BlackRock Canada Announces Changes to Forward-Using iShares(R) ETFs

Announcement relating to the following iShares Funds:                       
                                                                            
iShares Advantaged U.S. High Yield Bond Index Fund (CAD-Hedged) ("CHB")     
iShares Advantaged Short Duration High Income Fund ("CSD")                  
iShares Advantaged Canadian Bond Index Fund ("CAB")                         
iShares Broad Commodity Index Fund (CAD-Hedged) ("CBR")                     
iShares Advantaged Convertible Bond Index Fund ("CVD")                      
iShares Global Monthly Advantaged Dividend Index Fund ("CYH")               
iShares Managed Futures Index Fund ("CMF")                                  
                                                                            
(collectively, the "Forward-using iShares ETFs")                            



BlackRock Asset Management Canada Limited ("BlackRock Canada"), an indirect,
wholly-owned subsidiary of BlackRock, Inc. ("BlackRock"), announced changes
today to seven forward-using Canadian iShares exchange-traded funds ("ETFs") in
response to proposed new federal taxation rules first introduced in conjunction
with the 2013 Federal Budget (the "Proposed Amendments"). 


If enacted as proposed, the Proposed Amendments, which were initially outlined
on March 21, 2013 (the "Budget Date") by the Department of Finance (Canada) and
subsequently released in the form of draft legislation on September 13, 2013,
would eliminate the ability of investment funds to use forward agreements to
convert fully-taxable ordinary income to capital gains ("character conversion
transactions"). The Proposed Amendments generally apply to forward agreements
entered into on or after the Budget Date, so that in certain circumstances
(generally depending on the term and notional amount of the forward agreement),
forward agreements that existed prior to the Budget Date, or replacements of
such agreements that have a final settlement date that is before 2015, will be
"grandfathered", meaning that the Proposed Amendments will not apply to them.
The forward agreements (the "Legacy Forwards") of the Forward-using iShares ETFs
that were in effect as of the Budget Date or, in the case of CYH, that replaced
a forward agreement then in effect, are currently grandfathered. Accordingly,
the new rules under the Proposed Amendments would not apply to the Forward-using
iShares ETFs during the term of the Legacy Forwards, provided that the Legacy
Forwards do not exceed certain prescribed growth limits. 


As previously announced, as a result of the initial announcement, each of the
Forward-using iShares ETFs has temporarily stopped accepting subscriptions,
except in certain limited circumstances. The changes announced today, which we
believe are in the best interests of the funds, will enable the Forward-using
iShares ETFs (unless otherwise noted below) to resume operating as open-ended
ETFs by accepting new subscriptions following their implementation while
respecting the growth limits for forward agreements set out in the Proposed
Amendments. 


"BlackRock has reviewed its affected iShares product range over the past several
months to ensure we deliver products that will continue to meet the needs of our
clients and play a role in today's investment portfolios," says Mary Anne Wiley,
Managing Director, Head of iShares, BlackRock Canada. "Decisions about our mix
of products are based on a variety of factors including fit within an investment
portfolio, operational structure and complexities and client demand." 


The seven Forward-using iShares ETFs represent approximately 3% of assets under
management out of iShares Canada's line-up of 90-plus ETFs. Overall, changes
will be made to six of the seven Forward-using iShares ETFs: CHB, CSD, CAB, CBR,
CVD and CYH, while CMF, the seventh affected fund, will be terminated. With
respect to CHB and CSD, BlackRock Canada will change each fund's investment
strategy to pursue a new interim hybrid investment strategy as further described
below. For CBR, CAB and CVD, their respective Legacy Forwards will be terminated
and each fund will change its investment strategy to transition to investing in
a portfolio of directly-held securities. CYH's Legacy Forward expires in
November 2013, in connection with which BlackRock Canada expects to change its
investment strategy to invest in a portfolio of directly-held securities and to
change the fund's index.


All changes described below are subject to receipt of any required regulatory or
other approvals. 


Summary of Proposed Changes

The Hybrid Investment Strategy

Each of CHB and CSD will implement a new interim investment strategy (the
"Hybrid Strategy"), through which the funds will preserve their Legacy Forwards
until their termination date, while permitting the funds to invest proceeds from
the sale of new units in a portfolio of directly-held securities, in accordance
with each fund's investment objective.


