Hilarious. The primary (only?) reason securities are borrowed from the ETF is to short them, which tends to suppress the price which sounds to me like a net detriment to the shareholder.Thanks for contacting us about iShares ETFs. The reason you are seeing these numbers is because of securities lending activities within the fund. However we will not lend securities unless it was net benefit to the shareholder.
I suspect the "net benefit" iShares is talking about here has to do with the income from the lending operations. It would be interesting to know if the reported ER is inclusive or exclusive of expenses incurred by the lending operations. I wouldn't be in the least surprised if it's exclusive, meaning if they make $X through lending but only net $Y (< $X) after "expenses" they don't have to include the difference ($X-$Y) in their reported ER. Even if this is how it works, as long as $Y is greater than 0, there's a "net benefit" to the shareholder. However, if this is how it works there's potentially a far greater benefit to Blackrock than to the shareholder.
And, BTW, Vanguard does this too (lends securities) but since Vanguard is owned by its shareholders they don't do this so that they can put more money in their pockets. As I understand it, all income Vanguard receives from its lending operations goes to reducing their fees (and they're extremely conservative about how much and to whom they're willing to lend).