ international earnings, with

the Japanese currency approaching 100 to the US Dollar in early July 2016, a gain of nearly 20% since the turn of the calendar year, some

optimism that the worst was over for the domestic economy lent support to Japanese stocks. Compared to a (0.2%) contraction during the final

quarter of 2015, revised data released early in the review period showed that Japan’s economy had grown by 0.5% during the first quarter of

2016. Although there was some disappointment that the strength of the labour market was not feeding through to give a sustained boost to

consumer activity, Japanese equities benefited from investors’ optimism that a gradual recovery in demand from China, the US and Europe

could help to offset the effect of Japanese Yen strength.

Nevertheless, with slowing private consumption and government spending contributing to a cooling in economic activity during the second

quarter of 2016, investors took comfort from the government’s latest fiscal support package aimed at supporting low income workers and

boosting infrastructure spending. Investors also drew confidence from the Bank of Japan’s (“BoJ”) plan to revamp its stimulus programme to

target 10 year bond yields at zero in an effort to underpin inflation. During the final weeks of the review period, Japanese stocks received a

further boost from news that rising exports had helped the economy to grow by a stronger than expected 0.5% during the third quarter of 2016,

compared to just 0.2% three months earlier. Following Donald Trump’s US election victory, a surge in the US Dollar, to around 114 versus the

Japanese Yen, raised hopes that some of the currency pressure on Japanese exporters could ease further. Over the review period the Japanese

currency lost ground relative to the US Dollar but ended marginally stronger versus the Euro.

Japanese SRI indices underperformed relative to their mainstream peers over the review period, with the lack of exposure to several

outperforming stocks such as Toyota Motor and SoftBank acting as a drag on returns.

Israeli equities

This market review summary covers iShares TA-25 Israel UCITS ETF.

Following its broadly neutral performance relative to other developed markets early in the six month review period, the Israeli stock market

subsequently underperformed. Although signs from the domestic economy remained generally positive, with the labour market improving and

Gross Domestic Product growing by 0.8%, 1.2% and 0.8% over the first, second and third quarters of the year respectively, poor returns from the

country’s very large health care sector, which represents approximately 27% of the TA-25 market index, weighed on returns.

In particular, Perrigo and Mylan shares performed very poorly amid weakening global investor sentiment towards healthcare stocks. Ahead of

the US election, speculation over the scope for greater political intervention over the pricing of pharmaceuticals impacted on sentiment.

Following Donald Trump’s victory, investors rotated away from some more ‘defensive’ sectors, such as health care, into areas perceived as

greater potential beneficiaries of higher infrastructure spending, such as the materials sector.

iSHARES IV PLC






Emerging markets

This market review summary covers iShares MSCI China A UCITS ETF and iShares MSCI EM SRI UCITS ETF.

Emerging market equities generated strong returns over the Company’s review period, significantly outperforming relative to their developed

counterparts.

Despite some volatility in global markets early in the review year as European stock valuations gyrated amid Brexit related uncertainties, more

encouraging news flow from developing economies helped emerging markets to outperform. Previous concerns that China’s economy could be

facing an abrupt slowdown gradually eased, initially helped by more encouraging survey data from the manufacturing sector. Subsequently,

news emerged that China’s economy grew by 6.7% on a year on year basis during the second quarter of 2016, matching its first quarter

performance, raising hopes that the earlier slowdown in growth could be gradually bottoming out, with fears over a ‘hard landing’ abating.

Meanwhile, commodity prices also found support amid more encouraging signs from the global economy. This lent support to the resource rich

Brazilian market, which also benefitted from hopes of greater political clarity as the process which would eventually lead to the impeachment of

President Dilma Rousseff on the grounds of the misuse of public funds advanced.

Having generated strong returns, both on an outright basis and relative to their developed counterparts, during the third quarter of 2016,

emerging markets lost ground in late October and November 2016. Despite a further round of supportive data from China’s economy, including

news that economic growth held at 6.7% during the third quarter of 2016, growing political uncertainty around the US elections convinced some

investors to pare back exposure to markets perceived as higher risk. The growing conviction that US interest rates could rise around the turn of

the calendar year also weighed to some extent on emerging markets late in the review period.

Over the period Chinese equities performed broadly in line with their wider emerging market peers and outperformed broader global equities.

Since iShares MSCI EM SRI UCITS ETF launched in July 2016, EM SRI equities generally underperformed their broader market peers. Towards

the end of the review period, this mainly reflected the relatively large representation of the underperforming IT sector and the relatively low

weightings among outperforming resources companies in the EM SRI universe.

Fixed income

Government bonds

This market review summary covers iShares $ Treasury Bond 20+yr UCITS ETF and iShares € Govt Bond 20yr Target Duration UCITS ETF.

