Audited Annual Report ishares ETF II (CH) Umbrella Fund under Swiss Law of the Other Funds for Traditional Investments Type 31 May 2015
i S h a r e s E T F I I ( C H ) Contents Organisation and Management 3 Fund details 5 Report by Subfund ishares Gold (CH) 6 ishares Gold CHF Hedged (CH) 10 ishares Gold EUR Hedged (CH) 15 Notes to the annual report 20 Report of the audit company 23 This annual report is a translation of the German language annual report and shall only contain the same information and have the same meaning as the German language annual report. To the extent that if there is any inconsistency between the German language annual report and the annual report in another language, the German language annual report will prevail, except to the extent (and only to the extent) that it is required by law of any jurisdiction where the shares are sold, that in an action based upon disclosure in an annual report in a language other than German, the language of the annual report on which such action is based shall prevail. Any disputes as to the terms of the annual report, regardless of the language of the annual report, shall be governed by and construed in accordance with the laws of Switzerland. [2] i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T
i S H A R E S E T F I I ( C H ) Organisation and Management Fund Management Company BlackRock Asset Management Schweiz AG* Bahnhofstrasse 39 CH-8001 Zurich Custodian Bank State Street Bank GmbH, Munich, Zurich branch**** Beethovenstrasse 19 CH-8027 Zurich * Credit Suisse Funds AG, Zurich were the Fund Management Company until 2 February 2015. **** Credit Suisse AG, Zurich were the Custodian bank until 2 February 2015. Board of Directors } David Blumer, Chairman } Barry O Dwyer, Vice-Chairman } Christian Staub } Urs Dickenmann** } Dr. Peter Athanas ** With effect from 8 June 2015, Urs Dickenmann resigned as a member of the Board of Directors. With effect from 8 June 2015, Susanne Haury von Siebenthal was appointed as a member of the Board of Directors. Executive Committee*** } Christian Staub, CEO } Christian Hinze } Peter Lohse } Nathalie von Niederhäusern } Christian Gast } André Bantli } Frank Rosenschon } Holger Schmidt } Joerg Allensbach } Barbara Dailey *** With effect from 1 July 2015, Timea Gregorcsok and Alexander Barion were appointed as members of the Executive Committee. Sub-Custodian Bank Credit Suisse AG Paradeplatz 8 8001 Zurich Paying Agent (Switzerland) State Street Bank GmbH, Munich, Zurich branch**** Beethovenstrasse 19 CH-8027 Zurich **** Credit Suisse AG, Zurich were the Paying Agent until 2 February 2015. Paying Agent (Liechtenstein) LGT Bank AG Herrengasse 12 FL-9490 Vaduz Delivery Agent Credit Suisse AG Paradeplatz 8 CH-8001 Zurich Auditor Deloitte AG******* General-Guisan-Quai 38 P.O. Box 2232 CH-8022 Zurich ****** KPMG AG, Zurich were the Auditor until 2 February 2015. Fund Administrator State Street Bank GmbH, Munich, Zurich branch******* Beethovenstrasse 19 CH-8027 Zurich ******* Credit Suisse AG, Zurich were the Fund Administrator until 2 February 2015. i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T [3]
i S h a r e s E T F I I ( C H ) Organisation and Management (continued) General ishares ETF II (CH) is an umbrella fund under Swiss law of the Other funds for traditional investments type which was established under the Swiss Collective Investment Schemes Act (CISA) of June 23, 2006 and is divided into the following subfunds: a) ishares Gold (CH) b) ishares Gold CHF Hedged (CH) c) ishares Gold EUR Hedged (CH) Delegation and Sub-delegation of Investment Decisions Investment decisions in respect of the subfunds have been delegated to BlackRock Advisors (UK) Limited, London, which has sub-delegated these investment decisions to BlackRock Asset Management Deutschland AG, Munich. BlackRock Advisors (UK) Limited, London is a subsidiary of BlackRock, Inc. The precise duties involved are laid down in an investment management agreement between the Fund Management Company and BlackRock Advisors (UK) Limited, London, and in a sub-investment management agreement between BlackRock Advisors (UK) Limited, London, and BlackRock Asset Management Deutschland AG, Munich. Delegation of Other Specific Tasks Effective 2 February 2015, the Fund Management Company has delegated parts of the fund administration to State Street Bank GmbH, Munich, Zurich branch (the Fund Administration ). A Service Agreement between the Fund Management Company and State Street Bank GmbH, Munich, Zurich branch details the terms of the delegated tasks as outlined in the prospectus. [4] i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T
Fund details i S H A R E S E T F I I ( C H ) Total Expense Ratio (TER) Fund Unit Class Currency Flat fee charged to the subfund Total Expense Ratio (TER)* ishares Gold (CH) A USD 0.30% 0.34% ishares Gold CHF Hedged (CH) A CHF 0.35% 0.39% ishares Gold EUR Hedged (CH) A EUR 0.35% 0.42% TER (Total Expense Ratio) describes the sum of all periodic costs and commissions that are charged to the fund s assets. It is expressed retroactively as a percentage of average fund assets and has been calculated in accordance with the SFAMA guidelines on the calculation and disclosure of the Total Expense Ratio (TER) of collective investment schemes. Any reimbursements/commissions for client unit holdings from target funds have been credited to the fund and thus reduce the TER. * The model for charges and incidental fees at the expense of the fund assets has been switched from the previous charging model for individual items (variable TER) to a flat fee charging model, also