Fund Description: iShares Emerging Markets High Yield Bond ETF, formerly iShares Emerging Markets High Yield Bond Fund, is an exchange-traded index fund or Index ETF which is a separate investment portfolio of the iShares Inc., an open-end investment management company. INVESTMENT OBJECTIVE: The iShares Emerging Markets High Yield Bond Fund ETF seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Morningstar Emerging Markets High Yield Bond Index. INDEX DESCRIPTION: The Morningstar Emerging Markets High Yield Bond Index tracks the performance of the below-investment-grade U.S. dollar-denominated emerging market sovereign and corporate high-yield bond market. High-yield bonds are also known as junk bonds. All bonds included in the Index are selected according to a set of rules-based inclusion criteria regarding issue size, bond type, maturity, and liquidity. The securities included in the Index are rebalanced on the first business day of each month. Eligible countries included in the Index are rebalanced annually at the end of September. The Index includes bonds issued by corporations, sovereignties and quasi-sovereign corporations (more than 50% government ownership) based in Latin American, Eastern European, Middle Eastern/African, and Asian (excluding Japan) countries that meet certain criteria to be classified as emerging market countries by Morningstar, Inc.’s proprietary index methodology. Eligible individual securities must have a minimum outstanding face value of $500 million or more, and eligible issuers must have aggregate outstanding debt of $1 billion or more to be included in the Index. All securities included in the Index must be U.S. dollar-denominated fixed rate bonds with a remaining maturity of 13 months or more at the time of rebalancing and a minimum of 36 months to maturity or greater at time of issuance. Bonds must have a composite rating of BB+ or lower to be included in the Index and must have at least one credit rating from either Moody’s Investors Services, Inc., Standard & Poor’s Financial Services LLC, or Fitch, Inc. The Index employs a weight capping algorithm to limit exposure to single issuers. Single issuers are capped at 23% of the Index portfolio, and the sum of all issuers over 5% is capped at 48%. Issuer’s under 5% are capped at 4.7%. In instances where an issuer exceeds the capping threshold, the weight is modified and allocated on a pro rata basis to the remaining constituents. As of March 1, 2012, the Index included issuers located in Argentina, Belarus, Brazil, China, Dominican Republic, Ecuador, Egypt, El Salvador, Hong Kong, Hungary, India, Jamaica, Kazakhstan, Latvia, Lebanon, Mexico, Pakistan, Philippines, Russia, Serbia, South Korea, Sri Lanka, Turkey, Ukraine, the United Arab Emirates, Uruguay, Venezuela and Vietnam. Component issues, which include energy and industrials companies and sovereign obligations, may change over time. FUND STRATEGY: 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 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 security selection. Indexing seeks to achieve lower costs and better after-tax performance by keeping portfolio turnover low in comparison to actively managed investment companies. Representative sampling is an indexing strategy that is used which involves investing in a representative sample of securities that collectively has an investment profile similar to the Index. The securities 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 and yield) and liquidity measures similar to those of the Index. A Fund may or may not hold all of the securities in the Index. The Fund generally invests at least 80% of its assets in the securities of the Index and in investments that provide substantially similar exposure to the securities in the Index. 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 advised by BFA or its affiliates, as well as in bonds not included in the Index, but which BFA believes will help the Fund track the Index. FUND MANAGEMENT: BlackRock Fund Advisors (BFA) serves as the investment adviser to the Fund. BFA provides an investment program for the Fund and manages the investment of the Fund’s assets. As investment adviser, BFA has overall responsibility for the general management and administration of the Company.