UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT

OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-22649

iShares U.S. ETF Trust

(Exact name of registrant as specified in charter)

c/o: State Street Bank and Trust Company

100 Summer Street, 4^th Floor, Boston, MA 02110

(Address of principal executive offices) (Zip code)

The Corporation Trust Company

1209 Orange Street, Wilmington, DE 19801

(Name and address of agent for service)

Registrant’s telephone number, including area code: (415) 670-2000

Date of fiscal year end: July 31, 2020

Date of reporting period: July 31, 2020

		JULY 31, 2020

iShares U.S. ETF Trust

Table of Contents

Market Overview

iShares U.S. ETF Trust

Domestic Market Overview

The coronavirus pandemic and the resulting economic disruptions led to high volatility in the 12 months ended July 31, 2020 (“reporting period”), as investors tried to assess the economic impact. A steep decline in stocks, beginning in late February 2020, was followed by a steady recovery, leading to a return of 10.93% for the Russell 3000^® Index, a broad measure of U.S. equity market performance. Large capitalization stocks performed particularly well, with the S&P 500^® Index returning 11.96% for the reporting period.

The first half of the reporting period was characterized by a steadily improving economy and a strong job market. The U.S. set a record for the most consecutive months of both economic growth and job growth, as the unemployment rate declined to its lowest level in 50 years. Equity markets were further buoyed by a tentative trade agreement between the U.S. and China in December 2019.

However, the economic expansion was abruptly interrupted in February 2020, as the coronavirus began to spread globally, and the U.S. economy declined into a deep recession. As the U.S. and other countries began to limit travel and economic activity, in an attempt to reduce the transmission of the coronavirus, equity markets sank, and stocks in the U.S. posted their steepest declines since the 2008 financial crisis.

Following the issuance of stay-at-home orders and other restrictions on public gatherings and nonessential work, whole portions of the U.S. economy shut down. Businesses associated with travel and leisure were particularly affected, as air traffic declined, and conferences and events were postponed. Unemployment increased dramatically as record jobless claims brought the unemployment rate up to 14.7% in April 2020, the highest rate since the Great Depression.

In response to the crisis, the federal government enacted several rounds of stimulus spending, including the U.S. $1.8 trillion CARES Act. The stimulus was designed to stabilize affected industries, make loans to small businesses, and provide direct cash payments to individuals. In April 2020, an additional U.S. $484 billion in aid for small businesses and hospitals was added, and in July 2020 congress began negotiating another round of stimulus as the impact of the coronavirus continued to disrupt the economy.

The U.S. Federal Reserve Bank (“Fed”), which had already lowered interest rates three times in 2019 to boost a slowing economy, also responded to the crisis with unprecedented monetary policy measures. In March 2020, the Fed enacted two emergency interest rate reductions to restore confidence in markets, bringing short-term interest rates down to a range of 0.00% – 0.25%. The Fed further acted to stabilize credit markets by purchasing U.S. Treasuries, corporate and municipal bonds, and securities backed by mortgages and auto loans.

The combination of support from government stimulus, Fed intervention, and optimism surrounding development of a coronavirus vaccine led to a significant recovery in stock prices beginning in late March 2020. Despite a substantial economic contraction of 9.5% in the second quarter of 2020, a record setting quarterly decline, investors were encouraged by signs of improving economic conditions in May and June 2020 as unemployment declined and consumer spending increased. While corporate earnings were significantly down overall in the second quarter of 2020, investors anticipated that further economic progress and new developments in treating the virus would lead to higher future earnings growth. By the end of the reporting period, many stock prices were near their pre-coronavirus highs.

Investment Objective

The iShares Evolved U.S. Consumer Staples ETF (the “Fund”) seeks to provide access to U.S. companies with consumer staples exposure, as classified using a proprietary classification system. The Fund is an actively managed exchange-traded fund that does not seek to replicate the performance of a specified index.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 3/21/18. The first day of secondary market trading was 3/23/18.

The S&P Total Market Index^TM is an unmanaged index designed to track the broad equity market, including large-, mid-, small-, and micro-cap stocks.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 19 for more information.

Expense Example

Portfolio Management Commentary

U.S. consumer staples stocks advanced during the reporting period, as companies benefited from continued demand and low exposure to international supply chains that were disrupted during the coronavirus pandemic. Consumers shifted away from in-person restaurant visits and toward eating at home in response to the coronavirus, strengthening some consumer staples companies while weakening others. Lower interest rates also increased the appeal of consumer staples stocks, which often pay substantial dividends.

