OCTOBER 31, ANNUAL REPORT. ishares Trust ishares 0-5 Year TIPS Bond ETF STIP NYSE Arca ishares TIPS Bond ETF TIP NYSE Arca

OCTOBER 31, 2017 2017 ANNUAL REPORT ishares Trust ishares 0-5 Year TIPS Bond ETF STIP NYSE Arca ishares TIPS Bond ETF TIP NYSE Arca

Table of Contents Management s Discussions of Fund Performance... 5 About Fund Performance... 10 Shareholder Expenses... 10 Schedules of Investments... 11 ishares 0-5 Year TIPS Bond ETF... 11 ishares TIPS Bond ETF... 13 Financial Statements... 15 Financial Highlights... 18 Notes to Financial Statements... 20 Report of Independent Registered Public Accounting Firm... 29 Tax Information... 30 Board Review and Approval of Investment Advisory Contract... 31 Supplemental Information... 38 Trustee and Officer Information... 40

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Management s Discussion of Fund Performance U.S. BOND MARKET OVERVIEW The U.S. bond market posted a modestly positive gain for the 12 months ended October 31, 2017 ( reporting period ). The Bloomberg Barclays U.S. Aggregate Bond Index, a broad measure of U.S. fixed-income performance, returned 0.90%. Improving economic growth and rising interest rates contributed to the U.S. bond market performance. The U.S. economy expanded by 2.3% for the 12 months ended September 2017 (the most recent data available), its fastest year-over-year growth rate in two years. The job market mirrored this progress, with the unemployment rate declining to its lowest level in more than 16 years. The healthier economy and job market contributed to consumer confidence reaching its highest level since January 2004, while retail sales increased by 4.6% for the reporting period. On the manufacturing side, industrial output increased by 0.90% for the reporting period, reflecting a recovery in 2017 after industrial production contracted for much of 2016. At the same time, inflation was modest, with the consumer price index rising by 2.2% for the 12 months ended September 2017, well below the long-term historical average of 3.3%. In that environment, the U.S. Federal Reserve Bank ( Fed ) worked to normalize monetary policy by beginning to reverse some of the measures taken in response to the 2008 financial crisis. The Fed increased interest rates by a quarter percentage point three times during the reporting period, from 0.5% to 1.25%, which contributed to higher short-term bond yields. The Fed also started reducing the amount of U.S. Treasury bonds and mortgage-backed securities on its balance sheet in October 2017. Another catalyst for rising bond yields was the outcome of the U.S. presidential election in November 2016. The new administration was expected to enact pro-growth fiscal policies, including lower taxes and significant infrastructure spending, which was expected to lead to a higher federal budget deficit. Expectations of an increase in the supply of U.S. Treasury bonds, based on the government s need to fill the larger budget gap, led to an increase in U.S. bond yields during the reporting period. Overall, short-term U.S. Treasury bond yields rose more than long-term bond yields. For example, the yield of the two-year U.S. Treasury note increased from 0.86% to 1.6% over the course of the reporting period, while the yield of the 30-year U.S. Treasury bond rose less than half that amount, increasing from 2.58% to 2.88%. The yield difference, or spread, between short-term and longer-term U.S. Treasury securities reached levels not seen since before the 2008 financial crisis, when the Fed was raising short-term interest rates aggressively. Interest rate trends had important implications for returns across the U.S. bond market. U.S. Treasury bonds declined for the reporting period and were the weakest performers among the broad market segments. In contrast, economically sensitive corporate bonds performed well, benefiting from improving economic growth, healthy corporate profits, strong investor demand for their comparatively higher yields, and expectations of the new administration s corporate-friendly policies. As a result, the yield spread between U.S. Treasury securities and corporate bonds both investment-grade and high-yield declined for the reporting period. Mortgage-backed securities, which have higher yields than U.S. Treasury securities but greater sensitivity to interest rate changes than corporate bonds, finished between these two sectors, managing modest gains for the reporting period. M ANAGEMENT S D ISCUSSIONS OF F UND P ERFORMANCE 5