known as the fixed TER model. As a result of this split model during the period, the flat fee and TER presented above are different. Fund performance with benchmark Fund Unit Class Currency Inception Date 1 June 2014-31 May 2015 1 June 2013-31 May 2014 1 January 2015-31 May 2015 2014 2013 2012 ishares Gold (CH) A USD 5 October 2009 (5.03%) (10.63%) (0.78%) (0.52%) (27.76%) 7.91% London Gold Fixing PM (AM) (4.73%) (10.33%) (0.65%) (0.19%) (27.51%) 8.26% ishares Gold CHF Hedged (CH) A CHF 5 October 2009 (7.08%) (11.47%) (2.43%) (1.38%) (28.13%) 6.64% London Gold Fixing PM (AM) (Hedged into CHF) (5.64%) (10.93%) (1.41%) (0.52%) (28.02%) 7.28% ishares Gold EUR Hedged (CH) A EUR 5 October 2009 (5.95%) (11.20%) (1.31%) (1.12%) (28.05%) 6.99% London Gold Fixing PM (AM) (Hedged into EUR) (5.07%) (10.84%) (0.83%) (0.42%) (28.00%) 7.41% Fund performance is shown net of fees and expenses (TER). Fund performance is based on officially published net asset values which in turn are based on stock exchange closing prices at the end of the month in question. Historical performance is not an indicator of current or future performance. The performance data given does not take into account commissions and costs incurred in the purchase or redemption of fund units. Performance has been calculated in accordance with the SFAMA guidelines on the calculation and publication of performance data of collective investment schemes. i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T [5]
i S H A R E S E T F I I ( C H ) ishares Gold (CH) Key figures For the year ended 31 May 2015 31 May 2015 31 May 2014 31 May 2013 Total net fund assets in millions USD 371.8 885.3 1,185.7 Number of units outstanding 3,180,000.000 7,190,789.000 8,608,014.000 Net asset value per unit USD 116.9094 123.1115 137.7470 Review period from 1 June 2014 1 June 2013 1 June 2012 to 31 May 2015 31 May 2014 31 May 2013 [6] i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T
ishares Gold (CH) i S H A R E S E T F I I ( C H ) Statement of net assets As at 31 May 2015 31 May 2015 31 May 2014 USD USD Due from banks, including fiduciary deposits with third-party banks, broken down into: - Sight deposits 395,977.75 Other investments - Gold bars 371,764,335.67 885,066,601.34 - Gold held at Sub-Custodian 166,390.92 99,814.91 Other assets 95.67 115.39 Total fund assets, less 371,930,822.26 885,562,509.39 Other liabilities 89,307.28 293,703.35 Loans 69,478.93 Net fund assets 371,772,036.05 885,268,806.04 Number of units outstanding 3,180,000.000 7,190,789.000 Net asset value per unit 116.9094 123.1115 Changes in the fund s net assets Fund s net assets at the beginning of the reporting year 885,268,806.04 1,185,727,807.99 Issue of units* 26,057,034.93 413,701,942.66 Redemption of units* (512,758,836.21) (609,202,823.00) Total net income (26,794,968.71) (104,958,121.61) Fund s net assets at the end of the reporting year 371,772,036.05 885,268,806.04 * Following a change in delegation of Fund Administration during the year, other items from unit transactions being income and capital equalisation as of 31 May 2014 are disclosed on a net basis within issue of units and redemption of units for consistency with 31 May 2015 presentation. In the prior year 31 May 2014 accounts, the gross figures presented were other items from unit transactions (36,925,094.73), issue of units 387,144,918.03 and redemption of units (545,720,703.64). Changes in number of units outstanding Number at the beginning of the reporting year 7,190,789.000 8,608,014.000 Number of units issued 211,101.000 3,004,204.000 Number of units redeemed (4,221,890.000) (4,421,429.000) Number at the end of the reporting year 3,180,000.000 7,190,789.000 i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T [7]
i S H A R E S E T F I I ( C H ) ishares Gold (CH) Profit and loss account For the year ended 31 May 2015 1 June 2014-31 May 2015 USD 1 June 2013-31 May 2014 Income from bank assets 294.27 1,929.00 Current net income paid in on issued units (22,771.74) (987,836.90) Total income less: (22,477.47) (985,907.90) USD Interest paid 587.93 112.41 Auditing expenses 16,767.15 22,230.58 Remunerations to the following in accordance with the fund regulations: - The Fund Management Company 2,072,565.07 2,756,587.57 - The Custodian bank 292,749.17 456,147.88 Other expenses 7,893.20 6,623.67 Current net income paid out on redeemed units (1,115,358.42) (982,347.43) Net income (1,297,681.57) (3,245,262.58) Realised capital gains and losses** (28,946,354.89) (24,021,489.21) Realised net income (30,244,036.46) (27,266,751.79) Unrealised capital gains and losses 3,449,067.75 (77,691,369.82) Total net income (26,794,968.71) (104,958,121.61) ** Following a change in delegation of Fund Administration during the year, realised capital gains and losses as of 31 May 2014 are disclosed on a net basis for consistency with 31 May 2015 presentation. In the prior year 31 May 2014 accounts, the gross figures presented were realised gains 23,515,449.47 and realised losses (47,536,938.68). Appropriation of net income Net income for the reporting year (1,297,681.57) (3,245,262.58) Netting of loss against aggregate capital gains/losses 1,297,681.57 3,245,262.58 Total available for distribution [8] i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T
