IShares Treasury ETF (ASX: IGB)
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iShares Treasury ETF (ASX: IGB) Product Disclosure Statement Dated 2 March 2012 iShares Treasury ETF ARSN 154 626 865 BlackRock Investment Management (Australia) Limited ABN 13 006 165 975 Australian Financial Services Licence No 230523
Purpose of this SPDS No. 4 Supplementary Product 1. Fund name change Disclosure Statement No. 4 Effective from 29 September 2014 the Fund’s name changed from “iShares UBS Treasury ETF” to “iShares Treasury ETF”. iShares Treasury ETF As a result, effective from 29 September 2014, all references in the PDS to “iShares UBS Treasury ETF” are deleted and (ASX: IGB) replaced with “iShares Treasury ETF”. ARSN 154 626 865 2. Change to Index provider iShares Treasury ETF (known prior to 29 September 2014 As a result of Bloomberg Finance L.P.’s’ acquisition of certain as iShares UBS Treasury ETF) Australia bond indices, effective from 29 September 2014 the following amendments are made to the PDS: BlackRock Investment Management (Australia) Limited ABN 13 006 165 975 a. All references in the PDS to the below UBS index names are Australian Financial Services Licence No 230523 deleted and replaced with the applicable below Bloomberg index name: Date: 29 September 2014 UBS Index Name Bloomberg Index Name This Supplementary Product Disclosure Bloomberg AusBond Treasury Statement No. 4 is dated 29 September 2014 UBS Treasury Index SM Index (“SPDS No. 4”) and updates the Product UBS Composite Bond Index TM Bloomberg AusBond SM Disclosure Statement dated 2 March 2012 Composite Index (“PDS”), as amended by Supplementary Product b. All references in the PDS to “UBS” are deleted and replaced Disclosure Statement dated 24 December 2012 with “Bloomberg”. (“SPDS No. 1”), Supplementary Product c. Section 4.3, titled “About the Index” (on pages 5 and 6 of Disclosure Statement No. 2 dated 4 February the PDS), is deleted and replaced with the following new section 4.3: 2014 (“SPDS No. 2”) and Supplementary Product Disclosure Statement No. 3 dated 1 July 2014 “4.3 About the Index SM (“SPDS No. 3”) for the iShares Treasury ETF (the The Bloomberg AusBond Treasury Index is designed to “Fund”, known prior to 29 September 2014 as measure the performance of the Australian bond market which meets certain investment criteria and covers fixed iShares UBS Treasury ETF). This SPDS No. 4 interest bonds issued in the Australian debt market under must be read in conjunction with the PDS, SPDS Australian law. No. 1, SPDS No. 2 and SPDS No. 3. SM The Bloomberg AusBond Treasury Index , a sub-index of SM A copy of this SPDS No. 4 has been lodged with the Bloomberg AusBond Composite Index , is an index of valuations of the debt securities which are included in it. the Australian Securities and Investments Below is a description of the manner in which the debt Commission (“ASIC”) and released to the securities included are determined and also a description of Australian Securities Exchange (“ASX”). Neither the manner in which valuations are determined. ASIC nor ASX take any responsibility for the The Bloomberg AusBond Treasury Index SM has been contents of this SPDS No. 4. calculated since 31 March 1988. This SPDS No. 4 sets out the following changes Which debt securities can be included in the Bloomberg SM to the Fund: AusBond Treasury Index ? The debt securities which are included in the Bloomberg SM AusBond Treasury Index are selected by Bloomberg based on eligibility criteria. The key eligibility criteria for the debt securities which are included in the Bloomberg SM AusBond Treasury Index are that the debt securities: ► are of a minimum quality which is determined by reference to levels published by independent service providers and bond rating firms. In addition, if any debt securities fall below that minimum quality then those debt securities are removed and the Bloomberg SM AusBond Treasury Index is rebalanced (as further described below); ► are issued by the Australian Treasury (Commonwealth Government debt securities); ► are denominated in Australian dollars;
► are governed by the law of an Australian State or d. Section 10.9, titled “Index provider disclaimer” (on page 22 Territory or the Commonwealth of Australia; of the PDS), is deleted and replaced with the following new section 10.9: ► were issued in a minimum issue size of AUD 100 million. “10.9 Index disclaimer In addition to the above, certain debt securities are SM SM excluded from the Bloomberg AusBond Treasury Index , BLOOMBERG, the Bloomberg AusBond Treasury Index SM these include: convertible notes, zero coupon notes, private and Bloomberg AusBond Composite Index are placements, collateralised debt obligations, collateralised trademarks or service marks of Bloomberg Finance L.P. and bond obligations and collateralised fund obligations, its affiliates (collectively, "Bloomberg"). Bloomberg or synthetic securitizations, hybrid capital securities and Bloomberg's licensors own all proprietary right in the SM perpetual securities. Bloomberg AusBond Treasury Index and Bloomberg SM AusBond Composite Index . Bloomberg does not The different debt securities are included in the Bloomberg SM guarantee the timeliness, accuracy or completeness of any AusBond Treasury Index on the basis of their gross data or information relating to the Bloomberg AusBond market value proportions, not on an equally weighted basis, SM Treasury Index or the Bloomberg AusBond Composite and these proportions can be rebalanced on a daily basis. SM Index . Bloomberg makes no warranty, express or implied, Such rebalancings can occur, for example, when interest is SM as to the Bloomberg AusBond Treasury Index or the received on the debt securities, the debt securities are SM Bloomberg AusBond Composite Index or any data or redeemed or mature, or when there is a new issue of debt values relating thereto