iShares MSCI Russia Capped ETF N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-22421

iShares MSCI Russia Capped Index Fund, Inc.

(Exact name of Registrant as specified in charter)

c/o: State Street Bank and Trust Company

200 Clarendon Street, Boston, MA 02116

(Address of principal executive offices)(Zip code)

The Corporation Trust Incorporated

351 West Camden Street, Baltimore, MD 21201

(Name and address of agent for service)

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

Date of fiscal year end:  August 31, 2012

Date of reporting period:  February 29, 2012

Item 1.    Reports to Stockholders.

February 29, 2012

2012 Semi-Annual Report

iShares MSCI Russia Capped Index Fund, Inc.

iShares MSCI Russia Capped Index Fund  |  ERUS  |  NYSE Arca

Table of Contents

Fund Performance Overview	5
Shareholder Expenses	6
Schedule of Investments	7
Financial Statements	8
Financial Highlights	11
Notes to Financial Statements	12

Fund Performance Overview

iSHARES^® MSCI RUSSIA CAPPED INDEX FUND

Performance as of February 29, 2012

Average Annual Total Returns						Cumulative Total Returns
Year Ended 2/29/12			Inception to 2/29/12			Inception to 2/29/12
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(9.01)%	(9.86)%	(8.83)%	4.62%	4.48%	4.94%	6.09%	5.90%	6.52%

Total returns for the period since inception are calculated from the inception date of the Fund (11/9/10). “Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did 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 (11/10/10), 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 in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. 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. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.

The iShares MSCI Russia Capped Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Russia 25/50 Index^SM (the “Index”). The Index is a free float-adjusted market capitalization weighted index designed to measure the performance of equity securities in the top 85% by market capitalization of equity securities listed on stock exchanges in Russia. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended February 29, 2012, the total return for the Fund was 4.26%, net of fees, while the total return for the Index was 4.52%.

PORTFOLIO ALLOCATION

As of 2/29/12

Sector	Percentage of Net Assets
Energy		53.98	%
Financial		14.86
Basic Materials		12.49
Communications		7.38
Utilities		6.92
Consumer Non-Cyclical		3.37
Industrial		0.89
Short-Term and Other Net Assets		0.11
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS

As of 2/29/12

Security	Percentage of Net Assets
Gazprom OAO		22.42	%
LUKOIL OAO		11.78
Sberbank of Russia		10.58
NovaTek OAO SP GDR		4.55
Rosneft Oil Co. OJSC		4.50
Tatneft OAO		4.40
Uralkali OJSC		4.32
MMC Norilsk Nickel OJSC		4.14
Mobile TeleSystems OJSC SP ADR		3.58
Magnit OJSC SP GDR		3.37
TOTAL		73.64	%

FUND PERFORMANCE OVERVIEW 5

Shareholder Expenses (Unaudited)

iSHARES^® MSCI RUSSIA CAPPED INDEX FUND

As a shareholder of the 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 following Example is intended to help you understand your ongoing costs (in dollars and cents) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from September 1, 2011 to February 29, 2012.

ACTUAL EXPENSES

The first line in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid 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 in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. 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 second line in the table is 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.

	Beginning Account Value (9/1/11)		Ending Account Value (2/29/12)		Annualized Expense Ratio			Expenses Paid During  Perioda (9/1/11 to 2/29/12)
Actual	$	1,000.00	$	1,042.60		0.61	%	$	3.10
Hypothetical (5% return before expenses)		1,000.00		1,021.80		0.61			3.07

^a  Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (182 days) and divided by the number of days in the year (366 days).

