No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.

Transcription

1 No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. PROSPECTUS Continuous Offering October 23, 2015 This prospectus qualifies the distribution of common units ( Common Units ) and advisor class units ( Advisor Class Units ) of the exchange-traded funds listed below (each, an ishares Fund and together, the ishares Funds ). BlackRock Asset Management Canada Limited ( BlackRock Canada ) is the trustee, manager and portfolio adviser of the ishares Funds and is responsible for the day-to-day administration of the ishares Funds. See Organization and Management Details of the ishares Funds Trustee, Manager and Portfolio Adviser. ishares Premium Money Market ETF ( CMR ) ishares Canadian Financial Monthly Income ETF ( FIE ) ishares Equal Weight Banc & Lifeco ETF ( CEW ) ishares Advantaged Short Duration High Income ETF (CAD-Hedged) ( CSD ) Capitalized terms used but not otherwise defined have the meanings ascribed herein. The ishares Funds are established as investment trusts under the laws of the Province of Ontario. Unitholders of the ishares Funds are not shareholders of a corporation. CMR s investment objective is to maximize current income to the extent consistent with the preservation of capital and liquidity by investing in high-quality, short-term (generally less than 90 days), investment grade debt securities, including treasury bills and promissory notes issued or guaranteed by Canadian governments or their agencies, bankers acceptances and commercial paper (excluding asset-backed commercial paper) issued by Canadian chartered banks, loan companies, trust companies and corporations. FIE s investment objective is to maximize total return for Unitholders, consisting of distributions and capital appreciation and to provide Unitholders with a stable stream of monthly cash distributions of $0.05 per Unit ($0.60 per annum). There can be no assurance that FIE will achieve its stated investment objective, including making distributions at its targeted rate. Currently, FIE is paying monthly cash distributions of $0.04 per Advisor Class Unit ($0.48 per annum) and $0.04 per Common Unit ($0.48 per annum). FIE s net assets, together with borrowings under its loan facility, are invested in a diversified investment portfolio consisting primarily of common shares, preferred shares, corporate bonds and income trust units of issuers in the Canadian financial sector. CEW s investment objective is to provide Unitholders with a diversified equal weighted investment in a portfolio (the CEW Portfolio ) of common shares of the largest Canadian banks and Canadian life insurance companies. Cash distributions on the Common Units and Advisor Class Units of CEW are expected to be made monthly and will be derived from dividends received by CEW on the CEW Portfolio. Such distributions may also include capital gains and returns of capital. CEW will endeavour to provide holders of its Common Units and Advisor Class Units with monthly cash distributions targeted to be $ per Unit (approximately $0.50 per annum). Unitholders will also participate in any potential appreciation in the CEW Portfolio. There can be no assurance that CEW will achieve its stated investment objective, including making distributions at its targeted rate. Currently, CEW is paying monthly cash distributions of $0.023 per Common Unit ($0.276 per annum) and $ per Advisor Class Unit ($0.39 per annum).

2 CSD has been created to maximize total returns for Unitholders consisting of both tax-efficient monthly distributions and capital appreciation, and to preserve capital. Distributions are intended to be tax efficient when compared to units of a trust that depends solely on interest, dividend and/or other investment income to pay distributions. CSD will, to the extent possible, hedge its U.S. dollar currency exposure back to Canadian dollars. See Investment Objectives and Investment Strategies. Common Units and Advisor Class Units of each of the ishares Funds may be issued and sold on a continuous basis and there is no maximum number of Units that may be issued. The Common Units and the Advisor Class Units are collectively referred to as the Units. BlackRock Canada, a registered portfolio manager, exempt market dealer and investment fund manager, is the trustee, manager and portfolio advisor of the ishares Funds and is responsible for the administration of the ishares Funds. BlackRock Canada is an indirect, wholly-owned subsidiary of BlackRock, Inc. See Organization and Management Details of the ishares Funds Trustee, Manager and Portfolio Adviser. BlackRock Canada has appointed BlackRock Institutional Trust Company, N.A. ( BTC ), a national banking association organized under the laws of the United States of America, as the sub-advisor of the ishares Funds. BTC also acts as a sub-advisor in respect of the portfolio to which CSD is exposed through an equity forward agreement. BlackRock Canada may also appoint other affiliates to provide portfolio management or investment sub-advisory services to the ishares Funds. See Organization and Management Details of the ishares Funds BlackRock Institutional Trust Company, N.A. Manulife Asset Management Limited and Manulife Asset Management (Europe) Limited (collectively, Manulife Asset Management ) provide data services to FIE, including a model portfolio used by BTC to construct FIE s portfolio of securities. Manulife Asset Management, a leading global investment manager also provides investment advisory services to other institutional clients and investment funds. See Organization and Management Details of the ishares Funds Manulife Asset Management. The Units of each ishares Fund are listed on the Toronto Stock Exchange ( TSX ) and are offered on a continuous basis. The ishares Funds issue, or will issue, Units directly to Designated Brokers and Underwriters. An investor may buy or sell Units on the TSX through registered brokers and dealers in the province or territory where the investor resides. Investors may incur customary brokerage commissions when buying or selling Units. No fees are paid by a Unitholder to BlackRock Canada or the ishares Funds in connection with the buying or selling of Units on the TSX. Unitholders may redeem Units for cash, subject to a redemption discount, or may exchange the Prescribed Number of Units (or integral multiple thereof) for Baskets of Securities and/or cash. See Redemption and Exchange of Units Exchange of Units for Baskets of Securities and/or Cash. No underwriter has been involved in the preparation of this prospectus or has performed any review of the contents of this prospectus and the securities regulatory authorities have provided the ishares Funds with a decision exempting them from the requirement to include a certificate of an underwriter in this prospectus. The Designated Brokers and Underwriters are not underwriters of the ishares Funds in connection with the distribution of Units under this prospectus. There is no guarantee that an investment in an ishares Fund will earn a positive return in the short or long term, nor is there a guarantee that the investment objective of an ishares Fund will be achieved or that its NAV per Unit will be preserved or appreciate. An investor should carefully study this prospectus, including a description of the principal risk factors under Risk Factors, before deciding to invest in the ishares Funds. In the opinion of counsel, provided that an ishares Fund qualifies as a mutual fund trust within the meaning of the Income Tax Act (Canada) (the Tax Act ), or the Units of the ishares Fund are listed on a designated stock exchange within the meaning of the Tax Act (which currently includes the TSX), such Units will be qualified