Management s Discussion of Fund Performance ishares 0-5 YEAR TIPS BOND ETF Performance as of October 31, 2017 Average Annual Total Returns Cumulative Total Returns NAV MARKET INDEX NAV MARKET INDEX 1 Year 0.58% 0.59% 0.64% 0.58% 0.59% 0.64% 5 Years 0.14% 0.14% 0.24% 0.68% 0.68% 1.19% Since Inception 1.03% 1.04% 1.16% 7.36% 7.40% 8.33% GROWTH OF $10,000 INVESTMENT (SINCE INCEPTION AT NET ASSET VALUE) $11,500 $11,000 $10,500 $10,833 $10,736 $10,000 $9,500 Oct 11 Oct 12 Oct 13 Oct 14 Oct 15 Oct 16 Oct 17 Fund Index The inception date of the Fund was 12/1/10. The first day of secondary market trading was 12/3/10. Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See About Fund Performance on page 10 for more information. Beginning Account Value (5/1/17) Actual Ending Account Value (10/31/17) Expenses Paid During Period a Shareholder Expenses Beginning Account Value (5/1/17) Hypothetical 5% Return Ending Account Value (10/31/17) Expenses Paid During Period a Annualized Expense Ratio $ 1,000.00 $ 1,001.30 $ 0.45 $ 1,000.00 $ 1,024.80 $ 0.46 0.09% a Expenses are calculated using the Fund s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See Shareholder Expenses on page 10 for more information. 6 2017 ishares A NNUAL R EPORT TO S HAREHOLDERS

Management s Discussion of Fund Performance (Continued) ishares 0-5 YEAR TIPS BOND ETF The ishares 0-5 Year TIPS Bond ETF (the Fund ) seeks to track the investment results of an index composed of inflationprotected U.S. Treasury bonds with remaining maturities of less than five years, as represented by the Bloomberg Barclays U.S. Treasury Inflation-Protected Securities (TIPS) 0-5 Years Index (Series-L) (the Index ). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended October 31, 2017, the total return for the Fund was 0.58%, net of fees, while the total return for the Index was 0.64%. The performance of short-term Treasury inflation-protected securities ( TIPS ) was limited by rising real interest rates, though they benefited from increasing inflation and investor demand for inflation protection for the reporting period. In terms of realized inflation, the U.S. Consumer Price Index ( CPI ) rose at a 2.2% annual rate through September 2017, the latest period for which data were available. This was largely due to a temporary surge in energy prices relating to hurricane damage to energy production facilities in the Gulf of Mexico. Core inflation, which excludes food and energy prices, was 1.7% in September 2017, the slowest pace in two years. This effect can be seen in changes in oil prices, which began the reporting period at $47.84 and finished at $54.38, but had been as low as $46.41 as recently as June 2017. TIPS also benefited from changing expectations for future inflation, as represented by the breakeven inflation rate. The breakeven rate is the difference between the yields of nominal bonds and inflation-protected U.S. Treasury securities of comparable maturity. For the reporting period, the five-year breakeven rate increased from 1.87% to 1.97%, but three times exceeded 2.20% in early 2017. Rising breakeven rates reflected investor concern about the potential inflationary effects of the Trump administration s proposed tax cuts and infrastructure spending. ALLOCATION BY MATURITY As of 10/31/17 Percentage of Maturity Total Investments* 0-1 Year 14.07% 1-2 Years 15.02 2-3 Years 31.91 3-4 Years 20.67 4-5 Years 16.15 5-6 Years 2.18 TOTAL 100.00% FIVE LARGEST FUND HOLDINGS As of 10/31/17 Percentage of Security Total Investments* U.S. Treasury Inflation-Indexed Bonds, 0.13%, 04/15/18 14.07% U.S. Treasury Inflation-Indexed Bonds, 0.13%, 04/15/19 14.05 U.S. Treasury Inflation-Indexed Bonds, 0.13%, 04/15/20 11.86 U.S. Treasury Inflation-Indexed Bonds, 0.63%, 07/15/21 11.83 U.S. Treasury Inflation-Indexed Bonds, 1.38%, 01/15/20 10.12 TOTAL 61.93% * Excludes money market funds. M ANAGEMENT S D ISCUSSIONS OF F UND P ERFORMANCE 7

Management s Discussion of Fund Performance ishares TIPS BOND ETF Performance as of October 31, 2017 Average Annual Total Returns Cumulative Total Returns NAV MARKET INDEX NAV MARKET INDEX 1 Year (0.23)% (0.27)% (0.11)% (0.23)% (0.27)% (0.11)% 5 Years (0.22)% (0.19)% (0.11)% (1.09)% (0.94)% (0.55)% 10 Years 3.67% 3.66% 3.81% 43.46% 43.29% 45.30% GROWTH OF $10,000 INVESTMENT (AT NET ASSET VALUE) $16,000 $14,000 $14,530 $14,346 $12,000 $10,000 $8,000 Oct 08 Oct 09 Oct 10 Oct 11 Oct 12 Oct 13 Oct 14 Oct 15 Oct 16 Oct 17 Fund Index Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See About Fund Performance on page 10 for more information. Beginning Account Value (5/1/17) Actual Ending Account Value (10/31/17) Expenses Paid During Period a Shareholder Expenses Beginning Account Value (5/1/17) Hypothetical 5% Return Ending Account Value (10/31/17) Expenses Paid During Period a Annualized Expense Ratio $ 1,000.00 $ 1,000.50 $ 1.01 $ 1,000.00 $ 1,024.20 $ 1.02 0.20% a Expenses are calculated using the Fund s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See Shareholder Expenses on page 10 for more information. 8 2017 ishares A NNUAL R EPORT TO S HAREHOLDERS