6 2012 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® MSCI RUSSIA CAPPED INDEX FUND

February 29, 2012

Security	Shares		Value
COMMON STOCKS — 96.04%
BANKS — 13.61%
Sberbank of Russia		3,717,240	$	12,747,913
VTB Bank OJSC		1,471,705,000		3,650,675
				16,398,588
CHEMICALS — 4.32%
Uralkali OJSC		639,795		5,206,615
				5,206,615
ELECTRIC — 6.92%
Federal Grid Co. of Unified Energy System OJSC		217,820,000		2,586,403
IDGC Holding JSCa		13,469,200		1,369,280
Inter RAO UES OJSC		1,225,682,000		1,497,753
RusHydro OJSC		71,176,000		2,892,111
				8,345,547
FOOD — 3.37%
Magnit OJSC SP GDRb		137,878		4,063,265
				4,063,265
IRON & STEEL — 4.03%
Mechel OAO SP ADR		122,012		1,354,333
Novolipetsk Steel OJSC SP GDRb		55,910		1,340,163
Severstal OAO		140,765		2,159,055
				4,853,551
METAL FABRICATE & HARDWARE — 0.89%
TMK OAO SP GDRb		74,504		1,074,348
				1,074,348
MINING — 4.14%
MMC Norilsk Nickel OJSC		25,253		4,995,279
				4,995,279
OIL & GAS — 50.44%
Gazprom OAO		4,068,325		27,027,938
LUKOIL OAO		221,200		14,197,231
NovaTek OAO SP GDRb		37,753		5,477,960
Rosneft Oil Co. OJSC		701,040		5,422,832
Surgutneftegas OJSC		3,241,100		3,367,016
Tatneft OAO		797,165		5,305,793
				60,798,770
REAL ESTATE — 0.94%
LSR Group OJSC SP GDRb		213,716		1,131,626
				1,131,626

Security	Shares		Value
TELECOMMUNICATIONS — 7.38%
Mobile TeleSystems OJSC SP ADR		236,182	$	4,310,321
Rostelecom OJSCa		717,600		3,610,721
Sistema JSFC SP GDRb		44,942		979,736
				8,900,778
TOTAL COMMON STOCKS (Cost: $119,522,815)				115,768,367
PREFERRED STOCKS — 3.85%
BANKS — 0.31%
Sberbank of Russia		144,795		376,422
				376,422
OIL & GAS — 1.76%
Surgutneftegas OJSC		3,099,400		2,120,832
				2,120,832
PIPELINES — 1.78%
AK Transneft OAO		1,148		2,141,571
				2,141,571
TOTAL PREFERRED STOCKS (Cost: $3,561,479)				4,638,825
SHORT-TERM INVESTMENTS — 0.07%
MONEY MARKET FUNDS — 0.07%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.02%c,d		85,568		85,568
				85,568
TOTAL SHORT-TERM INVESTMENTS (Cost: $85,568)				85,568
TOTAL INVESTMENTS IN SECURITIES — 99.96% (Cost: $123,169,862)				120,492,760
Other Assets, Less Liabilities — 0.04%				45,117
NET ASSETS — 100.00%			$	120,537,877

SP ADR — Sponsored American Depositary Receipts

SP GDR — Sponsored Global Depositary Receipts

^a  Non-income earning security.

^b  This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

^c  Affiliated issuer. See Note 2.

^d  The rate quoted is the annualized seven-day yield of the fund at period end.

See notes to financial statements.

SCHEDULEOF INVESTMENTS 7

Statement of Assets and Liabilities (Unaudited)

iSHARES^® MSCI RUSSIA CAPPED INDEX FUND

February 29, 2012

ASSETS
Investments, at cost:
Unaffiliated	$	123,084,294
Affiliated (Note 2)		85,568
Total cost of investments	$	123,169,862
Investments in securities, at fair value (Note 1):
Unaffiliated	$	120,407,192
Affiliated (Note 2)		85,568
Total fair value of investments		120,492,760
Receivables:
Investment securities sold		1,955,892
Dividends and interest		63,125
Total Assets		122,511,777
LIABILITIES
Payables:
Investment securities purchased		1,919,123
Investment advisory fees (Note 2)		54,777
Total Liabilities		1,973,900
NET ASSETS	$	120,537,877
Net assets consist of:
Paid-in capital	$	126,519,361
Accumulated net investment loss		(206,809	)
Accumulated net realized loss		(3,098,785	)
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(2,675,890	)
NET ASSETS	$	120,537,877
Shares outstandinga		4,600,000
Net asset value per share	$	26.20

^a  $0.001 par value, number of shares authorized: 1 billion.

