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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 811-09102
iShares, Inc.
(Exact name of registrant as specified in charter)
45 Fremont Street, San Francisco, CA | 94105 | |
(Address of principal executive offices) | (Zip code) |
CT Corporation
300 East Lombard Street, Baltimore, Maryland 21202
(Name and address of agent for service)
Registrant’s telephone number, including area code: 1-800-474-2737
Date of fiscal year end: August 31, 2004
Date of reporting period: February 29, 2004
Form N-CSRS is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSRS in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSRS, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. Section 3507.
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iShares®
ITEM 1. | Reports to Stockholders |
2004 SEMI-ANNUAL REPORT TO SHAREHOLDERS
FEBRUARY, 29, 2004
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INDUSTRIAL STRENGTH
INVESTMENT TOOLS
iSHARESMSCIJAPANINDEXFUND
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To Our Shareholders:
Following several years of economic slowdown, international markets showed renewed strength during the past six months. Declining interest rates around the world largely fueled the rise. Corporate cost cutting measures and improving investor confidence levels also helped buoy market levels.
In general, emerging markets were the performance leaders, benefiting from rising export demand as global economic conditions firmed. As China developed into a more important global market, many emerging markets found they did not depend so heavily on the U.S. for export growth. Japan bounced back, delivering an impressive 7% gross domestic product (GDP) annualized growth rate in the fourth quarter of 2003 alone. Europe showed more muted growth levels, still somewhat hemmed in by the euro’s continued rise against the U.S. dollar. For many markets, in Europe and elsewhere, the weakening U.S. dollar had a dampening effect as it made those countries’ exports more expensive in U.S. dollars. For U.S.-based investors, however, the relative strength of the foreign currencies helped to boost returns.
While the improved market returns provided a welcome relief from the weak market environment of the past few years, we urge you to keep in mind that past performance is not a guarantee of future returns. In light of today’s complex and uncertain market environment, the iShares(R) Funds continue to innovate and expand, offering more tools that help investors tailor their portfolios to achieve diversity and address volatility. For example, the iShares family of funds recently introduced the iShares S&P 1500 Index Fund, offering access to approximately 90% of the total U.S. equity market capitalization. Launched late last year, the iShares Dow Jones Select Dividend Index Fund provides investors with exposure to fifty of the highest dividend-yielding securities in the Dow Jones U.S. Total Market Index, while the iShares Dow Jones Transportation Average Index Fund provides exposure to airlines, industrial transportation companies and general industrial services companies. The iShares family of funds has also added the iShares Lehman TIPS Bond Fund, which provides the opportunity to gain exposure to inflation-protected government securities. Looking ahead to the future, the iShares Funds plan to introduce new funds, which will give investors focused exposure to additional indexes.
With the addition of these iShares Funds, investors can achieve even more diversity in their portfolios — and at lower cost, since iShares Fund fees are, on average, about half those of actively managed funds.1 With more than 80 different funds in the iShares family of funds to choose from, investors have the ability to build a diverse portfolio that covers a wide swath of market segments with various capitalizations and sectors, as well as value and growth, international and fixed income securities. That is important because market segments do not tend to move in tandem, particularly in volatile markets. Economic factors, including inflation, interest rate levels, currency valuations or the price of oil, as well as the normal pace of the economic cycle, all may result in one market segment outperforming another.
As market conditions change, we encourage you to talk with your financial advisor about what blend of investments or asset allocation can best help you meet your financial goals. We will continue to work closely with the financial advisor community to introduce innovative strategies and structures for their clients’ portfolios. To learn more about the iShares Funds, please visit our web site, www.iShares.com.
Regardless of market conditions, a sound, disciplined investing plan is essential. Such a plan should be grounded in two key concepts: keeping the costs associated with investing as low as possible, and maintaining a diversified portfolio. That is why we believe the iShares Funds are an indispensable tool for investors. And that is also why more and more investors have recognized the benefits of the iShares Funds. Assets under management for the iShares family of funds continue to grow, and as of February 29, 2004, had reached $68.3 billion.
On behalf of the iShares family of funds, we thank you for making the iShares Funds a part of your portfolio. We look forward to meeting your investment needs in the year ahead.
/s/ Lee T. Kranefuss |
Lee T. Kranefuss President and Chairman Of the Board Of Directors iShares, Inc. |
1 | Morningstar Principia, BGI analysis 3/04. |
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The iShares Funds are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to the iShares Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the iShares Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., none of which is affiliated with SEI.
To determine if the fund(s) are an appropriate investment for you, 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, which may be obtained by calling 1-800-iShares or by visiting www.iShares.com. Read the prospectus carefully before investing.
There are risks involved with investing, including possible loss of principal. Diversification may not protect against market risk. An investment in the funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The annual management fees of the iShares Funds may be substantially less than those of most mutual funds. iShares transactions will result in brokerage commissions, but the savings from lower annual fees can help offset these costs.
iShares is a registered trademark of Barclays Global Investors, N.A. The iShares Funds are not sponsored, endorsed, or issued by Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Dow Jones & Company, Inc. or Standard and Poor’s. None of these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with the companies listed above.
This advertising section does not constitute part of the 2004 Semi-Annual Report.
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Managers’ Discussion & Analysis
iSHARES® MSCI JAPAN INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception To 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
42.12% | 41.84% | 42.95% | (0.19)% | (0.01)% | 0.55% | (4.72)% | (4.62)% | (4.00)% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception To 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
42.12% | 41.84% | 42.95% | (0.93)% | (0.03)% | 2.76% | (31.96)% | (31.42)% | (27.77)% |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
[CHART]
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets)
Technology Hardware & Equipment | 11.67 | % | |
Automobiles & Components | 11.53 | % | |
Capital Goods | 9.17 | % | |
Consumer Durables & Apparel | 8.95 | % | |
Materials | 7.83 | % | |
Banks | 7.46 | % | |
Pharmaceuticals & Biotechnology | 5.27 | % | |
Utilities | 5.11 | % | |
Diversified Financials | 4.96 | % | |
Transportation | 4.42 | % |
The iShares MSCI Japan Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Japanese market, as measured by the MSCI Japan Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 16.06%, while the Index returned 16.54%.
The Japanese market showed renewed signs of life during the reporting period. After more than a decade of anemic economic activity, gross domestic product (“GDP”) growth for the fourth quarter of 2003 was a robust 7.0% annual rate — its highest growth level in 13 years.
In addition to GDP growth that outpaced the U.S. and Europe, Japan saw export levels grow an annualized 17.9% during the fourth quarter, reassuring to a nation that has relied on an export-led recovery in the recent past. In the face of increasing export levels, the central bank has continued its efforts to maintain a weak yen through intervention. In the first two months of 2004, the amount spent on intervention was equal to 51% of 2003’s record annual level.
4 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Perhaps even more encouraging than the healthy fourth quarter GDP rate itself, foreign trade accounted for less of the growth than domestic consumer demand and firms’ capital investment. As increased foreign trade translated into higher levels of manufacturing activity, the benefits may have finally trickled through the economy, providing broad-based growth during the reporting period.
Not surprisingly, some of Japan’s large exporters logged gains during the reporting period. Toyota Motor Corp. (5.80% of the net assets of the Fund as of February 29, 2004) and Sony Corp. (2.26% of the net assets of the Fund as of February 29, 2004) both benefited from strong foreign trade. Financial company Mitsubishi Tokyo Financial Group Inc. (2.00% of the net assets of the Fund as of February 29, 2004) posted strong gains, while Nomura Holdings Inc. (1.93% of the net assets of the Fund as of February 29, 2004) logged more moderate returns during the reporting period. NTT DoCoMo Inc. (2.30% of the net assets of the Fund as of February 29, 2004), on the other hand, suffered losses, as did Canon Inc. (2.54% of the net assets of the Fund as of February 29, 2004).
MANAGERS’ DISCUSSION & ANALYSIS | 5 |
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Schedule of Investments (Unaudited)
iSHARES MSCI JAPAN INDEX FUND
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.92% | |||||
Toyota Motor Corp. | 6,023,700 | $ | 207,846,870 | ||
Canon Inc. | 1,863,000 | 90,882,207 | |||
NTT DoCoMo Inc. | 39,744 | 82,572,652 | |||
Sony Corp. | 1,987,200 | 81,117,628 | |||
Takeda Chemical Industries Ltd. | 1,863,000 | 76,729,819 | |||
Honda Motor Co. Ltd. | 1,738,800 | 75,752,224 | |||
Matsushita Electic Industrial Co. Ltd. | 4,968,015 | 72,433,168 | |||
Mitsubishi Tokyo Financial Group Inc. | 9,315 | 71,614,497 | |||
Nomura Holdings Inc. | 4,347,000 | 69,028,418 | |||
Nissan Motors Co. Ltd. | 5,526,900 | 61,359,415 | |||
Tokyo Electric Power Co. Inc. (The) | 2,608,200 | 57,291,598 | |||
Nippon Telegraph & Telephone Corp. | 11,799 | 54,642,998 | |||
Sumitomo Mitsui Financial Group Inc. | 8,073 | 44,923,888 | |||
Mizuho Financial Group Inc.(1) | 13,662 | 41,138,550 | |||
Hitachi Ltd. | 6,210,000 | 40,524,712 | |||
Millea Holdings Inc. | 3,105 | 39,785,832 | |||
Fuji Photo Film Co. Ltd. | 1,242,000 | 38,762,768 | |||
UFJ Holdings Inc.(1) | 7,452 | 33,420,099 | |||
East Japan Railway Co. | 6,831 | 31,885,502 | |||
Murata Manufacturing Co. Ltd. | 558,900 | 31,050,000 | |||
Sharp Corp. | 1,863,000 | 30,896,540 | |||
Chubu Electric Power Co. Inc. | 1,428,300 | 30,524,259 | |||
Kansai Electric Power Co. Inc. (The) | 1,552,500 | 28,134,267 | |||
Rohm Co. Ltd. | 248,400 | 28,077,430 | |||
NEC Corp. | 3,726,000 | 27,418,122 | |||
Kyocera Corp. | 372,600 | 27,384,020 | |||
JFE Holdings Inc. | 1,055,750 | 26,669,138 | |||
Shin-Etsu Chemical Co. Ltd. | 683,100 | 26,571,252 | |||
Kao Corp. | 1,242,000 | 26,201,812 | |||
Denso Corp. | 1,242,000 | 25,974,465 | |||
Toshiba Corp. | 6,210,000 | 25,519,769 | |||
Ricoh Co. Ltd. | 1,242,000 | 25,121,911 | |||
Mitsubishi Corp. | 2,484,000 | 24,508,073 | |||
Nippon Steel Corp. | 12,420,000 | 24,326,194 | |||
Mitsui & Co. Ltd. | 3,105,000 | 24,013,591 | |||
Secom Co. Ltd. | 621,000 | 23,985,173 | |||
Nintendo Co. Ltd. | 248,400 | 23,871,499 | |||
Ito-Yokado Co. Ltd. | 621,000 | 23,416,804 | |||
Hoya Corp. | 248,400 | $ | 23,303,130 | ||
Aeon Co. Ltd. | 621,000 | 22,564,250 | |||
Tokyo Electron Ltd. | 372,652 | 22,476,448 | |||
Fujitsu Ltd.(1) | 3,726,000 | 22,439,209 | |||
Mitsui Sumitomo Insurance Co. Ltd. | 2,484,000 | 21,825,371 | |||
Mitsubishi Estate Co. Ltd. | 1,863,000 | 21,688,962 | |||
Yamanouchi Pharmaceutical Co. Ltd. | 621,000 | 20,802,307 | |||
Tokyo Gas Co. Ltd. | 5,589,000 | 20,768,204 | |||
Mitsubishi Heavy Industries Ltd. | 6,831,000 | 20,006,590 | |||
Mitsui Fudosan Co. Ltd. | 1,863,000 | 19,847,446 | |||
Seven-Eleven Japan Co. Ltd. | 621,000 | 19,608,731 | |||
Fanuc Ltd. | 310,500 | 19,495,058 | |||
Dai Nippon Printing Co. Ltd. | 1,242,000 | 19,324,547 | |||
Softbank Corp. | 496,800 | 18,369,687 | |||
Bridgestone Corp. | 1,242,000 | 18,335,585 | |||
SANYO Electric Co. Ltd. | 3,726,000 | 18,244,646 | |||
Mitsubishi Electric Corp. | 3,726,000 | 17,869,522 | |||
Tohoku Electric Power Co. Inc. | 1,055,700 | 17,672,298 | |||
TDK Corp. | 248,400 | 17,323,888 | |||
Asahi Glass Co. Ltd. | 1,863,000 | 17,153,377 | |||
ORIX Corp. | 186,300 | 17,136,326 | |||
Nikko Cordial Corp. | 3,105,000 | 17,022,652 | |||
Kirin Brewery Co. Ltd. | 1,863,000 | 16,982,866 | |||
Eisai Co. Ltd. | 621,000 | 16,852,142 | |||
Daiwa Securities Group Inc. | 2,484,000 | 16,687,315 | |||
Nippon Oil Corp. | 3,105,500 | 16,229,549 | |||
Kyushu Electric Power Co. Inc. | 931,500 | 16,215,568 | |||
Central Japan Railway Co. | 1,863 | 16,130,313 | |||
Sompo Japan Insurance Inc. | 1,863,000 | 15,806,343 | |||
Asahi Kasei Corp. | 3,105,000 | 15,345,964 | |||
Nitto Denko Corp. | 310,500 | 15,345,964 | |||
Fujisawa Pharmaceutical Co. Ltd. | 621,000 | 14,919,687 | |||
SMC Corp. | 124,200 | 14,561,614 | |||
Toppan Printing Co. Ltd. | 1,242,000 | 14,538,880 | |||
Advantest Corp. | 186,300 | 13,862,521 | |||
Daikin Industries Ltd. | 621,000 | 13,640,857 | |||
Shizuoka Bank Ltd. (The) | 1,863,000 | 13,623,806 | |||
Ajinomoto Co. Inc. | 1,242,000 | 13,538,550 | |||
Omron Corp. | 621,000 | 13,498,764 | |||
Sankyo Co. Ltd. | 621,000 | 13,441,928 | |||
Japan Tobacco Inc. | 1,863 | 13,333,937 |
6 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Schedule of Investments (Unaudited)(Continued)
iSHARES MSCI JAPAN INDEX FUND
February 29, 2004
Security | Shares | Value | |||
Takefuji Corp. | 186,300 | $ | 13,333,937 | ||
Olympus Corp. | 621,000 | 12,930,395 | |||
Keyence Corp. | 62,120 | 12,809,478 | |||
Osaka Gas Co. Ltd. | 4,347,000 | 12,532,537 | |||
Toyota Industries Corp. | 558,900 | 12,379,077 | |||
Daiwa House Industry Co. Ltd. | 1,242,000 | 12,288,138 | |||
Pioneer Corp. | 434,700 | 12,055,107 | |||
Sekisui House Ltd. | 1,242,000 | 11,844,811 | |||
Toray Industries Inc. | 3,105,000 | 11,822,076 | |||
JSR Corp. | 558,900 | 11,637,356 | |||
Komatsu Ltd. | 1,863,000 | 11,321,911 | |||
Promise Co. Ltd. | 186,300 | 11,287,809 | |||
NTT Data Corp. | 3,105 | 11,282,125 | |||
Taisho Pharmaceutical Co. Ltd. | 621,000 | 11,196,870 | |||
Daiichi Pharmaceutical Co. Ltd. | 621,000 | 11,094,563 | |||
Matsushita Electric Works Ltd. | 1,242,000 | 11,083,196 | |||
OJI Paper Co. Ltd. | 1,863,000 | 10,997,941 | |||
Tostem Inax Holding Corp. | 621,000 | 10,997,941 | |||
Shionogi & Co. Ltd. | 621,000 | 10,901,318 | |||
Nippon Yusen Kabushiki Kaisha | 2,484,000 | 10,776,277 | |||
Sumitomo Electric Industries Ltd. | 1,242,000 | 10,651,236 | |||
Itochu Corp. | 3,105,000 | 10,600,082 | |||
Bank of Yokohama Ltd. (The) | 2,484,000 | 10,367,051 | |||
Toyo Seikan Kaisha Ltd. | 621,000 | 10,259,061 | |||
Nippon Express Co. Ltd. | 1,863,000 | 10,213,591 | |||
Kinki Nippon Railway Co. Ltd.1 | 3,105,000 | 10,060,132 | |||
Sumitomo Trust & Banking Co. Ltd. (The) | 1,863,000 | 10,026,030 | |||
Tokyu Corp. | 1,863,000 | 10,008,979 | |||
Sumitomo Corp. | 1,242,000 | 9,662,273 | |||
Trend Micro Inc. | 310,500 | 9,605,437 | |||
Mitsubishi Chemical Corp. | 3,726,000 | 9,480,395 | |||
Sumitomo Chemical Co. Ltd. | 2,484,000 | 9,253,048 | |||
Resona Holdings Inc.1 | 8,073,000 | 9,162,109 | |||
Chugai Pharmaceutical Co. Ltd. | 621,000 | 9,156,425 | |||
Marui Co. Ltd. | 621,000 | 9,150,741 | |||
Terumo Corp. | 434,700 | 9,051,277 | |||
West Japan Railway Co. | 2,484 | 9,025,700 | |||
Mitsui O.S.K. Lines Ltd. | 1,863,000 | 8,934,761 | |||
Yamato Transport Co. Ltd. | 621,000 | 8,889,292 | |||
Nippon Unipac Holding | 1,863 | 8,627,842 | |||
ACOM Co. Ltd. | 142,830 | $ | 8,601,697 | ||
Kubota Corp. | 1,863,000 | 8,474,382 | |||
Fast Retailing Co. Ltd. | 124,200 | 8,468,699 | |||
Stanley Electric Co. Ltd. | 496,800 | 8,457,331 | |||
Yokogawa Electric Corp. | 621,000 | 8,428,913 | |||
Credit Saison Co. Ltd. | 310,500 | 8,255,560 | |||
AIFUL Corp. | 93,150 | 8,218,616 | |||
Keihin Electric Express Railway Co. Ltd. | 1,242,000 | 8,184,514 | |||
Alps Electric Co. Ltd. | 621,000 | 8,110,626 | |||
Daido Life Insurance Co. Ltd. | 2,484 | 7,729,819 | |||
Sumitomo Metal Mining Co. Ltd. | 1,242,000 | 7,684,349 | |||
Nikon Corp.1 | 621,000 | 7,655,931 | |||
Oriental Land Co. Ltd. | 124,200 | 7,650,247 | |||
Shiseido Co. Ltd. | 621,000 | 7,366,063 | |||
Toho Co. Ltd. | 496,800 | 7,129,621 | |||
Konica Minolta Holdings Inc. | 621,000 | 7,127,348 | |||
Isetan Co. Ltd. | 621,000 | 7,127,347 | |||
Tobu Railway Co. Ltd. | 1,863,000 | 7,007,990 | |||
UNY Co. Ltd. | 621,000 | 6,990,939 | |||
Yamaha Corp. | 372,600 | 6,905,684 | |||
Hirose Electric Co. Ltd. | 62,100 | 6,854,530 | |||
Keio Electric Railway Co. Ltd. | 1,242,000 | 6,831,796 | |||
Mitsui Chemicals Inc. | 1,242,000 | 6,774,959 | |||
Nippon Meat Packers Inc. | 621,000 | 6,746,540 | |||
Kajima Corp. | 1,863,000 | 6,513,509 | |||
Taisei Corp. | 1,863,000 | 6,479,407 | |||
Daito Trust Construction Co. Ltd. | 186,300 | 6,428,254 | |||
Casio Computer Co. Ltd. | 621,000 | 6,416,886 | |||
Sekisui Chemical Co. Ltd. | 1,242,000 | 6,411,203 | |||
Marubeni Corp. | 3,105,000 | 6,252,059 | |||
Nidec Corp. | 62,100 | 6,138,386 | |||
Asahi Breweries Ltd. | 621,000 | 6,098,600 | |||
Sumitomo Realty & Development Co. Ltd. | 621,000 | 6,041,763 | |||
Joyo Bank Ltd. | 1,863,000 | 6,036,079 | |||
Yamada Denki Co. Ltd. | 186,300 | 5,916,721 | |||
Sumitomo Metal Industries Ltd. | 6,210,000 | 5,854,201 | |||
Uni-Charm Corp. | 124,200 | 5,808,731 | |||
Obayashi Corp. | 1,242,000 | 5,695,058 | |||
Nisshin Seifun Group Inc. | 621,000 | 5,592,751 |
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Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI JAPAN INDEX FUND
February 29, 2004
Security | Shares | Value | |||
Mitsui Trust Holdings Inc.1 | 1,242,000 | $ | 5,570,016 | ||
Shimizu Corp. | 1,242,000 | 5,547,282 | |||
Oki Electric Industry Co. Ltd.1 | 1,242,000 | 5,524,547 | |||
Teijin Ltd. | 1,863,000 | 5,490,445 | |||
Takashimaya Co. Ltd. | 621,000 | 5,456,343 | |||
Citizen Watch Co. Ltd. | 621,000 | 5,427,924 | |||
Toto Ltd. | 621,000 | 5,410,873 | |||
Takara Holdings Inc. | 621,000 | 5,399,506 | |||
Seino Transportation Co. Ltd. | 621,000 | 5,376,771 | |||
Kaneka Corp. | 621,000 | 5,336,985 | |||
NSK Ltd. | 1,242,000 | 5,263,097 | |||
Nissan Chemical Industries Ltd. | 621,000 | 5,052,801 | |||
Bank of Fukuoka Ltd. | 1,242,000 | 5,024,382 | |||
CSK Corp. | 124,200 | 5,024,382 | |||
Anritsu Corp.1 | 621,000 | 5,018,698 | |||
Chiba Bank Ltd. (The) | 1,242,000 | 4,990,280 | |||
TonenGeneral Sekiyu K.K. | 621,000 | 4,984,597 | |||
Mitsui Mining & Smelting Co. Ltd. | 1,242,000 | 4,933,443 | |||
Kuraray Co. Ltd. | 621,000 | 4,916,392 | |||
JAFCO Co. Ltd. | 62,100 | 4,859,555 | |||
Konami Corp. | 186,300 | 4,842,504 | |||
Taiheiyo Cement Corp. | 1,863,000 | 4,723,147 | |||
Kikkoman Corp. | 621,000 | 4,717,463 | |||
NGK Insulators Ltd. | 621,000 | 4,643,575 | |||
Nissin Food Products Co. Ltd. | 186,300 | 4,569,687 | |||
Furkukawa Electric Co. Ltd. | 1,242,000 | 4,444,646 | |||
Suzuken Co. Ltd. | 124,200 | 4,376,442 | |||
THK Co. Ltd. | 248,400 | 4,353,707 | |||
Dainippon Screen Manufacturing Co. Ltd.1 | 621,000 | 4,342,339 | |||
Tosoh Corp. | 1,242,000 | 4,319,605 | |||
Mitsubishi Rayon Co. Ltd. | 1,242,000 | 4,308,237 | |||
Nippon Shokubai Co. Ltd. | 621,000 | 4,302,554 | |||
Lawson Inc. | 124,200 | 4,296,870 | |||
Shimamura Co. Ltd. | 62,100 | 4,262,768 | |||
Kamigumi Co. Ltd. | 621,000 | 4,166,145 | |||
Mabuchi Motor Co. Ltd. | 62,100 | 4,137,727 | |||
Shimano Inc. | 186,300 | 4,109,308 | |||
Hino Motors Ltd. | 621,000 | 4,035,420 | |||
Kawasaki Heavy Industries Ltd. | 3,105,000 | 3,978,583 | |||
Kyowa Hakko Kogyo Co. Ltd. | 621,000 | 3,938,797 | |||
Japan Airlines System Corp. | 1,242,000 | $ | 3,933,114 | ||
Daimaru Inc. (The) | 621,000 | 3,927,430 | |||
All Nippon Airways Co. Ltd.1 | 1,242,000 | 3,830,807 | |||
Showa Denko K.K. | 1,863,000 | 3,734,185 | |||
Suruga Bank Ltd. (The) | 621,000 | 3,734,185 | |||
Denki Kagaku Kogyo Kabushiki Kaisha | 1,242,000 | 3,717,133 | |||
Sumitomo Bakelite Co. Ltd. | 621,000 | 3,643,246 | |||
Mitsubishi Materials Corp.1 | 1,863,000 | 3,631,878 | |||
Dowa Mining Co. Ltd. | 621,000 | 3,478,419 | |||
Aeon Credit Service Co. Ltd. | 62,190 | 3,472,076 | |||
Amada Co. Ltd. | 621,000 | 3,438,633 | |||
Ishikawajima-Harima Heavy Industries Co. Ltd. | 2,484,000 | 3,432,949 | |||
FamilyMart Co. Ltd. | 124,200 | 3,398,847 | |||
77 Bank Ltd. (The) | 621,000 | 3,370,428 | |||
Nisshinbo Industries Inc. | 621,000 | 3,290,857 | |||
Oracle Corp. | 62,100 | 3,273,806 | |||
Nippon Mining Holdings Inc. | 931,500 | 3,248,229 | |||
Nippon Kayaku Co. Ltd. | 621,000 | 3,222,652 | |||
Kinden Corp. | 621,000 | 3,171,499 | |||
Benesse Corp. | 124,200 | 3,137,397 | |||
Toyoda Gosei Co. Ltd. | 124,200 | 3,137,397 | |||
SEGA Corp.1 | 310,500 | 3,097,611 | |||
Shimachu Co. Ltd. | 124,200 | 3,069,193 | |||
Namco Ltd. | 124,200 | 3,057,825 | |||
Fujikura Ltd. | 621,000 | 3,018,039 | |||
Mitsui Engineering & Shipbuilding Co. Ltd. | 1,863,000 | 3,000,989 | |||
Kawasaki Kisen Kaisha Ltd. | 621,000 | 2,989,621 | |||
Okumura Corp. | 621,000 | 2,955,519 | |||
Teikoku Oil Co. Ltd. | 621,000 | 2,898,682 | |||
Ebara Corp. | 621,000 | 2,875,948 | |||
Minebea Co. Ltd. | 621,000 | 2,875,948 | |||
Mitsukoshi Ltd. | 621,000 | 2,864,580 | |||
Gunma Bank Ltd. | 621,000 | 2,813,427 | |||
NTN Corp. | 621,000 | 2,813,427 | |||
Sumitomo Heavy Industries Ltd.1 | 1,242,000 | 2,773,641 | |||
Nippon Sanso Corp. | 621,000 | 2,756,590 | |||
Meiji Seika Kaisha Ltd. | 621,000 | 2,733,855 | |||
Meiji Dairies Corp. | 621,000 | 2,711,120 |
8 | 2004 iSHARE SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI JAPAN INDEX FUND
February 29, 2004
Security | Shares | Value | |||
Toyobo Co. Ltd. | 1,242,000 | $ | 2,705,437 | ||
Ube Industries Ltd. | 1,863,000 | 2,694,069 | |||
Dainippon Ink & Chemicals Inc. | 1,242,000 | 2,682,702 | |||
Gunze Ltd. | 621,000 | 2,677,018 | |||
Fuji Electric Holdings Co. Ltd. | 1,242,000 | 2,671,334 | |||
Coca-Cola West Japan Co. Ltd. | 124,200 | 2,654,283 | |||
Hitachi Cable Ltd. | 621,000 | 2,546,293 | |||
Fuji Television Network Inc. | 577 | 2,529,590 | |||
Aoyama Trading Co. Ltd. | 124,200 | 2,495,140 | |||
Ito En Ltd. | 62,100 | 2,455,354 | |||
TIS Inc. | 62,100 | 2,455,354 | |||
Daicel Chemical Industries Ltd. | 621,000 | 2,370,099 | |||
Bandai Co. Ltd. | 101,699 | 2,313,033 | |||
Nippon Sheet Glass Co. Ltd. | 621,000 | 2,210,955 | |||
Meitec Corp. | 62,100 | 2,193,904 | |||
Nishimatsu Construction Co. Ltd. | 621,000 | 2,193,904 | |||
Nichirei Corp. | 621,000 | 2,125,700 | |||
Katokichi Co. Ltd. | 124,200 | 2,115,470 | |||
Toda Corp. | 621,000 | 2,051,812 | |||
Mitsubishi Gas Chemical Co. Inc. | 621,000 | 2,017,710 | |||
World Co. Ltd. | 62,100 | 2,000,659 | |||
Itochu Techno-Science Corp. | 62,100 | 1,989,292 | |||
Capcom Co. Ltd. | 186,300 | 1,935,297 | |||
Ariake Japan Co. Ltd. | 62,100 | 1,898,353 | |||
Sapporo Breweries Ltd. | 621,000 | 1,864,250 | |||
Hitachi Software Engineering Co. Ltd. | 62,100 | 1,628,377 | |||
Hokugin Financial Group Inc.1 | 1,242,000 | 1,580,066 | |||
Asatsu-DK Inc. | 62,100 | 1,563,015 | |||
Autobacs Seven Co. Ltd. | 62,100 | 1,560,173 | |||
Saizeriya Co. Ltd. | 124,290 | 1,439,016 | |||
Sumitomo Osaka Cement Co. Ltd. | 621,000 | 1,301,565 | |||
Ishihara Sangyo Kaisha Ltd.1 | 621,000 | 1,267,463 | |||
Aderans Co. Ltd. | 62,100 | 1,250,412 | |||
Bellsystem24 Inc. | 6,210 | 1,242,455 | |||
Kanebo Ltd.1 | 1,242,000 | 1,204,942 | |||
Snow Brand Milk Products Co. Ltd.1 | 310,500 | 903,704 | |||
TOTAL COMMON STOCKS (Cost: $3,359,651,108) | 3,581,234,625 |
Security | Shares or Principal | Value | ||||
SHORT-TERM INVESTMENTS – 4.88% | ||||||
MONEY MARKET FUNDS – 2.33% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2, 3 | 56,731,576 | $ | 56,731,576 | |||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares2, 3 | 21,052,238 | 21,052,238 | ||||
BlackRock Temp Cash Money Market Fund2 | 975,969 | 975,969 | ||||
Short-Term Investment Co.- Prime Money Market Portfolio, Institutional Shares2 | 4,922,509 | 4,922,509 | ||||
83,682,292 | ||||||
FLOATING RATE NOTES – 1.36% | ||||||
Beta Finance Inc. | ||||||
1.05%, 05/20/042, 4 | $ | 956,920 | 956,889 | |||
1.05%, 09/15/042, 4 | 1,913,840 | 1,913,736 | ||||
1.05%, 10/12/042, 4 | 956,920 | 956,862 | ||||
1.14%, 08/23/042, 4 | 956,920 | 957,314 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/042 | 1,435,380 | 1,435,250 | ||||
1.38%, 11/22/042 | 478,460 | 478,486 | ||||
1.40%, 10/29/042 | 1,913,840 | 1,913,808 | ||||
CC USA Inc. | ||||||
1.05%, 04/19/042, 4 | 842,090 | 842,084 | ||||
1.06%, 05/24/042, 4 | 1,913,840 | 1,913,796 | ||||
1.09%, 07/15/042, 4 | 956,920 | 957,048 | ||||
1.51%, 02/15/052, 4 | 1,243,996 | 1,245,899 | ||||
Dorada Finance Inc. | ||||||
1.05%, 05/20/042, 4 | 1,913,840 | 1,913,777 | ||||
1.24%, 08/09/042 | 478,460 | 478,428 | ||||
1.48%, 01/18/052, 4 | 1,435,380 | 1,435,317 | ||||
Five Finance Inc. | ||||||
1.06%, 04/15/042, 4 | 956,920 | 956,920 | ||||
HBOS Treasury Services PLC | ||||||
1.16%, 01/24/052 | 1,913,840 | 1,913,840 | ||||
Holmes Financing PLC | ||||||
1.05%, 04/15/042 | 191,384 | 191,384 |
SCHEDULEOF INVESTMENTS | 9 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI JAPAN INDEX FUND
February 29, 2004
Security | Principal | Value | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042, 4 | $ | 478,460 | $ | 478,427 | ||
1.05%, 09/27/042, 4 | 2,066,947 | 2,066,770 | ||||
1.06%, 05/17/042 | 956,920 | 956,910 | ||||
1.07%, 04/13/042 | 956,920 | 956,915 | ||||
1.46%, 01/12/052, 4 | 956,920 | 956,837 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 956,920 | 956,858 | ||||
1.06%, 07/20/042 | 765,536 | 765,477 | ||||
1.07%, 03/29/042 | 956,920 | 956,920 | ||||
1.07%, 05/04/042 | 956,920 | 956,912 | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042, 4 | 1,435,380 | 1,435,380 | ||||
1.17%, 12/28/042, 4 | 1,913,840 | 1,913,840 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052, 4 | 1,818,148 | 1,818,148 | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | 956,920 | 956,920 | ||||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 956,920 | 956,840 | ||||
1.06%, 07/20/042 | 956,920 | 956,846 | ||||
1.09%, 10/07/042 | 1,913,840 | 1,913,610 | ||||
1.24%, 08/06/042 | 478,460 | 478,439 | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052, 4 | 842,090 | 842,014 | ||||
1.06%, 07/15/042, 4 | 574,152 | 574,081 | ||||
1.07%, 02/25/052, 4 | 1,071,750 | 1,071,539 | ||||
1.10%, 07/06/042, 4 | 574,152 | 574,132 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042, 4 | 956,920 | 956,816 | ||||
1.32%, 02/04/052, 4 | 478,460 | 478,371 | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042, 4 | 956,920 | 956,848 | ||||
1.06%, 04/20/042, 4 | 956,920 | 956,920 | ||||
1.06%, 07/06/042, 4 | 1,148,304 | 1,148,266 | ||||
1.06%, 11/15/042, 4 | 1,148,304 | 1,148,304 | ||||
48,650,178 | ||||||
COMMERCIAL PAPER—0.57% | ||||||
Amsterdam Funding Corp | ||||||
1.03%, 03/03/042 | 1,435,380 | 1,435,298 | ||||
Corporate Asset Funding Corp. | ||||||
1.03%, 03/16/042 | $ | 956,920 | $ | 956,509 | ||
1.05%, 05/21/042 | 995,196 | 992,857 | ||||
CRC Funding LLC | ||||||
1.03%, 03/26/042 | 765,536 | 764,988 | ||||
Delaware Funding Corp. | ||||||
1.02%, 03/16/042 | 1,935,007 | 1,934,185 | ||||
1.03%, 03/05/042 | 855,314 | 855,216 | ||||
Edison Asset Securitization | ||||||
1.03%, 03/03/042 | 1,435,380 | 1,435,298 | ||||
Eureka Securitization Inc. | ||||||
1.04%, 04/14/042 | 1,148,304 | 1,146,844 | ||||
Falcon Asset Securitization Corp. | ||||||
1.03%, 03/10/042 | 669,844 | 669,671 | ||||
Galaxy Funding Inc. | ||||||
1.05%, 05/17/042 | 956,920 | 954,781 | ||||
Gemini Securitization Corp. | ||||||
1.04%, 04/19/042 | 478,460 | 477,783 | ||||
GIRO Funding US Corp. | ||||||
1.05%, 05/19/042 | 478,460 | 477,358 | ||||
Jupiter Securitization Corp. | ||||||
1.03%, 03/24/042 | 956,920 | 956,290 | ||||
Liberty Street Funding Corp. | ||||||
1.03%, 03/10/042 | 382,768 | 382,669 | ||||
New Center Asset Trust | ||||||
1.04%, 03/01/042 | 478,460 | 478,460 | ||||
Park Avenue Receivables Corp. | ||||||
1.03%, 03/22/042 | 786,301 | 785,829 | ||||
Preferred Receivables Funding Corp. | ||||||
1.04%, 03/15/042 | 1,913,840 | 1,913,066 | ||||
1.04%, 05/20/042 | 478,460 | 477,354 | ||||
Receivables Capital Corp. | ||||||
1.03%, 03/15/042 | 2,086,085 | 2,085,250 | ||||
Windmill Funding Corp. | ||||||
1.03%, 03/05/042 | 1,092,803 | 1,092,677 | ||||
20,272,383 | ||||||
TIME DEPOSITS 0.44% | ||||||
Abbey National Treasury Services PLC | ||||||
1.02%, 03/01/042 | 1,913,840 | 1,913,840 | ||||
1.33%, 02/10/052 | 956,920 | 956,784 | ||||
1.39%, 02/02/052 | 956,920 | 956,787 | ||||
1.40%, 10/25/042 | 1,913,840 | 1,913,653 |
10 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI JAPAN INDEX FUND
February 29, 2004
Security | Principal | Value | |||||
Bank of New York | |||||||
1.39%, 11/01/042 | $ | 1,913,840 | $ | 1,913,711 | |||
Bank of Novia Scotia | |||||||
1.24%, 10/07/042 | 1,435,380 | 1,435,293 | |||||
1.42%, 10/29/042 | 1,435,380 | 1,435,451 | |||||
SunTrust Bank | |||||||
1.01%, 03/01/042 | 3,157,836 | 3,157,836 | |||||
Toronto-Dominion Bank | |||||||
1.34%, 02/10/052 | 765,536 | 765,427 | |||||
1.41%, 11/01/042 | 1,435,380 | 1,435,284 | |||||
15,884,066 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.13% | |||||||
Federal Home Loan | |||||||
Mortgage Corporation | |||||||
1.15%, 05/12/042 | 1,435,379 | 1,432,079 | |||||
1.28%, 08/19/042 | 765,535 | 760,881 | |||||
Federal National | |||||||
Mortgage Association | |||||||
1.28%, 08/20/042 | 2,487,990 | 2,472,776 | |||||
4,665,736 | |||||||
REPURCHASE AGREEMENTS – 0.05% | |||||||
Merrill Lynch Government | |||||||
Securities Inc. | |||||||
1.06%, 03/01/042 | 1,913,840 | 1,913,840 | |||||
1,913,840 | |||||||
TOTAL SHORT-TERM INVESTMENTS (COST: $175,068,495) | 175,068,495 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 104.80% (Cost $3,534,719,603) | 3,756,303,120 | ||||||
Other Assets, Less Liabilities – (4.80%) | (172,111,323 | ) | |||||
NET ASSETS – 100.00% | $ | 3,584,191,797 | |||||
1 | Non-income earning securities. |
2 | All or a portion of this security represents investments of securities lending collateral. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See Notes To Financial Statements.
SCHEDULEOF INVESTMENTS | 11 |
Table of Contents
Statement of Assets and Liabilities (Unaudited)
iSHARES, INC.
February 29, 2004
iShares MSCI Japan Index Fund | ||||
ASSETS | ||||
Investments at cost | $ | 3,534,719,603 | ||
Foreign currency, at cost | $ | 1,029,759 | ||
Investments in securities, at value (including securities on loana) (Note 1) | $ | 3,756,303,120 | ||
Foreign currency, at value | 1,009,450 | |||
Receivables: | ||||
Investment securities sold | 4,302,385 | |||
Dividends and interest | 1,656,149 | |||
Capital stock sold | 105,048 | |||
Total Assets | 3,763,376,152 | |||
LIABILITIES | ||||
Payables: | ||||
Collateral for securities on loan (Note 5) | 174,765,583 | |||
Advisory fees (Note 2) | 3,104,427 | |||
Distribution fees | 1,314,345 | |||
Total Liabilities | 179,184,355 | |||
NET ASSETS | $ | 3,584,191,797 | ||
Net assets consist of: | ||||
Paid-in capital | $ | 3,385,275,402 | ||
Accumulated net investment loss | (2,230,768 | ) | ||
Accumulated net realized loss | (20,382,522 | ) | ||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies | 221,529,685 | |||
NET ASSETS | $ | 3,584,191,797 | ||
Shares outstanding | 372,600,000 | |||
Net asset value per share | $ | 9.62 | ||
a | Securities on loan with market value of $165,952,637. See Note 5. |
See notes to financial statements.
12
Table of Contents
Statement of Operations (Unaudited)
iSHARES, INC.
For the six months ended February 29, 2004
iShares MSCI Japan Index Fund | ||||
NET INVESTMENT INCOME | ||||
Dividendsa | $ | 8,888,555 | ||
Interest | 13,304 | |||
Securities lending income | 432,618 | |||
Total investment income | 9,334,477 | |||
EXPENSES (NOTE 2) | ||||
Advisory fees | 7,621,224 | |||
Distribution fees | 3,229,332 | |||
Total expenses | 10,850,556 | |||
Net investment loss | (1,516,079 | ) | ||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments | (2,580,811 | ) | ||
In-kind redemptions | 64,014,188 | |||
Foreign currency transactions | 431,806 | |||
Net realized gain | 61,865,183 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 266,267,675 | |||
Translation of assets and liabilities in foreign currencies | (75,758 | ) | ||
Net change in unrealized appreciation (depreciation) | 266,191,917 | |||
Net realized and unrealized gain | 328,057,100 | |||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 326,541,021 | ||
a | Net of foreign withholding tax of $925,296. |
See notes to financial statements.
13
Table of Contents
Statements of Changes in Net Assets
iSHARES, INC.
iShares MSCI Japan Index Fund | ||||||||
For the six (unaudited) | For the year ended August | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income (loss) | $ | (1,516,079 | ) | $ | 212,198 | |||
Net realized gain | 61,865,183 | 8,673,926 | ||||||
Net change in unrealized appreciation (depreciation) | 266,191,917 | 171,100,487 | ||||||
Net increase in net assets resulting from operations | 326,541,021 | 179,986,611 | ||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (474,213 | ) | — | |||||
Total distributions to shareholders | (474,213 | ) | — | |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 1,731,933,278 | 1,146,153,031 | ||||||
Cost of shares redeemed | (200,663,190 | ) | (265,660,262 | ) | ||||
Net increase in net assets from capital share transactions | 1,531,270,088 | 880,492,769 | ||||||
INCREASE IN NET ASSETS | 1,857,336,896 | 1,060,479,380 | ||||||
NET ASSETS: | ||||||||
Beginning of period | 1,726,854,901 | 666,375,521 | ||||||
End of period | $ | 3,584,191,797 | $ | 1,726,854,901 | ||||
Accumulated net investment loss included in net assets at end of period | $ | (2,230,768 | ) | $ | (240,476 | ) | ||
SHARES ISSUED AND REDEEMED: | ||||||||
Shares sold | 185,400,000 | 158,400,000 | ||||||
Shares redeemed | (21,000,000 | ) | (36,000,000 | ) | ||||
Net increase in shares outstanding | 164,400,000 | 122,400,000 | ||||||
See notes to financial statements
14
Table of Contents
iSHARES, INC.
(For a share outstanding throughout each period)
iSHARES MSCI Japan Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 29, 2004 (Unaudited) | Year Ended Aug. 31, | Year Ended Aug. 31, | Year Ended Aug. 31, | Year Ended Aug. 31, | Year Ended Aug. 31, | |||||||||||||||||||
Net Asset Value, Beginning Of Period | $ | 8.29 | $ | 7.77 | $ | 9.07 | $ | 13.82 | $ | 13.22 | $ | 8.39 | ||||||||||||
Income From Investment Operations: | ||||||||||||||||||||||||
Net investment income (loss)1 | (0.01 | ) | 0.003 | (0.01 | ) | (0.01 | ) | (0.05 | ) | (0.03 | ) | |||||||||||||
Net realized and unrealized gain (loss) | 1.34 | 0.52 | (1.29 | ) | (4.74 | ) | 1.21 | 4.91 | ||||||||||||||||
Total from investment operations | 1.33 | 0.52 | (1.30 | ) | (4.75 | ) | 1.16 | 4.88 | ||||||||||||||||
Less Distributions From: | ||||||||||||||||||||||||
Net investment income | (0.00 | )3 | — | — | — | (0.00 | )3 | (0.04 | ) | |||||||||||||||
Net realized gain | — | — | — | — | (0.53 | ) | — | |||||||||||||||||
Return of capital | — | — | — | — | (0.03 | ) | (0.01 | ) | ||||||||||||||||
Total distributions | (0.00 | ) | — | — | — | (0.56 | ) | (0.05 | ) | |||||||||||||||
Net Asset Value, End Of Period | $ | 9.62 | $ | 8.29 | $ | 7.77 | $ | 9.07 | $ | 13.82 | $ | 13.22 | ||||||||||||
Total Return | 16.06 | %4 | 6.69 | % | (14.33 | )% | (34.37 | )% | 8.75 | % | 58.14 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 3,584,192 | $ | 1,726,855 | $ | 666,376 | $ | 527,899 | $ | 787,790 | $ | 713,653 | ||||||||||||
Ratio of expenses to average net assets5 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.88 | % | 0.94 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets5 | (0.12 | )% | 0.03 | % | (0.12 | )% | (0.11 | )% | (0.32 | )% | (0.27 | )% | ||||||||||||
Portfolio turnover rate2 | 0 | %6 | 2 | % | 2 | % | 21 | % | 22 | % | 0 | % |
1 | Based on average shares outstanding throughout the period. |
2 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
3 | Rounds to less than $0.01. |
4 | Not annualized. |
5 | Annualized for periods of less than one year. |
6 | Rounds to less than 1%. |
See Notes To Financial Statements.
FINANCIAL HIGHLIGHTS | 15 |
Table of Contents
Notes To The Financial Statements (Unaudited)
iSHARES, INC.
1. SIGNIFICANT ACCOUNTING POLICIES
iShares, 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 September 1, 1994. As of February 29, 2004, the Company offered 24 investment portfolios or funds.
These financial statements relate only to the iShares MSCI Japan Index Fund (the “Fund”).
The Fund’s investment objective is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Japanese market, as measured by the MSCI Japan Index compiled by Morgan Stanley Capital International Inc. (“MSCI”). The investment advisor utilizes a “passive” or index approach to achieve the Fund’s investment objective. The Fund is classified as a non-diversified fund under the 1940 Act. Non-diversified funds generally hold stocks in fewer companies than diversified funds and may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence.
The Fund invests in the securities of foreign issuers of a single country, which 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; lesser 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.
Under the Fund’s organizational documents, the 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. However, based on experience, the Fund expects the risk of loss to be remote.
The following significant accounting policies are consistently followed by the Company in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for investment companies. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. Actual results could differ from those estimates.
Certain prior year amounts in the financial statements have been reclassified to be consistent with the current period presentation.
SECURITY VALUATION
Portfolio securities for which market prices are readily available are valued using the official closing price of the primary exchange on which they are traded. The methodology used to determine such closing prices varies among markets. Such prices are generally the same as those used by MSCI in calculating the benchmark index used by the Fund. Short-term investments are valued at amortized cost, which approximates market value. Mutual fund shares are valued at net asset value. Any securities, including restricted securities or other assets for which market quotations are not readily available, or for which a significant event has occurred since the time of the most recent market quotation, are valued in accordance with fair value pricing policies approved by the Company’s Board of Directors.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, and interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.
16 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Notes To The Financial Statements (Unaudited) (Continued)
iSHARES, INC.
FOREIGN CURRENCY TRANSLATION
The Fund’s accounting records are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the prevailing rates of exchange at the end of each day. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective dates of such transactions.
Foreign currency and assets and liabilities denominated in foreign currency are generally converted into U.S. dollars using the same exchange rate utilized by MSCI in the calculation of the MSCI Japan Index (currently, the exchange rate as of 4:00 p.m. London time). However, the Company may use a different exchange rate from the rate used by MSCI in the event that the investment advisor concludes that such rate is more appropriate.
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.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income, if any, including any net foreign currency gains, are declared and distributed at least annually. Distributions of net realized gains, if any, generally are declared and distributed once a year. 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.
At August 31, 2003, the tax year-end of the Fund, the components of distributable earnings (accumulated losses) on a tax basis consisted of undistributed ordinary income of $474,213, unrealized depreciation of $52,845,227 and capital and other losses of $74,779,399, for total accumulated losses of $127,150,413.
FEDERAL INCOME TAXES
The Fund is treated as an entity separate from the Company’s other funds for federal income tax purposes. It is the policy of the Fund to qualify as a regulated investment company, as defined in Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute all of its net income and any net 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 was required for the six months ended February 29, 2004.
At August 31, 2003, the tax year-end of the Fund, the Fund had tax basis net capital loss carryforwards of $2,959,030, $62,572,173 and $3,621,148 expiring in 2009, 2010 and 2011, respectively. Such losses may be applied against any net realized taxable gains in each succeeding year, or until their respective expiration date, whichever occurs first.
If the Fund owns shares in certain foreign investment entities, referred to, under U.S. tax law code, as “passive foreign investment companies”, the Fund may elect to mark-to-market annually the shares of the passive foreign investment company, and would be required to distribute to shareholders any such mark-to-market gains.
For the year ended August 31, 2003, the Fund reclassified certain amounts to paid-in-capital from accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss), respectively, as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, realized foreign currency gains and losses and gains and losses on in-kind redemptions. These reclassifications have no effect on net assets or net asset value per share.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as an investment by the Fund, collateralized by securities, which are delivered to the Fund’s custodian or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest. Repurchase agreements held by the Fund at February 29, 2004 represent collateral from securities on loan. For further information, see Note 5, below.
NOTESTOTHE FINANCIAL HIGHLIGHTS | 17 |
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Notes to The Financial Statements (Unaudited) ( Continued)
iSHARES, INC.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
Barclays Global Fund Advisors (“BGFA”) acts as investment advisor to the Company and is responsible for the investment management of the Fund. BGFA is a California corporation indirectly owned by Barclays Bank PLC. BGFA serves as investment advisor to the Fund pursuant to an Advisory Agreement between the Company and BGFA, as amended on December 28, 2001. Under this agreement, BGFA is responsible for placing purchase and sale orders, providing continuous supervision of the investment portfolio of the Fund, and the general management of the Company’s affairs.
Under the Advisory Agreement, BGFA is responsible for all of the expenses (“Covered Expenses”) of the Fund, other than interest, taxes, brokerage commissions and other expenses connected with the executions of portfolio transactions, extraordinary expenses, distribution fees and advisory fees.
For its investment advisory services to the Fund, BGFA is entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate net assets of all the funds offered by the Company (except for the iShares MSCI Brazil, iShares MSCI Emerging Markets, iShares MSCI Pacific ex-Japan, iShares MSCI South Africa, iShares MSCI South Korea, and iShares MSCI Taiwan Index Funds) as follows:
Advisory Fee | Aggregate Net Assets | |
0.59% | First $7 billion | |
0.54 | Over $7 billion, up to and including $11 billion | |
0.49 | Over $11 billion |
Barclays Global Investors, N.A. (“BGI”) has a license agreement with MSCI for the use of the MSCI Japan Index. Under a sub-license agreement between BGI and the Fund, the fee for the use of the MSCI Japan Index is paid directly by BGI to MSCI.
Investors Bank & Trust Company (“Investors Bank”) serves as administrator, custodian and transfer agent for the Company. As compensation for its services, Investors Bank receives certain out-of-pocket costs, transaction fees, and asset-based fees, which are accrued daily and paid monthly. These fees are Covered Expenses as defined above.
BGI serves as securities lending agent for the Company. BGI is an affiliate of BGFA, the Fund’s investment advisor. As securities lending agent, BGI receives as fees, a share of the income earned on investment of the cash collateral received for the loan of securities. For the six months ended February 29, 2004, BGI earned securities lending agent fees of $465,665.
SEI Investments Distribution Co. (the “Distributor”) serves as the Fund’s underwriter and distributor of the shares of the Fund, pursuant to a Distribution Agreement with the Company. The Company has adopted a distribution plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Distributor is entitled to receive a distribution fee from the Fund, not to exceed 0.25% of the average daily net assets of the Fund, for distribution-related services.
Pursuant to an exemptive order issued by the Securities and Exchange Commission, the Fund may invest in the Institutional Shares of the Institutional Money Market Fund (“IMMF”) and Prime Money Market Fund (“PMMF”) of Barclays Global Investors Funds. The IMMF and PMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Money Market Master Portfolio and Prime Money Market Master Portfolio (collectively the “Master Portfolios”), respectively, which are managed by BGFA, the Fund’s investment advisor. The IMMF and PMMF are open-end money market funds available only to institutional investors, including other investment companies managed by BGFA. The IMMF and PMMF seek a high level of income consistent with liquidity and the preservation of capital. While the IMMF and PMMF do not directly charge an advisory fee, the Master Portfolios in which they invest do charge an advisory fee.
18 | 2004 iSHARE SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Notes to The Financial Statements (Unaudited) ( Continued)
iSHARES, INC.
Income distributions from the IMMF and PMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Fund from temporary cash investments or from investment of securities lending collateral are recorded as either interest income or securities lending income, respectively, in the accompanying Statement of Operations.
As of February 29, 2004, certain directors and officers of the Company are also officers of BGI.
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended February 29, 2004, aggregated $9,844,240 and $11,683,322, respectively.
In-kind purchases and sales for the six months ended February 29, 2004, aggregated $1,728,999,032 and $200,119,812, respectively.
At February 29, 2004, the cost of investments for federal income tax purposes was $3,543,721,162. Net unrealized appreciation aggregated $212,581,958, of which $285,485,946 represented gross unrealized appreciation on securities and $72,903,988 represented gross unrealized depreciation on securities.
4. CAPITAL SHARE TRANSACTIONS
The Company’s authorized shares are 10.9 billion shares of $.001 par value capital stock. At February 29, 2004, 2,124,600,000 shares were authorized to the Fund.
The Company issues and redeems capital shares of the Fund only in aggregations of a specified number of shares (each, a “Creation Unit”) 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.
The consideration for purchase of Creation Units of the Fund is generally the in-kind deposit of a designated portfolio of equity securities constituting a portfolio sampling representation of the MSCI Japan Index and an amount of cash. A purchase transaction fee and a redemption transaction fee are charged to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.
5. LOANS OF PORTFOLIO SECURITIES
The Fund may lend its investment securities to approved borrowers such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received is required to have a value equal of at least 105% of the market value of the loaned securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Fund of securities lending are that the borrower may not provide additional collateral when required, or return the securities when due.
As of February 29, 2004, the Fund had loaned securities which were collateralized by cash. The cash collateral received was invested in a joint account with other funds managed by BGFA, which invests in securities with remaining maturities of 397 days or less, repurchase agreements and money market mutual funds including money market funds managed by BGFA. Repurchase agreements held in the joint account are fully collateralized by U.S. Government securities. Income from the joint account is allocated daily to the Fund, based on the Fund’s portion of the total cash collateral received. The market value of the securities on loan at February 29, 2004, and the value of the related collateral received are disclosed in the Statement of Assets and Liabilities. Securities lending income is presented net of broker rebates and fees paid to BGI.
NOTESTO FINANCIAL STATEMENTS | 19 |
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Notes:
20 | 2004 iSHARE SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Notes:
NOTES | 21 |
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The following is a list of iShares Funds being offered as of February 29, 2004, along with their respective exchange trading symbols. Please call iShares at 1-800-iShares (1-800-474-2737) to obtain a prospectus for any iShares fund. The prospectus contains more complete information, including charges, expenses, investment objectives and risk factors which should be carefully considered to determine if the fund(s) are an appropriate investment for you. Read the prospectus(es) carefully before investing. Investing involves risk, including possible loss of principal.
Broad Market
iShares Dow Jones U.S. Total Market Index Fund (IYY)
iShares Russell 3000 Index Fund (IWV)
iShares Russell 3000 Growth Index Fund (IWZ)
iShares Russell 3000 Value Index Fund (IWW)
iShares S&P 1500 Index Fund (ISI)
Large Cap
iShares Russell 1000 Index Fund (IWB)
iShares Russell 1000 Growth Index Fund (IWF)
iShares Russell 1000 Value Index Fund (IWD)
iShares S&P 100 Index Fund (OEF)
iShares S&P 500 Index Fund (IVV)
iShares S&P 500/BARRA Growth Index Fund (IVW)
iShares S&P 500/BARRA Value Index Fund (IVE)
Mid Cap
iShares Russell Midcap Index Fund (IWR)
iShares Russell Midcap Growth Index Fund (IWP)
iShares Russell Midcap Value Index Fund (IWS)
iShares S&P MidCap 400 Index Fund (IJH)
iShares S&P MidCap 400/BARRA Growth Index Fund (IJK)
iShares S&P MidCap 400/BARRA Value Index Fund (IJJ)
Small Cap
iShares Russell 2000 Index Fund (IWM)
iShares Russell 2000 Growth Index Fund (IWO)
iShares Russell 2000 Value Index Fund (IWN)
iShares S&P SmallCap 600 Index Fund (IJR)
iShares S&P SmallCap 600/BARRA Growth Index Fund (IJT)
iShares S&P SmallCap 600/BARRA Value Index Fund (IJS)
Sector & Industry
iShares Cohen & Steers Realty Majors Index Fund (ICF)
iShares Dow Jones Transportation Average Index Fund (IYT)
iShares Dow Jones U.S. Basic Materials Sector Index Fund (IYM)
iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund (IYC)
iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund (IYK)
iShares Dow Jones U.S. Energy Sector Index Fund (IYE)
iShares Dow Jones U.S. Financial Sector Index Fund (IYF)
iShares Dow Jones U.S. Financial Services Index Fund (IYG)
iShares Dow Jones U.S. Healthcare Sector Index Fund (IYH)
iShares Dow Jones U.S. Industrial Sector Index Fund (IYJ)
iShares Dow Jones U.S. Real Estate Index Fund (IYR)
iShares Dow Jones U.S. Technology Sector Index Fund (IYW)
iShares Dow Jones U.S. Telecommunications Sector Index Fund (IYZ)
iShares Dow Jones U.S. Utilities Sector Index Fund (IDU)
iShares Goldman Sachs Natural Resources Index Fund (IGE)
iShares Goldman Sachs Networking Index Fund (IGN)
iShares Goldman Sachs Semiconductor Index Fund (IGW)
iShares Goldman Sachs Software Index Fund (IGV)
iShares Goldman Sachs Technology Index Fund (IGM)
iShares Nasdaq Biotechnology Index Fund (IBB)
Specialty
iShares Dow Jones Select Dividend Index Fund (DVY)
Global Sector
iShares S&P Global Energy Sector Index Fund (IXC)
iShares S&P Global Financials Sector Index Fund (IXG)
iShares S&P Global Healthcare Sector Index Fund (IXJ)
iShares S&P Global Technology Sector Index Fund (IXN)
iShares S&P Global Telecommunications Sector Index Fund (IXP)
International/Broad Market
iShares MSCI EAFE Index Fund (EFA)
iShares MSCI Emerging Markets Index Fund (EEM)
International/Regional
iShares MSCI EMU Index Fund (EZU)
iShares MSCI Pacific ex-Japan Index Fund (EPP)
iShares S&P Europe 350 Index Fund (IEV)
International/Developed Country
iShares MSCI Australia Index Fund (EWA)
iShares MSCI Austria Index Fund (EWO)
iShares MSCI Belgium Index Fund (EWK)
iShares MSCI Canada Index Fund (EWC)
iShares MSCI France Index Fund (EWQ)
iShares MSCI Germany Index Fund (EWG)
iShares MSCI Hong Kong Index Fund (EWH)
iShares MSCI Italy Index Fund (EWI)
iShares MSCI Japan Index Fund (EWJ)
iShares MSCI Netherlands Index Fund (EWN)
iShares MSCI Singapore Index Fund (EWS)
iShares MSCI Spain Index Fund (EWP)
iShares MSCI Sweden Index Fund (EWD)
iShares MSCI Switzerland Index Fund (EWL)
iShares MSCI United Kingdom Index Fund (EWU)
iShares S&P/TOPIX 150 Index Fund (ITF)
International/Emerging Country
iShares MSCI Brazil Index Fund (EWZ)
iShares MSCI Malaysia Index Fund (EWM)
iShares MSCI Mexico Index Fund (EWW)
iShares MSCI South Africa Index Fund (EZA)
iShares MSCI South Korea Index Fund (EWY)
iShares MSCI Taiwan Index Fund (EWT)
iShares S&P Latin America 40 Index Fund (ILF)
Global/Broad Market
iShares S&P Global 100 Index Fund (IOO)
Fixed Income
iShares GS $ InvesTop™ Corporate Bond Fund (LQD)
iShares Lehman 1-3 Year Treasury Bond Fund (SHY)
iShares Lehman 7-10 Year Treasury Bond Fund (IEF)
iShares Lehman 20+ Year Treasury Bond Fund (TLT)
iShares Lehman Aggregate Bond Fund (AGG)
iShares Lehman TIPS Bond Fund (TIP)
An investment in the fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
iShares is a registered trademark of Barclays Global Investors, N.A. The iShares Funds are not sponsored, endorsed or issued by Goldman, Sachs & Co. or Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., Morgan Stanley Capital International, The Nasdaq Stock Market, Inc., Frank Russell Company, or Standard & Poor’s. None of these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with Goldman, Sachs & Co. or Lehman Brothers. “GS $ InvesTop™” and “Goldman Sachs®” are trademarks of Goldman, Sachs & Co.
This advertising section does not constitute part of the 2004 Semi-Annual Report.
22 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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The iShares Funds are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to the iShares Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the iShares Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., a wholly owned subsidiary of Barclays Bank PLC none of which is affiliated with SEI.
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Morgan Stanley Capital International, Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds.
Investing involves risk, including possible loss of principal.