Management s Discussion of Fund Performance (Continued) ishares TIPS BOND ETF The ishares TIPS Bond ETF (the Fund ) seeks to track the investment results of an index composed of inflation-protected U.S. Treasury bonds, as represented by the Bloomberg Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index (Series-L) (the Index ). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended October 31, 2017, the total return for the Fund was -0.23%, net of fees, while the total return for the Index was -0.11%. U.S. Treasury inflation-protected securities ( TIPS ) performance was limited by the increase in real interest rates and the resulting decline in Treasury bond prices, offset somewhat by investor demand for inflation protection during the reporting period. Interest rates rose and U.S. Treasury bond prices declined for the reporting period as economic growth improved, while the Fed raised short-term interest rates several times and announced a plan to start reducing the amount of Treasury bonds on its balance sheet. Inflation-indexed securities outperformed nominal Treasuries, particularly following the presidential election in November 2016, as investors were concerned about the potential inflationary effects of the new Trump administration s proposed stimulus policies. This can be seen in changing investor expectations for future inflation, as represented by the breakeven inflation rate. The breakeven rate is the difference between the yields of nominal bonds and inflation-protected U.S. Treasury securities of comparable maturity. For the reporting period, the 10-year breakeven rate increased from 1.73% to 1.88%, but had been as high as 2.08% in late January 2017. When breakeven rates widen, TIPS outperform like-maturity Treasuries. In terms of realized inflation, the U.S. Consumer Price Index ( CPI ) rose at a 2.2% annual rate through September 2017, the latest period for which data were available. A rising CPI and higher breakeven rates helped TIPS overall performance for the reporting period. ALLOCATION BY MATURITY As of 10/31/17 Percentage of Maturity Total Investments* 0-1 Year 1.38% 1-5 Years 36.15 5-10 Years 41.97 10-15 Years 8.23 More than 20 Years 12.27 TOTAL 100.00% FIVE LARGEST FUND HOLDINGS As of 10/31/17 Percentage of Security Total Investments* U.S. Treasury Inflation-Indexed Bonds, 0.13%, 04/15/21 9.28% U.S. Treasury Inflation-Indexed Bonds, 0.13%, 07/15/24 7.03 U.S. Treasury Inflation-Indexed Bonds, 0.13%, 04/15/20 6.73 U.S. Treasury Inflation-Indexed Bonds, 0.13%, 04/15/19 6.40 U.S. Treasury Inflation-Indexed Bonds, 0.63%, 01/15/26 5.97 TOTAL 35.41% * Excludes money market funds. M ANAGEMENT S D ISCUSSIONS OF F UND P ERFORMANCE 9

About Fund Performance Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.ishares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower. Net asset value or NAV is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return ( Market Price ) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund s NAV is calculated. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively. An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. Shareholder Expenses As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested on May 1, 2017 and held through October 31, 2017, is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds. Actual Expenses The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number corresponding to your Fund under the heading entitled Expenses Paid During Period. Hypothetical Example for Comparison Purposes The table also provides information about hypothetical account values and hypothetical expenses based on each Fund s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. 10 2017 ishares A NNUAL R EPORT TO S HAREHOLDERS