See notes to financial statements.

8 2012 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS

Statement of Operations (Unaudited)

iSHARES^® MSCI RUSSIA CAPPED INDEX FUND

Six months ended February 29, 2012

NET INVESTMENT INCOME
Dividends — unaffiliateda	$	106,485
Interest — affiliated (Note 2)		61
Total investment income		106,546
EXPENSES
Investment advisory fees (Note 2)		313,355
Total expenses		313,355
Net investment loss		(206,809	)
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		(1,695,557	)
In-kind redemptions — unaffiliated		589,399
Foreign currency transactions		(60,452	)
Net realized loss		(1,166,610	)
Net change in unrealized appreciation/depreciation on:
Investments		6,314,917
Translation of assets and liabilities in foreign currencies		17,762
Net change in unrealized appreciation/depreciation		6,332,679
Net realized and unrealized gain		5,166,069
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	4,959,260

^a  Net of foreign withholding tax of $18,792.

See notes to financial statements.

FINANCIAL STATEMENTS 9

Statements of Changes in Net Assets

iSHARES^® MSCI RUSSIA CAPPED INDEX FUND

	Six months ended February 29, 2012 (Unaudited)			Period from November 9, 2010a to August 31, 2011
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	(206,809	)	$	1,506,986
Net realized loss		(1,166,610	)		(1,244,551	)
Net change in unrealized appreciation/depreciation		6,332,679			(9,008,569	)
Net increase (decrease) in net assets resulting from operations		4,959,260			(8,746,134	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		—			(1,554,120	)
Total distributions to shareholders		—			(1,554,120	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		21,039,292			129,749,002
Cost of shares redeemed		(17,295,980	)		(7,613,443	)
Net increase in net assets from capital share transactions		3,743,312			122,135,559
INCREASE IN NET ASSETS		8,702,572			111,835,305
NET ASSETS
Beginning of period		111,835,305			—
End of period	$	120,537,877		$	111,835,305
Accumulated net investment loss included in net assets at end of period	$	(206,809	)	$	—
SHARES ISSUED AND REDEEMED
Shares sold		950,000			4,754,000
Shares redeemed		(800,000	)		(304,000	)
Net increase in shares outstanding		150,000			4,450,000

^a  Commencement of operations.

See notes to financial statements.

10 2012 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights

iSHARES^® MSCI RUSSIA CAPPED INDEX FUND

(For a share outstanding throughout each period)

	Six months ended Feb. 29, 2012 (Unaudited)			Period from Nov. 9, 2010a to Aug. 31, 2011
Net asset value, beginning of period	$	25.13		$	25.00
Income from investment operations:
Net investment income (loss)b		(0.04	)		0.45
Net realized and unrealized gainc		1.11			0.03
Total from investment operations		1.07			0.48
Less distributions from:
Net investment income		—			(0.35	)
Total distributions		—			(0.35	)
Net asset value, end of period	$	26.20		$	25.13
Total return		4.26	%d		1.76	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	120,538		$	111,835
Ratio of expenses to average net assetse		0.61	%		0.58	%
Ratio of net investment income (loss) to average net assetse		(0.40)	%		1.99	%
Portfolio turnover ratef		9	%		22	%

^a  Commencement of operations.

^b  Based on average shares outstanding throughout each period.

^c  The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d  Not annualized.

^e  Annualized for periods of less than one year.

^f  Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 11

Notes to Financial Statements (Unaudited)

iSHARES^® MSCI RUSSIA CAPPED INDEX FUND

iShares MSCI Russia Capped Index Fund, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Company was incorporated under the laws of the State of Maryland on May 21, 2010 pursuant to Articles of Incorporation.

These financial statements relate only to the following fund (the “Fund”):

iShares MSCI Index Fund	Diversification Classification
Russia Capped	Non-diversified

Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.

The investment objective of the Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve the Fund’s investment objective.

The Fund may invest in securities of non-U.S. issuers that may trade in non-U.S. markets. This may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets and the risk of war.