3 investments for trusts governed by registered retirement savings plans, registered retirement income funds, deferred profit sharing plans, registered disability savings plans, registered education savings plans and tax-free savings accounts. Holders of tax-free savings accounts and annuitants of registered retirement savings plans and registered retirement income funds should consult their own tax advisors to ensure Units of an ishares Fund would not be a prohibited investment for purposes of the Tax Act in their particular circumstances. While each ishares Fund is a mutual fund under the securities legislation of certain provinces and territories of Canada, the ishares Funds have been granted exemptive relief from certain provisions of Canadian securities legislation applicable to conventional mutual funds. Registration of interests in, and transfer of, the Units will be made only through the systems administered by CDS Clearing and Depository Services Inc. Beneficial owners will not have the right to receive physical certificates evidencing their ownership of Units. ishares is a registered trademark of BlackRock, Inc. or its subsidiaries in the U.S. or elsewhere. Used with permission. During the period in which an ishares Fund is in continuous distribution, additional information will be available in its most recently filed comparative annual financial statements, its most recent interim financial statements filed after its most recent comparative annual financial statements, its most recently filed annual management report of fund performance ( MRFP ), its most recent interim MRFP filed after that annual MRFP and its most recent Summary Document. These documents are or will be incorporated by reference into, and form an integral part of this prospectus. These documents are publicly available on the ishares Funds website at and may be obtained upon request, at no cost, by calling or by contacting a registered dealer. These documents and other information about the ishares Funds are publicly available at See Documents Incorporated by Reference.

4 TABLE OF CONTENTS IMPORTANT TERMS... 1 PROSPECTUS SUMMARY... 7 Organization and Management Details of the ishares Funds...15 SUMMARY OF FEES AND EXPENSES...16 Fees and Expenses Payable by the ishares Funds...16 Fees and Expenses Payable Directly by You...19 OVERVIEW OF THE LEGAL STRUCTURE OF THE ishares FUNDS...20 INVESTMENT OBJECTIVES...21 ishares Premium Money Market ETF...21 ishares Canadian Financial Monthly Income ETF...21 ishares Equal Weight Banc & Lifeco ETF...21 ishares Advantaged Short Duration High Income ETF (CAD-Hedged)...21 INVESTMENT STRATEGIES...21 ishares Premium Money Market ETF...21 ishares Canadian Financial Monthly Income ETF...22 ishares Equal Weight Banc & Lifeco ETF...22 ishares Advantaged Short Duration High Income ETF (CAD-Hedged)...23 Investments in ishares ETFs or Other Funds...24 Securities Lending...25 Use of Derivative Instruments...25 OVERVIEW OF THE SECTORS IN WHICH THE ishares FUNDS INVEST...28 ishares Premium Money Market ETF...28 ishares Canadian Financial Income Monthly ETF...28 ishares Equal Weight Banc & Lifeco ETF...28 ishares Advantaged Short Duration High Income ETF (CAD-Hedged)...28 INVESTMENT RESTRICTIONS...28 FEES AND EXPENSES...31 Fees and Expenses Payable by the ishares Funds...31 Fees and Expenses Payable Directly by You...33 ANNUAL RETURNS, MANAGEMENT EXPENSE RATIO AND TRADING EXPENSE RATIO...33 RISK FACTORS...34 General Risks Relating to an Investment in the ishares Funds Additional Risks Relating to an Investment in Certain ishares Funds DISTRIBUTION POLICY Year-End Distributions Distribution Reinvestment Plan Pre-Authorized Cash Contribution Plan Systematic Withdrawal Plan PURCHASES OF UNITS Continuous Distribution Designated Brokers Issuance of Units Buying and Selling Units Special Considerations for Unitholders Non-Resident Unitholders Registration and Transfer through CDS REDEMPTION AND EXCHANGE OF UNITS Redemption of Units for Cash Exchange of Units for Baskets of Securities and/or Cash Conversion of Units Suspension of Exchanges and Redemptions Costs Associated with Exchanges and Redemptions Exchange, Redemption and Conversion of Units through CDS Participants Short-Term Trading PRICE RANGE AND TRADING VOLUME OF UNITS INCOME TAX CONSIDERATIONS Status of the ishares Funds Taxation of the ishares Funds Taxation of Unitholders Taxation of Registered Plans INTERNATIONAL INFORMATION REPORTING ORGANIZATION AND MANAGEMENT DETAILS OF THE ishares FUNDS Executive Officers and Directors of BlackRock Canada Trustee, Manager and Portfolio Adviser Duties and Services to be Provided by the Trustee and Manager BlackRock Institutional Trust Company, N.A i-

5 Portfolio Managers of BTC...66 Details of the Investment Sub- Advisory Agreement...67 Manulife Asset Management...67 Details of Manulife Asset Management Data Services Agreement...67 Conflicts of Interest...68 Independent Review Committee...68 Custodian...69 Sub-custodians...69 Auditor...70 Registrar and Transfer Agent...70 Securities Lending Agents...70 Accounting and Reporting...70 CALCULATION OF NET ASSET VALUE...70 Reporting of Net Asset Values...71 Valuation Policies and Procedures...71 ATTRIBUTES OF THE UNITS...71 Description of the Securities Distributed...71 Certain Provisions of the Units...72 Modification of Terms...73 UNITHOLDER MATTERS...73 Meetings of Unitholders and Voting...73 Matters Requiring Unitholder Approval...73 Amendments to the Trust Documents...75 Reporting to Unitholders...75 TERMINATION OF THE ishares FUNDS...75 PRINCIPAL HOLDERS OF SECURITIES OF THE ishares FUNDS...75 PROXY VOTING DISCLOSURE FOR PORTFOLIO SECURITIES HELD...76 MATERIAL CONTRACTS...77 LEGAL AND ADMINISTRATIVE PROCEEDINGS...78 EXPERTS...78 EXEMPTIONS AND APPROVALS...78 OTHER MATERIAL FACTS...80 PURCHASERS STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION...80 DOCUMENTS INCORPORATED BY REFERENCE...81 CERTIFICATE OF THE ishares FUNDS, THE TRUSTEE AND THE MANAGER...C-1 TABLE OF CONTENTS (continued) -ii-