ishares Gold (CH) i S H A R E S E T F I I ( C H ) Composition of portfolio, and changes in holdings (continued) For the year ended 31 May 2015 Description Traded on an official stock exchange Other investments Precious metals and stones 31 May 2014 number/ nominal value Purchases 1 Disposals 1 31 May 2015 number/ nominal value Gold bars 707,770.173 379,175.371 774,905.645 312,039.899 371,764,335.67 99.96 Gold held at Sub-Custodian 139.660 2 166,390.92 0.04 371,930,726.59 100.00 Market value USD % of total fund assets Total other investments 371,930,726.59 100.00 Total traded on an official stock exchange 371,930,726.59 100.00 Total investments 371,930,726.59 100.00 Other assets 95.67 0.00 Total fund assets 371,930,822.26 100.00 Loans (69,478.93) (0.02) Other liabilities (89,307.28) (0.02) Net fund assets 371,772,036.05 99.96 1 Inclusive of purchases/sales. 2 There is counterparty risk associated with the Gold held at the Sub-Custodian. i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T [9]
i S H A R E S E T F I I ( C H ) ishares Gold CHF Hedged (CH) Key figures For the year ended 31 May 2015 31 May 2015 31 May 2014 31 May 2013 Total net fund assets in millions CHF 337.8 402.7 577.8 Number of units outstanding 3,040,000.000 3,368,276.000 4,278,421.000 Net asset value per unit CHF 111.1172 119.5643 135.0539 Review period from 1 June 2014 1 June 2013 1 June 2012 to 31 May 2015 31 May 2014 31 May 2013 [10] i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T
ishares Gold CHF Hedged (CH) i S H A R E S E T F I I ( C H ) Statement of net assets As at 31 May 2015 31 May 2015 31 May 2014 CHF CHF Due from banks, including fiduciary deposits with third-party banks, broken down into: - Sight deposits 581.74 1,911,091.93 Other investments - Gold bars 338,044,354.91 401,741,615.14 - Gold held at Sub-Custodian 189,349.14 85,440.65 Derivative financial instruments (280,634.01) (855,555.49) Other assets 183.67 309.50 Total fund assets, less 337,953,835.45 402,882,901.73 Other liabilities 95,248.90 157,225.13 Loans 62,380.73 Net fund assets 337,796,205.82 402,725,676.60 Number of units outstanding 3,040,000.000 3,368,276.000 Net asset value per unit 111.1172 119.5643 Changes in the fund s net assets Fund s net assets at the beginning of the reporting year 402,725,676.60 577,817,622.35 Issue of units* 8,128,549.43 70,737,209.45 Redemption of units* (47,199,419.37) (193,655,869.02) Total net income (25,858,600.84) (52,173,286.18) Fund s net assets at the end of the reporting year 337,796,205.82 402,725,676.60 * Following a change in delegation of Fund Administration during the year, other items from unit transactions being income and capital equalisation as of 31 May 2014 are disclosed on a net basis within issue of units and redemption of units for consistency with 31 May 2015 presentation. In the prior year 31 May 2014 accounts, the gross figures presented were other items from unit transactions (13,708,817.80), Issue of units 65,992,543.70 and Redemption of units (175,202,385.47). Changes in number of units outstanding Number at the beginning of the reporting year 3,368,276.000 4,278,421.000 Number of units issued 72,365.000 523,770.000 Number of units redeemed (400,641.000) (1,433,915.000) Number at the end of the reporting year 3,040,000.000 3,368,276.000 Off-balance-sheet business Equivalent underlying value in fund currency 31 May 2015 31 May 2014 As a % of net fund assets Equivalent underlying value in fund currency As a % of net fund assets Derivative exposure Exposure-increasing positions - Currency Risk 9,932,662.55 2.94 0.00 Total exposure-increasing positions 9,932,662.55 2.94 0.00 Exposure-reducing positions - Currency Risk 352,976,968.36 104.49 401,827,042.37 99.78 Total exposure-reducing positions 352,976,968.36 104.49 401,827,042.37 99.78 i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T [11]
i S H A R E S E T F I I ( C H ) ishares Gold CHF Hedged (CH) Profit and loss account For the year ended 31 May 2015 1 June 2014-31 May 2015 CHF 1 June 2013-31 May 2014 Income from bank assets 686.81 1,063.65 Current net income paid in on issued units (26,518.80) (171,665.51) Total income less: (25,831.99) (170,601.86) CHF Interest paid 6,530.76 179.35 Negative interest 1,030.24 Auditing expenses 15,254.05 19,450.40 Remunerations to the following in accordance with the fund regulations: - The Fund Management Company 1,304,331.95 1,646,542.44 - The Custodian bank 140,670.09 239,972.58 Other expenses 7,220.06 5,918.44 Current net income paid out on redeemed units (108,275.78) (369,529.61) Net income (1,392,593.36) (1,713,135.46) Realised capital gains and losses** (57,678,067.31) (11,095,392.56) Realised net income (59,070,660.67) (12,808,528.02) Unrealised capital gains and losses 33,212,059.83 (39,364,758.16) Total net income (25,858,600.84) (52,173,286.18) ** Following a change in delegation of Fund Administration during the year, realised capital gains and losses as of 31 May 2014 are disclosed on a net basis for consistency with 31 May 2015 presentation. In the prior year 31 May 2014 accounts, the gross figures presented were realised gains 174,473,604.87 and realised losses (185,568,997.43). Appropriation of net income Net income for the reporting year (1,392,593.36) (1,713,135.46) Netting of loss against aggregate capital gains/losses 1,392,593.36 1,713,135.46 Total available for distribution [12] i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T