Pursuant to the Company’s organizational documents, the Fund’s officers and directors are indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by the Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

SECURITY VALUATION

U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The securities and other assets of the Fund are valued at fair value pursuant to the policies and procedures approved by the Board of Directors of the Company (the “Board”).

12 2012 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® MSCI RUSSIA CAPPED INDEX FUND

• Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price.

• Open-end U.S. mutual funds are valued at that day’s published net asset value (NAV).

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors in accordance with policies approved by the Board. Such valuations are reported to the Board.

Fair value pricing could result in a difference between the prices used to calculate the Fund’s net asset value and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.

Various inputs are used in determining the fair value of investments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for an investment within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are as follows:

• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means; and

• Level 3 — Unobservable inputs for the asset or liability, including the Fund’s assumptions used in determining the fair value of investments.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The categorization of a value determined for an investment within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Fund’s perceived risk of that instrument.

As of February 29, 2012, the value of each of the Fund’s investments was classified as Level 1. The breakdown of the Fund’s investments into major categories is disclosed in its Schedule of Investments.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of February 29, 2012 are reflected in dividends receivable. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Fund may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.

NOTESTO FINANCIAL STATEMENTS 13

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® MSCI RUSSIA CAPPED INDEX FUND

FOREIGN CURRENCY TRANSLATION

The accounting records of the Fund are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.

The Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Fund as a component of realized and unrealized gains and losses from investments for financial reporting purposes.

FOREIGN TAXES

The Fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, capital gains on investments, certain foreign currency transactions or other corporate events. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Fund invests. These foreign taxes, if any, are paid by the Fund and are reflected in its Statement of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on capital gains from sales of investments and foreign currency transactions are included in their respective net realized gain (loss) categories, and foreign taxes on other corporate events are reflected in “Other foreign taxes.” Foreign taxes payable as of February 29, 2012, if any, are disclosed in the Fund’s Statement of Assets and Liabilities.

DISTRIBUTIONS TO SHAREHOLDERS

Dividends and distributions paid by the Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Fund.

FEDERAL INCOME TAXES

It is the policy of the Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.

RECENT ACCOUNTING STANDARD

In May 2011, the Financial Accounting Standards Board issued amended guidance to improve disclosure about fair value measurements which will require the following disclosures for fair value measurements categorized as Level 3: quantitative information about the unobservable inputs and assumptions used in the fair value measurement, a description of the valuation policies and procedures and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, the amounts and reasons for all transfers in and out of Level 1 and Level 2 will be required to be disclosed. The amended guidance is effective for financial statements for fiscal years beginning after December 15, 2011, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Fund’s financial statements and disclosures.

14 2012 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® MSCI RUSSIA CAPPED INDEX FUND

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Agreement with the Company, BlackRock Fund Advisors (“BFA”) manages the investment of the Fund’s assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (“BlackRock”). Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Fund, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.

For its investment advisory services to the Fund, BFA is entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:

Investment Advisory Fee			Aggregate Average Daily Net Assets
	0.74	%	First $2 billion
	0.69		Over $2 billion, up to and including $4 billion
	0.64		Over $4 billion, up to and including $8 billion
	0.57		Over $8 billion, up to and including $16 billion
	0.51		Over $16 billion, up to and including $32 billion
	0.45		Over $32 billion

At the Special Board of Directors meeting held on January 5, 2012, the Board approved a new distribution agreement with BlackRock Investments, LLC (“BRIL”). BRIL is an affiliate of BFA. Effective April 1, 2012, BRIL will replace SEI Investments Distribution Co. as the distributor for the Fund. Pursuant to the new distribution agreement, BFA will be responsible for any fees or expenses for distribution services provided to the Fund.

The Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Interest — affiliated” in the Statement of Operations.

The PNC Financial Services Group, Inc. (“PNC”) and Barclays PLC (“Barclays”) are the largest stockholders of BlackRock. Due to the ownership structure, PNC is an affiliate of the Fund for 1940 Act purposes, but Barclays is not.