or results to be obtained therefrom, securities which are to be included in the Bloomberg SM and expressly disclaims all warranties of merchantability AusBond Treasury Index (which occurs at the beginning and fitness for a particular purpose with respect thereto. It of the following month). Rebalancing is performed on the is not possible to invest directly in an index. Back-tested basis that interest and principal received on the debt performance is not actual performance. To the maximum securities are reinvested in all of the debt securities SM extent allowed by law, Bloomberg, its licensors, and its and comprising the Bloomberg AusBond Treasury Index and their respective employees, contractors, agents, suppliers on the basis that it is performed in market value and vendors shall have no liability or responsibility proportions at the day’s closing prices. As the Bloomberg SM whatsoever for any injury or damages - whether direct, AusBond Treasury Index includes the value of reinvested indirect, consequential, incidental, punitive or otherwise - interest and principal payments made on the debt arising in connection with the Bloomberg AusBond Treasury instruments included in it, it is considered as a capital SM SM Index or the Bloomberg AusBond Composite Index or accumulation index - which means that it is designed to any data or values relating thereto - whether arising from measure the total return from investing in those debt their negligence or otherwise. Nothing in the Bloomberg securities. SM AusBond Treasury Index or the Bloomberg AusBond SM How are the valuations of those debt securities Composite Index shall constitute or be construed as an determined? offering of financial instruments or as investment advice or SM The Bloomberg AusBond Treasury Index is a gross market investment recommendations (i.e., recommendations as to value weighted index. All debt instruments are valued by whether or not to “buy”, “sell”, “hold”, or to enter or not to BVAL, Bloomberg’s securities valuation service. BVAL enter into any other transaction involving any specific provides credible, transparent and defensible valuations interest or interests) by Bloomberg or its affiliates or a across a broad spectrum of financial instruments, including recommendation as to an investment or other strategy by fixed income, derivatives and structured notes. These Bloomberg or its affiliates. Data and other information SM prices are completely independent, drawing on contributors available via the Bloomberg AusBond Treasury Index or SM relevant to the market. This broad global dataset of market the Bloomberg AusBond Composite Index should not be observations is combined with market-leading analytics and considered as information sufficient upon which to base an Bloomberg’s terms and conditions databases to produce investment decision. All information provided by the SM objective third-party pricing with deep transparency into Bloomberg AusBond Treasury Index and Bloomberg SM how the prices are derived.” AusBond Composite Index is impersonal and not tailored to the needs of any person, entity or group of persons. Bloomberg and its affiliates do not express an opinion on the future or expected value of any security or other interest and do not explicitly or implicitly recommend or suggest an investment strategy of any kind.” Terms used in this SPDS No. 4 have the same meaning as in the PDS, SPDS No. 1, SPDS No. 2 and SPDS No. 3. Prior to investing in the Fund, a prospective investor must take into account and accept the foregoing information, as well as the information disclosed in the PDS, SPDS No. 1, SPDS No. 2 and SPDS No. 3. 2 iShares Treasury ETF Supplementary Product Disclosure Statement No. 4
Supplementary Product Disclosure Statement No. 3 iShares UBS Treasury ETF (ASX: IGB) ARSN 154 626 865 BlackRock Investment Management (Australia) Limited ABN 13 006 165 975 Australian Financial Services Licence No 230523 Date: 1 July 2014 This Supplementary Product Disclosure Purpose of this SPDS No. 3 Statement No. 3 is dated 1 July 2014 (“SPDS No. 1. Changes to fee disclosure 3”) and updates the Product Disclosure Effective from 1 July 2014, the following amendments are Statement dated 2 March 2012 (“PDS”), as made to the PDS: amended by Supplementary Product Disclosure i. the “Consumer Advisory Warning” within section 6.1, titled Statement dated 24 December 2012 (“SPDS No. “Consumer Advisory Warning” (on page 12 of the PDS), is 1”) and Supplementary Product Disclosure deleted and replaced with the Consumer Advisory Warning Statement No. 2 dated 4 February 2014 (“SPDS as shown below. No. 2”) for the iShares UBS Treasury ETF (the “Fund”). This SPDS No. 3 must be read in DID YOU KNOW? conjunction with the PDS, SPDS No. 1 and SPDS Small differences in both investment performance and fees and costs can have a substantial impact on your long-term No. 2. returns. A copy of this SPDS No. 3 has been lodged with For example, total annual fees and costs of 2% of your the Australian Securities and Investments account balance rather than 1% could reduce your final Commission (“ASIC”) and released to the return by up to 20% over a 30 year period (for example, reduce it from $100,000 to $80,000). Australian Securities Exchange (“ASX”). Neither ASIC nor ASX take any responsibility for the You should consider whether features such as superior investment performance or the provision of better member contents of this SPDS No. 3. services justify higher fees and costs. This SPDS No. 3 sets out the following changes You may be able to negotiate to pay lower contribution fees to the Fund: and management costs where applicable. Ask the fund or your financial adviser. TO FIND OUT MORE If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website (www.moneysmart.gov.au) has a managed investment fee calculator to help you check out different fee options.