With the implementation of the Hybrid Strategy, unitholders will continue to
benefit from the tax-advantaged (i.e., capital gain) character of that portion
of each fund's distributions that are funded through the partial settlement of
its Legacy Forward until it is terminated. Upon investing the proceeds from new
subscriptions directly through the Hybrid Strategy, BlackRock Canada expects
that these tax benefits will diminish over time as each fund accepts new
subscriptions and the tax benefit is spread over the fund`s larger asset base.
The portion of future distributions derived from each fund's direct investments
is expected to be fully taxable as ordinary income (net of allowable expenses). 


Following the expiry or earlier termination of each of CHB and CSD's Legacy
Forward, BlackRock Canada expects that each fund will invest in a portfolio of
directly-held securities in accordance with its investment objective and neither
fund will engage in any further character conversion transactions.


iShares Advantaged U.S. High Yield Bond Index Fund (CAD-Hedged)

CHB will preserve its Legacy Forward until its scheduled expiry on January 9,
2015 or earlier termination and, until that time, will implement the Hybrid
Strategy described above. 


BlackRock Canada expects that CHB will be re-opened to new subscriptions during
the fourth quarter of 2013 and will begin implementing the Hybrid Strategy at
that time.


iShares Advantaged Short Duration High Income Fund 

CSD will preserve its Legacy Forward in relation to the Canadian
dollar-denominated classes of units (CSD and CSD.A) until its scheduled expiry
on February 24, 2016 or earlier termination and, until that time, will implement
the Hybrid Strategy described above. 


In connection with implementing the Hybrid Strategy, the U.S. dollar-denominated
common units of CSD ("CSD.U") and the U.S. dollar-denominated advisor class
units of CSD ("CSD.V" and together with CSD.U, the "USD Units") will be
terminated during the fourth quarter of 2013 and the proceeds received from the
liquidation of the assets referable to each class of the USD Units, less all
liabilities and obligations referable to each class, will be distributed to
holders of the respective classes of the USD Units on or after the date of such
termination. In addition, the USD Units will be de-listed from the Toronto Stock
Exchange (the "TSX") and will no longer be offered and sold by CSD. The Legacy
Forward (the "USD Forward") entered into by CSD and a Canadian chartered bank or
an affiliate thereof in relation to the USD Units will also be terminated. 


The termination of the USD Units will enable CSD to implement the Hybrid
Strategy without the operational complexity of operating CSD with four classes
of units denominated in two different currencies. Unitholders of CSD.U or CSD.V
will be able to continue to access a short duration high yield strategy by
purchasing units of CSD or CSD.A on the TSX. 


The termination will involve a taxable disposition of USD Units by holders of
such units. For unitholders who hold their USD Units as capital property, the
disposition will generally result in a capital gain (or capital loss). The tax
consequences to CSD and its unitholders of the settlement of the USD Forward is
expected to be as described, with respect to CSD's forward agreements generally,
in the current prospectus of CSD. 


BlackRock Canada expects that CSD will be re-opened to new subscriptions during
the fourth quarter of 2013 and will begin implementing the Hybrid Strategy at
that time.


iShares Advantaged Canadian Bond Index Fund 

iShares Broad Commodity Index Fund (CAD-Hedged) 

iShares Advantaged Convertible Bond Index Fund 

CAB, CBR and CVD expect to terminate their Legacy Forwards during the fourth
quarter of 2013, in each case prior to their scheduled expiration dates.
BlackRock Canada has decided to proceed with the early termination of these
Legacy Forwards because it expects that going forward the economic value of the
tax benefit of maintaining the Legacy Forward is minimal and, in some cases,
non-existent once netted against the associated costs incurred by the fund (and,
by extension, its unitholders) in maintaining such forwards. At this time,
BlackRock Canada believes that the investment exposure provided by each of these
funds continues to have merit and relevance to Canadian investors and, as such,
the funds will be continued as long-only funds with portfolios of directly-held
securities and will continue to be benchmarked to their current indices.


Unitholders of CAB, CBR and CVD are expected to continue to benefit from the
tax-advantaged character of such funds' distributions that are funded through
the termination and settlement of their Legacy Forwards. Following termination
of the Legacy Forwards, distributions to unitholders will no longer have the
tax-advantaged character derived through the use of their respective Legacy
Forwards. 