Certain directors and officers of the Company are also officers of BlackRock Institutional Trust Company, N.A. and/or BFA.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended February 29, 2012, aggregated $9,802,783 and $9,184,246, respectively.

In-kind purchases and sales (see Note 4) for the six months ended February 29, 2012, aggregated $20,752,790 and $17,231,454, respectively.

4. CAPITAL SHARE TRANSACTIONS

Capital shares are issued and redeemed by the Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at net asset value. Except when aggregated in Creation Units, shares of the Fund are not redeemable. Transactions in capital shares for the Fund are disclosed in detail in the Statements of Changes in Net Assets.

NOTESTO FINANCIAL STATEMENTS 15

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® MSCI RUSSIA CAPPED INDEX FUND

The consideration for the purchase of Creation Units of a fund in the Company generally consists of the in-kind deposit of a designated portfolio of securities, which constitutes an optimized representation of the securities of that fund’s underlying index, and a specified amount of cash. Certain funds in the Company may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Company’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities.

5. INCOME TAX INFORMATION

For purposes of U.S. GAAP, in-kind redemptions are treated as sales of securities resulting in realized capital gains or losses to the Fund. Because such gains or losses are not taxable to the Fund and are not distributed to existing Fund shareholders, the gains or losses are reclassified from accumulated net realized gain (loss) to paid-in capital at the end of the Fund’s tax year. These reclassifications have no effect on net assets or net asset values per share.

The tax character of current year distributions will be determined at the end of the current fiscal year.

The Fund may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Fund may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.

As of February 29, 2012, the cost of investments for federal income tax purposes was $124,394,606. Net unrealized depreciation was $3,901,846, of which $4,259,017 represented gross unrealized appreciation on securities and $8,160,863 represented gross unrealized depreciation on securities.

Management has reviewed the tax positions as of February 29, 2012, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Fund’s financial statements.

6. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Fund through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.

16 2012 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS

Notes

NOTES 17

Notes

18 2012 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS

For more information visit www.iShares.com

or call 1-800-474-2737

This report is intended for the Fund’s shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

Investing involves risk, including possible loss of principal.

The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.

A description of the policies that the Fund uses to determine how to vote proxies relating to portfolio securities and information about how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Fund’s website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Fund also discloses its complete schedule of portfolio holdings on a daily and monthly basis on the Fund’s website.

©2012 BlackRock. All rights reserved. iShares^® and BlackRock^® are registered trademarks of BlackRock. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

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iS-SAR-87-0212

A copy of the semi-annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is attached.

Item 2. Code of Ethics.

Not applicable to this semi-annual filing.

Item 3. Audit Committee Financial Expert.

Not applicable to this semi-annual filing.

Item 4. Principal Accountant Fees and Services.

Not applicable to this semi-annual filing.

Item 5. Audit Committee of Listed Registrants.

Not applicable to this semi-annual filing.

Item 6. Investments.

(a) A schedule of investments is included as part of the reports to shareholders filed under Item 1 of this Form.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to the Registrant.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to the Registrant.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable to the Registrant.

Item 10. Submission of Matters to a Vote of Security Holders.

There were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Directors.

Item 11. Controls and Procedures.

(a) The President (the Registrant’s Principal Executive Officer) and Chief Financial Officer (the Registrant’s Principal Financial Officer) have concluded that, based on their evaluation as of a date within 90 days of the filing date of this report, the disclosure controls and procedures of the Registrant (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are reasonably designed to achieve the purposes described in Section 4(a) of the attached certification.

(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a) (1) Not applicable to this semi-annual filing.

(a) (2) Section 302 Certifications are attached.

(a) (3) Not applicable to the Registrant.

(b) Section 906 Certifications are attached.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

iShares MSCI Russia Capped Index Fund, Inc.

By: /s/ Michael Latham

Michael Latham, President (Principal Executive Officer)

Date: April 18, 2012

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By: /s/ Michael Latham

Michael Latham, President (Principal Executive Officer)

Date: April 18, 2012

By: /s/ Jack Gee

Jack Gee, Treasurer and Chief Financial Officer (Principal Financial  Officer)

Date: April 18, 2012