Schedule of Investments ishares 0-5 YEAR TIPS BOND ETF October 31, 2017 Security Principal (000s) Value U.S. GOVERNMENT OBLIGATIONS 99.76% U.S. Treasury Inflation-Indexed Bonds 0.13%, 04/15/18 $186,184 $ 186,192,414 0.13%, 04/15/19 185,436 185,934,807 0.13%, 04/15/20 156,437 157,008,739 0.13%, 04/15/21 84,775 84,934,990 0.13%, 01/15/22 14,426 14,446,127 0.13%, 04/15/22 104,975 104,827,683 0.13%, 07/15/22 94,184 94,504,453 0.13%, 01/15/23 28,991 28,869,569 0.63%, 07/15/21 152,722 156,639,302 1.13%, 01/15/21 30,884 32,034,640 1.25%, 07/15/20 126,405 131,436,351 1.38%, 07/15/18 15 15,032 1.38%, 01/15/20 129,563 133,937,261 1.63%, 01/15/18 6 6,357 1.88%, 07/15/19 12,313 12,807,024 2.13%, 01/15/19 38 38,812 TOTAL U.S. GOVERNMENT OBLIGATIONS (Cost: $1,329,800,163) 1,323,633,561 Security Shares (000s) SHORT-TERM INVESTMENTS 0.05% Value MONEY MARKET FUNDS 0.05% BlackRock Cash Funds: Treasury, SL Agency Shares 1.00% a,b 701 $ 700,567 700,567 TOTAL SHORT-TERM INVESTMENTS (Cost: $700,567) 700,567 TOTAL INVESTMENTS IN SECURITIES 99.81% (Cost: $1,330,500,730) c 1,324,334,128 Other Assets, Less Liabilities 0.19% 2,538,849 NET ASSETS 100.00% $1,326,872,977 a Affiliated issuer. See Schedule 1. b The rate quoted is the annualized seven-day yield of the fund at period end. c The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $1,330,673,946. Net unrealized depreciation was $6,339,818, of which $1,791 represented gross unrealized appreciation on investments and $6,341,609 represented gross unrealized depreciation on investments. Schedule 1 Affiliates (Note 2) Investments in issuers considered to be affiliates of the Fund during the year ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows: Affiliated issuer Shares held at 10/31/16 (000s) Shares purchased (000s) Shares sold (000s) Shares held at 10/31/17 (000s) Value at 10/31/17 Net realized gain (loss) a Change in unrealized appreciation (depreciation) Income BlackRock Cash Funds: Treasury, SL Agency Shares 5,369 (4,668) b 701 $700,567 $ 497 $ $30,629 a b Includes realized capital gain distributions from an affiliated fund, if any. Net of shares purchased and sold. S CHEDULES OF I NVESTMENTS 11

Schedule of Investments (Continued) ishares 0-5 YEAR TIPS BOND ETF October 31, 2017 Schedule 2 Fair Value Measurements Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund s policy regarding valuation of financial instruments, see Note 1. The following table summarizes the value of the Fund s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund s investments into major categories is disclosed in the schedule of investments above. Level 1 Level 2 Level 3 Total Investments: Assets: U.S. government obligations $ $1,323,633,561 $ $1,323,633,561 Money market funds 700,567 700,567 Total $700,567 $1,323,633,561 $ $1,324,334,128 See notes to financial statements. 12 2017 ishares A NNUAL R EPORT TO S HAREHOLDERS

Schedule of Investments ishares TIPS BOND ETF October 31, 2017 Security Principal (000s) Value U.S. GOVERNMENT OBLIGATIONS 99.67% U.S. Treasury Inflation-Indexed Bonds 0.13%, 04/15/18 $ 325,300 $ 325,314,521 0.13%, 04/15/19 1,504,771 1,508,819,724 0.13%, 04/15/20 1,578,921 1,584,695,497 0.13%, 04/15/21 2,181,354 2,185,475,244 0.13%, 01/15/22 778,825 779,912,744 0.13%, 04/15/22 303,262 302,836,934 0.13%, 07/15/22 553,503 555,387,430 0.13%, 01/15/23 977,764 973,675,727 0.13%, 07/15/24 1,674,435 1,654,926,614 0.13%, 07/15/26 1,061,161 1,031,432,813 0.25%, 01/15/25 902,910 893,026,307 0.38%, 07/15/23 80,667 81,560,048 0.38%, 07/15/25 1,243,766 1,242,774,487 0.38%, 01/15/27 5,124 5,056,718 0.38%, 07/15/27 264,287 261,316,633 0.63%, 07/15/21 629,588 645,736,643 0.63%, 01/15/24 495,848 505,174,834 0.63%, 01/15/26 1,389,479 1,406,784,404 0.63%, 02/15/43 135,911 127,234,018 0.75%, 02/15/42 730,429 706,978,793 0.75%, 02/15/45 614,991 588,270,327 0.88%, 02/15/47 130,257 128,691,482 1.00%, 02/15/46 317,069 322,628,887 1.13%, 01/15/21 217,414 225,512,345 1.25%, 07/15/20 424,369 441,260,806 1.38%, 01/15/20 275,488 284,789,490 1.38%, 02/15/44 685,946 758,469,678 1.75%, 01/15/28 401,185 448,543,885 Security Principal or Shares (000s) Value 2.00%, 01/15/26 $764,667 $ 858,121,844 2.13%, 02/15/40 205,050 258,238,463 2.38%, 01/15/25 387,330 441,473,503 2.38%, 01/15/27 455,017 530,602,601 2.50%, 01/15/29 409,451 493,351,993 3.63%, 04/15/28 274,517 358,934,797 3.88%, 04/15/29 470,254 637,669,059 TOTAL U.S. GOVERNMENT OBLIGATIONS (Cost: $23,573,905,586) 23,554,679,293 SHORT-TERM INVESTMENTS 0.25% MONEY MARKET FUNDS 0.25% BlackRock Cash Funds: Treasury, SL Agency Shares 1.00% a,b 59,079 59,078,872 59,078,872 TOTAL SHORT-TERM INVESTMENTS (Cost: $59,078,872) 59,078,872 TOTAL INVESTMENTS IN SECURITIES 99.92% (Cost: $23,632,984,458) c 23,613,758,165 Other Assets, Less Liabilities 0.08% 19,738,832 NET ASSETS 100.00% $23,633,496,997 a Affiliated issuer. See Schedule 1. b The rate quoted is the annualized seven-day yield of the fund at period end. c The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $23,691,351,465. Net unrealized depreciation was $77,593,300, of which $107,512,477 represented gross unrealized appreciation on investments and $185,105,777 represented gross unrealized depreciation on investments. Schedule 1 Affiliates (Note 2) Investments in issuers considered to be affiliates of the Fund during the year ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows: Affiliated issuer Shares held at 10/31/16 (000s) Shares purchased (000s) Shares sold (000s) Shares held at 10/31/17 (000s) Value at 10/31/17 Net realized gain (loss) a Change in unrealized appreciation (depreciation) Income BlackRock Cash Funds: Treasury, SL Agency Shares 84,571 (25,492) b 59,079 $59,078,872 $ 475 $ $622,099 a b Includes realized capital gain distributions from an affiliated fund, if any. Net of shares purchased and sold. S CHEDULES OF I NVESTMENTS 13

