The BlackRock Portfolio Aware Optimized Bond Index (the “Index”) measures the performance of a rules-based strategy that allocates to U.S. Dollar-denominated iShares® Fixed Income ETFs. The Index employs an optimization framework designed to maximize Risk‑Adjusted Yield within the context of hypothetical portfolios that represent combined equity and fixed income exposures. Although equity exposure is incorporated into the optimization process, the published Index holds only Fixed Income ETFs.

To support this design, the optimization process includes constraints and penalty terms to help manage interest rate sensitivity, ensure a minimum allocation to U.S. Government Bonds, limit concentration risk, enforce a minimum yield requirement, and moderate turnover.

The ETF Constituent Universe spans U.S. Treasury Bonds, Treasury Inflation-Protected Securities, U.S. Treasury Floating Rate Bonds, Investment Grade Mortgage-Backed Securities, Investment Grade Corporate Bonds, High Yield Corporate Bonds, Emerging Markets Bonds, and Investment Grade Floating Rate Bonds.