In connection with the termination of its Legacy Forward, each Forward-using
iShares ETF will change its investment strategy such that it will invest
directly in and hold the constituent securities of the applicable index in
substantially the same proportion as they are reflected in the applicable index
or invest directly in a manner that causes the Forward-using iShares ETF to
replicate the performance of its current index. The current index for each
Forward-using iShares ETF is set out in its prospectus.


iShares Global Monthly Advantaged Dividend Index Fund 

CYH's Legacy Forward will expire on November 5, 2013. Unitholders of CYH are
expected to continue to benefit from the tax-advantaged character of its
distributions that are funded through the final settlement of its Legacy
Forward. 


In connection with the expiry or earlier termination of its Legacy Forward, CYH
will change its investment strategy such that it will invest directly in and
hold the constituent securities of the applicable index in substantially the
same proportion as they are reflected in the applicable index or invest directly
in a manner that causes CYH to replicate the performance of the applicable
index. 


In addition, in connection with the expiry or earlier termination of the Legacy
Forward, BlackRock Canada expects to change CYH's index from the Zacks Global
Multi-Asset Income Index (the "Current Index") to the Dow Jones Global Select
Dividend Composite Index Canadian Dollar Hedged (the "New Index"). Both the
Current Index and the New Index seek to provide exposure to a diversified
representation of high-yielding global securities in similar industries and
geographies and have a high degree of correlation historically. 


iShares Managed Futures Index Fund 

Managed Futures are a complex asset class that many investors perceive as risky.
BlackRock Canada believes in providing products that will help investors build
robust portfolios and achieve their investment goals. As such, BlackRock Canada
has decided to terminate CMF and expects that this termination will occur in
December 2013. The proceeds received from the liquidation of CMF's assets, less
all liabilities and obligations of CMF will be distributed to unitholders on or
shortly after the termination date. 


"As part of our review process, we have decided to close the iShares Managed
Futures Index Fund (CMF) as we have seen little long-term demand," said Wiley.
"While ETF closures are infrequent, they are part of the natural cycle of
innovation of an industry that continues to be embraced by investors."


The units of CMF will be delisted from the TSX in connection with the
termination. Following the termination and distribution described above, CMF
will be dissolved.


Tax Treatment of the Legacy Forwards

Certain considerations pertaining to the tax treatment of each of the
Forward-using iShares ETFs and its forward agreement(s) are set out in the
fund's prospectus. The early termination of a Legacy Forward, as described above
in respect of certain Forward-using iShares ETFs, will have the effect of
accelerating certain tax consequences described in the prospectus of each
Forward-using iShares ETF. Unitholders should consult their own tax advisors
about the consequences in their particular circumstances of the changes set out
in this announcement.


About BlackRock

BlackRock is a leader in investment management, risk management and advisory
services for institutional and retail clients worldwide. At June 30, 2013,
BlackRock's AUM was US$3.857 trillion. BlackRock helps clients meet their goals
and overcome challenges with a range of products that include separate accounts,
mutual funds, iShares(R) (exchange-traded funds), and other pooled investment
vehicles. BlackRock also offers risk management, advisory and enterprise
investment system services to a broad base of institutional investors through
BlackRock Solutions(R). Headquartered in New York City, as of June 30, 2013, the
firm has approximately 10,700 employees in 30 countries and a major presence in
key global markets, including North and South America, Europe, Asia, Australia
and the Middle East and Africa. For additional information, please visit the
Company's website at www.blackrock.com.


About iShares ETFs

iShares is the global product leader in exchange traded funds with over 600
funds globally across equities, fixed income and commodities, which trade on 20
exchanges worldwide. The iShares Funds are bought and sold like common stocks on
securities exchanges. The iShares Funds are attractive to many individual and
institutional investors and financial intermediaries because of their relative
low cost, tax efficiency and trading flexibility. Investors can purchase and
sell shares through any brokerage firm, financial advisor, or online broker, and
hold the funds in any type of brokerage account. The iShares customer base
consists of the institutional segment of pension plans and fund managers, as
well as the retail segment of financial advisors and high net worth individuals.


iShares(R) Funds are managed by BlackRock Asset Management Canada Limited.
Commissions, management fees and expenses all may be associated with investing
in iShares Funds. Please read the relevant prospectus before investing. The ETFs
are not guaranteed, their values change frequently and past performance may not
be repeated. Tax, investment and all other decisions should be made, as
appropriate, only with guidance from a qualified professional. 


(C) 2013 BlackRock Asset Management Canada Limited. All rights reserved.
iSHARES(R) and BLACKROCK(R) are registered trademarks of BlackRock, Inc., or its
subsidiaries in the United States and elsewhere. Used with permission. 



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