ishares Gold CHF Hedged (CH) i S H A R E S E T F I I ( C H ) Composition of portfolio, and changes in holdings (continued) For the year ended 31 May 2015 Description Traded on an official stock exchange 31 May 2014 number/ nominal value Purchases 1 Disposals 1 31 May 2015 number/ nominal value Other investments Precious metals and stones Gold bars 359,373.582 405,372.619 463,970.160 300,776.041 338,044,354.91 100.02 Gold held at Sub-Custodian 168.474 2 189,349.14 0.06 338,233,704.05 100.08 Total other investments 338,233,704.05 100.08 Total traded on an official stock exchange 338,233,704.05 100.08 Market value CHF % of total fund assets Derivative financial instruments Open forward exchange transactions CHF/USD Maturity 16.06.2015 352,693,051 374,351,136 (283,882.01) (0.08) USD/CHF Maturity 16.06.2015 10,534,125 9,929,414 3,248.00 0.00 (280,634.01) (0.08) Total open forward exchange transactions (280,634.01) (0.08) Total derivative financial instruments (280,634.01) (0.08) Total investments 337,953,070.04 100.00 Sight deposits 581.74 0.00 Other assets 183.67 0.00 Total fund assets 337,953,835.45 100.00 Loans (62,380.73) (0.02) Other liabilities (95,248.90) (0.03) Net fund assets 337,796,205.82 99.95 1 Inclusive of purchases/sales. 2 There is counterparty risk associated with the Gold held at the Sub-Custodian. List of closed forward exchange transactions for the period ended 31 May 2015 Maturity Transaction Currency Amount Countercurrency Countervalue 06.06.2014 Bought CHF 415,426,145 USD 465,667,475 06.06.2014 Bought USD 16,175,250 CHF 14,463,569 20.06.2014 Bought CHF 399,130,624 USD 444,966,638 11.07.2014 Bought CHF 406,642,803 USD 452,053,875 11.07.2014 Bought CHF 14,384,542 USD 16,049,250 25.07.2014 Bought CHF 423,040,116 USD 474,097,050 08.08.2014 Bought CHF 420,112,202 USD 465,597,338 22.08.2014 Bought CHF 411,798,331 USD 452,424,713 22.08.2014 Bought USD 7,708,500 CHF 7,008,938 05.09.2014 Bought CHF 408,004,756 USD 449,042,775 19.09.2014 Bought CHF 398,273,902 USD 432,997,250 03.10.2014 Bought CHF 388,197,288 USD 415,453,088 17.10.2014 Bought CHF 381,702,738 USD 399,437,775 31.10.2014 Bought CHF 386,925,541 USD 406,047,538 31.10.2014 Bought USD 4,939,000 CHF 4,685,600 13.11.2014 Bought CHF 378,914,770 USD 400,879,775 13.11.2014 Bought USD 19,413,263 CHF 18,686,255 20.11.2014 Bought CHF 358,421,112 USD 370,137,825 08.12.2014 Bought CHF 369,200,040 USD 385,317,888 22.12.2014 Bought CHF 372,337,039 USD 385,247,850 22.12.2014 Bought CHF 2,363,225 USD 2,418,000 08.01.2015 Bought CHF 371,127,440 USD 378,464,350 08.01.2015 Bought USD 2,398,000 CHF 2,353,265 22.01.2015 Bought CHF 371,287,027 USD 368,581,638 22.01.2015 Bought USD 14,523,000 CHF 14,799,445 22.01.2015 Bought USD 9,682,000 CHF 9,861,446 22.01.2015 Bought CHF 12,602,015 USD 13,871,813 02.02.2015 Bought CHF 365,231,852 USD 417,981,063 02.02.2015 Bought USD 572,850 CHF 501,487 02.02.2015 Bought USD 2,547,500 CHF 2,193,143 06.02.2015 Bought USD 3,250,387 CHF 3,007,745 06.02.2015 Bought CHF 2,866,124 USD 3,097,341 i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T [13]
i S H A R E S E T F I I ( C H ) ishares Gold CHF Hedged (CH) List of closed forward exchange transactions for the period ended 31 May 2015 (continued) Maturity Transaction Currency Amount Countercurrency Countervalue 12.02.2015 Bought CHF 938,110 USD 1,013,242 17.02.2015 Bought CHF 142,143 USD 153,690 17.02.2015 Bought USD 1,013,242 CHF 937,940 17.02.2015 Bought USD 384,590,924 CHF 357,092,673 17.02.2015 Bought CHF 357,888,469 USD 389,886,875 18.02.2015 Bought CHF 1,035,091 USD 1,112,201 03.03.2015 Bought USD 5,549,242 CHF 5,149,319 03.03.2015 Bought CHF 348,190,427 USD 375,232,697 03.03.2015 Bought USD 362,086,878 CHF 343,041,108 03.03.2015 Bought USD 1,054,741 CHF 1,000,000 04.03.2015 Bought USD 1,923,135 CHF 1,840,440 05.03.2015 Bought CHF 711,362 USD 740,963 06.03.2015 Bought USD 951,263 CHF 915,115 06.03.2015 Bought USD 2,383,111 CHF 2,316,658 09.03.2015 Bought USD 476,622 CHF 463,277 11.03.2015 Bought USD 1,390,034 CHF 1,372,172 11.03.2015 Bought USD 460,769 CHF 460,600 13.03.2015 Bought USD 456,012 CHF 459,341 17.03.2015 Bought USD 7,282,800 CHF 6,904,859 17.03.2015 Bought CHF 350,055,112 USD 369,683,455 17.03.2015 Bought CHF 1,838,446 USD 1,923,136 17.03.2015 Bought CHF 914,217 USD 951,263 17.03.2015 Bought CHF 463,022 USD 476,622 17.03.2015 Bought CHF 2,315,109 USD 2,383,111 17.03.2015 Bought USD 13,833,654 CHF 13,661,010 17.03.2015 Bought CHF 1,371,158 USD 1,390,034 17.03.2015 Bought CHF 460,375 USD 460,769 17.03.2015 Bought CHF 459,057 USD 456,012 17.03.2015 Bought USD 335,732,684 CHF 337,310,628 17.03.2015 Bought USD 456,805 CHF 459,181 27.03.2015 Bought USD 401,984 CHF 385,000 31.03.2015 Bought CHF 459,194 USD 456,805 31.03.2015 Bought USD 21,999,380 CHF 22,114,415 31.03.2015 Bought CHF 358,116,044 USD 356,607,949 31.03.2015 Bought USD 350,912,084 CHF 336,460,823 10.04.2015 Bought CHF 49,393 USD 51,131 10.04.2015 Bought EUR 114 CHF 119 14.04.2015 Bought CHF 16,206,404 USD 16,927,110 14.04.2015 Bought CHF 321,100,854 USD 335,065,374 14.04.2015 Bought CHF 371,844 USD 388,749 14.04.2015 Bought USD 344,570,513 CHF 337,679,102 16.04.2015 Bought CHF 880,961 USD 909,191 05.05.2015 Bought USD 9,053,625 CHF 8,866,143 05.05.2015 Bought CHF 345,084,122 USD 352,381,233 05.05.2015 Bought USD 909,191 CHF 880,793 05.05.2015 Bought CHF 1,206,316 USD 1,241,188 05.05.2015 Bought USD 358,559,026 CHF 336,543,502 12.05.2015 Bought CHF 1,354,929 USD 1,460,053 19.05.2015 Bought CHF 13,466,463 USD 14,386,140 19.05.2015 Bought CHF 8,502,408 USD 9,071,625 19.05.2015 Bought CHF 322,414,568 USD 343,659,604 19.05.2015 Bought USD 1,416,461 CHF 1,314,199 19.05.2015 Bought USD 374,407,114 CHF 343,069,239 20.05.2015 Bought CHF 41,574 USD 45,093 27.05.2015 Bought CHF 9,997,205 USD 10,611,392 27.05.2015 Bought CHF 7,344,341 USD 8,025,962 27.05.2015 Bought USD 374,351,136 CHF 352,852,150 27.05.2015 Bought CHF 575,016 USD 624,266 27.05.2015 Bought CHF 334,935,588 USD 365,700,909 [14] i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T
