iShares ESG Advanced Total USD Bond Market ETF (EUSB US) - Portfolio Construction Methodology

Core Insights - The iShares ESG Advanced Total USD Bond Market ETF (EUSB US) is designed to provide broad USD taxable exposure across various bond types while excluding the energy sector [1] Group 1: Portfolio Construction - The underlying index is the Bloomberg MSCI US Universal Choice ESG Screened Index, which includes Treasuries, government-related, securitized, and corporate bonds [1] - Constituents are selected from the Bloomberg US Universal universe with a minimum maturity of one year and specific liquidity thresholds for different bond types [1] - ESG eligibility criteria include an MSCI ESG Rating of at least BBB and a Controversy Score of 3 or higher, along with exclusions for certain industries such as adult entertainment, alcohol, civilian firearms, and fossil fuels [1] Group 2: Market Value and Rebalancing - The index is market-value weighted and rebalanced on a monthly basis to match pre-screen sector exposures [1] - Key liquidity thresholds include Treasuries/government-related/corporates at a minimum of USD 300 million, high yield at USD 150 million, MBS pool aggregates at USD 1 billion, and ABS and CMBS deals at USD 500 million with tranches of at least USD 25 million [1]