6 IMPORTANT TERMS Unless otherwise indicated, all references to dollar amounts in this prospectus are to Canadian dollars and all references to times in this prospectus are to Toronto time. Advisor Class Unit in relation to an ishares Fund, a redeemable, transferable advisor class unit of the ishares Fund. Basket of Securities in relation to a particular ishares Fund, a group of securities determined by BlackRock Canada from time to time representing the constituents of the applicable portfolio in approximately the same weightings as such constituents are weighted in the applicable portfolio, based on each security s sale price at the last Valuation Time. BlackRock BlackRock, Inc., the ultimate parent company of BlackRock Canada. BlackRock Canada BlackRock Asset Management Canada Limited. BRAL BlackRock Advisors (UK) Limited, an affiliate of BlackRock Canada. BRAL Agreement the securities lending management agreement dated August 19, 2004, as amended, between BlackRock Canada, in its capacity as trustee and manager of the ishares Funds, and BRAL. BTC BlackRock Institutional Trust Company, N.A., an affiliate of BlackRock Canada. BTC Agreement the securities lending authorization agreement dated August 17, 2005, as amended, between BlackRock Canada, in its capacity as trustee of the ishares Funds, and BTC. Canadian securities legislation the securities legislation in force in each province and territory of Canada, all regulations, rules, orders and policies made thereunder and all multilateral and national instruments adopted by the securities regulatory authorities therein and all exemptions therefrom. Canadian Share Portfolio as defined under Prospectus Summary Investment Strategies Use of Derivative Instruments Use of the Forward by CSD. Canadian Trading Day each day on which trading takes place on the TSX. Cash Creation Fee the fee payable in connection with cash payments (in whole or in part) for subscriptions of a Prescribed Number of Units of the applicable ishares Fund, representing, as applicable, brokerage expenses, commissions, transaction costs, costs or expenses related to market impact and other costs or expenses that the ishares Fund incurs or expects to incur in purchasing securities on the market with such cash proceeds. Cash Exchange Fee the fee payable in connection with cash payments (in whole or in part) for exchanges of a Prescribed Number of Units of the applicable ishares Fund, representing, as applicable, brokerage expenses, commissions, transaction costs, costs or expenses related to market impact and other costs or expenses that an ishares Fund incurs or expects to incur in selling securities on the market to obtain the necessary cash for the exchange. CDS CDS Clearing and Depository Services Inc. CDS Participant a participant in CDS, including a securities broker or dealer, bank, trust company or other institution that directly or indirectly maintains a custodial relationship with CDS, which holds Units on behalf of beneficial owners of Units. CEW Declaration of Trust the amended and restated declaration of trust governing CEW dated as of October 23, 2015 (as may be further amended or restated from time to time). 1

7 CEW Portfolio a diversified equal weighted portfolio consisting of common shares of the largest Canadian banks and Canadian life insurance companies. CMR and CSD Declaration of Trust the amended and restated master declaration of trust governing CMR and CSD dated as of May 29, 2015 (as may be further amended or restated from time to time). Common Unit in relation to an ishares Fund, a redeemable, transferable common unit of the ishares Fund. Constituent Issuers the issuers of the securities included in a portfolio of an ishares Fund from time to time. Constituent Securities in relation to an ishares Fund, the securities or other assets included in the portfolio of such ishares Fund from time to time. Counterparty as defined under Prospectus Summary Investment Strategies Use of Derivative Instruments Use of the Forward by CSD. CRA Canada Revenue Agency. Custody Agreement as defined under Prospectus Summary Organization and Management Details of the ishares Funds Custodian. derivative an instrument, agreement or security, the market price, value or payment obligations of which are derived from, referenced to or based on an underlying interest. Designated Broker a registered dealer that has entered into a Designated Broker Agreement with BlackRock Canada, on behalf of one or more ishares Funds, pursuant to which the Designated Broker agrees to perform certain duties in relation to the ishares Funds. Designated Broker Agreement an agreement between BlackRock Canada, on behalf of an ishares Fund, and a Designated Broker. distribution record date a date determined by BlackRock Canada as the record date for the determination of Unitholders of an ishares Fund entitled to receive a distribution. ETF exchange-traded fund. Extraordinary Resolution a resolution passed by not less than 66 2/3% of the votes cast by the Unitholders who voted in respect of that resolution whether at a meeting or by way of written resolution. FIE Portfolio FIE s portfolio of securities, consisting primarily of common shares, preferred shares, corporate bonds and income trust units of issuers in the Canadian financial sector. FIE Trust Agreement the amended and restated trust agreement governing FIE between BlackRock Canada, as trustee, and BlackRock Canada, as manager, dated as of October 23, 2015 (as may be further amended or restated from time to time). Fitch Fitch Rating Service Inc. Forward as defined under Prospectus Summary Investment Strategies Use of Derivative Instruments Use of the Forward by CSD. Forward Amount as defined under Prospectus Summary Investment Strategies Use of Derivative Instruments Use of the Forward by CSD. 2