Demand rose for some consumer staples used in the home during the pandemic. Food companies, which includes General Mills and other makers of consumer food products, contributed substantially to the Fund’s return. Demand for packaged foods like Cheerios increased considerably during the coronavirus pandemic, as consumers built reserves in anticipation of further disruptions. Makers of household products, such as Procter & Gamble, also benefited from changing purchasing patterns during the pandemic. Coronavirus-related concerns drove demand for household cleaning supplies, including Mr. Clean, as consumers became more conscious about keeping surfaces disinfected. However, the shift of work from offices to homes also transferred demand for commercial bathroom tissue to consumer bathroom tissue brands, such as Charmin. Beverage and soft drink company stocks, including PepsiCo and Monster Beverage, advanced during the reporting period. Drink makers created new outlets for direct online sales, even as the closing of restaurants reduced beverage revenue.

On the downside, restaurants detracted from the Fund’s return. Many restaurant stocks, such as Starbucks, declined significantly due to coronavirus-related restrictions. Earnings decreased considerably amid substantially lower same-store sales, as numerous restaurant locations closed temporarily or limited operations to drive-through and takeout.

The Fund’s evolved investment process looks beyond the traditional sector definitions by applying machine learning and natural language processing to group individual companies with related business activity. During the reporting period, the evolved process identified several consumer staples companies with similar businesses that have traditionally been categorized in other sectors. For instance, the Fund held positions in Chipotle Mexican Grill, Yum China Holdings, and Wingstop, which are generally classified as companies in the consumer discretionary sector. These particular stocks contributed to performance, partly due to effective takeout offerings, despite the overall decline in restaurant visits during the pandemic.

Portfolio Information

Investment Objective

The iShares Evolved U.S. Discretionary Spending ETF (the “Fund”) seeks to provide access to U.S. companies with discretionary spending exposure, as classified using a proprietary classification system. The Fund is an actively managed exchange-traded fund that does not seek to replicate the performance of a specified index.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 3/21/18. The first day of secondary market trading was 3/23/18.

The S&P Total Market Index^TM is an unmanaged index designed to track the broad equity market, including large-, mid-, small-, and micro-cap stocks.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 19 for more information.

Expense Example

Portfolio Management Commentary

Stocks related to U.S. discretionary spending advanced strongly for the reporting period, as coronavirus-related restrictions reinforced the shift toward online buying across industries. However, the mix of goods consumers purchased online changed considerably due to the recession and the pandemic.

E-commerce retailers, such as Amazon.com, advanced significantly during the reporting period. The temporary closure of many brick-and-mortar retailers and shortages of some goods accelerated the preexisting shift toward e-commerce, with consumers increasingly buying essential goods online. The Amazon Marketplace, which allows other companies and individuals to sell goods on Amazon.com for a fee, was a driver of growth, as small businesses tapped into e-commerce during the pandemic. Amazon’s large customer base and wide selection of products made it the default choice for many new online buyers of items like bathroom tissue, but traditional retailers with a strong e-commerce platform, such as Target Corporation, also increased their online sales.

The shift toward increased use of technology as more people stayed at home benefited consumer technology companies as well, most notably Apple. Demand for wearable technology like the Apple Watch, which has many health applications, continued to expand. Apple’s revenue from services, such as the App Store and Apple Pay, also rose as consumers increased in-app purchases and stores expanded contactless payment support during the pandemic.

As consumers stayed home, they also spent money on home goods. Home improvement retail stocks, such as Home Depot and Lowe’s Companies, advanced meaningfully amid increased consumer demand for materials for do-it-yourself projects. Superstores like Walmart benefited from higher demand for essential goods, as well as home improvement supplies.

The Fund’s evolved investment process looks beyond the traditional sector definitions by applying machine learning and natural language processing to group individual companies with related business activity. During the reporting period, the evolved process identified several discretionary spending companies with similar businesses that have traditionally been categorized in other sectors. For instance, the Fund held positions in Apple, PayPal Holdings, and Square, which are generally classified as companies in the information technology sector. These stocks posted substantial gains as customers turned to contactless payments to avoid exposure to the coronavirus.

Portfolio Information

Investment Objective

The iShares Evolved U.S. Financials ETF (the “Fund”) seeks to provide access to U.S. companies with financials exposure, as classified using a proprietary classification system. The Fund is an actively managed exchange-traded fund that does not seek to replicate the performance of a specified index.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 3/21/18. The first day of secondary market trading was 3/23/18.

