iShares 3-7 Year Treasury Bond ETF (IEI US) – Portfolio Construction MethodologyThe underlying ICE US Treasury 3-7 Year Bond Index targets USD-denominated, fixed-rate, nominal U.S. Treasury notes and bonds with remaining maturities ≥3 and <7 years. Eligible issues must have at least USD 300m par outstanding after deducting Federal Reserve SOMA holdings; TIPS, STRIPS, floaters and agency/Treasury-related instruments are excluded. Constituents enter when their remaining term ages into the 3–7 year window and ...

iShares Aaa – A Rated Corporate Bond ETF (QLTA US) – Portfolio Construction MethodologyThe underlying Bloomberg US Corporate Aaa – A Capped Index targets USD-denominated, fixed-rate investment-grade corporate bonds (industrial, utility, financial) issued by U.S. and non-U.S. issuers, requiring minimum par outstanding of USD 500m and an index rating of A- or higher (middle of Moody’s/S&P/Fitch; lower of two if only two; single if one). Eligible securities are SEC-registered, 144A with registration rights, or ...

1. Report Industry Investment Rating No information provided regarding the industry investment rating in the report. 2. Core Viewpoints of the Report - Pacer broadened its cash - flow product line by issuing S&P 500 cash - flow quality + dividend and cash - flow quality + R & D expenditure ETFs, compounding cash - flow factors with other factors [2][8]. - In the past week, commodity ETFs in the US had significant inflows, and oil and gas service ETFs had risen by over 10% this year [2][11][17]. - In the week from December 30 to January 7, US domestic stock funds saw an outflow of $26.4 billion, international stock products had an outflow of over $10 billion, while bond products had an inflow of over $10 billion [2][20]. 3. Summary by Directory 3.1 Innovation Product: Pacer US ETF Widens Cash - Flow Quality Strategy - Last week, there were 24 new products launched in the US, with more than half being single - stock leveraged ETFs. There were 15 single - stock 2x leveraged products issued, involving 4 managers and multiple key fields, and one 2x leveraged product linked to the Founder - Led index [7]. - Nomura launched 2 products in the US last week, one for disruptive technology and the other mainly investing in US tax - free municipal bonds [8]. - Pacer issued S&P 500 cash - flow quality + dividend and cash - flow quality + R & D expenditure ETFs. The cash - flow quality factor is calculated based on cash - flow/revenue and cash - flow/invested capital. The cash - flow quality + dividend product selects stocks according to cash - flow quality factor and dividend yield, and the cash - flow quality + R & D expenditure ETF selects stocks according to cash - flow quality factor and R & D expenditure ratio, with the final index's R & D expenditure ratio reaching 24% [8][9]. - Roundhill launched an active ETF for the autonomous taxi and self - driving field, Harbor launched a small - cap growth active ETF, and PIMCO launched a stock - bond hybrid strategy product aiming to outperform the S&P 500 [10]. 3.2 US ETF Dynamics 3.2.1 US ETF Funds: Commodity ETFs Have Significant Inflows - In the past week, the inflows of US international stock ETFs were similar to those of US domestic stock products, with a total of over $30 billion. Bond ETFs continued to have an inflow of over $10 billion, and commodity ETFs had an inflow of over $4 billion. State Street's multiple products were among the top in terms of inflows, with gold ETFs having an inflow of over $3 billion. iShares' two emerging - market products had significant inflows, but its US stock products had more outflows [2][11][13]. - Among the products, Vanguard's S&P 500 ETF had the highest inflow, and the US total - market stock ETF also had obvious inflows, while many other stock products showed outflows in the two - week total [15]. 3.2.2 US ETF Performance: Oil and Gas Service ETFs Have Risen by Over 10% This Year - In a complex geopolitical environment, apart from the continuous rise of precious metals, the oil and gas service sector had significant gains, rising by over 10% in the first half - month of this year, while traditional energy ETFs like State Street's largest energy sector ETF had a gain of about 6.5% [17]. 3.3 Recent Capital Flows of US Ordinary Public Offering Funds - In November 2025, the total amount of US non - money public offering funds was $23.72 trillion, an increase of $0.03 trillion compared to October 2025. In November, the S&P 500 rose by 0.13%, and the scale of US domestic stock products decreased by 0.15%, with the redemption pressure easing [18]. - In the week from December 30 to January 7, US domestic stock funds' outflow expanded to $26.4 billion, international stock products had an outflow of over $10 billion, while bond products had an inflow of over $10 billion [20].

iShares Global Consumer Discretionary ETF (RXI US) – Portfolio Construction MethodologyThe underlying S&P Global 1200 Consumer Discretionary (Sector) Capped Index delivers float-adjusted, market-cap-weighted exposure to consumer discretionary constituents of the S&P Global 1200 across developed and emerging markets as classified by GICS. Eligibility, investability, and ongoing maintenance follow the parent index’s large-cap selection process and committee oversight. To control concentration, the sector inde ...