8 forward contracts agreements between two parties to buy or sell an asset at a specified point in time in the future at a predetermined price and may include physical forward contracts, which are forward contracts that settle by physical delivery of the asset that is bought or sold, as opposed to settlement in cash. futures contracts standardized contracts entered into on domestic or foreign exchanges which call for the future delivery of specified quantities of various assets such as stocks, bonds, agricultural commodities, industrial commodities, currencies, financial instruments, energy products or metals at a specified time and place. The terms and conditions of futures contracts in respect of a particular commodity are standardized and as such are not subject to any negotiation between the buyer and seller. The contractual obligations, depending upon whether one is a buyer or a seller, may be satisfied either by taking or making, as the case may be, physical delivery of an approved grade of commodity or by making an offsetting sale or purchase of an equivalent but opposite futures contract on the same exchange prior to the designated date of delivery. The difference between the price at which the futures contract is sold or purchased and the price paid for brokerage commissions constitutes the profit or loss to the trader. In market terminology, a trader who purchases a futures contract is long in the market and a trader who sells a futures contract is short in the market. Before a trader closes out his or her long or short position by an offsetting sale or purchase, his or her outstanding contracts are known as open trades or open positions. The aggregate amount of open long or short positions held by traders in a particular contract is referred to as the open interest in such contract. Growth Limits as defined under Prospectus Summary Investment Strategies Use of Derivative Instruments Interim Investment Strategy and Change of Investment Objective. GST federal goods and services tax. High Income Portfolio a portfolio of securities, consisting primarily of below investment grade debt securities, to which CSD has economic exposure. HST federal harmonized sales tax. Hybrid Strategy as defined under Prospectus Summary Investment Strategies Use of Derivative Instruments Interim Investment Strategy and Change of Investment Objective. IFRS International Financial Reporting Standards. Illiquid Securities securities that cannot be disposed of within seven days in the ordinary course of business at approximately the amount at which the securities are valued for the portfolio of an ishares Fund. Investment Sub-Advisory Agreement as described under Organization and Management Details of the ishares Funds Details of the Investment Sub-Advisory Agreement. IRC the Independent Review Committee of an ishares Fund as described under Organization and Management Details of the ishares Funds Independent Review Committee. ishares ETFs ETFs, including the ishares Funds, that are listed on a recognized Canadian or U.S. stock exchange and managed by BlackRock Canada or an affiliate. ishares Funds collectively, CMR, FIE, CEW and CSD. Management Fee Distribution as described under Fees and Expenses Management Fee Distributions, an amount equal to the difference between the applicable management fee otherwise chargeable and a reduced fee determined by BlackRock Canada from time to time that is distributed quarterly in cash by an ishares Fund to Unitholders who hold large investments in the ishares Fund. Manulife Asset Management collectively, Manulife Asset Management Limited and Manulife Asset Management (Europe) Limited, data services providers to FIE. 3

9 Manulife Services Agreement an amended and restated license agreement among BlackRock Canada, Manulife Asset Management Limited and Manulife Asset Management (Europe) Limited effective as of October 9, MER management expense ratio. Model Portfolio as defined under Prospectus Summary Investment Strategies. Moody s Moody s Investor s Services, Inc. MRFP management report of fund performance. NAV or Net Asset Value in relation to an ishares Fund, the market value of the total assets held by that ishares Fund, less an amount equal to the total liabilities of that ishares Fund. NAV per Unit in relation to a Unit of a class of an ishares Fund, the NAV of that class of Units (calculated as described under Calculation of Net Asset Value ) divided by the number of Units of that class outstanding. NI National Instrument Mutual Fund Prospectus Disclosure. NI National Instrument Investment Funds. NI National Instrument Independent Review Committee for Investment Funds. Other Funds as defined under Prospectus Summary Investment Strategies Investments in ishares ETFs or Other Funds. PACC Plan the pre-authorized cash contribution plan of each ishares Fund as described under Distribution Policy Pre-Authorized Cash Contribution Plan. Plan Agent SSTCC, plan agent for the Plans. Plan Unit as defined under Distribution Policy Distribution Reinvestment Plan. Plans collectively, the Reinvestment Plan, the PACC Plan and the SW Plan. Prescribed Number of Units in relation to an ishares Fund, the number of Units of a class determined by BlackRock Canada from time to time for the purpose of subscription orders, exchanges, redemptions or for such other purposes as BlackRock Canada may determine. Prospectus Delivery Decision as defined under Exemptions and Approvals. Proxy Voting Guidelines as defined under Proxy Voting Disclosure for Portfolio Securities Held. Publicly-Traded Trust as defined under Income Tax Considerations Taxation of the ishares Funds ishares Holding an Underlying Other Fund and Publicly-Traded Trust Securities. Registered Plans trusts governed by registered retirement savings plans, registered retirement income funds, deferred profit sharing plans, registered disability savings plans, registered education savings plans and tax-free savings accounts. Reinvestment Plan the distribution reinvestment plan of each ishares Fund as described under Distribution Policy Distribution Reinvestment Plan. REIT real estate investment trust. 4

10 S&P Standard & Poor s Financial Services LLC, a division of The McGraw-Hill Companies, Inc., a limited liability company established under the laws of the State of New York. securities regulatory authority the securities commission or similar regulatory authority in each province and territory of Canada that is responsible for administering the Canadian securities legislation in force in such province or territory. SIFT Rules provisions of the Tax Act applicable to SIFT trusts and SIFT partnerships (as defined in the Tax Act). SSBT State Street Bank and Trust Company, an affiliate of SSTCC. SSTCC State Street Trust Company Canada, the custodian, registrar and transfer agent and Plan Agent of the ishares Funds. Summary Document a document in respect of each class of Units of an ishares Fund, summarizing certain features of the Units and of that ishares Fund. swap a forward-type financial derivative contract in which two counterparties agree to exchange cash flows determined with reference to prices of, for example, currencies or interest rates, according to predetermined rules. At inception, this instrument typically has zero market value, but as market prices change the swap acquires value. SW Plan the systematic withdrawal plan of each ishares Fund as described under Distribution Policy Systematic Withdrawal Plan. Tax Act the Income Tax Act (Canada) and the regulations issued thereunder. Tax Proposals all specific proposals to amend the Tax Act and the regulations thereunder that have been publicly announced by the Minister of Finance (Canada) prior to the date hereof. TER trading expense ratio. Top Fund as defined under Income Tax Considerations Taxation of the ishares Funds ishares Holding an Underlying Other Fund and Publicly-Traded Trust Securities. Trading Day for each ishares Fund, a day on which: (i) a regular session of the TSX is held; and (ii) the primary market or exchange for the majority of the securities held by the ishares Fund is open for trading. Trust Document with respect to an ishares Fund, the CMR and CSD Declaration of Trust, the FIE Trust Agreement or the CEW Declaration of Trust, as the case may be. TSX the Toronto Stock Exchange. Underlying Fund as defined under Income Tax Considerations Taxation of the ishares Funds ishares Holding an Underlying Other Fund and Publicly-Traded Trust Securities. Underwriters registered brokers and dealers that enter into Underwriting Agreements with one or more ishares Funds and that subscribe for and purchase Units from such ishares Funds. Underwriting Agreement an agreement between BlackRock Canada, on behalf of one or more ishares Funds, and an Underwriter. Unitholder in respect of an ishares Fund, a holder of one or more Units of such ishares Fund. Units in respect of an ishares Fund, the Common Units and Advisor Class Units of such ishares Fund. 5