ishares Gold EUR Hedged (CH) i S H A R E S E T F I I ( C H ) Key figures For the year ended 31 May 2015 31 May 2015 31 May 2014 31 May 2013 Total net fund assets in millions EUR 79.5 81.7 184.7 Number of units outstanding 1,028,000.000 994,388.000 1,996,144.000 Net asset value per unit EUR 77.2972 82.1811 92.5518 Review period from 1 June 2014 1 June 2013 1 June 2012 to 31 May 2015 31 May 2014 31 May 2013 i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T [15]
i S H A R E S E T F I I ( C H ) ishares Gold EUR Hedged (CH) Statement of net assets As at 31 May 2015 31 May 2015 31 May 2014 EUR EUR Due from banks, including fiduciary deposits with third-party banks, broken down into: - Sight deposits 443.52 318,030.58 Other investments - Gold bars 79,855,724.17 81,535,519.71 - Gold held at Sub-Custodian 273,183.47 209,099.40 Derivative financial instruments (450,955.36) (296,511.46) Other assets 43.07 83.43 Total fund assets, less 79,678,438.87 81,766,221.66 Other liabilities 22,331.57 46,348.33 Loans 194,581.71 Net fund assets 79,461,525.59 81,719,873.33 Number of units outstanding 1,028,000.000 994,388.000 Net asset value per unit 77.2972 82.1811 Changes in the fund s net assets Fund s net assets at the beginning of the reporting year 81,719,873.33 184,746,712.52 Issue of units* 12,442,428.43 4,081,349.38 Redemption of units* (9,877,308.68) (96,795,667.66) Total income (4,823,467.49) (10,312,520.91) Fund s net assets at the end of the reporting year 79,461,525.59 81,719,873.33 * Following a change in delegation of Fund Administration during the year, other items from unit transactions being income and capital equalisation as of 31 May 2014 are disclosed on a net basis within issue of units and redemption of units for consistency with 31 May 2015 presentation. In the prior year 31 May 2014 accounts, the gross figures presented were other items from unit transactions (8,609,943.90), issue of units 3,773,622.44 and redemption of units (87,877,996.82). Changes in number of units outstanding Number at the beginning of the reporting year 994,388.000 1,996,144.000 Number of units issued 155,049.000 44,098.000 Number of units redeemed (121,437.000) (1,045,854.000) Number at the end of the reporting year 1,028,000.000 994,388.000 Off-balance-sheet business Equivalent underlying value in fund currency 31 May 2015 31 May 2014 As a % of net fund assets Equivalent underlying value in fund currency As a % of net fund assets Derivative exposure Exposure-increasing positions - Currency Risk 2,854,539.88 3.59 0.00 Total exposure-increasing positions 2,854,539.88 3.59 0.00 Exposure-reducing positions - Currency Risk 84,193,088.46 105.95 81,744,604.45 100.03 Total exposure-reducing positions 84,193,088.46 105.95 81,744,604.45 100.03 [16] i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T
ishares Gold EUR Hedged (CH) i S H A R E S E T F I I ( C H ) Profit and loss account For the year ended 31 May 2015 1 June 2014-31 May 2015 EUR 1 June 2013-31 May 2014 Income from bank assets 194.71 (704.04) Current net income paid in on issued units (41,666.89) (14,487.61) Total income less: (41,472.18) (15,191.65) EUR Interest paid 1,332.71 (78.70) Negative interest 72.78 Auditing expenses 13,218.21 16,105.13 Remunerations to the following in accordance with the fund regulations: - The Fund Management Company 266,398.84 381,523.94 - The Custodian bank 33,913.87 62,959.37 Other expenses 6,500.20 4,805.38 Current net income paid out on redeemed units (14,388.70) (113,550.37) Net income (348,520.09) (366,956.40) Realised capital gains and losses** (19,605,132.69) (7,609,803.06) Realised net income (19,953,652.78) (7,976,759.46) Unrealised capital gains and losses 15,130,185.29 (2,335,761.45) Total net income (4,823,467.49) (10,312,520.91) ** Following a change in delegation of Fund Administration during the year, realised capital gains and losses as of 31 May 2014 are disclosed on a net basis for consistency with 31 May 2015 presentation. In the prior year 31 May 2014 accounts, the gross figures presented were realised gains 35,616,996.87 and realised losses (43,226,799.93). Appropriation of net income Net income for the reporting year (348,520.09) (366,956.40) Netting of loss against aggregate capital gains/losses 348,520.09 366,956.40 Total available for distribution i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T [17]
i S H A R E S E T F I I ( C H ) ishares Gold EUR Hedged (CH) Composition of portfolio, and changes in holdings (continued) For the year ended 31 May 2015 Description Traded on an official stock exchange Other investments Precious metals and stones 31 May 2014 number/ nominal value Purchases 1 Disposals 1 31 May 2015 number/ nominal value Gold bars 88,971.846 93,160.949 108,647.929 73,484.866 79,855,724.17 100.23 Gold held at Sub-Custodian 251.389 2 273,183.47 0.34 80,128,907.64 100.57 Market value EUR % of total fund assets Total other investments 80,128,907.64 100.57 Total traded on an official stock exchange 80,128,907.64 100.57 Derivative financial instruments Open forward exchange transactions EUR/USD Maturity 16.06.2015 83,726,789 92,321,763 (466,301.70) (0.59) USD/EUR Maturity 16.06.2015 3,130,140 2,839,194 15,346.34 0.02 (450,955.36) (0.57) Total open forward exchange transactions (450,955.36) (0.57) Total derivative financial instruments (450,955.36) (0.57) Total investments 79,677,952.28 100.00 Sight deposits 443.52 0.00 Other assets 43.07 0.00 Total fund assets 79,678,438.87 100.00 Loans (194,581.71) (0.24) Other liabilities (22,331.57) (0.03) Net fund assets 79,461,525.59 99.73 1 Inclusive of purchases/sales. 