Amount Type of fee or cost If you are no If you are an How and when paid an Authorised Authorised Participant Participant Fees when your money moves in or out of the Fund. Establishment Fee. The fee to Nil Nil Not applicable. open your investment. The $300 fixed fee to create Units in the Fund is applicable only to Authorised Participants at the time of Contribution Fee. The fee on each $300 to create creation as only Authorised Participants are able to apply amount contributed to your Nil units in the for Units in the Fund. investment. Fund If you are not an Authorised Participant, you will not be charged a contribution fee for your initial or any additional investments. The $300 fixed fee to redeem Units in the Fund is applicable only to Authorised Participants at the time of $300 to redemption as only Authorised Participants are able to Withdrawal Fee. The fee on each redeem units redeem for Units in the Fund. amount you take out of your Nil in the Fund investment. If you are not an Authorised Participant, you will not be charged a withdrawal fee for your initial or any subsequent redemption of investments. Exit Fee. The fee to close your Nil Nil Not applicable. investment. Management costs. The fees and costs for managing your investment. Management Fee. Until Current Current The management fee is calculated on the NAV of the Fund Unitholders receive notice to the Management Management on a daily basis and is payable monthly or as otherwise contrary, this will be charged as Fee: Fee: incurred by the Fund. The deduction of the management one management fee 0.26% p.a. 0.26% p.a. fee is reflected in the unit price of the Fund. Service fees. Switching Fee. The fee for Nil Nil No specific switching fee is applicable. changing investment options. ii. the fee table within section 6.2, titled “Fees and other iv. the example of annual fees and costs table and the costs” (on page 12 of the PDS), is deleted and replaced paragraph immediately below it within the “Example of with the fee table as shown above. annual fees and costs for the Fund” subsection of section 6.3, titled “Additional explanation of fees and costs” (on iii. the “Alternative forms of remuneration” subsection within page 14 of the PDS), are deleted and replaced with the section 6.3, titled “Additional explanation of fees and example of annual fees and costs table as shown below. costs” (on page 14 of the PDS), is amended by adding the following paragraph to the end of the subsection: “BlackRock will only make these payments to the extent that they are permitted by law.” Example of annual fees and costs for the Fund Balance of $50,000 with a contribution of $5,000 during year ► Nil (if you are not an For every additional $5,000 you put in, you will be charged: Authorised Participant); or ► $0 if you are not an Authorised Participant; or Contribution Fee ► $300 (if you are an ► $300 if you are an Authorised Participant creating units in the Fund. Authorised Participant PLUS And, for every $50,000 you have in the Fund you will be charged $130 Management Costs 0.26% per year each year. EQUALS If you had an investment of $50,000 at the beginning of the year and you put in an additional $5,000 during that year you would be charged fees of: Cost of Fund $300 + $130 = $430. What it costs you will depend on whether you are an Authorised Participant and the fees you negotiate. Please note this is an example. In practice, the actual investment balance of an investor will vary and the actual fees we charge are based on the value of the Fund, which also fluctuates. The amounts assume a constant investment of $50,000 throughout the year and do not take into account any additional contributions made during the year. Management Fees will also be charged in relation to additional contributions. 2 iShares UBS Treasury ETF Supplementary Product Disclosure Statement No. 3
Supplementary Product Disclosure Statement No. 2 dated 4 February 2014 iShares UBS Treasury ETF (ASX: IGB) Dated 4 February 2014 iShares UBS Treasury ETF (known prior to 4 February 2014 as iShares UBS Treasury Index Fund) ARSN 154 626 865 BlackRock Investment Management (Australia) Limited ABN 13 006 165 975 Australian Financial Services Licence No 230523 This Supplementary Product Disclosure Purpose of this SPDS No. 2 Statement No. 2 is dated 4 February 2014 Fund name change (“SPDS No. 2”) and updates the Product Effective from 4 February 2014 the Fund’s name changed from Disclosure Statement dated 2 March 2012 “iShares UBS Treasury Index Fund” to “iShares UBS Treasury (“PDS”), as amended by Supplementary Product ETF”. Disclosure Statement dated 24 December 2012 As a result, effective from 4 February 2014, all references in (“SPDS No. 1”) for the iShares UBS Treasury the PDS to “iShares UBS Treasury Index Fund” are deleted and Inflation ETF (the “Fund” known prior to 4 replaced with “iShares UBS Treasury ETF”. February 2014 as iShares UBS Treasury Index Terms used in this SPDS No. 2 have the same meanings as in Fund). This SPDS No. 2 must be read in the PDS and SPDS No. 1. Prior to investing in the Fund, a conjunction with the PDS and SPDS No. 1. prospective investor must take into account and accept the foregoing information, as well as the information disclosed in A copy of this SPDS No. 2 has been lodged with the PDS and SPDS No.1. the Australian Securities and Investments Commission (“ASIC”) and released to the Australian Securities Exchange (“ASX”). Neither ASIC nor ASX take any responsibility for the contents of this SPDS No. 2. This SPDS No. 2 sets out the following change to the Fund:
iShares UBS Treasury Index Fund (ASX: IGB) Supplementary Product Disclosure Statement Dated 24 December 2012 iShares UBS Treasury Index Fund ARSN 154 626 865 BlackRock Investment Management (Australia) Limited ABN 13 006 165 975 Australian Financial Services Licence No 230523 This Supplementary Product Disclosure Purpose of this SPDS Statement (“SPDS”) is dated 24 December 2012 1. Change in registered trademark ownership and updates the Product Disclosure Statement Ownership of the iShares® trademark has been transferred dated 2 March 2012 (“PDS”) for the iShares UBS within the BlackRock Group of companies from BlackRock Treasury Index Fund (the “Fund”). This SPDS Institutional Trust Company, N.A to BlackRock Fund Advisors. must be read in conjunction with the PDS. The sentence referencing iShares® as being a registered A copy of this SPDS has been lodged with the trademark of BlackRock Institutional Trust Company, N.A., as disclosed at the end of the “About iShares®” section on page Australian Securities and Investments 4 of the PDS is deleted in its entirety and replaced with the Commission (“ASIC”) and released to the following: Australian Securities Exchange (“ASX”). “iShares® is a registered trademark of BlackRock Fund Neither ASIC nor ASX take any responsibility Advisors or its affiliates.” for the contents of this SPDS. 2. Risk disclosure This SPDS sets out the following changes to the The Fund’s risk disclosure, as detailed within the “Risks” Fund: section on pages 9 to 11 of the PDS is amended by adding the following paragraph immediately after the paragraph in the Risks section titled “Index risk” on page 11 of the PDS: “Index-Related Risks In order to meet its investment objective, the Fund will seek to achieve a return which reflects the return of the Index, as published by the index provider. While index providers do provide a description of what each index is designed to achieve, index providers do not generally provide any warranty or accept any liability in relation to the quality, accuracy or completeness of data in respect of the their indices, nor any guarantee that the published index will be in line with their described benchmark index methodologies. Errors in respect of the quality, accuracy and completeness of the data may occur from time to time and may not be identified and corrected for a period of time, in particular where an index is less commonly used. During a period where an index contains incorrect constituents, the Fund would have market exposure to such constituents. As such, errors may potentially result in a negative or positive performance impact to the Fund and to Unitholders.