Schedule of Investments (Continued) ishares TIPS BOND ETF October 31, 2017 Schedule 2 Fair Value Measurements Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund s policy regarding valuation of financial instruments, see Note 1. The following table summarizes the value of the Fund s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund s investments into major categories is disclosed in the schedule of investments above. Level 1 Level 2 Level 3 Total Investments: Assets: U.S. government obligations $ $23,554,679,293 $ $23,554,679,293 Money market funds 59,078,872 59,078,872 Total $59,078,872 $23,554,679,293 $ $23,613,758,165 See notes to financial statements. 14 2017 ishares A NNUAL R EPORT TO S HAREHOLDERS

Statements of Assets and Liabilities October 31, 2017 ishares 0-5 Year TIPS Bond ETF ishares TIPS Bond ETF ASSETS Investments in securities, at cost: Unaffiliated $1,329,800,163 $23,573,905,586 Affiliated (Note 2) 700,567 59,078,872 Total cost of investments in securities $1,330,500,730 $23,632,984,458 Investments in securities, at fair value (Note 1): Unaffiliated $1,323,633,561 $23,554,679,293 Affiliated (Note 2) 700,567 59,078,872 Cash 7,091,809 Receivables: Investment securities sold 1,062,429 185,120,901 Dividends and interest 1,543,233 35,813,242 Total Assets 1,326,939,790 23,841,784,117 LIABILITIES Payables: Investment securities purchased 204,408,849 Investment advisory fees (Note 2) 66,813 3,878,271 Total Liabilities 66,813 208,287,120 NET ASSETS $1,326,872,977 $23,633,496,997 Net assets consist of: Paid-in capital $1,333,723,920 $23,769,288,036 Undistributed net investment income 3,600,222 73,833,258 Accumulated net realized loss (4,284,563) (190,398,004) Net unrealized depreciation (6,166,602) (19,226,293) NET ASSETS $1,326,872,977 $23,633,496,997 Shares outstanding a 13,200,000 207,800,000 Net asset value per share $ 100.52 $ 113.73 a No par value, unlimited number of shares authorized. See notes to financial statements. F INANCIAL S TATEMENTS 15

Statements of Operations Year ended October 31, 2017 ishares 0-5 Year TIPS Bond ETF ishares TIPS Bond ETF NET INVESTMENT INCOME Dividends affiliated (Note 2) $ 30,629 $ 622,099 Interest unaffiliated a 17,979,015 468,463,390 Securities lending income affiliated net (Note 2) 17,291 35,245 Total investment income 18,026,935 469,120,734 EXPENSES Investment advisory fees (Note 2) 1,017,162 44,025,073 Proxy fees 27,349 490,856 Total expenses 1,044,511 44,515,929 Net investment income 16,982,424 424,604,805 NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from: Investments unaffiliated (957,287) (18,130,558) In-kind redemptions unaffiliated 698,417 54,521,745 Realized gain distributions from affiliated funds 497 475 Net realized gain (loss) (258,373) 36,391,662 Net change in unrealized appreciation/depreciation on: Investments unaffiliated (9,579,648) (478,399,237) Net change in unrealized appreciation/depreciation (9,579,648) (478,399,237) Net realized and unrealized loss (9,838,021) (442,007,575) NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 7,144,403 $ (17,402,770) a Reflects net inflationary and deflationary adjustments to income. See Note 1. See notes to financial statements. 16 2017 ishares A NNUAL R EPORT TO S HAREHOLDERS