11 Valuation Date each Trading Day or any other day designated by BlackRock Canada on which the NAV and NAV per Unit of an ishares Fund will be calculated. Valuation Time 4:00 p.m. or such other time BlackRock Canada deems appropriate on each Valuation Date. 6

12 PROSPECTUS SUMMARY The following is a summary of the principal features of the Units of the ishares Funds and should be read together with the more detailed information and statements contained elsewhere in this prospectus or incorporated by reference in this prospectus. Issuers: ishares Premium Money Market ETF ishares Canadian Financial Monthly Income ETF ishares Equal Weight Banc & Lifeco ETF ishares Advantaged Short Duration High Income ETF (CAD-Hedged) (each, an ishares Fund and collectively the ishares Funds ). The ishares Funds are exchange-traded mutual funds established as investment trusts under the laws of the Province of Ontario. Unitholders of the ishares Funds are not shareholders of a corporation. Offerings: Each ishares Fund is offering two classes of units called common units (the Common Units ) and advisor class units (the Advisor Class Units ). The Common Units and the Advisor Class Units are collectively referred to as the Units. The primary difference between Common Units and Advisor Class Units is the service fee component of the annual management fee payable by an ishares Fund in respect of the Advisor Class Units, as described under Fees and Expenses Fees and Expenses Payable by the ishares Funds Advisor Class Units Service Fee. The NAV per Unit of each class of each ishares Fund will not be the same as a result of the different fees and distributions, as applicable, allocable to each class of Units. Continuous Distribution: Units of the ishares Funds are being issued and sold on a continuous basis and there is no maximum number of Units that may be issued. The Units of each ishares Fund are listed on the TSX and are offered on a continuous basis. Each Unit of a class of an ishares Fund represents an equal beneficial interest in that class of the ishares Fund. Investors may purchase or sell Units on the TSX through a registered broker or dealer in the province or territory where the investor resides. Accordingly, investors may trade Units in the same way as other securities listed on the TSX, including by using market orders and limit orders. Investors may incur customary brokerage commissions when buying or selling Units on the TSX. The ishares Funds issue, or will issue, a Prescribed Number of Units directly to Designated Brokers and Underwriters at the NAV per Unit. See Purchases of Units. Investment Objectives: CMR s investment objective is to maximize current income to the extent consistent with the preservation of capital and liquidity by investing in high-quality, short-term (generally less than 90 days), investment grade debt securities, including treasury bills and promissory notes issued or guaranteed by Canadian governments or their agencies, bankers acceptances and commercial paper (excluding asset-backed commercial paper) issued by Canadian chartered banks, loan companies, trust companies and corporations. FIE s investment objective is to maximize total return for Unitholders, consisting of distributions and capital appreciation and to provide Unitholders with a stable stream of monthly cash distributions of $0.05 per Unit ($0.60 per annum). There can be no 7

13 assurance that FIE will achieve its stated investment objective, including making distributions at its targeted rate. Currently, FIE is paying monthly cash distributions of $0.04 per Advisor Class Unit ($0.48 per annum) and $0.04 per Common Unit ($0.48 per annum). FIE s net assets, together with borrowings under its loan facility, are invested in a diversified investment portfolio (the FIE Portfolio ) consisting primarily of common shares, preferred shares, corporate bonds and income trust units of issuers in the Canadian financial sector. CEW s investment objective is to provide Unitholders with a diversified equal weighted investment in a portfolio (the CEW Portfolio ) of common shares of the largest Canadian banks and Canadian life insurance companies. Cash distributions on the Common Units and Advisor Class Units of CEW are expected to be made monthly and will be derived from dividends received by CEW on the CEW Portfolio. Such distributions may also include capital gains and returns of capital. CEW will endeavour to provide holders of its Common Units and Advisor Class Units with monthly cash distributions targeted to be $ per Unit (approximately $0.50 per annum). Unitholders will also participate in any potential appreciation in the CEW Portfolio. There can be no assurance that CEW will achieve its stated investment objective, including making distributions at its targeted rate. Currently, CEW is paying monthly cash distributions of $0.023 per Common Unit ($0.276 per annum) and $ per Advisor Class Unit ($0.39 per annum). CSD has been created to maximize total returns for Unitholders consisting of both taxefficient monthly distributions and capital appreciation, and to preserve capital. Distributions are intended to be tax efficient when compared to units of a trust that depends solely on interest, dividend and/or other investment income to pay distributions. CSD will, to the extent possible, hedge its U.S. dollar currency exposure back to Canadian dollars. See Investment Objectives. Investment Strategies: CMR invests in high-quality, short-term (generally less than 90 days), investment grade debt securities, including treasury bills and promissory notes issued or guaranteed by Canadian governments or their agencies, bankers acceptances and commercial paper (excluding asset-backed commercial paper) issued by Canadian chartered banks, loan companies, trust companies and corporations. Investments made by CMR shall be in the top two ratings categories of any of the designated rating organizations (as defined in NI ). The FIE Portfolio is comprised primarily of common shares, preferred shares, corporate bonds and income trust units of issuers in the Canadian financial sector. Up to 25% of the assets in the FIE Portfolio may be invested in securities of other Canadian issuers. To construct the FIE Portfolio, BTC, the sub-advisor to FIE, refers to a model portfolio (the Model Portfolio ) provided by Manulife Asset Management. The Model Portfolio is provided on a quarterly basis, or more frequently if required to reflect any corporate actions affecting the constituents of the Model Portfolio. The composition of the FIE Portfolio will vary over time, generally as a result of changes to the Model Portfolio. The CEW Portfolio consists of common shares of the largest Canadian banks and Canadian life insurance companies. The passive equal weighting approach is intended to reduce the risks to investors of increasing exposure to any single investment. Constituent Issuers are selected for inclusion in the CEW Portfolio based on the following criteria: (i) the minimum market capitalization of such an issuer is $5 billion for banks and $1.5 billion for life insurance companies; and (ii) the issuer must be a Canadian bank or a Canadian life insurance company. The CEW Portfolio will be rebalanced: (i) semiannually, to adjust for changes in the market value of investments; and (ii) to reflect the 8