Supplementary Product Disclosure Statement to the iShares UBS Treasury Index Fund Product Disclosure Statement dated 2 March 2012 Apart from scheduled rebalances, index providers may carry out additional ad hoc rebalances to their benchmark indices in order, for example, to correct an error in the selection of index constituents. Where the index is rebalanced and the Fund in turn rebalances its portfolio to bring it in line with the Index, any transaction costs and market exposure arising from such portfolio rebalancing will be borne by the Fund and, by extension, Unitholders. Therefore, errors and additional ad hoc rebalances carried out by an index provider may increase the costs and market exposure risk of the Fund.” 3. ASIC Relief The relief disclosure, as detailed within the “ASIC Relief” section on page 24 of the PDS is amended by adding the following paragraph immediately after the final paragraph in the ASIC Relief section on page 24 of the PDS: “Periodic Statements ASIC has granted relief under the Corporations Act so that BlackRock is not required to provide periodic statements to Unitholders under section 1017D(1) of the Corporations Act for each reporting period ending on or before 1 March 2013. For subsequent reporting periods ending before 1 January 2014, ASIC has granted relief under the Corporations Act so that periodic statements may disclose opening balances, closing balances, termination values, transaction details, increases in contributions, returns on investments and amounts paid by a Unitholder that are based on the unit net asset value for units or the last market price for Units as at the relevant transaction date, the date of settlement of the transaction or other relevant date. The ASIC relief commenced on 19 November 2012 and applies to the Fund while Units are able to be traded on AQUA Market of the ASX.” Terms used in this SPDS have the same meanings as in the PDS. Prior to investing in the Fund, a prospective investor must take into account and accept the foregoing information, as well as the information disclosed in the PDS.
3 1. Before you start 1.3 Changes to this PDS and access to additional information 1.1 The Issuer of this PDS Certain information in this PDS is subject to change. Investment in the iShares UBS Treasury Index Fund We will notify you of any changes or other significant (referred to in this Product Disclosure Statement events that affect the information in this PDS (and may ("PDS") as the “Fund”) is offered and managed by issue a supplementary or replacement PDS) in BlackRock Investment Management (Australia) Limited accordance with our obligations under the Corporations ABN 13 006 165 975, AFS Licence No. 230523 Act. Updated performance information, fund size, (referred to in this PDS as “BlackRock”, the current Unit prices and other general information “Responsible Entity”, the “Issuer”, the “Manager”, “we”, relating to the Fund can be obtained: “our” or “us”). ► from our website at au.iShares.com; BlackRock is the Issuer of this PDS and of Units in the ► from your financial adviser; or Fund. Neither BlackRock nor any of our associates or related bodies corporate guarantees the success of the ► by contacting our iShares Call Centre (refer to the Fund, the achievement of the investment objective, or Corporate Directory section of this PDS for contact the repayment of capital or particular rates of return on details). investment or capital. We may update this PDS (including the terms and An investor in the Fund could lose all or a substantial features of the Fund where we can according to the part of their investment in the Fund. In particular, the Fund’s constitution and the law) with changes that are performance of the Fund will depend on the not materially adverse without issuing a supplementary performance and market value of the assets held by the PDS. Any such updates may be obtained by visiting our Fund as a result of tracking its underlying index. website at au.iShares.com, or by contacting our iShares Call Centre (refer to the Corporate Directory section of 1.2 About this Product Disclosure Statement this PDS for contact details). A paper copy of any This PDS describes the main features of the Fund and is updated information is available free of charge upon dated 2 March 2012. request. A copy of this PDS has been lodged with the Australian The offer or invitation to subscribe for Units in the Fund Securities and Investments Commission (“ASIC”) and under this PDS is subject to the terms and conditions ASX Ltd (“ASX”). Neither ASIC nor the ASX take any described in this PDS. We reserve the right to accept responsibility for the contents of this PDS. An or decline applications in full or in part and reserve the application for quotation on the ASX has been made to right to change these terms and conditions. the ASX and as at the date of this PDS quotation has This PDS can only be used by investors receiving it not commenced. No applications for Units will be (electronically or otherwise) in Australia. accepted until the exposure period for the Fund, as required by the Corporations Act 2001 (Cth) (the In addition, certain Fund portfolio information will only "Corporations Act"), has expired. Once the exposure be made available to Authorised Participants in relation period has expired BlackRock may determine when to their activities as Authorised Participants. applications for Units can be accepted. 1.4 Need help? In preparing this PDS, we did not take into account your particular investment objectives, financial situation or If you have questions about the Fund described in this needs. As the needs and aspirations of investors differ, PDS speak to your financial adviser. you should consider whether investing in the Fund is Should you require general assistance with respect to appropriate for you in light of your particular needs, an iShares product, please call the iShares Call Centre objectives and financial circumstances. You may also (refer to the Corporate Directory section of this PDS for wish to obtain independent advice. contact details). If you have received this PDS electronically, we can Further information on the different iShares funds listed provide you with a paper copy free of charge upon on ASX is available at au.iShares.com or from your request by contacting the iShares Call Centre (refer to financial adviser. the Corporate Directory section of this PDS for contact details).