Statements of Changes in Net Assets Year ended October 31, 2017 ishares 0-5 Year TIPS Bond ETF Year ended October 31, 2016 Year ended October 31, 2017 ishares TIPS Bond ETF Year ended October 31, 2016 INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 16,982,424 $ 3,925,201 $ 424,604,805 $ 201,609,717 Net realized gain (loss) (258,373) 1,013,660 36,391,662 50,516,250 Net change in unrealized appreciation/depreciation (9,579,648) 11,496,649 (478,399,237) 673,679,568 Net increase (decrease) in net assets resulting from operations 7,144,403 16,435,510 (17,402,770) 925,805,535 DISTRIBUTIONS TO SHAREHOLDERS: From net investment income (13,244,635) (4,128,619) (348,213,385) (224,456,496) Return of capital (1,113,785) Total distributions to shareholders (13,244,635) (5,242,404) (348,213,385) (224,456,496) CAPITAL SHARE TRANSACTIONS: Proceeds from shares sold 740,791,185 291,793,222 5,949,463,546 6,501,998,386 Cost of shares redeemed (195,996,673) (95,313,483) (1,672,352,886) (1,220,470,038) Net increase in net assets from capital share transactions 544,794,512 196,479,739 4,277,110,660 5,281,528,348 INCREASE IN NET ASSETS 538,694,280 207,672,845 3,911,494,505 5,982,877,387 NET ASSETS Beginning of year 788,178,697 580,505,852 19,722,002,492 13,739,125,105 End of year $1,326,872,977 $788,178,697 $23,633,496,997 $19,722,002,492 Undistributed (distributions in excess of) net investment income included in net assets at end of year $ 3,600,222 $ (567,842) $ 73,833,258 $ (2,601,796) SHARES ISSUED AND REDEEMED Shares sold 7,350,000 2,900,000 52,100,000 57,100,000 Shares redeemed (1,950,000) (950,000) (14,700,000) (10,700,000) Net increase in shares outstanding 5,400,000 1,950,000 37,400,000 46,400,000 See notes to financial statements. F INANCIAL S TATEMENTS 17

Financial Highlights (For a share outstanding throughout each period) Year ended Oct. 31, 2017 ishares 0-5 Year TIPS Bond ETF Year ended Oct. 31, 2016 Year ended Oct. 31, 2015 Year ended Oct. 31, 2014 Year ended Oct. 31, 2013 Net asset value, beginning of year $ 101.05 $ 99.23 $ 100.46 $ 101.37 $ 103.03 Income from investment operations: Net investment income (loss) a 1.50 0.60 (0.53) 0.34 0.13 Net realized and unrealized gain (loss) b (0.92) 1.93 (0.70) (0.51) (1.16) Total from investment operations 0.58 2.53 (1.23) (0.17) (1.03) Less distributions from: Net investment income (1.11) (0.56) (0.53) (0.21) Return of capital (0.15) (0.21) (0.42) Total distributions (1.11) (0.71) (0.74) (0.63) Net asset value, end of year $ 100.52 $ 101.05 $ 99.23 $ 100.46 $ 101.37 Total return 0.58% 2.56% (1.22)% (0.18)% (1.01)% Ratios/Supplemental data: Net assets, end of year (000s) $1,326,873 $788,179 $580,506 $502,317 $633,589 Ratio of expenses to average net assets 0.09% 0.10% 0.10% 0.16% 0.20% Ratio of expenses to average net assets prior to waived fees n/a 0.17% 0.20% 0.20% n/a Ratio of net investment income (loss) to average net assets 1.49% 0.60% (0.53)% 0.34% 0.13% Portfolio turnover rate c 27% 42% 25% 25% 23% a Based on average shares outstanding throughout each period. b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund s underlying securities. c Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. See notes to financial statements. 18 2017 ishares A NNUAL R EPORT TO S HAREHOLDERS

