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MEGATRENDS OWN THE FUTURE

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The modern world is changing at the speed of innovation

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1 billion……hours ago

humanity emerged…seconds ago

IBM released the first PC…Google searches occurred this morning1

1 Source: All 3 “billion” stats: (2013) Hal Varian, “Beyond Big Data”.

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For illustrative purposes only.

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Structural themes are long-term opportunities driven by powerful transformations in our economy and society

Structural > cyclical

Time

Cyclical themes

Gro

wth

Structural themes

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Structural theme:

horses

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vs. cars

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From 1905-1930, the number of horse-drawn carriages fell

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93%

Source: International Monetary Fund (IMF) Riding the Energy Transition, May 2017.

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https://www.imf.org/en/Publications/WP/Issues/2017/05/22/Riding-the-Energy-Transition-Oil-Beyond-2040-44932

Televisions in U.S. households

0.01%

6

1 "1920s-1960s Television", Elon University School of Communications .

19461

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http://www.elon.edu/e-web/predictions/150/1930.xhtml

Televisions in U.S. households

83%

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1 "Number of TV Households in America", Buffalo History Museum.

19581

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http://www.buffalohistory.org/explore/exhibits/virtual_exhibits/wheels_of_power/educ_materials/television_handout.pdf

Years new technology takes to reach 1/4 of American population1

4 years

8

2004 –Facebook

1 Source: Pew Research Chart of the Week: The ever-accelerating rate of technology adoption; Yahoo Finance for number of active users at Facebook over the years. References to specific companies are strictly for illustrative purposes only and should not be construed as investment advice or recommendations regarding those companies. For holdings information for the iShares funds, please visit www.iShares.com.

1876Telephone

35 years

1975PC

16 years

1991The Web

7 years

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The Goldilocks problem

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F – A – A – N - G

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Source: Pew Research Chart of the Week: The ever-accelerating rate of technology adoption; Yahoo Finance for number of active users at Facebook over the years. References to specific companies are strictly for illustrative purposes onl y and should not be construed as investment advice or recommendations regarding those companies. For holdings information for t he iShares funds, please visit www.iShares.com.

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Company B

up 22%

Company A

up 213%

5/99 6/99 7/99 8/99 9/99 10/99 11/99

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Can you spot the FAANG?Two “pure-play” e-commerce names had very different charts in 1999

May 19, 1999 to November 30, 1999

For illustrative purposes only. Source: Bloomberg, December 2019.

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5/99 5/03 5/07 5/11 5/15 5/19

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Can you spot the FAANG?

Growth from May 19, 1999 to May 30, 2020

For illustrative purposes only. Source: Bloomberg, May 2020 1 Amazon total return was 3,400% between 05/19/1999 and 05/31/2020. Includes dividends. 2 eToys filed for bankruptcy in February, 2001.References to specific companies are strictly for illustrative purposes only and should not be construed as investment advice or recommendations regarding those companies. For holdings information for the iShares funds, please visit www.iShares.com.

They’re even more different 20+ years later

Amazon gave investors a

34x return1

eToys filed for

bankruptcy2

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May-99 May-03 May-07 May-11 May-15 May-19

Nasdaq

NASDAQ Composite Index

3x returns1

Broad Tech Index

Too broadBroad indexes may be too

diversified to offer targeted

thematic exposure.

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What about a tech focused index?

For illustrative purposes only. Source: Bloomberg., May 2020 .1 Nasdaq returned 309% between 05/19/1999 and 05/31/2020.Index performance is for illustrative purposes only. Index performance does not reflect any management fees, transaction cost s or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.

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MSCI ACWI Internet & Direct Marketing Retail Index

Targeted Index

23xreturns1

Megatrend Index

Focused Exposure

??returns1

Single stocksIncreased risk

Lack diversification

The Goldilocks scenario

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1 Reflects total returns, including dividends, from 09/15/99 through 05/31/20. Data from Bloomberg as of May 2020. The MSCI ACWI Internet & Direct Marketing Retail Index has returned 2,342% and the Nasdaq Composite Index has returned 326% over this time period. Index performance is for illustrative purposes only. Index performance does not reflect any management fees, transactions costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.

Broad IndexLack targeted exposure

3xreturns1

Nasdaq Composite IndexBroad Tech Index

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T – R – E – N - D

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It’s on the tip of your tongue

Are self driving cars cool?

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And the top of your Twitter

Will there be more of them on the road in 10 years?