The S&P Total Market Index^TM is an unmanaged index designed to track the broad equity market, including large-, mid-, small-, and micro-cap stocks.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 19 for more information.

Expense Example

Portfolio Management Commentary

Financials stocks declined sharply for the reporting period. Although financials stocks advanced steadily in 2019 amid solid economic growth and a favorable regulatory environment, the economic disruption precipitated by the coronavirus pandemic led to sharp declines among financials stocks. The Fed’s stimulus, which reduced interest rates to historically low levels, further pressured the profitability of many financials companies.

Banks detracted the most from the Fund’s performance, as lower asset prices led to reduced management fees, and declining consumer spending prompted concerns that credit demand would weaken. For example, Wells Fargo, a large diversified bank, declined significantly amid sharply higher loan loss provisions in anticipation of more defaults. The bank’s dividend reduction and lingering effects of earlier scandals also contributed to declines. Similarly, Citigroup declined due to an increase in bad loans and expectations of further defaults amid higher unemployment and rising bankruptcies. Smaller regional banks like Truist Financial also detracted amid expectations of higher loan defaults.

Insurance companies were also notable detractors, led by life insurance companies, such as Prudential Financial, which declined amid expectations of policy losses from pandemic-related deaths and lower income as bond yields declined. An increase in coronavirus-related workers compensation and travel claims weighed on large insurance companies operating in multiple segments, such as AIG. Revenues also declined due to lower premiums and investment losses. Consumer finance companies weakened as consumer credit card spending declined amid the pandemic. For example, lower entertainment and travel spending, both of which declined sharply amid pandemic-related travel restrictions, weighed heavily on American Express.

The Fund’s evolved investment process looks beyond the traditional sector definitions by applying machine learning and natural language processing to group individual companies with related business activity. During the reporting period, the evolved process identified several financials companies with similar businesses that have traditionally been categorized in other sectors. For example, the process identified several managed healthcare companies, including UnitedHealth, which benefited amid lower payments for medical care during the pandemic. Mastercard, an electronic payment processor in the software and services industry, benefited from expectations of continued growth in digital payments, especially in emerging markets.

Portfolio Information

Investment Objective

The iShares Evolved U.S. Healthcare Staples ETF (the “Fund”) seeks to provide access to U.S. companies with healthcare staples exposure, as classified using a proprietary classification system. The Fund is an actively managed exchange-traded fund that does not seek to replicate the performance of a specified index.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 3/21/18. The first day of secondary market trading was 3/23/18.

The S&P Total Market Index^TM is an unmanaged index designed to track the broad equity market, including large-, mid-, small-, and micro-cap stocks.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 19 for more information.

Expense Example

Portfolio Management Commentary

U.S. healthcare staples stocks advanced strongly during the reporting period, rebounding after a sharp coronavirus-related market decline to end the reporting period with significant gains amid investor optimism about coronavirus treatments and vaccines and higher demand for testing and laboratory equipment. Healthcare equipment stocks contributed the most to the Fund’s return, bolstered by medical device innovations to treat chronic diseases. For example, Abbott Laboratories advanced due to strong sales and new devices for continuous blood-glucose monitoring that can work together with an insulin pump for managing diabetes. Strong demand for the company’s COVID-19 infection and antibody tests, which offered relatively fast delivery of test results, also drove gains. Similarly, the need for remote consultations with diabetic patients, who generally experience worse outcomes from contracting the coronavirus, drove strong sales of DexCom’s smart blood sugar monitor, which transmits the patient’s data to physicians.

Danaher Corporation benefited from strong sales of its rapid COVID-19 test, which eliminates the lag time of laboratory analysis, enabling higher testing levels and quicker responses to outbreaks. Emergency U.S. Food and Drug Administration approval of the company’s test that identifies coronavirus antibodies also supported Danaher’s gains.

Managed healthcare companies, such as UnitedHealth Group, posted strong earnings growth as consumers delayed medical care during the pandemic, which also postponed treatment payments. The life sciences tools and services industry was a modest contributor, largely due to Thermo Fisher Scientific, as lower demand for some scientific instruments amid coronavirus disruptions was more than offset by rising sales of equipment used for developing coronavirus vaccines and treatments.

The Fund’s evolved investment process looks beyond traditional sector definitions by applying machine learning and natural language processing to group individual companies with related business activities. More specifically, the evolved investment process identified several companies with healthcare-related businesses in the healthcare real estate investment trusts industry. Senior care facilities like Ventas and Welltower generally declined due to lower occupancy rates and higher health and safety expenses after the coronavirus outbreak, which detracted from the Fund’s performance for the reporting period. However, Medical Properties Trust, a company that leases properties to hospitals, was more resilient and contributed marginally to performance, as occupancy rates remained high during the pandemic.

