FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS/SOPHISTICATED INVESTORS ONLY
iSHARES
FACTOR ETFs
GETTING MORE
OUT OF BETA
Building blocks to
unlock sources of
outperformance
1
The investing landscape has changed so that investors are no
longer simply invested across asset classes and geographies,
but are expressing more distinct views on specific drivers of
risk and return within their portfolios.
2
These drivers of risk and returns are known as ‘factors’. Simply put, they are
a way to build portfolios around specific types of stocks which exhibit strong
characteristics associated with long term outperformance in comparison to
traditional indices. Historically, ‘factor investing’ was available through active
management, but with the evolution of index investing, investors can now
access factor exposures with an iShares ETF.
WHY USE iSHARES FOR
FACTOR EXPOSURES?
Targeted exposure – Upgrade
your equity allocation
with iShares Factor ETF
building blocks our turnkey
solutions to access sources
of outperformance.
Industry-leading indices –
iShares Factor ETFs follow
an index methodology that is
delivered by MSCI®.
3
Cost-efficient & transparent –
Capture returns of five single
factors with a Total Expense
Ratio (TER) from 0.25% and
three multi-factor strategies
from 0.35% TER with full
transparency of daily holdings.
The iShares factor funds range – which is part of our smart beta offering –
provides investors with a suite of funds that can capture factors that have
historically provided higher risk-adjusted returns.
Investors may choose to include factor funds as part of their portfolio – either to
diversify risk or with the aim to boost performance.
At iShares we currently offer five single factor and three multi-factor strategies,
all following a broadly diversified MSCI benchmark.
FIVE SINGLE FACTOR STRATEGIES
VALUE
SIZE
QUALITY
MINIMUM
VOLATILITY
MOMENTUM
THREE MULTI-FACTOR STRATEGIES
iSHARES FACTORSELECT™
MSCI WORLD UCITS ETF
iSHARES FACTORSELECT™
MSCI EUROPE UCITS ETF
iSHARES FACTORSELECT™
MSCI USA UCITS ETF
IFSW
IFSE
IFSU
[2] iSHARES FACTOR E TFs
HISTORY OF FACTOR INVESTING
Factor investing has its roots in academic research. One of the first factor
models was the Capital Asset Pricing Model (CAPM)1. Later research by Fama
and French2 validated value and size as drivers of risk and return. Subsequent
research by Sloan3 and Carhart4 have added to the academic literature by
identifying quality and momentum as factors.
Factor investing is a different way to think about risk, diversification and
investment returns. Factor investing has been used in active management for
many years to generate alpha.
SINGLE FACTOR INVESTING
Single Factor ETFs are building blocks that provide investors with the flexibility
to construct their portfolios by expressing factor views.
MULTI-FACTOR INVESTING
Multi-factor ETFs are turnkey solutions that aim to provide combined factor
exposure through a single investment.
WHY iSHARES?
iShares has been entrusted with
more assets from more investors than
any other ETF manager in the world.
iShares launched its first ETF in Europe
in April 2000 and today manages over
40% of all European ETP assets. With
over 700 ETFs listed globally, iShares
offers an unparalleled range of funds
for its clients, and its management
is backed by the expertise of 100
investment teams worldwide. iShares
continues to drive innovation and
offers investors more choice for their
investment challenges.
1Sharpe, William (1964), ‘Capital Asset Prices: A Theory of Market Equilibrium under Conditions of
Risk’, Journal of Finance 19, 425-442.
2Fama, Eugene F. and Kenneth R. French (1992), ‘The Cross-Section of Expected Stock Returns’, Journal
of Finance 47, 427-465. Fama, Eugene F., and Kenneth R. French (1993), ‘Common Risk Factors in the
Returns on Stock and Bonds’, Journal of Financial Economics 33, 3-56.
3Sloan, R. (1996), Do stock prices fully reflect information in accruals and cash flows about future
earnings?, The Accounting Review 71, p.289-315.
4 Carhart, M. (1997), On Persistence in Mutual Fund Performance, The Journal of Finance 52(1), p.57-82.
G E T T I N G M O R E O U T O F B E TA [3]
Single Factor ETFs
Summary
Each of our Single Factor ETFs allows investors to capture
targeted exposure to individual risk factors: Value, Size,
Quality, Momentum and Minimum Volatility.
iSHARES MSCI WORLD VALUE FACTOR UCITS ETF
iSHARES MSCI EUROPE VALUE FACTOR UCITS ETF
VALUE
``What: Exposure to a sub-set of MSCI World or MSCI Europe stocks that
capture undervalued stocks based on their fundamentals.