*2004 Barclays Global Investors. All rights reserved. iShares is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available with out charge, upon request, by calling toll-free 1 800 474 2737; on the Funds’ website at www.iShares.com: and on the Securities and Exchange Commission’s website at www.sec.gov.
This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
iShares® industrial strength investment tools from BARCLAYS GLOBAL INVESTORS
I 800 iSHARES (1 800 474 2737) www.iSHARES.COM
BGI-F037-02004 | BARCLAYS |
Table of Contents
iShares®
2004 SEMI-ANNUAL REPORT TO SHAREHOLDERS
FEBRUARY 29, 2004
[GRAPHIC]
INDUSTRIAL STRENGTH
INVESTMENT TOOLS
iSHARESMSCIAUSTRALIAINDEXFUND
iSHARESMSCIBRAZILINDEXFUND
iSHARESMSCICANADAINDEXFUND
iSHARESMSCIEMERGINGMARKETSINDEXFUND
iSHARESMSCIHONGKONGINDEXFUND
iSHARESMSCIMALAYSIAINDEXFUND
iSHARESMSCIMEXICOINDEXFUND
iSHARESMSCIPACIFICEX-JAPANINDEXFUND
iSHARESMSCISINGAPOREINDEXFUND
iSHARESMSCISOUTHAFRICAINDEXFUND
iSHARESMSCISOUTHKOREAINDEXFUND
iSHARESMSCITAIWANINDEXFUND
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Following several years of economic slowdown, international markets showed renewed strength during the past six months. Declining interest rates around the world largely fueled the rise. Corporate cost cutting measures and improving investor confidence levels also helped buoy market levels.
In general, emerging markets were the performance leaders, benefiting from rising export demand as global economic conditions firmed. As China developed into a more important global market, many emerging markets found they did not depend so heavily on the U.S. for export growth. Japan bounced back, delivering an impressive 7% gross domestic product (GDP) annualized growth rate in the fourth quarter of 2003 alone. Europe showed more muted growth levels, still somewhat hemmed in by the euro’s continued rise against the U.S. dollar. For many markets, in Europe and elsewhere, the weakening U.S. dollar had a dampening effect as it made those countries’ exports more expensive in U.S. dollars. For U.S.-based investors, however, the relative strength of the foreign currencies helped to boost returns.
While the improved market returns provided a welcome relief from the weak market environment of the past few years, we urge you to keep in mind that past performance is not a guarantee of future returns. In light of today’s complex and uncertain market environment, the iShares® Funds continue to innovate and expand, offering more tools that help investors tailor their portfolios to achieve diversity and address volatility. For example, the iShares family of funds recently introduced the iShares S&P 1500 Index Fund, offering access to approximately 90% of the total U.S. equity market capitalization. Launched late last year, the iShares Dow Jones Select Dividend Index Fund provides investors with exposure to fifty of the highest dividend-yielding securities in the Dow Jones U.S. Total Market Index, while the iShares Dow Jones Transportation Average Index Fund provides exposure to airlines, industrial transportation companies and general industrial services companies. The iShares family of funds has also added the iShares Lehman TIPS Bond Fund, which provides the opportunity to gain exposure to inflation-protected government securities. Looking ahead to the future, the iShares Funds plan to introduce new funds, which will give investors focused exposure to additional indexes.
With the addition of these iShares Funds, investors can achieve even more diversity in their portfolios – and at lower cost, since iShares Fund fees are, on average, about half those of actively managed funds.1 With more than 80 different funds in the iShares family of funds to choose from, investors have the ability to build a diverse portfolio that covers a wide swath of market segments with various capitalizations and sectors, as well as value and growth, international and fixed income securities. That is important because market segments do not tend to move in tandem, particularly in volatile markets. Economic factors, including inflation, interest rate levels, currency valuations or the price of oil, as well as the normal pace of the economic cycle, all may result in one market segment outperforming another.
As market conditions change, we encourage you to talk with your financial advisor about what blend of investments or asset allocation can best help you meet your financial goals. We will continue to work closely with the financial advisor community to introduce innovative strategies and structures for their clients’ portfolios. To learn more about the iShares Funds, please visit our web site, www.iShares.com.
Regardless of market conditions, a sound, disciplined investing plan is essential. Such a plan should be grounded in two key concepts: keeping the costs associated with investing as low as possible, and maintaining a diversified portfolio. That is why we believe the iShares Funds are an indispensable tool for investors. And that is also why more and more investors have recognized the benefits of the iShares Funds. Assets under management for the iShares family of funds continue to grow, and as of February 29, 2004, had reached $68.3 billion.
On behalf of the iShares family of funds, we thank you for making the iShares Funds a part of your portfolio. We look forward to meeting your investment needs in the year ahead.
[GRAPHIC APPEARS HERE]
Lee T. Kranefuss
President and Chairman of the Board of Directors
iShares, Inc.
1 | Morningstar Principia, BGI analysis 3/04. |
SHAREHOLDER LETTER | 1 |
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The iShares Funds are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to the iShares Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the iShares Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., none of which is affiliated with SEI.
To determine if the fund(s) are an appropriate investment for you, 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, which may be obtained by calling 1-800-iShares or by visiting www.ishares.com. Read the prospectus carefully before investing.
There are risks involved with investing, including possible loss of principal. Diversification may not protect against market risk. An investment in the funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The annual management fees of the iShares Funds may be substantially less than those of most mutual funds. iShares transactions will result in brokerage commissions, but the savings from lower annual fees can help offset these costs.
iShares is a registered trademark of Barclays Global Investors, N.A. The iShares Funds are not sponsored, endorsed, or issued by Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Dow Jones & Company, Inc. or Standard and Poor’s. None of these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with the companies listed above.
This advertising section does not constitute part of the 2004 Semi-Annual Report.
2 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Managers’ Discussion & Analysis
iSHARES® MSCI AUSTRALIA INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
55.98% | 56.49 | % | 55.58 | % | 10.37 | % | 10.18 | % | 10.16 | % | 7.17 | % | 7.28 | % | 7.51 | % |
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
55.98% | 56.49 | % | 55.58 | % | 63.76 | % | 62.38 | % | 62.23 | % | 73.68 | % | 75.06 | % | 78.10 | % |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | |||||
Banks | [GRAPHIC APPEARS HERE] | 29.35 | % | ||
Materials | [GRAPHIC APPEARS HERE] | 21.12 | % | ||
Media | [GRAPHIC APPEARS HERE] | 9.30 | % | ||
Real Estate | [GRAPHIC APPEARS HERE] | 8.73 | % | ||
Insurance | [GRAPHIC APPEARS HERE] | 4.72 | % | ||
Food & Staples Retailing | [GRAPHIC APPEARS HERE] | 4.06 | % | ||
Food, Beverage & Tobacco | [GRAPHIC APPEARS HERE] | 3.25 | % | ||
Diversified Financials | [GRAPHIC APPEARS HERE] | 3.16 | % | ||
Energy | [GRAPHIC APPEARS HERE] | 2.83 | % | ||
Transportation | [GRAPHIC APPEARS HERE] | 2.43 | % |
The iShares MSCI Australia Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Australian market, as measured by the MSCI Australia Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 27.35%, while the Index returned 27.10%.
Following a twelve-year run of economic expansion, characterized by low inflation and low interest rates, Australia’s economy began to see signs of slowing during the reporting period. Thanks to low interest rates, Australians were on a buying streak that fueled an overheated housing market. In response, the central bank raised interest rates in November and again in December.
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The country’s strong currency also began to weigh on growth prospects. Although U.S. economic recovery increased export demand for Australia, the Australian dollar’s rapid gains against the U.S. dollar limited the potential gains. However, for U.S.-based investors, the strengthening Australian currency meant enhanced returns on Australian-based investments during the reporting period.
Despite the dampening effect of the strong currency, BHP Billiton Ltd. (9.00% of the net assets of the Fund as of February 29, 2004) posted gains, in part due to increased demand from China. Banks generally performed well, with Commonwealth Bank of Australia, Australia and New Zealand Banking Group Ltd., and Westpac Banking Corp. Ltd. (7.83%, 6.35%, and 5.91%, respectively, of the net assets of the Fund as of February 29, 2004) all posting gains during the reporting period.
The preferred and common shares of The News Corp. Ltd. (5.66% and 3.25%, respectively, of the net assets of the Fund as of February 29, 2004) declined during the reporting period, as the publication and entertainment giant’s revenues were hampered by the strong Australian currency. Woolworths Ltd. (2.34% of the net assets of the Fund as of February 29, 2004) posted a slight loss.
MANAGERS’ DISCUSSION & ANALYSIS | 5 |
Table of Contents
Managers’ Discussion & Analysis
iSHARES® MSCI BRAZIL INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||
Year Ended 2/29/04 | Inception to 2/29/04 | Inception to 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
128.13% | 127.72 | % | 130.21 | % | (2.34 | )% | (2.30 | )% | 0.34 | % | (8.26 | )% | (8.12 | )% | 1.24 | % |
Total returns for the period since inception are calculated from the inception date of the Fund (7/10/00). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (7/14/00), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
FUND ALLOCATIONS BY SECTOR (% of Net Assets) | |||||
Materials | [GRAPHIC APPEARS HERE] | 27.72 | % | ||
Energy | [GRAPHIC APPEARS HERE] | 23.88 | % | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 12.60 | % | ||
Banks | [GRAPHIC APPEARS HERE] | 11.15 | % | ||
Food, Beverage & Tobacco | [GRAPHIC APPEARS HERE] | 11.14 | % | ||
Utilities | [GRAPHIC APPEARS HERE] | 7.02 | % | ||
Capital Goods | [GRAPHIC APPEARS HERE] | 3.97 | % | ||
Food & Staples Retailing | [GRAPHIC APPEARS HERE] | 1.14 | % | ||
Consumer Durables & Apparel | [GRAPHIC APPEARS HERE] | 0.37 | % |
The iShares MSCI Brazil Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Brazilian market, as measured by the MSCI Brazil Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 39.42%, while the Index returned 40.26%.
Brazil delivered one of the strongest equity market and currency performances in the world during the reporting period.
During the reporting period, Brazil’s stock market gained amid prospects for accelerating economic expansion. During the course of the reporting period, the central bank cut its benchmark lending rate by a full 5.5%, from 22.0% to 16.5%. President Luiz Inacio Lula da Silva continued to implement measures to spur economic growth. In September, he passed a bill aimed at overhauling the tax system, including tax breaks for investment. In November, he introduced a bill that would revamp the power industry by allowing supply and demand to determine electricity prices.
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The measures appeared to be taking hold, with gross domestic product growth reaching an annual rate of 6% in the fourth quarter of 2003. On the other hand, unemployment grew slightly, topping 11%, and household consumption declined. Moreover, when the central bank held interest rates steady during the first two months of 2004, citing possible inflation concerns, markets responded negatively. The possibility of higher interest rates in the U.S. also weighed on the market. For U.S. dollar-based investors, returns were enhanced by the strength of the local currency during the reporting period.
Oil company Petroleo Brasileiro SA performed well during the reporting period. Its preferred and common shares, which represented 13.13% and 10.75%, respectively, of the net assets of the Fund as of February 29, 2004, delivered solid gains. Mining giant Companhia Vale do Rio Doce (whose Class A shares and ADR shares represented 9.59% and 6.33%, respectively, of the net assets of the Fund as of February 29, 2004) posted strong gains during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 7 |
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Managers’ Discussion & Analysis
iSHARES® MSCI CANADA INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
48.55% | 49.11 | % | 50.05 | % | 11.85 | % | 11.88 | % | 12.26 | % | 10.56 | % | 10.62 | % | 11.33 | % |
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
48.55% | 49.11 | % | 50.05 | % | 75.02 | % | 75.32 | % | 78.28 | % | 122.57 | % | 123.54 | % | 135.20 | % |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | |||||
Banks | [GRAPHIC APPEARS HERE] | 21.85 | % | ||
Energy | [GRAPHIC APPEARS HERE] | 16.70 | % | ||
Materials | [GRAPHIC APPEARS HERE] | 16.34 | % | ||
Insurance | [GRAPHIC APPEARS HERE] | 8.63 | % | ||
Technology Hardware & Equipment | [GRAPHIC APPEARS HERE] | 7.38 | % | ||
Diversified Financials | [GRAPHIC APPEARS HERE] | 4.56 | % | ||
Utilities | [GRAPHIC APPEARS HERE] | 4.00 | % | ||
Transportation | [GRAPHIC APPEARS HERE] | 3.61 | % | ||
Media | [GRAPHIC APPEARS HERE] | 2.83 | % | ||
Food & Staples Retailing | [GRAPHIC APPEARS HERE] | 2.61 | % |
The iShares MSCI Canada Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Canadian market, as measured by the MSCI Canada Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 21.02%, while the Index returned 21.64%.
Although the Canadian market entered the reporting period better poised than many for economic recovery, its growth stalled during the past six months. The country battled a series of unforeseen events, such as SARS and Mad Cow Disease, but it was the strength of its currency that put a stranglehold on economic growth.
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Canada depends heavily on exports to the U.S., which account for 85% of Canada’s exports, for its economic prosperity. As the Canadian currency rose against the U.S. dollar, its export levels diminished. Export levels to the U.S. shrank in each of the three final months of 2003, as the U.S. turned instead to suppliers in China and Mexico.
For the entire year of 2003, gross domestic product growth was a slight 1.5%. In response to the anemic growth rate, the central bank attempted to stimulate the economy by lowering its benchmark lending rate in January, from 2.75% to 2.50%.
Among the Fund’s ten largest holdings, the strongest performer far and away was Nortel Networks Corp., the second largest holding at 6.62% of the net assets of the Fund as of February 29, 2004. Participating in a global rebound in the telecommunications industry, the company posted triple-digit gains during the reporting period.
Financial companies also moved in step with their counterparts around the world. Bank of Montreal and Canadian Imperial Bank of Commerce (4.28% and 4.00%, respectively, of the net assets of the Fund as of February 29, 2004) both performed well during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 9 |
Table of Contents
Managers’ Discussion & Analysis
iSHARES® MSCI EMERGING MARKETS INDEX FUND
Performance as of 2/29/04
Total Returns | ||||
Inception to 2/29/04 | ||||
NAV | MARKET | INDEX | ||
71.66% | 73.17% | 69.79% |
“Total returns” represent the total change in value of an investment over the period indicated and are calculated from the inception date of the Fund (4/7/03).
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and since inception periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (4/11/03), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the table above do 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.
TOP 10 FUND ALLOCATIONS BY COUNTRY (% of Net Assets) | |||||
South Korea | [GRAPHIC APPEARS HERE] | 17.78 | % | ||
South Africa | [GRAPHIC APPEARS HERE] | 14.36 | % | ||
Taiwan | [GRAPHIC APPEARS HERE] | 11.89 | % | ||
Brazil | [GRAPHIC APPEARS HERE] | 8.15 | % | ||
Mexico | [GRAPHIC APPEARS HERE] | 7.49 | % | ||
Russia | [GRAPHIC APPEARS HERE] | 5.16 | % | ||
India | [GRAPHIC APPEARS HERE] | 5.02 | % | ||
China | [GRAPHIC APPEARS HERE] | 4.76 | % | ||
Hong Kong | [GRAPHIC APPEARS HERE] | 4.52 | % | ||
Thailand | [GRAPHIC APPEARS HERE] | 3.97 | % |
The iShares MSCI Emerging Markets Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 28.40%, while the Index returned 28.41%.
Emerging markets generally delivered healthy gains during the reporting period. Because many emerging markets depend on exports to the U.S. and to neighboring countries for their economic livelihood, the improving economic conditions in the U.S. and other major markets helped to buoy market returns. For some emerging markets, however, currency strength against the U.S. dollar dampened export trade somewhat. For U.S.-based investors, however, the weakness of the U.S. dollar boosted returns in these emerging markets.
South Korea overcame a number of obstacles during the reporting period to deliver gains. Early in the period, the International Monetary Fund cut its growth outlook for the country down from 5.0% to 2.5%. News of OPEC’s plans to cut oil production was also negative for Korea, which is the world’s fourth-largest oil importer. However, as a major exporter of electronics, South Korea benefited from signs of recovery in the U.S. during the reporting period. The world’s second-largest chipmaker and the largest Fund holding at 7.66% of net assets as of February 29, 2004, Samsung Electronics Co. Ltd. benefited from the increased export demand. In general, the telecommunications sector rebounded worldwide during the reporting period. Hong Kong’s China Mobile Ltd. participated in this trend, (1.92% of the net assets of the Fund as of February 29, 2004) posting gains for the reporting period.
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The Taiwanese market also advanced during the reporting period. Because of Taiwan’s dependence on exports, signs of increasing global growth helped boost the equity market. Although strength in the U.S. helped Taiwan’s export market, growing economic strength in the U.S., China and Japan also contributed to export growth, helping Taiwan’s local economy. In December alone, Taiwan’s export orders rose 20% to a record $15.7 billion on stronger Chinese and U.S. demand for computer chips, flat-panel displays and other electronic goods.
South Africa, on the other hand, found its growth hindered by the strength of its currency, which gained against the U.S. dollar during the reporting period. Record high gold prices helped to mitigate the problem for Anglo American PLC (3.93% of the Fund’s net assets as of February 29, 2004), the largest mining company in the world, although it did implement cost-cutting measures to counter the currency’s rise and deliver positive returns.
MANAGERS’ DISCUSSION & ANALYSIS | 11 |
Table of Contents
Managers’ Discussion & Analysis
iSHARES® MSCI HONG KONG INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
55.79% | 55.04 | % | 57.49 | % | 7.62 | % | 7.61 | % | 8.35 | % | 1.22 | % | 1.27 | % | 3.41 | % |
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception To 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
55.79% | 55.04 | % | 57.49 | % | 44.35 | % | 44.31 | % | 49.31 | % | 10.13 | % | 10.60 | % | 30.60 | % |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | |||||
Real Estate | [GRAPHIC APPEARS HERE] | 26.39 | % | ||
Banks | [GRAPHIC APPEARS HERE] | 16.10 | % | ||
Capital Goods | [GRAPHIC APPEARS HERE] | 15.20 | % | ||
Utilities | [GRAPHIC APPEARS HERE] | 14.96 | % | ||
Diversified Financials | [GRAPHIC APPEARS HERE] | 9.84 | % | ||
Retailing | [GRAPHIC APPEARS HERE] | 4.89 | % | ||
Transportation | [GRAPHIC APPEARS HERE] | 4.69 | % | ||
Consumer Durables & Apparel | [GRAPHIC APPEARS HERE] | 2.16 | % | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 2.08 | % | ||
Media | [GRAPHIC APPEARS HERE] | 1.58 | % |
The iShares MSCI Hong Kong Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Hong Kong market, as measured by the MSCI Hong Kong Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 26.28%, while the Index returned 26.60%.
The Hong Kong market delivered solid gains during the reporting period. After successfully fighting off the effects of global economic slowdown and the SARS virus in the past few years, the Hong Kong economy rebounded at a healthy pace.
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Unlike many of its Asian neighbors who depend heavily on electronics-related exports to drive their economies, Hong Kong is largely a services-based economy. Generally as its ties to mainland China strengthened, so did its role as the provider of service-based industries, such as tourism, financial services, and professional services.
Driving much of the market’s returns during the reporting period was the real estate market. The largest holdings in the Fund, Hutchison Whampoa Ltd., Cheung Kong (Holdings) Ltd., and Sun Hung Kai Properties Ltd. (13.98%, 10.19%, and 9.33%, respectively, of the net assets of the Fund as of February 29, 2004) all posted gains during the reporting period. Swire Pacific Ltd. Class A shares (4.57% of the Fund’s net assets as of February 29, 2004) and BOC Hong Kong (Holdings) Ltd. (4.85% of the net assets of the Fund as of February 29, 2004) also performed well during the reporting period, logging some of the best gains among the Fund’s ten largest holdings.
As the economic landscape strengthened in Hong Kong and the region, utilities companies also gained ground. Hong Kong & China Gas Co. Ltd. and Hongkong Electric Holdings Ltd. (4.72% and 4.07%, respectively, of the Fund’s net assets as of February 29, 2004) both performed well during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 13 |
Table of Contents
Managers’ Discussion & Analysis
iSHARES® MSCI MALAYSIA INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
39.17% | 44.75 | % | 41.01 | % | 21.22 | % | 16.80 | % | 19.93 | % | (5.53 | )% | (5.46 | )% | (4.30 | )% |
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
39.17% | 44.75 | % | 41.01 | % | 161.76 | % | 117.38 | % | 148.09 | % | (36.45 | )% | (36.06 | )% | (29.56 | )% |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. In the case of the Malaysia Fund, which has a NAV determined prior to the opening of the regular trading day on the American Stock Exchange (the “Amex”), the market return will use the midpoint of the bid/ask spread as of the opening of regular trading on the Amex. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | |||||
Banks | [GRAPHIC APPEARS HERE] | 22.07 | % | ||
Hotels Restaurants & Leisure | [GRAPHIC APPEARS HERE] | 11.93 | % | ||
Food, Beverage & Tobacco | [GRAPHIC APPEARS HERE] | 11.62 | % | ||
Capital Goods | [GRAPHIC APPEARS HERE] | 11.21 | % | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 9.94 | % | ||
Utilities | [GRAPHIC APPEARS HERE] | 9.94 | % | ||
Transportation | [GRAPHIC APPEARS HERE] | 7.06 | % | ||
Diversified Financials | [GRAPHIC APPEARS HERE] | 3.88 | % | ||
Automobiles & Components | [GRAPHIC APPEARS HERE] | 3.36 | % | ||
Media | [GRAPHIC APPEARS HERE] | 2.79 | % |
The iShares MSCI Malaysia Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Malaysian market, as measured by the MSCI Malaysia Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 20.35%, while the Index returned 21.18%.
After struggling in the last reporting period with the repercussions of a sluggish global economy, the SARS virus and the terrorist bombings in Bali, the Malaysian market rebounded during the reporting period.
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Malaysia’s economy historically has relied heavily on exports and tourism, and therefore benefited during the reporting period from the upswing in economic growth both in the U.S. and among its Asian neighbors. During the reporting period, Genting Bhd (4.14% of the net assets of the Fund as of February 29, 2004), Malaysian International Shipping Corp. Bhd. (3.73% of the net assets of the Fund as of February 29, 2004), and Sime Darby Bhd. (4.80% of the net assets of the Fund as of February 29, 2004) benefited from the improved economic environment and increase in foreign demand.
Financial companies also were buoyed by increased economic activity. The largest Fund holding at 10.10% of net assets as of February 29, 2004, Malayan Banking Bhd., posted gains for the reporting period. Commerce Asset Holdings Bhd. (4.63% of the Fund’s net assets as of February 29, 2004) also performed well.
During the last two decades, Malaysia’s export market has shifted from commodities toward electronics, its leading export today. Together, electronic parts and semiconductors account for roughly 40% of Malaysia’s export. Even so, the country remains a leading exporter of commodity products, including palm oil. IOI Corp. Bhd., a major producer of palm oil and rubber, represented 4.33% of the Fund’s net assets as of February 29, 2004 and logged healthy gains during the reporting period, thanks to increased regional demand.
MANAGERS’ DISCUSSION & ANALYSIS | 15 |
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Managers’ Discussion & Analysis
iSHARES® MSCI MEXICO INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
70.65% | 71.53 | % | 64.41 | % | 14.20 | % | 14.67 | % | 15.49 | % | 11.33 | % | 11.36 | % | 13.20 | % |
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
70.65% | 71.53 | % | 64.41 | % | 94.25 | % | 98.28 | % | 105.43 | % | 135.18 | % | 135.81 | % | 168.59 | % |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | |||||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 43.40 | % | ||
Materials | [GRAPHIC APPEARS HERE] | 12.89 | % | ||
Food, Beverage & Tobacco | [GRAPHIC APPEARS HERE] | 10.76 | % | ||
Media | [GRAPHIC APPEARS HERE] | 7.92 | % | ||
Banks | [GRAPHIC APPEARS HERE] | 6.04 | % | ||
Capital Goods | [GRAPHIC APPEARS HERE] | 4.70 | % | ||
Food & Staples Retailing | [GRAPHIC APPEARS HERE] | 4.66 | % | ||
Retailing | [GRAPHIC APPEARS HERE] | 4.42 | % | ||
Household & Personal Products | [GRAPHIC APPEARS HERE] | 2.62 | % | ||
Consumer Durables & Apparel | [GRAPHIC APPEARS HERE] | 1.52 | % |
The iShares MSCI Mexico Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Mexican market, as measured by the MSCI Mexico Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 31.96%, while the Index returned 28.51%.
Regulatory constraints, such as those imposed by the Securities and Exchange Commission and Internal Revenue Service, can restrict the Fund’s ability to hold a given index component at its benchmark weight, resulting in differences between a fund’s holdings and the securities in its underlying index. One such constraint, the “5/50 Rule”, precludes the sum of all the securities weighted over 5% in a fund’s portfolio from exceeding 50% of a fund’s total assets. As of February 29, 2004, nearly 80% of the Index was represented by securities each having a weighting of 5% or more of the Index. To comply with the 5/50 Rule, the Fund was obligated to underweight some of these stocks relative to
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the benchmark, and overweight its investment in other stocks. In general, the overweighted securities outperformed the benchmark returns. This had a positive impact on the Fund’s performance relative to the Index’s and was a major factor in the Fund’s ability to outperform the Index by 3.45 percentage points during the reporting period.
The Mexican economy experienced a more moderate recovery than most international markets during the reporting period. Manufacturing levels remained fairly stagnant, in part due to lack of demand from the U.S., while construction edged up. In October, the central bank revised its forecast for 2003 economic growth downward, from 2.0% to 1.5%, in the face of lower demand for Mexican exports.
Not all sectors were slow, however. Retail sales figures released in late September showed growth levels that exceeded consensus expectations. Rising commodities prices helped boost returns for mining companies.
Telecommunications companies generally moved in step during the reporting period with their counterparts around the world. The largest Fund holding at 21.89% of net assets as of February 29, 2004, America Movil SA de CV Series L, was also a strong performer, rebounding from previous reporting periods. Telefonos de Mexico SA de CV Series L (18.05% of the net assets of the Fund as of February 29, 2004) also posted gains. Financial companies also echoed the performance of their international counterparts. Grupo Financiero BBVA Bancomer SA de CV Class B (4.77% of the net assets of the Fund as of February 29, 2004) was an example, delivering solid gains during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 17 |
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Managers’ Discussion & Analysis
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||
Year Ended 2/29/04 | Inception to 2/29/04 | Inception to 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
55.94% | 55.40 | % | 55.91 | % | 22.28 | % | 22.81 | % | 22.41 | % | 60.35 | % | 61.99 | % | 60.52 | % |
Total returns for the period since inception are calculated from the inception date of the Fund (10/25/01). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (10/26/01), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
FUND ALLOCATIONS BY COUNTRY (% of Net Assets) | |||||
Australia | [GRAPHIC APPEARS HERE] | 63.90 | % | ||
Hong Kong | [GRAPHIC APPEARS HERE] | 22.27 | % | ||
Singapore | [GRAPHIC APPEARS HERE] | 10.51 | % | ||
New Zealand | [GRAPHIC APPEARS HERE] | 2.95 | % |
The iShares MSCI Pacific ex-Japan Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Australia, Hong Kong, New Zealand and Singapore markets, as measured by the MSCI Pacific Free ex-Japan Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 26.50%, while the Index returned 26.35%.
The markets comprising the Index – Australia, Hong Kong, New Zealand and Singapore, all posted gains during the reporting period, responding to global economic recovery.
Australia’s economy was hemmed in by its strong currency, as a rising Australian dollar made Australian goods more expensive to its export market. For U.S.-based investors, however, the stronger currency boosted returns, and the Australian market contributed the most, in U.S dollar terms, to the Index’s overall performance during the reporting period. BHP Billiton Ltd. (5.81% of the net assets of the Fund as of February 29, 2004) logged gains despite the strong currency, thanks to growing demand from China. The financial sector also performed well, with Commonwealth Bank of Australia, Australia and New Zealand Banking Group Ltd., and Westpac Banking Corp. Ltd. (5.06%, 4.10% and 3.81%, respectively, of the Fund’s net assets as of February 29, 2004) all posting gains during the reporting period.
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For Hong Kong, the real estate market was the main driver of performance. The sector continued to benefit from the government’s efforts to reverse deflation in the property market. Hutchison Whampoa Ltd. and Cheung Kong (Holdings) Ltd. (2.96% and 2.36%, respectively, of the net assets of the Fund as of February 29, 2004) both posted gains. The gains posted by Sun Hung Kai Properties Ltd. (2.05% of the net assets of the Fund as of February 29, 2004) made it the strongest performer among the Fund’s ten largest holdings during the reporting period.
Singapore’s economy relies largely on exports, particularly those to the U.S. The improving economic climate in the U.S., therefore, helped the Singapore market as demand for exports grew. Its neighboring markets, including Japan and China, also helped to buoy its export market as their respective economies strengthened.
MANAGERS’ DISCUSSION & ANALYSIS | 19 |
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Managers’ Discussion & Analysis
iSHARES® MSCI SINGAPORE INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
55.75% | 58.79 | % | 54.39 | % | 4.13 | % | 4.50 | % | 3.84 | % | (6.18 | )% | (6.03 | )% | (5.58 | )% |
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
55.75% | 58.79 | % | 54.39 | % | 22.41 | % | 24.60 | % | 20.71 | % | (39.85 | )% | (39.08 | )% | (36.70 | )% |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR | |||||
Banks | [GRAPHIC APPEARS HERE] | 37.15 | % | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 12.01 | % | ||
Transportation | [GRAPHIC APPEARS HERE] | 11.09 | % | ||
Capital Goods | [GRAPHIC APPEARS HERE] | 10.88 | % | ||
Real Estate | [GRAPHIC APPEARS HERE] | 9.66 | % | ||
Technology Hardware & Equipment | [GRAPHIC APPEARS HERE] | 5.57 | % | ||
Media | [GRAPHIC APPEARS HERE] | 3.42 | % | ||
Food, Beverage & Tobacco | [GRAPHIC APPEARS HERE] | 2.61 | % | ||
Semiconductors & Semiconductor Equipment | [GRAPHIC APPEARS HERE] | 2.42 | % | ||
Diversified Financials | [GRAPHIC APPEARS HERE] | 2.27 | % |
The iShares MSCI Singapore Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Singaporean market, as measured by the MSCI Singapore Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 21.01%, while the Index returned 20.69%.
Singapore shrugged off the difficulties it faced in previous reporting periods to deliver gains during the reporting period. Because Singapore’s economy historically has relied heavily on its export market, particularly to the U.S., it responded positively to signs of renewed economic strength in the U.S. economy.
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The increased export demand translated into gains for companies like Venture Corp. Ltd. (3.96% of the net assets of the Fund as of February 29, 2004) and Keppel Corp. Ltd. (4.03% of the net assets of the Fund as of February 29, 2004). Non-exporting companies also posted gains. Singapore Telecommunications Ltd. (12.01% of the net assets of the Fund as of February 29, 2004) and City Developments Ltd. (3.70% of the net assets of the Fund as of February 29, 2004) were among the strongest performers within the Fund’s ten largest holdings during the reporting period.
Financial companies also generally performed well during the reporting period, as the economic environment improved. The largest Fund holding at 14.27% of net assets as of February 29, 2004, United Overseas Bank Ltd., logged gains, as did DBS Group Holdings Ltd. (13.53% of the net assets of the Fund as of February 29, 2004) and Oversea-Chinese Banking Corp. Ltd. (9.35% of the net assets of the Fund as of February 29, 2004).
Singapore Airlines Ltd. (4.27% of the Fund’s net assets as of February 29, 2004), having overcome a drop-off in business in the wake of the SARS virus was dealt another blow during the reporting period in the form of the November terrorist bombings in Istanbul. Because Singapore Airlines operates regular flights to Istanbul, it suffered a short-term setback, but managed to finish the reporting period in positive territory.
MANAGERS’ DISCUSSION & ANALYSIS | 21 |
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Managers’ Discussion & Analysis
iSHARES® MSCI SOUTH AFRICA INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||
Year Ended 2/29/04 | Inception to 2/29/04 | Inception to 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
54.70% | 56.16 | % | 57.44 | % | 50.13 | % | 51.13 | % | 53.27 | % | 54.54 | % | 55.64 | % | 57.92 | % |
Total returns for the period since inception are calculated from the inception date of the Fund (2/3/03). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (2/7/03), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | |||||
Materials | [GRAPHIC APPEARS HERE] | 48.39 | % | ||
Insurance | [GRAPHIC APPEARS HERE] | 10.47 | % | ||
Banks | [GRAPHIC APPEARS HERE] | 9.62 | % | ||
Energy | [GRAPHIC APPEARS HERE] | 7.57 | % | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 5.83 | % | ||
Capital Goods | [GRAPHIC APPEARS HERE] | 4.10 | % | ||
Retailing | [GRAPHIC APPEARS HERE] | 2.78 | % | ||
Food, Beverage & Tobacco | [GRAPHIC APPEARS HERE] | 2.73 | % | ||
Diversified Financials | [GRAPHIC APPEARS HERE] | 1.98 | % | ||
Food & Staples Retailing | [GRAPHIC APPEARS HERE] | 1.62 | % |
The iShares MSCI South Africa Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the South African market, as measured by the MSCI South Africa Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 27.83%, while the Index returned 28.23%.
The South African market posted gains during the reporting period. For U.S.-based investors, returns were enhanced by the local currency’s strength against the U.S. dollar.
The South African economy historically has been driven by metals, mining, and materials companies. Despite record high prices for gold, these companies came under pressure during the reporting period. Because these companies generally make their revenues in U.S. dollars but incur costs in South African rand, they have been adversely affected by the local currency’s rapid gains. From its low against the U.S. dollar in December 2002 through November 2003, the currency doubled against the U.S. dollar.
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The currency’s strength severely hindered companies like Anglo American PLC, the largest mining company in the world and the largest Fund holding at 24.70% of net assets as of February 29, 2004, which implemented cost-cutting measures to counter the rand’s rise. Other companies cut profit forecasts and pared back on expansion plans due to the pace of cost increases. In December, the currency briefly reversed course, providing relief, but showed strength again in February.
Although Anglo American posted gains for the reporting period, other top ten Fund holdings did not fare as well. Impala Platinum Holdings Ltd., AngloGold Ltd., and Gold Fields Ltd. (4.81%, 4.27%, and 3.84%, respectively, of the net assets of the Fund as of February 29, 2004) all declined.
Apart from the metals and mining-related companies, financial companies generally performed well, with Standard Bank Group Ltd. (5.52% of the net assets of the Fund as of February 29, 2004) logging gains. Telecommunications company MTN Group Ltd. (4.23% of the net assets of the Fund as of February 29, 2004) performed in line with its telecommunications counterparts around the world, and was by far the best performer among the ten largest holdings in the Fund for the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 23 |
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Managers’ Discussion & Analysis
iSHARES® MSCI SOUTH KOREA INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | CUMULATIVE TOTAL RETURNS | |||||||||||||||||||||||
Year Ended 2/29/04 | Inception to 2/29/04 | Inception to 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
63.05% | 62.17 | % | 69.46 | % | 8.56 | % | 8.89 | % | 8.88 | % | 36.77 | % | 38.35 | % | 38.30 | % |
Total returns for the period since inception are calculated from the inception date of the Fund (5/9/00). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. In the case of the South Korea Fund, the NAV of which is determined prior to the opening of the regular trading day on the American Stock Exchange (the “AMEX”), the market return is calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the AMEX. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (5/12/00), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | |||||
Semiconductors & Semiconductor Equipment | [GRAPHIC APPEARS HERE] | 25.74 | % | ||
Banks | [GRAPHIC APPEARS HERE] | 11.94 | % | ||
Materials | [GRAPHIC APPEARS HERE] | 10.87 | % | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 8.90 | % | ||
Technology Hardware & Equipment | [GRAPHIC APPEARS HERE] | 7.96 | % | ||
Automobiles & Components | [GRAPHIC APPEARS HERE] | 7.69 | % | ||
Capital Goods | [GRAPHIC APPEARS HERE] | 4.81 | % | ||
Consumer Durables & Apparel | [GRAPHIC APPEARS HERE] | 4.44 | % | ||
Utilities | [GRAPHIC APPEARS HERE] | 3.20 | % | ||
Food, Beverage & Tobacco | [GRAPHIC APPEARS HERE] | 2.67 | % |
The iShares MSCI South Korea Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the South Korean market, as measured by the MSCI South Korea Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 19.85%, while the Index returned 22.10%.
Regulatory constraints, such as those imposed by the Securities and Exchange Commission and Internal Revenue Service, can restrict the Fund’s ability to hold a given index component at its benchmark weight, resulting in differences between a fund’s holdings and the securities in its underlying index. One such constraint, the “Single Issuer Rule”, generally prohibits a fund from investing more than 25% of the value of a fund’s total assets in the securities of a single issuer. To comply with this Rule, the Fund was obligated to underweight its investment in the Index’s largest constituent, Samsung Electronics Co. Ltd., which outperformed the benchmark during the reporting period. This had a negative impact on the Fund’s performance relative to the Index’s, and was a major factor in the Fund’s underperformance of the Index by 2.25 percentage points.
24 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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The South Korean market managed to overcome difficulties on several fronts to deliver gains during the reporting period. Early in the period, the market stumbled as the International Monetary Fund cut its growth outlook for the country down from 5.0% to 2.5%. News of OPEC’s plans to cut oil production compounded the market’s woes, as the production cuts would have meant higher oil prices, which in turn would have raised costs for energy-using companies, slowing their earnings growth. Because it has no natural oil reserves, Korea is the world’s fourth-largest oil importer.
Another concern for the Korean economy has been a slump in domestic demand in the face of high debt payments and tightened lending rules. A report released in October showed that one in seven South Koreans were at least three months overdue on debt payments. In an effort to reverse the trend, the Korean government boosted spending and cut taxes during the reporting period.
Countering these problems, exports rose during the reporting period at their fastest clip in more than three years, as demand for cars, semiconductors and computers accelerated in the U.S., China, and Europe. The world’s second-largest chipmaker and the largest Fund holding at 24.73% of net assets as of February 29, 2004, Samsung Electronics Co. Ltd., benefited from the high export demand. Its affiliate, Samsung SDI Co. Ltd. (4.66% of the net assets of the Fund as of February 29, 2004), which manufactures plasma display panels, showed even stronger gains during the reporting period. Steel manufacturer POSCO (7.42% of the net assets of the Fund as of February 29, 2004), continued to benefit from Korea’s strong currency as it converted foreign gains back into the local currency.
MANAGERS’ DISCUSSION & ANALYSIS | 25 |
Table of Contents
Managers’ Discussion & Analysis
iSHARES® MSCI TAIWAN INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||
Year Ended 2/29/04 | Inception to 2/29/04 | Inception to 2/29/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
60.32% | 64.83 | % | 62.65 | % | (10.12 | )% | (9.86 | )% | (9.16 | )% | (32.59 | )% | (31.87 | )% | (29.85 | )% |
Total returns for the period since inception are calculated from the inception date of the Fund (6/20/00). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. In the case of the Taiwan Fund, the NAV of which is determined prior to the opening of the regular trading day on the American Stock Exchange (the “AMEX”), the market return is calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the AMEX. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (6/23/00), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | |||||
Semiconductors & Semiconductor Equipment | [GRAPHIC APPEARS HERE] | 27.34 | % | ||
Technology Hardware & Equipment | [GRAPHIC APPEARS HERE] | 25.55 | % | ||
Banks | [GRAPHIC APPEARS HERE] | 13.95 | % | ||
Materials | [GRAPHIC APPEARS HERE] | 13.09 | % | ||
Insurance | [GRAPHIC APPEARS HERE] | 4.38 | % | ||
Capital Goods | [GRAPHIC APPEARS HERE] | 3.63 | % | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 2.48 | % | ||
Consumer Durables & Apparel | [GRAPHIC APPEARS HERE] | 2.12 | % | ||
Diversified Financials | [GRAPHIC APPEARS HERE] | 2.03 | % | ||
Transportation | [GRAPHIC APPEARS HERE] | 1.62 | % |
The iShares MSCI Taiwan Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Taiwanese market, as measured by the MSCI Taiwan Index (the “Index”). For the six-month period ended February 29, 2004 the Fund returned 16.53%, while the Index returned 17.20%.
Taiwanese equities advanced during the reporting period, buoyed by signs of global economic growth. Because of Taiwan’s dependence on exports, growing economic strength in the U.S., China and Japan helped to boost the local economy. In December, Taiwan’s export orders rose 20% to a record $15.7 billion on stronger Chinese and U.S. demand for computer chips, flat-panel displays and other electronic goods. The increased levels of exports, in turn, prompted companies to increase hiring, which resulted in an annualized unemployment rate of 4.7%, a two-year low. Additionally, government stimulus measures, a boom in real estate and an increase in domestic demand combined to create a strong backdrop for growth.
26 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
During the reporting period, technology stocks generally performed well in response to the rise in export demand. United Microelectronics Corp. (6.53% of the net assets of the Fund as of February 29, 2004), the world’s second-largest supplier of made-to-order chips, was chosen over IBM to make advanced telecommunications chips for Xilinx Inc., the world’s largest seller of programmable semiconductors. AU Optronics Corp. (2.92% of the net assets of the Fund as of February 29, 2004) also posted solid gains during the reporting period.
China Steel Corp. (3.41% of the net assets of the Fund as of February 29, 2004), Taiwan’s largest steel producer, benefited from strong demand during the reporting period. In February, the company rallied nearly 20% in U.S. dollar terms when it announced plans to raise prices on six types of products beginning in April.
Financial company Cathay Financial Holdings Co. Ltd. (4.38% of the net assets of the Fund as of February 29, 2004) benefited from increased real estate activity and improving economic conditions. The company was a strong performer among the Fund’s ten largest holdings during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 27 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI AUSTRALIA INDEX FUND
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS – 93.87% | |||||
National Australia Bank Ltd. | 676,040 | $ | 16,117,399 | ||
BHP Billiton Ltd. | 1,684,318 | 15,932,306 | |||
Commonwealth Bank of Australia | 566,952 | 13,857,840 | |||
Australia and New Zealand Banking Group Ltd. | 809,600 | 11,237,397 | |||
Westpac Banking Corp. Ltd. | 804,642 | 10,460,843 | |||
News Corp. Ltd. (The) | 613,342 | 5,759,136 | |||
Woolworths Ltd. | 457,823 | 4,143,427 | |||
Rio Tinto Ltd. | 140,377 | 3,912,080 | |||
Wesfarmers Ltd. | 168,162 | 3,567,998 | |||
Telstra Corp. Ltd. | 965,848 | 3,562,056 | |||
AMP Ltd. | 822,193 | 3,108,379 | |||
Foster’s Group Ltd. | 917,475 | 3,093,426 | |||
Coles Myer Ltd. | 494,381 | 2,975,229 | |||
Westfield Trust | 976,967 | 2,668,377 | |||
Insurance Australia Group Ltd. | 757,538 | 2,630,153 | |||
QBE Insurance Group Ltd. | 301,259 | 2,566,098 | |||
Suncorp-Metway Ltd. | 241,280 | 2,528,047 | |||
Woodside Petroleum Ltd. | 209,984 | 2,465,840 | |||
Macquarie Bank Ltd. | 95,875 | 2,448,485 | |||
Rinker Group Ltd. | 424,768 | 2,303,940 | |||
Amcor Ltd. | 385,536 | 2,293,419 | |||
Stockland Trust Group | 531,918 | 2,199,751 | |||
Alumina Ltd. | 507,469 | 2,153,457 | |||
WMC Resources Ltd.1 | 507,712 | 2,048,723 | |||
General Property Trust | 883,328 | 2,030,965 | |||
Macquarie Infrastructure Group | 873,959 | 1,995,937 | |||
Westfield Holdings Ltd. | 190,336 | 1,894,413 | |||
Australian Gas Light Co. Ltd. | 204,416 | 1,797,976 | |||
Brambles Industries Ltd. | 433,856 | 1,777,478 | |||
TABCORP Holdings Ltd. | 188,096 | 1,642,820 | |||
BHP Steel Ltd. | 343,040 | 1,564,215 | |||
Orica Ltd. | 125,888 | 1,341,350 | |||
CSL Ltd. | 85,568 | 1,320,400 | |||
Newcrest Mining Ltd. | 146,304 | 1,298,130 | |||
Lend Lease Corp. Ltd. | 167,558 | 1,279,866 | |||
Origin Energy Ltd. | 295,488 | 1,278,989 | |||
Santos Ltd. | 265,280 | 1,242,388 | |||
Boral Ltd. | 258,560 | 1,224,881 | |||
Mirvac Group | 306,176 | 1,089,021 | |||
James Hardie Industries NV | 207,744 | 1,073,909 | |||
Coca-Cola Amatil Ltd. | 205,888 | 1,046,841 | |||
John Fairfax Holdings Ltd. | 391,404 | 1,023,739 | |||
Centro Properties Group | 283,712 | 919,372 | |||
Investa Property Group | 604,562 | 909,577 | |||
Patrick Corporation Ltd. | 222,912 | 858,219 | |||
Mayne Group Ltd. | 340,548 | 840,799 | |||
Macquarie Goodman Industrial Trust | 634,560 | 822,519 | |||
Toll Holdings Ltd. | 96,832 | 725,441 | |||
Transurban Group | 208,192 | 722,837 | |||
TAB Ltd. | 201,792 | 708,401 | |||
PaperlinX Ltd. | 198,656 | 689,729 | |||
Sonic Healthcare Ltd. | 108,096 | 667,212 | |||
Southcorp Ltd. | 283,136 | 650,992 | |||
Gandel Retail Trust | 580,544 | 622,607 | |||
Lion Nathan Ltd. | 130,368 | 605,524 | |||
Australian Stock Exchange Ltd. | 45,760 | 593,849 | |||
CSR Ltd. | 421,184 | 591,435 | |||
Publishing & Broadcasting Ltd. | 58,432 | 557,679 | |||
Leighton Holdings Ltd. | 62,848 | 530,970 | |||
Commonwealth Property Office Fund | 577,984 | 521,754 | |||
Harvey Norman Holdings Ltd. | 234,176 | 505,900 | |||
Computershare Ltd. | 191,296 | 500,345 | |||
Deutsche Office Trust | 505,600 | 433,006 | |||
Ansell Ltd. | 77,710 | 420,899 | |||
Cochlear Ltd. | 23,488 | 417,716 | |||
OneSteel Ltd. | 241,216 | 388,970 | |||
Iluka Resources Ltd. | 107,456 | 343,238 | |||
Futuris Corp. Ltd. | 257,792 | 338,129 | |||
Aristocrat Leisure Ltd. | 139,072 | 258,595 | |||
TOTAL COMMON STOCKS | 166,102,838 | ||||
PREFERRED STOCKS – 5.66% | |||||
News Corp. Ltd. (The) | 1,211,748 | 10,013,038 | |||
TOTAL PREFERRED STOCKS | 10,013,038 |
28 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI AUSTRALIA INDEX FUND
February 29, 2004
Security | Shares or Principal | Value | ||||
SHORT-TERM INVESTMENTS – 20.02% | ||||||
MONEY MARKET FUNDS – 9.59% | ||||||
Barclays Global Investors Funds | ||||||
Institutional Money Market Fund, | ||||||
Institutional Shares2,3 | 11,520,935 | $ | 11,520,935 | |||
Barclays Global Investors Funds | ||||||
Prime Money Market Fund, | ||||||
Institutional Shares2,3 | 4,252,624 | 4,252,624 | ||||
BlackRock Temp Cash Money | ||||||
Market Fund2 | 197,149 | 197,149 | ||||
Short-Term Investment Co. - | ||||||
Prime Money Market Portfolio, | ||||||
Institutional Shares2 | 994,364 | 994,364 | ||||
16,965,072 | ||||||
FLOATING RATE NOTES – 5.55% | ||||||
Beta Finance Inc. | ||||||
1.05%, 05/20/042,4 | $ | 193,301 | 193,295 | |||
1.05%, 09/15/042,4 | 386,602 | 386,581 | ||||
1.05%, 10/12/042,4 | 193,301 | 193,289 | ||||
1.14%, 08/23/042,4 | 193,301 | 193,381 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/042 | 289,952 | 289,925 | ||||
1.38%, 11/22/042 | 96,651 | 96,656 | ||||
1.40%, 10/29/042 | 386,602 | 386,596 | ||||
CC USA Inc. | ||||||
1.05%, 04/19/042,4 | 170,105 | 170,104 | ||||
1.06%, 05/24/042,4 | 386,602 | 386,593 | ||||
1.09%, 07/15/042,4 | 193,301 | 193,327 | ||||
1.51%, 02/15/052,4 | 251,291 | 251,676 | ||||
Dorada Finance Inc. | ||||||
1.05%, 05/20/042,4 | 386,602 | 386,589 | ||||
1.24%, 08/09/042 | 96,651 | 96,644 | ||||
1.48%, 01/18/052,4 | 289,952 | 289,939 | ||||
Five Finance Inc. | ||||||
1.06%, 04/15/042,4 | 193,301 | 193,301 | ||||
HBOS Treasury Services PLC | ||||||
1.16%, 01/24/052 | 386,602 | 386,602 | ||||
Holmes Financing PLC | ||||||
1.05%, 04/15/042 | 38,660 | 38,660 |
Security | Principal | Value | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042,4 | $ | 96,651 | $ | 96,644 | ||
1.05%, 09/27/042,4 | 417,530 | 417,494 | ||||
1.06%, 05/17/042 | 193,301 | 193,299 | ||||
1.07%, 04/13/042 | 193,301 | 193,300 | ||||
1.46%, 01/12/052,4 | 193,301 | 193,284 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 193,301 | 193,289 | ||||
1.06%, 07/20/042 | 154,641 | 154,629 | ||||
1.07%, 03/29/042 | 193,301 | 193,301 | ||||
1.07%, 05/04/042 | 193,301 | 193,299 | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042,4 | 289,952 | 289,952 | ||||
1.17%, 12/28/042,4 | 386,602 | 386,602 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052,4 | 367,272 | 367,272 | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | 193,301 | 193,301 | ||||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 193,301 | 193,285 | ||||
1.06%, 07/20/042 | 193,301 | 193,286 | ||||
1.09%, 10/07/042 | 386,602 | 386,556 | ||||
1.24%, 08/06/042 | 96,651 | 96,646 | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052,4 | 170,105 | 170,090 | ||||
1.06%, 07/15/042,4 | 115,981 | 115,966 | ||||
1.07%, 02/25/052,4 | 216,497 | 216,454 | ||||
1.10%, 07/06/042,4 | 115,981 | 115,977 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042,4 | 193,301 | 193,280 | ||||
1.32%, 02/04/052,4 | 96,651 | 96,633 | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042,4 | 193,301 | 193,287 | ||||
1.06%, 04/20/042,4 | 193,301 | 193,301 | ||||
1.06%, 07/06/042,4 | 231,961 | 231,954 | ||||
1.06%, 11/15/042,4 | 231,961 | 231,961 | ||||
9,827,500 |
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI AUSTRALIA INDEX FUND
February 29, 2004
Security | Principal | Value | |||||
COMMERCIAL PAPER – 2.32% | |||||||
Amsterdam Funding Corp. | |||||||
1.03%, 03/03/042 | $ | 289,952 | $ | 289,935 | |||
Corporate Asset Funding Corp. | |||||||
1.03%, 03/16/042 | 193,301 | 193,218 | |||||
1.05%, 05/21/042 | 201,033 | 200,560 | |||||
CRC Funding LLC | |||||||
1.03%, 03/26/042 | 154,641 | 154,530 | |||||
Delaware Funding Corp. | |||||||
1.02%, 03/16/042 | 390,878 | 390,712 | |||||
1.03%, 03/05/042 | 172,776 | 172,757 | |||||
Edison Asset Securitization | |||||||
1.03%, 03/03/042 | 289,952 | 289,935 | |||||
Eureka Securitization Inc. | |||||||
1.04%, 04/14/042 | 231,961 | 231,666 | |||||
Falcon Asset Securitization Corp. | |||||||
1.03%, 03/10/042 | 135,311 | 135,276 | |||||
Galaxy Funding Inc. | |||||||
1.05%, 05/17/042 | 193,301 | 192,869 | |||||
Gemini Securitization Corp. | |||||||
1.04%, 04/19/042 | 96,651 | 96,514 | |||||
GIRO Funding US Corp. | |||||||
1.05%, 05/19/042 | 96,651 | 96,428 | |||||
Jupiter Securitization Corp. | |||||||
1.03%, 03/24/042 | 193,301 | 193,174 | |||||
Liberty Street Funding Corp. | |||||||
1.03%, 03/10/042 | 77,320 | 77,301 | |||||
New Center Asset Trust | |||||||
1.04%, 03/01/042 | 96,651 | 96,651 | |||||
Park Avenue Receivables Corp. | |||||||
1.03%, 03/22/042 | 158,835 | 158,740 | |||||
Preferred Receivables Funding Corp. | |||||||
1.04%, 03/15/042 | 386,602 | 386,446 | |||||
1.04%, 05/20/042 | 96,651 | 96,427 | |||||
Receivables Capital Corp. | |||||||
1.03%, 03/15/042 | 421,396 | 421,228 | |||||
Windmill Funding Corp. | |||||||
1.03%, 03/05/042 | 220,750 | 220,725 | |||||
4,095,092 | |||||||
TIME DEPOSITS – 1.81% | |||||||
Abbey National Treasury Services PLC | |||||||
1.02%, 03/01/042 | 386,602 | 386,602 | |||||
1.33%, 02/10/052 | 193,301 | 193,274 | |||||
1.39%, 02/02/052 | 193,301 | 193,274 | |||||
1.40%, 10/25/042 | 386,602 | 386,564 | |||||
Bank of New York | |||||||
1.39%, 11/01/042 | 386,602 | 386,576 | |||||
Bank of Novia Scotia | |||||||
1.24%, 10/07/042 | 289,952 | 289,934 | |||||
1.42%, 10/29/042 | 289,952 | 289,966 | |||||
SunTrust Bank | |||||||
1.01%, 03/01/042 | 637,894 | 637,894 | |||||
Toronto-Dominion Bank | |||||||
1.34%, 02/10/052 | 154,641 | 154,619 | |||||
1.41%, 11/01/042 | 289,952 | 289,932 | |||||
3,208,635 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.53% | |||||||
Federal Home Loan | |||||||
Mortgage Corp. | |||||||
1.15%, 05/12/042 | 289,952 | 289,285 | |||||
1.28%, 08/19/042 | 154,641 | 153,701 | |||||
Federal National Mortgage Association | |||||||
1.28%, 08/20/042 | 502,583 | 499,509 | |||||
942,495 | |||||||
REPURCHASE AGREEMENTS – 0.22% | |||||||
Merrill Lynch Government Securities Inc. | |||||||
1.06%, 03/01/042 | 386,602 | 386,602 | |||||
386,602 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 35,425,396 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 119.55% | 211,541,272 | ||||||
Other Assets, Less Liabilities – (19.55%) | (34,591,523 | ) | |||||
NET ASSETS – 100.00% | $ | 176,949,749 | |||||
1 | Non-income earning securities. |
2 | All or a portion of this security represents investments of securities lending collateral. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See notes to financial statements.