14 impact of a merger, acquisition or other significant corporate action or event of or affecting one or more of the Canadian banks or life insurance companies in the CEW Portfolio. CSD obtains exposure to the performance of an actively managed diversified high-yield debt portfolio (the High Income Portfolio ) consisting primarily of below investment grade debt securities as rated by Moody s, S&P and Fitch (Ba1/BB+/BB+ or below) or which are unrated but judged by BlackRock Asset Management Canada Limited ( BlackRock Canada ) or its affiliates to be of comparable quality, with an opportunistic allocation to investment grade debt securities and other select fixed-income debt obligations with a near term maturity of five years or less and/or an effective duration of less than one year as determined by BlackRock Canada or its affiliates. Such securities may include: (i) floating rate or adjustable rate debt securities; (ii) callable debt obligations with a high probability of being redeemed by the issuer prior to maturity (generally known as call risk ); (iii) asset-backed securities of U.S. issuers rated BBB or higher with adjustable interest rates and which are backed by a loan, lease or receivable against assets other than real estate and mortgage-backed securities; (iv) debt securities with a put option expiring within 24 months that provide the holder thereof the right to sell their interest in the security back to the issuer prior to the maturity date; (v) convertible debt securities that are trading well below their conversion price and whereby 90% of the value of the security is priced as regular debt given that there is very little chance that it will ever reach the convertible price before maturity (also known as busted convertibles); and (vi) U.S. and Canadian secured broadly syndicated bank loan facilities with an issue size larger than U.S.$300 million. The High Income Portfolio may also contain cash. It is expected that, under normal market conditions, the investments in the High Income Portfolio will be diversified among the following: (i) (ii) (iii) non-investment grade corporate debt securities whereby the issuer would be anticipated to announce positive fundamental results including improved corporate earnings or a positive change to its credit rating within the next 120 days; debt securities which are anticipated to be called, tendered, or mature within 180 days; and investments allocated toward debt securities for which no substantial change in the fundamental status is anticipated and which would be held to maturity. Investments in ishares ETFs or Other Funds In accordance with applicable securities legislation, including NI , an ishares Fund may invest in one or more ishares ETFs or certain other investment funds (collectively, Other Funds ), provided that: (i) no management fees or incentive fees are payable by an ishares Fund that, to a reasonable person, would duplicate a fee payable by an Other Fund for the same service, and (ii) no sales fees or redemption fees are payable by the ishares Fund in relation to its purchases or redemptions of the securities of an Other Fund; provided, however, that the restriction in (ii) does not apply to brokerage fees incurred on the purchase or sale of index participation units issued by an Other Fund. In such circumstances, the ishares Fund may charge up to an additional 0.05% of the NAV of the Units of each class of the ishares Fund if necessary to hedge any currency exposure. See Fees and Expenses Fees and Expenses Payable by the ishares Funds Management Fee. 9

15 Use of Derivative Instruments Each of the ishares Funds may invest in or use derivative instruments, provided that the use of such derivative instruments is permitted by, and in compliance with, NI and is consistent with the investment objective of the ishares Fund. Use of the Forward by CSD In order to obtain exposure to the performance of the High Income Portfolio, CSD invests a portion of its assets in a portfolio of common shares of Canadian public companies listed on the TSX that qualify as Canadian securities for the purposes of the Tax Act (the Canadian Share Portfolio ). CSD has entered into one or more forward purchase and sale agreements (collectively, the Forward ) with a Canadian chartered bank or an affiliate thereof (the Counterparty ) pursuant to which CSD has agreed to sell securities in the Canadian Share Portfolio to the Counterparty from time to time in exchange for a purchase price determined by reference to the Canadian dollar value of the performance of a fund that invests in or obtains exposure to the High Income Portfolio (the Forward Amount ). However, neither CSD nor its Unitholders by virtue of their investment in Units of CSD, will have any ownership interest in the securities of the High Income Portfolio or any other financial instrument, if any, which the Counterparty chooses to hedge its exposure under the Forward. Under the terms of the Forward, the Counterparty and CSD have agreed that their settlement obligations under the Forward with respect to the Canadian Share Portfolio securities will be discharged by physical delivery of the Canadian Share Portfolio securities by CSD to the Counterparty against cash payment or, at the election of CSD, by the making of cash payments between the parties. The amount payable by the Counterparty for physical delivery of the Canadian Share Portfolio may be more or less than the original subscription price of the Units of CSD. In connection with the Forward, the Canadian Share Portfolio securities or other acceptable securities have been pledged to and may be held by the Counterparty as security for the obligations of CSD under the Forward. CSD is entitled to pre-settle the Forward in whole or in part from time to time as needed to fund Unit redemptions, pay distributions and expenses and for such other purposes as it may determine by tendering to the Counterparty securities of the Canadian Share Portfolio or, at the election of CSD, cash. The Counterparty is entitled to terminate the Forward upon the occurrence of certain specified events of default or termination events. Tax Amendments Affecting the Forward The Tax Act contains rules enacted in 2013 (the DFA Rules ) that target certain financial arrangements that would deem gains on the settlement of certain forward agreements (described as derivative forward agreements ) to be included in ordinary income rather than treated as capital gains. The DFA Rules generally apply to forward agreements entered into on or after March 21, 2013 so that in certain circumstances (generally depending on the term and notional amount of the forward agreement) a forward agreement that existed prior to that date and that has a final settlement date that is after 2014 will be grandfathered until (and including) March 21, 2018, meaning that the DFA Rules will not apply to it, if at all, until after that date. The Forward was in effect as of March 21, 2013, is currently grandfathered and is scheduled to expire on February 24, Accordingly, the DFA Rules will not apply to CSD during the term of the Forward, provided that the Forward does not exceed certain growth limits set out in the DFA Rules (the Growth Limits ). 10