``How: The index applies three diversified metrics, which look at a company’s
earnings, book value (equity value on balance sheet) and cash flow ratios.
``Why: In anticipation that over the long run a portfolio focused on undervalued
stocks will perform better than the wider market.
iSHARES MSCI WORLD SIZE FACTOR UCITS ETF
iSHARES MSCI EUROPE SIZE FACTOR UCITS ETF
SIZE
``What: Exposure to smaller capitalisation companies within the MSCI World or
MSCI Europe investment universe.
``How: The index equally weights the mid-capitalisation constituents of the
parent index and in doing so increases the exposure to smaller companies
within the index.
``Why: In anticipation that over the long run a portfolio of smaller company
stocks will get rewarded for the additional risk versus the broad market.
iSHARES MSCI WORLD QUALITY FACTOR UCITS ETF
iSHARES MSCI EUROPE QUALITY FACTOR UCITS ETF
QUALITY
``What: Exposure to a sub-set of MSCI World or MSCI Europe stocks with
strong balance sheets and stable earnings.
``How: The index seeks exposure to companies with high return on equity and
low earnings variability and leverage.
``Why: In anticipation that strong balance sheet companies will exhibit lower
risk and perform better in the longer-term relative to the wider market.
[4] iSHARES FACTOR E TFs
iSHARES MSCI WORLD MOMENTUM FACTOR UCITS ETF
iSHARES MSCI EUROPE MOMENTUM FACTOR UCITS ETF
``What: Exposure to a sub-set of MSCI World and MSCI Europe stocks
that exhibit the strongest risk-adjusted performance over the last 6 and
12 months.
MOMENTUM
``How: The index selects the stocks with higher risk-adjusted price performance.
``Why: In anticipation that the price trend of these stocks will continue to
outperform relative to the wider market.
iSHARES MSCI WORLD MINIMUM VOLATILITY UCITS ETF
iSHARES MSCI EUROPE MINIMUM VOLATILITY UCITS ETF
``What: Exposure to a sub-set of MSCI World and MSCI Europe stocks that
show reduced volatility compared to the parent index.
MINIMUM
VOLATILITY
``How: The index selects an optimal portfolio of stocks, seeking to minimise
volatility while aiming to provide broadly representative market exposure.
``Why: To achieve reduced volatility relative to MSCI World and MSCI Europe
equity markets; mitigating the peaks and valleys of the performance of the
parent index.
G E T T I N G M O R E O U T O F B E TA [ 5 ]
Multi-Factor ETFs
Summary
Our range of Multi-Factor ETFs allows investors to gain costefficient access to a rules-based index strategy capitalising
on four equity factors that have historically outperformed the
broad market: Quality, Value, Momentum and Size
IFSW
ISHARES FACTORSELECT™ MSCI WORLD UCITS ETF
IFSE
ISHARES FACTORSELECT™ MSCI EUROPE UCITS ETF
IFSU
ISHARES FACTORSELECT™ MSCI USA UCITS ETF
``What: Exposure to a subset of the MSCI World / MSCI Europe / MSCI USA
constituents, targeting maximised factor exposure at a target risk similar
market risk to MSCI World / MSCI Europe / MSCI USA Index.
``How: The index selects an optimised portfolio of stocks, seeking to maximise
exposure to the Quality, Value, Momentum and Size factors, while maintaining
a similar market risk to the MSCI World / MSCI Europe / MSCI USA Index.
``Why: In anticipation of outperformance versus the MSCI World / MSCI Europe /
MSCI USA Index at a similar target market risk.
[6] iSHARES FACTOR E TFs
Illustrative examples
USE FACTOR ETFs AS BUILDING BLOCKS TO MANAGE THE RISK AND
RETURN OF YOUR PORTFOLIO
APPLICATION 1
Investor challenge
A discretionary portfolio manager holds a broadly diversified equity portfolio
invested in developed European markets stocks. The manager follows the MSCI
Europe index, which is heavily weighted towards large market capitalisation
stocks. The manager holds the view that smaller sized companies have a higher
potential to outperform the market due to their potential for growth. At the
same time, the manager understands that historically, smaller size stocks show
higher volatility which he would like to mitigate5.