30 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI BRAZIL INDEX FUND
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS AND RIGHTS – 28.24% | |||||
Petroleo Brasileiro SA | 919,300 | $ | 28,502,246 | ||
Companhia Vale do Rio Doce ADR | 289,738 | 16,775,830 | |||
Unibanco Holdings SA | 159,251,000 | 7,272,235 | |||
Companhia Siderurgica Nacional | 113,169,000 | 7,227,273 | |||
Centrais Eletricas Brasileiras SA | 455,891,000 | 5,102,847 | |||
Souza Cruz SA | 420,700 | 4,420,058 | |||
Companhia de Saneamento Basico do Estado de Sao Paulo | 34,870,000 | 1,830,600 | |||
Companhia Siderurgica de Tubarao | 53,890,000 | 1,776,103 | |||
Brasil Telecom Participacoes SA | 270,084,000 | 1,659,915 | |||
Tele Norte Leste Participacoes SA | 25,360,000 | 291,695 | |||
Tele Centro Oeste Celular Participacoes SA Rights | 5,808,690 | 40 | |||
TOTAL COMMON STOCKS AND RIGHTS | 74,858,842 | ||||
PREFERRED STOCKS – 70.65% | |||||
Petroleo Brasileiro SA | 1,236,300 | 34,807,416 | |||
Companhia Vale do Rio Doce Class A | 507,200 | 25,425,305 | |||
Companhia de Bebidas das Americas | 79,884,000 | 21,366,398 | |||
Banco Itau Holding Financeira SA | 124,264,000 | 11,945,984 | |||
Banco Bradesco SA | 2,062,085,000 | 10,336,985 | |||
Tele Norte Leste Participacoes SA | 670,772,000 | 9,857,182 | |||
Embraer-Empresa Brasileira de Aeronautica SA | 1,172,943 | 8,872,080 | |||
Brasil Telecom Participacoes SA | 929,444,000 | 7,084,520 | |||
Aracruz Celulose SA Class B | 1,902,000 | 6,791,691 | |||
Companhia Energetica de Minas Gerais | 378,815,467 | 6,763,402 | |||
Gerdau SA | 253,689 | 5,426,549 | |||
Telesp Celular Participacoes SA1 | 1,597,784,000 | 4,772,773 | |||
Usinas Siderurgicas de Minas Gerais SA Class A | 412,100 | 4,704,661 | |||
Sadia SA | 2,536,000 | 3,744,137 | |||
Tele Centro Oeste Celular Participacoes SA | 980,238,000 | 3,315,135 | |||
Centrais Eletricas Brasileiras SA Class B | 268,499,000 | 3,180,502 | |||
Companhia Brasileira de Distribuicao | 131,238,000 | 3,016,784 | |||
Votorantim Celulose e Papel SA | 42,161,000 | 2,851,025 | |||
Embratel Participacoes SA | 848,031,000 | 2,352,650 | |||
Braskem SA Class A1 | 84,486,000 | 2,235,072 | |||
Telemig Celular Participacoes SA | 914,003,000 | 1,864,091 | |||
Companhia Paranaense de Energia Class B1 | 462,859,000 | 1,732,245 | |||
Duratex SA | 59,917,000 | 1,645,789 | |||
Tele Nordeste Celular Participacoes SA | 914,890,000 | 1,130,850 | |||
Tele Celular Sul Participacoes SA | 886,351,000 | 1,083,405 | |||
Companhia de Tecidos Norte de Minas | 13,948,400 | 991,354 | |||
TOTAL PREFERRED STOCKS | 187,297,985 | ||||
SHORT-TERM INVESTMENTS – 0.34% | |||||
MONEY MARKET FUNDS – 0.34% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2 | 917,428 | 917,428 | |||
917,428 | |||||
TOTAL SHORT-TERM INVESTMENTS | 917,428 | ||||
TOTAL INVESTMENTS IN SECURITIES – 99.23% | 263,074,255 | ||||
Other Assets, Less Liabilities – 0.77% | 2,043,320 | ||||
NET ASSETS – 100.00% | $ | 265,117,575 | |||
1 | Non-income earning securities. |
2 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI CANADA INDEX FUND
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.84% | |||||
Royal Bank of Canada | 468,490 | $ | 22,154,418 | ||
Nortel Networks Corp.1 | 2,729,475 | 21,766,635 | |||
Bank of Nova Scotia | 354,375 | 18,131,428 | |||
EnCana Corp. | 333,900 | 14,393,722 | |||
Bank of Montreal | 347,400 | 14,074,652 | |||
Canadian Imperial Bank of Commerce | 257,175 | 13,156,320 | |||
Alcan Inc. | 257,625 | 12,129,064 | |||
Sun Life Financial Inc. | 433,800 | 11,758,752 | |||
Manulife Financial Corp. | 325,934 | 11,628,441 | |||
Suncor Energy Inc. | 315,675 | 8,180,376 | |||
Canadian National Railway Co. | 207,225 | 8,134,556 | |||
Barrick Gold Corp. | 359,775 | 7,301,415 | |||
Petro-Canada | 156,375 | 7,030,028 | |||
TransCanada Corp. | 336,600 | 6,951,508 | |||
Talisman Energy Inc. | 91,125 | 5,300,769 | |||
Thomson Corp. | 163,575 | 5,201,971 | |||
Magna International Inc. Class A | 64,350 | 5,077,020 | |||
Canadian Natural Resources Ltd. | 89,780 | 4,901,349 | |||
Placer Dome Inc. | 287,775 | 4,842,899 | |||
Inco Ltd.1 | 130,275 | 4,808,063 | |||
BCE Inc. | 212,175 | 4,631,717 | |||
Enbridge Inc. | 113,850 | 4,402,964 | |||
Power Corp. of Canada | 112,725 | 4,343,494 | |||
National Bank of Canada | 127,125 | 4,325,140 | |||
Imperial Oil Ltd. | 94,950 | 4,320,251 | |||
Brascan Corp. Class A | 114,075 | 4,246,727 | |||
Loblaw Companies Ltd. | 79,200 | 3,863,933 | |||
Great-West Lifeco Inc. | 93,379 | 3,528,463 | |||
Power Financial Corp. | 87,300 | 3,513,471 | |||
Nexen Inc. | 88,431 | 3,292,065 | |||
Potash Corp. of Saskatchewan Inc. | 37,575 | 3,090,293 | |||
Bombardier Inc. Class B | 633,483 | 3,064,136 | |||
George Weston Ltd. | 38,250 | 2,803,717 | |||
Canadian Pacific Railway Ltd. | 112,050 | 2,630,576 | |||
ATI Technologies Inc.1 | 168,315 | 2,609,243 | |||
Teck Cominco Ltd. Class B | 129,600 | 2,434,075 | |||
Shell Canada Ltd. | 50,400 | 2,311,244 | |||
Abitibi-Consolidated Inc. | 265,050 | 2,093,930 | |||
Shaw Communications Inc. Class B | 123,582 | 2,073,285 | |||
Rogers Communications Inc. Class B | 108,450 | 2,039,272 | |||
Noranda Inc. | 119,025 | 1,943,609 | |||
Brookfield Properties Corp. | 64,806 | 1,936,814 | |||
Shoppers Drug Mart Corp.1 | 82,125 | 1,924,360 | |||
Cameco Corp. | 40,281 | 1,912,353 | |||
Investors Group Inc. | 76,950 | 1,898,301 | |||
Precision Drilling Corp. Class A1 | 38,256 | 1,827,620 | |||
Canadian Tire Corp. Class A | 55,140 | 1,799,987 | |||
TransAlta Corp. | 134,325 | 1,786,995 | |||
Husky Energy Inc. | 91,127 | 1,735,267 | |||
NOVA Chemicals Corp. | 63,000 | 1,724,136 | |||
Goldcorp Inc. | 127,350 | 1,676,170 | |||
Cognos Inc.1 | 53,100 | 1,651,077 | |||
Penn West Petroleum Ltd. | 36,909 | 1,622,978 | |||
Domtar Inc. | 140,625 | 1,619,271 | |||
Falconbridge Ltd. | 58,275 | 1,563,555 | |||
MDS Inc. | 98,550 | 1,549,771 | |||
TELUS Corp. | 88,664 | 1,546,953 | |||
Fairmont Hotels & Resorts Inc. | 58,068 | 1,473,177 | |||
Dofasco Inc. | 56,025 | 1,467,694 | |||
Fairfax Financial Holdings Ltd. | 9,450 | 1,457,909 | |||
Celestica Inc.1 | 83,158 | 1,425,477 | |||
Agrium Inc. | 90,900 | 1,353,592 | |||
Glamis Gold Ltd.1 | 87,075 | 1,344,008 | |||
SNC-Lavalin Group Inc. | 32,850 | 1,191,096 | |||
CGI Group Inc.1 | 181,359 | 1,175,944 | |||
Finning International Inc. | 49,950 | 1,139,534 | |||
QLT Corp.1 | 47,744 | 1,127,993 | |||
Biovail Corp.1 | 54,000 | 1,101,532 | |||
CP Ships Ltd. | 60,975 | 1,099,300 | |||
Onex Corp. | 90,482 | 1,062,114 | |||
Masonite International Corp.1 | 37,350 | 1,000,732 | |||
C.I. Fund Management Inc. | 88,760 | 995,594 | |||
MI Developments Inc. Class A1 | 32,830 | 948,626 | |||
Four Seasons Hotels Inc. | 17,106 | 917,292 | |||
Meridian Gold Inc.1 | 70,425 | 887,562 | |||
Aliant Inc. | 34,200 | 803,926 | |||
Kinross Gold Corp.1 | 120,700 | 801,518 | |||
Agnico-Eagle Mines Ltd. | 53,550 | 727,969 | |||
Molson Inc. Class A | 29,967 | 681,195 | |||
CAE Inc. | 117,450 | 560,224 |
32 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI CANADA INDEX FUND
February 29, 2004
Security | Shares | Value | |||
Hudson’s Bay Co. | 52,875 | $ | 513,874 | ||
Intrawest Corp. | 28,800 | 503,343 | |||
Ballard Power Systems Inc.1 | 13,500 | 140,660 | |||
Angiotech Pharmaceuticals Inc.1 | 4,950 | 126,724 | |||
TOTAL COMMON STOCKS | 328,289,208 | ||||
SHORT-TERM INVESTMENTS – 0.13% | |||||
MONEY MARKET FUNDS - 0.13% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2 | 431,348 | 431,348 | |||
431,348 | |||||
TOTAL SHORT - TERM INVESTMENTS | 431,348 | ||||
TOTAL INVESTMENTS IN SECURITIES – 99.97% | 328,720,556 | ||||
Other Assets, Less Liabilities – 0.03% | 89,447 | ||||
NET ASSETS – 100.00% | $ | 328,810,003 | |||
1 | Non-income earning securities. |
2 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI EMERGING MARKETS INDEX FUND
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS – 97.05% | |||||
ARGENTINA – 0.99% | |||||
BBVA Banco Frances SA ADR | 699,504 | $ | 6,148,640 | ||
Petrobras Energia Participaciones SA ADR | 338,832 | 4,523,407 | |||
Tenaris SA ADR | 204,464 | 7,084,678 | |||
17,756,725 | |||||
BERMUDA – 0.16% | |||||
Brilliance China Automotive Holdings Ltd. | 6,240,000 | 2,966,142 | |||
2,966,142 | |||||
BRAZIL – 6.96% | |||||
Aracruz Celulose SA ADR | 96,512 | 3,488,909 | |||
Banco Bradesco SA ADR | 365,456 | 9,257,000 | |||
Banco Itau Holding Financiera SA ADR | 293,280 | 13,930,800 | |||
Brasil Telecom Participacoes SA ADR | 165,568 | 6,311,452 | |||
Companhia Brasileira de Distribuicao Pao de Acucar ADR | 201,552 | 4,635,696 | |||
Companhia de Bebidas das Americas ADR | 608,400 | 16,365,960 | |||
Companhia Vale do Rio Doce ADR | 260,000 | 15,054,000 | |||
Companhia Vale do Rio Doce Sponsored ADR | 365,248 | 18,171,088 | |||
Empresa Brasiliera de Aeronautica SA ADR | 199,680 | 6,028,339 | |||
Petroleo Brasileiro SA ADR | 546,000 | 17,035,200 | |||
Tele Norte Leste Participacoes SA ADR | 688,064 | 10,011,331 | |||
Telesp Celular Partcipacoes SA ADR | 449,696 | 3,404,199 | |||
Votorantim Celulose e Papel ADR | 43,680 | 1,485,120 | |||
125,179,094 | |||||
CHILE – 2.19% | |||||
Banco Santander Chile SA ADR | 410,176 | 11,300,349 | |||
Compania de Telecomunicaciones de Chile SA ADR | 713,648 | 11,190,001 | |||
Enersis SA ADR | 1,049,152 | 7,522,420 | |||
Sociedad Quimica y Minera de Chile SA ADR | 223,600 | 9,375,548 | |||
39,388,318 | |||||
CHINA – 4.76% | |||||
Beijing Capital International Airport Co. Ltd. Class H | 832,000 | 312,647 | |||
Beijing Datang Power Generation Co. Ltd. Class H | 1,664,000 | 1,410,921 | |||
China Life Insurance Co. Ltd. Hong Kong | 12,128,000 | 8,647,443 | |||
China Petroleum and Chemical Corp. Class H | 34,112,000 | 14,352,384 | |||
China Shipping Development Co. Ltd. | 3,744,000 | 2,982,175 | |||
China Southern Airlines Co. Ltd.1 | 1,248,000 | 709,469 | |||
China Telecom Corp. Ltd. Class H | 17,888,000 | 6,951,727 | |||
Guangshen Railway Co. Ltd. Class H | 13,312,000 | 3,976,233 | |||
Huadian Power International Corp. Ltd. | 7,072,000 | 2,771,071 | |||
Huaneng Power International Inc. Class H | 2,496,000 | 4,729,793 | |||
Jiangsu Expressway Co. Ltd. Class H | 1,248,000 | 657,361 | |||
Jiangxi Copper Co. Ltd. | 3,744,000 | 2,368,905 | |||
PetroChina Co. Ltd. Class H | 44,096,000 | 23,651,638 | |||
Qingling Motors Co. Ltd. | 2,912,000 | 542,457 | |||
Sinopec Shanghai Petrochemical Co. Ltd. | 4,992,000 | 2,292,747 | |||
Travelsky Technology Ltd. Class H | 416,000 | 443,585 | |||
Tsingtao Brewery Co. Ltd. Class H | 832,000 | 1,015,436 | |||
Yanzhou Coal Mining Co. Ltd. Class H | 2,912,000 | 3,348,266 | |||
Yizheng Chemical Fibre Co. Ltd. | 1,664,000 | 386,934 | |||
Zhejiang Expressway Co. Ltd. | 4,992,000 | 4,040,366 | |||
85,591,558 | |||||
CZECH REPUBLIC – 2.41% | |||||
CEZ AS | 2,075,228 | 14,186,157 | |||
Komercni Banka AS | 61,990 | 6,919,362 | |||
Philip Morris CR AS | 26,624 | 18,216,314 | |||
Unipetrol AS1 | 1,601,600 | 4,017,311 | |||
43,339,144 |
34 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI EMERGING MARKETS INDEX FUND
February 29, 2004
Security | Shares | Value | |||
HONG KONG – 4.52% | |||||
Beijing Enterprises Holdings Ltd. | 832,000 | $ | 1,074,224 | ||
China Merchants Holdings International Co. Ltd. | 832,000 | 1,213,179 | |||
China Mobile Ltd. | 9,776,000 | 34,600,975 | |||
China Overseas Land & Investment Ltd. | 2,080,000 | 494,357 | |||
China Pharmaceutical Group Ltd. | 2,956,000 | 1,101,306 | |||
China Resources Enterprises Ltd. | 2,912,000 | 4,115,187 | |||
China Resources Land Ltd. | 6,656,000 | 1,274,105 | |||
China Travel International Investment Hong Kong Ltd. | 14,560,000 | 2,936,747 | |||
Citic Pacific Ltd. | 2,288,000 | 7,069,304 | |||
CNOOC Ltd. | 5,928,000 | 11,994,836 | |||
COFCO International Ltd. | 1,248,000 | 753,560 | |||
Cosco Pacific Ltd. | 1,248,000 | 1,899,934 | |||
Denway Motors Ltd. | 4,576,000 | 5,290,955 | |||
Legend Group Ltd. | 7,072,000 | 2,975,494 | |||
Shanghai Industrial Holdings Ltd. | 832,000 | 2,185,859 | |||
Shenzhen Investment Ltd. | 2,080,000 | 355,403 | |||
TCL International Holdings Ltd. | 4,160,000 | 1,897,262 | |||
81,232,687 | |||||
HUNGARY – 1.52% | |||||
Gedeon Richter Rt | 109,616 | 12,468,443 | |||
MATAV Rt | 922,272 | 3,615,884 | |||
OTP Bank Rt1 | 680,368 | 11,163,850 | |||
Raba Jarmuipari Holding Rt | 18,720 | 74,300 | |||
27,322,477 | |||||
INDIA – 5.02% | |||||
Dr. Reddy’s Laboratories Ltd. ADR | 329,056 | 8,374,475 | |||
HDFC Bank Ltd. ADR | 494,208 | 15,028,865 | |||
ICICI Bank Ltd. ADR | 687,531 | 10,244,212 | |||
Infosys Technologies Ltd. ADR | 201,344 | 16,918,936 | |||
Mahanagar Telephone Nigam Ltd. ADR | 1,327,872 | 9,481,006 | |||
Satyam Computer Services Ltd. ADR | 576,368 | 11,827,071 | |||
Videsh Sanchar Nigam Ltd. ADR | 1,322,672 | 11,679,194 | |||
Wipro Ltd. ADR | 162,864 | 6,711,625 | |||
90,265,384 | |||||
INDONESIA – 2.46% | |||||
PT Aneka Tambang Tbk | 15,600,000 | $ | 2,767,593 | ||
PT Astra International Inc. Tbk1 | 5,720,000 | 3,653,223 | |||
PT Bank Central Asia Tbk | 5,200,000 | 2,244,825 | |||
PT Bank Mandiri1 | 10,920,000 | 1,808,161 | |||
PT Bank Pan Indonesia Tbk | 39,104,000 | 1,618,734 | |||
PT Bank Rakyat Indonesia | 1,189,136 | 217,997 | |||
PT Bhakti Investama Tbk1 | 22,360,000 | 1,057,836 | |||
PT Bimantara Citra Tbk | 1,872,000 | 791,532 | |||
PT Gudang Garam Tbk | 2,080,000 | 3,468,717 | |||
PT Hanjaya Mandala Sampoerna Tbk | 5,616,000 | 3,238,084 | |||
PT Kalbe Farma Tbk | 63,024,000 | 3,577,944 | |||
PT Matahari Putra Prima Tbk | 18,200,000 | 1,452,986 | |||
PT Ramayana Lestari Sentosa Tbk | 4,160,000 | 1,795,860 | |||
PT Semen Gresik (Persero) Tbk | 119,500 | 125,790 | |||
PT Telekomunikasi Indonesia Tbk | 19,032,000 | 16,432,123 | |||
44,251,405 | |||||
ISRAEL – 3.68% | |||||
AudioCodes Ltd. | 177,632 | 2,445,993 | |||
Bank Hapoalim Ltd.1 | 2,404,688 | 6,074,663 | |||
Bank Leumi Le-Israel1 | 3,148,288 | 5,828,085 | |||
Check Point Software Technologies Ltd. | 239,850 | 5,521,347 | |||
Elbit Systems Ltd. | 46,176 | 868,179 | |||
Israel Chemicals Ltd. | 1,830,400 | 2,793,103 | |||
Israel Discount Bank Class A1 | 3,172,208 | 3,426,607 | |||
Makhteshim-Agan Industries Ltd. | 728,000 | 2,682,361 | |||
NICE Systems Ltd.1 | 20,800 | 480,499 | |||
Supersol Ltd. | 209,456 | 473,597 | |||
Teva Pharmaceutical Industries Ltd. | 500,864 | 32,568,991 | |||
United Mizrahi Bank Ltd.1 | 933,712 | 3,038,880 | |||
66,202,305 | |||||
MEXICO – 7.49% | |||||
Alfa SA de CV Class A | 873,600 | 3,234,006 | |||
America Movil SA de CV Series L1 | 14,643,200 | 26,058,530 | |||
Cemex SA de CV Series CPO | 1,830,400 | 10,605,716 | |||
Consorcio Ara SA de CV1 | 1,456,000 | 4,478,077 | |||
Controladora Comercial Mexicana SA de CV | 2,017,600 | 2,640,413 |
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI EMERGING MARKETS INDEX FUND
February 29, 2004
Security | Shares | Value | |||
Fomento Economico Mexicano SA de CV Class UBD | 1,268,800 | $ | 5,695,810 | ||
Grupo Carso SA de CV Series A1 | 62,400 | 266,248 | |||
Grupo Continental SA | 1,102,400 | 2,145,119 | |||
Grupo Elektra SA de CV Series CPO | 291,200 | 1,615,160 | |||
Grupo Financiero Banorte SA de CV Series O | 335,400 | 1,226,168 | |||
Grupo Financiero BBVA Bancomer SA de CV Class B1 | 7,176,000 | 7,698,416 | |||
Grupo Mexico SA de CV Series B1 | 936,000 | 3,563,136 | |||
Grupo Modelo SA de CV Series C | 2,724,800 | 7,291,909 | |||
Grupo Televisa SA Series CPO | 4,284,800 | 9,394,844 | |||
Hylsamex SA de CV Series CPO1 | 296,946 | 240,198 | |||
Industrias Penoles SA de CV Series CP | 187,200 | 824,631 | |||
Kimberly-Clark de Mexico SA de CV Class A | 1,518,400 | 4,011,282 | |||
Telefonos de Mexico SA de CV Series L | 15,412,800 | 26,146,528 | |||
TV Azteca SA de CV Series CPO | 1,996,800 | 1,135,150 | |||
Vitro SA de CV Series A | 3,036,800 | 3,686,043 | |||
Wal-Mart de Mexico SA de CV Series C | 1,560,000 | 4,781,020 | |||
Wal-Mart de Mexico SA de CV Series V | 2,579,200 | 7,930,262 | |||
134,668,666 | |||||
PERU – 0.38% | |||||
Compania de Minas Buenaventura SAu ADR | 279,136 | 6,757,883 | |||
6,757,883 | |||||
PHILIPPINE ISLANDS – 1.41% | |||||
ABS-CBN Broadcasting Corp.1 | 5,907,396 | 2,438,689 | |||
Ayala Corp. | 18,720,400 | 1,961,121 | |||
Bank of the Philippine Islands | 3,411,252 | 2,755,894 | |||
Equitable PCI Bank Inc.1 | 2,443,624 | 1,670,446 | |||
Filinvest Land Inc.1 | 24,960,000 | 460,909 | |||
Globe Telecom Inc. | 118,560 | 1,863,026 | |||
Jollibee Foods Corp. | 8,944,000 | 3,017,329 | |||
Manila Electric Co. Class B1 | 2,288,000 | 1,300,000 | |||
Megaworld Corp.1 | 35,381,068 | 640,779 | |||
Metropolitan Bank & Trust Co.1 | 40 | 18 | |||
Petron Corp. | 41,603,600 | 2,326,906 | |||
Philippine Long Distance Telephone Co.1 | 257,920 | 4,442,159 | |||
SM Prime Holdings Inc. | 23,088,000 | 2,500,653 | |||
25,377,929 | |||||
RUSSIA – 5.16% | |||||
JSC MMC Norilsk Nickel ADR | 160,368 | 11,386,128 | |||
LUKOIL ADR | 332,384 | 36,595,478 | |||
Rostelecom ADR | 197,392 | 2,828,627 | |||
Surgutneftegaz ADR | 791,024 | 25,470,973 | |||
Tatneft ADR | 56,160 | 1,480,939 | |||
YUKOS ADR | 305,761 | 14,988,404 | |||
92,750,549 | |||||
SOUTH AFRICA – 14.36% | |||||
African Bank Investments Ltd. | 1,775,280 | 2,895,856 | |||
Alexander Forbes Ltd. | 1,828,528 | 3,560,015 | |||
Anglo American Platinum Corp. Ltd. | 112,736 | 4,999,943 | |||
Anglo American PLC | 2,826,304 | 70,688,406 | |||
AngloGold Ltd. | 228,176 | 9,673,853 | |||
Anglovaal Industries Ltd. | 843,028 | 2,173,635 | |||
Barloworld Ltd. | 437,424 | 4,448,881 | |||
Bidvest Group Ltd. | 516,703 | 4,117,155 | |||
Bidvest Group Ltd. Warrants (Expire 12/8/06)1 | 18,430 | 15,877 | |||
Dimension Data Holdings PLC1 | 2,623,920 | 1,972,427 | |||
FirstRand Ltd. | 5,948,800 | 8,138,627 | |||
Foschini Ltd. | 1,937,312 | 5,606,744 | |||
Gold Fields Ltd. | 667,888 | 8,233,754 | |||
Harmony Gold Mining Co. Ltd. | 249,808 | 3,804,488 | |||
Impala Platinum Holdings Ltd. | 97,968 | 8,130,247 | |||
Imperial Holdings Ltd. | 541,008 | 5,693,537 | |||
Investec Ltd. | 181,584 | 3,712,760 | |||
Iscor Ltd. | 743,600 | 3,845,725 | |||
JD Group Ltd. | 588,848 | 3,673,937 | |||
Liberty Group Ltd. | 360,048 | 2,977,169 | |||
Metro Cash & Carry Ltd.1 | 6,204,030 | 2,135,944 | |||
MTN Group Ltd.1 | 2,160,496 | 9,663,197 | |||
Nampak Ltd. | 1,595,568 | 3,190,416 | |||
Naspers Ltd. | 810,992 | 5,059,937 | |||
Nedcor Ltd. | 8,808 | 84,750 | |||
Network Healthcare Holdings Ltd.1 | 3,581,982 | 2,417,966 |
36 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI EMERGING MARKETS INDEX FUND
February 29, 2004
Security | Shares | Value | |||
New Africa Capital Ltd. | 1,834,144 | $ | 2,123,267 | ||
Old Mutual PLC | 7,279,584 | 12,870,467 | |||
Pick’n Pay Stores Ltd. | 880,672 | 2,330,275 | |||
Sanlam Ltd. | 5,643,456 | 7,763,305 | |||
Sappi Ltd. | 402,480 | 5,506,984 | |||
Sasol Ltd. | 1,192,048 | 17,885,648 | |||
Shoprite Holdings Ltd. | 2,412,800 | 3,391,668 | |||
Standard Bank Group Ltd. | 1,996,176 | 12,094,399 | |||
Telkom South Africa Ltd. | 250,848 | 2,536,199 | |||
Tiger Brands Ltd. | 333,008 | 4,140,384 | |||
Tongaat-Hulett Group Ltd. | 170,976 | 1,086,031 | |||
Truworths International Ltd. | 1,712,256 | 2,445,528 | |||
Woolworths Holdings Ltd. | 3,027,856 | 3,113,664 | |||
258,203,065 | |||||
SOUTH KOREA – 17.37% | |||||
Kookmin Bank ADR | 948,688 | 39,399,013 | |||
Korea Electric Power Corp. ADR | 3,133,312 | 32,367,113 | |||
KT Corp. ADR | 1,103,232 | 20,983,473 | |||
POSCO ADR | 1,438,944 | 53,658,222 | |||
Samsung Electronics Co. Ltd. GDR | 589,888 | 137,738,848 | |||
SK Telecom Co. Ltd. ADR | 1,125,072 | 28,138,051 | |||
312,284,720 | |||||
TAIWAN – 11.26% | |||||
AU Optronics Corp. ADR | 2,221,024 | 38,201,613 | |||
Chunghwa Telecom Co. Ltd. ADR | 1,680,640 | 27,629,722 | |||
Siliconware Precision Industries Co. ADR | 6,758,960 | 36,903,922 | |||
Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 5,292,157 | 54,985,511 | |||
United Microelectronics Corp. ADR | 8,603,728 | 44,825,423 | |||
202,546,191 | |||||
THAILAND – 3.87% | |||||
Advanced Info Service PCL | 1,601,600 | 3,526,047 | |||
Bangkok Bank PCL1 | 1,497,600 | 3,792,599 | |||
Bangkok Expressway PCL | 3,868,800 | 2,486,312 | |||
Banpu PCL | 624,000 | 2,271,112 | |||
BEC World PCL | 264,000 | 131,026 | |||
Charoen Pokphand Food PCL | 5,824,000 | 601,818 | |||
Electricity Generating PCL | 1,518,400 | 3,072,354 | |||
Industrial Finance Corp. of Thailand1 | 10,025,600 | 1,339,639 | |||
Kasikornbank PCL1 | 2,974,400 | 3,860,891 | |||
Kiatnakin Finance PCL | 644,800 | 742,611 | |||
Krung Thai Bank PCL | 1,607,400 | 458,205 | |||
Land & House PCL | 5,241,600 | 1,720,963 | |||
National Finance PCL | 2,600,000 | 1,019,089 | |||
National Petrochemical PCL | 832,000 | 2,604,632 | |||
PTT Exploration and Production PCL | 665,600 | 4,269,056 | |||
PTT PCL | 3,892,400 | 15,950,023 | |||
Ratchaburi Electricity Generating Holding PCL | 6,843,200 | 6,966,862 | |||
Sahavira Steel Industry PCL | 1,815,600 | 1,571,148 | |||
Shin Corp. PCL | 2,454,400 | 2,280,112 | |||
Siam Cement PCL | 624,000 | 4,192,822 | |||
Siam City Cement PCL | 124,800 | 813,153 | |||
Siam Makro PCL | 2,808,000 | 3,055,281 | |||
Thai Union Frozen Products PCL | 2,496,000 | 1,715,246 | |||
TISCO Finance PCL1 | 520,000 | 403,665 | |||
United Broadcasting Corp. PCL1 | 1,102,400 | 676,198 | |||
69,520,864 | |||||
TURKEY – 0.89% | |||||
Adana Cimento TAS Class A | 291,537,000 | 1,086,678 | |||
Akbank TAS | 499,019,998 | 2,611,586 | |||
Akcansa Cimento AS | 110,934,500 | 315,345 | |||
Arcelik AS | 203,009,250 | 1,161,799 | |||
Dogan Yayin Holding AS1 | 231,716,400 | 876,789 | |||
Eregli Demir ve Celik Fabrikalari TAS1 | 41,600,000 | 1,300,000 | |||
Hurriyet Gazetecilik ve Matbaacilik AS1 | 259,073,440 | 907,148 | |||
Trakya Cam Sanayii AS | 260,714,921 | 706,756 | |||
Tupras-Turkiye Petrol Rafinerileri AS | 184,510,000 | 1,528,320 | |||
Turk Sise ve Cam Fabrikalari AS1 | 746,512,000 | 1,995,569 | |||
Turkiye Garanti Bankasi AS1 | 486,946,323 | 1,750,879 | |||
Vestel Elektronik Sanayi ve Ticaret AS1 | 394,992,000 | 1,680,501 | |||
Yapi Ve Kredi Bankasi AS | 70,512,000 | 157,962 | |||
16,079,332 |
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI EMERGING MARKETS INDEX FUND
February 29, 2004
Security | Shares | Value | |||
VENEZUELA – 0.19% | |||||
Compania Anonima Nacional Telefonos de Venezuela (CANTV) ADR | 184,080 | $ | 3,411,002 | ||
3,411,002 | |||||
TOTAL COMMON STOCKS | 1,745,095,440 | ||||
PREFERRED STOCKS – 1.29% | |||||
BRAZIL – 1.19% | |||||
Petroleo Brasileiro SA ADR | 762,736 | 21,432,882 | |||
21,432,882 | |||||
THAILAND – 0.10% | |||||
Siam Commercial Bank PCL1 | 1,393,600 | 1,684,805 | |||
1,684,805 | |||||
TOTAL PREFERRED STOCKS | 23,117,687 | ||||
EXCHANGE TRADED FUNDS – 1.34% | |||||
iShares MSCI Malaysia Index Fund3 | 728,000 | 5,241,600 | |||
iShares MSCI South Korea Index Fund3 | 270,400 | 7,468,448 | |||
iShares MSCI Taiwan Index Fund3 | 894,816 | 11,310,474 | |||
TOTAL EXCHANGE TRADED FUNDS | 24,020,522 | ||||
SHORT-TERM INVESTMENTS – 18.51% | |||||
MONEY MARKET FUNDS – 8.91% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2,3 | 109,206,109 | 109,206,109 | |||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares2,3 | 39,800,778 | 39,800,778 | |||
BlackRock Temp Cash Money Market Fund2 | 1,845,140 | 1,845,140 | |||
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares2 | 9,306,359 | 9,306,359 | |||
160,158,386 |
Security | Shares or Principal | Value | ||||
FLOATING RATE NOTES – 5.11% | ||||||
Beta Finance Inc. | ||||||
1.05%, 05/20/042,4 | $ | 1,809,126 | $ | 1,809,067 | ||
1.05%, 09/15/042,4 | 3,618,253 | 3,618,057 | ||||
1.05%, 10/12/042,4 | 1,809,126 | 1,809,016 | ||||
1.14%, 08/23/042,4 | 1,809,126 | 1,809,872 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/042 | 2,713,689 | 2,713,444 | ||||
1.38%, 11/22/042 | 904,563 | 904,613 | ||||
1.40%, 10/29/042 | 3,618,253 | 3,618,193 | ||||
CC USA Inc. | ||||||
1.05%, 04/19/042,4 | 1,592,031 | 1,592,021 | ||||
1.06%, 05/24/042,4 | 3,618,253 | 3,618,170 | ||||
1.09%, 07/15/042,4 | 1,809,126 | 1,809,369 | ||||
1.51%, 02/15/052,4 | 2,351,864 | 2,355,462 | ||||
Dorada Finance Inc. | ||||||
1.05%, 05/20/042,4 | 3,618,253 | 3,618,134 | ||||
1.24%, 08/09/042 | 904,563 | 904,503 | ||||
1.48%, 01/18/052,4 | 2,713,689 | 2,713,571 | ||||
Five Finance Inc. | ||||||
1.06%, 04/15/042,4 | 1,809,126 | 1,809,126 | ||||
HBOS Treasury Services PLC | ||||||
1.16%, 01/24/052 | 3,618,253 | 3,618,253 | ||||
Holmes Financing PLC | ||||||
1.05%, 04/15/042 | 361,825 | 361,825 | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042,4 | 904,563 | 904,501 | ||||
1.05%, 09/27/042,4 | 3,907,713 | 3,907,377 | ||||
1.06%, 05/17/042 | 1,809,126 | 1,809,107 | ||||
1.07%, 04/13/042 | 1,809,126 | 1,809,116 | ||||
1.46%, 01/12/052,4 | 1,809,126 | 1,808,970 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 1,809,126 | 1,809,009 | ||||
1.06%, 07/20/042 | 1,447,301 | 1,447,190 | ||||
1.07%, 03/29/042 | 1,809,126 | 1,809,126 | ||||
1.07%, 05/04/042 | 1,809,126 | 1,809,111 | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042,4 | 2,713,689 | 2,713,689 | ||||
1.17%, 12/28/042,4 | 3,618,253 | 3,618,253 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052,4 | 3,437,340 | 3,437,340 |
38 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI EMERGING MARKETS INDEX FUND
February 29, 2004
Security | Principal | Value | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | $ | 1,809,126 | $ | 1,809,126 | ||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 1,809,126 | 1,808,976 | ||||
1.06%, 07/20/042 | 1,809,126 | 1,808,987 | ||||
1.09%, 10/07/042 | 3,618,253 | 3,617,818 | ||||
1.24%, 08/06/042 | 904,563 | 904,524 | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052,4 | 1,592,031 | 1,591,889 | ||||
1.06%, 07/15/042,4 | 1,085,476 | 1,085,342 | ||||
1.07%, 02/25/052,4 | 2,026,221 | 2,025,822 | ||||
1.10%, 07/06/042,4 | 1,085,476 | 1,085,437 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042,4 | 1,809,126 | 1,808,931 | ||||
1.32%, 02/04/052,4 | 904,563 | 904,395 | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042,4 | 1,809,126 | 1,808,991 | ||||
1.06%, 04/20/042,4 | 1,809,126 | 1,809,126 | ||||
1.06%, 07/06/042,4 | 2,170,952 | 2,170,879 | ||||
1.06%, 11/15/042,4 | 2,170,952 | 2,170,952 | ||||
91,976,680 | ||||||
COMMERCIAL PAPER – 2.13% | ||||||
Amsterdam Funding Corp. | ||||||
1.03%, 03/03/042 | 2,713,689 | 2,713,535 | ||||
Corporate Asset Funding Corp. | ||||||
1.03%, 03/16/042 | 1,809,126 | 1,808,350 | ||||
1.05%, 05/21/042 | 1,881,491 | 1,877,067 | ||||
CRC Funding LLC | ||||||
1.03%, 03/26/042 | 1,447,301 | 1,446,266 | ||||
Delaware Funding Corp. | ||||||
1.02%, 03/16/042 | 3,658,270 | 3,656,716 | ||||
1.03%, 03/05/042 | 1,617,033 | 1,616,848 | ||||
Edison Asset Securitization | ||||||
1.03%, 03/03/042 | 2,713,689 | 2,713,534 | ||||
Eureka Securitization Inc. | ||||||
1.04%, 04/14/042 | 2,170,952 | 2,168,192 | ||||
Falcon Asset Securitization Corp. | ||||||
1.03%, 03/10/042 | 1,266,388 | 1,266,062 | ||||
Galaxy Funding Inc. | ||||||
1.05%, 05/17/042 | 1,809,126 | 1,805,083 | ||||
Gemini Securitization Corp. | ||||||
1.04%, 04/19/042 | 904,563 | 903,283 | ||||
GIRO Funding US Corp. | ||||||
1.05%, 05/19/042 | 904,563 | 902,479 | ||||
Jupiter Securitization Corp. | ||||||
1.03%, 03/24/042 | 1,809,126 | 1,807,936 | ||||
Liberty Street Funding Corp. | ||||||
1.03%, 03/10/042 | 723,651 | 723,464 | ||||
New Center Asset Trust | ||||||
1.04%, 03/01/042 | 904,563 | 904,563 | ||||
Park Avenue Receivables Corp. | ||||||
1.03%, 03/22/042 | 1,486,559 | 1,485,666 | ||||
Preferred Receivables Funding Corp. | ||||||
1.04%, 03/15/042 | 3,618,253 | 3,616,789 | ||||
1.04%, 05/20/042 | 904,563 | 902,473 | ||||
Receivables Capital Corp. | ||||||
1.03%, 03/15/042 | 3,943,895 | 3,942,315 | ||||
Windmill Funding Corp. | ||||||
1.03%, 03/05/042 | 2,066,022 | 2,065,786 | ||||
38,326,407 | ||||||
TIME DEPOSITS – 1.67% | ||||||
Abbey National Treasury Services PLC | ||||||
1.02%, 03/01/042 | 3,618,253 | 3,618,253 | ||||
1.33%, 02/10/052 | 1,809,126 | 1,808,869 | ||||
1.39%, 02/02/052 | 1,809,126 | 1,808,875 | ||||
1.40%, 10/25/042 | 3,618,253 | 3,617,899 | ||||
Bank of New York | ||||||
1.39%, 11/01/042 | 3,618,253 | 3,618,010 | ||||
Bank of Novia Scotia | ||||||
1.24%, 10/07/042 | 2,713,689 | 2,713,526 | ||||
1.42%, 10/29/042 | 2,713,689 | 2,713,824 | ||||
SunTrust Bank | ||||||
1.01%, 03/01/042 | 5,970,117 | 5,970,117 | ||||
Toronto-Dominion Bank | ||||||
1.34%, 02/10/052 | 1,447,301 | 1,447,095 | ||||
1.41%, 11/01/042 | 2,713,689 | 2,713,507 | ||||
30,029,975 |
SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI EMERGING MARKETS INDEX FUND
February 29, 2004
Security | Principal | Value | |||||
U.S. GOVERNMENT AGENCY NOTES – 0.49% | |||||||
Federal Home Loan | |||||||
Mortgage Corp. | |||||||
1.15%, 05/12/042 | $ | 2,713,689 | $ | 2,707,448 | |||
1.28%, 08/19/042 | 1,447,301 | 1,438,502 | |||||
Federal National Mortgage Association | |||||||
1.28%, 08/20/042 | 4,703,728 | 4,674,963 | |||||
8,820,913 | |||||||
REPURCHASE AGREEMENTS – 0.20% | |||||||
Merrill Lynch Government Securities Inc. | |||||||
1.06%, 03/01/042 | 3,618,253 | 3,618,253 | |||||
3,618,253 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 332,930,614 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 118.19% | 2,125,164,263 | ||||||
Other Assets, Less Liabilities – (18.19%) | (327,029,944 | ) | |||||
NET ASSETS – 100.00% | $ | 1,798,134,319 | |||||
1 | Non-income earning securities. |
2 | All or a portion of this security represents investments of securities lending collateral. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See notes to financial statements.
40 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI HONG KONG INDEX FUND
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS – 100.02% | |||||
Hutchison Whampoa Ltd. | 9,100,800 | $ | 76,581,949 | ||
Cheung Kong (Holdings) Ltd. | 5,850,000 | 55,803,041 | |||
Sun Hung Kai Properties Ltd. | 5,200,000 | 51,105,815 | |||
Hang Seng Bank Ltd. | 3,250,000 | 46,137,194 | |||
CLP Holdings Ltd. | 6,825,200 | 35,161,330 | |||
BOC Hong Kong (Holdings) Ltd. | 13,000,000 | 26,554,982 | |||
Hong Kong & China Gas Co. Ltd. | 14,950,663 | 25,833,799 | |||
Swire Pacific Ltd. Class A | 3,575,000 | 25,030,994 | |||
Hongkong Electric Holdings Ltd. | 5,200,000 | 22,312,866 | |||
Bank of East Asia Ltd. | 5,720,100 | 18,592,153 | |||
Wharf (Holdings) Ltd. (The) | 5,200,000 | 16,233,612 | |||
Henderson Land Development Co. Ltd. | 2,600,000 | 13,227,387 | |||
Li & Fung Ltd. | 6,500,000 | 12,692,948 | |||
Hong Kong Exchanges & Clearing Ltd. | 3,900,000 | 10,321,370 | |||
PCCW Ltd.1 | 13,000,576 | 10,271,722 | |||
Esprit Holdings Ltd. | 2,600,000 | 10,154,358 | |||
MTR Corp. Ltd. | 6,175,083 | 9,797,501 | |||
Cathay Pacific Airways Ltd. | 4,550,000 | 9,265,017 | |||
Hang Lung Properties Ltd. | 5,200,000 | 7,515,561 | |||
Johnson Electric Holdings Ltd. | 5,525,000 | 6,636,658 | |||
Television Broadcasts Ltd. | 1,300,000 | 6,346,474 | |||
New World Development Co. Ltd. | 5,850,000 | 6,313,071 | |||
Hysan Development Co. Ltd. | 3,250,000 | 6,116,832 | |||
Yue Yuen Industrial (Holdings) Ltd. | 1,950,000 | 5,636,671 | |||
Hopewell Holdings Ltd. | 2,600,000 | 5,060,478 | |||
Cheung Kong Infrastructure Holdings Ltd. | 1,950,000 | 4,972,796 | |||
Sino Land Co. Ltd. | 6,500,000 | 4,425,830 | |||
Techtronic Industries Co. Ltd. | 1,300,000 | 4,308,922 | |||
Giordano International Ltd. | 6,500,000 | 3,945,670 | |||
Shangri-La Asia Ltd. | 3,900,000 | 3,657,573 | |||
ASM Pacific Technology Ltd. | 650,000 | 2,964,471 | |||
Texwinca Holdings Ltd. | 2,600,000 | 1,887,241 | |||
SCMP Group Ltd. | 3,900,000 | 1,741,105 | |||
SmarTone Telecommunications Holdings Ltd. | 975,000 | 1,121,071 | |||
TOTAL COMMON STOCKS | 547,728,462 |
Security | Shares or Principal | Value | ||||
SHORT-TERM INVESTMENTS – 12.27% | ||||||
MONEY MARKET FUNDS – 5.89% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2,3 | 21,946,422 | $ | 21,946,422 | |||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares2,3 | 8,053,266 | 8,053,266 | ||||
BlackRock Temp Cash Money Market Fund2 | 373,345 | 373,345 | ||||
Short-Term Investment Co. - | ||||||
Prime Money Market Portfolio, Institutional Shares2 | 1,883,043 | 1,883,043 | ||||
32,256,076 | ||||||
FLOATING RATE NOTES – 3.40% | ||||||
Beta Finance Inc. | ||||||
1.05%, 05/20/042,4 | $ | 366,058 | 366,046 | |||
1.05%, 09/15/042,4 | 732,115 | 732,075 | ||||
1.05%, 10/12/042,4 | 366,058 | 366,035 | ||||
1.14%, 08/23/042,4 | 366,058 | 366,208 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/042 | 549,086 | 549,037 | ||||
1.38%, 11/22/042 | 183,029 | 183,039 | ||||
1.40%, 10/29/042 | 732,115 | 732,103 | ||||
CC USA Inc. | ||||||
1.05%, 04/19/042,4 | 322,131 | 322,128 | ||||
1.06%, 05/24/042,4 | 732,115 | 732,098 | ||||
1.09%, 07/15/042,4 | 366,058 | 366,107 | ||||
1.51%, 02/15/052,4 | 475,875 | 476,603 | ||||
Dorada Finance Inc. | ||||||
1.05%, 05/20/042,4 | 732,115 | 732,091 | ||||
1.24%, 08/09/042 | 183,029 | 183,017 | ||||
1.48%, 01/18/052,4 | 549,086 | 549,062 | ||||
Five Finance Inc. | ||||||
1.06%, 04/15/042,4 | 366,058 | 366,058 | ||||
HBOS Treasury Services PLC | ||||||
1.16%, 01/24/052 | 732,115 | 732,115 | ||||
Holmes Financing PLC | ||||||
1.05%, 04/15/042 | 73,212 | 73,212 |
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI HONG KONG INDEX FUND
February 29, 2004
Security | Principal | Value | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042,4 | $ | 183,029 | $ | 183,016 | ||
1.05%, 09/27/042,4 | 790,684 | 790,617 | ||||
1.06%, 05/17/042 | 366,058 | 366,054 | ||||
1.07%, 04/13/042 | 366,058 | 366,055 | ||||
1.46%, 01/12/052,4 | 366,058 | 366,026 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 366,058 | 366,034 | ||||
1.06%, 07/20/042 | 292,846 | 292,824 | ||||
1.07%, 03/29/042 | 366,058 | 366,058 | ||||
1.07%, 05/04/042 | 366,058 | 366,054 | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042,4 | 549,086 | 549,087 | ||||
1.17%, 12/28/042,4 | 732,115 | 732,115 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052,4 | 695,509 | 695,509 | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | 366,058 | 366,058 | ||||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 366,058 | 366,027 | ||||
1.06%, 07/20/042 | 366,058 | 366,029 | ||||
1.09%, 10/07/042 | 732,115 | 732,027 | ||||
1.24%, 08/06/042 | 183,029 | 183,021 | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052,4 | 322,131 | 322,102 | ||||
1.06%, 07/15/042,4 | 219,635 | 219,607 | ||||
1.07%, 02/25/052,4 | 409,984 | 409,904 | ||||
1.10%, 07/06/042,4 | 219,635 | 219,627 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042,4 | 366,058 | 366,018 | ||||
1.32%, 02/04/052,4 | 183,029 | 182,995 | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042,4 | 366,058 | 366,030 | ||||
1.06%, 04/20/042,4 | 366,058 | 366,058 | ||||
1.06%, 07/06/042,4 | 439,269 | 439,254 | ||||
1.06%, 11/15/042,4 | 439,269 | 439,269 | ||||
18,610,509 | ||||||
COMMERCIAL PAPER – 1.42% | ||||||
Amsterdam Funding Corp. | ||||||
1.03%, 03/03/042 | 549,086 | 549,055 | ||||
Corporate Asset Funding Corp. | ||||||
1.03%, 03/16/042 | 366,058 | 365,900 | ||||
1.05%, 05/21/042 | 380,700 | 379,805 | ||||
CRC Funding LLC | ||||||
1.03%, 03/26/042 | 292,846 | 292,637 | ||||
Delaware Funding Corp. | ||||||
1.02%, 03/16/042 | 740,212 | 739,898 | ||||
1.03%, 03/05/042 | 327,190 | 327,153 | ||||
Edison Asset Securitization | ||||||
1.03%, 03/03/042 | 549,086 | 549,055 | ||||
Eureka Securitization Inc. | ||||||
1.04%, 04/14/042 | 439,269 | 438,711 | ||||
Falcon Asset Securitization Corp. | ||||||
1.03%, 03/10/042 | 256,240 | 256,174 | ||||
Galaxy Funding Inc. | ||||||
1.05%, 05/17/042 | 366,058 | 365,239 | ||||
Gemini Securitization Corp. | ||||||
1.04%, 04/19/042 | 183,029 | 182,770 | ||||
GIRO Funding US Corp. | ||||||
1.05%, 05/19/042 | 183,029 | 182,607 | ||||
Jupiter Securitization Corp. | ||||||
1.03%, 03/24/042 | 366,058 | 365,817 | ||||
Liberty Street Funding Corp. | ||||||
1.03%, 03/10/042 | 146,423 | 146,386 | ||||
New Center Asset Trust | ||||||
1.04%, 03/01/042 | 183,029 | 183,029 | ||||
Park Avenue Receivables Corp. | ||||||
1.03%, 03/22/042 | 300,789 | 300,609 | ||||
Preferred Receivables Funding Corp. | ||||||
1.04%, 03/15/042 | 732,115 | 731,819 | ||||
1.04%, 05/20/042 | 183,029 | 182,606 | ||||
Receivables Capital Corp. | ||||||
1.03%, 03/15/042 | 798,005 | 797,686 | ||||
Windmill Funding Corp. | ||||||
1.03%, 03/05/042 | 418,038 | 417,990 | ||||
7,754,946 | ||||||
TIME DEPOSITS – 1.11% | ||||||
Abbey National Treasury Services PLC | ||||||
1.02%, 03/01/042 | 732,115 | 732,115 | ||||
1.33%, 02/10/052 | 366,058 | 366,005 | ||||
1.39%, 02/02/052 | 366,058 | 366,007 | ||||
1.40%, 10/25/042 | 732,115 | 732,043 |
42 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (continued)
iSHARES MSCI HONG KONG INDEX FUND
February 29, 2004
Security | Principal | Value | |||||
Bank of New York | |||||||
1.39%, 11/01/042 | $ | 732,115 | $ | 732,066 | |||
Bank of Novia Scotia | |||||||
1.24%, 10/07/042 | 549,086 | 549,053 | |||||
1.42%, 10/29/042 | 549,086 | 549,114 | |||||
SunTrust Bank | |||||||
1.01%, 03/01/042 | 1,207,990 | 1,207,990 | |||||
Toronto-Dominion Bank | |||||||
1.34%, 02/10/052 | 292,846 | 292,804 | |||||
1.41%, 11/01/042 | 549,086 | 549,049 | |||||
6,076,246 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.32% | |||||||
Federal Home Loan | |||||||
Mortgage Corp. | |||||||
1.15%, 05/12/042 | 549,086 | 547,823 | |||||
1.28%, 08/19/042 | 292,846 | 291,066 | |||||
Federal National Mortgage Association | |||||||
1.28%, 08/20/042 | 951,750 | 945,929 | |||||
1,784,818 | |||||||
REPURCHASE AGREEMENTS – 0.13% | |||||||
Merrill Lynch Government Securities Inc. | |||||||
1.06%, 03/01/042 | 732,115 | 732,115 | |||||
732,115 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 67,214,710 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 112.29% | 614,943,172 | ||||||
Other Assets, Less Liabilities – (12.29%) | (67,324,151 | ) | |||||
NET ASSETS – 100.00% | $ | 547,619,021 | |||||
(1) | Non-income earning securities. |
(2) | All or a portion of this security represents investments of securities lending collateral. |
(3) | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
(4) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI MALAYSIA INDEX FUND
February 29, 2004
Security | Shares | Value | ||||
COMMON STOCKS – 99.97% | ||||||
Malayan Banking Bhd | 8,269,800 | $ | 24,809,400 | |||
Telekom Malaysia Bhd | 5,544,000 | 14,735,368 | ||||
Sime Darby Bhd | 7,345,800 | 11,791,942 | ||||
Tenaga Nasional Bhd | 4,481,400 | 11,439,363 | ||||
Commerce Asset Holdings Bhd | 8,223,600 | 11,361,553 | ||||
IOI Corp. Bhd | 4,296,600 | 10,628,432 | ||||
Genting Bhd | 2,032,800 | 10,164,000 | ||||
Public Bank Bhd | 10,950,637 | 9,970,843 | ||||
Maxis Communications Bhd | 4,204,200 | 9,570,087 | ||||
Malaysian International Shipping Corp. Bhd | 2,679,600 | 9,167,053 | ||||
Resorts World Bhd | 2,818,200 | 8,380,437 | ||||
British American Tobacco (Malaysia) Bhd | 646,800 | 7,616,921 | ||||
AMMB Holdings Bhd | 5,174,400 | 5,555,672 | ||||
PLUS Expressways Bhd | 8,639,400 | 5,524,669 | ||||
Gamuda Bhd | 2,818,200 | 4,746,442 | ||||
Petronas Gas Bhd | 2,263,800 | 4,319,092 | ||||
Malakoff Bhd | 2,772,000 | 4,303,895 | ||||
Magnum Corp. Bhd | 4,897,200 | 4,201,282 | ||||
Hong Leong Bank Bhd | 2,725,800 | 4,160,432 | ||||
Astro All Asia Networks PLC1 | 3,281,100 | 4,110,009 | ||||
OYL Industries Bhd | 369,733 | 3,794,628 | ||||
Tanjong PLC | 1,108,800 | 3,618,189 | ||||
YTL Corp. Bhd | 2,957,420 | 3,580,035 | ||||
Berjaya Sports Toto Bhd | 2,449,200 | 2,939,040 | ||||
Perusahaan Otomobil Nasional Bhd | 1,108,800 | 2,815,768 | ||||
Kuala Lumpur Kepong Bhd | 1,432,200 | 2,732,487 | ||||
SP Setia Bhd | 2,402,900 | 2,681,131 | ||||
Nestle (Malaysia) Bhd | 415,800 | 2,352,553 | ||||
PPB Group Bhd | 1,109,133 | 2,305,829 | ||||
Hong Leong Credit Bhd | 1,478,800 | 2,159,826 | ||||
Road Builder (Malaysia) Holdings Bhd | 2,079,500 | 2,101,389 | ||||
IJM Corp. Bhd | 1,617,000 | 1,991,463 | ||||
Malaysian Pacific Industries Bhd | 415,800 | 1,991,463 | ||||
Malaysian Airline System Bhd1 | 1,432,200 | 1,941,008 | ||||
Star Publications (Malaysia) Bhd | 1,016,400 | 1,858,942 | ||||
RHB Capital Bhd | 2,633,400 | 1,781,010 | ||||
DRB-Hicom Bhd | 2,818,200 | 1,750,251 | ||||
Malayan Cement Bhd | 6,514,200 | 1,697,121 | ||||
UMW Holdings Bhd | 1,071,433 | 1,691,736 | ||||
Golden Hope Plantations Bhd | 1,524,600 | 1,500,527 | ||||
IGB Corp. Bhd | 3,372,600 | 1,366,791 | ||||
Petronas Dagangan Bhd | 693,000 | 1,340,408 | ||||
Unisem (Malaysia) Bhd | 462,000 | 1,325,211 | ||||
Oriental Holdings Bhd | 1,016,800 | 1,220,160 | ||||
Multi-Purpose Holdings Bhd1 | 3,003,000 | 1,169,589 | ||||
Malaysian Oxygen Bhd | 369,600 | 1,137,979 | ||||
Guinness Anchor Bhd | 877,800 | 1,104,180 | ||||
Malaysia Mining Corp. Bhd | 1,617,000 | 1,021,263 | ||||
Edaran Otomobil Nasional Bhd | 415,800 | 1,001,203 | ||||
TA Enterprise Bhd | 3,788,400 | 996,947 | ||||
Mulpha International Bhd1 | 5,174,400 | 912,328 | ||||
New Straits Times Press Bhd1 | 693,000 | 893,605 | ||||
Hong Leong Industries Bhd | 508,200 | 862,603 | ||||
OSK Holdings Bhd | 1,478,400 | 820,901 | ||||
Malaysian Resources Corp. Bhd1 | 2,823,700 | 809,956 | ||||
IOI Properties Bhd | 369,750 | 783,286 | ||||
Highlands & Lowlands Bhd | 877,800 | 776,160 | ||||
Puncak Niaga Holdings Bhd1 | 785,400 | 764,732 | ||||
Malaysia Airports Holdings Bhd | 1,617,000 | 714,884 | ||||
Tan Chong Motor Holdings Bhd | 1,940,400 | 679,140 | ||||
Courts Mammoth Bhd | 739,200 | 626,375 | ||||
Jaya Tiasa Holdings Bhd | 554,400 | 557,318 | ||||
TIME Engineering Bhd1 | 1,570,800 | 442,304 | ||||
WTK Holdings Bhd | 323,400 | 418,718 | ||||
Hume Industries Bhd | 667 | 904 | ||||
TOTAL COMMON STOCKS | 245,588,233 | |||||
SHORT-TERM INVESTMENTS – 0.09% | ||||||
MONEY MARKET FUNDS – 0.09% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2 | 218,790 | 218,790 | ||||
218,790 | ||||||
TOTAL SHORT-TERM INVESTMENTS | 218,790 | |||||
TOTAL INVESTMENTS IN SECURITIES – 100.06% | 245,807,023 | |||||
Other Assets, Less Liabilities – (0.06%) | (154,887 | ) | ||||
NET ASSETS - 100.00% | $ | 245,652,136 | ||||
1 | Non-income earning securities. |
2 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
See notes to financial statements.