Financial Highlights (Continued) (For a share outstanding throughout each period) Year ended Oct. 31, 2017 Year ended Oct. 31, 2016 ishares TIPS Bond ETF Year ended Oct. 31, 2015 Year ended Oct. 31, 2014 Year ended Oct. 31, 2013 Net asset value, beginning of year $ 115.74 $ 110.80 $ 113.01 $ 112.98 $ 122.64 Income from investment operations: Net investment income a 2.14 1.38 0.33 1.67 1.69 Net realized and unrealized gain (loss) b (2.41) 4.99 (2.11) 0.37 (9.51) Total from investment operations (0.27) 6.37 (1.78) 2.04 (7.82) Less distributions from: Net investment income (1.74) (1.43) (0.43) (2.01) (1.84) Total distributions (1.74) (1.43) (0.43) (2.01) (1.84) Net asset value, end of year $ 113.73 $ 115.74 $ 110.80 $ 113.01 $ 112.98 Total return (0.23)% 5.75% (1.58)% 1.80% (6.44)% Ratios/Supplemental data: Net assets, end of year (000s) $23,633,497 $19,722,002 $13,739,125 $12,283,725 $13,806,525 Ratio of expenses to average net assets 0.20% 0.20% 0.20% 0.20% 0.20% Ratio of net investment income to average net assets 1.88% 1.21% 0.29% 1.48% 1.43% Portfolio turnover rate c 32% 24% 41% 47% 47% a Based on average shares outstanding throughout each period. b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund s underlying securities. c Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. See notes to financial statements. F INANCIAL H IGHLIGHTS 19

Notes to Financial Statements ishares Trust (the Trust ) is registered under the Investment Company Act of 1940, as amended (the 1940 Act ), as an openend management investment company. The Trust was established as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999. These financial statements relate only to the following funds (each, a Fund, and collectively, the Funds ): Diversification ishares ETF Classification 0-5 Year TIPS Bond Diversified TIPS Bond Diversified The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a passive or index approach to try to achieve each Fund s investment objective. Pursuant to the Trust s organizational documents, the Funds officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. 1. SIGNIFICANT ACCOUNTING POLICIES The following significant accounting policies are consistently followed by each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America ( U.S. GAAP ). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. SECURITY VALUATION Each Fund s investments are valued at fair value each day that the Fund s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the Global Valuation Committee ) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Trustees of the Trust (the Board ). Fixed income investments are valued using the last available bid price or current market quotations provided by dealers or prices (including evaluated prices) supplied by approved independent third-party pricing services. The pricing services may use matrix pricing or valuation models that utilize certain inputs and assumptions to derive values, including transaction data, credit quality information, perceived market movements, news, and other relevant information and by other methods, which may include consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; general market conditions; and/or other factors and assumptions. Pricing services generally value fixed income securities assuming orderly transactions of an institutional round lot size, but a fund may hold or transact in such securities in smaller odd lot sizes. Odd lots may trade at lower prices than institutional round lots. 20 2017 ishares A NNUAL R EPORT TO S HAREHOLDERS

Notes to Financial Statements (Continued) Open-end U.S. mutual funds (including money market funds) are valued at that day s published net asset value ( NAV ). In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued by the Global Valuation Committee, in accordance with policies approved by the Board. The fair valuation approaches that may be utilized by the Global Valuation Committee to determine fair value include market approach, income approach and the cost approach. The valuation techniques used under these approaches take into consideration inputs that include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other inputs, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such inputs are reported to the Board on a quarterly basis. The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Trust s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements in market values, and reviews of market related activity. Fair value pricing could result in a difference between the prices used to calculate a Fund s NAV and the prices used by the Fund s underlying index, which in turn could result in a difference between the Fund s performance and the performance of the Fund s underlying index. Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data ( observable inputs ) or they may be internally developed ( unobservable inputs ). These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and Level 3 Unobservable inputs for the asset or liability based on the best information available in the circumstances, to the extent observable inputs are not available, including the Global Valuation Committee s assumptions used in determining the fair value of investments. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgement exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The fair value hierarchy for each Fund s investments is included in its schedule of investments. Changes in valuation techniques may result in transfers in or out of an assigned level within the fair value hierarchy. In accordance with the Trust s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of values determined for financial instruments are based on the pricing N OTES TO F INANCIAL S TATEMENTS 21