Solution
In order to increase his exposure to smaller sized companies, the manager
selects the iShares MSCI Europe Size Factor UCITS ETF, which provides
exposure to mid-cap stocks and adds a source of potential outperformance over
the broad equity market to his portfolio5.
In order to mitigate the potential higher volatility a smaller market capitalisation
exposure may bring, the manager chooses the iShares MSCI Europe Minimum
Volatility UCITS ETF to gain exposure to a global portfolio that shows reduced
volatility compared to the benchmark. As a result, the overall volatility profile of
his portfolio may be reduced.
Key benefits
``
TARGETED factor exposure
The building block nature of iShares Factor ETFs allows investors to mix and
match factor exposures, to express their unique investment views and risk and
return profiles.
``
POTENTIAL to outperform the broad equity market
The iShares Factor ETF range allows investors to implement an ETF strategy
that has the potential to outperform the broad MSCI Europe equity market.
``
LOW COST in a single trade
Gain targeted exposure to European factors with a diversified ETF –
all in a single trade.
5 Source: BlackRock, MPI, Morningstar, Bloomberg. 02.02.2009 – 31.07.2014.
Frequency; monthly in USD.
G E T T I N G M O R E O U T O F B E TA [ 7 ]
APPLICATION 1
USE FACTOR ETFs TO EXPRESS YOUR VIEW ON THE BUSINESS CYCLE
ILLUSTRATIVE APPLICATION
Momentum
EARLY CYCLE:
RECOVERY
MID CYCLE:
SLOWDOWN
LATE CYCLE:
PICKUP
CONTRACTION:
RECESSION
Source: BlackRock, September 2014.
Investor challenge
A discretionary portfolio manager holds a broadly diversified equity portfolio
invested in global stocks. She recently attended a macroeconomic conference
and subsequently adjusted her outlook on global equities. The portfolio manager
believes that the global economy is entering into an early cycle recovery. As a
result, she would like to adjust her portfolio to benefit from stocks that may
perform well in the short-term in this part of the business cycle, while keeping
trading costs low.
Solution
In order to maintain her current asset allocation while expressing her macro
views, the manager selects the iShares MSCI World Momentum Factor UCITS
ETF. The fund aims to capture short-term opportunities through exposure
to global companies that have been experiencing an upward price trend. As
a result, the manager takes advantage of tactical opportunities through the
momentum factor. The trade is easily implemented with an iShares ETF and is a
cost-efficient way to express her factor views.
[8] iSHARES FACTOR E TFs
Key benefits
``
TARGETED factor exposure
The building block nature of the iShares Factor ETFs allows investors to mix and
match factor exposures, to express their unique investment views and risk and
return profiles.
``
CHOICE beyond countries and sectors
iShares Factor ETFs offer investors a wider choice to express their views.
``
FLEXIBLE strategic exposure
Simplicity and ease of trading means that investors can add or reduce their
factor exposures as their views on the market change.
G E T T I N G M O R E O U T O F B E TA [9]
Methodology in a nutshell –
Single Factor ETFs
STARTING UNIVERSE: MSCI WORLD INDEX OR MSCI EUROPE INDEX
VALUE
iShares MSCI World Value Factor UCITS ETF
iShares MSCI Europe Value Factor UCITS ETF
Rules-based index construction centred on three value signals:
1. Price to forward earnings,
2. Price to book value,
3. Enterprise value to operating cash flow.
Sector neutral constraint: Stocks are compared within their respective sectors
and constraints are in place to ensure same sector weights as the parent index.
SIZE
iShares MSCI World Size Factor UCITS ETF
iShares MSCI Europe Size Factor UCITS ETF
Rules-based index construction centred on market capitalisation:
1. Selecting the mid-cap constituents to capture the smallest market capitalisation
stocks within the starting universe,
2. Equally weighting each security.
Sector agnostic: No sector neutral constraint is applied.
QUALITY
iShares MSCI World Quality Factor UCITS ETF
iShares MSCI Europe Quality Factor UCITS ETF
Rules-based index construction centred on three quality signals:
1. Return on equity,
2. Leverage,
3. Earnings variability.
Sector neutral constraint: Stocks are compared within their respective sectors
and constraints are in place to ensure the same sector weights as the parent index.
