The Fund seeks to achieve its objective by tracking the performance
of the MSCI World ex Australia Quality Sector Capped Select Index
(referred to in this section 25 of the PDS as the Index).

The Fund aims to provide investors with the performance of an
index, before fees and expenses.

Benefits of iShares

iShares ETFs are managed funds listed or quoted on exchanges (including ASX) providing you with the opportunity to gain exposure to a diversified portfolio of assets in a single transaction.

The significant benefits of investing in the Funds include:

• low cost access to diversified portfolios of international shares;

• access to market capitalisation weighted, minimum volatility and multiple-factor exposures; and

• currency hedged options, to seek to minimise the impact of Australian dollar volatility on investor returns.

Other benefits of investing in iShares ETFs generally include:

• Diversification: In contrast to a direct investment in a single company or bond, an iShares ETF provides, as far as possible and practicable, exposure to all of the securities or instruments within the index that the particular iShares ETF seeks to track.

• Access global markets: iShares ETFs let you achieve international diversification by investing in overseas equity and bond markets. With iShares ETFs you can gain exposure by asset class, market capitalisation, country and sector.

• Liquidity and transparency: Each iShares ETF seeks investment results that correspond generally to the performance (before fees and expenses) of a particular index. As a traded security, an iShares ETF enables you to enter and exit your holding on the ASX. You can easily track performance and trade during ASX trading hours (subject to ASX rules).

• Managing risk: Investing in an iShares ETF can assist you in establishing a portfolio appropriate to your investment needs and risk profile.

• Lower cost: As each iShares ETF is passively managed and designed to track the performance of a particular index, the expenses of managing an iShares ETF are generally lower compared to other forms of retail managed funds. However, brokerage or adviser fees may still apply when buying or selling units of an iShares ETF.

• Receipt of income: You will generally receive income from your investment in the form of distributions. Distributions may include dividends, coupons and other income. There may be years in which no distributions are made.

• Accessibility: iShares ETFs can 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.

The Index aims to reflect the performance characteristics of a subset of
large and mid-cap securities within the MSCI World ex Australia Index
(“Parent Index”) which are selected for their relatively high-quality
characteristics when compared to peers. To construct the Index, the
quality score of each security in the Parent Index is calculated based on
three fundamental variables:
► Return on equity: to identify profitable companies.
► Earnings variability: to determine stocks with earnings
stability.
► Debt to Equity: to find stocks with low leverage.
Securities are then ranked based on their quality score with Index
weights calculated based on the Quality Weight: Quality Score * Market
Capitalization Weight in the Parent Index.
To ensure diversification and mitigate concentration risk in the Index,
as at each rebalance date, the maximum issuer weight is capped at 5%
and sector weights are capped at +/- 5% of the sector weight of the
Parent Index.
Construction of the Index is done using a fixed number of securities with
the aim of ensuring a high exposure to the quality factor is attained
while maintaining sufficient index market capitalization and number of
securities coverage.
The Index rebalances semi‐annually in May and November. Refer to the
section of this PDS titled “Additional information about the Index” for
further information.

The Fund will generally be exposed to the international developed
market stocks that form the Index and to depositary receipts
representing securities of the Index.
The Fund may have limited exposure to securities that are not
constituents of the Index, including derivatives, where such securities
provide similar performance (with matching risk profile) to Index
securities. However, from time to time the Fund may be exposed to all
constituents of the Index.
Generally, the Fund may also be exposed to a small allocation of cash
(or cash equivalents, that may include other BlackRock Group funds) for
cash flow management purposes. The Fund will also invest in forward
foreign exchange contracts for currency hedging purposes.