44 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI MEXICO INDEX FUND
February 29, 2004
Security | Shares | Value | ||||
COMMON STOCKS – 99.94% | ||||||
America Movil SA de CV Series L1 | 12,296,100 | $ | 21,881,713 | |||
Telefonos de Mexico SA de CV Series L | 10,633,500 | 18,038,845 | ||||
Cemex SA de CV Series CPO | 1,458,600 | 8,451,430 | ||||
Grupo Televisa SA Series CPO | 2,187,186 | 4,795,620 | ||||
Grupo Financiero BBVA Bancomer SA de CV Class B1 | 4,442,100 | 4,765,487 | ||||
Wal-Mart de Mexico SA de CV Series V | 1,513,272 | 4,652,855 | ||||
Fomento Economico Mexicano SA de CV Class UBD | 1,020,000 | 4,578,915 | ||||
Grupo Modelo SA de CV Series C | 1,229,100 | 3,289,227 | ||||
Grupo Carso SA de CV Series A1 | 673,200 | 2,872,409 | ||||
Kimberly-Clark de Mexico SA de CV Class A | 989,400 | 2,613,779 | ||||
America Telecom SA de CV Series A11 | 991,288 | 1,773,917 | ||||
TV Azteca SA de CV Series CPO | 3,116,100 | 1,771,455 | ||||
Grupo Mexico SA de CV Series B1 | 454,883 | 1,731,635 | ||||
Alfa SA de CV Class A | 459,000 | 1,699,186 | ||||
Carso Global Telecom SA de CV Class A11 | 1,147,500 | 1,683,214 | ||||
Consorcio Ara SA de CV1 | 492,146 | 1,513,645 | ||||
Controladora Comercial Mexicana SA de CV | 1,086,300 | 1,421,630 | ||||
Grupo Elektra SA de CV Series CPO | 255,020 | 1,414,486 | ||||
Corporacion Interamericana de Entretenimiento SA de CV Class B1 | 622,200 | 1,348,489 | ||||
Coca-Cola Femsa SA de CV ADR1 | 56,253 | 1,337,696 | ||||
Grupo Financiero Banorte SA de CV Series O | 346,800 | 1,267,844 | ||||
Industrias Penoles SA de CV Series CP | 260,100 | 1,145,761 | ||||
Apasco SA de CV | 107,100 | 1,088,859 | ||||
Grupo Aeroportuario del Sureste SA de CV ADR | 47,634 | 1,045,566 | ||||
Organizacion Soriana SA de CV Series B1 | 346,800 | 1,018,350 | ||||
Grupo Continental SA | 408,000 | 793,912 | ||||
Grupo Bimbo SA Series A | 341,700 | 753,225 | ||||
Grupo Sanborns SA de CV Series B11 | 346,800 | 564,496 | ||||
Vitro SA de CV Series A | 382,500 | 464,275 | ||||
Hylsamex SA de CV Series CPO1 | 131,545 | 106,406 | ||||
TOTAL COMMON STOCKS | 99,884,327 | |||||
SHORT-TERM INVESTMENTS - 0.10% | ||||||
MONEY MARKET FUNDS – 0.10% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2 | 95,737 | 95,737 | ||||
95,737 | ||||||
TOTAL SHORT-TERM INVESTMENTS | 95,737 | |||||
TOTAL INVESTMENTS IN SECURITIES – 100.04% | 99,980,064 | |||||
Other Assets, Less Liabilities – (0.04%) | (35,219 | ) | ||||
NET ASSETS – 100.00% | $ | 99,944,845 | ||||
1 | Non-income earning securities. |
2 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI PACIFIC EX-JAPAN INDEX FUND
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS – 95.95% | |||||
AUSTRALIA – 60.27% | |||||
Alumina Ltd. | 1,207,268 | $ | 5,123,073 | ||
Amcor Ltd. | 930,262 | 5,533,803 | |||
AMP Ltd. | 1,974,067 | 7,463,148 | |||
Ansell Ltd. | 195,570 | 1,059,262 | |||
Aristocrat Leisure Ltd. | 311,320 | 578,879 | |||
Australia and New Zealand Banking Group Ltd. | 1,950,157 | 27,068,539 | |||
Australian Gas Light Co. Ltd. | 478,160 | 4,205,738 | |||
Australian Stock Exchange Ltd. | 116,616 | 1,513,381 | |||
BHP Billiton Ltd. | 4,057,308 | 38,378,900 | |||
BHP Steel Ltd. | 816,755 | 3,724,289 | |||
Boral Ltd. | 631,240 | 2,990,384 | |||
Brambles Industries Ltd. | 1,033,902 | 4,235,825 | |||
Centro Properties Group | 671,488 | 2,175,964 | |||
Coca-Cola Amatil Ltd. | 498,542 | 2,534,844 | |||
Coles Myer Ltd. | 1,197,034 | 7,203,858 | |||
Commonwealth Bank of Australia | 1,366,282 | 33,395,627 | |||
Commonwealth Property Office Fund | 1,538,196 | 1,388,550 | |||
Computershare Ltd. | 458,638 | 1,199,593 | |||
CSL Ltd. | 201,154 | 3,104,007 | |||
CSR Ltd. | 1,058,402 | 1,486,230 | |||
Deutsche Office Trust | 1,359,144 | 1,163,999 | |||
Foster’s Group Ltd. | 2,211,834 | 7,457,582 | |||
Futuris Corp. Ltd. | 607,762 | 797,162 | |||
Gandel Retail Trust | 1,396,987 | 1,498,205 | |||
General Property Trust | 2,122,996 | 4,881,233 | |||
Harvey Norman Holdings Ltd. | 615,158 | 1,328,950 | |||
Iluka Resources Ltd. | 280,360 | 895,531 | |||
Insurance Australia Group Ltd. | 1,808,150 | 6,277,852 | |||
Investa Property Group | 1,397,695 | 2,102,864 | |||
James Hardie Industries NV | 503,186 | 2,601,162 | |||
John Fairfax Holdings Ltd. | 895,604 | 2,342,501 | |||
Leighton Holdings Ltd. | 152,994 | 1,292,566 | |||
Lend Lease Corp. Ltd. | 413,832 | 3,160,992 | |||
Macquarie Bank Ltd. | 231,856 | 5,921,209 | |||
Macquarie Goodman Industrial Trust | 1,549,806 | 2,008,865 | |||
Macquarie Infrastructure Group | 2,109,752 | 4,818,226 | |||
Mayne Group Ltd. | 846,756 | 2,090,607 | |||
Mirvac Group | 763,336 | 2,715,068 | |||
National Australia Bank Ltd. | 1,627,722 | 38,806,349 | |||
Newcrest Mining Ltd. | 350,450 | 3,109,481 | |||
News Corp. Ltd. (The) | 1,480,490 | 13,901,451 | |||
OneSteel Ltd. | 581,446 | 937,605 | |||
Orica Ltd. | 300,140 | 3,198,023 | |||
Origin Energy Ltd. | 714,144 | 3,091,098 | |||
PaperlinX Ltd. | 447,888 | 1,555,056 | |||
Patrick Corporation Ltd. | 496,825 | 1,912,793 | |||
Publishing & Broadcasting Ltd. | 134,762 | 1,286,178 | |||
QBE Insurance Group Ltd. | 715,606 | 6,095,469 | |||
Rinker Group Ltd. | 1,039,310 | 5,637,214 | |||
Rio Tinto Ltd. | 337,464 | 9,404,577 | |||
Santos Ltd. | 630,122 | 2,951,056 | |||
Sonic Healthcare Ltd. | 256,022 | 1,580,270 | |||
Southcorp Ltd. | 688,517 | 1,583,051 | |||
Stockland Trust Group | 1,276,503 | 5,278,988 | |||
Suncorp-Metway Ltd. | 590,906 | 6,191,306 | |||
TAB Ltd. | 493,124 | 1,731,138 | |||
TABCORP Holdings Ltd. | 451,758 | 3,945,630 | |||
Telstra Corp. Ltd. | 2,340,576 | 8,632,065 | |||
Toll Holdings Ltd. | 250,862 | 1,879,396 | |||
Transurban Group | 506,368 | 1,758,097 | |||
Wesfarmers Ltd. | 406,694 | 8,629,081 | |||
Westfield Holdings Ltd. | 469,560 | 4,673,528 | |||
Westfield Trust | 2,373,170 | 6,481,808 | |||
Westpac Banking Corp. Ltd. | 1,936,290 | 25,172,966 | |||
WMC Resources Ltd.1 | 1,222,748 | 4,934,041 | |||
Woodside Petroleum Ltd. | 501,380 | 5,887,701 | |||
Woolworths Ltd. | 1,116,538 | 10,104,983 | |||
398,068,867 | |||||
HONG KONG – 22.27% | |||||
ASM Pacific Technology Ltd. | 172,000 | 784,445 | |||
Bank of East Asia Ltd. | 1,530,800 | 4,975,589 | |||
BOC Hong Kong (Holdings) Ltd. | 3,913,000 | 7,993,050 | |||
Cathay Pacific Airways Ltd. | 1,118,000 | 2,276,547 | |||
Cheung Kong (Holdings) Ltd. | 1,634,000 | 15,586,696 | |||
Cheung Kong Infrastructure Holdings Ltd. | 516,000 | 1,315,878 | |||
CLP Holdings Ltd. | 1,978,000 | 10,190,047 | |||
Esprit Holdings Ltd. | 645,000 | 2,519,062 | |||
Giordano International Ltd. | 1,548,000 | 939,676 |
46 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI PACIFIC EX-JAPAN INDEX FUND
February 29, 2004
Security | Shares | Value | |||
Hang Lung Properties Ltd. | 1,290,500 | $ | 1,865,160 | ||
Hang Seng Bank Ltd. | 825,600 | 11,720,267 | |||
Henderson Land Development Co. Ltd. | 774,000 | 3,937,691 | |||
Hong Kong & China Gas Co. Ltd. | 3,956,600 | 6,836,754 | |||
Hong Kong Exchanges & Clearing Ltd. | 1,204,000 | 3,186,392 | |||
Hongkong Electric Holdings Ltd. | 1,462,000 | 6,273,348 | |||
Hopewell Holdings Ltd. | 688,000 | 1,339,080 | |||
Hutchison Whampoa Ltd. | 2,322,000 | 19,539,302 | |||
Hysan Development Co. Ltd. | 688,000 | 1,294,886 | |||
Johnson Electric Holdings Ltd. | 1,677,000 | 2,014,421 | |||
Li & Fung Ltd. | 1,720,000 | 3,358,749 | |||
MTR Corp. Ltd. | 1,419,000 | 2,251,411 | |||
New World Development Co. Ltd. | 1,634,000 | 1,763,343 | |||
PCCW Ltd.1 | 3,440,600 | 2,718,409 | |||
SCMP Group Ltd. | 1,204,000 | 537,510 | |||
Shangri-La Asia Ltd. | 860,000 | 806,542 | |||
Sino Land Co. Ltd. | 1,548,000 | 1,054,029 | |||
SmarTone Telecommunications Holdings Ltd. | 215,000 | 247,211 | |||
Sun Hung Kai Properties Ltd. | 1,376,000 | 13,523,385 | |||
Swire Pacific Ltd. Class A | 989,000 | 6,924,658 | |||
Techtronic Industries Co. Ltd. | 516,000 | 1,710,310 | |||
Television Broadcasts Ltd. | 344,000 | 1,679,375 | |||
Texwinca Holdings Ltd. | 688,000 | 499,393 | |||
Wharf (Holdings) Ltd. (The) | 1,290,000 | 4,027,185 | |||
Yue Yuen Industrial (Holdings) Ltd. | 473,000 | 1,367,254 | |||
147,057,055 | |||||
NEW ZEALAND – 2.90% | |||||
Auckland International Airport Ltd. | 266,869 | 1,220,201 | |||
Carter Holt Harvey Ltd. | 900,420 | 1,178,924 | |||
Contact Energy Ltd. | 328,606 | 1,135,307 | |||
Fisher & Paykel Appliances Holdings Ltd. | 236,672 | 624,619 | |||
Fisher & Paykel Healthcare Corp. Ltd. | 92,450 | 741,481 | |||
Fletcher Building Ltd. | 448,748 | 1,261,229 | |||
Independent Newspapers Ltd. | 156,606 | 504,561 | |||
Lion Nathan Ltd. | 299,624 | 1,391,673 | |||
NGC Holdings Ltd. | 144,449 | 234,677 | |||
Sky City Entertainment Group Ltd. | 465,432 | 1,371,931 | |||
Sky Network Television Ltd.1 | 102,168 | 364,188 | |||
Telecom Corp. of New Zealand Ltd. | 2,067,182 | 8,119,715 | |||
Tenon Ltd.1 | 237,723 | 216,736 | |||
Tower Ltd.1 | 474,850 | 462,224 | |||
Warehouse Group Ltd. (The) | 114,552 | 329,021 | |||
19,156,487 | |||||
SINGAPORE – 10.51% | |||||
Allgreen Properties Ltd. | 430,000 | 290,498 | |||
Capitaland Ltd. | 1,118,000 | 1,175,632 | |||
Chartered Semiconductor Manufacturing Ltd.1 | 1,032,000 | 1,036,698 | |||
City Developments Ltd. | 453,000 | 1,782,993 | |||
ComfortDelGro Corp. Ltd. | 1,806,000 | 1,002,597 | |||
Creative Technology Ltd. | 64,500 | 678,249 | |||
Datacraft Asia Ltd.1 | 258,000 | 345,720 | |||
DBS Group Holdings Ltd. | 1,204,000 | 10,397,298 | |||
Fraser & Neave Ltd. | 172,830 | 1,441,731 | |||
Haw Par Corp. Ltd. | 86,397 | 247,682 | |||
Jardine Cycle & Carriage Ltd. | 86,000 | 310,707 | |||
Keppel Corp. Ltd. | 516,000 | 2,212,836 | |||
Keppel Land Ltd. | 430,000 | 485,005 | |||
Neptune Orient Lines Ltd.1 | 1,118,000 | 1,379,233 | |||
Oversea-Chinese Banking Corp. Ltd. | 1,032,000 | 7,699,457 | |||
Overseas Union Enterprise Ltd. | 86,000 | 330,915 | |||
Parkway Holdings Ltd. | 516,000 | 312,222 | |||
SembCorp Industries Ltd. | 1,032,000 | 866,947 | |||
SembCorp Logistics Ltd. | 344,000 | 414,275 | |||
SembCorp Marine Ltd. | 516,000 | 292,519 | |||
Singapore Airlines Ltd. | 602,000 | 4,102,335 | |||
Singapore Exchange Ltd. | 860,000 | 889,176 | |||
Singapore Land Ltd. | 86,000 | 208,148 | |||
Singapore Post Ltd. | 1,376,000 | 606,256 | |||
Singapore Press Holdings Ltd. | 430,000 | 4,698,487 | |||
Singapore Technologies Engineering Ltd. | 1,462,000 | 1,786,436 | |||
Singapore Telecommunications Ltd. | 6,708,000 | 9,181,754 | |||
SMRT Corp. Ltd. | 860,000 | 295,550 | |||
ST Assembly Test Services Ltd.1 | 344,000 | 379,921 | |||
United Overseas Bank Ltd. | 1,290,000 | 10,685,269 | |||
United Overseas Land Ltd. | 344,000 | 414,275 | |||
Venture Corp. Ltd. | 258,000 | 3,258,628 | |||
Wing Tai Holdings Ltd. | 430,000 | 212,190 | |||
69,421,639 | |||||
TOTAL COMMON STOCKS | 633,704,048 |
SCHEDULESOF INVESTMENTS | 47 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI PACIFIC EX-JAPAN INDEX FUND
February 29, 2004
Security | Shares or Principal | Value | ||||
PREFERRED STOCKS – 3.68% | ||||||
AUSTRALIA – 3.63% | ||||||
News Corp. Ltd. (The) | 2,901,038 | $ | 23,972,149 | |||
23,972,149 | ||||||
NEW ZEALAND – 0.05% | ||||||
Tenon Ltd.1 | 340,843 | 313,088 | ||||
313,088 | ||||||
TOTAL PREFERRED STOCKS | 24,285,237 | |||||
SHORT-TERM INVESTMENTS – 3.39% | ||||||
MONEY MARKET FUNDS – 1.64% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2,3 | 7,454,095 | 7,454,095 | ||||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares2,3 | 2,664,928 | 2,664,928 | ||||
BlackRock Temp Cash Money Market Fund2 | 123,544 | 123,544 | ||||
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares2 | 623,123 | 623,123 | ||||
10,865,690 | ||||||
FLOATING RATE NOTES – 0.93% | ||||||
Beta Finance Inc. | ||||||
1.05%, 05/20/042,4 | $ | 121,133 | 121,129 | |||
1.05%, 09/15/042,4 | 242,266 | 242,253 | ||||
1.05%, 10/12/042,4 | 121,133 | 121,126 | ||||
1.14%, 08/23/042,4 | 121,133 | 121,183 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/042 | 181,700 | 181,683 | ||||
1.38%, 11/22/042 | 60,567 | 60,570 | ||||
1.40%, 10/29/042 | 242,266 | 242,262 |
Security | Principal | Value | ||||
CC USA Inc. | ||||||
1.05%, 04/19/042,4 | $ | 106,597 | $ | 106,597 | ||
1.06%, 05/24/042,4 | 242,266 | 242,261 | ||||
1.09%, 07/15/042,4 | 121,133 | 121,149 | ||||
1.51%, 02/15/052,4 | 157,473 | 157,714 | ||||
Dorada Finance Inc. | ||||||
1.05%, 05/20/042,4 | 242,266 | 242,258 | ||||
1.24%, 08/09/042 | 60,567 | 60,563 | ||||
1.48%, 01/18/052,4 | 181,700 | 181,692 | ||||
Five Finance Inc. | ||||||
1.06%, 04/15/042,4 | 121,133 | 121,133 | ||||
HBOS Treasury Services PLC | ||||||
1.16%, 01/24/052 | 242,266 | 242,266 | ||||
Holmes Financing PLC | ||||||
1.05%, 04/15/042 | 24,227 | 24,227 | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042,4 | 60,567 | 60,562 | ||||
1.05%, 09/27/042,4 | 261,647 | 261,626 | ||||
1.06%, 05/17/042 | 121,133 | 121,132 | ||||
1.07%, 04/13/042 | 121,133 | 121,133 | ||||
1.46%, 01/12/052,4 | 121,133 | 121,123 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 121,133 | 121,125 | ||||
1.06%, 07/20/042 | 96,906 | 96,899 | ||||
1.07%, 03/29/042 | 121,133 | 121,133 | ||||
1.07%, 05/04/042 | 121,133 | 121,132 | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042,4 | 181,700 | 181,700 | ||||
1.17%, 12/28/042,4 | 242,266 | 242,266 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052,4 | 230,153 | 230,153 | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | 121,133 | 121,133 | ||||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 121,133 | 121,123 | ||||
1.06%, 07/20/042 | 121,133 | 121,124 | ||||
1.09%, 10/07/042 | 242,266 | 242,237 | ||||
1.24%, 08/06/042 | 60,567 | 60,564 |
48 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI PACIFIC EX-JAPAN INDEX FUND
February 29, 2004
Security | Principal | Value | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052,4 | $ | 106,597 | $ | 106,588 | ||
1.06%, 07/15/042,4 | 72,680 | 72,671 | ||||
1.07%, 02/25/052,4 | 135,669 | 135,642 | ||||
1.10%, 07/06/042,4 | 72,680 | 72,677 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042,4 | 121,133 | 121,120 | ||||
1.32%, 02/04/052,4 | 60,567 | 60,555 | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042,4 | 121,133 | 121,124 | ||||
1.06%, 04/20/042,4 | 121,133 | 121,133 | ||||
1.06%, 07/06/042,4 | 145,360 | 145,355 | ||||
1.06%, 11/15/042,4 | 145,360 | 145,360 | ||||
6,158,456 | ||||||
COMMERCIAL PAPER – 0.39% | ||||||
Amsterdam Funding Corp. | ||||||
1.03%, 03/03/042 | 181,700 | 181,689 | ||||
Corporate Asset Funding Corp. | ||||||
1.03%, 03/16/042 | 121,133 | 121,081 | ||||
1.05%, 05/21/042 | 125,978 | 125,683 | ||||
CRC Funding LLC | ||||||
1.03%, 03/26/042 | 96,906 | 96,837 | ||||
Delaware Funding Corp. | ||||||
1.02%, 03/16/042 | 244,946 | 244,842 | ||||
1.03%, 03/05/042 | 108,271 | 108,259 | ||||
Edison Asset Securitization | ||||||
1.03%, 03/03/042 | 181,700 | 181,689 | ||||
Eureka Securitization Inc. | ||||||
1.04%, 04/14/042 | 145,360 | 145,175 | ||||
Falcon Asset Securitization Corp. | ||||||
1.03%, 03/10/042 | 84,793 | 84,771 | ||||
Galaxy Funding Inc. | ||||||
1.05%, 05/17/042 | 121,133 | 120,862 | ||||
Gemini Securitization Corp. | ||||||
1.04%, 04/19/042 | 60,567 | 60,481 | ||||
GIRO Funding US Corp. | ||||||
1.05%, 05/19/042 | 60,567 | 60,427 | ||||
Jupiter Securitization Corp. | ||||||
1.03%, 03/24/042 | 121,133 | 121,053 | ||||
Liberty Street Funding Corp. | ||||||
1.03%, 03/10/042 | 48,453 | 48,441 | ||||
New Center Asset Trust | ||||||
1.04%, 03/01/042 | 60,567 | 60,567 | ||||
Park Avenue Receivables Corp. | ||||||
1.03%, 03/22/042 | 99,535 | 99,475 | ||||
Preferred Receivables Funding Corp. | ||||||
1.04%, 03/15/042 | 242,266 | 242,168 | ||||
1.04%, 05/20/042 | 60,567 | 60,427 | ||||
Receivables Capital Corp. | ||||||
1.03%, 03/15/042 | 264,070 | 263,964 | ||||
Windmill Funding Corp. | ||||||
1.03%, 03/05/042 | 138,334 | 138,318 | ||||
2,566,209 | ||||||
TIME DEPOSITS – 0.30% | ||||||
Abbey National Treasury Services PLC | ||||||
1.02%, 03/01/042 | 242,266 | 242,266 | ||||
1.33%, 02/10/052 | 121,133 | 121,116 | ||||
1.39%, 02/02/052 | 121,133 | 121,116 | ||||
1.40%, 10/25/042 | 242,266 | 242,242 | ||||
Bank of New York | ||||||
1.39%, 11/01/042 | 242,266 | 242,250 | ||||
Bank of Novia Scotia | ||||||
1.24%, 10/07/042 | 181,700 | 181,689 | ||||
1.42%, 10/29/042 | 181,700 | 181,709 | ||||
SunTrust Bank | ||||||
1.01%, 03/01/042 | 399,739 | 399,739 | ||||
Toronto-Dominion Bank | ||||||
1.34%, 02/10/052 | 96,906 | 96,893 | ||||
1.41%, 11/01/042 | 181,700 | 181,687 | ||||
2,010,707 | ||||||
U.S. GOVERNMENT AGENCY NOTES – 0.09% | ||||||
Federal Home Loan Mortgage Corp. | ||||||
1.15%, 05/12/042 | 181,700 | 181,282 | ||||
1.28%, 08/19/042 | 96,906 | 96,317 | ||||
Federal National Mortgage Association | ||||||
1.28%, 08/20/042 | 314,946 | 313,020 | ||||
590,619 |
SCHEDULESOF INVESTMENTS | 49 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI PACIFIC EX-JAPAN INDEX FUND
February 29, 2004
Security | Principal | Value | |||||
PURCHASE AGREEMENTS – 0.04% | |||||||
Merrill Lynch Government Securities Inc. | |||||||
1.06%, 03/01/042 | $ | 242,266 | $ | 242,266 | |||
242,266 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 22,433,947 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 103.02% | 680,423,232 | ||||||
Other Assets, Less Liabilities – (3.02%) | (19,956,681 | ) | |||||
NET ASSETS – 100.00% | $ | 660,466,551 | |||||
1 | Non-income earning securities. |
2 | All or a portion of this security represents investments of securities lending collateral. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See notes to financial statements.
50 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI SINGAPORE INDEX FUND
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.77% | |||||
United Overseas Bank Ltd. | 3,080,000 | $ | 25,512,116 | ||
DBS Group Holdings Ltd. | 2,800,000 | 24,179,762 | |||
Singapore Telecommunications Ltd. | 15,680,000 | 21,462,417 | |||
Oversea-Chinese Banking Corp. Ltd. | 2,240,000 | 16,711,999 | |||
Singapore Airlines Ltd. | 1,120,000 | 7,632,251 | |||
Keppel Corp. Ltd. | 1,680,000 | 7,204,582 | |||
Venture Corp. Ltd. | 560,000 | 7,072,992 | |||
City Developments Ltd. | 1,680,000 | 6,612,425 | |||
Singapore Press Holdings Ltd. | 560,000 | 6,118,960 | |||
Singapore Technologies Engineering Ltd. | 4,760,000 | 5,816,302 | |||
Fraser & Neave Ltd. | 560,000 | 4,671,464 | |||
Singapore Exchange Ltd. | 3,920,000 | 4,052,989 | |||
Capitaland Ltd. | 3,640,000 | 3,827,640 | |||
Neptune Orient Lines Ltd.1 | 3,080,000 | 3,799,677 | |||
ComfortDelGro Corp. Ltd. | 5,600,000 | 3,108,827 | |||
Chartered Semiconductor Manufacturing Ltd.1 | 3,080,000 | 3,094,023 | |||
SembCorp Industries Ltd. | 3,080,000 | 2,587,399 | |||
Haw Par Corp. Ltd. | 840,000 | 2,408,107 | |||
Singapore Post Ltd. | 4,760,000 | 2,097,224 | |||
Jardine Cycle & Carriage Ltd. | 560,000 | 2,023,204 | |||
SMRT Corp. Ltd. | 5,320,000 | 1,828,286 | |||
Creative Technology Ltd. | 168,000 | 1,766,603 | |||
Allgreen Properties Ltd. | 2,520,000 | 1,702,453 | |||
United Overseas Land Ltd. | 1,400,000 | 1,686,004 | |||
Keppel Land Ltd. | 1,400,000 | 1,579,086 | |||
Parkway Holdings Ltd. | 2,520,000 | 1,524,805 | |||
SembCorp Marine Ltd. | 2,520,000 | 1,428,580 | |||
Singapore Land Ltd. | 560,000 | 1,355,383 | |||
SembCorp Logistics Ltd. | 1,120,000 | 1,348,803 | |||
ST Assembly Test Services Ltd.1 | 1,120,000 | 1,236,951 | |||
Datacraft Asia Ltd.1 | 840,000 | 1,125,600 | |||
Overseas Union Enterprise Ltd. | 280,000 | 1,077,398 | |||
Wing Tai Holdings Ltd. | 1,400,000 | 690,850 | |||
TOTAL COMMON STOCKS | 178,345,162 |
Security | Shares or Principal | Value | |||
SHORT-TERM INVESTMENTS – 3.81% | |||||
MONEY MARKET FUNDS – 1.87% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2,3 | 2,319,541 | $ | 2,319,541 | ||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares2,3 | 798,456 | 798,457 | |||
BlackRock Temp Cash Money Market Fund2 | 37,016 | 37,016 | |||
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares2 | 186,698 | 186,698 | |||
3,341,712 | |||||
FLOATING RATE NOTES – 1.03% | |||||
Beta Finance Inc. | |||||
1.05%, 05/20/042,4 | 36,293 | 36,292 | |||
1.05%, 09/15/042,4 | 72,587 | 72,583 | |||
1.05%, 10/12/042,4 | 36,293 | 36,291 | |||
1.14%, 08/23/042,4 | 36,293 | 36,308 | |||
Canadian Imperial Bank of Commerce | |||||
1.24%, 10/07/042 | 54,440 | 54,435 | |||
1.38%, 11/22/042 | 18,147 | 18,148 | |||
1.40%, 10/29/042 | 72,587 | 72,586 | |||
CC USA Inc. | |||||
1.05%, 04/19/042,4 | 31,938 | 31,938 | |||
1.06%, 05/24/042,4 | 72,587 | 72,585 | |||
1.09%, 07/15/042,4 | 36,293 | 36,298 | |||
1.51%, 02/15/052,4 | 47,181 | 47,254 | |||
Dorada Finance Inc. | |||||
1.05%, 05/20/042,4 | 72,587 | 72,585 | |||
1.24%, 08/09/042 | 18,147 | 18,146 | |||
1.48%, 01/18/052,4 | 54,440 | 54,438 | |||
Five Finance Inc. | |||||
1.06%, 04/15/042,4 | 36,293 | 36,293 | |||
HBOS Treasury Services PLC | |||||
1.16%, 01/24/052 | 72,587 | 72,587 | |||
Holmes Financing PLC | |||||
1.05%, 04/15/042 | 7,259 | 7,259 |
SCHEDULESOF INVESTMENTS | 51 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI SINGAPORE INDEX FUND
February 29, 2004
Security | Principal | Value | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042,4 | $ | 18,147 | $ | 18,145 | ||
1.05%, 09/27/042,4 | 78,394 | 78,387 | ||||
1.06%, 05/17/042 | 36,293 | 36,293 | ||||
1.07%, 04/13/042 | 36,293 | 36,293 | ||||
1.46%, 01/12/052,4 | 36,293 | 36,290 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 36,293 | 36,292 | ||||
1.06%, 07/20/042 | 29,035 | 29,033 | ||||
1.07%, 03/29/042 | 36,293 | 36,293 | ||||
1.07%, 05/04/042 | 36,293 | 36,293 | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042,4 | 54,440 | 54,440 | ||||
1.17%, 12/28/042,4 | 72,587 | 72,587 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052,4 | 68,958 | 68,958 | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | 36,293 | 36,293 | ||||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 36,293 | 36,290 | ||||
1.06%, 07/20/042 | 36,293 | 36,291 | ||||
1.09%, 10/07/042 | 72,587 | 72,578 | ||||
1.24%, 08/06/042 | 18,147 | 18,146 | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052,4 | 31,938 | 31,935 | ||||
1.06%, 07/15/042,4 | 21,776 | 21,773 | ||||
1.07%, 02/25/052,4 | 40,649 | 40,641 | ||||
1.10%, 07/06/042,4 | 21,776 | 21,776 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042,4 | 36,293 | 36,290 | ||||
1.32%, 02/04/052,4 | 18,147 | 18,143 | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042,4 | 36,293 | 36,291 | ||||
1.06%, 04/20/042,4 | 36,293 | 36,293 | ||||
1.06%, 07/06/042,4 | 43,552 | 43,551 | ||||
1.06%, 11/15/042,4 | 43,552 | 43,552 | ||||
1,845,173 | ||||||
COMMERCIAL PAPER – 0.43% | ||||||
Amsterdam Funding Corp. | ||||||
1.03%, 03/03/042 | 54,440 | 54,437 | ||||
Corporate Asset Funding Corp. | ||||||
1.03%, 03/16/042 | 36,293 | 36,278 | ||||
1.05%, 05/21/042 | 37,745 | 37,656 | ||||
CRC Funding LLC | ||||||
1.03%, 03/26/042 | 29,035 | 29,014 | ||||
Delaware Funding Corp. | ||||||
1.02%, 03/16/042 | 73,390 | 73,359 | ||||
1.03%, 03/05/042 | 32,440 | 32,437 | ||||
Edison Asset Securitization | ||||||
1.03%, 03/03/042 | 54,440 | 54,437 | ||||
Eureka Securitization Inc. | ||||||
1.04%, 04/14/042 | 43,552 | 43,497 | ||||
Falcon Asset Securitization Corp. | ||||||
1.03%, 03/10/042 | 25,405 | 25,399 | ||||
Galaxy Funding Inc. | ||||||
1.05%, 05/17/042 | 36,293 | 36,212 | ||||
Gemini Securitization Corp. | ||||||
1.04%, 04/19/042 | 18,147 | 18,121 | ||||
GIRO Funding US Corp. | ||||||
1.05%, 05/19/042 | 18,147 | 18,105 | ||||
Jupiter Securitization Corp. | ||||||
1.03%, 03/24/042 | 36,293 | 36,270 | ||||
Liberty Street Funding Corp. | ||||||
1.03%, 03/10/042 | 14,517 | 14,514 | ||||
New Center Asset Trust | ||||||
1.04%, 03/01/042 | 18,147 | 18,147 | ||||
Park Avenue Receivables Corp. | ||||||
1.03%, 03/22/042 | 29,822 | 29,804 | ||||
Preferred Receivables Funding Corp. | ||||||
1.04%, 03/15/042 | 72,587 | 72,558 | ||||
1.04%, 05/20/042 | 18,147 | 18,105 | ||||
Receivables Capital Corp. | ||||||
1.03%, 03/15/042 | 79,120 | 79,088 | ||||
Windmill Funding Corp. | ||||||
1.03%, 03/05/042 | 41,447 | 41,442 | ||||
768,880 | ||||||
TIME DEPOSITS – 0.34% | ||||||
Abbey National Treasury Services PLC | ||||||
1.02%, 03/01/042 | 72,587 | 72,587 | ||||
1.33%, 02/10/052 | 36,293 | 36,288 | ||||
1.39%, 02/02/052 | 36,293 | 36,288 | ||||
1.40%, 10/25/042 | 72,587 | 72,580 |
52 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI SINGAPORE INDEX FUND
February 29, 2004
Security | Principal | Value | |||||
Bank of New York | |||||||
1.39%, 11/01/042 | $ | 72,587 | $ | 72,582 | |||
Bank of Novia Scotia | |||||||
1.24%, 10/07/042 | 54,440 | 54,437 | |||||
1.42%, 10/29/042 | 54,440 | 54,443 | |||||
SunTrust Bank | |||||||
1.01%, 03/01/042 | 119,768 | 119,768 | |||||
Toronto-Dominion Bank | |||||||
1.34%, 02/10/052 | 29,035 | 29,031 | |||||
1.41%, 11/01/042 | 54,440 | 54,437 | |||||
602,441 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.10% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.15%, 05/12/042 | 54,440 | 54,315 | |||||
1.28%, 08/19/042 | 29,035 | 28,858 | |||||
Federal National Mortgage Association | |||||||
1.28%, 08/20/042 | 94,363 | 93,786 | |||||
176,959 | |||||||
REPURCHASE AGREEMENTS – 0.04% | |||||||
Merrill Lynch Government Securities Inc. | |||||||
1.06%, 03/01/042 | 72,587 | 72,587 | |||||
72,587 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 6,807,752 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 103.58% | 185,152,914 | ||||||
Other Assets, Less Liabilities – (3.58%) | (6,396,834 | ) | |||||
NET ASSETS – 100.00% | $ | 178,756,080 | |||||
1 | Non-income earning securities. |
2 | All or a portion of this security represents investments of securities lending collateral. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 53 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI SOUTH AFRICA INDEX FUND
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.90% | |||||
Anglo American PLC | 864,300 | $ | 21,616,921 | ||
Sasol Ltd. | 441,390 | 6,622,675 | |||
Standard Bank Group Ltd. | 797,130 | 4,829,638 | |||
Old Mutual PLC | 2,727,810 | 4,822,829 | |||
Impala Platinum Holdings Ltd. | 50,735 | 4,210,437 | |||
AngloGold Ltd. | 88,200 | 3,739,367 | |||
MTN Group Ltd.1 | 828,793 | 3,706,922 | |||
Gold Fields Ltd. | 272,310 | 3,357,050 | |||
FirstRand Ltd. | 2,391,450 | 3,271,772 | |||
Sanlam Ltd. | 2,074,710 | 2,854,032 | |||
Anglo American Platinum Corp. Ltd. | 62,790 | 2,784,793 | |||
Harmony Gold Mining Co. Ltd. | 176,100 | 2,681,941 | |||
Sappi Ltd. | 154,830 | 2,118,481 | |||
Bidvest Group Ltd. | 226,415 | 1,804,104 | |||
Barloworld Ltd. | 173,910 | 1,768,776 | |||
Tiger Brands Ltd. | 134,700 | 1,674,764 | |||
Imperial Holdings Ltd. | 134,370 | 1,414,102 | |||
Telkom South Africa Ltd. | 137,880 | 1,394,036 | |||
Naspers Ltd. | 199,290 | 1,243,409 | |||
Liberty Group Ltd. | 119,160 | 985,312 | |||
Nampak Ltd. | 492,750 | 985,278 | |||
Iscor Ltd. | 166,200 | 859,547 | |||
Dimension Data Holdings PLC1 | 1,124,730 | 845,471 | |||
Woolworths Holdings Ltd. | 730,230 | 750,924 | |||
Anglovaal Industries Ltd. | 276,360 | 712,557 | |||
Network Healthcare Holdings Ltd.1 | 943,980 | 637,220 | |||
JD Group Ltd. | 98,580 | 615,060 | |||
Investec Ltd. | 29,850 | 610,328 | |||
African Bank Investments Ltd. | 365,400 | 596,044 | |||
Foschini Ltd. | 185,250 | 536,129 | |||
Truworths International Ltd. | 372,270 | 531,694 | |||
Alexander Forbes Ltd. | 269,100 | 523,919 | |||
New Africa Capital Ltd. | 434,700 | 503,223 | |||
Pick’n Pay Stores Ltd. | 188,370 | 498,431 | |||
Shoprite Holdings Ltd. | 331,815 | 466,432 | |||
Metro Cash & Carry Ltd.1 | 1,321,890 | 455,105 | |||
Nedcor Ltd. | 33,090 | 318,388 | |||
Steinhoff International Holdings Ltd. | 60,870 | 81,081 | |||
Bidvest Group Ltd. Warrants (Expire 12/8/06)1 | 17,071 | 14,706 | |||
TOTAL COMMON STOCKS | 87,442,898 | ||||
SHORT-TERM INVESTMENTS – 0.04% | |||||
MONEY MARKET FUNDS – 0.04% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2 | 35,866 | 35,866 | |||
35,866 | |||||
TOTAL SHORT-TERM INVESTMENTS | 35,866 | ||||
TOTAL INVESTMENTS IN SECURITIES – 99.94% | 87,478,764 | ||||
Other Assets, Less Liabilities – 0.06% | 53,039 | ||||
NET ASSETS – 100.00% | $ | 87,531,803 | |||
1 | Non-income earning securities. |
2 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
See notes to financial statements.
54 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI SOUTH KOREA INDEX FUND
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.24% | |||||
Samsung Electronics Co. Ltd. | 164,980 | $ | 76,457,568 | ||
Kookmin Bank1 | 555,969 | 23,212,651 | |||
POSCO | 155,940 | 22,940,153 | |||
SK Telecom Co. Ltd. | 72,860 | 14,745,476 | |||
Samsung SDI Co. Ltd. | 103,960 | 14,409,422 | |||
Hyundai Motor Co. Ltd. | 305,100 | 12,971,939 | |||
LG Electronics Inc. | 203,406 | 11,450,236 | |||
Korea Electric Power Corp. | 522,060 | 9,189,321 | |||
Samsung Electro-Mechanics Co. Ltd.1 | 216,960 | 8,099,102 | |||
KT Corp. | 213,560 | 7,899,541 | |||
Shinhan Financial Group Ltd. | 420,360 | 7,738,770 | |||
Hyundai Mobis Co. | 131,080 | 5,907,517 | |||
LG Corp. | 117,520 | 5,746,088 | |||
Shinsegae Department Store Co. Ltd. | 20,340 | 4,618,010 | |||
Samsung Fire & Marine Insurance Co. Ltd. | 70,060 | 4,509,815 | |||
Daeduck Electronics Co. Ltd. | 384,241 | 4,345,583 | |||
KT&G Corp. | 162,720 | 3,825,857 | |||
Hana Bank | 151,813 | 3,291,864 | |||
S-Oil Corp. | 90,620 | 3,282,663 | |||
Hyundai Heavy Industries Co. Ltd. | 99,440 | 3,044,082 | |||
Samsung Corp. | 298,320 | 2,942,612 | |||
Kia Motors Corp. | 316,400 | 2,932,619 | |||
Kangwon Land Inc. | 234,012 | 2,795,811 | |||
NCsoft Corp.1 | 41,744 | 2,715,490 | |||
KT Corp. ADR | 141,861 | 2,698,196 | |||
Daewoo Shipbuilding and Marine Engineering Co. Ltd. | 212,440 | 2,474,854 | |||
Samsung Securities Co. Ltd. | 103,960 | 2,470,818 | |||
Hankook Tire Co. Ltd. | 287,020 | 2,382,071 | |||
Humax Co. Ltd. | 231,650 | 2,284,983 | |||
SK Telecom Co. Ltd. ADR | 87,369 | 2,185,099 | |||
Daelim Industrial Co. Ltd. | 58,760 | 1,978,653 | |||
Cheil Jedang Corp. | 31,640 | 1,840,286 | |||
Cheil Communications Inc. | 11,300 | 1,729,592 | |||
Korea Exchange Bank1 | 244,080 | 1,662,484 | |||
Samsung Heavy Industries Co. Ltd. | 354,820 | 1,644,361 | |||
S1 Corp. | 70,060 | 1,632,350 | |||
LG Petrochemical Co. Ltd. | 63,280 | 1,571,238 | |||
LG Investments & Securities Co. Ltd. | 185,320 | 1,564,819 | |||
Honam Petrochemical Corp.1 | 33,900 | 1,524,923 | |||
Hanjin Shipping Co. Ltd. | 83,620 | 1,493,214 | |||
Hite Brewery Co. Ltd. | 18,080 | 1,383,673 | |||
Daishin Securities Co. Ltd. | 85,880 | 1,347,352 | |||
Amorepacific Corp. | 9,040 | 1,306,803 | |||
LG Engineering & Construction Co. Ltd. | 79,100 | 1,294,792 | |||
Daum Communications Corp.1 | 33,222 | 1,243,000 | |||
Cheil Industries Inc. | 90,400 | 1,222,245 | |||
Nong Shim Co. Ltd. | 7,122 | 1,211,225 | |||
Korean Air Co. Ltd.1 | 67,800 | 985,867 | |||
Hyundai Department Store Co. Ltd. | 31,640 | 914,762 | |||
Kumgang Korea Chemical Co. Ltd. | 11,300 | 914,762 | |||
Hyundai Securities Co. Ltd.1 | 151,420 | 834,355 | |||
Good Morning Securities Co. Ltd.1 | 174,524 | 761,316 | |||
LG Household & Health Care Ltd. | 22,600 | 588,061 | |||
LG Cable Ltd. | 45,200 | 580,374 | |||
YuHan Corp. | 9,356 | 564,861 | |||
Samsung Fine Chemicals Co. Ltd. | 27,120 | 419,714 | |||
Dongwon Financial Holding Co. Ltd. | 69,007 | 386,697 | |||
Hyosung Corp. | 32,826 | 301,460 | |||
Poongsan Corp. | 22,600 | 219,082 | |||
Daewoo Securities Co. Ltd.1 | 47,460 | 195,127 | |||
Dong-A Pharmaceutical Co. Ltd. | 9 | 149 | |||
LG Chem Investment Ltd. | 6 | 57 | |||
TriGem Computer Inc.1 | 7 | 30 | |||
TOTAL COMMON STOCKS | 306,885,895 | ||||
SHORT-TERM INVESTMENTS – 0.19% | |||||
MONEY MARKET FUNDS – 0.19% | |||||
Barclays Global Investors Funds Institutional Money Market Fund Institutional Shares2 | 575,709 | 575,709 | |||
575,709 | |||||
TOTAL SHORT-TERM INVESTMENTS | 575,709 | ||||
TOTAL INVESTMENTS IN SECURITIES – 99.43% | 307,461,604 | ||||
Other Assets, Less Liabilities – 0.57% | 1,759,422 | ||||
NET ASSETS – 100.00% | $ | 309,221,026 | |||
1 | Non-income earning securities. |
2 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 55 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI TAIWAN INDEX FUND
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS - 100.01% | |||||
Taiwan Semiconductor Manufacturing Co. Ltd.1 | 31,815,726 | $ | 60,569,588 | ||
United Microelectronics Corp1 | 31,815,473 | 28,996,864 | |||
Cathay Financial Holdings Co. Ltd. | 9,899,055 | 19,439,008 | |||
Hon Hai Precision Industry Co. Ltd. | 4,242,516 | 18,824,535 | |||
China Steel Corp. | 14,847,683 | 15,134,799 | |||
Nan Ya Plastic Corp. | 10,605,992 | 14,340,586 | |||
AU Optronics Corp1 | 7,777,800 | 12,941,625 | |||
Formosa Plastic Corp. | 7,777,258 | 12,590,974 | |||
Mega Financial Holdings Co. Ltd. | 16,261,136 | 11,846,668 | |||
Asustek Computer Inc. | 4,242,156 | 11,128,426 | |||
China Development Financial Holding Co. | 19,796,338 | 11,039,181 | |||
Chinatrust Financial Holding Co. Ltd. | 9,191,289 | 10,967,270 | |||
Formosa Chemicals & Fibre Corp. | 6,363,964 | 10,112,130 | |||
MediaTek Inc. | 841,050 | 9,531,312 | |||
Fubon Financial Holding Co. Ltd. | 8,484,000 | 9,029,591 | |||
Quanta Computer Inc. | 3,535,468 | 8,956,590 | |||
Chunghwa Telecom Co. Ltd. | 4,242,000 | 6,931,165 | |||
Compal Electronics Inc. | 4,949,910 | 6,678,038 | |||
Acer Inc. | 4,242,512 | 6,677,616 | |||
First Financial Holding Co. Ltd.1 | 7,777,050 | 6,435,214 | |||
Advanced Semiconductor Engineering Inc.1 | 5,656,792 | 6,376,716 | |||
Hua Nan Financial Holdings Co. Ltd.1 | 5,656,186 | 5,307,709 | |||
Lite-On Technology Corp. | 4,242,631 | 5,215,046 | |||
Taishin Financial Holdings Co. Ltd. | 5,656,441 | 5,138,365 | |||
CMC Magnetics Corp.1 | 5,656,400 | 4,883,955 | |||
Benq Corp. | 3,535,472 | 4,865,182 | |||
Chang Hwa Commercial Bank Ltd.1 | 7,070,446 | 4,811,846 | |||
Uni-President Enterprises Corp. | 7,070,637 | 4,154,834 | |||
Winbond Electronics Corp.1 | 7,777,280 | 4,127,053 | |||
Taiwan Cellular Corp. | 4,242,920 | 4,095,998 | |||
Siliconware Precision Industries Co. Ltd.1 | 3,535,525 | 3,847,686 | |||
Chunghwa Picture Tubes Ltd.1 | 6,363,000 | 3,719,937 | |||
SinoPac Holdings Co. | 6,363,393 | 3,624,778 | |||
Walsin Lihwa Corp.1 | 7,070,779 | 3,455,365 | |||
Tatung Co. Ltd.1 | 8,484,120 | 3,433,837 | |||
Pou Chen Corp. | 2,828,616 | 3,264,929 | |||
Ritek Corp.1 | 4,242,625 | 3,090,865 | |||
Far Eastern Textile Ltd. | 4,242,975 | 3,052,957 | |||
Via Technologies Inc. | 2,121,502 | 2,868,528 | |||
Delta Electronics Inc. | 2,121,404 | 2,862,035 | |||
President Chain Store Corp. | 1,414,653 | 2,841,605 | |||
China Motor Co. Ltd. | 1,414,330 | 2,840,957 | |||
International Bank of Taipei | 3,535,244 | 2,755,699 | |||
Gigabyte Technology Co. Ltd. | 1,414,116 | 2,670,943 | |||
Realtek Semiconductor Corp. | 1,414,700 | 2,629,633 | |||
Yang Ming Marine Transport Corp. | 2,121,000 | 2,575,341 | |||
Synnex Technology International Corp. | 1,414,942 | 2,460,400 | |||
Macronix International Co. Ltd.1 | 7,777,200 | 2,401,594 | |||
Inventec Co. Ltd. | 3,535,500 | 2,331,914 | |||
Yageo Corp.1 | 4,242,100 | 2,276,528 | |||
Yulon Motor Co. Ltd. | 1,414,331 | 2,073,476 | |||
Ambit Microsystems Corp. | 707,934 | 2,058,750 | |||
Cheng Shin Rubber Industry Co. Ltd. | 1,414,604 | 2,018,742 | |||
Taiwan Glass Industrial Corp. | 2,121,012 | 1,882,235 | |||
Taiwan Cement Corp. | 2,828,187 | 1,695,810 | |||
Zyxel Communication Corp. | 707,450 | 1,643,753 | |||
Teco Electric & Machinery Co. Ltd. | 3,535,092 | 1,557,963 | |||
Evergreen Marine Corp. Ltd. | 1,414,319 | 1,543,433 | |||
Asia Cement Corp. | 2,121,740 | 1,507,577 | |||
Advantech Co. Ltd. | 707,567 | 1,442,499 | |||
Taiwan Styrene Monomer Corp. | 1,414,600 | 1,335,929 | |||
Kinpo Electronics Inc. | 2,121,235 | 1,310,072 | |||
Nien Made Enterprise Co. Ltd. | 707,000 | 1,292,970 | |||
Cathay Real Estate Development Co. Ltd.1 | 2,121,493 | 1,284,790 | |||
Accton Technology Corp. | 1,414,259 | 1,259,286 | |||
Premier Image Technology Corp. | 707,340 | 1,187,559 | |||
Micro-Star International Co. Ltd. | 707,103 | 1,165,962 | |||
EVA Airways Corp. | 2,121,222 | 1,163,794 | |||
Wan Hai Lines Ltd. | 1,032,368 | 1,073,997 | |||
Formosa Taffeta Co. Ltd. | 2,121,762 | 1,017,784 | |||
Sampo Corp.1 | 2,121,148 | 966,615 | |||
Giant Manufacturing Co. Ltd. | 707,914 | 946,574 | |||
Systex Corp. | 1,414,772 | 941,626 | |||
D-Link Corp. | 707,585 | 890,978 |
56 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI TAIWAN INDEX FUND
February 29, 2004
Security | Shares | Value | ||||
Phoenixtec Power Co. Ltd. | 709,438 | $ | 889,057 | |||
Arima Computer Corp.1 | 2,121,600 | 884,132 | ||||
Oriental Union Chemical Corp. | 707,880 | 878,616 | ||||
China Airlines Ltd.1 | 1,414,187 | 856,441 | ||||
Continental Engineering Corp. | 1,414,571 | 831,227 | ||||
Compeq Manufacturing Co. Ltd.1 | 1,414,200 | 818,290 | ||||
Taiwan Secom Co. Ltd. | 707,486 | 793,284 | ||||
Nien Hsing Textile Co. Ltd. | 707,800 | 732,097 | ||||
Elitegroup Computer Systems Co. Ltd. | 707,300 | 725,218 | ||||
Prodisc Technology Inc.1 | 707,572 | 674,585 | ||||
Shihlin Electric & Engineering Corp. | 707,080 | 523,606 | ||||
Picvue Electronics Ltd.1 | 1,414,040 | 498,125 | ||||
Eternal Chemical Co. Ltd. | 707,100 | 491,822 | ||||
BES Engineering Corp.1 | 2,121,366 | 483,357 | ||||
WU’S Printed Circuit Co. Ltd.1 | 707,000 | 468,436 | ||||
Aurora Corp. | 610 | 408 | ||||
Microelectronics Technology Inc.1 | 420 | 229 | ||||
Tung Ho Steel Enterprise Corp.1 | 210 | 129 | ||||
China Synthetic Rubber Corp.1 | 236 | 92 | ||||
Far Eastern Department Stores Co. Ltd.1 | 160 | 87 | ||||
Pacific Electric Wire & Cable Co. Ltd.1,2 | 986 | 15 | ||||
TOTAL COMMON STOCKS | 443,964,842 | |||||
SHORT-TERM INVESTMENTS – 0.10% | ||||||
MONEY MARKET FUNDS – 0.10% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3 | 443,873 | 443,873 | ||||
443,873 | ||||||
TOTAL SHORT-TERM INVESTMENTS | 443,873 | |||||
TOTAL INVESTMENTS IN SECURITIES – 100.11% | 444,408,715 | |||||
Other Assets, Less Liabilities – (0.11%) | (509,390 | ) | ||||
NET ASSETS – 100.00% | $ | 443,899,325 | ||||
1 | Non-income earning securities. |
2 | Security valued at fair value in accordance with procedures approved by the Board of Directors. See Note 1. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 57 |
Table of Contents
Statements of Assets and Liabilities (Unaudited)
iSHARES, INC.
February 29, 2004
iShares MSCI | |||||||||||||||||||||||
Australia Index Fund | Brazil Index Fund | Canada Index Fund | Emerging Markets Index Fund | Hong Kong Index Fund | Malaysia Index Fund | ||||||||||||||||||
ASSETS | |||||||||||||||||||||||
Investments at cost | $ | 172,579,398 | $ | 228,666,519 | $ | 259,021,280 | $ | 1,894,928,255 | $ | 524,883,266 | $ | 185,266,595 | |||||||||||
Foreign currency, at cost | $ | 69,991 | $ | — | $ | 267,300 | $ | 1,789,625 | $ | 221,196 | $ | 29,413 | |||||||||||
Investments in securities, at value (including securities on loana) (Note 1) | $ | 211,541,272 | $ | 263,074,255 | $ | 328,720,556 | $ | 2,125,164,263 | $ | 614,943,172 | $ | 245,807,023 | |||||||||||
Foreign currency, at value | 69,132 | — | 266,435 | 1,841,772 | 221,629 | 29,413 | |||||||||||||||||
Receivables: | |||||||||||||||||||||||
Investment securities sold | 1,385,227 | 2,484,606 | — | 2,521,841 | 5,242,071 | 689,376 | |||||||||||||||||
Dividends and interest | 876,274 | 2,302,926 | 284,897 | 3,393,882 | 145,658 | 55,975 | |||||||||||||||||
Capital shares sold | 13,093 | — | — | — | — | 17,064,350 | |||||||||||||||||
Total Assets | 213,884,998 | 267,861,787 | 329,271,888 | 2,132,921,758 | 620,552,530 | 263,646,137 | |||||||||||||||||
LIABILITIES | |||||||||||||||||||||||
Payables: | |||||||||||||||||||||||
Investment securities purchased | 1,406,619 | 2,189,574 | — | 2,521,841 | 5,380,512 | 17,753,220 | |||||||||||||||||
Collateral for securities on loan (Note 5) | 35,303,241 | — | — | 330,406,963 | 66,854,349 | — | |||||||||||||||||
Advisory fees (Note 2) | 158,300 | 414,636 | 324,250 | 1,858,635 | 490,725 | 168,839 | |||||||||||||||||
Distribution fees | 67,089 | 140,002 | 137,635 | — | 207,923 | 71,942 | |||||||||||||||||
Total Liabilities | 36,935,249 | 2,744,212 | 461,885 | 334,787,439 | 72,933,509 | 17,994,001 | |||||||||||||||||
NET ASSETS | $ | 176,949,749 | $ | 265,117,575 | $ | 328,810,003 | $ | 1,798,134,319 | $ | 547,619,021 | $ | 245,652,136 | |||||||||||
Net assets consist of: | |||||||||||||||||||||||
Paid-in capital | $ | 149,031,038 | $ | 281,817,567 | $ | 174,495,873 | $ | 1,570,925,371 | $ | 469,341,854 | $ | 213,973,534 | |||||||||||
Undistributed (distributions in excess of) net investment income | (491,421 | ) | 1,209,875 | 106,277 | (780,010 | ) | (871,387 | ) | (257,676 | ) | |||||||||||||
Undistributed net realized gain (accumulated net realized loss) | (10,541,496 | ) | (52,317,513 | ) | 84,511,288 | (2,298,306 | ) | (10,910,583 | ) | (28,604,150 | ) | ||||||||||||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies | 38,951,628 | 34,407,646 | 69,696,565 | 230,287,264 | 90,059,137 | 60,540,428 | |||||||||||||||||
NET ASSETS | $ | 176,949,749 | $ | 265,117,575 | $ | 328,810,003 | $ | 1,798,134,319 | $ | 547,619,021 | $ | 245,652,136 | |||||||||||
Shares outstanding | 12,800,000 | 15,850,000 | 22,500,000 | 10,400,000 | 48,750,000 | 34,650,000 | |||||||||||||||||
Net asset value per share | $ | 13.82 | $ | 16.73 | $ | 14.61 | $ | 172.90 | $ | 11.23 | $ | 7.09 | |||||||||||
a | Securities on loan with market values of $33,492,695, $-, $-, $310,697,377, $62,816,605 and $-, respectively. See Note 5. |
See notes to financial statements.
58 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Unaudited) (Continued)
iSHARES, INC.
February 29, 2004
iShares MSCI | |||||||||||||||||||||||
Mexico Index Fund | Pacific ex-Japan Index Fund | Singapore Index Fund | South Africa Index Fund | South Korea Index Fund | Taiwan Index Fund | ||||||||||||||||||
ASSETS | |||||||||||||||||||||||
Investments at cost | $ | 96,194,424 | $ | 576,000,564 | $ | 159,213,236 | $ | 62,478,147 | $ | 226,035,086 | $ | 371,870,750 | |||||||||||
Foreign currency, at cost | $ | 44,682 | $ | 555,359 | $ | 249,462 | $ | 586 | $ | — | $ | 135,751 | |||||||||||
Investments in securities, at value (including securities on loana) (Note 1) | $ | 99,980,064 | $ | 680,423,232 | $ | 185,152,914 | $ | 87,478,764 | $ | 307,461,604 | $ | 444,408,715 | |||||||||||
Foreign currency, at value | 44,730 | 557,757 | 247,710 | 582 | — | 134,789 | |||||||||||||||||
Receivables: | |||||||||||||||||||||||
Investment securities sold | — | 5,574,194 | 2,452,484 | 1,998,795 | 5,811,483 | — | |||||||||||||||||
Dividends and interest | 34 | 2,085,146 | 2,589 | 53,312 | 2,158,122 | 100 | |||||||||||||||||
Capital shares sold | 28,547 | — | — | — | — | — | |||||||||||||||||
Total Assets | 100,053,375 | 688,640,329 | 187,855,697 | 89,531,453 | 315,431,209 | 444,543,604 | |||||||||||||||||
LIABILITIES | |||||||||||||||||||||||
Payables: | |||||||||||||||||||||||
Investment securities purchased | — | 5,565,656 | 2,148,004 | 1,851,484 | 5,803,232 | — | |||||||||||||||||
Collateral for securities on loan (Note 5) | — | 22,122,953 | 6,628,400 | — | — | — | |||||||||||||||||
Advisory fees (Note 2) | 76,259 | 485,169 | 162,909 | 110,777 | 304,363 | 481,732 | |||||||||||||||||
Distribution fees | 32,271 | — | 72,099 | 37,389 | 102,588 | 162,547 | |||||||||||||||||
Custodian fees | — | — | 17,026 | — | — | — | |||||||||||||||||
Accrued expenses | — | — | 71,179 | — | — | — | |||||||||||||||||
Total Liabilities | 108,530 | 28,173,778 | 9,099,617 | 1,999,650 | 6,210,183 | 644,279 | |||||||||||||||||
NET ASSETS | $ | 99,944,845 | $ | 660,466,551 | $ | 178,756,080 | $ | 87,531,803 | $ | 309,221,026 | $ | 443,899,325 | |||||||||||
Net assets consist of: | |||||||||||||||||||||||
Paid-in capital | $ | 97,378,761 | $ | 557,443,532 | $ | 172,900,238 | $ | 55,566,355 | $ | 236,491,101 | $ | 413,954,569 | |||||||||||
Undistributed (distributions in excess of) net investment income (accumulated net investment loss) | (103,947 | ) | (261,627 | ) | (852,404 | ) | 38,075 | 525,339 | (1,565,613 | ) | |||||||||||||
Undistributed net realized gain (accumulated net realized loss) | (1,115,657 | ) | (1,117,244 | ) | (19,224,185 | ) | 6,928,548 | (9,260,971 | ) | (41,026,634 | ) | ||||||||||||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies | 3,785,688 | 104,401,890 | 25,932,431 | 24,998,825 | 81,465,557 | 72,537,003 | |||||||||||||||||
NET ASSETS | $ | 99,944,845 | $ | 660,466,551 | $ | 178,756,080 | $ | 87,531,803 | $ | 309,221,026 | $ | 443,899,325 | |||||||||||
Shares outstanding | 5,100,000 | 8,600,000 | 28,000,000 | 1,500,000 | 11,300,000 | 35,350,000 | |||||||||||||||||
Net asset value per share | $ | 19.60 | $ | 76.80 | $ | 6.38 | $ | 58.35 | $ | 27.36 | $ | 12.56 | |||||||||||
a | Securities on loan with market values of $-, $20,897,633, $6,128,388, $-, $- and $-, respectively. See Note 5. |
See notes to financial statements.
FINANCIAL STATEMENTS | 59 |
Table of Contents
Statements of Operations (Unaudited)
iSHARES, INC.
For the six months ended February 29, 2004
iShares MSCI | ||||||||||||||||||||||||
Australia Index Fund | Brazil Index Fund | Canada Index Fund | Emerging Markets Index Fund | Hong Kong Index Fund | Malaysia Index Fund | |||||||||||||||||||
NET INVESTMENT INCOME | ||||||||||||||||||||||||
Dividendsa | $ | 2,425,340 | $ | 6,370,404 | $ | 2,757,628 | $ | 6,467,182 | $ | 3,535,595 | $ | 1,521,264 | ||||||||||||
Interest | 2,879 | 3,924 | 1,169 | 25,060 | 5,513 | 1,837 | ||||||||||||||||||
Securities lending income | 12,087 | — | — | 342,781 | 84,368 | — | ||||||||||||||||||
Total investment income | 2,440,306 | 6,374,328 | 2,758,797 | 6,835,023 | 3,625,476 | 1,523,101 | ||||||||||||||||||
EXPENSES (Note 2) | ||||||||||||||||||||||||
Advisory fees | 371,011 | 1,018,342 | 1,129,705 | 3,319,069 | 1,154,614 | 417,130 | ||||||||||||||||||
Distribution fees | 157,208 | 344,034 | 478,688 | — | 489,243 | 176,750 | ||||||||||||||||||
Total expenses | 528,219 | 1,362,376 | 1,608,393 | 3,319,069 | 1,643,857 | 593,880 | ||||||||||||||||||
Net investment income | 1,912,087 | 5,011,952 | 1,150,404 | 3,515,954 | 1,981,619 | 929,221 | ||||||||||||||||||
NET REALIZED AND UNREALIZED | ||||||||||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||||||||||
Investments | (1,128,752 | ) | 53,406,655 | (5,476,401 | ) | (1,768,918 | ) | (409,626 | ) | (1,408,759 | ) | |||||||||||||
In-kind redemptions | — | — | 98,965,412 | — | 5,602,047 | — | ||||||||||||||||||
Foreign currency transactions | 102,645 | (73,906 | ) | 66,424 | (48,943 | ) | 5,998 | (3,372 | ) | |||||||||||||||
Net realized gain (loss) | (1,026,107 | ) | 53,332,749 | 93,555,435 | (1,817,861 | ) | 5,198,419 | (1,412,131 | ) | |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||||||
Investments | 27,909,927 | 19,181,711 | (16,684,602 | ) | 200,426,882 | 79,561,341 | 29,918,150 | |||||||||||||||||
Translation of assets and liabilities in foreign currencies | (4,372 | ) | 24,384 | (2,874 | ) | 53,488 | (685 | ) | — | |||||||||||||||
Net change in unrealized appreciation (depreciation) | 27,905,555 | 19,206,095 | (16,687,476 | ) | 200,480,370 | 79,560,656 | 29,918,150 | |||||||||||||||||
Net realized and unrealized gain | 26,879,448 | 72,538,844 | 76,867,959 | 198,662,509 | 84,759,075 | 28,506,019 | ||||||||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 28,791,535 | $ | 77,550,796 | $ | 78,018,363 | $ | 202,178,463 | $ | 86,740,694 | $ | 29,435,240 | ||||||||||||
a | Net of foreign withholding tax of $13,535, $1,046,049, $486,640, $814,050, $- and $397,900, respectively. |
See notes to financial statements.
60 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Unaudited) (Continued)
iSHARES, INC.
For the six months ended February 29, 2004
iShares MSCI | ||||||||||||||||||||||||
Mexico Index Fund | Pacific ex-Japan Index Fund | Singapore Index Fund | South Africa Index Fund | South Korea Index Fund | Taiwan Index Fund | |||||||||||||||||||
NET INVESTMENT INCOME | ||||||||||||||||||||||||
Dividendsa | $ | 391,862 | $ | 6,514,967 | $ | 1,417,881 | $ | 1,060,352 | $ | 2,141,129 | $ | 73,746 | ||||||||||||
Interest | 174 | 3,662 | 997 | 102 | 1,090 | 1,118 | ||||||||||||||||||
Securities lending income | — | 40,436 | 25,558 | — | — | — | ||||||||||||||||||
Total investment income | 392,036 | 6,559,065 | 1,444,436 | 1,060,454 | 2,142,219 | 74,864 | ||||||||||||||||||
EXPENSES (Note 2) | ||||||||||||||||||||||||
Advisory fees | 214,237 | 1,040,026 | 343,020 | 319,381 | 706,311 | 1,226,215 | ||||||||||||||||||
Distribution fees | 90,779 | — | 183,906 | 107,903 | 238,618 | 414,262 | ||||||||||||||||||
Custodian fees and expenses | — | — | 55,302 | — | — | — | ||||||||||||||||||
Directors’ fees | — | — | 2,451 | — | — | — | ||||||||||||||||||
Professional fees | — | — | 14,286 | — | — | — | ||||||||||||||||||
Federal and state registration fees | — | — | 826 | — | — | — | ||||||||||||||||||
Insurance | — | — | 749 | — | — | — | ||||||||||||||||||
Printing | — | — | 17,163 | — | — | — | ||||||||||||||||||
AMEX listing fee | — | — | 221 | — | — | — | ||||||||||||||||||
Total expenses | 305,016 | 1,040,026 | 617,924 | 427,284 | 944,929 | 1,640,477 | ||||||||||||||||||
Net investment income (loss) | 87,020 | 5,519,039 | 826,512 | 633,170 | 1,197,290 | (1,565,613 | ) | |||||||||||||||||
NET REALIZED AND UNREALIZED | ||||||||||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||||||||||
Investments | (17,825 | ) | (1,675,028 | ) | (3,860,630 | ) | (285,528 | ) | (993,632 | ) | (1,104,219 | ) | ||||||||||||
In-kind redemptions | 6,649,883 | 4,317,918 | — | 7,768,296 | — | — | ||||||||||||||||||
Foreign currency transactions | (4,689 | ) | 198,246 | 26,334 | (21,878 | ) | (5,705 | ) | 13,357 | |||||||||||||||
Net realized gain (loss) | 6,627,369 | 2,841,136 | (3,834,296 | ) | 7,460,890 | (999,337 | ) | (1,090,862 | ) | |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||||||
Investments | 10,925,899 | 81,655,032 | 29,218,138 | 12,540,256 | 35,359,500 | 55,031,445 | ||||||||||||||||||
Translation of assets and liabilities in foreign currencies | 4,455 | (14,684 | ) | (7,363 | ) | (3,533 | ) | 39,038 | (8,027 | ) | ||||||||||||||
Net change in unrealized appreciation (depreciation) | 10,930,354 | 81,640,348 | 29,210,775 | 12,536,723 | 35,398,538 | 55,023,418 | ||||||||||||||||||
Net realized and unrealized gain | 17,557,723 | 84,481,484 | 25,376,479 | 19,997,613 | 34,399,201 | 53,932,556 | ||||||||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 17,644,743 | $ | 90,000,523 | $ | 26,202,991 | $ | 20,630,783 | $ | 35,596,491 | $ | 52,366,943 | ||||||||||||
a | Net of foreign withholding tax of $-, $152,014, $385,900, $-, $423,097 and $12,095, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 61 |
Table of Contents
Statements of Changes in Net Assets
iSHARES, INC.
iShares MSCI Australia Index Fund | iShares MSCI Brazil Index Fund | iShares MSCI Canada Index Fund | ||||||||||||||||||||||
For the six months ended February 29, 2004 (unaudited) | For the year ended | For the six months ended February 29, 2004 (unaudited) | For the year ended | For the six months ended February 29, 2004 (unaudited) | For the year ended | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income | $ | 1,912,087 | $ | 2,634,052 | $ | 5,011,952 | $ | 2,200,072 | $ | 1,150,404 | $ | 4,043,853 | ||||||||||||
Net realized gain (loss) | (1,026,107 | ) | 3,417,876 | 53,332,749 | (38,109,067 | ) | 93,555,435 | 43,873,019 | ||||||||||||||||
Net change in unrealized appreciation (depreciation) | 27,905,555 | 12,038,862 | 19,206,095 | 53,071,314 | (16,687,476 | ) | 100,028,939 | |||||||||||||||||
Net increase in net assets resulting from operations | 28,791,535 | 18,090,790 | 77,550,796 | 17,162,319 | 78,018,363 | 147,945,811 | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||||||||||
From net investment income | (4,470,639 | ) | (2,180,684 | ) | (5,717,313 | ) | (733,550 | ) | (4,394,348 | ) | (1,067,330 | ) | ||||||||||||
Total distributions to shareholders | (4,470,639 | ) | (2,180,684 | ) | (5,717,313 | ) | (733,550 | ) | (4,394,348 | ) | (1,067,330 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Proceeds from shares sold | 65,088,088 | 8,283,804 | 240,549,147 | 52,276,580 | 88,517,701 | 505,287,212 | ||||||||||||||||||
Cost of shares redeemed | — | (13,383,892 | ) | (150,299,666 | ) | (49,458,528 | ) | (336,738,527 | ) | (215,179,302 | ) | |||||||||||||
Net increase (decrease) in net assets from capital share transactions | 65,088,088 | (5,100,088 | ) | 90,249,481 | 2,818,052 | (248,220,826 | ) | 290,107,910 | ||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | 89,408,984 | 10,810,018 | 162,082,964 | 19,246,821 | (174,596,811 | ) | 436,986,391 | |||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of period | 87,540,765 | 76,730,747 | 103,034,611 | 83,787,790 | 503,406,814 | 66,420,423 | ||||||||||||||||||
End of period | $ | 176,949,749 | $ | 87,540,765 | $ | 265,117,575 | $ | 103,034,611 | $ | 328,810,003 | $ | 503,406,814 | ||||||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period | $ | (491,421 | ) | $ | 2,067,131 | $ | 1,209,875 | $ | 1,915,236 | $ | 106,277 | $ | 3,350,221 | |||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 5,000,000 | 800,000 | 16,800,000 | 5,350,000 | 6,500,000 | 53,800,000 | ||||||||||||||||||
Shares redeemed | — | (1,200,000 | ) | (9,400,000 | ) | (7,000,000 | ) | (25,100,000 | ) | (19,700,000 | ) | |||||||||||||
Net increase (decrease) in shares outstanding | 5,000,000 | (400,000 | ) | 7,400,000 | (1,650,000 | ) | (18,600,000 | ) | 34,100,000 | |||||||||||||||
See notes to financial statements.