MOMENTUM
iShares MSCI World Momentum Factor UCITS ETF
iShares MSCI Europe Momentum Factor UCITS ETF
Rules-based index construction centred on price performance:
1. 6-month and 12-month price performance,
2. Risk-adjusted to reduce exposure to more volatile stocks.
Sector agnostic: No sector neutral constraint is applied.
MINIMUM
VOLATILITY
iShares MSCI World Minimum Volatility UCITS ETF
iShares MSCI Europe Minimum Volatility UCITS ETF
Optimised index construction focused on a lower volatility portfolio:
1. Optimal combination of securities, focusing on both return volatility and correlation,
2. Portfolio constraints are applied at the country, sector, factor and security weight level
relative to the starting universe.
Sector and country relative constraints are applied during the optimisation process to ensure
diversification, prevent unintended bias and control turnover.
[10 ] i S H A R E S FA C T O R E T F s
Methodology in a nutshell –
Multi-Factor ETFs
STARTING UNIVERSE: MSCI WORLD, MSCI EUROPE OR MSCI USA
IFSW
iShares FactorSelect™ MSCI World UCITS ETF
IFSE
iShares FactorSelect™ MSCI Europe UCITS ETF
IFSU
iShares FactorSelect™ MSCI USA UCITS ETF
Rules-based index construction focused on maximising factor exposure at similar target risk to the
starting universe:
1. Each security in the starting universe is rated for the following four factors:
QUALITY
VALUE
MOMENTUM
SIZE
2. Each security receives an equally weighted aggregate factor score.
3. All securities are passed through an optimization process to select the subset of securities
producing the highest factor exposure at similar market risk to the starting universe.
G E T T I N G M O R E O U T O F B E T A [ 11 ]
At a glance
Factor
VALUE
SIZE
QUALITY
MOMENTUM
MINIMUM
VOLATILITY
Fund name
Index name
Current number of
index holdings
Total Expense
Ratio (TER)
Ticker
iShares MSCI
World Value Factor
UCITS ETF
MSCI World
Enhanced
Value Index
394
0.30%
IWVL
iShares MSCI
Europe Value
Factor UCITS ETF
MSCI Europe
Enhanced
Value Index
150
0.25%
IEVL
iShares MSCI
World Size Factor
UCITS ETF
MSCI World
Mid-Cap Equal
Weighted Index
908
0.30%
IWSZ
iShares MSCI
Europe Size Factor
UCITS ETF
MSCI Europe
Mid-Cap Equal
Weighted Index
235
0.25%
IESZ
iShares MSCI World
Quality Factor
UCITS ETF
MSCI World
Sector Neutral
Quality Index
298
0.30%
IWQU
iShares MSCI
Europe Quality
Factor UCITS ETF
MSCI Europe
Sector Neutral
Quality Index
125
0.25%
IEQU
iShares MSCI World
Momentum Factor
UCITS ETF
MSCI World
Momentum Index
346
0.30%
IWMO
iShares MSCI
Europe Momentum
Factor UCITS ETF
MSCI Europe
Momentum Index
125
0.25%
IEMO
iShares MSCI World
Minimum Volatility
UCITS ETF
MSCI World
Minimum
Volatility Index
277
0.30%
MVOL
iShares MSCI
Europe Minimum
Volatility UCITS ETF
MSCI Europe
Minimum
Volatility Index
142
0.25%
MVEU
Source: MSCI, BlackRock, as at 7 August 2015.
[ 12 ] i S H A R E S F A C T O R E T F s
Factor
Current number of
index holdings
Total Expense
Ratio (TER)
Ticker
MSCI World
Diversified
Multiple-Factor
Index
351
0.50%
IFSW
iShares
FactorSelect™
MSCI Europe
UCITS ETF
MSCI Europe
Diversified
Multiple-Factor
Index
114
0.45%
IFSE
iShares
FactorSelect™
MSCI USA
UCITS ETF
MSCI USA
Diversified
Multiple-Factor
Index
137
0.35%
IFSU
Fund name
Index name
iShares
FactorSelect™
MSCI World
UCITS ETF
VALUE
SIZE
QUALITY
MOMENTUM
Source: MSCI, BlackRock as at 20 July 2015.