Long dated government bond markets rallied early in the review period amid safe haven buying in the wake of the Brexit vote and confidence

that relatively muted rates of economic growth would enable policymakers to keep interest rates at historically low levels. Despite signs that US

economic activity was picking up during the summer, investors also drew succor from comments by senior Fed officials suggesting that

policymakers would remain patient before raising US interest rates further. However, optimism that the European Central Bank (“ECB”)’s

extraordinary degree of economic stimulus, growing evidence that deflationary forces in Europe were abating as oil and other commodity prices

rose and the looming prospect that the strengthening US economy would convince Fed policymakers to raise interest rates shortly weighed

heavily on long dated government bonds during the second half of the Company’s review period. While US bond markets fell heavily in November

2016 to end the period with significant losses, reflecting the view that the new Trump administration’s proposed infrastructure improvement

programme could fan inflationary forces and potentially convince the Fed to implement more aggressive interest increases in 2017, the returns

from their European peers dipped into moderate negative territory only very late in the review period. Despite rising global government bond

yields, European government debt prices were underpinned by growing levels of political uncertainty ahead of the Italian referendum and

conviction that the lacklustre nature of the Eurozone economic recovery would see the ECB maintaining ultra low borrowing costs for an

extended period.

iSHARES IV PLC





Fixed income (continued)

Corporate bonds

This market review summary covers iShares $ Short Duration Corp Bond UCITS ETF, iShares $ Short Duration High Yield Corp Bond UCITS

ETF, iShares $ Ultrashort Bond UCITS ETF, iShares € Ultrashort Bond UCITS ETF, iShares £ Ultrashort Bond UCITS ETF, iShares iBonds Sep

2018 $ Corp UCITS ETF and iShares Fallen Angels High Yield Corp Bond UCITS ETF.

Short dated credit produced modest positive returns over the Company’s review period, marginally outperforming their government peers of

similar maturities. Despite sporadic ‘flight to safety’ moves as investors switched from credit to government debt during periods of uncertainty,

particularly in the aftermath of the Brexit vote, corporate bonds continued to attract buying from investors seeking attractive levels of yield.

High yield bonds were particular beneficiaries of this ongoing search for income, while the US sub-investment grade market also benefitted

from the recovery in oil & gas prices given the relatively high representation of energy sector borrowers in the US high yield space.

While Sterling and US Dollar short dated credit markets produced modest positive gains over the review period, their Euro peers delivered

largely flat returns, reflecting investors’ reduced appetite for risk given uncertainties across the single currency zone. Since inception on 22

June 2016, iShares Fallen Angels High Yield Corp Bond UCITS ETF, which offers diversified exposure to a subset of high yield corporate bonds

that have been downgraded to sub-investment grade at some point in their trading history, marginally underperformed broader $ high yield

bonds over the remainder of the Company’s review period.

Mortgage debt

This market review summary covers iShares US Mortgage Backed Securities UCITS ETF.

Following the Fund’s inception in May 2016, mortgage backed bond markets produced steady gains for much of the remainder of the review

period, largely matching the returns from medium dated US Dollar credit markets until late October 2016. However, mortgage backed assets fell

sharply in value in November 2016, largely reflecting higher default risks as the prospect of higher interest rates as a result of the incoming US

administration’s spending plans. Against this backdrop, since the inception date, mortgage backed securities underperformed both government

and corporate bonds over the remainder of the Company’s review period.

Other speciality funds

This market review summary covers iShares Ageing Population UCITS ETF.

Launched in September 2016, the Fund seeks to offer competitively priced and diversified access to companies that specifically provide

products or services to the world’s ageing population (defined as people aged 60 years or above). Since launch, the Fund underperformed wider

equity markets over the remainder of the Company’s review period, reflecting investors’ preference for traditional growth based sectors, such as

materials, following the US election result.

This market review summary covers iShares Automation & Robotics UCITS ETF.

Launched in September 2016, the Fund seeks to offer competitively priced and diversified access to companies that are developing technology

in the fields of automation and robotics, across both developed and emerging markets. Since launch, the Fund outperformed wider equity

markets over the remainder of the Company’s review period, reflecting holdings across a range of outperforming industrial companies with

particular expertise in automation & robotic technologies.

This market review summary covers iShares Digitalisation UCITS ETF.

Launched in September 2016, the Fund seeks to offer competitively priced and diversified access to companies that offer digitally focused

services across both developed and emerging markets. Since launch, the Fund underperformed wider equity markets over the remainder of the

Company’s review period, reflecting some investors’ perception of a lack of clarity over the incoming US government’s policies towards the IT

sector, particularly with regard to the perceived risk of new trade barriers and taxation changes.

iSHARES IV PLC





Fixed income (continued)

Other speciality funds (continued)

This market review summary covers iShares Healthcare Innovation UCITS ETF.