4 iShares UBS Treasury Index Fund 1.5 Offer eligibility 3. About BlackRock The offer in this PDS is only available to Authorised BlackRock, Inc.® (“BlackRock, Inc.”) is a premier Participants who have, where required, entered into a provider of global investment management, risk relevant Authorised Participant Agreement (“AP management and advisory services to institutional and Agreement”). retail clients around the world. Through BlackRock The minimum initial investment for Units in the Fund is Solutions® – an outgrowth of our longstanding 10,000 Units and the minimum amount for subsequent investment in sophisticated, integrated systems – we applications for creations and redemptions is also offer risk management services and enterprise 10,000 Units per transaction. investment system outsourcing to a broad base of institutional portfolios. Investors who are not Authorised Participants cannot invest through this PDS but may do so through the ASX. BlackRock, Inc., through its subsidiaries (the Please consult your stockbroker or financial adviser. “BlackRock Group”), directly manages investments on behalf of institutional and retail clients from around the Investors who are not Authorised Participants may use globe. The BlackRock Group has asset management this PDS for informational purposes only and may teams covering all major asset classes, across many obtain further information in relation to the Fund by investment styles and regions globally. Through cutting contacting the Registrar (refer to the Corporate edge systems, capabilities and an unqualified Directory section of this PDS for contact details). commitment to teamwork and communication across all its investment capabilities, the BlackRock Group delivers an unparalleled breadth of perspective and 2. About iShares® insights to the management of all its client portfolios. iShares are exchange traded funds ("ETFs"), which are Headquartered in New York, the BlackRock Group managed funds quoted on exchanges around the world operates offices in different countries, maintaining a (including the ASX). ETFs are designed to give investors major presence in most key markets including the the opportunity to buy or sell a diversified portfolio of United States, the United Kingdom, Asia, Australia, the assets in a single transaction. Middle East and Europe. The name of each iShares fund generally refers to the BlackRock, Inc. is the largest provider of ETFs in the fund’s underlying index. The provider of that index is world through its iShares family, which consists of over responsible for choosing the components of the index 470 funds and approximately US$ 620 billion of assets and their weightings within the index. under management. A range of international iShares have been cross-listed on the ASX since October 2007. There are many types of indices, some are narrow, At June 30, 2011, BlackRock’s AUM was $3.659 trillion. tracking a single market sector with minimal holdings, while others are as broad as the entire market with 3.1 Responsible Entity in Australia hundreds of holdings. This means investors can use BlackRock Investment Management (Australia) Limited iShares to gain the exposure and diversification they is the responsible entity of the Fund. BlackRock want. Investment Management (Australia) Limited is a wholly- iShares is the world leader in ETFs with over 470 owned subsidiary of BlackRock, Inc. but is not products offering interests in ETFs and trading on guaranteed by any member of the BlackRock Group, exchanges worldwide. These products account for including BlackRock Inc. When you invest with approximately 40 per cent of the global ETF market as BlackRock you are gaining the expertise of an at the date of this PDS. Over the past ten years, experienced team of Australian investment iShares has cemented its position as the world leader professionals across the full spectrum of investment through commitment to high quality products, investor styles and asset classes, including equities, fixed education and superior client service. income, alternatives, and multi-asset class solutions, backed by the international resources and knowledge iShares ETFs were first launched in Australia in October of the world’s largest asset manager. 2007. As at the date of this PDS, there are 19 cross- listed iShares ETFs and 4 domestic iShares ETFs quoted We are a member of the Financial Services Council on the ASX, across both international and domestic (FSC). shares. iShares ETFs are brought to you by BlackRock, one of the world’s leading investment managers and itself an index-investing pioneer over many decades. BlackRock’s strength and stability are just some of the reasons for choosing iShares ETFs. iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A.