G E T T I N G M O R E O U T O F B E TA [13]
Regulatory Information
BlackRock Advisors (UK) Limited, which is authorised and regulated by the Financial Conduct Authority (‘FCA’), having its registered office at 12 Throgmorton Avenue, London, EC2N 2DL, England, Tel +44
(0)20 7743 3000, has issued this document for access by Professional Clients only and no other person should rely upon the information contained within it. For your protection, calls are usually recorded.
iShares plc, iShares II plc, iShares III plc, iShares IV plc, iShares V plc, iShares VI plc and iShares VII plc (together ‘the Companies’) are open-ended investment companies with variable capital having segregated
liability between their funds organised under the laws of Ireland and authorised by the Central Bank of Ireland.
For investors in Austria
The funds mentioned in this document are registered for public offer in Austria. The Sales Prospectuses for the Companies, Key Investor Information Document and other documents as well as the annual and
semi-annual reports have been published in Austria and are available free of charge from UniCredit Bank AG Vienna Branch, Julius Tandler Platz 3, 1090 Vienna, Austria, the Austrian paying and information
agent and are also available on the website www.ishares.com. Any decision to invest must be based solely on the information contained in the Company’s Prospectus, Key Investor Information Document and
the latest half-yearly report and unaudited accounts and/or annual report and audited accounts. Investors should read the fund specific risks in the Key Investor Information Document and the Company’s
Prospectus. The Companies intend to fulfil the requirements for treatment of all of their sub-funds as reporting funds. Therefore the Companies have an Austrian tax representative who calculates the Austrian
Deemed Distributed Income figures once a year and files an electronic tax return with the Austrian Control Bank. However, it cannot be guaranteed that the requirements will be met in the future. The Companies
reserve the right to give up the reporting fund status and to not undertake such tax filings.
For investors in Denmark
This document is directed at Professional Investors in Denmark only and the Funds are authorised by Finanstilsynet, the Danish Financial Supervisory Authority. Any decision to invest must be based solely on the
information contained in the Company’s Prospectus, Key Investor Information Document and the latest half-yearly report and unaudited accounts and/or annual report and audited accounts and the Danish country
supplements. Investors should read the fund specific risks in the Key Investor Information Document and the Company’s Prospectus. Copies of all documentation can be obtained free of charge from offices of
the paying agent in Denmark BlackRock Copenhagen Branch, filial af BlackRock Investment Management (UK) Limited Harbour House, Sundkrogsgade 21, 2100 København Ø, Denmark. This document is
strictly confidential and may not be distributed without authorisation from BlackRock Advisors (UK) Limited.
For investors in Finland
The funds mentioned are registered for public distribution in Finland and are authorised by the Finanssivalvonta (Fiva), the Financial Supervisory Authority (FIN-FSA), in Finland. Any decision to invest must be
based solely on the information contained in the Company’s Prospectus, Key Investor Information Document and the latest half-yearly report and unaudited accounts and/or annual report and audited accounts.
Investors should read the fund specific risks in the Key Investor Information Document and the Company’s Prospectus. This document is strictly confidential and may not be distributed without authorisation from
BlackRock Advisors (UK) Limited.
For investors in France
Any subscription for shares in a sub-fund of one of the companies will be carried out according to the conditions specified in the full Prospectus, Key Investor Information Document, the French Addendum and in
the Supplements of Companies as the case may be. These documents can be obtained by contacting the paying agent of the Company: BNP Paribas Securities Services, 3 rue d’Antin, 75002 Paris, tel: 00 33 1
42 98 10 00 or by visiting the French part of the site www.iShares.eu. The companies are undertakings for collective investment in transferable securities (UCITS) governed by foreign laws and approved by the
Financial Regulator in the home state as a UCITS complying with European regulations. The European Directive 2009/65/EC of July 13, 2009 on UCITS, as amended, establishes common rules in order to allow
the cross-border marketing of UCITS which comply with it. This common foundation did not prohibit different methods of implementation. This is why a European UCITS may be marketed in France even though
the activity of such scheme would not respect rules identical to those which govern the approval of this type of product in France. This sub fund has been authorized for marketing in France by the Autorité des
Marchés Financiers. Please note that the distribution of shares of some sub funds of funds is not allowed in France. This document does not constitute an offer or a solicitation in relation to the shares of the funds.