Notes to Financial Statements (Continued) transparency of the financial instruments and are not necessarily an indication of the risks associated with investing in those securities. SECURITY TRANSACTIONS AND INCOME RECOGNITION Security transactions are accounted for on trade date. Realized gains and losses on investment transactions are determined using the specific identification method. Interest income, including amortization and accretion of premiums and discounts on debt securities, and payment-in-kind interest income, are recognized daily on the accrual basis. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source. Inflation-indexed public obligations are income-generating instruments whose interest and principal payments are adjusted for inflation (or deflation). The inflation (deflation) adjustment is applied to the principal of each bond periodically and is accounted for as interest income in the statements of operations. DISTRIBUTIONS TO SHAREHOLDERS Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds. LOANS OF PORTFOLIO SECURITIES Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by an approved bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Funds. Any additional required collateral is delivered to the Funds and any excess collateral is returned by the Funds on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions. Cash received as collateral for securities on loan may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BlackRock Fund Advisors ( BFA ), the Funds investment adviser, or its affiliates. As of October 31, 2017, any securities on loan were collateralized by cash and/or U.S. government obligations. Cash collateral received was invested in money market funds managed by BFA and is disclosed in the schedules of investments. Any non-cash collateral received cannot be sold, re-invested or pledged by the Fund, except in the event of borrower default. The securities on loan for each Fund are also disclosed in its schedule of investments. The total value of any securities on loan as of October 31, 2017 and the total value of the related cash collateral are disclosed in the statements of assets and liabilities. Income earned by the Funds from securities lending is disclosed in the statements of operations. The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock, Inc. ( BlackRock ). BlackRock s indemnity allows for full replacement of securities loaned if the collateral received 22 2017 ishares A NNUAL R EPORT TO S HAREHOLDERS

Notes to Financial Statements (Continued) does not cover the value of the securities loaned in the event of borrower default. Each Fund could incur a loss if the value of an investment purchased with cash collateral falls below the value of the loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received. Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements ( MSLA ) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, a Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty s bankruptcy or insolvency. Under the MSLA, the borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral. RECENT ACCOUNTING STANDARD In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update Premium Amortization on Purchase Callable Debt Securities which amends the amortization period for certain purchased callable debt securities. Under the new guidance, premium amortization of purchased callable debt securities that have explicit, non-contingent call features and are callable at fixed prices will be amortized to the earliest call date. The guidance will be applied on a modified retrospective basis and is effective for fiscal years, and their interim periods, beginning after December 15, 2018. Management is currently evaluating the impact of this guidance to the Funds. 2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES Pursuant to an Investment Advisory Agreement with the Trust, BFA manages the investment of each Fund s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except (i) interest and taxes; (ii) brokerage commissions and other expenses connected with the execution of portfolio transactions; (iii) distribution fees; (iv) the advisory fee payable to BFA; and (v) litigation expenses and any extraordinary expenses (in each case as determined by a majority of the independent trustees). For its investment advisory services to the ishares 0-5 Year TIPS Bond ETF, BFA is entitled to an annual investment advisory fee of 0.06%, accrued daily and paid monthly by the Fund, based on the average daily net assets of the Fund. Prior to August 4, 2017, BFA was entitled to an annual investment advisory fee of 0.10%. For its investment advisory services to the ishares TIPS Bond ETF, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Fund, based on the Fund s allocable portion of the aggregate of the average daily net assets of the Fund and certain other ishares funds, as follows: Investment Advisory Fee Aggregate Average Daily Net Assets 0.2000% First $121 billion 0.1900 a Over $121 billion, up to and including $181 billion 0.1805 a Over $181 billion, up to and including $231 billion 0.1715 a Over $231 billion, up to and including $281 billion 0.1630 a Over $281 billion a Investment advisory fee level reflects a 5% reduction (rounded to the fourth decimal place) from the investment advisory fee at the prior aggregate average daily net asset level. N OTES TO F INANCIAL S TATEMENTS 23

Notes to Financial Statements (Continued) The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. ( BTC ), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by BFA, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the collateral investment fees ). Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Funds retain a portion of securities lending income and remit the remaining portion to BTC as compensation for its services as securities lending agent. Pursuant to a securities lending agreement, each Fund retains 80% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act ishares exchange-traded funds (the ishares ETF Complex ) in a given calendar year exceeds the aggregate securities lending income generated across the ishares ETF Complex in the calendar year 2013, each Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 85% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees. For the year ended October 31, 2017, the total of securities lending agent services and collateral investment fees paid were as follows: Fees Paid ishares ETF to BTC 0-5 Year TIPS Bond $ 5,927 TIPS Bond 12,057 BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds. Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7. For the year ended October 31, 2017, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows: ishares ETF Purchases Sales 0-5 Year TIPS Bond $250,147,823 $ 26,392,894 TIPS Bond 26,392,894 250,147,823 Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in Dividends affiliated in the statements of operations. The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes. Certain trustees and officers of the Trust are also officers of BTC and/or BFA. 24 2017 ishares A NNUAL R EPORT TO S HAREHOLDERS