5 4. About the Fund Which debt securities can be included in the UBS Treasury Index? 4.1 Investment objective and Fund strategy The debt securities which are included in the UBS The Fund aims to provide investors with the Treasury Index are selected by UBS, from time to time, performance of the market, before fees and expenses, based on eligibility criteria. The key eligibility criteria as represented by the UBS Treasury Index (the “Index”). for the debt securities which are included in the UBS Treasury Index are that the debt securities: The Fund seeks to achieve its objective by employing a full replication strategy to track the performance of the ► are of a minimum quality which is determined by Index. If we determine that we can achieve a more reference to levels published by independent efficient means of obtaining exposure to the Index, we service providers and bond rating firms. In addition, may do so. For example, in rare circumstances where a if any debt securities fall below that minimum particular Index constituent security cannot be quality then those debt securities are removed and acquired, a combination of existing or similar securities the UBS Treasury Index is rebalanced (as further in the Index, of like quality, would be used. However, described below); the Fund will not invest in financial derivative ► are issued by the Australian Treasury instruments. Where required by the ASX Operating (Commonwealth Government debt securities); Rules, we will not significantly change the Fund’s investment objective, as described in this PDS, unless ► are denominated in Australian dollars; the change in objective has been approved by a resolution passed by at least 75% of votes cast by ► are governed by the law of an Australian State or Unitholders who vote on the resolution at a meeting of Territory or the Commonwealth of Australia; Unitholders. ► were issued in a minimum issue size of AUD 100 4.2 What the Fund invests in million; and, In order to achieve its objective the Fund invests ► have a final maturity of less than 50 years. primarily in Investment Grade fixed income securities In addition to the above, certain debt securities are which reflect the minimum quality standard required to excluded from the UBS Treasury Index, these include: be included in the Index, and which are issued by the convertibles notes, zero coupon notes, private Australian Commonwealth Government. placements, collateralised debt obligations, Whilst the Constitution of the Fund allows the collateralised bond obligations and collateralised fund Responsible Entity to borrow on behalf of the Fund, it is obligations, synthetic securitisations or hybrid capital our intention that no borrowing arrangements will be securities. entered into by the Fund other than temporary The different debt securities are included in the UBS overdrafts which may be used as a means of managing Treasury Index on the basis of their gross market value certain cash flows. proportions, not on an equally weighted basis, and As the Fund aims to track the performance of the Index, these proportions can be rebalanced on a daily basis. investment decisions are independent of labour Such rebalancings can occur, for example, when standards or environmental, social or ethical interest or principal is received on the debt securities, considerations. the debt securities are redeemed or mature, or when there is a new issue of debt securities which are to be 4.3 About the Index included in the UBS Treasury Index (which occurs at the beginning of the following month). Rebalancing is The UBS Treasury Index is designed to measure the performed on the basis that interest and principal performance of the Australian bond market which received on the debt securities are reinvested in all of meets certain investment criteria and covers fixed the debt securities comprising the UBS Treasury Index interest bonds issued in the Australian debt market and on the basis that it is performed in market value under Australian law. proportions at the day’s closing prices. The UBS Treasury Index, a sub-index of the UBS As the UBS Treasury Index includes the value of Composite Bond IndexTM, is an index of valuations of reinvested interest and principal payments made on the the debt securities which are included in it. Below is debt instruments included in it, it is considered as a set out a description of the manner in which the debt capital accumulation index - which means that it is securities included in it are determined and also a designed to measure the total return from investing in description of the manner in which valuations are those debt securities. determined. The UBS Treasury Index has been calculated since 31 March 1988.
6 iShares UBS Treasury Index Fund How are the valuations of those debt securities 4.6 Rebalancing the Fund determined? The Fund will typically rebalance on a monthly basis in The UBS Treasury Index is a gross market value line with the Index. However, as stated above, the weighted index. This means that all debt instruments proportions of debt securities within the Index may be are valued using a determination of the price which an rebalanced intra-month and as often as daily by the investor would pay to acquire the debt instrument. This Index provider. The Fund may rebalance intra-month in price includes the value of future interest payments line with Index activity or to manage the overall which are to be made under the debt securities. exposure to remain within an acceptable tolerance as determined by the Manager. These prices for debt instruments making up the UBS Treasury Index are taken from the firm closing prices at 4.7 Benefits of iShares the end of the day from active UBS trading books. UBS Each iShares fund is a managed fund listed or quoted employs periodic price testing to verify that its prices on exchanges (including ASX) providing you with the are consistent with market pricing. opportunity to gain exposure to a diversified portfolio of Involvement of UBS AG entities in the Index assets in a single transaction. UBS AG provides the UBS Treasury Index. Conflicts of The benefits of investing in iShares funds include: interest may exist between UBS AG in this role and UBS ► Diversification: In contrast to a direct investment in AG entities acting in other capacities. For example, a a single company or bond, an iShares fund provides, UBS AG entity may act as the issuer of or an obligor as far as practicable or efficient, and possible, under a debt security and as a dealer, calculation agent exposure to all of the securities or instruments or hedge provider in relation to a debt security. Various within the index, which the particular iShares fund conflicts of interest may arise as a result of these seeks to track. Notwithstanding, there may be a different roles as well as from the overall activities of concentration of bonds issued by Australian UBS AG entities. UBS AG entities shall be entitled to Commonwealth or State governments in the case of receive fees or other payments and exercise all rights, fixed income iShares funds, and each fixed income including rights of termination or resignation, which iShares fund will invest only in debt securities and they may have, even though this may have a not in other asset classes, such as equities. detrimental effect on the Issuer, the constituent debt instruments, an index or the Units. ► Liquidity and transparency: Each iShares fund seeks investment results that correspond generally to the 4.4 Performance of the Index performance (before fees and expenses) of a Information relating to the past performance of the particular index. As a traded security, an iShares Index can be found on our website at au.iShares.com. fund enables you to enter and exit your holding on It is important to note that past performance is not a the ASX. You can easily track performance and reliable indicator of future performance. trade during the ASX’s trading hours (subject to ASX rules). 4.5 Changes to the Index ► Managing risk: Investing in an iShares fund can BlackRock has no present intention to change the Index assist you in establishing a portfolio appropriate to adopted by the Fund. your investment needs and suit your risk profile. BlackRock will not substitute the Index for another ► Lower cost: As each iShares fund is passively index if to do so would significantly change the Fund's managed and designed to follow a particular investment objective as described in this PDS, unless, underlying index, the expenses of managing a fund where required by the ASX Operating Rules, the change are generally lower compared to other forms of of investment objective has been approved by a retail managed funds. However, brokerage or resolution passed by at least 75% of votes cast by adviser fees may still apply when buying or selling Unitholders who vote on the resolution at a meeting of an ETF. Unitholders. ► Receipt of income: You will generally receive regular income from your investment in the form of distributions. Distributions will normally include interest and other income. There may be periods in which no distributions are made. ► Accessibility: iShares offer a cost-effective way to gain exposure to a diversified portfolio of securities. They can be less costly than purchasing a large number of individual securities as there are less trading costs and they offer lower thresholds than an investor might otherwise be able to afford.
