Correspondence 0001193125-24-177778 from iSHARES TRUST (CIK 0001100663)
iSHARES TRUST (CIK 0001100663)
Date: July 11, 2024 · CIK: 0001100663 · Accession: 0001193125-24-177778
AI Filing Summary & Sentiment
File numbers found in text: 333-92935, 811-09729
Letter
VIA EDGAR Division of Investment Management Securities and Exchange Commission Re: iShares Trust (the “Trust”) (Securities Act File No. 333-92935 and Investment Company Act File No. 811-09729) Post-Effective Amendment No. 2,729
Dear Mr. Orlic:
This letter responds to your comments with respect to post-effective amendment (“PEA”) number 2,729 to the registration statement of the Trust filed pursuant to Rule 485(a) under the Securities Act of 1933 (“Securities Act”), on behalf of the following series of the Trust (each, a “Fund”):
iShares U.S. Digital Infrastructure and Real Estate ETF (“IDGT”)
iShares MSCI USA Quality GARP ETF (“GARP”)
The Securities and Exchange Commission staff (the “Staff”) provided comments to the Trust on July 8, 2024. For your convenience, the Staff’s comments are summarized below, and each comment is followed by the Trust’s response. Capitalized terms have the meanings assigned in each Fund’s Prospectus unless otherwise defined in this letter.
Comments applicable to GARP
Comment 1:
On page S-2 in the Principal Investment Strategies, please add disclosure clarifying what is meant by “return on equity” in the following sentence: “The quality score is based on three metrics: return on equity, debt-to-equity ratio, and earnings variability.”
Response:
The Trust amended the Fund’s disclosure to the following:
The process for weighting the selected securities in the Underlying Index involves calculating a “tilt score” for each security. Two components of the tilt score are value and quality scores, which are calculated for each security relative to its peers within the corresponding Global Industry Classification Standards sector. The value score is based on three metrics: price-to-book value, forward price-to-earnings ratio, and the ratio of enterprise value to cash flow from operations. The quality score is based on three metrics: return on equity (i.e., the trailing 12-month EPS divided by the most recently reported book value per share), debt-to-equity ratio, and earnings variability.
BRUSSELS CHICAGO DALLAS FRANKFURT HOUSTON LONDON LOS ANGELES MILAN
MUNICH NEW YORK PALO ALTO PARIS ROME SAN FRANCISCO WASHINGTON
Securities and Exchange Commission
July 11, 2024
Page
Comments applicable to each Fund
Comment 2:
In the SAI on p. 57, please add GARP to the list of excluded funds in the first paragraph under the section “Fundamental Investment Policies”.
Response:
The Trust has made this change.
Comment 3:
In the SAI on p. 58, consider adding real estate investment trusts (“REITs”) to Fundamental Investment Policy #5 for IDGT. The Staff notes that Fundamental Investment Policy #4 for GARP on p. 59 includes REITs in its list.
Response:
The Trust respectfully notes that IDGT’s Fundamental Investment Policy #5 reflects the Trust’s language used to describe a fund’s policy for buying and selling real estate at the time of its inception in 2001. The Trust interprets the meaning of “real estate” to exclude securities of REITs. Over the years, the investment policy language has been enhanced to include more specificity with respect to excluding interests in REITs from interests in real estate, as reflected in Fundamental Investment Policy #4 for GARP, which incepted in 2020. While the two policies do not include the same language verbatim, the Trust considers the meaning to be the same: the term real estate does not include securities or interests in REITs, and therefore the Trust respectfully declines to make any revisions to IDGT’s Fundamental Investment Policy #5. Further, the Fund’s Prospectus includes clear disclosure of the Fund’s investment in REITs as it includes a principal risk factor disclosing the risks related to real estate investment, specifically in companies that invest in, develop or operate real estate, including REITs and Data Center REITs. The Trust will consider adding clarifying language in the notations regarding IDGT’s fundamental investment policy in the future.
