iShares

ETF Tax Efficiency

Because ETFs seek to track market indexes, their turnover is typically lower than that of actively managed funds. Lower turnover can result in increased tax efficiency for investors when securities are sold at a gain. In addition, with traditional mutual funds, the buying and selling activities of some shareholders can trigger capital gains distributions for all of the fund's shareholders. For example when the fund must sell securities to raise cash in order to meet redemptions, any related capital gains are distributed to all remaining investors in the fund. Learn the differences between ETFs and actively managed funds.

In contrast, ETF trading occurs on an exchange just like stocks; there is no fund company in the middle. Thus ETF investors are generally insulated from the tax consequences of their fellow shareholders' actions and will primarily be affected when they decide to complete ETF trading by either buying or selling an ETF.

Carefully consider the iShares Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses, which may be obtained by calling 1-800-iShares (1-800-474-2737), or by viewing or downloading a prospectus. Read the prospectus carefully before investing.

Investing involves risk, including possible loss of principal.

Investment comparisons are for illustrative purposes only and are not meant to be all-inclusive. To better understand the similarities and differences between investments, including investment objectives, risks, fees and expenses, it is important to read the products' prospectuses.

In addition to the normal risks associated with investing, narrowly focused investments typically exhibit higher volatility.

Shares of the iShares Funds may be sold throughout the day on the exchange through any brokerage account. However, shares may only be redeemed directly from a Fund by Authorized Participants, in very large creation/redemption units.

iShares Funds are obliged to distribute portfolio gains to shareholders by year-end. These gains may be generated due to index rebalancing or to meet diversification requirements. Trading shares of the iShares Funds will also generate tax consequences and transaction expenses. Certain traditional mutual funds can be tax efficient as well.

This material is not intended to be tax advice. The tax consequences of dividend distributions may vary by individual taxpayer. Please consult your tax professional or financial advisor for more information with regard to your specific situation.

BlackRock does not provide tax advice. Please note that (i) any discussion of U.S. tax matters contained in this communication cannot be used by you for the purpose of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein; and (iii) you should seek advice based on your particular circumstances from an independent tax advisor.

The iShares Funds ("Funds") are distributed by BlackRock Investments, LLC (together with its affiliates, "BlackRock").

© 2000-2013 BlackRock. All rights reserved. iSHARES® and BLACKROCK® are registered trademarks of BlackRock. All other marks are the property of their respective owners.

iS-2356
© 2000-2013