2 There is counterparty risk associated with the Gold held at the Sub-Custodian. List of closed forward exchange transactions for the period ended 31 May 2015 Maturity Transaction Currency Amount Countercurrency Countervalue 06.06.2014 Bought EUR 84,392,463 USD 115,558,600 06.06.2014 Bought USD 4,014,000 EUR 2,941,983 20.06.2014 Bought EUR 80,940,403 USD 110,231,925 11.07.2014 Bought EUR 82,525,135 USD 111,793,500 11.07.2014 Bought EUR 2,923,195 USD 3,969,000 25.07.2014 Bought EUR 85,894,579 USD 116,953,200 08.08.2014 Bought EUR 85,230,586 USD 114,777,900 22.08.2014 Bought EUR 83,604,415 USD 111,773,250 22.08.2014 Bought USD 5,139,000 EUR 3,846,980 22.08.2014 Bought USD 2,569,500 EUR 1,915,182 05.09.2014 Bought EUR 78,348,660 USD 104,368,250 19.09.2014 Bought EUR 76,470,714 USD 100,346,400 03.10.2014 Bought EUR 74,453,892 USD 96,361,950 17.10.2014 Bought EUR 73,380,012 USD 92,697,300 31.10.2014 Bought EUR 74,452,389 USD 94,334,900 31.10.2014 Bought USD 2,469,500 EUR 1,942,945 13.11.2014 Bought EUR 71,812,671 USD 91,640,150 13.11.2014 Bought USD 4,437,825 EUR 3,542,136 20.11.2014 Bought EUR 67,943,729 USD 84,424,500 08.12.2014 Bought EUR 69,939,548 USD 87,667,125 22.12.2014 Bought EUR 70,559,948 USD 87,773,400 22.12.2014 Bought EUR 393,198 USD 483,600 08.01.2015 Bought EUR 70,394,962 USD 86,447,900 08.01.2015 Bought USD 2,398,000 EUR 1,956,281 22.01.2015 Bought EUR 68,922,808 USD 82,175,975 22.01.2015 Bought EUR 2,856,200 USD 3,310,125 02.02.2015 Bought EUR 72,694,065 USD 84,577,000 02.02.2015 Bought EUR 2,198,708 USD 2,547,500 06.02.2015 Bought USD 682,695 EUR 597,571 [18] i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T
ishares Gold EUR Hedged (CH) i S H A R E S E T F I I ( C H ) List of closed forward exchange transactions for the period ended 31 May 2015 (continued) Maturity Transaction Currency Amount Countercurrency Countervalue 12.02.2015 Bought EUR 322,848 USD 365,593 17.02.2015 Bought EUR 74,293,006 USD 84,245,000 17.02.2015 Bought EUR 597,625 USD 682,830 17.02.2015 Bought USD 365,593 EUR 322,831 17.02.2015 Bought USD 84,802,230 EUR 74,567,800 18.02.2015 Bought EUR 210,728 USD 240,285 03.03.2015 Bought EUR 71,733,412 USD 81,591,305 03.03.2015 Bought USD 80,470,542 EUR 71,733,412 04.03.2015 Bought USD 9,570,072 EUR 8,548,142 05.03.2015 Bought USD 28,344 EUR 25,342 06.03.2015 Bought USD 351,379 EUR 318,592 17.03.2015 Bought USD 1,092,420 EUR 973,919 17.03.2015 Bought EUR 72,721,208 USD 81,591,305 17.03.2015 Bought EUR 8,545,791 USD 9,570,073 17.03.2015 Bought EUR 318,510 USD 351,379 17.03.2015 Bought USD 3,281,427 EUR 3,025,559 17.03.2015 Bought USD 81,643,780 EUR 77,586,031 23.03.2015 Bought USD 320,111 EUR 301,323 27.03.2015 Bought USD 208,763 EUR 190,000 30.03.2015 Bought USD 339,182 EUR 311,451 31.03.2015 Bought USD 5,183,100 EUR 4,926,138 31.03.2015 Bought EUR 82,795,224 USD 87,138,909 31.03.2015 Bought EUR 301,336 USD 320,111 31.03.2015 Bought USD 2,413,325 EUR 2,271,783 31.03.2015 Bought EUR 2,285,482 USD 2,497,760 31.03.2015 Bought USD 85,265,100 EUR 78,184,121 10.04.2015 Bought EUR 38,505 USD 41,552 14.04.2015 Bought EUR 3,168,390 USD 3,456,945 14.04.2015 Bought EUR 75,506,412 USD 82,360,356 14.04.2015 Bought USD 698,114 EUR 635,309 14.04.2015 Bought EUR 311,348 USD 339,182 14.04.2015 Bought USD 83,247,769 EUR 78,350,842 05.05.2015 Bought EUR 80,411,199 USD 85,458,369 05.05.2015 Bought USD 2,776,445 EUR 2,612,468 05.05.2015 Bought EUR 528,551 USD 560,922 05.05.2015 Bought USD 87,327,087 EUR 78,327,282 19.05.2015 Bought EUR 2,917,309 USD 3,253,689 19.05.2015 Bought EUR 74,651,168 USD 83,242,846 19.05.2015 Bought EUR 2,500,111 USD 2,802,352 19.05.2015 Bought USD 91,598,465 EUR 80,068,588 20.05.2015 Bought CHF 459 EUR 438 21.05.2015 Bought USD 721,689 EUR 648,563 27.05.2015 Bought EUR 1,315,589 USD 1,505,555 27.05.2015 Bought EUR 78,045,096 USD 89,298,887 27.05.2015 Bought EUR 699,957 USD 795,633 27.05.2015 Bought EUR 648,379 USD 721,689 27.05.2015 Bought USD 92,321,763 EUR 83,742,738 27.05.2015 Bought EUR 3,033,717 USD 3,344,961 i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T [19]
i S H A R E S E T F I I ( C H ) Notes to the annual report As at 31 May 2015 1. Sales Restrictions United States of America (US) Units of this collective investment scheme may not be offered, sold or delivered to citizens and/or residents of the US and/or persons or entities whose income and/or revenue, irrespective of source, is subject to US income tax, including those deemed to be US persons under Regulation S of the US Securities Act of 1933 and/or the US Commodity Exchange Act, as amended. 2. Information relating to the SFAMA Transparency Directive The Fund Management Company and its agents do not pay any retrocessions to third parties as remuneration for distribution activity in respect of fund shares in Switzerland or from Switzerland. In respect of distribution in Switzerland or from Switzerland, the Fund Management Company and its agents do not pay any rebates to reduce the fees or costs incurred by the investor and charged to the fund. 3. Soft commissions The Fund Management Company has not concluded any commission sharing agreements or agreements in respect of soft commissions. 4. Valuation of the Fund s Assets and the Units 1. The net asset value of each subfund is calculated in the reference currency of the respective subfund at the market value as of the end of the financial year, for each day on which units are issued or redeemed, as well as on days when no units are issued or redeemed but a morning fixing is available. The subfund s assets will not be calculated on days when precious metal trading in London is closed (e.g. bank and stock exchange holidays). 