62 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES, INC.
iShares MSCI Emerging Markets Index Fund | iShares MSCI Hong Kong Index Fund | iShares MSCI Malaysia Index Fund | ||||||||||||||||||||||
For the six months ended February 29, 2004 (Unaudited) | For the period August 31, 2003 | For the Six months ended February 29, 2004 (Unaudited) | For the year ended | For the six months ended February 29, 2004 (Unaudited) | For the year ended | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income | $ | 3,515,954 | $ | 707,065 | $ | 1,981,619 | $ | 4,118,499 | $ | 929,221 | $ | 1,483,772 | ||||||||||||
Net realized gain (loss) | (1,817,861 | ) | (485,246 | ) | 5,198,419 | (1,557,634 | ) | (1,412,131 | ) | (1,306,184 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) | 200,480,370 | 29,806,894 | 79,560,656 | 32,371,162 | 29,918,150 | 4,269,454 | ||||||||||||||||||
Net increase in net assets resulting from operations | 202,178,463 | 30,028,713 | 86,740,694 | 34,932,027 | 29,435,240 | 4,447,042 | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||||||||||
From net investment income | (4,998,228 | ) | — | (6,211,899 | ) | (2,327,202 | ) | (2,163,298 | ) | (1,342,811 | ) | |||||||||||||
Total distributions to shareholders | (4,998,228 | ) | — | (6,211,899 | ) | (2,327,202 | ) | (2,163,298 | ) | (1,342,811 | ) | |||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Proceeds from shares sold | 1,303,107,875 | 267,817,496 | 240,765,163 | 168,140,088 | 133,464,243 | 22,654,462 | ||||||||||||||||||
Cost of shares redeemed | — | — | (24,301,877 | ) | (49,620,095 | ) | (14,813,629 | ) | (19,290,970 | ) | ||||||||||||||
Net increase (decrease) in net assets from capital share transactions | 1,303,107,875 | 267,817,496 | 216,463,286 | 118,519,993 | 118,650,614 | 3,363,492 | ||||||||||||||||||
INCREASE IN NET ASSETS | 1,500,288,110 | 297,846,209 | 296,992,081 | 151,124,818 | 145,922,556 | 6,467,723 | ||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of period | 297,846,209 | — | 250,626,940 | 99,502,122 | 99,729,580 | 93,261,857 | ||||||||||||||||||
End of period | $ | 1,798,134,319 | $ | 297,846,209 | $ | 547,619,021 | $ | 250,626,940 | $ | 245,652,136 | $ | 99,729,580 | ||||||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period | $ | (780,010 | ) | $ | 702,264 | $ | (871,387 | ) | $ | 3,358,893 | $ | (257,676 | ) | $ | 976,401 | |||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 8,200,000 | 2,200,000 | 23,550,000 | 21,525,000 | 20,325,000 | 3,975,000 | ||||||||||||||||||
Shares redeemed | — | — | (2,550,000 | ) | (6,225,000 | ) | (2,325,000 | ) | (3,750,000 | ) | ||||||||||||||
Net increase in shares outstanding | 8,200,000 | 2,200,000 | 21,000,000 | 15,300,000 | 18,000,000 | 225,000 | ||||||||||||||||||
1 | Commencement of operations. |
See notes to financial statements.
FINANCIAL STATEMENTS | 63 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES, INC.
iShares MSCI Mexico Index Fund | iShares MSCI Pacific ex-Japan Index Fund | iShares MSCI Singapore Index Fund | ||||||||||||||||||||||
For the six months ended February 29, 2004 (Unaudited) | For the year ended August 31, 2003 | For the six months ended February 29, 2004 (Unaudited) | For the year ended | For the six months ended February 29, 2004 (Unaudited) | For the year ended | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income | $ | 87,020 | $ | 791,154 | $ | 5,519,039 | $ | 5,444,061 | $ | 826,512 | $ | 2,205,148 | ||||||||||||
Net realized gain (loss) | 6,627,369 | (11,129,490 | ) | 2,841,136 | 188,729 | (3,834,296 | ) | (4,645,255 | ) | |||||||||||||||
Net change in unrealized appreciation (depreciation) | 10,930,354 | 16,146,586 | 81,640,348 | 27,848,209 | 29,210,775 | 11,587,071 | ||||||||||||||||||
Net increase in net assets resulting from operations | 17,644,743 | 5,808,250 | 90,000,523 | 33,480,999 | 26,202,991 | 9,146,964 | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||||||||||
From net investment income | (788,654 | ) | (1,985,056 | ) | (9,962,572 | ) | (2,734,116 | ) | (3,170,833 | ) | (1,331,268 | ) | ||||||||||||
Total distributions to shareholders | (788,654 | ) | (1,985,056 | ) | (9,962,572 | ) | (2,734,116 | ) | (3,170,833 | ) | (1,331,268 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Proceeds from shares sold | 97,079,822 | 35,186,944 | 371,016,852 | 104,747,751 | 47,521,492 | 17,230,968 | ||||||||||||||||||
Cost of shares redeemed | (74,146,501 | ) | (49,848,527 | ) | (13,885,777 | ) | (17,225,922 | ) | — | (4,970,610 | ) | |||||||||||||
Net increase (decrease) in net assets from capital share transactions | 22,933,321 | (14,661,583 | ) | 357,131,075 | 87,521,829 | 47,521,492 | 12,260,358 | |||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | 39,789,410 | (10,838,389 | ) | 437,169,026 | 118,268,712 | 70,553,650 | 20,076,054 | |||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of period | 60,155,435 | 70,993,824 | 223,297,525 | 105,028,813 | 108,202,430 | 88,126,376 | ||||||||||||||||||
End of period | $ | 99,944,845 | $ | 60,155,435 | $ | 660,466,551 | $ | 223,297,525 | $ | 178,756,080 | $ | 108,202,430 | ||||||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period | $ | (103,947 | ) | $ | 597,687 | $ | (261,627 | ) | $ | 4,181,906 | $ | (852,404 | ) | $ | 1,491,917 | |||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 5,600,000 | 2,500,000 | 5,200,000 | 1,900,000 | 7,900,000 | 3,500,000 | ||||||||||||||||||
Shares redeemed | (4,500,000 | ) | (3,700,000 | ) | (200,000 | ) | (300,000 | ) | — | (1,000,000 | ) | |||||||||||||
Net increase (decrease) in shares outstanding | 1,100,000 | (1,200,000 | ) | 5,000,000 | 1,600,000 | 7,900,000 | 2,500,000 | |||||||||||||||||
See notes to financial statements.
64 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES, INC.
iShares MSCI South Africa Index Fund | iShares MSCI South Korea Index Fund | iShares MSCI Taiwan Index Fund | ||||||||||||||||||||||
For the six months ended February 29, 2004 (Unaudited) | For the period February 3, 20031 to August 31, 2003 | For the six months ended February 29, 2004 (Unaudited) | For the year ended | For the six months ended February 29, 2004 (Unaudited) | For the year ended | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income (loss) | $ | 633,170 | $ | 1,528,524 | $ | 1,197,290 | $ | 1,123,273 | $ | (1,565,613 | ) | $ | 643,699 | |||||||||||
Net realized gain (loss) | 7,460,890 | (473,013 | ) | (999,337 | ) | (4,733,350 | ) | (1,090,862 | ) | (15,291,942 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) | 12,536,723 | 12,462,102 | 35,398,538 | 18,288,979 | 55,023,418 | 52,075,339 | ||||||||||||||||||
Net increase in net assets resulting from operations | 20,630,783 | 13,517,613 | 35,596,491 | 14,678,902 | 52,366,943 | 37,427,096 | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||||||||||
From net investment income | (2,182,948 | ) | — | (1,814,739 | ) | — | (637,002 | ) | — | |||||||||||||||
Total distributions to shareholders | (2,182,948 | ) | — | (1,814,739 | ) | — | (637,002 | ) | — | |||||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Proceeds from shares sold | 11,821,259 | 68,396,211 | 120,953,759 | 66,418,682 | 157,442,104 | 55,256,747 | ||||||||||||||||||
Cost of shares redeemed | (24,651,115 | ) | — | — | (22,948,093 | ) | — | — | ||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | (12,829,856 | ) | 68,396,211 | 120,953,759 | 43,470,589 | 157,442,104 | 55,256,747 | |||||||||||||||||
INCREASE IN NET ASSETS | 5,617,979 | 81,913,824 | 154,735,511 | 58,149,491 | 209,172,045 | 92,683,843 | ||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of period | 81,913,824 | — | 154,485,515 | 96,336,024 | 234,727,280 | 142,043,437 | ||||||||||||||||||
End of period | $ | 87,531,803 | $ | 81,913,824 | $ | 309,221,026 | $ | 154,485,515 | $ | 443,899,325 | $ | 234,727,280 | ||||||||||||
Undistributed net investment income (accumulated net investment loss) included in net assets at end of period | $ | 38,075 | $ | 1,587,853 | $ | 525,339 | $ | 1,142,788 | $ | (1,565,613 | ) | $ | 637,002 | |||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 200,000 | 1,750,000 | 4,600,000 | 3,300,000 | 13,600,000 | 5,650,000 | ||||||||||||||||||
Shares redeemed | (450,000 | ) | — | — | (1,150,000 | ) | — | — | ||||||||||||||||
Net increase (decrease) in shares outstanding | (250,000 | ) | 1,750,000 | 4,600,000 | 2,150,000 | 13,600,000 | 5,650,000 | |||||||||||||||||
1 | Commencement of operations. |
See notes to financial statements.
FINANCIAL STATEMENTS | 65 |
Table of Contents
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Australia Index Fund | ||||||||||||||||||||||||
Six months Feb. 29, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | Year ended Aug. 31, 1999 | |||||||||||||||||||
Net asset value, beginning of period | $ | 11.22 | $ | 9.36 | $ | 9.24 | $ | 9.93 | $ | 9.99 | $ | 7.75 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income1 | 0.19 | 0.32 | 0.23 | 0.24 | 0.23 | 0.20 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 2.84 | 1.81 | (0.07 | ) | (0.71 | ) | (0.04 | ) | 2.29 | |||||||||||||||
Total from investment operations | 3.03 | 2.13 | 0.16 | (0.47 | ) | 0.19 | 2.49 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.43 | ) | (0.27 | ) | (0.04 | ) | (0.20 | ) | (0.23 | ) | (0.19 | ) | ||||||||||||
Return of capital | — | — | — | (0.02 | ) | (0.02 | ) | (0.06 | ) | |||||||||||||||
Total distributions | (0.43 | ) | (0.27 | ) | (0.04 | ) | (0.22 | ) | (0.25 | ) | (0.25 | ) | ||||||||||||
Net asset value, end of period | $ | 13.82 | $ | 11.22 | $ | 9.36 | $ | 9.24 | $ | 9.93 | $ | 9.99 | ||||||||||||
Total return | 27.35 | %3 | 23.33 | % | 1.74 | % | (4.77 | )% | 1.84 | % | 32.09 | % | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 176,950 | $ | 87,541 | $ | 76,731 | $ | 57,312 | $ | 61,574 | $ | 53,957 | ||||||||||||
Ratio of expenses to average net assets4 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.95 | % | 1.00 | % | ||||||||||||
Ratio of net investment income to average net assets4 | 3.04 | % | 3.21 | % | 2.47 | % | 2.54 | % | 2.22 | % | 2.03 | % | ||||||||||||
Portfolio turnover rate2 | 5 | % | 8 | % | 5 | % | 23 | % | 36 | % | 14 | % |
1 | Based on average shares outstanding throughout the period. |
2 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
3 | Not annualized. |
4 | Annualized for periods of less than one year. |
See notes to financial statements.
66 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Brazil Index Fund | ||||||||||||||||||||
Six months Feb. 29, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Period from Jul. 10, 20007 to Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of period | $ | 12.19 | $ | 8.30 | $ | 11.20 | $ | 19.25 | $ | 20.22 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income3 | 0.28 | 0.32 | 0.38 | 0.68 | 0.02 | |||||||||||||||
Net realized and unrealized gain (loss) | 4.53 | 3.68 | (3.28 | ) | (8.09 | ) | (0.63 | ) | ||||||||||||
Total from investment operations | 4.81 | 4.00 | (2.90 | ) | (7.41 | ) | (0.61 | ) | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.27 | ) | (0.11 | ) | — | (0.56 | ) | (0.02 | ) | |||||||||||
Net realized gain | — | — | — | — | (0.34 | ) | ||||||||||||||
Return of capital | — | — | — | (0.08 | ) | — | ||||||||||||||
Total distributions | (0.27 | ) | (0.11 | ) | — | (0.64 | ) | (0.36 | ) | |||||||||||
Net asset value, end of period | $ | 16.73 | $ | 12.19 | $ | 8.30 | $ | 11.20 | $ | 19.25 | ||||||||||
Total return | 39.42 | %5 | 48.85 | % | (25.89 | )% | (38.52 | )% | (2.97 | )%5 | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of period (000s) | $ | 265,118 | $ | 103,035 | $ | 83,788 | $ | 14,004 | $ | 18,283 | ||||||||||
Ratio of expenses to average net assets6 | 0.99 | % | 0.99 | % | 0.99 | % | 0.99 | % | 0.99 | %1 | ||||||||||
Ratio of net investment income to average net assets6 | 3.64 | % | 3.59 | % | 3.50 | % | 4.44 | % | 0.77 | %2 | ||||||||||
Portfolio turnover rate4 | 63 | % | 85 | % | 103 | % | 43 | % | 64 | % |
1 | Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was 1.40%. |
2 | Ratio of net investment income to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was 0.37%. |
3 | Based on average shares outstanding throughout the period. |
4 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
5 | Not annualized. |
6 | Annualized for periods of less than one year. |
7 | Commencement of operations. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 67 |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Canada Index Fund | ||||||||||||||||||||||||
Six months Feb. 29, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | Year ended Aug. 31, 1999 | |||||||||||||||||||
Net asset value, beginning of period | $ | 12.25 | $ | 9.49 | $ | 10.70 | $ | 16.94 | $ | 13.22 | $ | 9.90 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income3 | 0.04 | 0.10 | 0.07 | 0.05 | 0.70 | 0.07 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 2.52 | 2.69 | (1.27 | ) | (5.92 | ) | 8.08 | 3.87 | ||||||||||||||||
Total from investment operations | 2.56 | 2.79 | (1.20 | ) | (5.87 | ) | 8.78 | 3.94 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.20 | ) | (0.03 | ) | (0.01 | ) | (0.02 | ) | (0.55 | ) | (0.09 | ) | ||||||||||||
Net realized gain | — | — | — | (0.31 | ) | (4.39 | ) | (0.53 | ) | |||||||||||||||
Return of capital | — | — | — | (0.04 | ) | (0.12 | ) | — | ||||||||||||||||
Total distributions | (0.20 | ) | (0.03 | ) | (0.01 | ) | (0.37 | ) | (5.06 | ) | (0.62 | ) | ||||||||||||
Net asset value, end of period | $ | 14.61 | $ | 12.25 | $ | 9.49 | $ | 10.70 | $ | 16.94 | $ | 13.22 | ||||||||||||
Total return | 21.02 | %5 | 29.47 | % | (11.23 | )% | (34.95 | )% | 67.21 | % | 39.71 | % | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 328,810 | $ | 503,407 | $ | 66,420 | $ | 28,889 | $ | 22,028 | $ | 9,253 | ||||||||||||
Ratio of expenses to average net assets6 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 1.17 | %1 | 1.23 | % | ||||||||||||
Ratio of net investment income to average net assets6 | 0.60 | % | 0.98 | % | 0.70 | % | 0.44 | % | 4.07 | %2 | 0.53 | % | ||||||||||||
Portfolio turnover rate4 | 4 | % | 10 | % | 5 | % | 63 | % | 64 | % | 12 | % |
1 | Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2000 was 1.19%. |
2 | Ratio of net investment income to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2000 was 4.05%. |
3 | Based on average shares outstanding throughout the period. |
4 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
5 | Not annualized. |
6 | Annualized for periods of less than one year. |
See notes to financial statements.
68 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Emerging Markets Index Fund | ||||||||
Six months Feb. 29, 2004 | Period from Aug. 31, 2003 | |||||||
Net asset value, beginning of period | $ | 135.38 | $ | 101.25 | ||||
Income from investment operations: | ||||||||
Net investment income1 | 0.62 | 0.78 | ||||||
Net realized and unrealized gain | 37.71 | 33.35 | ||||||
Total from investment operations | 38.33 | 34.13 | ||||||
Less distributions from: | ||||||||
Net investment income | (0.81 | ) | — | |||||
Total distributions | (0.81 | ) | — | |||||
Net asset value, end of period | $ | 172.90 | $ | 135.38 | ||||
Total return | 28.40 | %2 | 33.72 | %2 | ||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 1,798,134 | $ | 297,846 | ||||
Ratio of expenses to average net assets3 | 0.74 | % | 0.78 | % | ||||
Ratio of expenses to average net assets exclusive of foreign taxes on stock dividends3 | 0.74 | % | 0.72 | % | ||||
Ratio of net investment income to average net assets3 | 0.78 | % | 1.58 | % | ||||
Portfolio turnover rate4 | 3 | % | 10 | % |
1 | Based on average shares outstanding throughout the period. |
2 | Not annualized. |
3 | Annualized for periods of less than one year. |
4 | Excludes portfolio securities received or delivered as a result of processing capital shares transactions in Creation Units. |
5 | Commencement of operations. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 69 |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Hong Kong Index Fund | ||||||||||||||||||||||||
Six months Feb. 29, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | Year ended Aug. 31, 1999 | |||||||||||||||||||
Net asset value, beginning of period | $ | 9.03 | $ | 7.99 | $ | 8.93 | $ | 13.24 | $ | 11.83 | $ | 6.41 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income1 | 0.05 | 0.23 | 0.23 | 0.23 | 0.33 | 0.29 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 2.30 | 0.95 | (1.11 | ) | (4.30 | ) | 1.42 | 5.49 | ||||||||||||||||
Total from investment operations | 2.35 | 1.18 | (0.88 | ) | (4.07 | ) | 1.75 | 5.78 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.15 | ) | (0.14 | ) | (0.06 | ) | (0.23 | ) | (0.32 | ) | (0.36 | ) | ||||||||||||
Return of capital | — | — | — | (0.01 | ) | (0.02 | ) | — | ||||||||||||||||
Total distributions | (0.15 | ) | (0.14 | ) | (0.06 | ) | (0.24 | ) | (0.34 | ) | (0.36 | ) | ||||||||||||
Net asset value, end of period | $ | 11.23 | $ | 9.03 | $ | 7.99 | $ | 8.93 | $ | 13.24 | $ | 11.83 | ||||||||||||
Total return | 26.28 | %4 | 15.14 | % | (9.94 | )% | (30.88 | )% | 14.73 | % | 90.51 | % | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 547,619 | $ | 250,627 | $ | 99,502 | $ | 52,946 | $ | 79,479 | $ | 77,200 | ||||||||||||
Ratio of expenses to average net assets3 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.94 | % | 1.01 | % | ||||||||||||
Ratio of net investment income to average net assets3 | 1.01 | % | 3.06 | % | 2.56 | % | 2.11 | % | 2.57 | % | 2.84 | % | ||||||||||||
Portfolio turnover rate2 | 3 | % | 10 | % | 15 | % | 43 | % | 21 | % | 43 | % |
1 | Based on average shares outstanding throughout the period. |
2 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
3 | Annualized for periods of less than one year. |
4 | Not annualized. |
See notes to financial statements.
70 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Malaysia Index Fund | ||||||||||||||||||||||||
Six months Feb. 29, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | Year ended Aug. 31, 1999 | |||||||||||||||||||
Net asset value, beginning of period | $ | 5.99 | $ | 5.68 | $ | 5.11 | $ | 5.96 | $ | 5.59 | $ | 2.11 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income1 | 0.04 | 0.10 | 0.08 | 0.06 | 0.05 | 0.01 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 1.16 | 0.30 | 0.52 | (0.85 | ) | 0.37 | 3.67 | |||||||||||||||||
Total from investment operations | 1.20 | 0.40 | 0.60 | (0.79 | ) | 0.42 | 3.68 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.10 | ) | (0.09 | ) | (0.03 | ) | (0.06 | ) | (0.05 | ) | (0.01 | ) | ||||||||||||
Return of capital | — | — | — | (0.00 | )3 | (0.00 | )3 | (0.19 | ) | |||||||||||||||
Total distributions | (0.10 | ) | (0.09 | ) | (0.03 | ) | (0.06 | ) | (0.05 | ) | (0.20 | ) | ||||||||||||
Net asset value, end of period | $ | 7.09 | $ | 5.99 | $ | 5.68 | $ | 5.11 | $ | 5.96 | $ | 5.59 | ||||||||||||
Total return | 20.35 | %4 | 7.39 | % | 11.82 | % | (13.22 | )% | 7.57 | % | 185.81 | % | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 245,652 | $ | 99,730 | $ | 93,262 | $ | 80,877 | $ | 99,206 | $ | 95,251 | ||||||||||||
Ratio of expenses to average net assets5 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.96 | % | 1.43 | % | ||||||||||||
Ratio of net investment income to average net assets5 | 1.31 | % | 1.91 | % | 1.53 | % | 1.19 | % | 0.81 | % | 0.33 | % | ||||||||||||
Portfolio turnover rate2 | 13 | % | 35 | % | 37 | % | 37 | % | 18 | % | 7 | % |
1 | Based on average shares outstanding throughout the period. |
2 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
3 | Rounds to less than $0.01. |
4 | Not annualized. |
5 | Annualized for periods of less than one year. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 71 |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Mexico Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 29, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | Year ended Aug. 31, 1999 | |||||||||||||||||||
Net asset value, beginning of period | $ | 15.04 | $ | 13.65 | $ | 15.35 | $ | 16.72 | $ | 13.39 | $ | 8.11 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income3 | 0.02 | 0.19 | 0.32 | 0.17 | 0.06 | 0.06 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 4.75 | 1.72 | (1.95 | ) | (1.36 | ) | 3.69 | 5.36 | ||||||||||||||||
Total from investment operations | 4.77 | 1.91 | (1.63 | ) | (1.19 | ) | 3.75 | 5.42 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.21 | ) | (0.52 | ) | (0.07 | ) | (0.15 | ) | — | (0.07 | ) | |||||||||||||
Net realized gain | — | — | — | (0.03 | ) | (0.42 | ) | (0.01 | ) | |||||||||||||||
Return of capital | — | — | — | — | — | (0.06 | ) | |||||||||||||||||
Total distributions | (0.21 | ) | (0.52 | ) | (0.07 | ) | (0.18 | ) | (0.42 | ) | (0.14 | ) | ||||||||||||
Net asset value, end of period | $ | 19.60 | $ | 15.04 | $ | 13.65 | $ | 15.35 | $ | 16.72 | $ | 13.39 | ||||||||||||
Total return | 31.96 | %5 | 14.60 | % | (10.67 | )% | (7.02 | )% | 28.20 | % | 66.92 | % | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 99,945 | $ | 60,155 | $ | 70,994 | $ | 46,056 | $ | 40,127 | $ | 21,430 | ||||||||||||
Ratio of expenses to average net assets6 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 1.04 | %1 | 1.26 | % | ||||||||||||
Ratio of net investment income to average net assets6 | 0.24 | % | 1.43 | % | 2.05 | % | 1.12 | % | 0.35 | %2 | 0.52 | % | ||||||||||||
Portfolio turnover rate4 | 2 | % | 13 | % | 8 | % | 34 | % | 24 | % | 18 | % |
1 | Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2000 was 1.04%. |
2 | Ratio of net investment income to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2000 was 0.35%. |
3 | Based on average shares outstanding throughout the period. |
4 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
5 | Not annualized. |
6 | Annualized for periods of less than one year. |
See notes to financial statements.
72 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Pacific ex-Japan Index Fund | ||||||||||||
Six months Feb. 29, 2004 | Year ended Aug. 31, 2003 | Period from Aug. 31, 2002 | ||||||||||
Net asset value, beginning of period | $ | 62.03 | $ | 52.51 | $ | 50.03 | ||||||
Income from investment operations: | ||||||||||||
Net investment income1 | 0.94 | 1.87 | 1.35 | |||||||||
Net realized and unrealized gain | 15.34 | 8.53 | 1.40 | |||||||||
Total from investment operations | 16.28 | 10.40 | 2.75 | |||||||||
Less distributions from: | ||||||||||||
Net investment income | (1.51 | ) | (0.88 | ) | (0.27 | ) | ||||||
Total distributions | (1.51 | ) | (0.88 | ) | (0.27 | ) | ||||||
Net asset value, end of period | $ | 76.80 | $ | 62.03 | $ | 52.51 | ||||||
Total return | 26.50 | %3 | 20.15 | % | 5.51 | %3 | ||||||
Ratios/Supplemental data: | ||||||||||||
Net assets, end of period (000s) | $ | 660,467 | $ | 223,298 | $ | 105,029 | ||||||
Ratio of expenses to average net assets4 | 0.50 | % | 0.50 | % | 0.50 | % | ||||||
Ratio of net investment income to average net assets4 | 2.65 | % | 3.47 | % | 2.87 | % | ||||||
Portfolio turnover rate2 | 5 | % | 8 | % | 5 | % |
1 | Based on average shares outstanding throughout the period. |
2 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
3 | Not annualized. |
4 | Annualized for periods of less than one year. |
5 | Commencement of operations. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 73 |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Singapore Index Fund | ||||||||||||||||||||||||
Six months Feb. 29, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | Year ended Aug. 31, 1999 | |||||||||||||||||||
Net asset value, beginning of period | $ | 5.38 | $ | 5.01 | $ | 5.34 | $ | 7.58 | $ | 7.93 | $ | 3.30 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income1 | 0.03 | 0.12 | 0.07 | 0.07 | 0.13 | 0.05 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 1.09 | 0.33 | (0.36 | ) | (2.16 | ) | (0.21 | ) | 4.70 | |||||||||||||||
Total from investment operations | 1.12 | 0.45 | (0.29 | ) | (2.09 | ) | (0.08 | ) | 4.75 | |||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.12 | ) | (0.08 | ) | (0.04 | ) | (0.07 | ) | (0.11 | ) | (0.11 | ) | ||||||||||||
Net realized gain | — | — | — | (0.06 | ) | (0.14 | ) | — | ||||||||||||||||
Return of capital | — | — | — | (0.02 | ) | (0.02 | ) | (0.01 | ) | |||||||||||||||
Total distributions | (0.12 | ) | (0.08 | ) | (0.04 | ) | (0.15 | ) | (0.27 | ) | (0.12 | ) | ||||||||||||
Net asset value, end of period | $ | 6.38 | $ | 5.38 | $ | 5.01 | $ | 5.34 | $ | 7.58 | $ | 7.93 | ||||||||||||
Total return | 21.01 | %4 | 9.30 | % | (5.42 | )% | (27.89 | )% | (1.29 | )% | 144.52 | % | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 178,756 | $ | 108,202 | $ | 88,126 | $ | 73,704 | $ | 88,719 | $ | 113,438 | ||||||||||||
Ratio of expenses to average net assets3 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.94 | % | 0.97 | % | ||||||||||||
Ratio of net investment income to average net assets3 | 1.12 | % | 2.67 | % | 1.44 | % | 1.15 | % | 1.60 | % | 0.76 | % | ||||||||||||
Portfolio turnover rate2 | 3 | % | 14 | % | 9 | % | 32 | % | 52 | % | 25 | % |
1 | Based on average shares outstanding throughout the period. |
2 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
3 | Annualized for periods of less than one year. |
4 | Not annualized. |
See notes to financial statements.
74 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI South Africa Index Fund | ||||||||
Six months Feb. 29, 2004 | Period from Feb. 3, 20035 to Aug. 31, 2003 | |||||||
Net asset value, beginning of period | $ | 46.81 | $ | 38.72 | ||||
Income from investment operations: | ||||||||
Net investment income1 | 0.39 | 0.89 | ||||||
Net realized and unrealized gain | 12.51 | 7.20 | ||||||
Total from investment operations | 12.90 | 8.09 | ||||||
Less distributions from: | ||||||||
Net investment income | (1.36 | ) | — | |||||
Total distributions | (1.36 | ) | — | |||||
Net asset value, end of period | $ | 58.35 | $ | 46.81 | ||||
Total return | 27.83 | %2 | 20.89 | %2 | ||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 87,532 | $ | 81,914 | ||||
Ratio of expenses to average net assets3 | 0.99 | % | 0.99 | % | ||||
Ratio of net investment income to average net assets3 | 1.47 | % | 3.86 | % | ||||
Portfolio turnover rate4 | 5 | % | 17 | % |
1 | Based on average shares outstanding throughout the period. |
2 | Not annualized. |
3 | Annualized for periods of less than one year. |
4 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
5 | Commencement of operations. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 75 |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI South Korea Index Fund | ||||||||||||||||||||
Six Months Feb. 29, 2004 | Year Ended Aug. 31, 2003 | Year Ended Aug. 31, 2002 | Year Ended Aug. 31, 2001 | Period from Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of period | $ | 23.06 | $ | 21.17 | $ | 13.25 | $ | 18.16 | $ | 20.36 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income (loss)3 | 0.15 | 0.19 | (0.00 | )5 | 0.09 | (0.04 | ) | |||||||||||||
Net realized and unrealized gain (loss) | 4.39 | 1.70 | 7.92 | (4.90 | ) | (2.16 | ) | |||||||||||||
Total from investment operations | 4.54 | 1.89 | 7.92 | (4.81 | ) | (2.20 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.24 | ) | — | — | (0.03 | ) | — | |||||||||||||
Return of capital | — | — | — | (0.07 | ) | — | ||||||||||||||
Total distributions | (0.24 | ) | — | — | (0.10 | ) | — | |||||||||||||
Net asset value, end of period | $ | 27.36 | $ | 23.06 | $ | 21.17 | $ | 13.25 | $ | 18.16 | ||||||||||
Total return | 19.85 | %6 | 8.93 | % | 59.77 | % | (26.49 | )% | (10.81 | )%6 | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of period (000s) | $ | 309,221 | $ | 154,486 | $ | 96,336 | $ | 37,767 | $ | 13,622 | ||||||||||
Ratio of expenses to average net assets7 | 0.99 | % | 0.99 | % | 1.00 | % | 1.01 | % | 0.99 | %1 | ||||||||||
Ratio of expenses to average net assets exclusive of foreign taxes on stock dividends7 | 0.99 | % | 0.99 | % | 0.99 | % | 0.99 | % | 0.99 | % | ||||||||||
Ratio of net investment income (loss) to average net assets7 | 1.25 | % | 0.98 | % | (0.01 | )% | 0.64 | % | (0.63 | )%2 | ||||||||||
Portfolio turnover rate4 | 4 | % | 39 | % | 25 | % | 39 | % | 55 | % |
1 | Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was 1.38%. |
2 | Ratio of net investment loss to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was (1.02)%. |
3 | Based on average shares outstanding throughout the period. |
4 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
5 | Rounds to less than $0.01. |
6 | Not annualized. |
7 | Annualized for periods of less than one year. |
8 | Commencement of operations. |
See notes to financial statements.
76 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Taiwan Index Fund | ||||||||||||||||||||
Six months Feb. 29, 2004 | Year Ended Aug. 31, 2003 | Year Ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Period from Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of period | $ | 10.79 | $ | 8.82 | $ | 9.01 | $ | 16.41 | $ | 19.59 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income (loss)3 | (0.05 | ) | 0.04 | (0.03 | ) | (0.03 | ) | (0.01 | ) | |||||||||||
Net realized and unrealized gain (loss) | 1.84 | 1.93 | (0.16 | ) | (7.37 | ) | (2.31 | ) | ||||||||||||
Total from investment operations | 1.79 | 1.97 | (0.19 | ) | (7.40 | ) | (2.32 | ) | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.02 | ) | — | — | — | (0.32 | ) | |||||||||||||
Net realized gain | — | — | — | — | (0.10 | ) | ||||||||||||||
Return of capital | — | — | — | — | (0.44 | ) | ||||||||||||||
Total distributions | (0.02 | ) | — | — | — | (0.86 | ) | |||||||||||||
Net asset value, end of period | $ | 12.56 | $ | 10.79 | $ | 8.82 | $ | 9.01 | $ | 16.41 | ||||||||||
Total return | 16.53 | %5 | 22.45 | % | (2.11 | )% | (45.09 | )% | (12.10 | )%5 | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of period (000s) | $ | 443,899 | $ | 234,727 | $ | 142,043 | $ | 110,786 | $ | 42,667 | ||||||||||
Ratio of expenses to average net assets6 | 0.99 | % | 1.31 | % | 1.33 | % | 1.60 | % | 1.56 | %1 | ||||||||||
Ratio of expenses to average net assets exclusive of foreign taxes on stock dividends6 | 0.99 | % | 0.99 | % | 0.99 | % | 0.99 | % | 0.99 | % | ||||||||||
Ratio of net investment income (loss) to average net assets6 | (0.94 | )% | 0.43 | % | (0.28 | )% | (0.23 | )% | (0.28 | )%2 | ||||||||||
Portfolio turnover rate4 | 1 | % | 15 | % | 11 | % | 30 | % | 52 | % |
1 | Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was 2.16%. |
2 | Ratio of net investment loss to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was (0.89)%. |
3 | Based on average shares outstanding throughout the period. |
4 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
5 | Not annualized. |
6 | Annualized for periods of less than one year. |
7 | Commencement of operations. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 77 |
Table of Contents
Notes to the Financial Statements (Unaudited)
iSHARES, INC.
1. SIGNIFICANT ACCOUNTING POLICIES
iShares, 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 September 1, 1994. As of February 29, 2004, the Company offered 24 investment portfolios or funds.
These financial statements relate only to the iShares MSCI Australia, iShares MSCI Brazil, iShares MSCI Canada, iShares MSCI Emerging Markets, iShares MSCI Hong Kong, iShares MSCI Malaysia, iShares MSCI Mexico, iShares MSCI Pacific ex-Japan, iShares MSCI Singapore, iShares MSCI South Africa, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds (each a “Fund”, collectively the “Funds”).
The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in a particular market, as measured by a particular equity securities index compiled by Morgan Stanley Capital International Inc. (“MSCI”). The investment advisor utilizes a “passive” or index approach to achieve each Fund’s investment objective. Each of the Funds is classified as a non-diversified fund under the 1940 Act. Non-diversified funds generally hold stocks in fewer companies than diversified funds and may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence.
Each Fund invests in the securities of foreign issuers of a single country or region, which 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; lesser 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.
Under the Funds’ organizational documents, their officers and directors are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.
The following significant accounting policies are consistently followed by the Company in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for investment companies. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. Actual results could differ from those estimates.
Certain prior year amounts in the financial statements have been reclassified to be consistent with the current period presentation.
SECURITY VALUATION
Portfolio securities for which market prices are readily available are valued using the official closing price of the primary exchange on which they are traded. The methodology used to determine such closing prices varies among markets. Such prices are generally the same as those used by MSCI in calculating the benchmark indices used by the Funds. Short-term investments are valued at amortized cost, which approximates market value. Mutual fund shares are valued at net asset value. Any securities, including restricted securities or other assets for which market quotations are not readily available, or for which a significant event has occurred since the time of the most recent market quotation, are valued in accordance with fair value pricing policies approved by the Company’s Board of Directors.
78 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to the Financial Statements (Unaudited) (Continued)
iSHARES, INC.
SECURITY TRANSACTIONS, INCOME RECOGNITION AND EXPENSES
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, and interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method. Common expenses incurred by the Company prior to December 28, 2001 were allocated to the Funds based on the ratio of average net assets of each Fund to the combined net assets of all funds offered by the Company, or other appropriate method. Other expenses, directly related to a specific fund, were charged to that fund. The expenses for the iShares MSCI Singapore Index Fund are still allocated to that Fund using this methodology. Additional details of the current expense structure may be found in Note 2.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the prevailing rates of exchange at the end of each day. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective dates of such transactions.
Foreign currency and assets and liabilities denominated in foreign currency are generally converted into U.S. dollars using the same exchange rates utilized by MSCI in the calculation of the relevant MSCI Indices (currently, the exchange rates as of 4:00 p.m. London time). However, the Company may use a different exchange rate from the rate used by MSCI in the event that the investment advisor concludes that such rate is more appropriate.
Each 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 Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes.
FOREIGN TAXES
South Korea and Taiwan levy taxes at rates of 16.5% and up to 20.0%, respectively, based on the par value of stock dividends received by the iShares MSCI Emerging Markets, iShares MSCI South Korea, and iShares MSCI Taiwan Index Funds. These taxes are paid by the Funds receiving the stock dividends and if any, are disclosed in their respective Statements of Operations.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income, if any, including any net foreign currency gains, are declared and distributed at least annually by each Fund. Distributions of net realized gains, if any, generally are declared and distributed once a year. 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 Funds.
At August 31, 2003, the tax year-end of the Funds, the components of distributable earnings (accumulated losses) on a tax basis were as follows:
iShares MSCI Index Fund | Undistributed Ordinary Income | Unrealized Appreciation (Depreciation) | Capital and Other | Total Distributable Earnings (Accumulated Losses) | |||||||||||
Australia | $ | 2,925,719 | $ | 8,829,154 | $ | (8,157,059 | ) | $ | 3,597,814 | ||||||
Brazil | 1,915,236 | 2,948,125 | (93,396,836 | ) | (88,533,475 | ) | |||||||||
Canada | 3,350,221 | 78,400,573 | (1,060,679 | ) | 80,690,115 | ||||||||||
Emerging Markets | 702,264 | 29,797,192 | (470,743 | ) | 30,028,713 | ||||||||||
Hong Kong | 3,456,795 | 8,549,863 | (11,258,286 | ) | 748,372 | ||||||||||
Malaysia | 976,401 | 25,691,452 | (22,261,193 | ) | 4,406,660 | ||||||||||
Mexico | 597,687 | (7,722,769 | ) | (7,164,923 | ) | (14,290,005 | ) | ||||||||
Pacific ex-Japan | 5,183,483 | 20,071,924 | (2,270,339 | ) | 22,985,068 | ||||||||||
Singapore | 1,698,638 | (5,390,088 | ) | (13,484,866 | ) | (17,176,316 | ) | ||||||||
South Africa | 1,587,853 | 12,274,784 | (345,024 | ) | 13,517,613 | ||||||||||
South Korea | 1,142,789 | 42,903,439 | (5,098,054 | ) | 38,948,174 | ||||||||||
Taiwan | 637,002 | 7,979,564 | (30,401,751 | ) | (21,785,185 | ) |
NOTESTOTHE FINANCIAL STATEMENTS | 79 |
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Notes to the Financial Statements (Unaudited) (Continued)
iSHARES, INC.
For the years ended August 31, 2003 and August 31, 2002, the tax characterization of distributions paid for each Fund was equal to the book characterization of distributions paid. The total distributions and distributions per share are disclosed in the accompanying Statements of Changes in Net Assets and the Financial Highlights for all Funds.
FEDERAL INCOME TAXES
Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company, as defined in Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute all of its net income and any net 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 was required for the six months ended February 29, 2004.
The Funds had tax basis net capital loss carryforwards at August 31, 2003, the tax year-end of the Funds, as follows:
iShares MSCI Index Fund | Expiring 2007 | Expiring 2008 | Expiring 2009 | Expiring 2010 | Expiring 2011 | Total | ||||||||||||
Australia | $ | 674,889 | $ | 630,985 | $ | 1,971,994 | $ | 3,625,203 | $ | 650,082 | $ | 7,553,153 | ||||||
Brazil | — | — | 94,163 | 1,993,420 | 90,139,850 | 92,227,433 | ||||||||||||
Canada | — | — | — | 780,114 | 21,276 | 801,390 | ||||||||||||
Hong Kong | 4,085,707 | — | — | 4,971,970 | 2,870,602 | 11,928,279 | ||||||||||||
Malaysia | 8,654,333 | — | — | 9,819,029 | 2,898,105 | 21,371,467 | ||||||||||||
Mexico | — | — | — | 1,319,032 | 2,329,290 | 3,648,322 | ||||||||||||
Pacific ex-Japan | — | — | — | — | 329,461 | 329,461 | ||||||||||||
Singapore | — | — | — | 4,810,766 | 4,428,316 | 9,239,082 | ||||||||||||
South Korea | — | — | 556,540 | 666,642 | 504,041 | 1,727,223 | ||||||||||||
Taiwan | — | — | — | 12,532,361 | 8,689,663 | 21,222,024 |
Net capital loss carryforwards may be applied against any net realized taxable gains in each succeeding year, or until their respective expiration dates, whichever occurs first.
If any of the Funds own shares in certain foreign investment entities, referred to, under U.S. tax law code, as “passive foreign investment companies”, such Funds may elect to mark-to-market annually the shares of the passive foreign investment company, and would be required to distribute to shareholders any such mark-to-market gains.
For the year ended August 31, 2003, each Fund reclassified certain amounts to paid-in-capital from accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss), respectively, as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, realized foreign currency gains and losses and gains and losses on in-kind redemptions. These reclassifications have no effect on net assets or net asset values per share.
REPURCHASE AGREEMENTS
Each Fund may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as an investment by the Fund, collateralized by securities, which are delivered to the Funds’ custodian or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest. Repurchase agreements held by the Funds at February 29, 2004 represent collateral from securities on loan. For further information, see Note 5, below.
80 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Notes to the Financial Statements (Unaudited) (Continued)
iSHARES, INC.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
Barclays Global Fund Advisors (“BGFA”) acts as investment advisor to the Company and is responsible for the investment management of each Fund. BGFA is a California corporation indirectly owned by Barclays Bank PLC. BGFA serves as investment advisor to each Fund pursuant to an Advisory Agreement between the Company and BGFA, as amended on December 28, 2001. Under this agreement, BGFA is responsible for placing purchase and sale orders, providing continuous supervision of the investment portfolio of each Fund, and the general management of the Company’s affairs.
Under the Advisory Agreement, except for the iShares MSCI Singapore Index Fund, BGFA is responsible for all of the expenses (“Covered Expenses”) of each of the Funds, other than interest, taxes, brokerage commissions and other expenses connected with the executions of portfolio transactions, extraordinary expenses, distribution fees and advisory fees. Prior to December 28, 2001 and pursuant to the prior advisory agreement, the investment advisory fee earned by and paid to BGFA with respect to each Fund was reduced by the aggregate of such Fund’s fees and expenses (subject to the exceptions in the prior sentence). BGFA also agreed to reimburse each Fund to the extent that the expenses of any Fund (subject to the same exceptions) exceeded the investment advisory fee as stated in the advisory fee tables below. These fee reduction and reimbursement provisions still apply to the iShares MSCI Singapore Index Fund.
For its investment advisory services to the iShares MSCI Australia, iShares MSCI Canada, iShares MSCI Hong Kong, iShares MSCI Malaysia, iShares MSCI Mexico and iShares MSCI Singapore Index Funds, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate net assets of all the funds offered by the Company (except for the iShares MSCI Brazil, iShares MSCI Emerging Markets, iShares MSCI Pacific ex-Japan, iShares MSCI South Africa, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds) as follows:
ADVISORY FEE | AGGREGATE NET ASSETS | |
0.59% | First $7 billion | |
0.54 | Over $7 billion, up to and including $11 billion | |
0.49 | Over $11 billion |
For its investment advisory services to the iShares MSCI Brazil, iShares MSCI South Africa, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate net assets of these four Funds as follows:
ADVISORY FEE | AGGREGATE NET ASSETS | |
0.74% | First $2 billion | |
0.69 | Over $2 billion, up to and including $4 billion | |
0.64 | Over $4 billion |
For its investment advisory services to the iShares MSCI Pacific ex-Japan Index Fund, BGFA is entitled to an annual investment advisory fee based on the average net assets of the Fund of 0.50%. For its investment advisory services to the iShares MSCI Emerging Markets Index Fund, BGFA is entitled to an annual investment advisory fee based on the average net assets of the Fund excluding any investments in other iShares Funds, of 0.75%.
NOTESTOTHE FINANCIAL STATEMENTS | 81 |
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Notes to the Financial Statements (Unaudited) (Continued)
iSHARES, INC.
Barclays Global Investors, N.A. (“BGI”) has a license agreement with MSCI for the use of the relevant MSCI indices. Under a sub-license agreement between BGI and the Funds, the fees for the use of such MSCI indices are paid directly by BGI to MSCI.
Investors Bank & Trust Company (“Investors Bank”) serves as administrator, custodian and transfer agent for the Company. As compensation for its services, Investors Bank receives certain out-of-pocket costs, transaction fees, and asset-based fees, which are accrued daily and paid monthly. These fees are Covered Expenses as defined above.
BGI serves as securities lending agent for the Company. BGI is an affiliate of BGFA, the Funds’ investment advisor. As securities lending agent, BGI receives as fees, a share of the income earned on investment of the cash collateral received for the loan of securities. For the six months ended February 29, 2004, BGI earned securities lending agent fees as follows:
iShares MSCI Index fund | Securities Lending Agent Fees | ||
Australia | $ | 14,256 | |
Emerging Markets | 372,662 | ||
Hong Kong | 89,747 | ||
Pacific ex-Japan | 42,198 | ||
Singapore | 26,012 |
SEI Investments Distribution Co. (the “Distributor”) serves as each Fund’s underwriter and distributor of the shares of each Fund, pursuant to a Distribution Agreement with the Company. The Company has adopted a distribution plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Distributor is entitled to receive a distribution fee from each Fund (other than the iShares MSCI Pacific ex-Japan and iShares MSCI Emerging Markets Index Funds), not to exceed 0.25% of the average daily net assets of such Fund, for distribution-related services.
Pursuant to an exemptive order issued by the Securities and Exchange Commission, each Fund may invest in the Institutional Shares of the Institutional Money Market Fund (“IMMF”) and Prime Money Market Fund (“PMMF”) of Barclays Global Investors Funds. The IMMF and PMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Money Market Master Portfolio and Prime Money Market Master Portfolio (collectively, the “Master Portfolios”), respectively, which are managed by BGFA, the Funds’ investment advisor. The IMMF and PMMF are open-end money market funds available only to institutional investors, including other investment companies managed by BGFA. The IMMF and PMMF seek a high level of income consistent with liquidity and the preservation of capital. While the IMMF and PMMF do not directly charge an advisory fee, the Master Portfolios in which they invest do charge an advisory fee. Income distributions from the IMMF and PMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Funds from temporary cash investments or from investment of securities lending collateral are recorded as either interest income or securities lending income, respectively, in the accompanying Statements of Operations.
As of February 29, 2004, certain directors and officers of the Company are also officers of BGI.
The iShares MSCI Emerging Markets Index Fund, in order to improve its portfolio liquidity and its ability to track the MSCI Emerging Markets Index, may invest in the shares of other iShares Funds that invest in securities in the Fund’s benchmark index. As of February 29, 2004, the iShares MSCI Emerging Markets Index Fund held shares of the iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan
82 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Notes to the Financial Statements (Unaudited) (Continued)
iSHARES, INC.
Index Funds. Transactions in shares of these affiliated Exchange Traded Funds (“ETFs”), including dividend income and net realized capital gains (losses) during the six months ended February 29, 2004 were as follows:
Affiliated ETF | Number of Shares Held Beginning of Period | Gross Additions | Gross Reductions | Number of Shares Held End of Period | Dividend Income | Net (Loss) | |||||||||
iShares MSCI Malaysia Index Fund | 294,800 | 743,200 | 310,000 | 728,000 | $ | 52,918 | $ | (50.842 | ) | ||||||
iShares MSCI South Korea Index Fund | 123,200 | 270,400 | 123,200 | 270,400 | 44,413 | 13,948 | |||||||||
iShares MSCI Taiwan Index Fund | 391,600 | 1,027,300 | 524,084 | 894,816 | 15,757 | (117,748 | ) |
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended February 29, 2004, were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||
Australia | $ | 6,193,131 | $ | 8,508,392 | ||
Brazil | 247,501,560 | 160,348,451 | ||||
Canada | 13,447,873 | 18,382,370 | ||||
Emerging Markets | 35,897,080 | 31,790,959 | ||||
Hong Kong | 10,402,682 | 12,781,648 | ||||
Malaysia | 137,450,682 | 19,983,136 | ||||
Mexico | 1,300,444 | 2,008,028 | ||||
Pacific ex-Japan | 20,825,622 | 23,520,216 | ||||
Singapore | 4,688,696 | 6,818,198 | ||||
South Africa | 4,663,966 | 6,080,592 | ||||
South Korea | 126,688,282 | 8,631,199 | ||||
Taiwan | 159,963,975 | 3,908,726 |
In-kind transactions for the six months ended February 29, 2004, were as follows:
iShares MSCI Index Fund | In-kind Purchases | In-kind Sales | ||||
Australia | $ | 64,531,079 | $ | — | ||
Canada | 87,183,495 | 333,071,164 | ||||
Emerging Markets | 1,292,627,364 | — | ||||
Hong Kong | 240,108,779 | 24,262,444 | ||||
Mexico | 97,036,989 | 74,127,724 | ||||
Pacific ex-Japan | 367,876,716 | 13,752,866 | ||||
Singapore | 47,416,748 | — | ||||
South Africa | 11,830,163 | 24,635,199 |
NOTESTOTHE FINANCIAL STATEMENTS | 83 |
Table of Contents
Notes to the Financial Statements (Unaudited) (Continued)
iSHARES, INC.
At February 29, 2004, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:
iShares MSCI Index Fund | Tax Cost | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation | |||||||||
Australia | $ | 175,788,672 | $ | 37,313,333 | $ | (1,560,733 | ) | $ | 35,752,600 | ||||
Brazil | 229,258,950 | 35,171,995 | (1,356,690 | ) | 33,815,305 | ||||||||
Canada | 264,087,146 | 64,964,293 | (330,883 | ) | 64,633,410 | ||||||||
Emerging Markets | 1,895,819,735 | 234,327,536 | (4,983,008 | ) | 229,344,528 | ||||||||
Hong Kong | 526,726,745 | 91,547,556 | (3,331,129 | ) | 88,216,427 | ||||||||
Malaysia | 191,432,581 | 54,462,986 | (88,544 | ) | 54,374,442 | ||||||||
Mexico | 96,308,284 | 7,610,714 | (3,938,934 | ) | 3,671,780 | ||||||||
Pacific ex-Japan | 579,702,022 | 101,639,421 | (918,211 | ) | 100,721,210 | ||||||||
Singapore | 162,160,854 | 23,607,515 | (615,455 | ) | 22,992,060 | ||||||||
South Africa | 62,517,717 | 25,093,714 | (132,667 | ) | 24,961,047 | ||||||||
South Korea | 229,606,541 | 79,089,771 | (1,234,708 | ) | 77,855,063 | ||||||||
Taiwan | 382,569,725 | 71,625,386 | (9,786,396 | ) | 61,838,990 |
4. CAPITAL SHARE TRANSACTIONS
The Company’s authorized shares are 10.9 billion shares of $.001 par value capital stock. The number of shares authorized to each Fund are as follows:
iShares MSCI Index Fund | Authorized Shares | |
Australia | 127,800,000 | |
Brazil | 500,000,000 | |
Canada | 340,200,000 | |
Emerging Markets | 500,000,000 | |
Hong Kong | 191,400,000 | |
Malaysia | 127,800,000 | |
iShares MSCI Index Fund | Authorized Shares | |
Mexico | 255,000,000 | |
Pacific ex-Japan | 500,000,000 | |
Singapore | 191,400,000 | |
South Africa | 200,000,000 | |
South Korea | 200,000,000 | |
Taiwan | 200,000,000 |
The Company issues and redeems capital shares of each Fund only in aggregations of a specified number of shares (each, a “Creation Unit”) at net asset value. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Statements of Changes in Net Assets.
The consideration for purchase of Creation Units of a Fund is generally the in-kind deposit of a designated portfolio of equity securities constituting a portfolio sampling representation of the corresponding MSCI Index and an amount of cash (except for the iShares MSCI Brazil, iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds which are offered in Creation Units solely for cash in U.S. dollars). A purchase transaction fee and a redemption transaction fee are charged to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.
84 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Notes to the Financial Statements (Unaudited) (Continued)
iSHARES, INC.
5. LOANS OF PORTFOLIO SECURITIES
Each Fund may lend its investment securities to approved borrowers such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received is required to have a value equal of at least 105% of the market value of the loaned securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to a Fund of securities lending are that the borrower may not provide additional collateral when required, or return the securities when due.
As of February 29, 2004, certain of the Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in a joint account with other funds managed by BGFA, which invests in securities with remaining maturities of 397 days or less, repurchase agreements and money market mutual funds including money market funds managed by BGFA. Repurchase agreements held in the joint account are fully collateralized by U.S. Government securities. Income from the joint account is allocated daily to each Fund, based on each Fund’s portion of the total cash collateral received. The market value of the securities on loan at February 29, 2004, and the value of the related collateral received are disclosed in the Statements of Assets and Liabilities. Securities lending income is presented net of broker rebates and fees paid to BGI.
NOTESTOTHE FINANCIAL STATEMENTS | 85 |
Table of Contents
The following is a list of iShares Funds being offered as of February 29, 2004, along with their respective exchange trading symbols. Please call iShares at 1-800-iShares (1-800-474-2737) to obtain a prospectus for any iShares fund. The prospectus contains more complete information, including charges, expenses, investment objectives and risk factors which should be carefully considered to determine if the fund(s) are an appropriate investment for you. Read the prospectus(es) carefully before investing. Investing involves risk, including possible loss of principal.
Broad Market
iShares Dow Jones U.S. Total Market Index Fund (IYY)
iShares Russell 3000 Index Fund (IWV)
iShares Russell 3000 Growth Index Fund (IWZ)
iShares Russell 3000 Value Index Fund (IWW)
iShares S&P 1500 Index Fund (ISI)
Large Cap
iShares Russell 1000 Index Fund (IWB)
iShares Russell 1000 Growth Index Fund (IWF)
iShares Russell 1000 Value Index Fund (IWD)
iShares S&P 100 Index Fund (OEF)
iShares S&P 500 Index Fund (IVV)
iShares S&P 500/BARRA Growth Index Fund (IVW)
iShares S&P 500/BARRA Value Index Fund (IVE)
Mid Cap
iShares Russell Midcap Index Fund (IWR)
iShares Russell Midcap Growth Index Fund (IWP)
iShares Russell Midcap Value Index Fund (IWS)
iShares S&P MidCap 400 Index Fund (IJH)
iShares S&P MidCap 400/BARRA Growth Index Fund (IJK)
iShares S&P MidCap 400/BARRA Value Index Fund (IJJ)
Small Cap
iShares Russell 2000 Index Fund (IWM)
iShares Russell 2000 Growth Index Fund (IWO)
iShares Russell 2000 Value Index Fund (IWN)
iShares S&P SmallCap 600 Index Fund (IJR)
iShares S&P SmallCap 600/BARRA Growth Index Fund (IJT)
iShares S&P SmallCap 600/BARRA Value Index Fund (IJS)
Sector & Industry
iShares Cohen & Steers Realty Majors Index Fund (ICF)
iShares Dow Jones Transportation Average Index Fund (IYT)
iShares Dow Jones U.S. Basic Materials Sector Index Fund (IYM)
iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund (IYC)
iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund (IYK)
iShares Dow Jones U.S. Energy Sector Index Fund (IYE)
iShares Dow Jones U.S. Financial Sector Index Fund (IYF)
iShares Dow Jones U.S. Financial Services Index Fund (IYG)
iShares Dow Jones U.S. Healthcare Sector Index Fund (IYH)
iShares Dow Jones U.S. Industrial Sector Index Fund (IYJ)
iShares Dow Jones U.S. Real Estate Index Fund (IYR)
iShares Dow Jones U.S. Technology Sector Index Fund (IYW)
iShares Dow Jones U.S. Telecommunications Sector Index Fund (IYZ)
iShares Dow Jones U.S. Utilities Sector Index Fund (IDU)
iShares Goldman Sachs Natural Resources Index Fund (IGE)
iShares Goldman Sachs Networking Index Fund (IGN)
iShares Goldman Sachs Semiconductor Index Fund (IGW)
iShares Goldman Sachs Software Index Fund (IGV)
iShares Goldman Sachs Technology Index Fund (IGM)
iShares Nasdaq Biotechnology Index Fund (IBB)
Specialty
iShares Dow Jones Select Dividend Index Fund (DVY)
Global Sector
iShares S&P Global Energy Sector Index Fund (IXC)
iShares S&P Global Financials Sector Index Fund (IXG)
iShares S&P Global Healthcare Sector Index Fund (IXJ)
iShares S&P Global Technology Sector Index Fund (IXN)
iShares S&P Global Telecommunications Sector Index Fund (IXP)
International/Broad Market
iShares MSCI EAFE Index Fund (EFA)
iShares MSCI Emerging Markets Index Fund (EEM)
International/Regional
iShares MSCI EMU Index Fund (EZU)
iShares MSCI Pacific ex-Japan Index Fund (EPP)
iShares S&P Europe 350 Index Fund (IEV)
International/Developed Country
iShares MSCI Australia Index Fund (EWA)
iShares MSCI Austria Index Fund (EWO)
iShares MSCI Belgium Index Fund (EWK)
iShares MSCI Canada Index Fund (EWC)
iShares MSCI France Index Fund (EWQ)
iShares MSCI Germany Index Fund (EWG)
iShares MSCI Hong Kong Index Fund (EWH)
iShares MSCI Italy Index Fund (EWI)
iShares MSCI Japan Index Fund (EWJ)
iShares MSCI Netherlands Index Fund (EWN)
iShares MSCI Singapore Index Fund (EWS)
iShares MSCI Spain Index Fund (EWP)
iShares MSCI Sweden Index Fund (EWD)
iShares MSCI Switzerland Index Fund (EWL)
iShares MSCI United Kingdom Index Fund (EWU)
iShares S&P/TOPIX 150 Index Fund (ITF)
International/Emerging Country
iShares MSCI Brazil Index Fund (EWZ)
iShares MSCI Malaysia Index Fund (EWM)
iShares MSCI Mexico Index Fund (EWW)
iShares MSCI South Africa Index Fund (EZA)
iShares MSCI South Korea Index Fund (EWY)
iShares MSCI Taiwan Index Fund (EWT)
iShares S&P Latin America 40 Index Fund (ILF)
Global/Broad Market
iShares S&P Global 100 Index Fund (IOO)
Fixed Income
iShares GS $ InvesTop™ Corporate Bond Fund (LQD)
iShares Lehman 1-3 Year Treasury Bond Fund (SHY)
iShares Lehman 7-10 Year Treasury Bond Fund (IEF)
iShares Lehman 20+ Year Treasury Bond Fund (TLT)
iShares Lehman Aggregate Bond Fund (AGG)
iShares Lehman TIPS Bond Fund (TIP)
An investment in the fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
iShares is a registered trademark of Barclays Global Investors, N.A. The iShares Funds are not sponsored, endorsed or issued by Goldman, Sachs & Co. or Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., Morgan Stanley Capital International, The Nasdaq Stock Market, Inc., Frank Russell Company, or Standard & Poor’s. None of these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with Goldman, Sachs & Co. or Lehman Brothers. “GS $ InvesTop™” and “Goldman Sachs®” are trademarks of Goldman, Sachs & Co. This advertising section does not constitute part of the 2004 Semi-Annual Report.
86 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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The iShares Funds are distributed by SFI Investments Distribution Co. (SFI). Barclays Global Fund Advisors (BGFA) serves as an advisor to the iShares Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the iShares Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., a wholly owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI.
The iShares Funds are not sponsored, endorsed, issued, sold, or promoted by Morgan Stanley Capital International, Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds.
Investing involves risk, including possible loss of principal.
©2004 Barclays Global Investors. All rights reserved. iShares is a registered trademark of Barclays Global Investors, N.A. All other trademarks, service-marks or registered trademarks are the property of their respective owners.
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available with out charge, upon request, by calling toll-free 1 800 474 2737; on the Funds’ website at www.iShares.com; and on the Securities and Exchange Commission’s website at www.sec.gov.
