Fund Description: iShares J.P.Morgan USD Emerging Markets Bond ETF, formerly iShares JPMorgan USD Emerging Markets Bond Fund, is an exchange-traded index fund or Index ETF which is a separate investment portfolio of the iShares Trust, an open-end investment management company. INVESTMENT OBJECTIVE: The iShares J.P.Morgan USD Emerging Markets Bond ETF seeks results that correspond generally to the price and yield performance, before fees and expenses, of the JPMorgan EMBI Global Core Index. INDEX DESCRIPTION: The JPMorgan EMBI Global Core Index is a broad, diverse U.S. dollar denominated emerging markets debt benchmark which tracks the total return of actively traded external debt instruments in emerging market countries. The methodology is designed to distribute the weights of each country within the Index by limiting the weights of countries with higher debt outstanding and reallocating this excess to countries with lower debt outstanding. As of October 31, 2007, the Index consisted of the following 26 countries: Argentina, Brazil, Bulgaria, Chile, China, Colombia, Ecuador, Egypt, El Salvador, Hungary, Indonesia, Iraq, Lebanon, Malaysia, Mexico, Panama, Peru, Philippines, Poland, Russia, Serbia, South Africa, Turkey, Ukraine, Uruguay and Venezuela. As of October 31, 2007, the Index's five highest weighted countries were Brazil, Mexico, the Philippines, Russia and Turkey. The Index may change its composition and weighting monthly upon rebalancing. The Index includes both fixed- and floating-rate instruments issued by sovereign and quasi-sovereign entities from index-eligible countries. Quasi-sovereign entities are entites whose securities are either 100% owned by their respective governments or subject to a 100% guarantee that does not rise to the level of constituting the full faith and credit by such governments. Only those instruments which: 1. Are denominated in U.S. dollars; 2. Have a current face amount outstanding of $1 billion or more; 3. Have at least two years until maturity; 4. Are able to settle internationally through Euroclear or another institution domiciled outside the issuing country; and 5. Save bid and offer prices that are available on a daily and timely basis-either from an inter-dealer broker or JPMorgan-are considered for inclusion into the Index. As of October 31, 2007, the Index consisted primarily of below investment grade bonds. Convertible bonds are not eligible for inclusion into the Index. The Index is market value weighted and is rebalanced monthly on the last business day of the month. FUND STRATEGY: The Fund generally will invest at least 90% of its assets in the securities of its Index. However, the Fund may at times invest up to 20% of its assets in certain futures, options and swap contracts, cash and cash equivalents, including money market funds. A passive or indexing approach is used to try to achieve the Fund's investment objective. Unlike many investment companies, the Fund does not try to beat the index it tracks and does not seek temporary defensive positions when markets decline or appear overvalued. Indexing may eliminate the chance that the Fund will substantially outperform its Index but also may reduce some of the risks of active management, such as poor bond selection. Indexing seeks to achieve lower costs and better after-tax performance by keeping portfolio turnover low in comparison to actively managed investment companies. Using a representative sampling indexing strategy involves investing in a representative sample of bonds that collectively has an investment profile similar to the Index. The bonds selected are expected to have, in the aggregate, investment characteristics (based on factors such as market capitalization and industry weightings), fundamental characteristics (such as return variability, duration, maturity or credit ratings and yield) and liquidity measures similar to those of the Index. The Fund may or may not hold all of the bonds in the Index. FUND MANAGEMENT: BlackRock Fund Advisors (BFA) serves as the investment adviser to the Fund.