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At a tipping pointRegulatory, societal and economic forces are tailwinds for long-term, secular trends

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Regulatory

Societal

Economic

forces


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Regulatory

Societal

Economic

4xfrom 2019 to 20251

In China, the number of all-electric vehicle sales is expected to grow

25%less CO2 per km driven2

Beginning January 1, 2021 new vehicles sold in the EU must emit

For illustrative purposes only. Forecasts may not come to pass. Source: 1 Los Angeles Times, "China EV Makers", September 2019. 2 January 2018, WSJ, June 2019, William Boston.

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https://www.latimes.com/business/story/2019-09-25/chinas-ev-makers-plunge-on-fears-that-a-government-backed-bubble-is-burstinghttps://theicct.org/sites/default/files/publications/China_NEV_mandate_PolicyUpdate%20_20180525.pdfhttps://www.wsj.com/articles/eu-auto-makers-have-to-sell-more-electric-cars-as-new-emission-targets-loom-11561139522


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Regulatory

Societal

Economic

80%of U.S. consumers age 18-34 are willing to pay more for EVs/Hybrids1

For illustrative purposes only. Forecasts may not come to pass. Source: 1 WardsAuto, February 2019, Steven Finlay.

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https://www.wardsauto.com/technology/survey-most-consumers-willing-pay-more-alt-propulsion


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Regulatory

Societal

Economic

Forecasts may not come to pass. Source: BloombergNEF. For illustrative purposes only.

Cost of EV batteries continues to decline

2010

$1,160 2018

$176

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https://about.bnef.com/blog/behind-scenes-take-lithium-ion-battery-prices/

Megatrends are driving changeMegatrends are the long-term, transformational forces driving our global economy & society.

Technological breakthrough

Demographics & social change

Rapid urbanizationClimate change & resource scarcity

Emerging global wealth

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What would you rather sacrifice for one week?

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OR

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49%willing to give up dessert

74%willing to give up alcohol

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Source: Delvv, Digital Habits 2016 Survey Findings, June 2016.

Drumroll please…

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2015 15bn

2017 20bn

2019 28bn

2021 35bn

2023 50bn

2025 75bn

Source: Statista, Internet of Things (IoT) Connected Devices Installed Base Worldwide from 2015 to 2025. For illustrative purposes only.

Internet-connected devices

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# of Cybercriminals on the FBI’s most wanted list(in millions)

1in 2014

71in 2020

Source: ITRC, 2017 ITR Annual Data Breach Year-End Review, as of February 2018. For illustrative purposes only.

More data more problems

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The top 5 companies in the S&P 500 has changed over time, with only Microsoft retaining its spot. What will the next 20 years look like?

2000 2020 2040

?

MegaRule #1: Weight for tomorrow

S&P 500 Weight S&P 500 Weight

Microsoft

General Electric

Cisco

Microsoft

Apple

Amazon

Source: Bloomberg, data as of 01/01/2000 and 01/01/2020. References to specific companies are strictly for illustrative purposes only and should not be construed as investment advice or recommendations regarding those companies. For holdings information for the iShares funds, please visit www.iShares.com.

Walmart

Intel

Facebook

Berkshire Hathaway

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U.S. healthcare spending continues to rise

Longer, healthier lives

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The 60+ demographic is rapidly increasing

1BIn 2015

Over 602BIn 2025

Over 604TIn 2017

Spent on national healthcare in the U.S.

6TIn 2027

Spent on national healthcare in the U.S.

Sources: Left side: United Nations World Population Prospects: the 2017 Revision. Right side: Center for Medicare and Medicaid Services..

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https://population.un.org/wpp/Publications/Files/WPP2017_DataBooklet.pdfhttps://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/ForecastSummary.pdf

Seek to do well & do good

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GenomicsUsing an individual’s DNA to tailor medical treatment

Did you know? The first whole human genome sequencing cost

~2.7B in 2003. Today it costs $699.1

Novartis Moderna, Inc.Sangamo

Therapeutics, Inc.

ZIOPHARM Oncology, Inc.

ImmunologyUsing the body’s immune system to fight disease

Did you know? With over 32 FDA approvals and rising,

immunotherapy is already boosting lung, renal, brain and skin cancer survival rates.2

Sources: 1 Dante Labs, March 2018, Andrea Riposati.2 https://www.cancerresearch.org.

References to specific companies are strictly for illustrative purposes only and should not be construed as investment advice or recommendations regarding those companies. For holdings information for the iShares funds, please visit www.iShares.com.

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https://us.dantelabs.com/https://www.cancerresearch.org/

Rapid urbanization

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Rise of the megacities

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Population growth of the world’s megacities through 2030

Source: United Nations Department of Economic and Social Affairs, The World’s Cities in 2018.