For investors in Germany
The Sales Prospectus and Key Investor Information Document, as well as the annual and semi-annual reports are available free of charge from Commerzbank Kaiserplatz, 60311 Frankfurt am Main,
Germany. The Companies intend to fulfil the prerequisites for treatment of their sub-funds as so-called “transparent funds” pursuant to §§ 2 and 4 of the German Investment Tax Act (Investmentsteuergesetz
– InvStG). However, it cannot be guaranteed that the requirements will be met. The Companies reserve the right to give up the “transparent status” and to not undertake the necessary publications. Any
decision to invest must be based solely on the information contained in the Company’s Prospectus, Key Investor Information Document and the latest half-yearly report and unaudited accounts and/or
annual report and audited accounts. Investors should read the fund specific risks in the Key Investor Information Document and the Company’s Prospectus. Please note that important information about
iShares VII funds is available in the current prospectus and other documents that can be obtained free of charge from the paying agent, Deutsche Bank AG Taunusanlage 12, 60325 Frankfurt am Main,
Federal Republic of Germany.
For investors in Iceland
The funds mentioned in this document are not registered for public distribution in Iceland. The investment described in this memorandum is not a public offering of securities. It is not registered for public
distribution in Iceland with the Financial Supervisory Authority pursuant to the Icelandic Act on Undertakings for Collective Investment in Transferable Securities (UCITS) and investment Funds No.
30/2003 and supplementary regulations. The investment may not be offered or sold by means of this memorandum or anyway later resold otherwise than in accordance with Article 13 of the Regulation
on UCITS and Investment Funds No. 792/2003. This document is intended for information purposes only and does not constitute investment advice or an offer to sell or a solicitation of an offer to buy
the funds described within and no steps may be taken which would constitute or result in a public offering of the funds in Iceland. This document is strictly confidential and may not be distributed without
authorisation from BlackRock Advisors (UK) Limited.
Please read the prospectus and ensure that you are eligible to invest under the local regulatory and financial rules, and comply with restrictions on foreign currency investments, that exist for Icelandic
investors. We recommend that you seek independent financial advice before making any investment decision. This document is for your information only. Accordingly, this document and relevant
information may not be used for any other purpose or passed on to any other person in Iceland. The funds described in this document are not registered for public distribution in Iceland and may not
be offered, sold or resold to the public in Iceland. Any decision to invest must be based solely on the information contained in the Company’s Prospectus, Key Investor Information Document and the
latest half-yearly report and unaudited accounts and/or annual report and audited accounts. Investors should read the fund specific risks in the Key Investor Information Document and the Company’s
Prospectus.
For investors in Israel
BlackRock Advisors (UK) Limited is not licensed under Israel’s Regulation of Investment Advice, Investment Marketing and Portfolio Management Law, 5755-1995. No action has been or will be taken
in Israel that would permit a public offering or distribution of the Funds mentioned in this document to the public in Israel. The Funds mentioned in this document have not been approved by the Israeli
Securities Authority. In addition, the Funds mentioned in this document are not regulated under the provisions of Israel’s Joint Investment Trusts law, 5754- 1994 (the “Joint Investment Trusts Law”).
This document has not been approved by the Israel Securities Authority and will only be distributed to Israeli residents in a manner that will not constitute “an offer to the public” under sections 15 and
15a of the Israel Securities Law, 5728-1968 (the “Securities Law”) or section 25 of the Joint Investment Trusts Law, as applicable. The document is being offered to those categories of investors listed
in the First Addendum (the “Addendum”) to the Securities Law, (“Institutional Investors”); in all cases under circumstances that will fall within the private placement or other exemptions of the Joint
Investment Trusts Law, the Securities Law and any applicable guidelines, pronouncements or rulings issued from time to time by the Israel Securities Authority. This document may not be reproduced or
used for any other purpose, nor be furnished to any other person other than those to whom copies have been sent. Nothing in this document should be considered investment advice or investment
marketing as defined in the Regulation of Investment Counselling, Investment Marketing and Portfolio Management Law, 5755-1995. This document does not constitute an offer to sell or solicitation of
an offer to buy any securities, nor does it constitute an offer to sell to or solicitation of an offer to buy from any person or persons in any state or other jurisdiction in which such offer or solicitation would
be unlawful, or in which the person making such offer or solicitation is not qualified to do so, or to a person or persons to whom it is unlawful to make such offer or solicitation.
