Fund Description: iShares TIPS Bond ETF, formerly iShares Barclays TIPS Bond Fund, formerly iShares Lehman TIPS 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 TIPS Bond ETF seeks results that correspond generally to the price and yield performance, before fees and expenses, of the Barclays Capital U.S. Treasury Inflation Protected Securities (TIPS) Index. INDEX DESCRIPTION: The Barclays Capital U.S. Treasury Inflation Protected Securities Index measures the performance of the inflation-protected public obligations of the U.S. Treasury. Inflation-protected public obligations of the U.S. Treasury, commonly known as TIPS, are securities issued by the U.S. Treasury that are designed to provide inflation protection to investors. TIPS are income-generating instruments whose interest and principal payments are adjusted for inflation, a sustained increase in prices that erodes the purchasing power of money. The inflation adjustment, which is typically applied monthly to the principal of the bond, follows a designated inflation index, such as the consumer price index. A fixed coupon rate is applied to the inflation-adjusted principal so that as inflation rises, both the principal value and the interest payments increase. This can provide investors with a hedge against inflation, as it helps preserve the purchasing power of an investment. Because of this inflation adjustment feature, inflation-protected bonds typically have lower yields than conventional fixed-rate bonds. As of May 31, 2010, there were 29 issues in the Index. The Index includes all publicly-issued U.S. Treasury inflation-protected securities that have at least one year remaining to maturity, are rated investment grade and have $250 million or more of outstanding face value. In addition, the securities must be denominated in U.S. dollars and must be fixed-rate and non-convertible. The Index is market capitalization weighted and the securities in the Index are updated on the last calendar day of each month. 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 90% of its assets in the bonds of its Index and at least 95% of its assets in U.S. government bonds. The Fund may invest up to 10% of its assets in U.S. government bonds not included in the Index, but which is believed will help the Fund track its Index. The Fund also may invest up to 5% of its assets in repurchase agreements collateralized by U.S. government obligations and in cash and cash equivalents, including shares of money market funds. FUND MANAGEMENT: BlackRock Fund Advisors (BFA) serves as the investment adviser to the Fund.