* * *
Sincerely,
/s/ Anne C. Choe
Show Raw Text
CORRESP 1 filename1.htm CORRESP 1875 K Street N.W. Washington, DC 20006-1238 Tel: 202 303 1000 Fax: 202 303 2000 July 11, 2024 VIA EDGAR Mr. David Orlic Division of Investment Management Securities and Exchange Commission 100 F Street, N.E. Washington, DC 20549 Re: iShares Trust (the “Trust”) (Securities Act File No. 333-92935 and Investment Company Act File No. 811-09729) Post-Effective Amendment No. 2,729 Dear Mr. Orlic: This letter responds to your comments with respect to post-effective amendment (“PEA”) number 2,729 to the registration statement of the Trust filed pursuant to Rule 485(a) under the Securities Act of 1933 (“Securities Act”), on behalf of the following series of the Trust (each, a “Fund”): iShares U.S. Digital Infrastructure and Real Estate ETF (“IDGT”) iShares MSCI USA Quality GARP ETF (“GARP”) The Securities and Exchange Commission staff (the “Staff”) provided comments to the Trust on July 8, 2024. For your convenience, the Staff’s comments are summarized below, and each comment is followed by the Trust’s response. Capitalized terms have the meanings assigned in each Fund’s Prospectus unless otherwise defined in this letter. Comments applicable to GARP Comment 1: On page S-2 in the Principal Investment Strategies, please add disclosure clarifying what is meant by “return on equity” in the following sentence: “The quality score is based on three metrics: return on equity, debt-to-equity ratio, and earnings variability.” Response: The Trust amended the Fund’s disclosure to the following: The process for weighting the selected securities in the Underlying Index involves calculating a “tilt score” for each security. Two components of the tilt score are value and quality scores, which are calculated for each security relative to its peers within the corresponding Global Industry Classification Standards sector. The value score is based on three metrics: price-to-book value, forward price-to-earnings ratio, and the ratio of enterprise value to cash flow from operations. The quality score is based on three metrics: return on equity (i.e., the trailing 12-month EPS divided by the most recently reported book value per share), debt-to-equity ratio, and earnings variability. BRUSSELS CHICAGO DALLAS FRANKFURT HOUSTON LONDON LOS ANGELES MILAN MUNICH NEW YORK PALO ALTO PARIS ROME SAN FRANCISCO WASHINGTON Securities and Exchange Commission July 11, 2024 Page 2 Comments applicable to each Fund Comment 2: In the SAI on p. 57, please add GARP to the list of excluded funds in the first paragraph under the section “Fundamental Investment Policies”. Response: The Trust has made this change. Comment 3: In the SAI on p. 58, consider adding real estate investment trusts (“REITs”) to Fundamental Investment Policy #5 for IDGT. The Staff notes that Fundamental Investment Policy #4 for GARP on p. 59 includes REITs in its list. Response: The Trust respectfully notes that IDGT’s Fundamental Investment Policy #5 reflects the Trust’s language used to describe a fund’s policy for buying and selling real estate at the time of its inception in 2001. The Trust interprets the meaning of “real estate” to exclude securities of REITs. Over the years, the investment policy language has been enhanced to include more specificity with respect to excluding interests in REITs from interests in real estate, as reflected in Fundamental Investment Policy #4 for GARP, which incepted in 2020. While the two policies do not include the same language verbatim, the Trust considers the meaning to be the same: the term real estate does not include securities or interests in REITs, and therefore the Trust respectfully declines to make any revisions to IDGT’s Fundamental Investment Policy #5. Further, the Fund’s Prospectus includes clear disclosure of the Fund’s investment in REITs as it includes a principal risk factor disclosing the risks related to real estate investment, specifically in companies that invest in, develop or operate real estate, including REITs and Data Center REITs. The Trust will consider adding clarifying language in the notations regarding IDGT’s fundamental investment policy in the future. * * * Sincerely, /s/ Anne C. Choe Anne C. Choe cc: Marisa Rolland Tim Kahn Michael Foland Michael Gung Toree Ho Luis Mora George Rafal Hannah Fiest - 2 -