iSHARES FACTOR E TFs
For investors in Italy
Any application for shares in the funds is on the terms of the Prospectus, Key Investor Information Document, for the Companies. The Shares of certain sub-funds in the Companies have been admitted to listing
in Italy and are currently listed on the Mercato Telematico Fondi of Borsa Italiana S.p.A. The list of the sub-funds listed in Italy, the Prospectus, of the Companies, the Documento di quotazione of the iShares
funds, the latest annual and semi annual report of the Companies are published (i) on the Companies’ internet website at the address www.iShares.com and (ii) on Borsa Italiana S.p.A’s website at the address
www.borsaitalia.it. These documents are available for the public in Italian version with certification that such documents are a faithful translation of the original documents. Investors are entitled to receive free of
charge, even at home, a copy of the above documents, upon written request forwarded to the Companies. Investors should read the fund specific risks in the Key Investor Information Document and the
Company’s Prospectus. For comprehensive information on the expenses charged to a fund and fees applicable to investors, see the Documento di quotazione and the Prospectus.
For investors in Luxembourg
The Companies have been notified to the Commission de Surveillance du Secteur Financier in Luxembourg in order to market their shares for sale to the public in Luxembourg and the Companies are notified
Undertaking in Collective Investment for Transferable Securities (UCITS). The Companies have not been listed on the Luxembourg Stock Exchange, investors should contact their broker for further information.
Investment is subject to the Prospectus, Key Investor Information Document and all documents (the main/umbrella Prospectus, the Supplement[s], the latest and any previous annual and semi-annual reports of
the Companies and the Memorandum and Articles of Association of the Companies) will be available in the Luxembourg, free of charge, from the offices of the Local Agent, BNP Paribas Securities Services,
Luxembourg Branch 33, rue de Gasperich Howald – Hesperange L-2085 Luxembourg or by visiting the website on www.iShares.com. Investors should read the fund specific risks in the Key Investor Information
Document and the Company’s Prospectus.
For investors in Norway
The funds mentioned are registered for public distribution in Norway and are authorised by Kredittilsynet, the Financial Supervisory Authority of Norway. Any application for shares in the funds is on the terms of
the Prospectus, Key Investor Information Document for the Companies. Any decision to invest must be based solely on the information contained in the Company’s Prospectus, Key Investor Information Document
and the latest half-yearly report and unaudited accounts and/or annual report and audited accounts. Investors should read the fund specific risks in the Key Investor Information Document and the Company’s
Prospectus. This document is strictly confidential and may not be distributed without authorisation from BlackRock Advisors (UK) Limited.
For investors in Spain
The funds mentioned are registered for public distribution in Spain.The sales Prospectus has been registered with the Spanish Securities Market Commission (Comisión Nacional del Mercado de Valores
(‘CNMV’)). The funds which are registered in the official registry of the Spanish Securities and Exchange Commission (CNMV) are iShares plc (registration number 801), iShares II plc (registration number 802)
and iShares III plc (registration number 806), iShares IV plc (registration number 1402), iShares V plc (registration number 977), iShares VI plc (registration number 1091), iShares VII plc (registration number
886) and iShares (Lux) (registration number 905). The official registry, CNMV, must always be checked to see which sub funds of the funds mentioned are registered for public distribution in Spain. Any decision
to invest must be based solely on the information contained in the Company’s Prospectus, Key Investor Information Document and the latest half-yearly report and unaudited accounts and/or annual report and
audited accounts, copies of which can be obtained free of charge at www.iShares.es. Investors should read the fund specific risks in the Key Investor Information Document and the Company’s Prospectus.
For investors in Sweden
The Funds mentioned herein are registered for public distribution in Sweden and are authorised by Finansinspektionen, the Swedish Financial Supervisory Authority. Any application for shares in the funds is on
the terms of the Prospectus, Key Investor Information Document, for the Companies. Important information relating to the Companies is contained in the relevant Prospectus, Key Investor Information Document
and other documents, copies of which can be obtained free of charge from offices of the paying agent BlackRock Investment Management (UK) Limited, Stockholm Filial Mäster Samuelsgatan 1, Box 609
S-11411 Stockholm, Sweden. Any decision to invest must be based solely on the information contained in the Company’s Prospectus, Key Investor Information Document and the latest half-yearly report and
unaudited accounts and/or annual report and audited accounts. Investors should read the fund specific risks in the Key Investor Information Document and the Company’s Prospectus. Please note that important
information about iShares V funds is available in the current prospectus and other documents that can be obtained free of charge from the paying agent BlackRock Investment Management (UK) Limited,
Stockholm Filial Mäster Samuelsgatan 1, Box 609 S-11411 Stockholm, Sweden.