This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
iShares® Industrial strength investment tools from BARCLAYS GLOBAL INVESTORS
1 800 iSHARES (1 800 474 2737) www.iSHARES.COM
BGI-F-035-02004 | BARCLAYS |
Table of Contents
iShares®
2004 SEMI – ANNUAL REPORT TO SHAREHOLDERS
FEBRUARY 29, 2004
[GRAPHIC APPEARS HERE]
INDUSTRIAL STRENGTH
INVESTMENT TOOLS
iSHARESMSCIAUSTRIAINDEXFUND
iSHARESMSCIBELGIUMINDEXFUND
iSHARESMSCIEMUINDEXFUND
iSHARESMSCIFRANCEINDEXFUND
iSHARESMSCIGERMANYINDEXFUND
iSHARESMSCIITALYINDEXFUND
iSHARESMSCINETHERLANDSINDEXFUND
iSHARESMSCISPAININDEXFUND
iSHARESMSCISWEDENINDEXFUND
iSHARESMSCISWITZERLANDINDEXFUND
iSHARESMSCIUNITEDKINGDOMINDEXFUND
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Following several years of economic slowdown, international markets showed renewed strength during the past six months. Declining interest rates around the world largely fueled the rise. Corporate cost cutting measures and improving investor confidence levels also helped buoy market levels.
In general, emerging markets were the performance leaders, benefiting from rising export demand as global economic conditions firmed. As China developed into a more important global market, many emerging markets found they did not depend so heavily on the U.S. for export growth. Japan bounced back, delivering an impressive 7% gross domestic product (GDP) annualized growth rate in the fourth quarter of 2003 alone. Europe showed more muted growth levels, still somewhat hemmed in by the euro’s continued rise against the U.S. dollar. For many markets, in Europe and elsewhere, the weakening U.S. dollar had a dampening effect as it made those countries’ exports more expensive in U.S. dollars. For U.S.-based investors, however, the relative strength of the foreign currencies helped to boost returns.
While the improved market returns provided a welcome relief from the weak market environment of the past few years, we urge you to keep in mind that past performance is not a guarantee of future returns. In light of today’s complex and uncertain market environment, the iShares® Funds continue to innovate and expand, offering more tools that help investors tailor their portfolios to achieve diversity and address volatility. For example, the iShares family of funds recently introduced the iShares S&P 1500 Index Fund, offering access to approximately 90% of the total U.S. equity market capitalization. Launched late last year, the iShares Dow Jones Select Dividend Index Fund provides investors with exposure to fifty of the highest dividend-yielding securities in the Dow Jones U.S. Total Market Index, while the iShares Dow Jones Transportation Average Index Fund provides exposure to airlines, industrial transportation companies and general industrial services companies. The iShares family of funds has also added the iShares Lehman TIPS Bond Fund, which provides the opportunity to gain exposure to inflation-protected government securities. Looking ahead to the future, the iShares Funds plan to introduce new funds, which will give investors focused exposure to additional indexes.
With the addition of these iShares Funds, investors can achieve even more diversity in their portfolios - and at lower cost, since iShares Fund fees are, on average, about half those of actively managed funds.1 With more than 80 different funds in the iShares family of funds to choose from, investors have the ability to build a diverse portfolio that covers a wide swath of market segments with various capitalizations and sectors, as well as value and growth, international and fixed income securities. That is important because market segments do not tend to move in tandem, particularly in volatile markets. Economic factors, including inflation, interest rate levels, currency valuations or the price of oil, as well as the normal pace of the economic cycle, all may result in one market segment outperforming another.
As market conditions change, we encourage you to talk with your financial advisor about what blend of investments or asset allocation can best help you meet your financial goals. We will continue to work closely with the financial advisor community to introduce innovative strategies and structures for their clients’ portfolios. To learn more about the iShares Funds, please visit our web site, www.iShares.com.
Regardless of market conditions, a sound, disciplined investing plan is essential. Such a plan should be grounded in two key concepts: keeping the costs associated with investing as low as possible, and maintaining a diversified portfolio. That is why we believe the iShares Funds are an indispensable tool for investors. And that is also why more and more investors have recognized the benefits of the iShares Funds. Assets under management for the iShares family of funds continue to grow, and as of February 29, 2004, had reached $68.3 billion.
On behalf of the iShares family of funds, we thank you for making the iShares Funds a part of your portfolio. We look forward to meeting your investment needs in the year ahead.
[GRAPHIC APPEARS HERE] |
Lee T. Kranefuss President and Chairman of the Board of Directors iShares, Inc. |
1 | Morningstar Principia, BGI analysis 3/04. |
SHAREHOLDER LETTER | 1 |
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The iShares Funds are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to the iShares Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the iShares Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., none of which is affiliated with SEI.
To determine if the fund(s) are an appropriate investment for you, 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, which may be obtained by calling 1-800-iShares or by visiting www.iShares.com. Read the prospectus carefully before investing.
There are risks involved with investing, including possible loss of principal. Diversification may not protect against market risk. An investment in the funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The annual management fees of the iShares Funds may be substantially less than those of most mutual funds. iShares transactions will result in brokerage commissions, but the savings from lower annual fees can help offset these costs.
iShares is a registered trademark of Barclays Global Investors, N.A. The iShares Funds are not sponsored, endorsed, or issued by Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Dow Jones & Company, Inc. or Standard and Poor’s. None of these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with the companies listed above.
This advertising section does not constitute part of the 2004 Semi-Annual Report.
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Managers’ Discussion & Analysis
iSHARES® MSCI AUSTRIA INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
72.90% | 75.49% | 69.09% | 11.06% | 11.33% | 10.23% | 5.98% | 6.05% | 6.76% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
72.90% | 75.49% | 69.09% | 68.96% | 70.99% | 62.76% | 58.86% | 59.71% | 68.40% |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
FUND ALLOCATIONS BY SECTOR (% of Net Assets) | ||||
Banks | [GRAPHIC APPEARS HERE] | 26.78% | ||
Materials | [GRAPHIC APPEARS HERE] | 18.69% | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 17.01% | ||
Energy | [GRAPHIC APPEARS HERE] | 10.42% | ||
Capital Goods | [GRAPHIC APPEARS HERE] | 8.27% | ||
Utilities | [GRAPHIC APPEARS HERE] | 5.68% | ||
Transportation | [GRAPHIC APPEARS HERE] | 5.52% | ||
Real Estate | [GRAPHIC APPEARS HERE] | 4.77% | ||
Diversified Financials | [GRAPHIC APPEARS HERE] | 2.72% |
The iShares MSCI Austria Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Austrian market, as measured by the MSCI Austria Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 45.03%, while the Index returned 44.12%.
Regulatory constraints, such as those imposed by the Securities and Exchange Commission and the Internal Revenue Service, can restrict the Fund’s ability to hold a given index component at its benchmark weight, resulting in differences between a fund’s holdings and the securities in its underlying index. One such constraint, the “5/50 Rule”, precludes the sum of all the securities weighted over 5% in a fund’s portfolio from exceeding 50% of a fund’s total assets. To comply with the 5/50 Rule, the Fund was obligated to underweight several of the Index’s largest weighted constituents and to overweight others. The combined effect of all the misweights in the Fund had a net positive impact on the
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Fund’s return relative to the Index’s return. In addition, the Fund held Austrian Airlines AG (1.16% of the net assets of the Fund as of February 29, 2004), a non-Index holding, which performed well over the reporting period and contributed positively to the performance of the Fund.
The Austrian market continued to deliver healthy gains during the reporting period. Many Austrian companies have benefited in recent years from their expansion into the emerging, higher-growth central and eastern European markets, including the Czech Republic and Slovenia. Austrian banks, in particular, have taken advantage of the opportunities that these markets offered. As of the close of the reporting period, more than 60% of central and eastern Europe’s banking assets were owned by foreign banks. Of these, more than 25% were Austrian. Erste Bank der Oesterreichischen Sparkassen AG, the largest Fund holding at 20.81% of net assets as of February 29, 2004, has been a leader in this expansion and continues to benefit from its efforts. Having paid roughly U.S. $455 million in September for Postabank, Hungary’s second-largest retail bank, Erste Bank has the largest retail network in central Europe. Austria’s largest bank, Bank Austria Creditanstalt (4.90% of the net assets of the Fund as of February 29, 2004), which also expanded into all major markets in central and eastern Europe, posted strong gains during the reporting period.
During the reporting period, the Austrian market also benefited from improving economic conditions both in the U.S. and in Germany, Austria’s main export market. Export demand increased, in turn boosting industrial and utility companies. Wienerberger Baustoffindustrie AG (5.06% of the net assets of the Fund as of February 29, 2004) benefited from improving economic conditions, as did Flughafen Wien AG (4.36% of the net assets of the Fund as of February 29, 2004).
MANAGERS’ DISCUSSION & ANALYSIS | 5 |
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Managers’ Discussion & Analysis
iSHARES® MSCI BELGIUM INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
80.14% | 78.41% | 76.29% | (0.73)% | (0.92)% | (3.52)% | 6.20% | 6.21% | 6.40% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
80.14% | 78.41% | 76.29% | (3.62)% | (4.54)% | (16.39)% | 61.46% | 61.60% | 63.91% |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | ||||
Diversified Financials | [GRAPHIC APPEARS HERE] | 31.92% | ||
Banks | [GRAPHIC APPEARS HERE] | 18.36% | ||
Utilities | [GRAPHIC APPEARS HERE] | 8.86% | ||
Food & Staples Retailing | [GRAPHIC APPEARS HERE] | 8.13% | ||
Materials | [GRAPHIC APPEARS HERE] | 7.45% | ||
Pharmaceuticals & Biotechnology | [GRAPHIC APPEARS HERE] | 4.81% | ||
Food, Beverage & Tobacco | [GRAPHIC APPEARS HERE] | 4.77% | ||
Consumer Durables & Apparel | [GRAPHIC APPEARS HERE] | 4.08% | ||
Real Estate | [GRAPHIC APPEARS HERE] | 2.93% | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 2.00% |
The iShares MSCI Belgium Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Belgian market, as measured by the MSCI Belgium Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 37.36%, while the Index returned 36.90%.
With more than half of its stock market represented by financial stocks, Belgium’s overall market performance has been largely determined by the direction of the financial sector. During the reporting period, this relationship had a positive effect on the Belgian market.
After struggling with a global economic downturn and the war in Iraq in previous reporting periods, financial stocks largely rebounded during the reporting period as conditions improved for the sector. Corporate earnings levels and equity valuations rose, investor activity increased,
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and the risks associated with war subsided. Fortis, the Fund’s largest holding at 23.79% of net assets as of February 29, 2004, gained during the reporting period. Dexia Group (13.65% of the net assets of the Fund as of February 29, 2004), KBC Bankverzekeringsholding (4.70% of the net assets of the Fund as of February 29, 2004) and Groupe Bruxelles Lambert SA (4.86% of the net assets of the Fund as of February 29, 2004) all posted gains.
As the overall economic landscape improved, the rest of Belgium’s market generally rebounded as well during the reporting period. Food chain Delhaize Group (4.78% of the net assets of the Fund as of February 29, 2004) continued to perform well. Pharmaceutical company UCB SA (4.81% of the net assets of the Fund as of February 29, 2004) gained and utility company Electrabel SA (8.86% of the net assets of the Fund as of February 29, 2004) benefited from improved conditions.
MANAGERS’ DISCUSSION & ANALYSIS | 7 |
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Managers’ Discussion & Analysis
iSHARES® MSCI EMU INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 2/29/04 | Inception to 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
59.22% | 60.67% | 60.08% | (5.75)% | (5.50)% | (5.38)% | (19.20)% | (18.42)% | (18.01)% |
Total returns for the period since inception are calculated from the inception date of the Fund (7/25/00). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (7/31/00), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY COUNTRY (% of Net Assets) | ||||
France | [GRAPHIC APPEARS HERE] | 28.08% | ||
Germany | [GRAPHIC APPEARS HERE] | 20.26% | ||
Netherlands | [GRAPHIC APPEARS HERE] | 14.71% | ||
Italy | [GRAPHIC APPEARS HERE] | 11.38% | ||
Spain | [GRAPHIC APPEARS HERE] | 10.96% | ||
Finland | [GRAPHIC APPEARS HERE] | 5.58% | ||
Belgium | [GRAPHIC APPEARS HERE] | 3.27% | ||
Ireland | [GRAPHIC APPEARS HERE] | 2.15% | ||
Portugal | [GRAPHIC APPEARS HERE] | 1.20% | ||
Greece | [GRAPHIC APPEARS HERE] | 0.98% |
The iShares MSCI Emu Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the European Monetary Union (“EMU”) markets, as measured by the MSCI EMU Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 27.33%, while the Index returned 27.91%.
European markets began to see signs of recovery during the reporting period. Higher gross domestic product (“GDP”) levels in the U.S. and Asia meant increased demand for many European markets, which also began to experience somewhat higher GDP growth and increased manufacturing levels. In some markets, business confidence levels were unexpectedly high.
The nagging problem for Europe during the reporting period remained the strong euro, which continued to rise sharply against the U.S. dollar, making European exports more expensive and reducing the value of sales and earnings in dollar-denominated markets. As of the end of the reporting period, however, demand from the U.S had been sufficient to compensate for the increase in the euro. And, for U.S. dollar-based investors, the strong euro boosted performance returns.
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EMU banks and insurance companies rebounded from the declines they experienced in previous periods as markets improved and equity valuations lifted. BNP Paribas SA (1.95% of the net assets of the Fund as of February 29, 2004) logged gains during the reporting period, as did Spain’s Banco Santander Central Hispano SA (1.91% of the net assets of the Fund as of February 29, 2004), which also benefited from holdings in Latin American markets.
Telecommunications companies participated in a global rebound for their sector. Telefonica SA (2.89% of the net assets of the Fund as of February 29, 2004), Deutsche Telecom AG (1.87% of the net assets of the Fund as of February 29, 2004), and Nokia OYJ (3.92% of the net assets of the Fund as of February 29, 2004) all logged gains during the reporting period.
French healthcare company Aventis SA (1.97% of the Fund’s net assets as of February 29, 2004) was the strongest performer among the Fund’s ten largest holdings.
MANAGERS’ DISCUSSION & ANALYSIS | 9 |
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Managers’ Discussion & Analysis
iSHARES® MSCI FRANCE INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
57.07% | 58.47% | 57.59% | 2.37% | 2.43% | 2.68% | 9.26% | 9.32% | 9.52% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
57.07% | 58.47% | 57.59% | 12.45% | 12.75% | 14.13% | 102.51% | 103.50% | 106.45% |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | ||||
Energy | [GRAPHIC APPEARS HERE] | 15.87% | ||
Banks | [GRAPHIC APPEARS HERE] | 11.93% | ||
Pharmaceuticals & Biotechnology | [GRAPHIC APPEARS HERE] | 10.24% | ||
Capital Goods | [GRAPHIC APPEARS HERE] | 6.46% | ||
Media | [GRAPHIC APPEARS HERE] | 5.49% | ||
Materials | [GRAPHIC APPEARS HERE] | 5.35% | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 4.93% | ||
Food & Staples Retailing | [GRAPHIC APPEARS HERE] | 4.62% | ||
Insurance | [GRAPHIC APPEARS HERE] | 4.56% | ||
Automobiles & Components | [GRAPHIC APPEARS HERE] | 4.12% |
The iShares MSCI France Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the French market, as measured by the MSCI France Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 26.58%, while the Index returned 27.11%.
During the reporting period, France remained steeped in economic slowdown. Its jobless rate reached 9.6%, a three-year high, and its economic growth was expected to lag the rest of Europe due to soft consumer demand and concerns about the strong currency. As the euro appreciated 14% against the U.S. dollar in 2003, France’s manufacturers struggled with a weak export market. However, demand from the U.S. and Asia was sufficient to compensate for the euro’s increase. In January, confidence among French manufacturers climbed to a two-and-a-half-year high as industrial production rose to meet increasing sales levels in France and higher export levels.
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Among the ten largest holdings in the Fund, Vivendi Universal SA (3.46% of the net assets of the Fund as of February 29, 2004) was the strongest performer during the reporting period. Following the auction of its television and film divisions, the entertainment company reported an improvement in core profits and anticipated decline in debt. France’s largest drug-maker, Aventis SA (6.85% of the net assets of the Fund as of February 29, 2004) also performed well. Financial companies Societe Generale (its Class A shares were 3.86% of the net assets of the Fund as of February 29, 2004), AXA (4.28% of the net assets of the Fund as of February 29, 2004), and BNP Paribas SA (6.76% of the net assets of the Fund as of February 29, 2004) all posted gains as French financial companies were lifted by the improving global economic conditions that buoyed their counterparts in markets around the world.
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Managers’ Discussion & Analysis
iSHARES® MSCI GERMANY INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
80.71% | 81.88% | 80.86% | (1.40)% | (1.27)% | (1.30)% | 5.23% | 5.29% | 5.72% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
80.71% | 81.88% | 80.86% | (6.83)% | (6.21)% | (6.34)% | 50.17% | 50.78% | 55.76% |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | ||||
Capital Goods | [GRAPHIC APPEARS HERE] | 12.07% | ||
Utilities | [GRAPHIC APPEARS HERE] | 11.65% | ||
Automobiles & Components | [GRAPHIC APPEARS HERE] | 11.54% | ||
Materials | [GRAPHIC APPEARS HERE] | 11.28% | ||
Diversified Financials | [GRAPHIC APPEARS HERE] | 9.78% | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 9.24% | ||
Insurance | [GRAPHIC APPEARS HERE] | 8.15% | ||
Software & Services | [GRAPHIC APPEARS HERE] | 5.91% | ||
Banks | [GRAPHIC APPEARS HERE] | 4.37% | ||
Pharmaceuticals & Biotechnology | [GRAPHIC APPEARS HERE] | 3.39% |
The iShares MSCI Germany Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the German market, as measured by the MSCI Germany Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 30.54%, while the Index returned 30.65%.
The German market rebounded during the reporting period, due largely to unexpected, and encouraging, economic news. In December, figures revealed that Germany’s trade surplus had widened 2% to a record 135 billion euros in 2003 as exports soared, despite the euro’s gains against the U.S. dollar. The government also began making strides to strengthen the economy. After months of negotiation, Germany agreed on a package of labor and tax measures that amounted to the largest changes to the economy’s economic framework since World War II. For U.S. dollar-based investors, the strengthening euro also enhanced performance returns during the reporting period.
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Among the ten largest holdings in the Fund, energy giants RWE AG (3.71% of the net assets of the Fund as of February 29, 2004) and E.ON AG (7.35% of the net assets of the Fund as of February 29, 2004) logged healthy gains as economic conditions improved. Financial companies, as well as telecommunications companies, participated in global strength in their respective industry sectors. Deutsche Bank AG (8.11% of the net assets of the Fund as of February 29, 2004) and Allianz AG (4.67% of the net assets of the Fund as of February 29, 2004) benefited from improving economic conditions, gaining ground during the reporting period. Deutsche Telekom AG (9.24% of the net assets of the Fund as of February 29, 2004) benefited from a rally in technology share prices worldwide. The largest holding at 11.28% of the net assets of the Fund as of February 29, 2004, Siemens AG also posted positive results during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 13 |
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Managers’ Discussion & Analysis
iSHARES® MSCI ITALY INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
41.06% | 42.20% | 40.02% | 0.96% | 1.09% | 0.46% | 10.63% | 10.69% | 10.50% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
41.06% | 42.20% | 40.02% | 4.89% | 5.56% | 2.35% | 123.68% | 124.65% | 121.58% |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | ||||
Banks | [GRAPHIC APPEARS HERE] | 23.37% | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 22.15% | ||
Energy | [GRAPHIC APPEARS HERE] | 17.79% | ||
Insurance | [GRAPHIC APPEARS HERE] | 13.26% | ||
Utilities | [GRAPHIC APPEARS HERE] | 6.83% | ||
Media | [GRAPHIC APPEARS HERE] | 4.32% | ||
Diversified Financials | [GRAPHIC APPEARS HERE] | 4.04% | ||
Capital Goods | [GRAPHIC APPEARS HERE] | 2.13% | ||
Consumer Durables & Apparel | [GRAPHIC APPEARS HERE] | 1.75% | ||
Automobiles & Components | [GRAPHIC APPEARS HERE] | 1.03% |
The iShares MSCI Italy Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Italian market, as measured by the MSCI Italy Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 26.58%, while the Index returned 27.04%.
Italian markets delivered healthy returns during the reporting period. Financial stocks, along with their counterparts around the world, benefited from improving valuations and renewed investor activity. Italian telecommunications companies generally moved in sync with the telecommunications sector globally, which rebounded from lows experienced in previous reporting periods, buoyed by improving economic conditions. For U.S. dollar-based investors, the strengthening euro also helped to boost returns during the reporting period.
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Within the Fund’s largest holdings, financial companies Sanpaulo IMI SpA (4.69% of the net assets of the Fund as of February 29, 2004) and Banca Intesa SpA (4.67% of the net assets of the Fund as of February 29, 2004) recovered from earlier losses to deliver gains for the reporting period, as did insurer Assicurazioni Generali SpA (8.82% of the net assets of the Fund as of February 29, 2004).
One company, however, had a significant impact on financial markets during the reporting period. In December, the Italian markets were shaken by the collapse of Parmalat, Italy’s largest dairy group. The revelation that the company’s financial crisis, which at first had appeared to be a short-term liquidity problem, was instead the result of nearly a decade of fraud, sent ripples through the financial markets and rattled investor confidence. Although Parmalat was a Fund holding at the time of its collapse, the Fund was fully divested of its holding of Parmalat as of February 29, 2004.
While Parlamat’s demise was the largest corporate crisis in Italy, it was not the only one. In January, software company Finmatica revealed that the chairman, as well as three other members of the board and three statutory auditors had been placed under investigation for, among other things, making misleading statements about the company’s fiscal health. In early February, the Italian government approved a bill intended to improve Italy’s system of financial services regulation and provide better guarantees for investors. Finmatica was not a Fund holding at any time during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 15 |
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Managers’ Discussion & Analysis
iSHARES® MSCI NETHERLANDS INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
53.01% | 54.23% | 49.24% | (3.89)% | (4.06)% | (2.29)% | 4.23% | 4.28% | 5.76% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
53.01% | 54.23% | 49.24% | (17.98)% | (18.71)% | (10.94)% | 39.09% | 39.67% | 56.32% |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | ||||
Energy | [GRAPHIC APPEARS HERE] | 24.61% | ||
Food, Beverage & Tobacco | [GRAPHIC APPEARS HERE] | 17.23% | ||
Diversified Financials | [GRAPHIC APPEARS HERE] | 13.96% | ||
Media | [GRAPHIC APPEARS HERE] | 8.03% | ||
Materials | [GRAPHIC APPEARS HERE] | 5.08% | ||
Banks | [GRAPHIC APPEARS HERE] | 4.72% | ||
Insurance | [GRAPHIC APPEARS HERE] | 4.70% | ||
Consumer Durables & Apparel | [GRAPHIC APPEARS HERE] | 4.51% | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 4.13% | ||
Transportation | [GRAPHIC APPEARS HERE] | 3.67% |
The iShares MSCI Netherlands Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Dutch market, as measured by the MSCI Netherlands Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 19.65%, while the Index returned 19.65%.
The Dutch market showed signs of recovery during the reporting period. Because the Netherlands has historically depended so heavily on foreign trade, it has been sensitive to the economic strength of its trading partners. As a result, the economic slowdown in the U.S. and major European markets in recent years had a dampening effect on the Dutch economy. By the second quarter of 2003, gross domestic product (“GDP”) had contracted by roughly 0.9% and equity markets languished. However, as the U.S. and some European markets began to experience improved GDP growth and market performance, the economic climate in the Netherlands improved as well, and, as of the end of the reporting
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period, appeared poised for recovery. In particular, those companies that were heavily dependent on exports were buoyed by the apparent global recovery. Unilever NV CVA (11.42% of the net assets of the Fund as of February 29, 2004) and Koninklijke Philips Electronics NV (4.51% of the net assets of the Fund as of February 29, 2004) both enjoyed gains during the reporting period, as foreign trade increased. For U.S. dollar-based investors, the strengthening euro also helped to enhance returns during the reporting period.
Financial stocks, which represent a significant percentage of the Dutch market, benefited along with their counterparts around the world from improved equity valuations and a return of investment to equity markets. ING Groep NV (13.96% of the net assets of the Fund as of February 29, 2004), ABN AMRO Holding NV (4.72% of the net assets of the Fund as of February 29, 2004), and AEGON NV (4.70% of the net assets of the Fund as of February 29, 2004) all performed well during the reporting period.
Supermarket chain Koninklijke Ahold NV (2.39% of the Fund’s net assets as of February 29, 2004), however, remained mired in the aftermath of its woes of early 2003, when it had revealed what it described as “significant accounting irregularities”. The company, which had suffered significant losses in the days immediately following that announcement, continued to lose ground during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 17 |
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Managers’ Discussion & Analysis
iSHARES® MSCI SPAIN INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
60.87% | 61.53% | 62.35% | 2.51% | 2.33% | 2.62% | 13.59% | 13.62% | 13.98% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
60.87% | 61.53% | 62.35% | 13.19% | 12.22% | 13.81% | 176.04% | 176.64% | 183.77% |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | ||||
Banks | [GRAPHIC APPEARS HERE] | 31.52% | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 23.69% | ||
Utilities | [GRAPHIC APPEARS HERE] | 15.78% | ||
Energy | [GRAPHIC APPEARS HERE] | 4.88% | ||
Capital Goods | [GRAPHIC APPEARS HERE] | 4.63% | ||
Food Beverge & Tobacco | [GRAPHIC APPEARS HERE] | 4.57% | ||
Media | [GRAPHIC APPEARS HERE] | 2.18% | ||
Transportation | [GRAPHIC APPEARS HERE] | 2.08% | ||
Retailing | [GRAPHIC APPEARS HERE] | 1.97% | ||
Pharmaceuticals & Biotechnology | [GRAPHIC APPEARS HERE] | 1.95% |
The iShares MSCI Spain Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Spanish market, as measured by the MSCI Spain Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 31.77%, while the Index returned 32.30%.
The Spanish market performed well during the reporting period as the country’s economy continued to improve. Gross domestic product chugged along at an estimated 2.3% for 2003, one of the highest rates in the European Union. Inflation rates, which have been a problem in recent years, finally dropped to a five-year low of 2.3% during the reporting period. For U.S. investors, returns were enhanced by the euro’s continued strengthening against the U.S. dollar during the reporting period.
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The largest holding at 23.69% of the net assets of the Fund as of February 29, 2004, Telefonica SA was a strong performer among the ten largest Fund holdings during the reporting period, thanks to a worldwide rebound in the telecommunications sector. Cigarette maker Altadis SA (3.31% of the net assets of the Fund as of February 29, 2004) also logged gains, although it suffered a slight loss in late February on news that its net profit in 2003 fell 33%, as it took a charge for restructuring its French and Spanish operations. Altadis SA countered the drop in revenue with an increased dividend, mitigating the stock’s price decline. Banco Popular Espanol SA (4.57% of the net assets of the Fund as of February 29, 2004) rebounded as equity valuations increased.
In addition, a number of Spanish companies, particularly banks and utilities, have substantial holdings in Latin America. In general, these companies benefited from strong gains in Latin American markets during the reporting period. Three companies in the Fund that had significant Latin American holdings included Banco Santander Central Hispano SA (14.65% of the net assets of the Fund as of February 29, 2004), Banco Bilbao Vizcaya Argentaria SA (10.52% of the net assets of the Fund as of February 29, 2004) and the utility company Endesa SA (4.84% of the net assets of the Fund as of February 29, 2004).
MANAGERS’ DISCUSSION & ANALYSIS | 19 |
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Managers’ Discussion & Analysis
iSHARES® MSCI SWEDEN INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
82.87% | 84.16% | 83.29% | 3.12% | 2.90% | 4.49% | 8.76% | 8.84% | 10.19% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
82.87% | 84.16% | 83.29% | 16.61% | 15.36% | 24.54% | 95.31% | 96.43% | 116.75% |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | ||||
Technology Hardware & Equipment | [GRAPHIC APPEARS HERE] | 23.46% | ||
Banks | [GRAPHIC APPEARS HERE] | 18.97% | ||
Capital Goods | [GRAPHIC APPEARS HERE] | 18.70% | ||
Retailing | [GRAPHIC APPEARS HERE] | 6.95% | ||
Materials | [GRAPHIC APPEARS HERE] | 6.88% | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 6.54% | ||
Health Care Equipment & Services | [GRAPHIC APPEARS HERE] | 3.62% | ||
Consumer Durables & Apparel | [GRAPHIC APPEARS HERE] | 3.44% | ||
Commercial Services & Supplies | [GRAPHIC APPEARS HERE] | 2.48% | ||
Insurance | [GRAPHIC APPEARS HERE] | 1.97% |
The iShares MSCI Sweden Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Swedish market, as measured by the MSCI Sweden Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 36.54%, while the Index returned 37.13%.
Sweden’s market delivered one of the best returns in Europe during the reporting period, thanks to relatively healthy economic conditions and an exceptionally strong performer in the Index. Although unemployment remained high, the economy remained fundamentally sound, with healthy gross domestic product growth and a surplus in the external accounts. Citing low domestic cost pressures, a benign inflation outlook and the weakness of the labor market, Sweden’s central bank, the Riksbank lowered its key interest rate in early February. The 0.25% drop brought the rate to 2.50%, its lowest level in nearly 60 years.
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The major factor in Sweden’s market performance during the reporting period was the performance of its largest weighting, cellular phone maker Telefonaktiebolaget LM Ericsson. Its Class B shares, which represented 23.46% of the net assets of the Fund as of February 29, 2004, returned nearly 70% during the reporting period as the telecommunications industry around the world demonstrated continued strength. Telecommunications company TeliaSonera AB (4.04% of the net assets of the Fund as of February 29, 2004) also posted modest gains during the reporting period.
The higher equity valuations, lower interest rates and improving economic environment helped to buoy financial companies, including Nordea AB (8.87% of the net assets of the Fund as of February 29, 2004) and Skandinaviska Enskilda Banken AB, whose Class A shares represented 3.90% of the net assets of the Fund as of February 29, 2004.
Economic strength in the U.S. and in Europe also helped Sweden’s foreign trade during the reporting period, benefiting carmaker Volvo AB (whose Class B shares represented 3.48% of the net assets of the Fund as of February 29, 2004) and clothing retailer Hennes & Mauritz AB (whose Class B shares made up 6.95% of the net assets of the Fund as of February 29, 2004).
MANAGERS’ DISCUSSION & ANALYSIS | 21 |
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Managers’ Discussion & Analysis
iSHARES® MSCI SWITZERLAND INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
50.16% | 49.27% | 51.22% | (0.25)% | (0.48)% | 0.22% | 5.07% | 5.08% | 6.79% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
50.16% | 49.27% | 51.22% | (1.23)% | (2.40)% | 1.13% | 48.35% | 48.48% | 68.86% |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | ||||
Pharmaceuticals & Biotechnology | [GRAPHIC APPEARS HERE] | 28.33% | ||
Diversified Financials | [GRAPHIC APPEARS HERE] | 13.58% | ||
Food, Beverage & Tobacco | [GRAPHIC APPEARS HERE] | 12.33% | ||
Materials | [GRAPHIC APPEARS HERE] | 12.18% | ||
Insurance | [GRAPHIC APPEARS HERE] | 9.26% | ||
Consumer Durables & Apparel | [GRAPHIC APPEARS HERE] | 5.71% | ||
Capital Goods | [GRAPHIC APPEARS HERE] | 5.12% | ||
Banks | [GRAPHIC APPEARS HERE] | 3.55% | ||
Health Care Equipment & Services | [GRAPHIC APPEARS HERE] | 2.77% | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 2.76% |
The iShares MSCI Switzerland Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Swiss market, as measured by the MSCI Switzerland Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 24.15%, while the Index returned 25.09%.
After being mired in recession in previous reporting periods, Switzerland showed renewed signs of life during the six months ended February 29, 2004. In November, Swiss leading economic indicators rose to top their highest levels in more than 2 1/2 years. Exports, which made up about 2/3 of the Swiss gross domestic product, gained during the reporting period. The Swiss franc, whose strength in previous reporting periods hindered Switzerland’s foreign trade, dropped against the euro, making Swiss exports more affordable and boosting foreign demand. Industrial production also improved during the reporting period. In an effort to continue the recovery trend, the Swiss National Bank left its benchmark interest rate close to zero during the reporting period.
22 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Benefiting from the improving conditions and the decline of the Swiss franc, consumer discretionary company Compagnie Financiere Richemont AG (whose Class A shares represented 2.81% of the net assets of the Fund as of February 29, 2004) posted gains during the reporting period. Nestle SA, whose registered shares represented 12.33% of the net assets of the Fund as of February 29, 2004, also benefited from these conditions.
Financial giant UBS AG (whose registered shares represented 8.87% of the Fund’s net assets as of February 29, 2004) and Credit Suisse Group (4.71% of the net assets of the Fund as of February 29, 2004) climbed along with financial companies worldwide, in response to economic recovery and improvements in financial markets. Financial companies Zurich Financial Services AG (4.76% of the net assets of the Fund as of February 29, 2004) and Swiss Reinsurance Co. (4.49% of the net assets of the Fund as of February 29, 2004) also gained during the reporting period.
Pharmaceutical companies also demonstrated strength, with both Roche Holding AG (8.28% of the net assets of the Fund as of February 29, 2004) and Novartis AG (the Fund’s largest holding at 18.00% of net assets as of February 29, 2004) delivering solid gains during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 23 |
Table of Contents
Managers’ Discussion & Analysis
iSHARES® MSCI UNITED KINGDOM INDEX FUND
Performance as of 2/29/04
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
48.86% | 51.92% | 50.55% | (1.05)% | (0.90)% | (0.44)% | 7.37% | 7.55% | 8.04% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/29/04 | Five Years Ended 2/29/04 | Inception to 2/29/04 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
48.86% | 51.92% | 50.55% | (5.12)% | (4.44)% | (2.20)% | 76.30% | 78.68% | 85.22% |
Total returns for the period since inception are calculated from the inception date of the Fund (3/12/96). “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.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Investors should not expect that such exceptional returns will be repeated.
A Fund’s per share 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 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 stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since Fund shares typically do not trade in the secondary market until several days after Fund inception, for the period from inception to the first day of secondary market trading in Fund shares (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading 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, the 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 returns shown in the tables above do 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.
TOP 10 FUND ALLOCATIONS BY SECTOR (% of Net Assets) | ||||
Banks | [GRAPHIC APPEARS HERE] | 21.24% | ||
Energy | [GRAPHIC APPEARS HERE] | 13.29% | ||
Pharmaceuticals & Biotechnology | [GRAPHIC APPEARS HERE] | 10.40% | ||
Telecommunication Services | [GRAPHIC APPEARS HERE] | 10.28% | ||
Food, Beverage & Tobacco | [GRAPHIC APPEARS HERE] | 7.30% | ||
Media | [GRAPHIC APPEARS HERE] | 4.61% | ||
Materials | [GRAPHIC APPEARS HERE] | 4.32% | ||
Utilities | [GRAPHIC APPEARS HERE] | 4.17% | ||
Insurance | [GRAPHIC APPEARS HERE] | 3.21% | ||
Food & Staples Retailing | [GRAPHIC APPEARS HERE] | 3.10% |
The iShares MSCI United Kingdom Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the British market, as measured by the MSCI United Kingdom Index (the “Index”). For the six-month period ended February 29, 2004 (the “reporting period”), the Fund returned 26.99%, while the Index returned 27.59%.
The British market delivered broad-based gains as the country’s economy experienced signs of recovery during the reporting period. During the fourth quarter of 2003, gross domestic product grew at an annual rate of 2.5%. A survey of purchasing managers showed that manufacturing activity accelerated in December to the fastest rate in four years. Retail sales growth and housing prices also improved, rising at the fastest pace since April and October of 2002, respectively. The Bank of England raised short-term rates in the face of the overall economic strength. Because of its expectation for strong economic growth in 2004, the chief economic advisor to the U.K. Treasury suggested in January that the Bank of England would likely raise its benchmark interest rate again to “lock in stability”. During the reporting period, the pound reversed course and appreciated against the U.S. dollar, boosting returns for U.S. investors.
24 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Vodafone Group PLC (8.53% of the net assets of the Fund as of February 29, 2004) continued to be a strong performer, moving in step with its telecommunications counterparts around the world. As markets improved and equity valuations rose, financial companies also generally performed well. Barclays PLC (an affiliate of the investment advisor and 2.94% of the net assets of the Fund as of February 29, 2004), HBOS PLC (2.62% of the net assets of the Fund as of February 29, 2004), and Lloyds TSB Group PLC (2.32% of the net assets of the Fund as of February 29, 2004) all gained during the reporting period.
Pharmaceutical companies showed mixed results. On the heels of its success with its popular drug Nexium, AstraZeneca PLC (4.03% of the net assets of the Fund as of February 29, 2004) received favorable news from a study on its blood-thinning drug Exanta, and posted positive returns for the reporting period. GlaxoSmithKline PLC (6.20% of the net assets of the Fund as of February 29, 2004) lost ground for the reporting period, despite FDA approval of its antidepressant Paxil for treatment of premenstrual dysphoric disorder.
MANAGERS’ DISCUSSION & ANALYSIS | 25 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI AUSTRIA INDEX FUND
February 29, 2004
Security | Shares | Value | ||||
COMMON STOCKS – 99.89% | ||||||
Erste Bank der Oesterreichischen Sparkassen AG | 65,656 | $ | 9,169,320 | |||
Telekom Austria AG1 | 553,320 | 8,009,376 | ||||
OMV AG | 26,419 | 4,259,123 | ||||
Wienerberger Baustoffindustrie AG | 70,702 | 2,231,320 | ||||
Oesterreichische Elektrizitaetswirtschafts AG Class A | 14,964 | 2,231,132 | ||||
Bank Austria Creditanstalt1 | 40,426 | 2,159,860 | ||||
Immofinanz Immobillien Anlage AG1 | 250,067 | 1,972,997 | ||||
Flughafen Wien AG | 34,771 | 1,922,532 | ||||
Mayr-Melnhof Karton AG | 15,515 | 1,890,148 | ||||
Boehler-Uddeholm AG | 24,534 | 1,859,493 | ||||
Voest-Alpine AG | 38,280 | 1,752,693 | ||||
VA Technologie AG1 | 35,873 | 1,458,402 | ||||
Lenzing AG | 7,250 | 1,432,202 | ||||
RHI AG1 | 60,581 | 1,302,204 | ||||
Generali Holding Vienna AG | 33,031 | 1,198,398 | ||||
Austrian Airlines AG1 | 34,046 | 511,010 | ||||
CA Immobilien Anlagen AG1 | 15,950 | 380,305 | ||||
BWT AG | 12,412 | 272,351 | ||||
TOTAL COMMON STOCKS | 44,012,866 | |||||
SHORT-TERM INVESTMENTS – 24.34% | ||||||
MONEY MARKET FUNDS – 11.66% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2,3 | 3,490,304 | 3,490,304 | ||||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares2,3 | 1,287,331 | 1,287,331 | ||||
BlackRock Temp Cash Money Market Fund2 | 59,680 | 59,680 | ||||
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares2 | 301,009 | 301,009 | ||||
5,138,324 | ||||||
Security | Principal | Value | ||||
FLOATING RATE NOTES – 6.75% | ||||||
Beta Finance Inc. | ||||||
1.05%, 05/20/042,4 | $ | 58,515 | $ | 58,513 | ||
1.05%, 09/15/042,4 | 117,030 | 117,024 | ||||
1.05%, 10/12/042,4 | 58,515 | 58,511 | ||||
1.14%, 08/23/042,4 | 58,515 | 58,539 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/042 | 87,773 | 87,765 | ||||
1.38%, 11/22/042 | 29,258 | 29,259 | ||||
1.40%, 10/29/042 | 117,030 | 117,028 | ||||
CC USA Inc. | ||||||
1.05%, 04/19/042,4 | 51,493 | 51,493 | ||||
1.06%, 05/24/042,4 | 117,030 | 117,027 | ||||
1.09%, 07/15/042,4 | 58,515 | 58,523 | ||||
1.51%, 02/15/052,4 | 76,070 | 76,186 | ||||
Dorada Finance Inc. | ||||||
1.05%, 05/20/042,4 | 117,030 | 117,026 | ||||
1.24%, 08/09/042 | 29,258 | 29,256 | ||||
1.48%, 01/18/052,4 | 87,773 | 87,769 | ||||
Five Finance Inc. | ||||||
1.06%, 04/15/042,4 | 58,515 | 58,515 | ||||
HBOS Treasury Services PLC | ||||||
1.16%, 01/24/052 | 117,030 | 117,030 | ||||
Holmes Financing PLC | ||||||
1.05%, 04/15/042 | 11,703 | 11,703 | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042,4 | 29,258 | 29,256 | ||||
1.05%, 09/27/042,4 | 126,393 | 126,382 | ||||
1.06%, 05/17/042 | 58,515 | 58,514 | ||||
1.07%, 04/13/042 | 58,515 | 58,515 | ||||
1.46%, 01/12/052,4 | 58,515 | 58,510 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 58,515 | 58,511 | ||||
1.06%, 07/20/042 | 46,812 | 46,808 | ||||
1.07%, 03/29/042 | 58,515 | 58,515 | ||||
1.07%, 05/04/042 | 58,515 | 58,515 | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042,4 | 87,773 | 87,773 | ||||
1.17%, 12/28/042,4 | 117,030 | 117,030 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052,4 | 111,179 | 111,179 |
26 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI AUSTRIA INDEX FUND
February 29, 2004
Security | Principal | Value | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | $ | 58,515 | $ | 58,515 | ||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 58,515 | 58,510 | ||||
1.06%, 07/20/042 | 58,515 | 58,511 | ||||
1.09%, 10/07/042 | 117,030 | 117,016 | ||||
1.24%, 08/06/042 | 29,258 | 29,256 | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052,4 | 51,493 | 51,489 | ||||
1.06%, 07/15/042,4 | 35,109 | 35,105 | ||||
1.07%, 02/25/052,4 | 65,537 | 65,524 | ||||
1.10%, 07/06/042,4 | 35,109 | 35,108 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042,4 | 58,515 | 58,509 | ||||
1.32%, 02/04/052,4 | 29,258 | 29,252 | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042,4 | 58,515 | 58,511 | ||||
1.06%, 04/20/042,4 | 58,515 | 58,515 | ||||
1.06%, 07/06/042,4 | 70,218 | 70,216 | ||||
1.06%, 11/15/042,4 | 70,218 | 70,218 | ||||
2,974,930 | ||||||
COMMERCIAL PAPER – 2.81% | ||||||
Amsterdam Funding Corp. | ||||||
1.03%, 03/03/042 | 87,773 | 87,768 | ||||
Corporate Asset Funding Corp. | ||||||
1.03%, 03/16/042 | 58,515 | 58,490 | ||||
1.05%, 05/21/042 | 60,856 | 60,713 | ||||
CRC Funding LLC | ||||||
1.03%, 03/26/042 | 46,812 | 46,779 | ||||
Delaware Funding Corp. | ||||||
1.02%, 03/16/042 | 118,324 | 118,274 | ||||
1.03%, 03/05/042 | 52,302 | 52,296 | ||||
Edison Asset Securitization | ||||||
1.03%, 03/03/042 | 87,773 | 87,768 | ||||
Eureka Securitization Inc. | ||||||
1.04%, 04/14/042 | 70,218 | 70,129 | ||||
Falcon Asset Securitization Corp. | ||||||
1.03%, 03/10/042 | 40,961 | 40,950 | ||||
Galaxy Funding Inc. | ||||||
1.05%, 05/17/042 | 58,515 | 58,384 | ||||
Gemini Securitization Corp. | ||||||
1.04%, 04/19/042 | 29,258 | 29,216 | ||||
GIRO Funding US Corp. | ||||||
1.05%, 05/19/042 | 29,258 | 29,190 | ||||
Jupiter Securitization Corp. | ||||||
1.03%, 03/24/042 | 58,515 | 58,477 | ||||
Liberty Street Funding Corp. | ||||||
1.03%, 03/10/042 | 23,406 | 23,400 | ||||
New Center Asset Trust | ||||||
1.04%, 03/01/042 | 29,258 | 29,258 | ||||
Park Avenue Receivables Corp. | ||||||
1.03%, 03/22/042 | 48,082 | 48,053 | ||||
Preferred Receivables Funding Corp. | ||||||
1.04%, 03/15/042 | 117,030 | 116,983 | ||||
1.04%, 05/20/042 | 29,258 | 29,190 | ||||
Receivables Capital Corp. | ||||||
1.03%, 03/15/042 | 127,563 | 127,512 | ||||
Windmill Funding Corp. | ||||||
1.03%, 03/05/042 | 66,824 | 66,817 | ||||
1,239,647 | ||||||
TIME DEPOSITS – 2.20% | ||||||
Abbey National Treasury Services PLC | ||||||
1.02%, 03/01/042 | 117,030 | 117,030 | ||||
1.33%, 02/10/052 | 58,515 | 58,507 | ||||
1.39%, 02/02/052 | 58,515 | 58,507 | ||||
1.40%, 10/25/042 | 117,030 | 117,019 | ||||
Bank of New York | ||||||
1.39%, 11/01/042 | 117,030 | 117,022 | ||||
Bank of Novia Scotia | ||||||
1.24%, 10/07/042 | 87,773 | 87,767 | ||||
1.42%, 10/29/042 | 87,773 | 87,777 | ||||
SunTrust Bank | ||||||
1.01%, 03/01/042 | 193,100 | 193,100 | ||||
Toronto-Dominion Bank | ||||||
1.34%, 02/10/052 | 46,812 | 46,805 | ||||
1.41%, 11/01/042 | 87,773 | 87,767 | ||||
971,301 | ||||||
U.S. GOVERNMENT AGENCY NOTES – 0.65% | ||||||
Federal Home Loan Mortgage Corp. | ||||||
1.15%, 05/12/042 | 87,773 | 87,571 | ||||
1.28%, 08/19/042 | 46,812 | 46,527 |
SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI AUSTRIA INDEX FUND
February 29, 2004
Security | Principal | Value | |||||
Federal National Mortgage Association | |||||||
1.28%, 08/20/042 | $ | 152,139 | $ | 151,209 | |||
285,307 | |||||||
REPURCHASE AGREEMENTS – 0.27% | |||||||
Merrill Lynch Government Securities Inc. | |||||||
1.06%, 03/01/042 | 117,030 | 117,030 | |||||
117,030 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 10,726,539 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 124.23% | 54,739,405 | ||||||
Other Assets, Less Liabilities – (24.23%) | (10,677,235 | ) | |||||
NET ASSETS – 100.00% | $ | 44,062,170 | |||||
1 | Non-income earning securities. |
2 | All or a portion of this security represents investments of securities lending collateral. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See notes to financial statements.