16 See Risk Factors Taxation of the ishares Funds Risk and Income Tax Considerations Taxation of the ishares Funds Tax Treatment of the Forward. Interim Investment Strategy and Change of Investment Objective In connection with the DFA Rules, CSD has implemented a hybrid strategy (the Hybrid Strategy ), through which CSD (i) continues to maintain exposure to the High Income Portfolio indirectly through the use of the Forward; and (ii) invests the proceeds from the sale of new Units of CSD in a portfolio of directly-held securities selected from the eligible universe of securities in which the High Income Portfolio is permitted to invest. Through the use of the Hybrid Strategy, Unitholders of CSD are expected to continue to benefit from the tax-advantaged (i.e., capital gain) character of that portion of CSD s distributions that are funded through the partial settlement of the Forward until its scheduled expiry on February 24, 2016 or earlier termination. By investing the proceeds from new subscriptions directly through the Hybrid Strategy, BlackRock Canada expects that these tax benefits will diminish over time as CSD accepts new subscriptions and the tax benefit is spread over CSD s larger asset base. The portion of future distributions derived from CSD s direct investments is expected to be fully taxable as ordinary income (net of allowable expenses). Given the expected change to the tax-advantaged nature of CSD s distributions over time as a result of the DFA Rules, BlackRock Canada expects that it will become necessary to change CSD s investment objective as it will no longer be possible for CSD to provide tax-advantaged returns after the expiration or earlier termination of the Forward. Accordingly, the investment objective of CSD is expected to be changed in connection with the expiration or earlier termination of the Forward to remove the reference to taxefficient distributions, and the name of CSD will be changed to better align with the new investment objective. The new investment objective is expected to read as follows: CSD has been created to maximize total returns for Unitholders consisting of both monthly distributions and capital appreciation, and to preserve capital, by investing in or obtaining economic exposure to a diversified high-yield debt portfolio consisting primarily of below investment grade debt securities. CSD will, to the extent possible, hedge its U.S. dollar currency exposure back to Canadian dollars. CSD has obtained exemptive relief from the securities regulatory authorities to effect this change of investment objective without obtaining prior approval of unitholders of CSD. See Exemptions and Approvals. Following the expiry or earlier termination of the Forward and the implementation of the new investment objective, BlackRock Canada expects that CSD will be fully invested in a portfolio of directly-held securities in accordance with its new investment objective and does not intend to enter into any forward agreements that would be subject to the DFA Rules. Currency Hedging In the event that an ishares Fund invests in an Other Fund or securities that are denominated in a different currency than the ishares Fund, the ishares Fund may enter into one or more currency forwards that seek to hedge some or all of the currency risk associated with such an investment, with financial institutions that have a designated rating as defined in NI In addition, the Forward has the effect of hedging CSD s currency exposure to U.S. dollar denominated assets held in the High Income Portfolio. 11

17 Such hedging is intended to reduce the impact on the ishares Funds of fluctuations in exchange rates and Unitholders exposure to U.S. dollar currency risk. In connection with the Hybrid Strategy, CSD will employ a currency hedging strategy that will seek to hedge its exposure to U.S. dollars resulting from exposure to U.S. dollar denominated assets held directly by CSD by entering into currency forward contracts with financial institutions that have a designated rating as defined in NI See Investment Strategies. FIE Loan Facility: FIE has entered into a loan facility (the FIE Loan Facility ) with a Canadian financial institution. FIE may borrow an amount not exceeding 15% of its NAV, which borrowing may be used by FIE to purchase additional securities for the FIE Portfolio and for working capital purposes. See Investment Strategies. Risk Factors: There are certain general risk factors inherent to an investment in the ishares Funds, including: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) general risks of investments; cease trading of Constituent Securities risk; fluctuation in NAV and NAV per Unit risk; volatility risk; Illiquid Securities risk; use of derivative instruments risk; securities lending risk; trading price of Units risk; changes in legislation and administrative practice risk; taxation of the ishares Funds risk; reliance on the manager and/or sub-advisor risk; issuer risk; and issuer concentration risk. See Risk Factors General Risks Relating to an Investment in the ishares Funds. In addition to the general risk factors applicable to all of the ishares Funds set forth above, there are certain additional specific risk factors inherent to an investment in certain ishares Funds, as indicated in the table below: CMR FIE CEW CSD Asset-Backed Securities Risk Bank Loan Risk Call Risk Changes in Dividend Policy Risk Counterparty Risk Currency Hedging Strategies Risk Exchange Rate Risk Fixed Income Risk Foreign Investment Risk 12

18 CMR FIE CEW CSD Foreign Markets Risk General Risks of Debt Instruments General Risks of Equity Investments General Risks of Preferred Equity Investments High Yield Securities Risk Income Trust Risk Interest Rate Risk Leverage Risk Medium and Smaller Issuer Risk Risk of Changes to Costs Associated with Forward Agreements Senior Loan Risk See Risk Factors Additional Risks Relating to an Investment in Certain ishares Funds. Special Considerations for Purchasers: The provisions of the early warning requirements set out in Canadian securities legislation do not apply in connection with the acquisition of Units. In addition, based upon exemptive relief granted by the securities regulatory authorities, a Unitholder may acquire more than 20% of the Units of any ishares Fund through purchases on the TSX without regard to the takeover bid requirements of Canadian securities legislation, provided that such Unitholder, as well as any person acting jointly or in concert with the Unitholder, undertakes to BlackRock Canada not to vote more than 20% of the Units of that ishares Fund. Market participants are permitted to sell Units of any ishares Fund short and at any price without regard to the restrictions in the Universal Market Integrity Rules applicable to trading on the TSX that generally prohibit selling securities short unless the price is at or above the last sale price. The Tax Act contains mark-to-market rules applicable to taxpayers that are financial institutions within the meaning of such rules. The mark-to-market rules apply to property that falls within the meaning of tracking property, as defined. The Units may be considered to be tracking property and thus mark-to-market properties for purposes of the mark-to-market rules in the Tax Act. Financial institutions that are subject to the mark-to-market rules should consult their own tax advisors about the consequences of purchasing and holding Units. See Purchases of Units Special Considerations for Unitholders. Exchanges and Redemptions: Distributions: Unitholders may redeem Units for cash, subject to a redemption discount, or may exchange the Prescribed Number of Units (or an integral multiple thereof) for Baskets of Securities and/or cash. See Redemption and Exchange of Units. Depending on the underlying investments of an ishares Fund, distributions on Units may consist of ordinary income sourced from dividends, interest income or distributions received by the ishares Fund, but may also include net realized capital gains and returns of capital, in any case, less the expenses of the ishares Fund. As a result of the higher annual management fees on the Advisor Class Units of the ishares Funds, any cash distributions on the Advisor Class Units of the ishares Funds (other than FIE and CEW) are generally expected to be less than the distributions payable on the Common Units of such ishares Funds. 13

