What is an ETF?

¹Morningstar, as of 12/31/2016. Post-tax comparison between the 1, 3 and 5 year returns at NAV of the iShares Core ETFs and the oldest share class of active open-end mutual funds within the same Morningstar categories as the iShares Core ETFs. Mutual funds are generally more tax inefficient than ETFs and, as a result, are typically more negatively impacted than ETFs when comparing performance based on post-tax returns rather than total returns. The number of ETFs and mutual funds used for each period varies based on the inception date of the iShares Core ETFs. iShares Core ETFs included in this comparison vary based on the time period analyzed: 1 year (19 Core ETFs existed for the full 1-year period ended 1/31/15); 3 year (15 Core ETFs existed for the full 3-year period ended 1/31/13); and 5 year (9 Core ETFs existed for the full 5-year period ended 1/31/11). iShares Core ETFs outperformed 77.5% (1955/2426), 84.6% (1804/2157), and 79.9% (1330/1515) of their active mutual fund peers over the 1, 3, and 5 year periods ended 12/31/16, respectively. Performance was averaged for Morningstar categories containing more than one iShares fund, and may be different for other time periods. Returns are calculated after taxes on distributions, including capital gains and dividends, assuming the highest federal tax rate for each type of distribution in effect at the time of the distribution. Past performance is no guarantee of future results. For more information on the differences between iShares ETFs and mutual funds, click here.

²Morningstar, as of 12/31/16. Comparison is between the average Prospectus Net Expense Ratio for the iShares ETFs (0.38%) and the oldest share class of active open-end mutual funds (1.22%) with 10-year track records that were available in the U.S. between 1/1/2007 and 12/31/2016.

³Morningstar, as of 12/31/16. "Tax Cost Ratio" is a Morningstar measure of the impact of taxes on capital gains and income distributions on performance. The average 10-year Tax Cost Ratio of iShares ETFs and the oldest share class of all actively managed open-end mutual funds available in the U.S. between 1/1/2007 and 12/31/2016 (excluding municipal bond and money market funds) included in the comparison is 0.51% and 1.20%, respectively.

⁴ETFs are subject to a short-term trading fee by Fidelity, if held less than 30 days. Other conditions and fees may apply. See Fidelity.com/commissions for details.  BlackRock is not affiliated with Fidelity or any of their affiliates.

Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments.

International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/ developing markets or in concentrations of single countries.

There is no guarantee that dividends will be paid.

Transactions in shares of ETFs will result in brokerage commissions and will generate tax consequences. All regulated investment companies are obliged to distribute portfolio gains to shareholders.

Certain traditional mutual funds can also be tax efficient.

Investment comparisons are for illustrative purposes only. To better understand the similarities and differences between investments, including investment objectives, risks, fees and expenses, it is important to read the products' prospectuses.

The strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any strategies discussed will be effective.

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

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