7 4.8 Additional Information 4.9 About the AQUA Rules The following information can be obtained from our The Fund is quoted on the ASX under the AQUA Rules. website at au.iShares.com: The AQUA Rules have been designed to offer greater flexibility and are specifically designed for managed ► the Fund's daily Net Asset Value (“NAV”) as at the funds, ETFs and structured products. close of the previous trading day for the Fund; As most investors are more familiar with the ASX ► where possible, and subject to availability, the Listing Rules, it is important to note the main Fund’s estimated intra-day NAV current to a time differences between the AQUA Rules and the ASX which is no more than 15 minutes before the time Listing Rules, which are set out below. the estimate is last available. It should be noted that the estimated intra-day NAV is an indicative ASX Listing Rules ASX AQUA Rules figure only and may be subject to error; Control A person: A person: ► the Fund's daily NAV per Unit (“NAV Price”) as at the close of the previous trading day for the Fund. ► controls the value of its ► does not control the value It should be noted that the NAV Price is that which own securities and the of the assets underlying is applied to a creation or redemption application business it runs, its products, but received prior to the close of trading on any ► the value of those ► offersproducts that give Business Day, as per section 7.5; securities is directly investors exposure to the ► copies of the latest PDS; influenced by the equity underlying assets – such issuer's performance and as shares, indices, ► daily underlying holdings of the Fund, including the name and percentage composition of each asset by conduct. currencies or commodities. value relative to NAV as at the close of the previous e.g. the management and trading day for the Fund; board generally control the The value (price) of products ► copies of Annual Financial Reports (the Fund’s fate of the business and, quoted under the AQUA financial year ends 30 June); therefore, have direct Rules is dependent upon the influence over the share performance of the ► copies of Semi-Annual Financial Reports; and price. underlying assets rather than the financial ► distributions (if declared). performance of the issuer Where the Fund is subject to the continuous disclosure itself. requirements of the Corporations Act, we will satisfy e.g. A managed fund issuer our obligations by disclosing material information does not control the value of regarding the Fund on our website at au.iShares.com. the shares it invests in. A paper copy of this material will be available from BlackRock free of charge upon request. This Continuous disclosure information will also be released to the ASX via the ASX Products under the ASX Issuers of products quoted Markets Announcements Platform (asxonline.com.au). Listing Rules are subject to under the AQUA Rules are Certain Fund portfolio information will only be made the continuous disclosure not subject to the available to Authorised Participants in relation to their requirements under ASX continuous disclosure activities as Authorised Participants. Listing Rule 3.1 and section requirements under ASX 674 of the Corporations Act Listing Rule 3.1 and section Prices of the underlying securities that form the Index 2001. 674 of the Corporations Act will not be publicly available to investors at the point of 2001 but must disclose sale as there is no consolidated source that reports information about: prices of trades. Such information is generally only available to certain wholesale clients, as defined by the ► the Net Tangible Assets Corporations Act. (“NTA”) or the Net Asset Value (“NAV”) of the funds; ► dividends,distributions and other disbursements; and any other information that is required to be disclosed to ASIC under section 675 of the Corporations Act 2001 must be disclosed to ASX via the ASX Company Announcement Platform at the same time it is disclosed to ASIC.