Launched in September 2016, the Fund seeks to offer competitively priced and diversified access to companies across the world that are

focused on innovation within global healthcare services, across both developed and emerging markets. Since launch, the Fund underperformed

wider equity markets over the remainder of the Company’s review period, reflecting investors’ preference for traditional growth based sectors,

such as materials, rather than more defensive areas, such as healthcare, following the US election result.

BlackRock Advisors (UK) Limited

December 2016

iSHARES IV PLC


FINANCIAL INSTRUMENTS AND RISKS*

* The information relating to financial instruments and risks is an integral part of the notes to the financial statements.


Introduction and overview

The Company's investment activities expose it to the various types of

risk which are associated with the financial instruments and markets

in which it invests. The following information is not intended to be a

comprehensive summary of all risks, and investors should refer to the

prospectus and supplements for a more detailed discussion of the

risks inherent in investing in the Company.

Risk management framework

The principal risks and uncertainties of the Company and related risk

management policies are consistent with those disclosed in the Company’s audited financial statements as at and for the year ended

31 May 2016.

The Directors of the Company consider the following risks to be the

principal risks and uncertainties facing the Company for the period:

a) Market risk

Market risk arises mainly from uncertainty about future values of

financial instruments influenced by other price, currency and interest

rate movements. It represents the potential loss the Funds may suffer

through holding market positions in the face of market movements.

i) Market risk arising from other price risk

Exposure to other price risk

Other price risk is the risk that the fair value or future cash flows of a

financial instrument will fluctuate because of changes in market

prices (other than those arising from interest rate risk or currency

risk), whether those changes are caused by factors specific to the

individual financial instrument or its issuer, or factors affecting

similar financial instruments traded in the market.

The Funds are exposed to market risk by virtue of their investments in

equities, rights, bonds, mortgage backed securities ("MBS"),

contracts for difference ("CFDs"), forward currency contracts and

futures contracts.

The movements in the prices of these investments result in

movements in the performance of the Funds. The investment

concentrations within the portfolio are disclosed in the schedules of

investments by investment type.

For iShares MSCI China A UCITS ETF, the existence of a liquid trading

market may depend on whether there is a readily available supply of, and corresponding demand for China A Shares.

The price at which China A Shares may be purchased or sold by the

Fund, upon any rebalancing activities or otherwise, and the NAV of the

Fund may be adversely affected if trading markets for the China A

Shares are limited or absent. Market volatility and settlement

difficulties in the China A Shares markets may result in significant

fluctuation in the prices of securities traded on such markets and may

consequently increase the volatility of the Net Asset Value of the

Fund.

Management of other price risk

The Investment Manager manages the Funds' market risk on a daily

basis in accordance with the Funds' investment objective. The

investment objective of the Funds is to provide investors with a total return, taking into account the capital and income returns, which

reflect the total returns of the respective benchmark. The Funds’

performances are correlated to their benchmark. The correlation of

the Funds’ performance against the benchmark is a metric monitored

by key management personnel.

ii) Market risk arising from foreign currency risk

Exposure to foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows

of a financial instrument will fluctuate because of changes in foreign

exchange rates.

The Funds may invest in securities, which as far as possible and

practicable, consist of the component securities of the benchmark

index of each Fund, and which may be denominated in currencies

other than its reporting currency.

The Funds with the exception of iShares MSCI Japan SRI EUR Hedged

UCITS ETF (Acc) (the "Currency Hedged Fund"), in line with their

benchmarks, are unhedged and are therefore exposed to foreign

currency risk.

Consequently, each Fund is exposed to the risk of currency

fluctuations between the base currency of the benchmark index and

the base currency of the constituent securities of the benchmark

index.

The Funds may also invest in forward currency contracts and thus gain

further exposure to foreign currency risk.

Management of foreign currency risk

To minimise this risk, the Currency Hedged Fund invests in forward

currency contracts that as far as possible track the hedging

methodology of the benchmark index.

iSHARES IV PLC


FINANCIAL INSTRUMENTS AND RISKS* (continued)



a) Market risk (continued)

ii) Market risk arising from foreign currency risk (continued)

Management of foreign currency risk (continued)

The benchmark index is designed to represent a close approximation

of the return that can be achieved by hedging the currency exposures

of the index in the one month forward market at the end of each

month.

Exchange rate exposures are managed where appropriate and in

compliance with the prospectus utilising forward currency contracts.

The details of the contracts in place at the period-end date are

disclosed in the schedules of investments.

For iShares MSCI China A UCITS ETF, the onshore Renminbi is the

official currency of the PRC and is the currency of denomination for all

financial transactions between individuals, state and corporations in

the PRC.

