ISHARES II PLC MSCI USA QLTY DIV UCITS ETF GBP DIST

Objectives and Approach

The Share Class is a share class of a Fund, which aims to achieve a return on your investment, through a combination of capital growth and income on the Fund’s assets, which reflects the return of the MSCI USA High Dividend Yield Index, the Fund’s benchmark index (Index). The Share Class, via the Fund is passively managed, and invests in equity securities (e.g. shares) that, so far as possible and practicable, make up the Index. The Index measures the performance of equity securities of large and mid-capitalisation companies in the United States (US) that have higher than average dividend income and quality characteristics. Quality characteristics, in this context, mean the growth, sustainability and consistency of dividend payments. The Index is derived from the MSCI USA Index (Parent Index) by selecting companies which have (i) higher than average dividend yields relative to the parent index, (ii) a track record for consistently paying dividends, and (iii) the capacity to sustain dividend payments. Dividend yield is a measure of how much a company pays out in dividends each year relative to its share price. The Index excludes any Real Estate Investment Trusts (REITs, i.e. closed-ended investment vehicles that invest in, manage and own real estate) that are part of the Parent Index. In order to create the Index, the index provider (MSCI) applies a dividend income and quality screening process to the companies which make up the Parent Index with REITs excluded. This screening process excludes companies (i) whose dividend payments are extremely high (i.e. in the top 5% of constituents, on the basis that dividend payments which are particularly high relative to a company’s earnings could be unsustainable) or negative, (ii) which do not have a good track record of growing dividends, (iii) which could be forced to cut or reduce dividends due to potentially weak fundamentals (i.e. information about a company which can be expected to impact the price or value of its shares, including profitability, consistency of earnings over time and debt levels), and (iv) which rank lowest among the remaining constituents based on recent annual performance. From the list of companies which remain after this screening process, only those with a higher dividend yield relative to the Parent Index will be included in the Index. Issuer weights in the Index are capped at 5%. The Index is free-float market capitalisation weighted. Free-float market capitalisation is the share price of a company multiplied by the company’s shares available to international investors (rather than all of the company’s issued shares). The Fund intends to replicate the Index by holding the equity securities, which make up the Index, in similar proportions to it. The Fund may also engage in short-term secured lending of its investments to certain eligible third parties to generate additional income to off-set the costs of theFund. The investment manager may use financial derivative instruments (FDIs) (i.e. investments the prices of which are based on one or more underlying assets) tohelp achieve the Fund’s investment objective. FDIs may be used for direct investment purposes. The use of FDIs is expected to be limited for this Share Class. Recommendation: This Fund is suitable for medium to long term investment, though the Fund may also be suitable for shorter term exposure to the Index. Your shares will be distributing shares (i.e. income will be paid on the shares semi-annually).