Portfolio Information

Investment Objective

The iShares Evolved U.S. Innovative Healthcare ETF (the “Fund”) seeks to provide access to U.S. companies with innovative healthcare exposure, as classified using a proprietary classification system. The Fund is an actively managed exchange-traded fund that does not seek to replicate the performance of a specified index.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 3/21/18. The first day of secondary market trading was 3/23/18.

The S&P Total Market Index^TM is an unmanaged index designed to track the broad equity market, including large-, mid-, small-, and micro-cap stocks.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 19 for more information.

Expense Example

Portfolio Management Commentary

U.S. innovative healthcare stocks advanced strongly despite disruption created by the coronavirus pandemic. During the first half of the reporting period, the Fund advanced steadily amid ongoing innovations in gene-based therapies, a favorable regulatory environment, clinical successes, and merger and acquisition activity. Following the emergence of the coronavirus, innovative healthcare stocks initially declined along with broad global markets but rebounded to post strong gains for the reporting period.

Biotechnology companies focusing on treatment and vaccines for the coronavirus were principal drivers of the Fund’s return. For example, Regeneron advanced sharply after announcing its intent to make an antibody therapy for treating and preventing the coronavirus. The drug uses genetic material to generate antibodies that provoke an immune response by blocking the spiky proteins that infect human cells. AbbVie’s announcement of a plan to develop a coronavirus treatment, along with continued diversification via acquisitions and development partnerships, bolstered the industry.

Biotechnology companies producing treatments for chronic conditions that increase the likelihood of severe coronavirus illness also performed well. Companies such as Vertex Pharmaceuticals raised earnings forecasts amid strong sales of its treatment for cystic fibrosis, a genetic lung disease.

Pharmaceuticals companies contributed modestly, driven by optimism about using existing medications for treating coronavirus complications. For example, Eli Lilly began a study to look at the use of its rheumatoid arthritis drug to reduce inflammation caused by COVID-19. Industry consolidation, such as Bristol Myers Squibb’s acquisition of Celgene, which resulted in a stronger pipeline, was also beneficial.

The Fund’s evolved investment process looks beyond traditional sector definitions by applying machine learning and natural language processing to group individual companies with related business activity. As of the end of the reporting period, the Fund’s portfolio consisted primarily of biotechnology and pharmaceuticals companies that emphasize innovation, but also included companies in diverse industries such as medical equipment. For example, DexCom, which makes smart blood-glucose monitors, posted strong sales during the pandemic, as physicians sought tools for remote consultations with diabetic patients, who are at higher risk for complications from the coronavirus.

Portfolio Information

Investment Objective

The iShares Evolved U.S. Media and Entertainment ETF (the “Fund”) seeks to provide access to U.S. companies with media and entertainment exposure, as classified using a proprietary classification system. The Fund is an actively managed exchange-traded fund that does not seek to replicate the performance of a specified index.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 3/21/18. The first day of secondary market trading was 3/23/18.

The S&P Total Market Index^TM is an unmanaged index designed to track the broad equity market, including large-, mid-, small-, and micro-cap stocks.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 19 for more information.

Expense Example

Portfolio Management Commentary

U.S. media and entertainment stocks declined modestly for the reporting period, as the coronavirus pandemic changed the landscape of the industry. Pandemic-related restrictions forced entertainment venues to close, sharply reducing media companies’ revenue. Partially offsetting these losses, home entertainment sales rose as consumers stayed home.

Broadcasting stocks drove detraction from the Fund’s performance amid pandemic-related disruptions, especially canceled entertainment productions. The mass media company ViacomCBS declined as new movie productions and releases were postponed and movie theaters closed, accelerating pre-existing weakness in movie theatre admissions. The canceled NCAA basketball tournament and consumers dropping their cable television subscriptions also weighed on revenue. Fox Corporation, whose revenue is dependent on local broadcast stations, also detracted amid declining advertising revenues.

Entertainment conglomerate Walt Disney was a significant detractor from the Fund’s return. Closed theme parks and resorts, cruise line suspensions, and disrupted studio operations drove sharply lower revenue. Additionally, delayed major league sports seasons constrained Disney’s ESPN revenues. However, these losses were partially offset by growth in the company’s new streaming service, Disney Plus.