8 iShares UBS Treasury Index Fund ASX Listing Rules ASX AQUA Rules ASX Listing Rules ASX AQUA Rules Periodic disclosure Auditor rotation Products under the ASX Products quoted under the There are specific Issuers of products under Listing Rules are required to AQUA Rules are not required requirements in relation to the AQUA Rules are not disclose half yearly and to disclose half yearly and auditor rotation under Part subject to the requirements annual financial information annual financial information 2M.4 Division 5 of the under Part 2M.4 Division 5 of or annual reports under or annual reports under the Corporations Act 2001. the Corporations Act 2001. Chapter 4 of the ASX Listing AQUA Rules. The responsible entity of an Rules. However, because the Fund unlisted scheme quoted on is a registered managed the AQUA market will investment scheme, we are continue to be required to still required to prepare undertake an independent financial reports under audit of its compliance with Chapter 2M of the the scheme’s compliance Corporations Act 2001. plan in accordance with These reports will be made section 601HG of the available on our website at Corporations Act 2001. au.iShares.com. Disclosure Corporate control Entities admitted under the Products quoted under the Requirements in the Certain requirements in the ASX Listing Rules are subject AQUA Rules will also be Corporations Act 2001 and Corporations Act 2001 and to the requirements of the subject to these the ASX Listing Rules in the ASX Listing Rules in Corporations Act 2001 in requirements of the relation to matters such as relation to matters such as relation to the issue of a Corporations Act 2001. takeover bids, share buy- takeover bids, buy-backs, PDS. backs, change of capital, change of capital, new new issuers, restricted issuers, restricted securities, Source: ASX Rules Framework securities, disclosure of disclosure of directors' 4.10 Announcements to ASX directors' interests and interests and substantial substantial shareholdings shareholdings that apply to All announcements (including continuous disclosure apply to companies and companies and listed notices and distribution information) will be made to schemes. schemes do not apply to the ASX via the ASX Markets Announcements Platform products quoted under the (asxonline.com.au). The responsible entity of a AQUA Rules. 4.11 Securities lending listed scheme may be replaced by a resolution of Issuers of products quoted The Fund does not participate in a securities lending members holding a majority under the AQUA Rules are program for lending any of the fixed income securities of the votes cast on the subject to general in the portfolio. resolution. requirement to provide the ASX with any information concerning itself that may lead to the establishment of a false market or materially affect the price of its products. The responsible entity of an unlisted scheme quoted on the AQUA market may only be replaced by a resolution of members holding a majority of votes that are eligible to be cast on the resolution. Related party transactions Chapter 10 of the ASX Chapter 10 of the ASX Listing Rules, which relates Listing Rules does not apply to transactions between an to AQUA products. entity and persons in a Unlisted schemes quoted on position to influence the the AQUA market remain entity, specifies controls subject to the related party over related party requirements in Part 5C.7 transactions. and Chapter 2E of the Corporations Act 2001.
9 5. Risks Tracking error risk. The Net Asset Value of the Fund may not correlate exactly with the Index. Factors such What are the significant risks? as the fees and expenses of the Fund, imperfect correlation between the Fund's assets and the Before you make an investment decision it is important securities constituting the Index, inability to rebalance to identify your investment objectives and the level of the Fund’s holdings of securities in response to risk that you are prepared to accept. This may be changes in the constituents of the Index, rounding of influenced by: prices, changes to the Index and regulatory policies ► the timeframe over which you are expecting a may affect the Responsible Entity's ability to achieve return on your investment and your need for regular close correlation with the Index of the Fund. The Fund's income versus long-term capital growth; returns may therefore deviate from the Index. ► your level of comfort with volatility in returns; or Concentration risk. If the Index of the Fund is concentrated in a particular bond, group of bonds, ► the general and specific risks associated with industry or group of industries, the Fund may be investing in particular funds. adversely affected by the performance of those bonds General risks and be subject to price volatility. In addition, where the Fund is concentrated in a single bond, group of bonds, All investments have an inherent level of risk. industry or group of industries, it may be more Generally, there is a trade off between higher expected susceptible to any single economic, market, political or returns for higher expected risk – represented by the regulatory occurrence. There may be limited variability of fund returns. The value of your investment counterparty diversification for the bonds comprising will fluctuate with the value of the underlying the Index, as they may be concentrated to Australian investments in the Fund. Investment risk may also government bonds, either Commonwealth or State. result in loss of income or capital invested and possible delays in repayment. You could receive back less than Government bonds risk. The price of government you initially invested and there is no guarantee that you bonds will generally be affected by changing interest will receive any income. rates. What about the specific risks of this Fund? In periods of low inflation, the positive growth of a government bond fund may be limited. The significant risks for this Fund are discussed below. The performance of the Fund will reflect the volatility of There is a risk to the Fund that the Australian Treasury the Fund’s underlying investments. If these risks may not continue to issue government debt securities, eventuate, your distributions may be lower than or may close down the Commonwealth Government expected or there may be none, and the value of your securities market. investment could fall. Liquidity risk. Certain bond markets (especially The significant risks for this Fund may include: secondary markets) may be relatively illiquid. The cost of dealing may be high in such illiquid markets. A Market risk. Past performance is not indicative of disruption in the asset allocation in the Fund is also future performance. The Net Asset Value of the Fund possible if underlying securities cannot be purchased or will change with changes in the market value of the sold. securities it holds. The price of Units and the income from them may go down as well as up. Investors may Reliance on investment ratings risk. Credit rating not get back their original investment. There can be no agencies assign various credit ratings to the individual assurance that the Fund will achieve its investment securities that form part of a fund’s portfolio. These objective or that an investor will achieve profits or avoid ratings vary based on the perceived quality of those losses, significant or otherwise. The capital return and securities. For example, the term ‘Investment Grade’ income of the Fund is based on the capital appreciation denotes a certain level of quality of a security, which and income on the securities it holds, less expenses has been ascribed by an independent rating agency or incurred. The Fund’s return may fluctuate in response agencies, though no guarantee of investment to changes in such capital appreciation or income. performance can be derived from this term. Grades Furthermore, the Fund may experience volatility and determined by such agencies may form only one view decline in a manner that broadly corresponds with the of the security and should not be relied upon in Index. isolation. Further, ratings are provided by commercial agencies that are paid for their services and therefore Secondary market trading risk. Units of the Fund may potential conflicts may exist in the classification of trade on the ASX when the Fund does not accept orders precise ratings grades. Rating agencies attempt to to create or redeem Units. On such days, Units may pursue principles and maintain standards that deliver trade in the secondary market with more significant effectiveness and reliability, however, neither an premiums or discounts than might be experienced on accurate rating classification determined when a bond days when the Fund accepts creation and redemption is issued, nor accurate review during the life of a bond, orders. can be assured.
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