19 It is intended that, for each taxation year of an ishares Fund, the net income and net realized capital gains of the ishares Funds will be distributed to Unitholders to such an extent that the ishares Funds will not be liable for ordinary income tax thereon. To the extent that any ishares Fund has not distributed the full amount of its net income or net realized capital gains in any taxation year, the difference between such amount and the amount actually distributed by the ishares Fund will be paid as a reinvested distribution. Reinvested distributions (if any), net of any required withholding tax, will be reinvested automatically in additional Units of the same class of the applicable ishares Fund at a price equal to the NAV per Unit of that class of Units of such ishares Fund and the Units of such ishares Fund will be immediately consolidated such that the number of outstanding Units of such ishares Fund following the distribution will equal the number of Units outstanding prior to the distribution. BlackRock Canada may determine in the future and upon notice to Unitholders of an ishares Fund that distributions shall be automatically reinvested in additional Units of the same class of such ishares Fund. If BlackRock Canada determines to implement the automatic reinvestment of distributions, Unitholders may give notice that they wish to continue to receive their distributions in cash. See Distribution Policy. Distribution Reinvestment, Pre- Authorized Cash Contribution and Systematic Withdrawal Plans: At any time, a Unitholder may elect to participate in the ishares Funds distribution reinvestment plan (the Reinvestment Plan ) by contacting the CDS Participant through which the Unitholder holds its Units. Under the Reinvestment Plan, cash distributions will be used to acquire additional Units (commission free to the Unitholder) of the same ishares Fund and class in the market and will be credited to the account of the Unitholder s broker through CDS. See Distribution Policy Distribution Reinvestment Plan below for additional information relating to the Reinvestment Plan. See Distribution Policy Pre-Authorized Cash Contribution Plan and Distribution Policy Systematic Withdrawal Plan for information regarding the pre-authorized cash contribution and systematic withdrawal plans available to Unitholders. Termination: The ishares Funds (other than CEW) do not have a fixed termination date but may, subject to applicable law, be terminated by BlackRock Canada upon not less than 60 days written notice to Unitholders. See Termination of the ishares Funds. CEW may be terminated at any time with the approval of Unitholders given by way of Extraordinary Resolution or by BlackRock Canada, if in its opinion the NAV of CEW is reduced as a result of redemptions or otherwise so that it is no longer economically feasible to continue CEW and it would be in the best interests of Unitholders to terminate CEW. BlackRock Canada will provide not less than 30 days, and not more than 60 days, notice to Unitholders prior to such termination. See Termination of the ishares Funds ishares Equal Weight Banc & Lifeco ETF. Income Tax Considerations: This summary of Canadian federal income tax considerations for the ishares Funds and for Canadian resident Unitholders is subject in its entirety to the qualifications, limitations and assumptions set out in Income Tax Considerations. A Unitholder who is an individual (other than a trust) resident in Canada and who holds Units as capital property (all within the meaning of the Tax Act) will generally be required to include in the Unitholder s income for tax purposes for any year the amount of net income and net taxable capital gains of the ishares Fund paid or payable to the Unitholder in the year and deducted by the ishares Fund in computing its income. Any returns of capital from an ishares Fund paid or payable to a Unitholder in a taxation year 14

20 will reduce the adjusted cost base of the Unitholder s Units of that ishares Fund. To the extent that a Unitholder s adjusted cost base would otherwise be a negative amount, the negative amount will be deemed to be a capital gain realized by the Unitholder and the adjusted cost base of the Unit to the Unitholder will be increased by the amount of such capital gain. Any loss of an ishares Fund cannot be allocated to, and cannot be treated as a loss of, the Unitholders of the ishares Fund. Upon the actual or deemed disposition of a Unit, including the exchange or redemption of a Unit, a capital gain (or a capital loss) will generally be realized by the Unitholder to the extent that the proceeds of disposition of the Unit exceed (or are less than) the aggregate of the adjusted cost base to the Unitholder of the Unit and any reasonable costs of disposition. The Trust Document governing each ishares Fund requires that the applicable ishares Fund distribute its net income and net realized capital gains, if any, for each taxation year to Unitholders to such an extent that the ishares Fund will not be liable in any taxation year for ordinary income tax. In the opinion of counsel, provided that an ishares Fund qualifies as a mutual fund trust within the meaning of the Tax Act, or the Units of the ishares Fund are listed on a designated stock exchange within the meaning of the Tax Act (which currently includes the TSX), such Units will be qualified investments for trusts governed by registered retirement savings plans, registered retirement income funds, deferred profit sharing plans, registered disability savings plans, registered education savings plans and tax-free savings accounts (collectively, Registered Plans ). Holders of tax-free savings accounts and annuitants of registered retirement savings plans and registered retirement income funds should consult their own tax advisors to ensure Units would not be a prohibited investment for the purposes of the Tax Act in their particular circumstances. See Income Tax Considerations Status of the ishares Funds. Each investor should satisfy himself or herself as to the tax consequences of an investment in Units by obtaining advice from his or her own tax advisor. See Income Tax Considerations. Organization and Management Details of the ishares Funds Trustee, Manager and Portfolio Advisor: BlackRock Canada, a registered portfolio manager, exempt market dealer and investment fund manager, is the trustee, manager and portfolio advisor of the ishares Funds and is responsible for the administration of the ishares Funds. BlackRock Canada is an indirect, wholly-owned subsidiary of BlackRock, Inc. ( BlackRock ). The principal office of BlackRock Canada is located at 161 Bay Street, Suite 2500, Toronto, Ontario, M5J 2S1. See Organization and Management Details of the ishares Funds Trustee, Manager and Portfolio Adviser. Sub-Advisors: Custodian: BlackRock Canada has appointed BlackRock Institutional Trust Company, N.A. ( BTC ), a national banking association organized under the laws of the United States of America, as the sub-advisor of the ishares Funds. BTC also acts as a sub-advisor in respect of the High Income Portfolio. BlackRock Canada may also appoint other affiliates to provide portfolio management or investment sub-advisory services to the ishares Funds. See Organization and Management Details of the ishares Funds BlackRock Institutional Trust Company, N.A. State Street Trust Company Canada ( SSTCC ) is the custodian of the ishares Funds pursuant to a service module (the Custody Agreement ) between BlackRock Canada, 15