On the upside, home digital entertainment contributed to the Fund’s performance due to an increase in online games played during pandemic-related restrictions. Activision Blizzard advanced amid strong demand for its newly released game, Warzone, Call of Duty. Video game maker ElectronicArts also advanced due to the popularity of several of its franchises, including Star Wars, and strong live-services revenue.

Internet service providers were also significant contributors, as consumers increased internet use during stay-at-home restrictions. Charter Communications, for example, advanced due to increased broadband internet subscriptions.

The Fund’s evolved investment process looks beyond the traditional sector definitions by applying machine learning and natural language processing to group individual companies with related business activity. During the reporting period, the evolved process identified several media and entertainment companies with similar businesses that have traditionally been categorized in other sectors. For example, Hasbro, a toy and game manufacturer in the consumer discretionary sector, which detracted from the Fund’s performance, expanded its presence into digital media, adding properties such as Peppa Pig to its portfolio. Hasbro’s stock declined amid investor concerns that disruptions to Chinese manufacturing would affect supply chains for its products.

Portfolio Information

Investment Objective

The iShares Evolved U.S. Technology ETF (the “Fund”) seeks to provide access to U.S. companies with technology exposure, as classified using a proprietary classification system. The Fund is an actively managed exchange-traded fund that does not seek to replicate the performance of a specified index.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 3/21/18. The first day of secondary market trading was 3/23/18.

The S&P Total Market Index^TM is an unmanaged index designed to track the broad equity market, including large-, mid-, small-, and micro-cap stocks.

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 19 for more information.

Expense Example

Portfolio Management Commentary

U.S. technology stocks advanced robustly during the reporting period, as the coronavirus pandemic accelerated technological trends. Software sales and subscriptions rose, as companies adopted solutions for remote work and online shopping increased during stay-at-home restrictions. Telecommuting drove higher personal computer sales and strong demand growth for chips used in 5G wireless technology and cloud data centers.

The software industry contributed the most to the Fund’s return, as companies adopted new computing technologies for remote work. Microsoft drove contribution among software stocks, advancing due to sharply rising demand for products and services that supported remote computing amid the rise in telecommuting due to stay-at-home directives. Sales of Microsoft’s intelligent cloud computing platform, Azure, and video conferencing solutions rose sharply. Revenue from the company’s Xbox console also climbed higher due to increased video game sales and subscriptions. Hardware technology companies benefited performance as well. Apple gained amid strong sales growth of iPhones, iPads, and Mac computers, as people increased purchases of consumer electronics that help them remain connected to others while practicing social distancing. More time spent at home fueled an increase in app purchases by consumers, which further drove the company’s revenue growth.

Semiconductors stocks were also notable contributors, supported by escalating demand for chips used for 5G wireless technology, artificial intelligence-driven data centers, and personal computers. Nvidia, for example, benefited from consumers upgrading their computing equipment and video game consoles during stay-at-home orders.

The Fund’s evolved investment process looks beyond the traditional sector definitions by applying machine learning and natural language processing to group individual companies with related business activity. During the reporting period, the evolved process identified several technology companies with similar businesses that have traditionally been categorized in other sectors. For example, the Fund held a position in Amazon.com, traditionally classified as a retail stock. The company benefited from increased online shopping as consumers avoided physical stores during stay-at-home restrictions. Amazon also gained amid growth in demand for its cloud services and higher Prime membership subscriptions, particularly for grocery delivery. The Fund also held a position in Google’s parent company Alphabet, traditionally categorized as a communications services stock, which advanced amid growth in cloud computing.

Portfolio Information

About Fund Performance

Past performance is no guarantee of future results. Financial markets have experienced extreme volatility and trading in many instruments has been disrupted. These circumstances may continue for an extended period of time and may continue to affect adversely the value and liquidity of the fund’s investments. As a result, current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at iShares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest ask on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not trade in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary market trading in shares of the fund, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.

Shareholder Expenses

As a shareholder of your Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested at the beginning of the period (or from the commencement of operations if less than 6 months) and held through the end of the period, is intended to help you understand your ongoing costs (in dollars and cents) of investing in your Fund and to compare these costs with the ongoing costs of investing in other funds.

Actual Expenses — The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period.”

Hypothetical Example for Comparison Purposes — The table also provides information about hypothetical account values and hypothetical expenses based on your Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the year ended July 31, 2020, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

Fair Value Measurements

Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.

The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of July 31, 2020. The breakdown of the Fund’s investments into major categories is disclosed in the Schedule of Investments above.