28 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI BELGIUM INDEX FUND
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.64% | |||||
Fortis | 204,505 | $ | 4,728,754 | ||
Dexia Group | 146,405 | 2,714,071 | |||
Electrabel SA | 5,320 | 1,761,592 | |||
Groupe Bruxelles Lambert SA | 16,170 | 966,388 | |||
UCB SA | 25,865 | 957,048 | |||
Solvay SA | 11,305 | 955,159 | |||
Delhaize Group | 17,465 | 949,820 | |||
Interbrew SA | 31,570 | 949,263 | |||
KBC Bankverzekeringsholding | 16,380 | 935,385 | |||
AGFA-Gevaert NV | 28,140 | 811,164 | |||
Colruyt NV | 5,845 | 665,963 | |||
Algemene Maatschappij voor Nijverheidskredit NV | 10,675 | 651,114 | |||
Cofinimmo | 3,955 | 582,811 | |||
Umicore | 7,840 | 525,538 | |||
Mobistar SA1 | 5,950 | 398,106 | |||
Bekaert NV | 6,195 | 357,077 | |||
Omega Pharma SA | 6,720 | 276,288 | |||
SA D’Ieteren NV | 1,190 | 247,661 | |||
Barco NV | 2,520 | 229,196 | |||
Compagnie Maritime Belge SA | 1,400 | 146,379 | |||
TOTAL COMMON STOCKS (Cost: $18,639,852) | 19,808,777 | ||||
SHORT-TERM INVESTMENTS – 15.83% | |||||
MONEY MARKET FUNDS – 7.68% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2,3 | 1,049,813 | 1,049,813 | |||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares2,3 | 373,292 | 373,292 | |||
BlackRock Temp Cash Money Market Fund2 | 17,306 | 17,306 | |||
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares2 | 87,285 | 87,285 | |||
1,527,696 |
Security | Principal | Value | ||||
FLOATING RATE NOTES – 4.34% | ||||||
Beta Finance Inc. | ||||||
1.05%, 05/20/042,4 | $ | 16,968 | $ | 16,967 | ||
1.05%, 09/15/042,4 | 33,936 | 33,934 | ||||
1.05%, 10/12/042,4 | 16,968 | 16,967 | ||||
1.14%, 08/23/042,4 | 16,968 | 16,975 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/042 | 25,452 | 25,449 | ||||
1.38%, 11/22/042 | 8,484 | 8,484 | ||||
1.40%, 10/29/042 | 33,936 | 33,935 | ||||
CC USA Inc. | ||||||
1.05%, 04/19/042,4 | 14,932 | 14,932 | ||||
1.06%, 05/24/042,4 | 33,936 | 33,935 | ||||
1.09%, 07/15/042,4 | 16,968 | 16,970 | ||||
1.51%, 02/15/052,4 | 22,058 | 22,092 | ||||
Dorada Finance Inc. | ||||||
1.05%, 05/20/042,4 | 33,936 | 33,935 | ||||
1.24%, 08/09/042 | 8,484 | 8,483 | ||||
1.48%, 01/18/052,4 | 25,452 | 25,451 | ||||
Five Finance Inc. | ||||||
1.06%, 04/15/042,4 | 16,968 | 16,968 | ||||
HBOS Treasury Services PLC | ||||||
1.16%, 01/24/052 | 33,936 | 33,936 | ||||
Holmes Financing PLC | ||||||
1.05%, 04/15/042 | 3,394 | 3,394 | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042,4 | 8,484 | 8,483 | ||||
1.05%, 09/27/042,4 | 36,651 | 36,647 | ||||
1.06%, 05/17/042 | 16,968 | 16,968 | ||||
1.07%, 04/13/042 | 16,968 | 16,968 | ||||
1.46%, 01/12/052,4 | 16,968 | 16,966 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 16,968 | 16,967 | ||||
1.06%, 07/20/042 | 13,574 | 13,573 | ||||
1.07%, 03/29/042 | 16,968 | 16,968 | ||||
1.07%, 05/04/042 | 16,968 | 16,968 | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042,4 | 25,452 | 25,452 | ||||
1.17%, 12/28/042,4 | 33,936 | 33,936 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052,4 | 32,239 | 32,239 |
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI BELGIUM INDEX FUND
February 29, 2004
Security | Principal | Value | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | $ | 16,968 | $ | 16,968 | ||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 16,968 | 16,966 | ||||
1.06%, 07/20/042 | 16,968 | 16,967 | ||||
1.09%, 10/07/042 | 33,936 | 33,932 | ||||
1.24%, 08/06/042 | 8,484 | 8,484 | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052,4 | 14,932 | 14,930 | ||||
1.06%, 07/15/042,4 | 10,181 | 10,179 | ||||
1.07%, 02/25/052,4 | 19,004 | 19,000 | ||||
1.10%, 07/06/042,4 | 10,181 | 10,180 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042,4 | 16,968 | 16,966 | ||||
1.32%, 02/04/052,4 | 8,484 | 8,482 | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042,4 | 16,968 | 16,967 | ||||
1.06%, 04/20/042,4 | 16,968 | 16,968 | ||||
1.06%, 07/06/042,4 | 20,361 | 20,361 | ||||
1.06%, 11/15/042,4 | 20,361 | 20,361 | ||||
862,653 | ||||||
COMMERCIAL PAPER – 1.81% | ||||||
Amsterdam Funding Corp. | ||||||
1.03%, 03/03/042 | 25,452 | 25,450 | ||||
Corporate Asset Funding Corp. | ||||||
1.03%, 03/16/042 | 16,968 | 16,961 | ||||
1.05%, 05/21/042 | 17,647 | 17,605 | ||||
CRC Funding LLC | ||||||
1.03%, 03/26/042 | 13,574 | 13,565 | ||||
Delaware Funding Corp. | ||||||
1.02%, 03/16/042 | 34,311 | 34,296 | ||||
1.03%, 03/05/042 | 15,166 | 15,164 | ||||
Edison Asset Securitization | ||||||
1.03%, 03/03/042 | 25,452 | 25,450 | ||||
Eureka Securitization Inc. | ||||||
1.04%, 04/14/042 | 20,361 | 20,336 | ||||
Falcon Asset Securitization Corp. | ||||||
1.03%, 03/10/042 | 11,877 | 11,874 | ||||
Galaxy Funding Inc. | ||||||
1.05%, 05/17/042 | 16,968 | 16,930 | ||||
Gemini Securitization Corp. | ||||||
1.04%, 04/19/042 | 8,484 | 8,472 | ||||
GIRO Funding US Corp. | ||||||
1.05%, 05/19/042 | 8,484 | 8,464 | ||||
Jupiter Securitization Corp. | ||||||
1.03%, 03/24/042 | 16,968 | 16,957 | ||||
Liberty Street Funding Corp. | ||||||
1.03%, 03/10/042 | 6,787 | 6,785 | ||||
New Center Asset Trust | ||||||
1.04%, 03/01/042 | 8,484 | 8,484 | ||||
Park Avenue Receivables Corp. | ||||||
1.03%, 03/22/042 | 13,942 | 13,934 | ||||
Preferred Receivables Funding Corp. | ||||||
1.04%, 03/15/042 | 33,936 | 33,922 | ||||
1.04%, 05/20/042 | 8,484 | 8,464 | ||||
Receivables Capital Corp. | ||||||
1.03%, 03/15/042 | 36,990 | 36,975 | ||||
Windmill Funding Corp. | ||||||
1.03%, 03/05/042 | 19,377 | 19,375 | ||||
359,463 | ||||||
TIME DEPOSITS – 1.42% | ||||||
Abbey National Treasury Services PLC | ||||||
1.02%, 03/01/042 | 33,936 | 33,936 | ||||
1.33%, 02/10/052 | 16,968 | 16,965 | ||||
1.39%, 02/02/052 | 16,968 | 16,965 | ||||
1.40%, 10/25/042 | 33,936 | 33,932 | ||||
Bank of New York | ||||||
1.39%, 11/01/042 | 33,936 | 33,933 | ||||
Bank of Novia Scotia | ||||||
1.24%, 10/07/042 | 25,452 | 25,450 | ||||
1.42%, 10/29/042 | 25,452 | 25,453 | ||||
SunTrust Bank | ||||||
1.01%, 03/01/042 | 55,994 | 55,994 | ||||
Toronto-Dominion Bank | ||||||
1.34%, 02/10/052 | 13,574 | 13,572 | ||||
1.41%, 11/01/042 | 25,452 | 25,450 | ||||
281,650 | ||||||
U.S. GOVERNMENT AGENCY NOTES – 0.41% | ||||||
Federal Home Loan Mortgage Corp. | ||||||
1.15%, 05/12/042 | 25,452 | 25,393 | ||||
1.28%, 08/19/042 | 13,574 | 13,492 |
30 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI BELGIUM INDEX FUND
February 29, 2004
Security | Principal | Value | |||||
Federal National Mortgage Association | |||||||
1.28%, 08/20/042 | $ | 44,116 | $ | 43,847 | |||
82,732 | |||||||
REPURCHASE AGREEMENTS – 0.17% | |||||||
Merrill Lynch Government Securities Inc. | |||||||
1.06%, 03/01/042 | 33,936 | 33,936 | |||||
33,936 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 3,148,130 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 115.47% | 22,956,907 | ||||||
Other Assets, Less Liabilities – (15.47%) | (3,075,811 | ) | |||||
NET ASSETS – 100.00% | $ | 19,881,096 | |||||
1 | Non-income earning securities. |
2 | All or a portion of this security represents investments of securities lending collateral. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments (Unaudited)
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS – 98.64% | |||||
AUSTRIA – 0.76% | |||||
Bank Austria Creditanstalt1 | 4,656 | $ | 248,758 | ||
Boehler-Uddeholm AG | 1,067 | 80,871 | |||
Erste Bank der Oesterreichischen Sparkassen AG | 3,492 | 487,682 | |||
Flughafen Wien AG | 291 | 16,090 | |||
Immofinanz Immobillien Anlage AG1 | 19,206 | 151,533 | |||
Mayr-Melnhof Karton AG | 873 | 106,355 | |||
Oesterreichische Elektrizitaetswirtschafts AG Class A | 776 | 115,702 | |||
OMV AG | 1,746 | 281,480 | |||
RHI AG1 | 4,171 | 89,657 | |||
Telekom Austria AG1 | 27,645 | 400,165 | |||
VA Technologie AG1 | 1,843 | 74,926 | |||
Voest-Alpine AG | 2,813 | 128,796 | |||
Wienerberger Baustoffindustrie AG | 4,559 | 143,880 | |||
2,325,895 | |||||
BELGIUM – 3.27% | |||||
AGFA-Gevaert NV | 10,476 | 301,981 | |||
Barco NV | 1,261 | 114,689 | |||
Bekaert NV | 2,328 | 134,185 | |||
Cofinimmo | 388 | 57,176 | |||
Colruyt NV | 2,231 | 254,194 | |||
Compagnie Maritime Belge SA | 679 | 70,994 | |||
Delhaize Group | 8,924 | 485,325 | |||
Dexia Group | 75,563 | 1,400,794 | |||
Electrabel SA | 3,492 | 1,156,293 | |||
Fortis | 122,123 | 2,823,841 | |||
Groupe Bruxelles Lambert SA | 8,730 | 521,742 | |||
Interbrew SA | 18,333 | 551,246 | |||
KBC Bankverzekeringsholding | 10,864 | 620,392 | |||
Mobistar SA1 | 2,425 | 162,253 | |||
Omega Pharma SA | 2,522 | 103,690 | |||
SA D’Ieteren NV | 388 | 80,750 | |||
Solvay SA | 7,566 | 639,251 | |||
UCB SA | 9,797 | 362,505 | |||
Umicore | 2,134 | 143,048 | |||
9,984,349 | |||||
FINLAND – 5.58% | |||||
Amer Group Ltd. | 2,522 | $ | 123,463 | ||
Elisa OYJ Class A1 | 15,617 | 262,926 | |||
Fortum OYJ | 42,195 | 446,680 | |||
KCI Konecranes OYJ | 1,358 | 48,089 | |||
Kesko OYJ | 7,081 | 142,090 | |||
Kone OYJ Class B | 3,880 | 241,045 | |||
Metso OYJ | 11,543 | 154,609 | |||
Nokia OYJ | 547,080 | 11,983,938 | |||
Nokian Renkaat OYJ | 1,164 | 98,375 | |||
Orion-Yhtyma OYJ Class B | 3,395 | 87,445 | |||
Outokumpu OYJ | 11,640 | 158,367 | |||
Pohjola Group PLC Class D | 2,231 | 62,176 | |||
Rautaruukki OYJ1 | 10,875 | 91,342 | |||
Sampo OYJ Class A | 32,204 | 361,322 | |||
Stora Enso OYJ Class R | 73,623 | 977,885 | |||
TietoEnator OYJ | 9,991 | 322,759 | |||
UPM-Kymmene OYJ | 61,401 | 1,209,208 | |||
Uponor OYJ | 5,141 | 171,190 | |||
Wartsila OYJ Class B | 3,492 | 81,136 | |||
17,024,045 | |||||
FRANCE – 28.08% | |||||
Accor SA | 23,183 | 1,017,100 | |||
Air France | 8,342 | 171,229 | |||
Alcatel SA Class A1 | 140,747 | 2,276,913 | |||
ALSTOM1 | 112,948 | 301,726 | |||
Arcelor | 41,613 | 760,568 | |||
Atos Origin SA1 | 4,074 | 284,481 | |||
Autoroutes du Sud de la France | 8,924 | 318,560 | |||
Aventis SA | 78,570 | 6,013,591 | |||
AXA | 163,251 | 3,748,472 | |||
BNP Paribas SA | 94,478 | 5,969,226 | |||
Bouygues SA | 22,407 | 825,198 | |||
Business Objects SA1 | 7,954 | 240,944 | |||
Cap Gemini SA1 | 12,850 | 532,630 | |||
Carrefour SA | 66,542 | 3,600,646 | |||
CNP Assurances | 3,492 | 201,494 | |||
Compagnie de Saint-Gobain | 36,860 | 1,934,989 | |||
Compagnie Generale des Etablissements Michelin Class B | 16,102 | 776,261 |
32 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI EMU INDEX FUND
February 29, 2004
Security | Shares | Value | |||
Credit Agricole SA | 73,332 | $ | 1,886,081 | ||
Dassault Systemes SA | 6,208 | 270,742 | |||
Essilor International SA | 11,349 | 650,767 | |||
Etablissements Economiques du Casino Guichard-Perrachon SA | 4,365 | 432,796 | |||
European Aeronautic Defence and Space Co. | 34,435 | 796,238 | |||
France Telecom1 | 125,130 | 3,446,859 | |||
Gecina SA | 3,312 | 249,996 | |||
Groupe Danone | 14,162 | 2,468,759 | |||
Groupe Wanadoo SA1 | 49,955 | 544,346 | |||
Hermes International | 1,067 | 211,192 | |||
Imerys SA | 1,164 | 254,977 | |||
Klepierre | 2,522 | 171,407 | |||
Lafarge SA | 19,598 | 1,687,491 | |||
Lagardere S.C.A | 14,453 | 875,445 | |||
L’Air Liquide SA | 11,555 | 2,047,321 | |||
L’Oreal SA | 38,897 | 3,196,998 | |||
LVMH Moet Hennessy Louis Vuitton SA | 27,839 | 2,127,282 | |||
Pernod Ricard SA | 6,160 | 755,813 | |||
Pinault-Printemps-Redoute SA | 7,760 | 837,872 | |||
PSA Peugeot Citroen SA | 19,497 | 970,212 | |||
Publicis Groupe | 11,834 | 409,058 | |||
Renault SA | 19,788 | 1,380,537 | |||
Sagem SA | 1,785 | 199,940 | |||
Sanofi-Synthelabo SA | 42,195 | 2,883,501 | |||
Schneider Electric SA | 24,153 | 1,605,541 | |||
Societe BIC SA | 3,395 | 146,754 | |||
Societe Generale Class A | 38,218 | 3,392,865 | |||
Societe Television Francaise 1 | 13,386 | 460,709 | |||
Sodexho Alliance SA | 11,737 | 384,414 | |||
Suez SA | 93,023 | 2,065,434 | |||
Technip-Coflexip SA | 2,242 | 311,997 | |||
Thales SA | 9,409 | 357,969 | |||
Thomson | 27,257 | 517,146 | |||
Total SA | 71,683 | 13,092,721 | |||
Unibail Holding | 4,947 | 496,342 | |||
Valeo SA | 9,118 | 419,744 | |||
Veolia Environnement | 28,324 | 846,381 | |||
Vinci SA | 7,760 | 704,816 | |||
Vivendi Universal SA1 | 105,730 | 3,028,068 | |||
Zodiac SA | 5,820 | 181,001 | |||
85,741,560 | |||||
GERMANY – 19.55% | |||||
adidas-Salomon AG | 5,238 | 588,993 | |||
Allianz AG | 33,623 | 4,188,520 | |||
ALTANA AG | 8,342 | 510,888 | |||
BASF AG | 62,856 | 3,342,619 | |||
Bayer AG | 77,018 | 2,181,843 | |||
Bayerische Hypo-und Vereinsbank AG1 | 43,262 | 949,279 | |||
Beiersdorf AG | 2,014 | 221,212 | |||
Celesio AG | 3,007 | 157,668 | |||
Commerzbank AG | 58,103 | 1,128,376 | |||
Continental AG | 14,550 | 596,044 | |||
DaimlerChrysler AG | 99,813 | 4,483,238 | |||
Deutsche Bank AG | 61,110 | 5,239,113 | |||
Deutsche Boerse AG | 11,931 | 686,215 | |||
Deutsche Lufthansa AG | 20,661 | 369,667 | |||
Deutsche Post AG | 47,530 | 1,129,151 | |||
Deutsche Telekom AG1 | 291,485 | 5,696,936 | |||
Douglas Holding AG | 3,589 | 111,171 | |||
E.ON AG | 72,265 | 4,884,536 | |||
EPCOS AG1 | 6,111 | 145,708 | |||
Fresenius Medical Care AG | 3,977 | 266,540 | |||
HeidelbergerCement AG1 | 5,860 | 262,118 | |||
Hypo Real Estate Holding AG1 | 15,380 | 439,522 | |||
Infineon Technologies AG1 | 70,519 | 999,743 | |||
KarstadtQuelle AG | 4,850 | 121,667 | |||
Linde AG | 9,894 | 519,883 | |||
MAN AG | 13,483 | 471,922 | |||
Merck KGaA | 5,044 | 222,485 | |||
METRO AG | 17,393 | 778,205 | |||
MLP AG1 | 7,372 | 169,455 | |||
Muenchener Rueckversicherungs-Gesellschaft AG | 17,404 | 2,029,457 | |||
Puma AG | 1,746 | 357,778 | |||
RWE AG | 48,015 | 2,120,268 | |||
SAP AG | 23,765 | 3,750,058 | |||
Schering AG | 18,721 | 926,712 | |||
Siemens AG | 93,217 | 7,186,763 |
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI EMU INDEX FUND
February 29, 2004
Security | Shares | Value | |||
Suedzucker AG | 5,820 | $ | 112,231 | ||
ThyssenKrupp AG | 38,897 | 753,457 | |||
TUI AG | 16,005 | 368,293 | |||
Volkswagen AG | 26,287 | 1,234,608 | |||
59,702,342 | |||||
GREECE – 0.98% | |||||
Hellenic Telecommunications Organization SA ADR | 170,817 | 1,298,209 | |||
National Bank of Greece SA ADR | 295,953 | 1,695,811 | |||
2,994,020 | |||||
IRELAND – 2.15% | |||||
Allied Irish Banks PLC | 100,395 | 1,524,332 | |||
Bank of Ireland | 115,818 | 1,515,308 | |||
CRH PLC | 64,117 | 1,338,378 | |||
DCC PLC | 9,700 | 144,627 | |||
Elan Corp. PLC1 | 44,717 | 630,616 | |||
Fyffes PLC | 37,927 | 80,111 | |||
Grafton Group PLC1 | 18,624 | 138,842 | |||
Greencore Group PLC | 16,296 | 67,628 | |||
Independent News & Media PLC | 58,200 | 146,073 | |||
Irish Life & Permanent PLC | 30,943 | 503,652 | |||
Kerry Group PLC Class A | 16,587 | 313,262 | |||
Ryanair Holdings PLC1 | 21,760 | 128,425 | |||
Waterford Wedgwood PLC | 46,315 | 14,962 | |||
Waterford Wedgwood PLC Restricted | 9,511 | 3,073 | |||
6,549,289 | |||||
ITALY – 10.82% | |||||
Alleanza Assicurazioni SpA | 56,066 | 658,306 | |||
Arnoldo Mondadori Editore SpA | 16,781 | 167,220 | |||
Assicurazioni Generali SpA | 111,744 | 3,019,812 | |||
Autogrill SpA1 | 14,550 | 204,105 | |||
Autostrade SpA1 | 22,989 | 419,603 | |||
Banca Antonveneta Spa Foreign | 25,026 | 493,164 | |||
Banca Fideuram SpA | 33,950 | 212,180 | |||
Banca Intesa SpA | 422,931 | 1,571,220 | |||
Banca Monte dei Paschi di Siena SpA | 123,578 | 403,057 | |||
Banca Nazionale del Lavoro SpA1 | 194,000 | 506,195 | |||
Banca Popolare di Milano Scrl | 49,179 | 317,135 | |||
Banca Popolare di Verona e Novaro Scrl | 43,941 | 758,894 | |||
Banche Popolari Unite Scrl1 | 35,793 | 635,516 | |||
Benetton Group SpA | 6,596 | 74,170 | |||
Bulgari SpA | 16,684 | 147,182 | |||
Capitalia SpA1 | 149,107 | 440,005 | |||
Enel SpA | 268,512 | 2,075,155 | |||
ENI SpA | 306,035 | 5,996,519 | |||
Fiat SpA1 | 51,798 | 399,670 | |||
Fineco SpA1 | 215,825 | 139,175 | |||
Finmeccanica SpA | 706,257 | 601,982 | |||
Gruppo Editoriale L’Espresso SpA | 20,079 | 124,242 | |||
Italcementi SpA | 12,513 | 152,676 | |||
Luxottica Group SpA | 16,199 | 275,743 | |||
Mediaset SpA | 69,646 | 800,450 | |||
Mediobanca SpA | 56,454 | 683,905 | |||
Mediolanum SpA | 31,719 | 230,159 | |||
Pirelli SpA | 212,159 | 217,476 | |||
Riunione Adriatica di Sicurta SpA | 34,629 | 629,048 | |||
Sanpaolo IMI SpA | 119,892 | 1,541,796 | |||
Seat Pagine Gialle SpA1 | 386,880 | 388,404 | |||
Snam Rete Gas SpA | 106,215 | 490,936 | |||
Sorin SpA1 | 16,859 | 48,912 | |||
Telecom Italia Media SpA1 | 169,482 | 81,706 | |||
Telecom Italia Mobile SpA | 432,620 | 2,445,763 | |||
Telecom Italia SpA1 | 944,229 | 2,968,207 | |||
Tiscali SpA1 | 23,183 | 160,443 | |||
UniCredito Italiano SpA | 487,716 | 2,569,385 | |||
33,049,516 | |||||
NETHERLANDS – 14.71% | |||||
ABN AMRO Holding NV | 178,577 | 4,124,785 | |||
AEGON NV | 156,522 | 2,316,240 | |||
Akzo Nobel NV | 31,428 | 1,210,138 | |||
ASML Holding NV1 | 53,253 | 982,578 | |||
Corio NV | 3,395 | 144,139 | |||
DSM NV | 8,633 | 408,787 | |||
Euronext NV | 10,185 | 277,521 | |||
Hagemeyer NV | 46,657 | 110,725 | |||
Heineken NV | 22,698 | 964,517 | |||
IHC Caland NV | 3,492 | 169,648 | |||
ING Groep NV | 202,827 | 4,959,607 | |||
Koninklijke Ahold NV1 | 123,899 | 1,029,889 | |||
Koninklijke KPN NV1 | 244,537 | 1,929,366 |
34 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI EMU INDEX FUND
February 29, 2004
Security | Shares | Value | |||
Koninklijke Numico NV CVA1 | 17,654 | $ | 581,719 | ||
Koninklijke Philips Electronics NV | 152,096 | 4,620,543 | |||
Koninklijke Vendex KBB NV | 9,797 | 167,984 | |||
Oce NV | 8,924 | 171,865 | |||
QIAGEN NV1 | 15,326 | 208,516 | |||
Reed Elsevier NV | 70,519 | 967,323 | |||
Rodamco Europe NV | 4,850 | 301,246 | |||
Royal Dutch Petroleum Co. | 242,015 | 11,937,934 | |||
TPG NV | 40,255 | 878,796 | |||
Unilever NV CVA | 65,863 | 4,775,059 | |||
Vedior NV | 11,446 | 179,762 | |||
VNU NV | 25,802 | 840,587 | |||
Wereldhave NV | 1,358 | 112,797 | |||
Wolters Kluwer NV CVA | 31,622 | 564,602 | |||
44,936,673 | |||||
PORTUGAL – 1.20% | |||||
Banco BPI SA Registered | 52,283 | 209,176 | |||
Banco Comercial Portugues SA Class R | 251,441 | 634,203 | |||
Banco Espirito Santo SA | 13,871 | 245,078 | |||
Brisa-Auto Estradas dePortugal SA | 35,793 | 259,721 | |||
CIMPOR-Cimentos de Portugal SGPS SA | 25,123 | 132,665 | |||
Electricidade de Portugal SA | 225,040 | 637,516 | |||
Jeronimo Martins SGPS SA1 | 5,723 | 68,975 | |||
Portugal Telecom SGPS SA | 103,499 | 1,167,665 | |||
PT Multimedia-Servicos de Telecomunicacoes e Multimedia SGPS SA1 | 5,917 | 135,863 | |||
Sonae SGPS SA1 | 147,343 | 181,243 | |||
3,672,105 | |||||
SPAIN – 10.96% | |||||
Abertis Infraestructuras SA | 26,319 | 420,866 | |||
Acciona SA | 3,201 | 206,817 | |||
Acerinox SA | 6,111 | 280,179 | |||
Actividades de Construccion y Servicios SA | 11,370 | 575,261 | |||
Altadis SA | 32,398 | 1,042,592 | |||
Amadeus Global Travel Distribution SA Class A | 35,599 | 211,870 | |||
Antena 3 Television SA1 | 1,902 | 84,698 | |||
Banco Bilbao Vizcaya Argentaria SA | 375,972 | 5,185,312 | |||
Banco Popular Espanol SA | 18,624 | 1,130,405 | |||
Banco Santander Central Hispano SA | 504,497 | 5,842,126 | |||
Corporacion Mapfre SA | 10,185 | 149,580 | |||
Endesa SA | 103,790 | 2,031,105 | |||
Fomento de Construcciones y Contratas SA | 6,111 | 223,839 | |||
Gas Natural SDG SA | 23,086 | 575,121 | |||
Grupo Ferrovial SA | 7,372 | 268,929 | |||
Iberdrola SA | 88,755 | 1,830,616 | |||
Iberia Lineas Aereas de Espana SA | 49,276 | 171,431 | |||
Indra Sistemas SA | 13,192 | 180,138 | |||
Industria de Diseno Textil SA | 26,488 | 579,240 | |||
NH Hoteles SA1 | 10,670 | 124,885 | |||
Promotora de Infomaciones SA | 9,603 | 175,993 | |||
Repsol YPF SA | 108,931 | 2,233,222 | |||
Sacyr Vallehermoso SA | 13,580 | 232,343 | |||
Sociedad General de Aguas de Barcelona SA | 7,566 | 124,372 | |||
Telefonica Publicidad e Informacion SA | 21,340 | 166,514 | |||
Telefonica SA | 542,643 | 8,812,237 | |||
Union Fenosa SA | 23,668 | 485,812 | |||
Zeltia SA | 19,885 | 132,924 | |||
33,478,427 | |||||
SWITZERLAND – 0.58% | |||||
STMicroelectronics NV | 68,676 | 1,779,129 | |||
1,779,129 | |||||
TOTAL COMMON STOCKS | 301,237,350 | ||||
PREFERRED STOCKS – 1.27% | |||||
GERMANY – 0.71% | |||||
Fresenius Medical Care AG | 2,813 | 127,538 | |||
Henkel KGaA | 7,178 | 606,380 | |||
Porsche AG | 970 | 564,479 | |||
ProSiebenSat.1 Media AG | 9,700 | 204,888 |
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI EMU INDEX FUND
February 29, 2004
Security | Shares or Principal | Value | ||||
RWE AG | 3,298 | $ | 125,638 | |||
Volkswagen AG | 12,513 | 399,724 | ||||
Wella AG | 1,649 | 151,126 | ||||
2,179,773 | ||||||
ITALY – 0.56% | ||||||
Banca Intesa SpA RNC | 104,663 | 297,150 | ||||
Telecom Italia SpA RNC1 | 635,582 | 1,409,633 | ||||
1,706,783 | ||||||
TOTAL PREFERRED STOCKS | 3,886,556 | |||||
SHORT-TERM INVESTMENTS – 24.46% | ||||||
MONEY MARKET FUNDS – 11.72% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2,3 | 24,335,897 | 24,335,897 | ||||
\Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares2,3 | 8,957,822 | 8,957,822 | ||||
BlackRock Temp Cash Money Market Fund2 | 415,279 | 415,279 | ||||
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares2 | 2,094,550 | 2,094,550 | ||||
35,803,548 | ||||||
FLOATING RATE NOTES – 6.78% | ||||||
Beta Finance Inc. | ||||||
1.05%, 05/20/042,4 | $ | 407,174 | 407,160 | |||
1.05%, 09/15/042,4 | 814,347 | 814,303 | ||||
1.05%, 10/12/042,4 | 407,174 | 407,149 | ||||
1.14%, 08/23/042,4 | 407,174 | 407,342 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/042 | 610,761 | 610,705 | ||||
1.38%, 11/22/042 | 203,587 | 203,598 | ||||
1.40%, 10/29/042 | 814,347 | 814,334 | ||||
CC USA Inc. | ||||||
1.05%, 04/19/042,4 | 358,313 | 358,311 | ||||
1.06%, 05/24/042,4 | 814,347 | 814,329 | ||||
1.09%, 07/15/042,4 | 407,174 | 407,228 | ||||
1.51%, 02/15/052,4 | 529,326 | 530,136 | ||||
Security | Principal | Value | ||||
Dorada Finance Inc. | ||||||
1.05%, 05/20/042,4 | $ | 814,347 | $ | 814,321 | ||
1.24%, 08/09/042 | 203,587 | 203,573 | ||||
1.48%, 01/18/052,4 | 610,761 | 610,734 | ||||
Five Finance Inc. | ||||||
1.06%, 04/15/042,4 | 407,174 | 407,174 | ||||
HBOS Treasury Services PLC | ||||||
1.16%, 01/24/052 | 814,347 | 814,347 | ||||
Holmes Financing PLC | ||||||
1.05%, 04/15/042 | 81,435 | 81,435 | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042,4 | 203,587 | 203,573 | ||||
1.05%, 09/27/042,4 | 879,495 | 879,420 | ||||
1.06%, 05/17/042 | 407,174 | 407,169 | ||||
1.07%, 04/13/042 | 407,174 | 407,171 | ||||
1.46%, 01/12/052,4 | 407,174 | 407,138 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 407,174 | 407,147 | ||||
1.06%, 07/20/042 | 325,739 | 325,714 | ||||
1.07%, 03/29/042 | 407,174 | 407,174 | ||||
1.07%, 05/04/042 | 407,174 | 407,170 | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042,4 | 610,761 | 610,761 | ||||
1.17%, 12/28/042,4 | 814,347 | 814,347 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052,4 | 773,630 | 773,630 | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | 407,174 | 407,174 | ||||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 407,174 | 407,140 | ||||
1.06%, 07/20/042 | 407,174 | 407,142 | ||||
1.09%, 10/07/042 | 814,347 | 814,250 | ||||
1.24%, 08/06/042 | 203,587 | 203,578 | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052,4 | 358,313 | 358,281 | ||||
1.06%, 07/15/042,4 | 244,304 | 244,274 | ||||
1.07%, 02/25/052,4 | 456,035 | 455,945 | ||||
1.10%, 07/06/042,4 | 244,304 | 244,296 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042,4 | 407,174 | 407,130 | ||||
1.32%, 02/04/052,4 | 203,587 | 203,549 |
36 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI EMU INDEX FUND
February 29, 2004
Security | Principal | Value | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042,4 | $ | 407,174 | $ | 407,143 | ||
1.06%, 04/20/042,4 | 407,174 | 407,174 | ||||
1.06%, 07/06/042,4 | 488,608 | 488,592 | ||||
1.06%, 11/15/042,4 | 488,608 | 488,608 | ||||
20,700,869 | ||||||
COMMERCIAL PAPER – 2.83% | ||||||
Amsterdam Funding Corp. | ||||||
1.03%, 03/03/042 | 610,761 | 610,726 | ||||
Corporate Asset Funding Corp. | ||||||
1.03%, 03/16/042 | 407,174 | 406,999 | ||||
1.05%, 05/21/042 | 423,461 | 422,465 | ||||
CRC Funding LLC | ||||||
1.03%, 03/26/042 | 325,739 | 325,506 | ||||
Delaware Funding Corp. | ||||||
1.02%, 03/16/042 | 823,354 | 823,004 | ||||
1.03%, 03/05/042 | 363,940 | 363,898 | ||||
Edison Asset Securitization | ||||||
1.03%, 03/03/042 | 610,761 | 610,726 | ||||
Eureka Securitization Inc. | ||||||
1.04%, 04/14/042 | 488,608 | 487,987 | ||||
Falcon Asset Securitization Corp. | ||||||
1.03%, 03/10/042 | 285,022 | 284,948 | ||||
Galaxy Funding Inc. | ||||||
1.05%, 05/17/042 | 407,174 | 406,264 | ||||
Gemini Securitization Corp. | ||||||
1.04%, 04/19/042 | 203,587 | 203,299 | ||||
GIRO Funding US Corp. | ||||||
1.05%, 05/19/042 | 203,587 | 203,118 | ||||
Jupiter Securitization Corp. | ||||||
1.03%, 03/24/042 | 407,174 | 406,906 | ||||
Liberty Street Funding Corp. | ||||||
1.03%, 03/10/042 | 162,869 | 162,828 | ||||
New Center Asset Trust | ||||||
1.04%, 03/01/042 | 203,587 | 203,587 | ||||
Park Avenue Receivables Corp. | ||||||
1.03%, 03/22/042 | 334,575 | 334,374 | ||||
Preferred Receivables Funding Corp. | ||||||
1.04%, 03/15/042 | 814,347 | 814,018 | ||||
1.04%, 05/20/042 | 203,587 | 203,116 | ||||
Receivables Capital Corp. | ||||||
1.03%, 03/15/042 | 887,639 | 887,283 | ||||
Windmill Funding Corp. | ||||||
1.03%, 03/05/042 | 464,992 | 464,939 | ||||
8,625,991 | ||||||
TIME DEPOSITS – 2.21% | ||||||
Abbey National Treasury Services PLC | ||||||
1.02%, 03/01/042 | 814,347 | 814,347 | ||||
1.33%, 02/10/052 | 407,174 | 407,116 | ||||
1.39%, 02/02/052 | 407,174 | 407,117 | ||||
1.40%, 10/25/042 | 814,347 | 814,268 | ||||
Bank of New York | ||||||
1.39%, 11/01/042 | 814,347 | 814,293 | ||||
Bank of Novia Scotia | ||||||
1.24%, 10/07/042 | 610,761 | 610,724 | ||||
1.42%, 10/29/042 | 610,761 | 610,791 | ||||
SunTrust Bank | ||||||
1.01%, 03/01/042 | 1,343,673 | 1,343,673 | ||||
Toronto-Dominion Bank | ||||||
1.34%, 02/10/052 | 325,739 | 325,693 | ||||
1.41%, 11/01/042 | 610,761 | 610,720 | ||||
6,758,742 | ||||||
U.S. GOVERNMENT AGENCY NOTES – 0.65% | ||||||
Federal Home Loan Mortgage Corp. | ||||||
1.15%, 05/12/042 | 610,760 | 609,356 | ||||
1.28%, 08/19/042 | 325,739 | 323,758 | ||||
Federal National Mortgage Association | ||||||
1.28%, 08/20/042 | 1,058,651 | 1,052,177 | ||||
1,985,291 | ||||||
REPURCHASE AGREEMENTS – 0.27% | ||||||
Merrill Lynch Government Securities Inc. | ||||||
1.06%, 03/01/042 | 814,347 | 814,347 | ||||
814,347 | ||||||
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI EMU INDEX FUND
February 29, 2004
Security | Value | |||
TOTAL SHORT-TERM INVESTMENTS | $ | 74,688,788 | ||
TOTAL INVESTMENTS IN SECURITIES-124.37% | 379,812,694 | |||
Other Assets, Less Liabilities-(24.37%) | (74,415,766 | ) | ||
NET ASSETS-100.00% | $ | 305,396,928 | ||
1 | Non-income earning securities. |
2 | All or a portion of this security represents investments of securities lending collateral. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See notes to financial statements.
38 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI FRANCE INDEX FUND
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.83% | |||||
Total SA | 47,922 | $ | 8,752,834 | ||
Aventis SA | 52,822 | 4,042,890 | |||
BNP Paribas SA | 63,182 | 3,991,904 | |||
AXA | 110,012 | 2,526,030 | |||
Carrefour SA | 44,800 | 2,424,167 | |||
France Telecom1 | 83,860 | 2,310,026 | |||
Societe Generale Class A | 25,676 | 2,279,429 | |||
L’Oreal SA | 26,418 | 2,171,332 | |||
Vivendi Universal SA1 | 71,400 | 2,044,869 | |||
Sanofi-Synthelabo SA | 28,728 | 1,963,200 | |||
Groupe Danone | 9,408 | 1,640,028 | |||
Alcatel SA Class A1 | 95,606 | 1,546,652 | |||
LVMH Moet Hennessy | |||||
Louis Vuitton SA | 19,208 | 1,467,755 | |||
Suez SA | 62,958 | 1,397,886 | |||
L’Air Liquide SA | 7,836 | 1,388,386 | |||
Credit Agricole SA | 51,226 | 1,317,520 | |||
Compagnie de Saint-Gobain | 24,164 | 1,268,504 | |||
STMicroelectronics NV | 45,892 | 1,188,884 | |||
Lafarge SA | 12,880 | 1,109,036 | |||
Schneider Electric SA | 16,170 | 1,074,881 | |||
Renault SA | 13,468 | 939,614 | |||
Accor SA | 14,812 | 649,842 | |||
PSA Peugeot Citroen SA | 13,034 | 648,600 | |||
Lagardere S.C.A | 9,814 | 594,452 | |||
Veolia Environnement | 19,152 | 572,302 | |||
Pinault-Printemps-Redoute SA | 5,264 | 568,371 | |||
Bouygues SA | 15,260 | 561,991 | |||
European Aeronautic Defence | |||||
and Space Co. | 22,190 | 513,098 | |||
Compagnie Generale des | |||||
Etablissements Michelin Class B | 10,640 | 512,944 | |||
Pernod Ricard SA | 4,130 | 506,738 | |||
Arcelor | 27,048 | 494,361 | |||
Vinci SA | 5,222 | 474,297 | |||
Essilor International SA | 7,672 | 439,923 | |||
Groupe Wanadoo SA1 | 33,880 | 369,181 | |||
Cap Gemini SA1 | 8,680 | 359,784 | |||
Thomson | 18,018 | 341,855 | |||
Societe Television Francaise 1 | 9,394 | 323,316 | |||
Unibail Holding | 3,192 | 320,259 | |||
Etablissements Economiques du | |||||
Casino Guichard-Perrachon SA | 3,024 | 299,834 | |||
Publicis Groupe | 7,896 | 272,936 | |||
Valeo SA | 5,740 | 264,239 | |||
Sodexho Alliance SA | 7,714 | 252,651 | |||
Thales SA | 6,104 | 232,229 | |||
Technip-Coflexip SA | 1,498 | 208,462 | |||
Euronext NV | 7,238 | 197,221 | |||
ALSTOM1 | 71,661 | 191,433 | |||
Atos Origin SA1 | 2,702 | 188,677 | |||
Dassault Systemes SA | 4,270 | 186,222 | |||
Autoroutes du Sud de la France | 5,208 | 185,910 | |||
Business Objects SA1 | 5,404 | 163,699 | |||
Sagem SA | 1,426 | 159,728 | |||
Gecina SA | 2,072 | 156,398 | |||
CNP Assurances | 2,660 | 153,487 | |||
Hermes International | 756 | 149,635 | |||
Imerys SA | 616 | 134,937 | |||
Air France | 6,398 | 131,326 | |||
Societe BIC SA | 2,516 | 108,758 | |||
Klepierre | 1,596 | 108,471 | |||
Zodiac SA | 3,360 | 104,495 | |||
TOTAL COMMON STOCKS | 58,947,889 | ||||
SHORT-TERM INVESTMENTS – 4.10% | |||||
MONEY MARKET FUNDS – 2.03% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2,3 | 835,570 | 835,570 | |||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares2,3 | 281,834 | 281,834 | |||
BlackRock Temp Cash Money Market Fund2 | 13,066 | 13,066 | |||
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares2 | 65,899 | 65,899 | |||
1,196,369 |
SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI FRANCE INDEX FUND
February 29, 2004
Security | Principal | Value | ||||
FLOATING RATE NOTES – 1.10% | ||||||
Beta Finance Inc. | ||||||
1.05%, 05/20/042,4 | $ | 12,811 | $ | 12,810 | ||
1.05%, 09/15/042,4 | 25,621 | 25,620 | ||||
1.05%, 10/12/042,4 | 12,811 | 12,810 | ||||
1.14%, 08/23/042,4 | 12,811 | 12,816 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/042 | 19,216 | 19,214 | ||||
1.38%, 11/22/042 | 6,405 | 6,406 | ||||
1.40%, 10/29/042 | 25,621 | 25,621 | ||||
CC USA Inc. | ||||||
1.05%, 04/19/042,4 | 11,273 | 11,273 | ||||
1.06%, 05/24/042,4 | 25,621 | 25,621 | ||||
1.09%, 07/15/042,4 | 12,811 | 12,812 | ||||
1.51%, 02/15/052,4 | 16,654 | 16,679 | ||||
Dorada Finance Inc. | ||||||
1.05%, 05/20/042,4 | 25,621 | 25,620 | ||||
1.24%, 08/09/042 | 6,405 | 6,405 | ||||
1.48%, 01/18/052,4 | 19,216 | 19,215 | ||||
Five Finance Inc. | ||||||
1.06%, 04/15/042,4 | 12,811 | 12,811 | ||||
HBOS Treasury Services PLC | ||||||
1.16%, 01/24/052 | 25,621 | 25,621 | ||||
Holmes Financing PLC | ||||||
1.05%, 04/15/042 | 2,562 | 2,562 | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042,4 | 6,405 | 6,405 | ||||
1.05%, 09/27/042,4 | 27,671 | 27,669 | ||||
1.06%, 05/17/042 | 12,811 | 12,810 | ||||
1.07%, 04/13/042 | 12,811 | 12,811 | ||||
1.46%, 01/12/052,4 | 12,811 | 12,810 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 12,811 | 12,810 | ||||
1.06%, 07/20/042 | 10,248 | 10,248 | ||||
1.07%, 03/29/042 | 12,811 | 12,811 | ||||
1.07%, 05/04/042 | 12,811 | 12,811 | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042,4 | 19,216 | 19,216 | ||||
1.17%, 12/28/042,4 | 25,621 | 25,621 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052,4 | 24,340 | 24,340 | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | 12,811 | 12,811 | ||||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 12,811 | 12,810 | ||||
1.06%, 07/20/042 | 12,811 | 12,810 | ||||
1.09%, 10/07/042 | 25,621 | 25,618 | ||||
1.24%, 08/06/042 | 6,405 | 6,405 | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052,4 | 11,273 | 11,272 | ||||
1.06%, 07/15/042,4 | 7,686 | 7,685 | ||||
1.07%, 02/25/052,4 | 14,348 | 14,345 | ||||
1.10%, 07/06/042,4 | 7,686 | 7,686 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042,4 | 12,811 | 12,809 | ||||
1.32%, 02/04/052,4 | 6,405 | 6,404 | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042,4 | 12,811 | 12,810 | ||||
1.06%, 04/20/042,4 | 12,811 | 12,811 | ||||
1.06%, 07/06/042,4 | 15,373 | 15,372 | ||||
1.06%, 11/15/042,4 | 15,373 | 15,373 | ||||
651,299 | ||||||
COMMERCIAL PAPER – 0.46% | ||||||
Amsterdam Funding Corp. | ||||||
1.03%, 03/03/042 | 19,216 | 19,215 | ||||
Corporate Asset Funding Corp. | ||||||
1.03%, 03/16/042 | 12,811 | 12,805 | ||||
1.05%, 05/21/042 | 13,323 | 13,292 | ||||
CRC Funding LLC | ||||||
1.03%, 03/26/042 | 10,248 | 10,241 | ||||
Delaware Funding Corp. | ||||||
1.02%, 03/16/042 | 25,905 | 25,894 | ||||
1.03%, 03/05/042 | 11,450 | 11,449 | ||||
Edison Asset Securitization | ||||||
1.03%, 03/03/042 | 19,216 | 19,215 | ||||
Eureka Securitization Inc. | ||||||
1.04%, 04/14/042 | 15,373 | 15,353 | ||||
Falcon Asset Securitization Corp. | ||||||
1.03%, 03/10/042 | 8,967 | 8,965 |
40 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI AUSTRIA INDEX FUND
February 29, 2004
Security | Principal | Value | |||||
Galaxy Funding Inc. | |||||||
1.05%, 05/17/042 | $ | 12,811 | $ | 12,782 | |||
Gemini Securitization Corp. | |||||||
1.04%, 04/19/042 | 6,405 | 6,396 | |||||
GIRO Funding US Corp. | |||||||
1.05%, 05/19/042 | 6,405 | 6,391 | |||||
Jupiter Securitization Corp. | |||||||
1.03%, 03/24/042 | 12,811 | 12,802 | |||||
Liberty Street Funding Corp. | |||||||
1.03%, 03/10/042 | 5,124 | 5,123 | |||||
New Center Asset Trust | |||||||
1.04%, 03/01/042 | 6,405 | 6,406 | |||||
Park Avenue Receivables Corp. | |||||||
1.03%, 03/22/042 | 10,526 | 10,520 | |||||
Preferred Receivables Funding Corp. | |||||||
1.04%, 03/15/042 | 25,621 | 25,611 | |||||
1.04%, 05/20/042 | 6,405 | 6,391 | |||||
Receivables Capital Corp. | |||||||
1.03%, 03/15/042 | 27,927 | 27,916 | |||||
Windmill Funding Corp. | |||||||
1.03%, 03/05/042 | 14,630 | 14,628 | |||||
271,395 | |||||||
TIME DEPOSITS – 0.36% | |||||||
Abbey National Treasury Services PLC | |||||||
1.02%, 03/01/042 | 25,621 | 25,621 | |||||
1.33%, 02/10/052 | 12,811 | 12,809 | |||||
1.39%, 02/02/052 | 12,811 | 12,809 | |||||
1.40%, 10/25/042 | 25,621 | 25,619 | |||||
Bank of New York | |||||||
1.39%, 11/01/042 | 25,621 | 25,620 | |||||
Bank of Novia Scotia | |||||||
1.24%, 10/07/042 | 19,216 | 19,215 | |||||
1.42%, 10/29/042 | 19,216 | 19,217 | |||||
SunTrust Bank | |||||||
1.01%, 03/01/042 | 42,275 | 42,275 | |||||
Toronto-Dominion Bank | |||||||
1.34%, 02/10/052 | 10,248 | 10,247 | |||||
1.41%, 11/01/042 | 19,216 | 19,215 | |||||
212,647 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.11% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.15%, 05/12/042 | $ | 19,216 | $ | 19,172 | |||
1.28%, 08/19/042 | 10,248 | 10,186 | |||||
Federal National Mortgage Association | |||||||
1.28%, 08/20/042 | 33,308 | 33,104 | |||||
62,462 | |||||||
REPURCHASE AGREEMENTS – 0.04% | |||||||
Merrill Lynch Government Securities Inc. | |||||||
1.06%, 03/01/042 | 25,621 | 25,621 | |||||
25,621 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 2,419,793 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 103.93% | 61,367,682 | ||||||
Other Assets, Less Liabilities – (3.93%) | (2,320,103 | ) | |||||
NET ASSETS – 100.00% | $ | 59,047,579 | |||||
1 | Non-income earning securities. |
2 | All or a portion of this security represents investments of securities lending collateral. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI GERMANY INDEX FUND
February 29, 2004
Security | Shares | Value | ||||
COMMON STOCKS – 95.75% | ||||||
Siemens AG | 213,330 | $ | 16,447,130 | |||
Deutsche Telekom AG1 | 688,950 | 13,465,201 | ||||
Deutsche Bank AG | 137,880 | 11,820,797 | ||||
E.ON AG | 158,550 | 10,716,712 | ||||
DaimlerChrysler AG | 219,930 | 9,878,458 | ||||
SAP AG | 54,600 | 8,615,744 | ||||
BASF AG | 136,950 | 7,282,864 | ||||
Allianz AG | 54,660 | 6,809,163 | ||||
RWE AG | 122,580 | 5,412,943 | ||||
Bayer AG | 190,290 | 5,390,725 | ||||
Muenchener Rueckversicherungs-Gesellschaft AG | 43,484 | 5,070,609 | ||||
Deutsche Post AG | 138,720 | 3,295,516 | ||||
Volkswagen AG | 63,150 | 2,965,934 | ||||
Commerzbank AG | 151,230 | 2,936,928 | ||||
Schering AG | 50,850 | 2,517,136 | ||||
Infineon Technologies AG1 | 170,130 | 2,411,920 | ||||
Bayerische Hypo-undVereinsbank AG1 | 106,350 | 2,333,590 | ||||
METRO AG | 45,450 | 2,033,543 | ||||
Deutsche Boerse AG | 34,470 | 1,982,553 | ||||
ThyssenKrupp AG | 91,950 | 1,781,124 | ||||
Continental AG | 40,950 | 1,677,526 | ||||
adidas-Salomon AG | 12,840 | 1,443,810 | ||||
Linde AG | 26,400 | 1,387,197 | ||||
ALTANA AG | 21,060 | 1,289,774 | ||||
MAN AG | 33,060 | 1,157,140 | ||||
Hypo Real Estate Holding AG1 | 38,414 | 1,097,776 | ||||
Deutsche Lufthansa AG | 60,270 | 1,078,351 | ||||
Puma AG | 4,890 | 1,002,025 | ||||
TUI AG | 36,330 | 835,993 | ||||
Fresenius Medical Care AG | 10,500 | 703,715 | ||||
Beiersdorf AG | 5,983 | 657,155 | ||||
Merck KGaA | 14,130 | 623,257 | ||||
HeidelbergerCement AG1 | 13,390 | 598,935 | ||||
Celesio AG | 10,770 | 564,709 | ||||
QIAGEN NV1 | 37,950 | 516,324 | ||||
MLP AG1 | 19,770 | 454,438 | ||||
Suedzucker AG | 18,540 | 357,518 | ||||
EPCOS AG1 | 14,700 | 350,501 | ||||
Security | Shares Or Principal | Value | ||||
KarstadtQuelle AG | 13,260 | $ | 332,641 | |||
Douglas Holding AG | 9,720 | 301,082 | ||||
TOTAL COMMON STOCKS | 139,598,457 | |||||
PREFERRED STOCKS – 4.22% | ||||||
Henkel KGaA | 20,370 | 1,720,808 | ||||
Porsche AG | 2,280 | 1,326,817 | ||||
Volkswagen AG | 30,660 | 979,424 | ||||
RWE AG | 22,470 | 855,996 | ||||
ProSiebenSat.1 Media AG | 21,450 | 453,077 | ||||
Wella AG | 4,800 | 439,904 | ||||
Fresenius Medical Care AG | 8,220 | 372,685 | ||||
TOTAL PREFERRED STOCKS | 6,148,711 | |||||
SHORT-TERM INVESTMENTS – 29.49% | ||||||
MONEY MARKET FUNDS – 14.15% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2,3 | 14,031,682 | 14,031,682 | ||||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares2,3 | 5,153,641 | 5,153,641 | ||||
BlackRock Temp Cash Money Market Fund2 | 238,920 | 238,920 | ||||
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares2 | 1,205,043 | 1,205,043 | ||||
20,629,286 | ||||||
FLOATING RATE NOTES – 8.17% | ||||||
Beta Finance Inc. | ||||||
1.05%, 05/20/042,4 | $ | 234,256 | 234,249 | |||
1.05%, 09/15/042,4 | 468,513 | 468,487 | ||||
1.05%, 10/12/042,4 | 234,256 | 234,242 | ||||
1.14%, 08/23/042,4 | 234,256 | 234,353 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/042 | 351,385 | 351,353 | ||||
1.38%, 11/22/042 | 117,128 | 117,135 |
42 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI GERMANY INDEX FUND
February 29, 2004
Security | Principal | Value | ||||
1.40%, 10/29/042 | $ | 468,513 | $ | 468,505 | ||
CC USA Inc. | ||||||
1.05%, 04/19/042,4 | 206,146 | 206,144 | ||||
1.06%, 05/24/042,4 | 468,513 | 468,502 | ||||
1.09%, 07/15/042,4 | 234,256 | 234,288 | ||||
1.51%, 02/15/052,4 | 304,533 | 305,000 | ||||
Dorada Finance Inc. | ||||||
1.05%, 05/20/042,4 | 468,513 | 468,497 | ||||
1.24%, 08/09/042 | 117,128 | 117,120 | ||||
1.48%, 01/18/052,4 | 351,385 | 351,369 | ||||
Five Finance Inc. | ||||||
1.06%, 04/15/042,4 | 234,256 | 234,256 | ||||
HBOS Treasury Services PLC | ||||||
1.16%, 01/24/052 | 468,513 | 468,513 | ||||
Holmes Financing PLC | ||||||
1.05%, 04/15/042 | 46,851 | 46,851 | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042,4 | 117,128 | 117,120 | ||||
1.05%, 09/27/042,4 | 505,994 | 505,950 | ||||
1.06%, 05/17/042 | 234,256 | 234,254 | ||||
1.07%, 04/13/042 | 234,256 | 234,255 | ||||
1.46%, 01/12/052,4 | 234,256 | 234,236 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 234,256 | 234,241 | ||||
1.06%, 07/20/042 | 187,405 | 187,391 | ||||
1.07%, 03/29/042 | 234,256 | 234,256 | ||||
1.07%, 05/04/042 | 234,256 | 234,254 | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042,4 | 351,385 | 351,385 | ||||
1.17%, 12/28/042,4 | 468,513 | 468,513 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052,4 | 445,087 | 445,087 | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | 234,256 | 234,256 | ||||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 234,256 | 234,237 | ||||
1.06%, 07/20/042 | 234,256 | 234,238 | ||||
1.09%, 10/07/042 | 468,513 | 468,457 | ||||
1.24%, 08/06/042 | 117,128 | 117,123 | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052,4 | 206,146 | 206,127 | ||||
1.06%, 07/15/042,4 | 140,554 | 140,537 | ||||
1.07%, 02/25/052,4 | 262,367 | 262,315 | ||||
1.10%, 07/06/042,4 | 140,554 | 140,549 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042,4 | 234,256 | 234,231 | ||||
1.32%, 02/04/052,4 | 117,128 | 117,106 | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042,4 | 234,256 | 234,239 | ||||
1.06%, 04/20/042,4 | 234,256 | 234,256 | ||||
1.06%, 07/06/042,4 | 281,108 | 281,098 | ||||
1.06%, 11/15/042,4 | 281,108 | 281,108 | ||||
11,909,683 | ||||||
COMMERCIAL PAPER – 3.40% | ||||||
Amsterdam Funding Corp. | ||||||
1.03%, 03/03/042 | 351,385 | 351,365 | ||||
Corporate Asset Funding Corp. | ||||||
1.03%, 03/16/042 | 234,256 | 234,156 | ||||
1.05%, 05/21/042 | 243,627 | 243,054 | ||||
CRC Funding LLC | ||||||
1.03%, 03/26/042 | 187,405 | 187,271 | ||||
Delaware Funding Corp. | ||||||
1.02%, 03/16/042 | 473,695 | 473,493 | ||||
1.03%, 03/05/042 | 209,383 | 209,359 | ||||
Edison Asset Securitization | ||||||
1.03%, 03/03/042 | 351,385 | 351,365 | ||||
Eureka Securitization Inc. | ||||||
1.04%, 04/14/042 | 281,108 | 280,750 | ||||
Falcon Asset Securitization Corp. | ||||||
1.03%, 03/10/042 | 163,979 | 163,937 | ||||
Galaxy Funding Inc. | ||||||
1.05%, 05/17/042 | 234,256 | 233,733 | ||||
Gemini Securitization Corp. | ||||||
1.04%, 04/19/042 | 117,128 | 116,962 | ||||
GIRO Funding US Corp. | ||||||
1.05%, 05/19/042 | 117,128 | 116,858 | ||||
Jupiter Securitization Corp. | ||||||
1.03%, 03/24/042 | 234,256 | 234,102 | ||||
Liberty Street Funding Corp. | ||||||
1.03%, 03/10/042 | 93,703 | 93,678 | ||||
New Center Asset Trust | ||||||
1.04%, 03/01/042 | 117,128 | 117,128 |
SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI GERMANY INDEX FUND
February 29, 2004
Security | Principal | Value | |||||
Park Avenue Receivables Corp. | |||||||
1.03%, 03/22/042 | $ | 192,488 | $ | 192,373 | |||
Preferred Receivables Funding Corp. | |||||||
1.04%, 03/15/042 | 468,513 | 468,323 | |||||
1.04%, 05/20/042 | 117,128 | 116,858 | |||||
Receivables Capital Corp. | |||||||
1.03%, 03/15/042 | 510,679 | 510,474 | |||||
Windmill Funding Corp. | |||||||
1.03%, 03/05/042 | 267,521 | 267,490 | |||||
4,962,729 | |||||||
TIME DEPOSITS – 2.67% | |||||||
Abbey National Treasury Services PLC | |||||||
1.02%, 03/01/042 | 468,513 | 468,513 | |||||
1.33%, 02/10/052 | 234,256 | 234,223 | |||||
1.39%, 02/02/052 | 234,256 | 234,224 | |||||
1.40%, 10/25/042 | 468,513 | 468,473 | |||||
Bank of New York | |||||||
1.39%, 11/01/042 | 468,513 | 468,481 | |||||
Bank of Novia Scotia | |||||||
1.24%, 10/07/042 | 351,385 | 351,363 | |||||
1.42%, 10/29/042 | 351,385 | 351,402 | |||||
SunTrust Bank | |||||||
1.01%, 03/01/042 | 773,046 | 773,046 | |||||
Toronto-Dominion Bank | |||||||
1.34%, 02/10/052 | 187,405 | 187,378 | |||||
1.41%, 11/01/042 | 351,385 | 351,361 | |||||
3,888,464 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.78% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.15%, 05/12/042 | 351,385 | 350,576 | |||||
1.28%, 08/19/042 | 187,405 | 186,266 | |||||
Federal National Mortgage Association | |||||||
1.28%, 08/20/042 | 609,066 | 605,342 | |||||
1,142,184 | |||||||
REPURCHASE AGREEMENTS – 0.32% | |||||||
Merrill Lynch Government Securities Inc. | |||||||
1.06%, 03/01/042 | 468,513 | 468,513 | |||||
468,513 | |||||||
TOTAL SHORT TERM INSTRUMENTS | 43,000,859 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 129.46% | 188,748,027 | ||||||
Other Assets, Less Liabilities – (29.46%) | (42,947,640 | ) | |||||
NET ASSETS – 100.00% | $ | 145,800,387 | |||||
1 | Non-income earning securities. |
2 | All or a portion of this security represents investments of securities lending collateral. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See notes to financial statements.
44 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS – 95.25% | |||||
ENI SpA | 250,632 | $ | 4,910,940 | ||
Telecom Italia SpA1 | 777,115 | 2,442,880 | |||
Assicurazioni Generali SpA | 90,090 | 2,434,626 | |||
Telecom Italia Mobile SpA | 361,053 | 2,041,168 | |||
UniCredito Italiano SpA | 252,351 | 1,329,436 | |||
Enel SpA | 171,369 | 1,324,400 | |||
Sanpaolo IMI SpA | 100,773 | 1,295,928 | |||
Banca Intesa SpA | 347,167 | 1,289,751 | |||
Mediaset SpA | 57,600 | 662,004 | |||
Riunione Adriatica di Sicurta SpA | 34,632 | 629,102 | |||
Banca Popolare di Verona e Novaro Scrl | 35,946 | 620,814 | |||
Mediobanca SpA | 50,418 | 610,783 | |||
Alleanza Assicurazioni SpA | 49,410 | 580,154 | |||
Banche Popolari Unite Scrl1 | 30,933 | 549,225 | |||
Snam Rete Gas SpA | 110,943 | 512,790 | |||
Finmeccanica SpA | 513,855 | 437,987 | |||
Banca Nazionale del Lavoro SpA1 | 157,203 | 410,182 | |||
Banca Antonveneta Spa Foreign | 20,772 | 409,334 | |||
Banca Monte dei Paschi di Siena SpA | 120,879 | 394,254 | |||
Capitalia SpA1 | 124,902 | 368,578 | |||
Banca Popolare di Milano Scrl | 51,021 | 329,013 | |||
Seat Pagine Gialle SpA1 | 300,307 | 301,490 | |||
Autostrade SpA1 | 16,155 | 294,866 | |||
Fiat SpA1 | 36,821 | 284,108 | |||
Luxottica Group SpA | 14,976 | 254,925 | |||
Mediolanum SpA | 27,855 | 202,121 | |||
Banca Fideuram SpA | 31,653 | 197,824 | |||
Autogrill SpA1 | 12,357 | 173,342 | |||
Pirelli SpA | 168,672 | 172,899 | |||
Italcementi SpA | 11,997 | 146,380 | |||
Arnoldo Mondadori Editore SpA | 11,097 | 110,580 | |||
Bulgari SpA | 12,456 | 109,884 | |||
Tiscali SpA1 | 15,228 | 105,389 | |||
Fineco SpA1 | 163,287 | 105,297 | |||
Gruppo Editoriale L’Espresso SpA | 14,310 | 88,545 | |||
Benetton Group SpA | 6,282 | 70,639 | |||
Telecom Italia Media SpA1 | 107,278 | 51,718 |
Security | Shares or Principal | Value | ||||
Sorin SpA1 | 13,298 | $ | 38,582 | |||
TOTAL COMMON STOCKS | 26,291,938 | |||||
PREFERRED STOCKS – 4.54% | ||||||
Telecom Italia SpA RNC1 | 565,291 | 1,253,738 | ||||
TOTAL PREFERRED STOCKS | 1,253,738 | |||||
SHORT-TERM INVESTMENTS – 30.09% | ||||||
MONEY MARKET FUNDS – 14.36% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2,3 | 2,683,472 | 2,683,472 | ||||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares2,3 | 999,976 | 999,976 | ||||
BlackRock Temp Cash Money Market Fund2 | 46,358 | 46,358 | ||||
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares2 | 233,818 | 233,818 | ||||
3,963,624 | ||||||
FLOATING RATE NOTES – 8.37% | ||||||
Beta Finance Inc. | ||||||
1.05%, 05/20/042,4 | $ | 45,453 | 45,452 | |||
1.05%, 09/15/042,4 | 90,907 | 90,902 | ||||
1.05%, 10/12/042,4 | 45,453 | 45,451 | ||||
1.14%, 08/23/042,4 | 45,453 | 45,472 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/042 | 68,180 | 68,174 | ||||
1.38%, 11/22/042 | 22,727 | 22,728 | ||||
1.40%, 10/29/042 | 90,907 | 90,905 | ||||
CC USA Inc. | ||||||
1.05%, 04/19/042,4 | 39,999 | 39,999 | ||||
1.06%, 05/24/042,4 | 90,907 | 90,905 | ||||
1.09%, 07/15/042,4 | 45,453 | 45,460 | ||||
1.51%, 02/15/052,4 | 59,089 | 59,180 | ||||
Dorada Finance Inc. | ||||||
1.05%, 05/20/042,4 | 90,907 | 90,904 |
SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI ITALY INDEX FUND
February 29, 2004
Security | Principal | Value | ||||
1.24%, 08/09/042 | $ | 22,727 | $ | 22,726 | ||
1.48%, 01/18/052,4 | 68,180 | 68,177 | ||||
Five Finance Inc. | ||||||
1.06%, 04/15/042,4 | 45,453 | 45,453 | ||||
HBOS Treasury Services PLC | ||||||
1.16%, 01/24/052 | 90,907 | 90,907 | ||||
Holmes Financing PLC | ||||||
1.05%, 04/15/042 | 9,091 | 9,091 | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042,4 | 22,727 | 22,725 | ||||
1.05%, 09/27/042,4 | 98,179 | 98,171 | ||||
1.06%, 05/17/042 | 45,453 | 45,453 | ||||
1.07%, 04/13/042 | 45,453 | 45,453 | ||||
1.46%, 01/12/052,4 | 45,453 | 45,449 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 45,453 | 45,450 | ||||
1.06%, 07/20/042 | 36,363 | 36,360 | ||||
1.07%, 03/29/042 | 45,453 | 45,453 | ||||
1.07%, 05/04/042 | 45,453 | 45,453 | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042,4 | 68,180 | 68,180 | ||||
1.17%, 12/28/042,4 | 90,907 | 90,907 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052,4 | 86,362 | 86,362 | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | 45,453 | 45,453 | ||||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 45,453 | 45,450 | ||||
1.06%, 07/20/042 | 45,453 | 45,450 | ||||
1.09%, 10/07/042 | 90,907 | 90,896 | ||||
1.24%, 08/06/042 | 22,727 | 22,726 | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052,4 | 39,999 | 39,995 | ||||
1.06%, 07/15/042,4 | 27,272 | 27,269 | ||||
1.07%, 02/25/052,4 | 50,908 | 50,898 | ||||
1.10%, 07/06/042,4 | 27,272 | 27,271 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042,4 | 45,453 | 45,449 | ||||
1.32%, 02/04/052,4 | 22,727 | 22,722 | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042,4 | 45,453 | 45,450 | ||||
1.06%, 04/20/042,4 | 45,453 | 45,453 | ||||
1.06%, 07/06/042,4 | 54,544 | 54,542 | ||||
1.06%, 11/15/042,4 | 54,544 | 54,545 | ||||
2,310,871 | ||||||
COMMERCIAL PAPER – 3.49% | ||||||
Amsterdam Funding Corp. | ||||||
1.03%, 03/03/042 | 68,180 | 68,176 | ||||
Corporate Asset Funding Corp. | ||||||
1.03%, 03/16/042 | 45,453 | 45,434 | ||||
1.05%, 05/21/042 | 47,272 | 47,160 | ||||
CRC Funding LLC | ||||||
1.03%, 03/26/042 | 36,363 | 36,337 | ||||
Delaware Funding Corp. | ||||||
1.02%, 03/16/042 | 91,912 | 91,873 | ||||
1.03%, 03/05/042 | 40,627 | 40,623 | ||||
Edison Asset Securitization | ||||||
1.03%, 03/03/042 | 68,180 | 68,176 | ||||
Eureka Securitization Inc. | ||||||
1.04%, 04/14/042 | 54,544 | 54,475 | ||||
Falcon Asset Securitization Corp. | ||||||
1.03%, 03/10/042 | 31,817 | 31,810 | ||||
Galaxy Funding Inc. | ||||||
1.05%, 05/17/042 | 45,453 | 45,352 | ||||
Gemini Securitization Corp. | ||||||
1.04%, 04/19/042 | 22,727 | 22,695 | ||||
GIRO Funding US Corp. | ||||||
1.05%, 05/19/042 | 22,727 | 22,674 | ||||
Jupiter Securitization Corp. | ||||||
1.03%, 03/24/042 | 45,453 | 45,424 | ||||
Liberty Street Funding Corp. | ||||||
1.03%, 03/10/042 | 18,181 | 18,177 | ||||
New Center Asset Trust | ||||||
1.04%, 03/01/042 | 22,727 | 22,727 | ||||
Park Avenue Receivables Corp. | ||||||
1.03%, 03/22/042 | 37,349 | 37,327 | ||||
Preferred Receivables Funding Corp. | ||||||
1.04%, 03/15/042 | 90,907 | 90,870 | ||||
1.04%, 05/20/042 | 22,727 | 22,674 |
46 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI ITALY INDEX FUND
February 29, 2004
Security | Principal | Value | |||||
Receivables Capital Corp. | |||||||
1.03%, 03/15/042 | $ | 99,088 | $ | 99,049 | |||
Windmill Funding Corp. | |||||||
1.03%, 03/05/042 | 51,908 | 51,902 | |||||
962,935 | |||||||
TIME DEPOSITS – 2.74% | |||||||
Abbey National Treasury Services PLC | |||||||
1.02%, 03/01/042 | 90,907 | 90,907 | |||||
1.33%, 02/10/052 | 45,453 | 45,447 | |||||
1.39%, 02/02/052 | 45,453 | 45,447 | |||||
1.40%, 10/25/042 | 90,907 | 90,898 | |||||
Bank of New York | |||||||
1.39%, 11/01/042 | 90,907 | 90,901 | |||||
Bank of Novia Scotia | |||||||
1.24%, 10/07/042 | 68,180 | 68,176 | |||||
1.42%, 10/29/042 | 68,180 | 68,184 | |||||
SunTrust Bank | |||||||
1.01%, 03/01/042 | 149,996 | 149,996 | |||||
Toronto-Dominion Bank | |||||||
1.34%, 02/10/052 | 36,363 | 36,358 | |||||
1.41%, 11/01/042 | 68,180 | 68,176 | |||||
754,490 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.80% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.15%, 05/12/042 | 68,180 | 68,023 | |||||
1.28%, 08/19/042 | 36,363 | 36,142 | |||||
Federal National Mortgage Association | |||||||
1.28%, 08/20/042 | 118,179 | 117,456 | |||||
221,621 | |||||||
REPURCHASE AGREEMENTS – 0.33% | |||||||
Merrill Lynch Government Securities Inc. | |||||||
1.06%, 03/01/042 | $ | 90,907 | $ | 90,907 | |||
90,907 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 8,304,448 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 129.88% | 35,850,124 | ||||||
Other Assets, Less Liabilities – (29.88%) | (8,247,653 | ) | |||||
NET ASSETS – 100.00% | $ | 27,602,471 | |||||
1 | Non-income earning securities. |
2 | All or a portion of this security represents investments of securities lending collateral. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 47 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI NETHERLANDS INDEX FUND
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.95% | |||||
Royal Dutch Petroleum Co. | 102,804 | $ | 5,071,039 | ||
ING Groep NV | 124,150 | 3,035,765 | |||
Unilever NV CVA | 34,268 | 2,484,426 | |||
ABN AMRO Holding NV | 44,486 | 1,027,541 | |||
AEGON NV | 69,031 | 1,021,533 | |||
Akzo Nobel NV | 26,520 | 1,021,155 | |||
Koninklijke Philips Electronics NV | 32,266 | 980,213 | |||
Koninklijke KPN NV1 | 113,854 | 898,294 | |||
Heineken NV | 20,722 | 880,550 | |||
Reed Elsevier NV | 63,856 | 875,925 | |||
TPG NV | 36,608 | 799,179 | |||
ASML Holding NV1 | 30,446 | 561,763 | |||
Koninklijke Ahold NV1 | 62,478 | 519,337 | |||
VNU NV | 14,456 | 470,953 | |||
Wolters Kluwer NV CVA | 22,386 | 399,696 | |||
Koninklijke Numico NV CVA1 | 11,596 | 382,101 | |||
Oce NV | 17,888 | 344,500 | |||
Koninklijke Vendex KBB NV | 16,458 | 282,197 | |||
IHC Caland NV | 5,772 | 280,414 | |||
Vedior NV | 12,220 | 191,918 | |||
DSM NV | 1,768 | 83,718 | |||
Hagemeyer NV | 29,822 | 70,773 | |||
Rodamco Europe NV | 884 | 54,907 | |||
TOTAL COMMON STOCKS (Cost: $23,265,871) | 21,737,897 | ||||
SHORT-TERM INVESTMENTS – 1.84% | |||||
MONEY MARKET FUNDS – 0.89% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2,3 | 133,106 | 133,106 | |||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares2,3 | 47,423 | 47,423 | |||
BlackRock Temp Cash Money Market Fund2 | 2,199 | 2,199 |
Security | Shares or Principal | Value | ||||
Short-Term Investment Co.– Prime Money Market Portfolio, Institutional Shares2 | 11,089 | $ | 11,089 | |||
193,817 | ||||||
FLOATING RATE NOTES – 0.50% | ||||||
Beta Finance Inc. | ||||||
1.05%, 05/20/042,4 | $ | 2,156 | 2,156 | |||
1.05%, 09/15/042,4 | 4,311 | 4,311 | ||||
1.05%, 10/12/042,4 | 2,156 | 2,155 | ||||
1.14%, 08/23/042,4 | 2,156 | 2,156 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/042 | 3,233 | 3,234 | ||||
1.38%, 11/22/042 | 1,078 | 1,078 | ||||
1.40%, 10/29/042 | 4,311 | 4,311 | ||||
CC USA Inc. | ||||||
1.05%, 04/19/042,4 | 1,897 | 1,897 | ||||
1.06%, 05/24/042,4 | 4,311 | 4,311 | ||||
1.09%, 07/15/042,4 | 2,156 | 2,156 | ||||
1.51%, 02/15/052,4 | 2,802 | 2,807 | ||||
Dorada Finance Inc. | ||||||
1.05%, 05/20/042,4 | 4,311 | 4,311 | ||||
1.24%, 08/09/042 | 1,078 | 1,078 | ||||
1.48%, 01/18/052,4 | 3,233 | 3,233 | ||||
Five Finance Inc. | ||||||
1.06%, 04/15/042,4 | 2,156 | 2,156 | ||||
HBOS Treasury Services PLC | ||||||
1.16%, 01/24/052 | 4,311 | 4,311 | ||||
Holmes Financing PLC | ||||||
1.05%, 04/15/042 | 431 | 431 | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042,4 | 1,078 | 1,078 | ||||
1.05%, 09/27/042,4 | 4,656 | 4,656 | ||||
1.06%, 05/17/042 | 2,156 | 2,156 | ||||
1.07%, 04/13/042 | 2,156 | 2,156 | ||||
1.46%, 01/12/052,4 | 2,156 | 2,155 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 2,156 | 2,155 | ||||
1.06%, 07/20/042 | 1,724 | 1,724 | ||||
1.07%, 03/29/042 | 2,156 | 2,156 | ||||
1.07%, 05/04/042 | 2,156 | 2,156 |
48 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI NETHERLANDS INDEX FUND
February 29, 2004
Security | Principal | Value | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042,4 | $ | 3,233 | $ | 3,233 | ||
1.17%, 12/28/042,4 | 4,311 | 4,311 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052,4 | 4,096 | 4,096 | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | 2,156 | 2,156 | ||||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 2,156 | 2,155 | ||||
1.06%, 07/20/042 | 2,156 | 2,155 | ||||
1.09%, 10/07/042 | 4,311 | 4,311 | ||||
1.24%, 08/06/042 | 1,078 | 1,078 | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052,4 | 1,897 | 1,897 | ||||
1.06%, 07/15/042,4 | 1,293 | 1,293 | ||||
1.07%, 02/25/052,4 | 2,414 | 2,414 | ||||
1.10%, 07/06/042,4 | 1,293 | 1,293 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042,4 | 2,156 | 2,155 | ||||
1.32%, 02/04/052,4 | 1,078 | 1,078 | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042,4 | 2,156 | 2,155 | ||||
1.06%, 04/20/042,4 | 2,156 | 2,156 | ||||
1.06%, 07/06/042,4 | 2,587 | 2,587 | ||||
1.06%, 11/15/042,4 | 2,587 | 2,587 | ||||
109,594 | ||||||
COMMERCIAL PAPER – 0.21% | ||||||
Amsterdam Funding Corp. | ||||||
1.03%, 03/03/042 | 3,233 | 3,233 | ||||
Corporate Asset Funding Corp. | ||||||
1.03%, 03/16/042 | 2,156 | 2,155 | ||||
1.05%, 05/21/042 | 2,242 | 2,237 | ||||
CRC Funding LLC | ||||||
1.03%, 03/26/042 | 1,724 | 1,723 | ||||
Delaware Funding Corp. | ||||||
1.02%, 03/16/042 | 4,359 | 4,357 | ||||
1.03%, 03/05/042 | 1,927 | 1,926 | ||||
Edison Asset Securitization | ||||||
1.03%, 03/03/042 | 3,233 | 3,233 | ||||
Eureka Securitization Inc. | ||||||
1.04%, 04/14/042 | 2,587 | 2,583 | ||||
Falcon Asset Securitization Corp. | ||||||
1.03%, 03/10/042 | 1,509 | 1,509 | ||||
Galaxy Funding Inc. | ||||||
1.05%, 05/17/042 | 2,156 | 2,151 | ||||
Gemini Securitization Corp. | ||||||
1.04%, 04/19/042 | 1,078 | 1,076 | ||||
GIRO Funding US Corp. | ||||||
1.05%, 05/19/042 | 1,078 | 1,075 | ||||
Jupiter Securitization Corp. | ||||||
1.03%, 03/24/042 | 2,156 | 2,154 | ||||
Liberty Street Funding Corp. | ||||||
1.03%, 03/10/042 | 862 | 862 | ||||
New Center Asset Trust | ||||||
1.04%, 03/01/042 | 1,078 | 1,078 | ||||
Park Avenue Receivables Corp. | ||||||
1.03%, 03/22/042 | 1,771 | 1,770 | ||||
Preferred Receivables Funding Corp. | ||||||
1.04%, 03/15/042 | 4,311 | 4,309 | ||||
1.04%, 05/20/042 | 1,078 | 1,076 | ||||
Receivables Capital Corp. | ||||||
1.03%, 03/15/042 | 4,699 | 4,697 | ||||
Windmill Funding Corp. | ||||||
1.03%, 03/05/042 | 2,462 | 2,461 | ||||
45,665 | ||||||
TIME DEPOSITS – 0.17% | ||||||
Abbey National Treasury Services PLC | ||||||
1.02%, 03/01/042 | 4,311 | 4,311 | ||||
1.33%, 02/10/052 | 2,156 | 2,155 | ||||
1.39%, 02/02/052 | 2,156 | 2,155 | ||||
1.40%, 10/25/042 | 4,311 | 4,311 | ||||
Bank of New York | ||||||
1.39%, 11/01/042 | 4,311 | 4,311 | ||||
Bank of Novia Scotia | ||||||
1.24%, 10/07/042 | 3,233 | 3,234 | ||||
1.42%, 10/29/042 | 3,233 | 3,234 | ||||
SunTrust Bank | ||||||
1.01%, 03/01/042 | 7,113 | 7,113 |
SCHEDULESOF INVESTMENTS | 49 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI NETHERLANDS INDEX FUND
February 29, 2004
Security | Principal | Value | |||||
Toronto-Dominion Bank | |||||||
1.34%, 02/10/052 | $ | 1,724 | $ | 1,724 | |||
1.41%, 11/01/042 | 3,233 | 3,233 | |||||
35,781 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.05% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.15%, 05/12/042 | 3,233 | 3,226 | |||||
1.28%, 08/19/042 | 1,724 | 1,714 | |||||
Federal National Mortgage Association | |||||||
1.28%, 08/20/042 | 5,602 | 5,568 | |||||
10,508 | |||||||
REPURCHASE AGREEMENTS – 0.02% | |||||||
Merrill Lynch Government Securities Inc. 1.06%, 03/01/042 | 4,311 | 4,311 | |||||
4,311 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 399,676 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 101.79% | 22,137,573 | ||||||
Other Assets, Less Liabilities – (1.79%) | (389,925 | ) | |||||
NET ASSETS – 100.00% | $ | 21,747,648 | |||||
1 | Non-income earning securities. |
2 | All or a portion of this security represents investments of securities lending collateral. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See Notes To Financial Statements.