Hong Kong is the first jurisdiction to allow for the accumulation of

Renminbi deposits outside the PRC. Since June 2010, the offshore

market for Renminbi is traded officially and regulated jointly by the

Hong Kong Monetary Authority and the People’s Bank of China (Hong

Kong) Limited (“PBOC”). While both onshore Renminbi ("CNY") and

offshore Renminbi ("CNH") are the same currency, the onshore and

offshore markets in which they are traded are largely separate and

independent and the movement of currency from one market to the

other is highly restricted. CNY and CNH are traded at different rates

and any movement may not be in the same direction. As a result the

Fund may be exposed to the exchange rate differences between CNH

and CNY and foreign exchange transaction costs associated with

converting from CNH to CNY and vice versa.

iii) Market risk arising from interest rate risk

Exposure to interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a

financial instrument will fluctuate because of changes in market

interest rates.

The Funds are exposed to interest rate risk through their cash

holdings, including margin cash held with brokers and their

investments in fixed and floating interest bearing securities where the

value of these securities may fluctuate as a result of a change in

interest rates.

The Funds also have indirect exposure to interest rate risk through

their investments into futures contracts, whereby the value of the

underlying asset may fluctuate as a result of a change in interest

rates.

Management of interest rate risk

Movements in the prices of these investments are derived from

movements in market interest rates and issuer creditworthiness.

Issuer creditworthiness and credit spreads are monitored by the

Investment Manager regularly. The securities in which the Funds

invest will generally have a minimum rating of investment grade from

a ratings agency as set out in the investment policy of the Funds.

Brexit

In a United Kingdom (“UK”) referendum held on 23 June 2016, the

electorate of the UK resolved to leave the European Union. The result

has led to political and economic instability, volatility in the financial

markets of the UK and more broadly across Europe. It may also lead

to weakening in consumer, corporate and financial confidence in such

markets as the UK negotiates its exit from the European Union. The

longer term process to implement the political, economic and legal

framework between the UK and the European Union is likely to lead to

continuing uncertainty and periods of exacerbated volatility in both

the UK and in wider European markets. In particular, the decision

made in the referendum may lead to a call for similar referendums in

other European jurisdictions which may also cause increased

economic volatility in wider European and global markets. The result

of this referendum does not change how the Funds’ portfolios are

managed however the mid to long term uncertainty may have an

adverse effect on the economy generally and therefore impact on the

ability of a Fund to execute on its strategy and it may also result in

increased costs to a Fund. For further details on the possible impact

of the results of the referendum please refer to the Investment

Manager’s report.

b) Counterparty credit risk

Exposure to counterparty credit risk

Counterparty credit risk is the risk that one party to a financial

instrument will cause a financial loss for the other party by failing to

discharge an obligation.

The Funds are exposed to counterparty credit risk from the parties

with which they trade and will bear the risk of settlement default.

Management of counterparty credit risk

Counterparty credit risk is monitored and managed by BlackRock’s

Risk and Quantitative Analysis (“RQA”) Counterparty & Concentration

Risk Team. The team is headed by BlackRock’s Chief Credit Officer

who reports to the Global Head of RQA. Credit authority resides with

the Chief Credit Officer and selected team members to whom specific

credit authority has been delegated.

iSHARES IV PLC


FINANCIAL INSTRUMENTS AND RISKS* (continued)



b) Counterparty credit risk (continued)

Management of counterparty credit risk (continued)

As such, counterparty approvals may be granted by the Chief Credit

Officer, or by identified RQA Credit Risk Officers who have been

formally delegated authority by the Chief Credit Officer.

The BlackRock RQA Counterparty & Concentration Risk Team

completes a formal review of each new counterparty, monitors and

reviews all approved counterparties on an ongoing basis and

maintains an active oversight of counterparty exposures and the

collateral management process.

There were no past due or impaired assets as at 30 November 2016 or

31 May 2016.

i) Exchange traded financial derivative instruments

The Funds’ holdings in futures contracts expose the Funds to

counterparty credit risk.

Management of counterparty credit risk related to futures contracts

The exposure is limited by trading the contracts through a clearing

house. The Funds’ exposure to counterparty credit risk on contracts in

which it currently has a gain position is reduced by such gains

received in cash from the counterparty under the daily mark-to-

market mechanism on exchange traded futures contracts (variation

margin). The Funds’ exposure to counterparty credit risk on contracts

in which it currently has a loss position is equal to the amount of

margin posted to the counterparty which has not been transferred to

the exchange under the daily mark-to-market mechanism. The

counterparties for futures contracts are Barclays Bank Plc, HSBC

Bank Plc and Citibank.

Margin is paid or received on futures contracts to cover any exposure

by the counterparty or the Funds to each other. The “Margin cash

account” on the condensed balance sheet consists of margin

receivable from or payable to the Company's clearing brokers and

various counter

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