For investors in Switzerland
The distribution of the Fund in Switzerland will be exclusively made to qualified investors as defined in the Swiss Collective Investment Schemes Act of 23 June 2006, as amended and its implementing ordinance.
Accordingly, some of the Funds have not been registered with the Swiss Financial Market Supervisory Authority (“FINMA”). This document may be made available in Switzerland solely to qualified Investors. In
respect of the registered funds, BlackRock Asset Management Schweiz AG, Bahnhofstrasse 39, CH-8001 Zürich, is the Swiss Representative and JPMorgan Chase Bank, National Association, Columbus, Zürich
Branch, Dreikönigstrasse 21, 8002 Zurich, the Swiss Paying Agent of the Fund. From 1st February 2016 JP Morgan Chase Bank is replaced as the Swiss Paying Agent for the foreign iShares ETFs registered
in Switzerland by State Street Bank GmbH, Munich, Zurich Branch, Beethovenstrasse 19, CH-8002 Zürich The Prospectus, Key Investor Information Document, the Articles of Incorporation, the latest and any
previous annual and semi-annual reports of the Fund are available free of charge from the Swiss representative. Investors should read th e fund specific risks in the Key Investor Information Document and the
Prospectus.
For investors in the UK
Most of the protections provided by the UK regulatory system do not apply to the operation of the Companies, and compensation will not be available under the UK Financial Services Compensation Scheme on
its default. The Companies are recognised schemes for the purposes of the Financial Services and Markets Act 2000. Any decision to invest must be based solely on the information contained in the Company’s
Prospectus, Key Investor Information Document and the latest half-yearly report and unaudited accounts and/or annual report and audited accounts. Investors should read the fund specific risks in the Key Investor
Information Document and the Company’s Prospectus.
Restricted Investors
This document is not, and under no circumstances is to be construed as an advertisement or any other step in furtherance of a public offering of shares in the United States or Canada. This document is not
aimed at persons who are resident in the United States, Canada or any province or territory thereof, where the companies/securities are not authorised or registered for distribution and where no prospectus has
been filed with any securities commission or regulatory authority. The companies/securities may not be acquired or owned by, or acquired with the assets of, an ERISA Plan.
Risk Warnings
Investment in the products mentioned in this document may not be suitable for all investors. Past performance is not a guide to future performance and should not be the sole factor of consideration when
selecting a product. The price of the investments may go up or down and the investor may not get back the amount invested. Your income is not fixed and may fluctuate. The value of investments involving
exposure to foreign currencies can be affected by exchange rate movements. We remind you that the levels and bases of, and reliefs from, taxation can change.
BlackRock has not considered the suitability of this investment against your individual needs and risk tolerance. The data displayed provides summary information. Investment should be made on the basis of the
relevant Prospectus which is available from the manager.
In respect of the products mentioned this document is intended for information purposes only and does not constitute investment advice or an offer to sell or a solicitation of an offer to buy the securities described
within. This document may not be distributed without authorisation from BlackRock Advisors (UK) Limited.
Index Disclaimers
iShares funds are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such funds or any index on which such funds are based. The Prospectus contains
a more detailed description of the limited relationship that MSCI has with BlackRock Advisors (UK) Limited and any related funds.
© 2016 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, iSHARES, BUILD ON BLACKROCK, SO WHAT DO I DO WITH MY MONEY and the stylized i logo are registered and
unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.
005441c-IS-SUGLIFAIsSp-DeFiIcNoSw-I-JAN16-EN-EMEAiS-1645-080916
G E T T I N G M O R E O U T O F B E TA
Want to know more?
Austria
+49 (0) 89 42729 5858
Germany
+49 (0) 89 42729 5858
Norway
+47 (0) 800 14 324
Denmark
+358 (0) 800 918 277
Israel
+44 (0) 207 743 1659
Spain
+34 (0) 91 788 94 00
Finland
+358 (0) 800 918 277
Italy
+39 (0) 800 898085
Sweden
+46 (0) 20 79 62 38
France
+33 (0) 1 56 43 29 19
Luxembourg
+32 (0) 2 402 49 12
Switzerland
+41 (0) 800 33 66 88
iShares.com
UK
+44 (0) 845 357 7000