2. Securities traded on a stock exchange or another regulated market open to the public shall be valued at the current prices paid on the main market on the order day. The value of precious metal is calculated in London on the basis of end-of-day fixings for precious metals trading. Other investments or investments for which no current market value is available shall be valued at the price which would probably be obtained in a diligent sale at the time of the valuation. In such cases, the Fund Management Company shall use appropriate and recognised valuation models and principles to determine the market value. 3. The net asset value of a unit of a subfund is determined by the market value of that subfund s assets, minus all that subfund s liabilities, divided by the number of units of that subfund in issue. It will be rounded to four places after the decimal point of the unit of account. 5. Prospectus / Fund Contract Change as per 2 February 2015 The Swiss Financial Market Supervisory Authority ( FINMA ) has approved by decree dated 29 January 2015 the changes to the fund contract requested by the Fund Management Company and the Custodian bank. The amendments below entered into force as of 2 February 2015 and are as follows: I. Fund Management Company change (Art. 34 CISA) and Custodian bank change (Art. 74 CISA): Credit Suisse Funds AG was replaced by BlackRock Asset Management Schweiz AG as Fund Management Company, and Credit Suisse AG was replaced by State Street Bank GmbH, Munich, Zurich branch, as Custodian bank. II. Adaptation of the fund contract to the revised collective investment schemes regulation provisions and to the model fund contract for securities funds of SFAMA: 1. The Fund Management Company The Fund Management Company manages the subfunds at its own discretion and in its own name, but for the account of the investors. It decides in particular on the issue of units, the assets and their valuation. It calculates the net asset value of the subfunds and determines the issue and redemption prices of units as well as distributions of income. It exercises all rights associated with the umbrella fund and subfunds. The Fund Management Company and its agents shall disclose all fees and costs directly or indirectly charged to investors, detailing their appropriation; they provide investors with full, accurate and comprehensible information on compensation paid for the distribution of collective investment schemes in the form of commission, brokerage fees and other pecuniary benefits. Investment decisions may only be delegated to Asset Managers who are subject to a recognised supervisory body. Where foreign law requires an agreement on cooperation and the exchange of information with foreign supervisory authorities, the Fund Management Company may only delegate investment decisions to Asset Managers abroad where such an agreement exists between the Swiss Financial Market Supervisory Authority ( FINMA ) and the relevant foreign supervisory authorities for the investment decisions concerned. [20] i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T
i S H A R E S E T F I I ( C H ) Notes to the annual report (continued) As at 31 May 2015 5. Prospectus / Fund Contract Change as per 2 February 2015 (continued) 2. The Custodian Bank The Custodian bank is responsible for the safekeeping of the subfunds assets. It handles the issue and redemption of fund units as well as payments on behalf of the subfunds. The Custodian bank and its agents shall disclose all fees and costs directly or indirectly charged to investors, detailing their appropriation; they provide investors with full, accurate and comprehensible information on compensation paid for the distribution of collective investment schemes in the form of commission, brokerage fees and other pecuniary benefits. The Custodian bank is responsible for cash account and safekeeping account management on behalf of the subfunds, but does not have independent access to their assets. The Custodian bank ensures that in the case of transactions relating to the assets of the subfunds the counter-value is transferred thereto within the usual time limit. It notifies the Fund Management Company if the counter-value is not refunded within the usual time limit and where possible requests reimbursement for the asset item concerned from the counterparty. The Custodian bank keeps the required records and accounts in such manner that it is at all times able to distinguish between the assets held in safe custody of the individual investment funds. In relation to assets that cannot be placed in safe custody, the custodian bank verifies ownership to the Fund Management Company and keeps a record thereof. 3. Investors Investor eligibility is not subject to any restrictions. If investors express an interest in more detailed information on risk management, they must now be given such information by the Fund Management Company at any time. 4. Units and unit classes The investors are not entitled to demand delivery of a registered or bearer unit certificate. The Fund Management Company and the Custodian bank are obliged to instruct investors who no longer meet the prerequisites for holding a unit class to ensure within 30 calendar days that their units are redeemed, transferred to a person who does meet the aforementioned prerequisites, or switched into units of another unit class whose prerequisites they do meet. If an investor fails to comply with this demand, the Fund Management Company must, in cooperation with the Custodian bank, make an enforced switch into another unit class of the same subfund or, should this not be possible, enforce the redemption of the units in question. III. Other amendments of the fund contract 1. Change of the Asset Manager All subfunds of ishares ETF II (CH) shall now be managed by BlackRock Asset Management Deutschland AG, Munich via a sub-delegation by BlackRock Advisors (UK) Limited, London. 