Shanghai+7 million (28%)

Sao Paulo+2 million (10%)

Cairo+5 million (27%)

Dhaka+9 million (43%)

Delhi+9 million (37%)

New York+1 million (6%)

Los Angeles+1 million (6%)

13M 20M

24M

26M

39M

33M

28M

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ONE Megacity, FIVE Megatrends

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Demographics& social change

Rapidurbanization

Climate change & resource scarcity

Emergingglobal wealth

Cities will invest $41 trillion through 2036 to leverage the internet of things1

Eight in ten U.S. residents 65 and older live in metropolitan

areas.2

MTA is spending $22b more on infrastructure upgrades

over the next five years.3

Over 100 cities worldwide are now powered primarily

by renewable energy.4

440 EM cities will make up half of GDP growth between

2010 and 2025.5

For illustrative purposes only. 1 CNBC, "Spending on smart cities around the world", October 2016 . 2 MarketWatch, "What these age forward cities are doing for older residents", October 2019. 3 WSJ, "MTA wants to spend $55B to improve your commute", September 2019. 4 Inside Climate News "More than 100 cities worldwide now powered primarily by renewable energy", February 2018. 5 McKinsey, "Unlocking the potential of emerging market cities", September 2012.

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https://api.ctia.org/docs/default-source/default-document-library/how-5g-can-help-municipalities-become-vibrant-smart-cities-accenture.pdfhttps://www.cnbc.com/2016/10/25/spending-on-smart-cities-around-the-world-could-reach-41-trillion.htmlhttps://api.ctia.org/docs/default-source/default-document-library/how-5g-can-help-municipalities-become-vibrant-smart-cities-accenture.pdfhttps://www.marketwatch.com/story/what-these-age-forward-cities-are-doing-for-older-residents-2019-10-28https://www.wsj.com/articles/mta-wants-to-spend-55-billion-to-improve-your-commute-11568667582https://insideclimatenews.org/news/27022018/renewable-energy-cities-clean-power-technology-cdp-report-global-warming-solutionshttps://www.mckinsey.com/featured-insights/urbanization/unlocking-the-potential-of-emerging-market-cities


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$2T gap to meet gov’t renewable targets

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total investment needed by 2030 for the implementation of renewable energy targets.

U.S.

$16B

Latin America

$218B

Africa

$225BAsia

$1.1T

Middle East

$30B

Others

$151B

2TAlmost

Source: International Renewable Energy Agency, Untapped potential for climate action: Renewable energy in Nationally Determin ed Contributions, November 2017.

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F or illustrative purposes only.The specific companies identified and described above do not represent all of the companies purchased or sold, and no assumptions should be made that the companies identified and discussed were or will be profitable. For top 10 holdings please see back of presentation.

MegaRule #2: Connect the value chain


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A billion people here, a billion people there…

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Source: 1 Yahoo Finance, “Billionaires Insight” report from UBS and PWC. 2 Bank of America Merrill Lynch “10 things for the next 10 years.” 3 Washington Post, “India is no longer home to the largest number of poor people in the world. Nigeria is.”

China mints billionaires per week.12

150M people enter the global middle class every year, of which

90% are from Asia.2people escape extreme poverty in India every minute.344

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Online Population: 292M 772M

Offline Population: 35M 628M

MegaRule #3: Think beyond borders

China’s vast digital potentialOnline vs. offline population in China compared to the United States in 2018

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Source: Circle ID, July 2018.

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http://www.circleid.com/posts/20180710_china_has_nearly_3_times_the_number_of_internet_users_as_the_us/

Owning the future

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Robotics & A.I.CybersecurityFinTech


GenomicsImmunotherapyAgeing


Clean energyElectric vehiclesSelf-driving


China & IndiaNew consumersDigital economy

Rapid urbanization

InfrastructureMegacitiesSmart cities

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MegaRules of the road

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1 Weight for tomorrow

2 Connect the value chain

3 Think beyond borders

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Put your money where your mind is…

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Important Information

Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses which may be obtained by visiting www.iShares.com or www.blackrock.com. Read the prospectus carefully before investing.

Investing involves risk, including possible loss of principal.

International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/developin g markets and in concentrations of single countries.

Funds that concentrate investments in specific industries, sectors, markets or asset classes may underperform or be more vola tile than other industries, sectors, markets or asset classes than the general

securities market.

Technology companies may be subject to severe competition and product obsolescence. Technologies perceived to displace older technologies or create new markets may not in fact do so. Companies that initially develop a novel technology may not be able to capitalize on the technology.

This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change. The strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any strategies discussed will be effective.

The information included in this material has been taken from trade and other sources considered to be reliable. We do not represent that this information is accurate and complete, and it should not be relied upon as such. Any opinions expressed in this material reflect our analysis at this date and are subject to change. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, but are not guaranteed as to accuracy.

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own the future iShares megatrends · Facebook Berkshire Hathaway ICRMH0720U-1254309-28/44....

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