iShares TIPS Bond ETF (TIP US) – Portfolio Construction MethodologyThe underlying Bloomberg US Treasury Inflation-Linked Bond Index (Series-L) offers market-value-weighted exposure to the full U.S. TIPS market. Eligible bonds are USD-denominated U.S. Treasury inflation-protected securities with at least 1 year remaining to maturity and a minimum amount outstanding of USD 500m; STRIPS and non-coupon instruments are excluded. Face amounts are inflation-adjusted; index weights reflect outstanding par times inf ...

iShares 20 Year Treasury Bond ETF (TLT US) – Portfolio Construction MethodologyThe underlying ICE US Treasury 20 Year Bond Index delivers market-value-weighted exposure to USD-denominated, fixed-rate nominal U.S. Treasury securities with remaining maturity ≥20 years. Eligible issues must have ≥USD 300m outstanding after deducting Federal Reserve SOMA holdings; TIPS, STRIPS and floaters are excluded. Constituents are weighted by amount outstanding; new auctions/re-openings are reflected at the scheduled mont ...

iShares MSCI Turkey ETF (TUR US) – Portfolio Construction MethodologyThe underlying MSCI Turkey IMI 25/50 Index offers free float-adjusted, market-cap exposure to large, mid and small Turkish equities meeting MSCI Global Investable Market Indexes rules. Eligibility requires minimum free-float and liquidity; additions must meet size cutoffs tied to the relevant Market Size-Segment Interim Cutoff (typically ≥50% of the global minimum size range for the segment, with higher thresholds when free float is <15%). ...

Core Viewpoint - iShares Currency Hedged MSCI EAFE Small-Cap ETF (HSCZ) offers targeted exposure to developed small-cap equities outside the U.S. while mitigating currency fluctuation impacts against the U.S. dollar [1] Group 1: Investment Proposition - The fund aims to replicate a diversified small-cap universe and employs a forward-hedging strategy to ensure equity fundamentals dominate returns rather than foreign exchange translation [1] - The investment opportunity focuses on domestically oriented businesses that are more sensitive to local demand, policy changes, and regional supply chains, leading to greater dispersion compared to large-cap equities [1] - Hedging can reduce volatility from currency fluctuations but may introduce implementation costs and basis risk related to interest-rate differentials [1] Group 2: Use Cases and Suitable Investors - HSCZ can serve as a size tilt within international allocations, act as a satellite for factor completion when portfolios are underweight in small caps, and provide a tactical overlay when concerns about a stronger dollar arise [1] - Suitable investors include those seeking clearer attribution to local equity drivers and outcome-oriented strategies that prioritize returns in home currency [1] Group 3: Market Conditions and Risks - Supportive market conditions for HSCZ often include periods of dollar strength or phases when domestic catalysts drive small-cap earnings, while it may be less advantageous during foreign currency appreciation [1] - Key fund-specific risks involve hedge implementation and roll costs, which can increase tracking differences, along with the higher volatility and liquidity risks typically associated with small-cap equities [1]

iShares Morningstar Small-Cap ETF (ISCB US) – Investment PropositioniShares Morningstar Small-Cap ETF (ISCB) delivers broad, rules-based exposure to U.S. small-capitalization companies intended to capture the size premium within a diversified core approach. The methodology emphasizes a representative slice of the investable small-cap universe and seeks to limit single-name and sector concentration, with turnover primarily arising from scheduled reconstitutions and corporate actions. The return profile leans ...

Core Viewpoint - iShares 1-3 Year International Treasury Bond ETF (ISHG) offers targeted access to short-maturity sovereign debt from developed markets outside the U.S., aiming for conservative rate exposure and diversification across various policy regimes and yield curves [1] Group 1: Investment Strategy - The strategy focuses on the front end of non-U.S. government bond markets, emphasizing liquidity, broad country representation, and low credit risk typical of high-quality sovereign issuers [1] - Short duration reduces price sensitivity to interest-rate changes, while cross-country exposure helps mitigate idiosyncratic outcomes as monetary cycles diverge [1] Group 2: Income and Return Potential - Income is derived from prevailing front-end yields, with return potential primarily influenced by international policy paths and term-structure movements [1] Group 3: Portfolio Role - ISHG can function as a defensive satellite, a diversification sleeve to complement U.S. short Treasuries, or a flexible parking place for cash with limited equity correlation [1] - It is particularly suitable for multi-asset allocators seeking global rate diversification and liability-aware investors who prioritize stability over yield chasing [1] Group 4: Market Conditions - The ETF is generally favored during periods of slowing growth or increased dispersion in policy paths, but may face challenges if foreign front-end yields rise sharply [1] - Monitoring tracking consistency and capacity is essential as assets scale relative to the underlying market depth [1]