2. Safekeeping of physical gold For investments in physical gold, the Custodian bank may delegate the safekeeping of the investments in physical gold to third-party Custodians and collective securities depositaries provided such investments in physical gold are held with a bank within the meaning of the Swiss Federal Law on Banks and Savings Banks in its vaults in Switzerland as direct or indirect Sub-Custodian. 3. Change of the Model of Remuneration and Incidental Costs Charged to the Fund s Assets For the administration, asset management and distribution of the subfunds as well as all tasks performed by the Custodian bank (such as safekeeping of the fund assets, the handling of payment transactions and other tasks, the Fund Management Company shall charge the subfunds a flat fee not exceeding 0.50% p.a. of the subfund s net asset value, to be charged to the fund assets on a pro rata basis every time the net asset value is calculated, and paid out at the end of each quarter. The Fund Management Company shall bear all costs accruing from administration, asset management and distribution. 6. Changes to the annual and semi-annual report as a result of the change of Fund administration 1. Until 30 November 2014, the umbrella fund classified unrealised gains/losses on futures within sight deposits. As of 31 May 2015 and going forward the umbrella fund classifies unrealised gains/losses on futures within derivative financial instruments. 2. Other items from unit transactions (which relate to income and capital equalisation) within the changes in net asset value will be netted off against Issue of units and Redemption of units going forward. i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T [21]
i S H A R E S E T F I I ( C H ) Notes to the annual report (continued) As at 31 May 2015 6. Changes to the annual and semi-annual report as a result of the change of Fund administration (continued) 3. Realised gains/losses within the Statement of income previously split between realised gains and realised losses will be reported as a net figure going forward. 7. Subsequent Events Effective 8 June 2015 Urs Dickenmann resigned as a member of the Board of Directors and Susanne Haury von Siebenthal was elected to the BlackRock Asset Management Schweiz AG, Board of Directors. Effective 1 July 2015, Timea Gregorcsok and Alexander Barion were appointed as members of the Executive Committee. 8. Exchange rates Exchange rates as at 31 May 2015 CHF/OZ 1123.907189 EUR/OZ 1086.696193 USD/OZ 1191.399999 CHF/USD 0.943350 EUR/CHF 0.966891 EUR/USD 0.912117 USD/CHF 1.060052 [22] i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T
Report of the audit company i S H A R E S E T F I I ( C H ) As collective investment scheme regulatory auditors, we have audited the financial statements of the investment fund ishares ETF II (CH), umbrella fund, with the subfunds: } ishares Gold (CH) } ishares Gold CHF Hedged (CH) } ishares Gold EUR Hedged (CH) which comprise the statement of net assets and the income statement, the statement of the appropriation of available earnings and the disclosure of the total costs as well as the supplemental disclosures in accordance with article 89 paragraph 1 lit. b h of the Swiss Collective Investment Schemes Act (CISA) for the year ended 31 May 2015. Responsibility of the Fund Management Company s Board of Directors The Board of Directors of the Fund Management Company is responsible for the preparation of these financial statements in accordance with the requirements of Swiss Collective Investment Schemes Act, the related ordinances as well as the investment fund agreement and the prospectus. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors of the Fund Management Company is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Responsibility of the audit company for collective investment schemes Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements for the year ended 31 May 2015, comply with the Swiss Collective Investment Schemes Act, the related ordinances as well as the investment fund agreement and the prospectus. Other Matter The financial statements of the ishares ETF II (CH) Umbrella Fund for the year ended 31 May 2014 were audited by another auditor whose report, dated 22 August 2014 expressed an unqualified opinion on those financial statements. Report on Other Legal Requirements We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and article 127 CISA as well as on independence (article 11 AOA) and that there are no circumstances incompatible with our independence. Deloitte AG Marcel Meyer Alexander Kosovan Licensed Audit Expert Licensed Audit Expert Auditor in Charge Zurich, 9 September 2015 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control system. An audit also includes evaluating the appropriateness This report is an English translation of the original German version. In case of discrepancies the original version takes precedence. i S H A R E S E T F I I ( C H ) A N N U A L R E P O R T [23]
Want to know more? +41 (0) 800 33 66 88 www.ishares.ch BlackRock Asset Management Schweiz AG Bahnhofstrasse 39 CH-8001 Zurich 2015 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, ALADDIN, ishares, LIFEPATH, SO WHAT DO I DO WITH MY MONEY, INVESTING FOR A NEW WORLD, and BUILT FOR THESE TIMES are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners. PRISMA 15/1436 ishares ETF II (CH) ENG 0515