50 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
February 29, 2004
Security | Shares | Value | ||||
COMMON STOCKS – 99.94% | ||||||
Telefonica SA | 767,165 | $ | 12,458,357 | |||
Banco Santander Central Hispano SA | 665,376 | 7,705,121 | ||||
Banco Bilbao Vizcaya Argentaria SA | 400,944 | 5,529,719 | ||||
Iberdrola SA | 126,144 | 2,601,783 | ||||
Repsol YPF SA | 125,184 | 2,566,428 | ||||
Endesa SA | 129,960 | 2,543,236 | ||||
Banco Popular Espanol SA | 39,600 | 2,403,567 | ||||
Altadis SA | 54,120 | 1,741,622 | ||||
Union Fenosa SA | 61,344 | 1,259,153 | ||||
Gas Natural SDG SA | 46,272 | 1,152,734 | ||||
Actividades de Construccion y | ||||||
Servicios SA | 21,643 | 1,095,019 | ||||
Industria de Diseno Textil SA | 47,352 | 1,035,494 | ||||
Bankinter SA | 22,752 | 938,260 | ||||
Abertis Infraestructuras SA | 49,673 | 794,320 | ||||
FAES FARMA SA | 43,096 | 749,655 | ||||
Sociedad General de Aguas de | ||||||
Barcelona SA | 45,144 | 742,089 | ||||
Promotora de Infomaciones SA | 34,392 | 630,298 | ||||
Fomento de Construcciones y | ||||||
Contratas SA | 16,392 | 600,421 | ||||
NH Hoteles SA1 | 47,928 | 560,966 | ||||
Acerinox SA | 12,216 | 560,082 | ||||
Corporacion Mapfre SA | 34,656 | 508,970 | ||||
Uralita SA1 | 42,048 | 457,141 | ||||
Sacyr Vallehermoso SA | 26,664 | 456,200 | ||||
Telefonica Publicidad e Informacion SA | 50,112 | 391,019 | ||||
Grupo Ferrovial SA | 10,368 | 378,223 | ||||
Indra Sistemas SA | 27,144 | 370,653 | ||||
Viscofan SA | 36,528 | 367,627 | ||||
Acciona SA | 5,616 | 362,850 | ||||
Amadeus Global Travel Distribution SA | ||||||
Class A | 57,072 | 339,668 | ||||
Iberia Lineas Aereas de Espana SA | 85,992 | 299,166 | ||||
Ebro Puleva SA | 25,039 | 295,554 | ||||
Zeltia SA | 41,424 | 276,905 | ||||
Grupo Empresarial ENCE SA | 9,600 | 258,838 | ||||
Antena 3 Television SA1 | 2,781 | 123,841 | ||||
TOTAL COMMON STOCKS | 52,554,979 | |||||
Security | Shares or Principal | Value | ||||
SHORT-TERM INVESTMENTS – 26.60% | ||||||
MONEY MARKET FUNDS – 12.70% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2,3 | 4,521,448 | $ | 4,521,448 | |||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares2,3 | 1,683,608 | 1,683,608 | ||||
BlackRock Temp Cash Money Market Fund2 | 78,051 | 78,051 | ||||
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares2 | 393,667 | 393,667 | ||||
6,676,774 | ||||||
FLOATING RATE NOTES – 7.40% | ||||||
Beta Finance Inc. | ||||||
1.05%, 05/20/042,4 | $ | 76,528 | 76,525 | |||
1.05%, 09/15/042,4 | 153,055 | 153,047 | ||||
1.05%, 10/12/042,4 | 76,528 | 76,523 | ||||
1.14%, 08/23/042,4 | 76,528 | 76,559 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/042 | 114,791 | 114,781 | ||||
1.38%, 11/22/042 | 38,264 | 38,266 | ||||
1.40%, 10/29/042 | 153,055 | 153,053 | ||||
CC USA Inc. | ||||||
1.05%, 04/19/042,4 | 67,344 | 67,344 | ||||
1.06%, 05/24/042,4 | 153,055 | 153,052 | ||||
1.09%, 07/15/042,4 | 76,528 | 76,538 | ||||
1.51%, 02/15/052,4 | 99,486 | 99,638 | ||||
Dorada Finance Inc. | ||||||
1.05%, 05/20/042,4 | 153,055 | 153,050 | ||||
1.24%, 08/09/042 | 38,264 | 38,261 | ||||
1.48%, 01/18/052,4 | 114,791 | 114,786 | ||||
Five Finance Inc. | ||||||
1.06%, 04/15/042,4 | 76,528 | 76,528 | ||||
HBOS Treasury Services PLC | ||||||
1.16%, 01/24/052 | 153,055 | 153,056 | ||||
Holmes Financing PLC | ||||||
1.05%, 04/15/042 | 15,306 | 15,306 |
SCHEDULESOF INVESTMENTS | 51 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI SPAIN INDEX FUND
February 29, 2004
Security | Principal | Value | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042,4 | $ | 38,264 | $ | 38,261 | ||
1.05%, 09/27/042,4 | 165,300 | 165,286 | ||||
1.06%, 05/17/042 | 76,528 | 76,527 | ||||
1.07%, 04/13/042 | 76,528 | 76,527 | ||||
1.46%, 01/12/052,4 | 76,528 | 76,521 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 76,528 | 76,523 | ||||
1.06%, 07/20/042 | 61,222 | 61,217 | ||||
1.07%, 03/29/042 | 76,528 | 76,528 | ||||
1.07%, 05/04/042 | 76,528 | 76,527 | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042,4 | 114,791 | 114,791 | ||||
1.17%, 12/28/042,4 | 153,055 | 153,056 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052,4 | 145,403 | 145,403 | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | 76,528 | 76,528 | ||||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 76,528 | 76,521 | ||||
1.06%, 07/20/042 | 76,528 | 76,522 | ||||
1.09%, 10/07/042 | 153,055 | 153,037 | ||||
1.24%, 08/06/042 | 38,264 | 38,262 | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052,4 | 67,344 | 67,339 | ||||
1.06%, 07/15/042,4 | 45,917 | 45,911 | ||||
1.07%, 02/25/052,4 | 85,711 | 85,694 | ||||
1.10%, 07/06/042,4 | 45,917 | 45,915 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042,4 | 76,528 | 76,519 | ||||
1.32%, 02/04/052,4 | 38,264 | 38,257 | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042,4 | 76,528 | 76,522 | ||||
1.06%, 04/20/042,4 | 76,528 | 76,528 | ||||
1.06%, 07/06/042,4 | 91,833 | 91,830 | ||||
1.06%, 11/15/042,4 | 91,833 | 91,833 | ||||
3,890,698 | ||||||
COMMERCIAL PAPER – 3.08% | ||||||
Amsterdam Funding Corp. | ||||||
1.03%, 03/03/042 | 114,791 | 114,785 | ||||
Corporate Asset Funding Corp. | ||||||
1.03%, 03/16/042 | 76,528 | 76,495 | ||||
1.05%, 05/21/042 | 79,589 | 79,402 | ||||
CRC Funding LLC | ||||||
1.03%, 03/26/042 | 61,222 | 61,178 | ||||
Delaware Funding Corp. | ||||||
1.02%, 03/16/042 | 154,748 | 154,682 | ||||
1.03%, 03/05/042 | 68,402 | 68,394 | ||||
Edison Asset Securitization | ||||||
1.03%, 03/03/042 | 114,791 | 114,785 | ||||
Eureka Securitization Inc. | ||||||
1.04%, 04/14/042 | 91,833 | 91,716 | ||||
Falcon Asset Securitization Corp. | ||||||
1.03%, 03/10/042 | 53,569 | 53,556 | ||||
Galaxy Funding Inc. | ||||||
1.05%, 05/17/042 | 76,528 | 76,357 | ||||
Gemini Securitization Corp. | ||||||
1.04%, 04/19/042 | 38,264 | 38,210 | ||||
GIRO Funding US Corp. | ||||||
1.05%, 05/19/042 | 38,264 | 38,176 | ||||
Jupiter Securitization Corp. | ||||||
1.03%, 03/24/042 | 76,528 | 76,477 | ||||
Liberty Street Funding Corp. | ||||||
1.03%, 03/10/042 | 30,611 | 30,603 | ||||
New Center Asset Trust | ||||||
1.04%, 03/01/042 | 38,264 | 38,264 | ||||
Park Avenue Receivables Corp. | ||||||
1.03%, 03/22/042 | 62,883 | 62,845 | ||||
Preferred Receivables Funding Corp. | ||||||
1.04%, 03/15/042 | 153,055 | 152,993 | ||||
1.04%, 05/20/042 | 38,264 | 38,175 | ||||
Receivables Capital Corp. | ||||||
1.03%, 03/15/042 | 166,830 | 166,763 | ||||
Windmill Funding Corp. | ||||||
1.03%, 03/05/042 | 87,395 | 87,385 | ||||
1,621,241 |
52 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI SPAIN INDEX FUND
February 29, 2004
Security | Principal | Value | |||||
TIME DEPOSITS – 2.42% | |||||||
Abbey National Treasury Services PLC | |||||||
1.02%, 03/01/042 | $ | 153,055 | $ | 153,056 | |||
1.33%, 02/10/052 | 76,528 | 76,517 | |||||
1.39%, 02/02/052 | 76,528 | 76,517 | |||||
1.40%, 10/25/042 | 153,055 | 153,040 | |||||
Bank of New York | |||||||
1.39%, 11/01/042 | 153,055 | 153,045 | |||||
Bank of Novia Scotia | |||||||
1.24%, 10/07/042 | 114,791 | 114,785 | |||||
1.42%, 10/29/042 | 114,791 | 114,797 | |||||
SunTrust Bank | |||||||
1.01%, 03/01/042 | 252,541 | 252,541 | |||||
Toronto-Dominion Bank | |||||||
1.34%, 02/10/052 | 61,222 | 61,213 | |||||
1.41%, 11/01/042 | 114,791 | 114,784 | |||||
1,270,295 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.71% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.15%, 05/12/042 | 114,791 | 114,527 | |||||
1.28%, 08/19/042 | 61,222 | 60,850 | |||||
Federal National Mortgage Association | |||||||
1.28%, 08/20/042 | 198,972 | 197,755 | |||||
373,132 | |||||||
REPURCHASE AGREEMENTS – 0.29% | |||||||
Merrill Lynch Government Securities Inc. | |||||||
1.06%, 03/01/042 | 153,055 | 153,056 | |||||
153,056 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 13,985,196 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 126.54% | 66,540,175 | ||||||
Other Assets, Less Liabilities - (26.54%) | (13,955,222 | ) | |||||
NET ASSETS – 100.00% | $ | 52,584,953 | |||||
1 | Non-income earning securities. |
2 | All or a portion of this security represents investments of securities lending collateral. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See notes to financial statements.
SCHEDULEOF INVESTMENTS | 53 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI SWEDEN INDEX FUND
February 29, 2004
Security | Shares | Value | ||||
COMMON STOCKS – 99.98% | ||||||
Telefonaktiebolaget LM Ericsson Class B1 | 2,245,452 | $ | 6,545,540 | |||
Nordea AB | 357,786 | 2,475,213 | ||||
Hennes & Mauritz AB Class B | 72,512 | 1,938,407 | ||||
Svenska Handelsbanken AB Class A | 84,128 | 1,582,160 | ||||
Svenska Cellulosa AB Class B | 29,304 | 1,163,232 | ||||
TeliaSonera AB | 249,751 | 1,127,271 | ||||
Sandvik AB | 34,188 | 1,095,328 | ||||
Skandinaviska Enskilda Banken AB Class A | 73,282 | 1,087,781 | ||||
Volvo AB Class B | 30,910 | 971,621 | ||||
Electrolux AB Series B | 45,496 | 959,522 | ||||
Tele2 AB Class B1 | 14,476 | 698,112 | ||||
Securitas AB Class B | 45,232 | 692,680 | ||||
Atlas Copco AB Class A | 17,358 | 621,411 | ||||
ASSA Abloy AB Class B | 45,738 | 602,123 | ||||
Skandia Forsakrings AB | 124,476 | 550,128 | ||||
SKF AB Class B | 13,970 | 516,073 | ||||
Swedish Match AB | 52,646 | 502,118 | ||||
Skanska AB Class B | 59,180 | 488,913 | ||||
Nobel Biocare Holding AG | 3,168 | 406,416 | ||||
Atlas Copco AB Class B | 10,560 | 344,709 | ||||
Volvo AB Class A | 11,374 | 343,014 | ||||
Holmen AB Class B | 7,986 | 276,778 | ||||
Getinge AB Class B | 22,968 | 246,828 | ||||
Drott AB Class B | 12,958 | 239,344 | ||||
Gambro AB Class A | 27,368 | 231,614 | ||||
Eniro AB | 26,158 | 230,159 | ||||
Trelleborg AB Class B | 12,276 | 225,098 | ||||
Svenskt Stal AB Series A | 9,834 | 177,018 | ||||
Modern Times Group AB Class B1 | 7,700 | 174,290 | ||||
Svenska Handelsbanken AB Class B | 7,854 | 146,652 | ||||
WM-Data AB Class B1 | 51,832 | 139,951 | ||||
Alfa Laval AB | 10,054 | 135,058 | ||||
OM AB | 8,536 | 133,586 | ||||
Billerud AB | 8,272 | 127,788 | ||||
Castellum AB | 5,346 | 126,393 | ||||
Gambro AB Class B | 14,960 | 124,596 | ||||
SAS AB1 | 10,912 | 100,410 | ||||
SKF AB Class A | 2,684 | 99,331 | ||||
Security | Shares or Principal | Value | ||||
Hoganas AB Class B | 4,136 | $ | 95,008 | |||
Svenskt Stal AB Series B | 4,642 | 80,753 | ||||
Axfood AB | 2,860 | 72,612 | ||||
TOTAL COMMON STOCKS | 27,895,039 | |||||
SHORT-TERM INVESTMENTS – 28.51% | ||||||
MONEY MARKET FUNDS – 13.61% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2,3 | 2,570,845 | 2,570,845 | ||||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares2,3 | 957,829 | 957,829 | ||||
BlackRock Temp Cash Money Market Fund2 | 44,404 | 44,404 | ||||
Short-Term Investment Co.- Prime Money Market Portfolio, Institutional Shares2 | 223,963 | 223,963 | ||||
3,797,041 | ||||||
FLOATING RATE NOTES – 7.93% | ||||||
Beta Finance Inc. | ||||||
1.05%, 05/20/042,4 | $ | 43,538 | 43,536 | |||
1.05%, 09/15/042,4 | 87,075 | 87,071 | ||||
1.05%, 10/12/042,4 | 43,538 | 43,535 | ||||
1.14%, 08/23/042,4 | 43,538 | 43,556 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/042 | 65,307 | 65,301 | ||||
1.38%, 11/22/042 | 21,769 | 21,770 | ||||
1.40%, 10/29/042 | 87,075 | 87,074 | ||||
CC USA Inc. | ||||||
1.05%, 04/19/042,4 | 38,313 | 38,313 | ||||
1.06%, 05/24/042,4 | 87,075 | 87,073 | ||||
1.09%, 07/15/042,4 | 43,538 | 43,544 | ||||
1.51%, 02/15/052,4 | 56,599 | 56,686 | ||||
Dorada Finance Inc. | ||||||
1.05%, 05/20/042,4 | 87,075 | 87,072 | ||||
1.24%, 08/09/042 | 21,769 | 21,767 | ||||
1.48%, 01/18/052,4 | 65,307 | 65,304 |
54 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI SWEDEN INDEX FUND
February 29, 2004
Security | Principal | Value | ||||
Five Finance Inc. | ||||||
1.06%, 04/15/042,4 | $ | 43,538 | $ | 43,538 | ||
HBOS Treasury Services PLC | ||||||
1.16%, 01/24/052 | 87,075 | 87,075 | ||||
Holmes Financing PLC | ||||||
1.05%, 04/15/042 | 8,708 | 8,708 | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042,4 | 21,769 | 21,767 | ||||
1.05%, 09/27/042,4 | 94,041 | 94,033 | ||||
1.06%, 05/17/042 | 43,538 | 43,537 | ||||
1.07%, 04/13/042 | 43,538 | 43,537 | ||||
1.46%, 01/12/052,4 | 43,538 | 43,534 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 43,538 | 43,535 | ||||
1.06%, 07/20/042 | 34,830 | 34,827 | ||||
1.07%, 03/29/042 | 43,538 | 43,538 | ||||
1.07%, 05/04/042 | 43,538 | 43,537 | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042,4 | 65,307 | 65,307 | ||||
1.17%, 12/28/042,4 | 87,075 | 87,075 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052,4 | 82,722 | 82,722 | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | 43,538 | 43,538 | ||||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 43,538 | 43,534 | ||||
1.06%, 07/20/042 | 43,538 | 43,534 | ||||
1.09%, 10/07/042 | 87,075 | 87,065 | ||||
1.24%, 08/06/042 | 21,769 | 21,768 | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052,4 | 38,313 | 38,310 | ||||
1.06%, 07/15/042,4 | 26,123 | 26,119 | ||||
1.07%, 02/25/052,4 | 48,762 | 48,753 | ||||
1.10%, 07/06/042,4 | 26,123 | 26,122 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042,4 | 43,538 | 43,533 | ||||
1.32%, 02/04/052,4 | 21,769 | 21,765 | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042,4 | 43,538 | 43,534 | ||||
1.06%, 04/20/042,4 | 43,538 | 43,538 | ||||
1.06%, 07/06/042,4 | 52,245 | 52,243 | ||||
1.06%, 11/15/042,4 | 52,245 | 52,245 | ||||
2,213,473 | ||||||
COMMERCIAL PAPER – 3.31% | ||||||
Amsterdam Funding Corp. | ||||||
1.03%, 03/03/042 | 65,307 | 65,303 | ||||
Corporate Asset Funding Corp. | ||||||
1.03%, 03/16/042 | 43,538 | 43,519 | ||||
1.05%, 05/21/042 | 45,279 | 45,173 | ||||
CRC Funding LLC | ||||||
1.03%, 03/26/042 | 34,830 | 34,805 | ||||
Delaware Funding Corp. | ||||||
1.02%, 03/16/042 | 88,038 | 88,001 | ||||
1.03%, 03/05/042 | 38,915 | 38,910 | ||||
Edison Asset Securitization | ||||||
1.03%, 03/03/042 | 65,307 | 65,303 | ||||
Eureka Securitization Inc. | ||||||
1.04%, 04/14/042 | 52,245 | 52,179 | ||||
Falcon Asset Securitization Corp. | ||||||
1.03%, 03/10/042 | 30,476 | 30,469 | ||||
Galaxy Funding Inc. | ||||||
1.05%, 05/17/042 | 43,538 | 43,440 | ||||
Gemini Securitization Corp. | ||||||
1.04%, 04/19/042 | 21,769 | 21,738 | ||||
GIRO Funding US Corp. | ||||||
1.05%, 05/19/042 | 21,769 | 21,719 | ||||
Jupiter Securitization Corp. | ||||||
1.03%, 03/24/042 | 43,538 | 43,509 | ||||
Liberty Street Funding Corp. | ||||||
1.03%, 03/10/042 | 17,415 | 17,411 | ||||
New Center Asset Trust | ||||||
1.04%, 03/01/042 | 21,769 | 21,769 | ||||
Park Avenue Receivables Corp. | ||||||
1.03%, 03/22/042 | 35,775 | 35,753 | ||||
Preferred Receivables Funding Corp. | ||||||
1.04%, 03/15/042 | 87,075 | 87,040 | ||||
1.04%, 05/20/042 | 21,769 | 21,719 | ||||
Receivables Capital Corp. | ||||||
1.03%, 03/15/042 | 94,912 | 94,874 | ||||
Windmill Funding Corp. | ||||||
1.03%, 03/05/042 | 49,720 | 49,714 | ||||
922,348 |
SCHEDULESOF INVESTMENTS | 55 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI SWEDEN INDEX FUND
February 29, 2004
Security | Principal | Value | |||||
TIME DEPOSITS – 2.59% | |||||||
Abbey National Treasury Services PLC | |||||||
1.02%, 03/01/042 | $ | 87,075 | $ | 87,075 | |||
1.33%, 02/10/052 | 43,538 | 43,531 | |||||
1.39%, 02/02/052 | 43,538 | 43,532 | |||||
1.40%, 10/25/042 | 87,075 | 87,067 | |||||
Bank of New York | |||||||
1.39%, 11/01/042 | 87,075 | 87,070 | |||||
Bank of Novia Scotia | |||||||
1.24%, 10/07/042 | 65,307 | 65,303 | |||||
1.42%, 10/29/042 | 65,307 | 65,310 | |||||
SunTrust Bank | |||||||
1.01%, 03/01/042 | 143,674 | 143,674 | |||||
Toronto-Dominion Bank | |||||||
1.34%, 02/10/052 | 34,830 | 34,825 | |||||
1.41%, 11/01/042 | 65,307 | 65,302 | |||||
722,689 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.76% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.15%, 05/12/042 | 65,307 | 65,156 | |||||
1.28%, 08/19/042 | 34,830 | 34,618 | |||||
Federal National Mortgage Association | |||||||
1.28%, 08/20/042 | 113,198 | 112,506 | |||||
212,280 | |||||||
REPURCHASE AGREEMENTS – 0.31% | |||||||
Merrill Lynch Government Securities Inc. | |||||||
1.06%, 03/01/042 | 87,075 | 87,075 | |||||
87,075 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 7,954,906 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 128.49% | 35,849,945 | ||||||
Other Assets, Less Liabilities – (28.49%) | (7,948,235 | ) | |||||
NET ASSETS – 100.00% | $ | 27,901,710 | |||||
1 | Non-income earning securities. |
2 | All or a portion of this security represents investments of securities lending collateral. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See Notes To Financial Statements.
56 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI SWITZERLAND INDEX FUND
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.55% | |||||
Novartis AG | 185,622 | $ | 8,177,277 | ||
Nestle SA Registered | 21,240 | 5,602,457 | |||
UBS AG Registered | 54,873 | 4,031,063 | |||
Roche Holding AG Genusschein | 36,480 | 3,762,750 | |||
Zurich Financial Services AG1 | 13,211 | 2,163,606 | |||
Credit Suisse Group | 58,765 | 2,137,666 | |||
Swiss Reinsurance Co. | 28,361 | 2,041,018 | |||
Holcim Ltd. Registered | 32,280 | 1,673,665 | |||
Compagnie Financiere Richemont AG Class A | 48,000 | 1,275,540 | |||
Synthes-Stratec Inc. | 1,248 | 1,259,743 | |||
Swisscom AG Registered | 3,768 | 1,253,478 | |||
Givaudan SA Registered | 2,184 | 1,117,751 | |||
Ciba Specialty Chemicals AG Registered1 | 14,285 | 1,025,780 | |||
Syngenta AG | 13,728 | 951,735 | |||
Serono SA | 1,392 | 928,329 | |||
ABB Ltd.1 | 135,054 | 817,736 | |||
Schindler Holding AG Participation Certificates1 | 2,952 | 813,511 | |||
Swatch Group (The) AG Class B | 5,424 | 696,124 | |||
Julius Baer Holding AG | 1,792 | 658,922 | |||
Swatch Group (The) AG Registered | 24,312 | 624,047 | |||
Banque Cantonale Vaudoise1 | 4,588 | 592,443 | |||
Societe Generale de Surveillance Holding SA | 1,032 | 584,235 | |||
Lonza Group AG Registered | 10,850 | 546,323 | |||
Adecco SA Registered | 10,512 | 522,683 | |||
Schindler Holding AG Registered1 | 1,536 | 474,085 | |||
Valora Holding AG Registered | 1,752 | 455,916 | |||
Vontobel Holding AG Registered | 14,400 | 359,419 | |||
Clariant AG Registered1 | 14,448 | 217,280 | |||
Logitech International SA Registered1 | 3,360 | 161,247 | |||
Sulzer AG Registered | 480 | 120,940 | |||
Geberit AG Registered | 192 | 97,659 | |||
Kudelski SA Bearer1 | 1,992 | 64,855 | |||
Kuoni Reisen Holding AG Registered | 24 | 8,768 | |||
TOTAL COMMON STOCKS | 45,218,051 |
Security | Shares or Principal | Value | |||
SHORT-TERM INVESTMENTS – 17.28% | |||||
MONEY MARKET FUNDS – 8.25% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2,3 | 2,538,779 | $ | 2,538,779 | ||
Barclays Global Investors Funds Prime Money Market FundInstitutional Shares2,3 | 944,817 | 944,817 | |||
BlackRock Temp Cash Money Market Fund2 | 43,801 | 43,801 | |||
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares2 | 220,921 | 220,921 | |||
3,748,318 | |||||
FLOATING RATE NOTES – 4.81% | |||||
Beta Finance Inc. | |||||
1.05%, 05/20/042,4 | 42,946 | 42,945 | |||
1.05%, 09/15/042,4 | 85,892 | 85,888 | |||
1.05%, 10/12/042,4 | 42,946 | 42,944 | |||
1.14%, 08/23/042,4 | 42,946 | 42,964 | |||
Canadian Imperial Bank of Commerce | |||||
1.24%, 10/07/042 | 64,419 | 64,414 | |||
1.38%, 11/22/042 | 21,473 | 21,474 | |||
1.40%, 10/29/042 | 85,892 | 85,891 | |||
CC USA Inc. | |||||
1.05%, 04/19/042,4 | 37,793 | 37,792 | |||
1.06%, 05/24/042,4 | 85,892 | 85,891 | |||
1.09%, 07/15/042,4 | 42,946 | 42,952 | |||
1.51%, 02/15/052,4 | 55,830 | 55,916 | |||
Dorada Finance Inc. | |||||
1.05%, 05/20/042,4 | 85,892 | 85,890 | |||
1.24%, 08/09/042 | 21,473 | 21,472 | |||
1.48%, 01/18/052,4 | 64,419 | 64,417 | |||
Five Finance Inc. | |||||
1.06%, 04/15/042,4 | 42,946 | 42,946 | |||
HBOS Treasury Services PLC | |||||
1.16%, 01/24/052 | 85,892 | 85,892 | |||
Holmes Financing PLC | |||||
1.05%, 04/15/042 | 8,589 | 8,589 |
SCHEDULESOF INVESTMENTS | 57 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI SWITZERLAND INDEX FUND
February 29, 2004
Security | Principal | Value | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042,4 | $ | 21,473 | $ | 21,472 | ||
1.05%, 09/27/042,4 | 92,764 | 92,756 | ||||
1.06%, 05/17/042 | 42,946 | 42,946 | ||||
1.07%, 04/13/042 | 42,946 | 42,946 | ||||
1.46%, 01/12/052,4 | 42,946 | 42,943 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 42,946 | 42,943 | ||||
1.06%, 07/20/042 | 34,357 | 34,354 | ||||
1.07%, 03/29/042 | 42,946 | 42,946 | ||||
1.07%, 05/04/042 | 42,946 | 42,946 | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042,4 | 64,419 | 64,419 | ||||
1.17%, 12/28/042,4 | 85,892 | 85,892 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052,4 | 81,598 | 81,598 | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | 42,946 | 42,946 | ||||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 42,946 | 42,943 | ||||
1.06%, 07/20/042 | 42,946 | 42,943 | ||||
1.09%, 10/07/042 | 85,892 | 85,882 | ||||
1.24%, 08/06/042 | 21,473 | 21,472 | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052,4 | 37,793 | 37,789 | ||||
1.06%, 07/15/042,4 | 25,768 | 25,765 | ||||
1.07%, 02/25/052,4 | 48,100 | 48,090 | ||||
1.10%, 07/06/042,4 | 25,768 | 25,767 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042,4 | 42,946 | 42,942 | ||||
1.32%, 02/04/052,4 | 21,473 | 21,469 | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042,4 | 42,946 | 42,943 | ||||
1.06%, 04/20/042,4 | 42,946 | 42,946 | ||||
1.06%, 07/06/042,4 | 51,535 | 51,534 | ||||
1.06%, 11/15/042,4 | 51,535 | 51,535 | ||||
2,183,404 | ||||||
COMMERCIAL PAPER – 2.00% | ||||||
Amsterdam Funding Corp. | ||||||
1.03%, 03/03/042 | 64,419 | 64,416 | ||||
Corporate Asset Funding Corp. | ||||||
1.03%, 03/16/042 | 42,946 | 42,928 | ||||
1.05%, 05/21/042 | 44,664 | 44,559 | ||||
CRC Funding LLC | ||||||
1.03%, 03/26/042 | 34,357 | 34,332 | ||||
Delaware Funding Corp. | ||||||
1.02%, 03/16/042 | 86,842 | 86,806 | ||||
1.03%, 03/05/042 | 38,386 | 38,382 | ||||
Edison Asset Securitization | ||||||
1.03%, 03/03/042 | 64,419 | 64,416 | ||||
Eureka Securitization Inc. | ||||||
1.04%, 04/14/042 | 51,535 | 51,470 | ||||
Falcon Asset Securitization Corp. | ||||||
1.03%, 03/10/042 | 30,062 | 30,055 | ||||
Galaxy Funding Inc. | ||||||
1.05%, 05/17/042 | 42,946 | 42,850 | ||||
Gemini Securitization Corp. | ||||||
1.04%, 04/19/042 | 21,473 | 21,443 | ||||
GIRO Funding US Corp. | ||||||
1.05%, 05/19/042 | 21,473 | 21,424 | ||||
Jupiter Securitization Corp. | ||||||
1.03%, 03/24/042 | 42,946 | 42,918 | ||||
Liberty Street Funding Corp. | ||||||
1.03%, 03/10/042 | 17,178 | 17,174 | ||||
New Center Asset Trust | ||||||
1.04%, 03/01/042 | 21,473 | 21,473 | ||||
Park Avenue Receivables Corp. | ||||||
1.03%, 03/22/042 | 35,289 | 35,268 | ||||
Preferred Receivables Funding Corp. | ||||||
1.04%, 03/15/042 | 85,892 | 85,858 | ||||
1.04%, 05/20/042 | 21,473 | 21,423 | ||||
Receivables Capital Corp. | ||||||
1.03%, 03/15/042 | 93,623 | 93,585 | ||||
Windmill Funding Corp. | ||||||
1.03%, 03/05/042 | 49,045 | 49,039 | ||||
909,819 |
58 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI SWITZERLAND INDEX FUND
February 29, 2004
Security | Principal | Value | |||||
TIME DEPOSITS – 1.57% | |||||||
Abbey National Treasury Services PLC | |||||||
1.02%, 03/01/042 | $ | 85,892 | $ | 85,892 | |||
1.33%, 02/10/052 | 42,946 | 42,940 | |||||
1.39%, 02/02/052 | 42,946 | 42,940 | |||||
1.40%, 10/25/042 | 85,892 | 85,884 | |||||
Bank of New York | |||||||
1.39%, 11/01/042 | 85,892 | 85,887 | |||||
Bank of Novia Scotia | |||||||
1.24%, 10/07/042 | 64,419 | 64,415 | |||||
1.42%, 10/29/042 | 64,419 | 64,423 | |||||
SunTrust Bank | |||||||
1.01%, 03/01/042 | 141,723 | 141,723 | |||||
Toronto-Dominion Bank | |||||||
1.34%, 02/10/052 | 34,357 | 34,352 | |||||
1.41%, 11/01/042 | 64,419 | 64,415 | |||||
712,871 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.46% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.15%, 05/12/042 | 64,419 | 64,271 | |||||
1.28%, 08/19/042 | 34,357 | 34,148 | |||||
Federal National Mortgage Association | |||||||
1.28%, 08/20/042 | 111,660 | 110,977 | |||||
209,396 | |||||||
REPURCHASE AGREEMENTS – 0.19% | |||||||
Merrill Lynch Government Securities Inc. | |||||||
1.06%, 03/01/042 | 85,892 | 85,892 | |||||
85,892 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 7,849,700 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 116.83% | 53,067,751 | ||||||
Other Assets, Less Liabilities – (16.83%) | (7,643,252 | ) | |||||
NET ASSETS – 100.00% | $ | 45,424,499 | |||||
1 | Non-income earning securities. |
2 | All or a portion of this security represents investments of securities lending collateral. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 59 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES MSCI UNITED KINGDOM INDEX FUND
February 29, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.75% | |||||
HSBC Holdings PLC | 1,037,869 | $ | 16,862,807 | ||
BP PLC | 2,093,320 | 16,811,400 | |||
Vodafone Group PLC | 6,461,031 | 16,097,087 | |||
GlaxoSmithKline PLC | 562,742 | 11,707,013 | |||
Royal Bank of Scotland Group PLC | 265,323 | 8,390,265 | |||
AstraZeneca PLC | 160,834 | 7,617,101 | |||
Shell Transport & Trading Co. PLC | 918,158 | 6,270,417 | |||
Barclays PLC3 | 617,317 | 5,541,922 | |||
HBOS PLC | 365,210 | 4,951,013 | |||
Lloyds TSB Group PLC | 527,165 | 4,380,396 | |||
Diageo PLC | 290,752 | 4,019,853 | |||
Tesco PLC | 724,048 | 3,459,997 | |||
Unilever PLC | 263,612 | 2,751,813 | |||
Rio Tinto PLC | 101,539 | 2,715,364 | |||
BT Group PLC | 826,483 | 2,710,969 | |||
National Grid Transco PLC | 290,382 | 2,322,620 | |||
British American Tobacco PLC | 149,152 | 2,275,265 | |||
Aviva PLC | 215,291 | 2,253,389 | |||
BHP Billiton PLC | 232,797 | 2,134,202 | |||
BG Group PLC | 332,701 | 1,957,242 | |||
Prudential PLC | 189,095 | 1,727,416 | |||
Cadbury Schweppes PLC | 194,051 | 1,598,932 | |||
Centrica PLC | 400,905 | 1,595,879 | |||
British Sky Broadcasting Group PLC1 | 118,590 | 1,586,772 | |||
Reckitt Benckiser PLC | 56,581 | 1,476,342 | |||
Imperial Tobacco Group PLC | 68,617 | 1,475,864 | |||
Compass Group PLC | 205,792 | 1,399,696 | |||
GUS PLC | 95,167 | 1,291,026 | |||
WPP Group PLC | 110,920 | 1,239,189 | |||
Kingfisher PLC | 222,194 | 1,234,981 | |||
Scottish Power PLC | 174,522 | 1,187,013 | |||
Marks & Spencer Group PLC | 213,053 | 1,158,474 | |||
Legal & General Group PLC | 611,146 | 1,134,165 | |||
Reed Elsevier PLC | 119,121 | 1,095,929 | |||
Scottish & Southern Energy PLC | 80,653 | 1,024,531 | |||
Boots Group PLC | 74,340 | 1,024,354 | |||
BAE Systems PLC | 286,976 | 1,013,215 | |||
ITV PLC1 | 390,478 | 1,003,639 | |||
Amersham PLC | 67,732 | 999,291 | |||
BAA PLC | 100,359 | 977,793 | |||
Reuters Group PLC | 133,753 | 970,536 | |||
Land Securities Group PLC | 43,616 | 891,987 | |||
Pearson PLC | 75,166 | 864,857 | |||
Smith & Nephew PLC | 86,966 | 828,342 | |||
Wolseley PLC | 54,398 | 821,243 | |||
BOC Group PLC | 46,610 | 804,872 | |||
SABMiller PLC | 74,871 | 783,653 | |||
J Sainsbury PLC | 140,715 | 781,458 | |||
Man Group PLC | 26,432 | 756,390 | |||
Carnival PLC | 15,562 | 724,021 | |||
3i Group PLC | 57,112 | 688,395 | |||
InterContinental Hotels Group PLC | 68,713 | 663,091 | |||
Next PLC | 25,665 | 662,521 | |||
Smiths Group PLC | 52,215 | 645,358 | |||
Hilton Group PLC | 152,456 | 625,978 | |||
Rentokil Initial PLC | 171,395 | 621,836 | |||
Scottish & Newcastle PLC | 77,939 | 614,717 | |||
Rolls-Royce Group PLC | 144,786 | 591,127 | |||
Safeway PLC | 103,191 | 583,123 | |||
Cable & Wireless PLC1 | 222,076 | 578,010 | |||
Hanson PLC | 68,676 | 553,766 | |||
Dixons Group PLC | 187,384 | 551,179 | |||
British Land Co. PLC | 45,489 | 544,499 | |||
Royal & Sun Alliance Insurance Group PLC | 276,002 | 528,851 | |||
AMVESCAP PLC | 64,900 | 513,382 | |||
United Utilities PLC | 53,808 | 504,277 | |||
Imperial Chemical Industries PLC | 113,870 | 497,658 | |||
Severn Trent PLC | 33,807 | 464,896 | |||
Rexam PLC | 50,198 | 422,003 | |||
LogicaCMG PLC | 73,871 | 419,495 | |||
Sage Group PLC | 116,171 | 415,550 | |||
Friends Provident PLC | 155,111 | 413,792 | |||
EMAP PLC | 24,426 | 412,501 | |||
Exel PLC | 28,615 | 408,899 | |||
Hays PLC | 157,176 | 408,362 | |||
Whitebread PLC | 28,733 | 394,055 | |||
Yell Group PLC | 62,776 | 393,186 | |||
Enterprise Inns PLC | 33,748 | 381,727 | |||
William Hill PLC | 41,241 | 380,379 | |||
GKN PLC | 71,508 | 363,942 |
60 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI UNITED KINGDOM INDEX FUND
February 29, 2004
Security | Shares | Value | |||
Tomkins PLC | 72,806 | $ | 362,779 | ||
Johnson Matthey PLC | 21,063 | 359,225 | |||
EMI Group PLC | 76,346 | 358,458 | |||
Daily Mail & General Trust PLC Class A | 28,202 | 356,155 | |||
Bunzl PLC | 42,185 | 349,160 | |||
Provident Financial PLC | 24,839 | 343,186 | |||
Liberty International PLC | 24,839 | 337,885 | |||
RMC Group PLC | 26,137 | 336,140 | |||
Capita Group PLC | 65,785 | 333,899 | |||
Corus Group PLC1 | 395,536 | 330,316 | |||
BPB PLC | 47,200 | 325,849 | |||
United Business Media PLC | 31,624 | 324,837 | |||
Signet Group PLC | 171,100 | 322,290 | |||
Kelda Group PLC | 38,704 | 320,348 | |||
Slough Estates PLC | 38,586 | 319,013 | |||
Hammerson PLC | 25,429 | 313,821 | |||
Rank Group PLC | 53,277 | 310,704 | |||
Peninsular & Oriental Steam Navigation Co. (The) | 72,216 | 307,572 | |||
British Airways PLC1 | 51,507 | 302,054 | |||
Electrocomponents PLC | 42,834 | 278,418 | |||
International Power PLC1 | 106,436 | 277,521 | |||
Persimmon PLC | 26,137 | 276,964 | |||
Associated British Ports Holdings PLC | 30,031 | 265,003 | |||
Kesa Electricals PLC | 50,789 | 256,372 | |||
Taylor Woodrow PLC | 50,917 | 255,600 | |||
Wimpey (George) PLC | 35,518 | 254,264 | |||
Cobham PLC | 10,856 | 252,839 | |||
Brambles Industries PLC | 63,720 | 247,737 | |||
Alliance Unichem PLC | 24,308 | 242,245 | |||
BBA Group PLC | 46,433 | 238,046 | |||
Misys PLC | 55,755 | 234,877 | |||
IMI PLC | 35,282 | 230,968 | |||
Canary Wharf Group PLC1 | 43,955 | 226,769 | |||
Invensys PLC1 | 532,968 | 225,016 | |||
Barratt Developments PLC | 21,594 | 222,211 | |||
Cattles PLC | 32,804 | 213,833 | |||
ARM Holdings PLC1 | 94,577 | 212,374 | |||
Close Brothers Group PLC | 12,980 | 211,495 | |||
Aegis Group PLC | 103,781 | 207,523 | |||
Mitchells & Butlers PLC | 45,365 | 199,947 | |||
FirstGroup PLC | 41,477 | 198,590 | |||
Celltech Group PLC1 | 25,783 | 193,785 | |||
Tate & Lyle PLC | 35,695 | 191,442 | |||
Pilkington PLC | 101,421 | 183,041 | |||
United Utilities PLC Class A | 32,066 | 181,351 | |||
Balfour Beatty PLC | 38,881 | 178,224 | |||
MFI Furniture Group PLC | 59,000 | 161,775 | |||
Schroders PLC | 12,626 | 158,864 | |||
AMEC PLC | 29,323 | 153,458 | |||
Stagecoach Group PLC | 96,347 | 150,640 | |||
Serco Group PLC | 38,586 | 150,377 | |||
Berkeley Group (The) PLC | 8,909 | 149,957 | |||
Kidde PLC | 80,299 | 141,940 | |||
Davis Service Group PLC | 19,352 | 141,499 | |||
Securicor PLC | 56,671 | 135,143 | |||
FKI PLC | 59,059 | 130,426 | |||
De La Rue PLC | 19,470 | 112,372 | |||
Novar PLC | 42,539 | 106,969 | |||
SSL International PLC | 17,051 | 99,676 | |||
Great Portland Estates PLC | 18,231 | 84,244 | |||
Aggreko PLC | 14,809 | 42,323 | |||
TOTAL COMMON STOCKS | 188,338,359 | ||||
SHORT-TERM INVESTMENTS – 0.42% | |||||
MONEY MARKET FUNDS – 0.21% | |||||
Barclays Global Investors Funds | 271,618 | 271,618 | |||
Barclays Global Investors Funds | 92,438 | 92,438 | |||
BlackRock Temp Cash Money | 4,285 | 4,285 | |||
Short-Term Investment Co. | 21,614 | 21,614 | |||
389,955 |
SCHEDULESOF INVESTMENTS | 61 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI UNITED KINGDOM INDEX FUND
February 29, 2004
Security | Principal | Value | ||||
FLOATING RATE NOTES – 0.11% | ||||||
Beta Finance Inc. | ||||||
1.05%, 05/20/042,4 | $ | 4,202 | $ | 4,202 | ||
1.05%, 09/15/042,4 | 8,403 | 8,403 | ||||
1.05%, 10/12/042,4 | 4,202 | 4,201 | ||||
1.14%, 08/23/042,4 | 4,202 | 4,203 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/042 | 6,303 | 6,302 | ||||
1.38%, 11/22/042 | 2,101 | 2,101 | ||||
1.40%, 10/29/042 | 8,403 | 8,403 | ||||
CC USA Inc. | ||||||
1.05%, 04/19/042,4 | 3,698 | 3,697 | ||||
1.06%, 05/24/042,4 | 8,403 | 8,403 | ||||
1.09%, 07/15/042,4 | 4,202 | 4,202 | ||||
1.51%, 02/15/052,4 | 5,462 | 5,471 | ||||
Dorada Finance Inc. | ||||||
1.05%, 05/20/042,4 | 8,403 | 8,403 | ||||
1.24%, 08/09/042 | 2,101 | 2,101 | ||||
1.48%, 01/18/052,4 | 6,303 | 6,302 | ||||
Five Finance Inc. | ||||||
1.06%, 04/15/042,4 | 4,202 | 4,202 | ||||
HBOS Treasury Services PLC | ||||||
1.16%, 01/24/052 | 8,403 | 8,403 | ||||
Holmes Financing PLC | ||||||
1.05%, 04/15/042 | 840 | 840 | ||||
K2 USA LLC | ||||||
1.05%, 08/16/042,4 | 2,101 | 2,101 | ||||
1.05%, 09/27/042,4 | 9,076 | 9,075 | ||||
1.06%, 05/17/042 | 4,202 | 4,202 | ||||
1.07%, 04/13/042 | 4,202 | 4,202 | ||||
1.46%, 01/12/052,4 | 4,202 | 4,201 | ||||
Links Finance LLC | ||||||
1.05%, 06/28/042 | 4,202 | 4,201 | ||||
1.06%, 07/20/042 | 3,361 | 3,361 | ||||
1.07%, 03/29/042 | 4,202 | 4,202 | ||||
1.07%, 05/04/042 | 4,202 | 4,202 | ||||
Nationwide Building Society | ||||||
1.09%, 07/23/042,4 | 6,303 | 6,303 | ||||
1.17%, 12/28/042,4 | 8,403 | 8,403 | ||||
Northern Rock PLC | ||||||
1.11%, 01/13/052,4 | 7,983 | 7,983 | ||||
Permanent Financing PLC | ||||||
1.06%, 12/10/042 | 4,202 | 4,202 | ||||
Sigma Finance Inc. | ||||||
1.06%, 07/01/042 | 4,202 | 4,201 | ||||
1.06%, 07/20/042 | 4,202 | 4,201 | ||||
1.09%, 10/07/042 | 8,403 | 8,402 | ||||
1.24%, 08/06/042 | 2,101 | 2,101 | ||||
Tango Finance Corp. | ||||||
1.05%, 01/18/052,4 | 3,698 | 3,697 | ||||
1.06%, 07/15/042,4 | 2,521 | 2,521 | ||||
1.07%, 02/25/052,4 | 4,706 | 4,705 | ||||
1.10%, 07/06/042,4 | 2,521 | 2,521 | ||||
WhistleJacket Capital LLC | ||||||
1.05%, 09/15/042,4 | 4,202 | 4,201 | ||||
1.32%, 02/04/052,4 | 2,101 | 2,100 | ||||
White Pine Finance LLC | ||||||
1.04%, 08/26/042,4 | 4,202 | 4,201 | ||||
1.06%, 04/20/042,4 | 4,202 | 4,202 | ||||
1.06%, 07/06/042,4 | 5,042 | 5,042 | ||||
1.06%, 11/15/042,4 | 5,042 | 5,042 | ||||
213,614 | ||||||
COMMERCIAL PAPER – 0.05% | ||||||
Amsterdam Funding Corp. | ||||||
1.03%, 03/03/042 | 6,303 | 6,302 | ||||
Corporate Asset Funding Corp. | ||||||
1.03%, 03/16/042 | 4,202 | 4,200 | ||||
1.05%, 05/21/042 | 4,370 | 4,360 | ||||
CRC Funding LLC | ||||||
1.03%, 03/26/042 | 3,361 | 3,359 | ||||
Delaware Funding Corp. | ||||||
1.02%, 03/16/042 | 8,496 | 8,493 | ||||
1.03%, 03/05/042 | 3,756 | 3,755 | ||||
Edison Asset Securitization | ||||||
1.03%, 03/03/042 | 6,303 | 6,302 | ||||
Eureka Securitization Inc. | ||||||
1.04%, 04/14/042 | 5,042 | 5,036 | ||||
Falcon Asset Securitization Corp. | ||||||
1.03%, 03/10/042 | 2,941 | 2,940 |
62 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
.Schedule of Investments (Unaudited) (Continued)
iSHARES MSCI UNITED KINGDOM INDEX FUND
February 29, 2004
Security | Principal | Value | |||||
Galaxy Funding Inc. | |||||||
1.05%, 05/17/042 | $ | 4,202 | $ | 4,192 | |||
Gemini Securitization Corp. | |||||||
1.04%, 04/19/042 | 2,101 | 2,098 | |||||
GIRO Funding US Corp. | |||||||
1.05%, 05/19/042 | 2,101 | 2,096 | |||||
Jupiter Securitization Corp. | |||||||
1.03%, 03/24/042 | 4,202 | 4,199 | |||||
Liberty Street Funding Corp. | |||||||
1.03%, 03/10/042 | 1,681 | 1,680 | |||||
New Center Asset Trust | |||||||
1.04%, 03/01/042 | 2,101 | 2,101 | |||||
Park Avenue Receivables Corp. | |||||||
1.03%, 03/22/042 | 3,453 | 3,450 | |||||
Preferred Receivables Funding Corp. | |||||||
1.04%, 03/15/042 | 8,403 | 8,400 | |||||
1.04%, 05/20/042 | 2,101 | 2,096 | |||||
Receivables Capital Corp. | |||||||
1.03%, 03/15/042 | 9,160 | 9,156 | |||||
Windmill Funding Corp. | |||||||
1.03%, 03/05/042 | 4,798 | 4,798 | |||||
89,013 | |||||||
TIME DEPOSITS – 0.04% | |||||||
Abbey National Treasury Services PLC | |||||||
1.02%, 03/01/042 | 8,403 | 8,407 | |||||
1.33%, 02/10/052 | 4,202 | 4,201 | |||||
1.39%, 02/02/052 | 4,202 | 4,201 | |||||
1.40%, 10/25/042 | 8,403 | 8,403 | |||||
Bank of New York | |||||||
1.39%, 11/01/042 | 8,403 | 8,403 | |||||
Bank of Novia Scotia | |||||||
1.24%, 10/07/042 | 6,303 | 6,302 | |||||
1.42%, 10/29/042 | 6,303 | 6,303 | |||||
SunTrust Bank | |||||||
1.01%, 03/01/042 | 13,866 | 13,866 | |||||
Toronto-Dominion Bank | |||||||
1.34%, 02/10/052 | 3,361 | 3,361 | |||||
1.41%, 11/01/042 | 6,303 | 6,302 | |||||
69,749 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.01% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.15%, 05/12/042 | 6,303 | 6,288 | |||||
1.28%, 08/19/042 | 3,361 | 3,341 | |||||
Federal National Mortgage Association | |||||||
1.28%, 08/20/042 | 10,924 | 10,858 | |||||
20,487 | |||||||
REPURCHASE AGREEMENTS – 0.00% | |||||||
Merrill Lynch Government Securities Inc. | |||||||
1.06%, 03/01/042 | 8,403 | 8,403 | |||||
8,403 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 791,221 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 100.17% | 189,129,580 | ||||||
Other Assets, Less Liabilities – (0.17%) | (313,996 | ) | |||||
NET ASSETS – 100.00% | $ | 188,815,584 | |||||
1 | Non-income earning securities. |
2 | All or a portion of this security represents investments of securities lending collateral. |
3 | Issuer is an affiliate of the Fund’s investment advisor. See Note 2. |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 63 |
Table of Contents
Statements of Assets and Liabilities (Unaudited)
iSHARES, INC.
February 29, 2004
iShares MSCI | ||||||||||||||||||||||||
Austria Index Fund | Belgium Index Fund | EMU Index Fund | France Index Fund | Germany Index Fund | Italy Index Fund | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Investments at cost | $ | 46,111,320 | $ | 21,787,982 | $ | 343,241,471 | $ | 59,157,444 | $ | 202,755,515 | $ | 34,304,961 | ||||||||||||
Foreign currency, at cost | $ | 39,789 | $ | 7,556 | $ | 126,657 | $ | 6,792 | $ | 17,119 | $ | 14,575 | ||||||||||||
Investments in securities, at value (including securities on loana) (Note 1) | $ | 54,739,405 | $ | 22,956,907 | $ | 379,812,694 | $ | 61,367,682 | $ | 188,748,027 | $ | 35,850,124 | ||||||||||||
Foreign currency, at value | 39,569 | 7,405 | 126,657 | 6,792 | 17,127 | 14,385 | ||||||||||||||||||
Receivables: | ||||||||||||||||||||||||
Investment securities sold | 693,686 | 219,736 | 2,278,540 | 763,886 | — | 709,858 | ||||||||||||||||||
Dividends and interest | 1,439 | 42,317 | 226,944 | 88,122 | 19,913 | 65,696 | ||||||||||||||||||
Capital shares sold | 10,128 | — | — | — | — | — | ||||||||||||||||||
Total Assets | 55,484,227 | 23,226,365 | 382,444,835 | 62,226,482 | 188,785,067 | 36,640,063 | ||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Payables: | ||||||||||||||||||||||||
Investment securities purchased | 698,306 | 227,810 | 2,293,489 | 758,314 | — | 698,030 | ||||||||||||||||||
Collateral for securities on loan (Note 5) | 10,686,808 | 3,098,894 | 74,363,542 | 2,339,647 | 42,783,056 | 8,301,315 | ||||||||||||||||||
Advisory fees (Note 2) | 25,990 | 13,052 | 274,713 | 56,935 | 141,736 | 26,883 | ||||||||||||||||||
Distribution fees | 10,953 | 5,513 | 116,163 | 24,007 | 59,888 | 11,364 | ||||||||||||||||||
Total Liabilities | 11,422,057 | 3,345,269 | 77,047,907 | 3,178,903 | 42,984,680 | 9,037,592 | ||||||||||||||||||
NET ASSETS | $ | 44,062,170 | $ | 19,881,096 | $ | 305,396,928 | $ | 59,047,579 | $ | 145,800,387 | $ | 27,602,471 | ||||||||||||
Net assets consist of: | ||||||||||||||||||||||||
Paid-in capital | $ | 36,980,129 | $ | 20,079,730 | $ | 285,491,003 | $ | 63,409,156 | $ | 186,798,145 | $ | 30,718,166 | ||||||||||||
Undistributed (distributions in excess of) net investment income (accumulated net investment loss) | (186,394 | ) | (114,048 | ) | (429,423 | ) | (212,311 | ) | (160,425 | ) | (89,877 | ) | ||||||||||||
Accumulated net realized loss | (1,359,430 | ) | (1,262,745 | ) | (16,283,872 | ) | (6,371,668 | ) | (26,829,835 | ) | (4,586,572 | ) | ||||||||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | 8,627,865 | 1,178,159 | 36,619,220 | 2,222,402 | (14,007,498 | ) | 1,560,754 | |||||||||||||||||
NET ASSETS | $ | 44,062,170 | $ | 19,881,096 | $ | 305,396,928 | $ | 59,047,579 | $ | 145,800,387 | $ | 27,602,471 | ||||||||||||
Shares outstanding | 2,900,000 | 1,400,000 | 4,850,000 | 2,800,000 | 9,000,000 | 1,350,000 | ||||||||||||||||||
Net asset value per share | $ | 15.19 | $ | 14.20 | $ | 62.97 | $ | 21.09 | $ | 16.20 | $ | 20.45 | ||||||||||||
a | Securities on loan with market values of $10,174,847, $2,941,168, $70,680,080, $2,226,050, $40,724,698 and $7,862,147, respectively. See Note 5. |
See notes to financial statements.
64 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Unaudited) (Continued)
iSHARES, INC.
February 29, 2004
iShares MSCI | ||||||||||||||||||||
Netherlands Index Fund | Spain Index Fund | Sweden Index Fund | Switzerland Index Fund | United Kingdom Index Fund | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Investments at cost | $ | 23,665,547 | $ | 53,175,148 | $ | 30,672,207 | $ | 47,491,342 | $ | 182,661,635 | ||||||||||
Foreign currency, at cost | $ | 33,627 | $ | 82,067 | $ | 7,768 | $ | 17,030 | $ | 218,546 | ||||||||||
Investments in securities, at value (including securities on loana) (Note 1) | $ | 22,137,573 | �� | $ | 66,540,175 | $ | 35,849,945 | $ | 53,067,751 | $ | 189,129,580 | |||||||||
Foreign currency, at value | 33,619 | 81,172 | 7,554 | 16,971 | 216,924 | |||||||||||||||
Receivables: | ||||||||||||||||||||
Investment securities sold | — | — | 150,281 | 192,487 | 532,901 | |||||||||||||||
Dividends and interest | 65 | 9,765 | 1,907 | 219,403 | 567,898 | |||||||||||||||
Capital shares sold | — | — | — | — | 8,941 | |||||||||||||||
Total Assets | 22,171,257 | 66,631,112 | 36,009,687 | 53,496,612 | 190,456,244 | |||||||||||||||
LIABILITIES | ||||||||||||||||||||
Payables: | ||||||||||||||||||||
Investment securities purchased | — | — | 123,302 | 167,484 | 629,652 | |||||||||||||||
Collateral for securities on loan (Note 5) | 393,684 | 13,976,509 | 7,951,436 | 7,843,420 | 767,374 | |||||||||||||||
Advisory fees (Note 2) | 21,053 | 48,944 | 23,354 | 43,042 | 171,225 | |||||||||||||||
Distribution fees | 8,872 | 20,706 | 9,885 | 18,167 | 72,409 | |||||||||||||||
Total Liabilities | 423,609 | 14,046,159 | 8,107,977 | 8,072,113 | 1,640,660 | |||||||||||||||
NET ASSETS | $ | 21,747,648 | $ | 52,584,953 | $ | 27,901,710 | $ | 45,424,499 | $ | 188,815,584 | ||||||||||
Net assets consist of: | ||||||||||||||||||||
Paid-in capital | $ | 31,482,586 | $ | 41,462,091 | $ | 30,061,447 | $ | 47,030,577 | $ | 206,186,086 | ||||||||||
Undistributed net investment income (accumulated net investment loss) | (44,250 | ) | 200,586 | (80,642 | ) | (20,383 | ) | 292,908 | ||||||||||||
Accumulated net realized loss | (8,162,700 | ) | (2,442,593 | ) | (7,256,375 | ) | (7,173,225 | ) | (24,119,787 | ) | ||||||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | (1,527,988 | ) | 13,364,869 | 5,177,280 | 5,587,530 | 6,456,377 | ||||||||||||||
NET ASSETS | $ | 21,747,648 | $ | 52,584,953 | $ | 27,901,710 | $ | 45,424,499 | $ | 188,815,584 | ||||||||||
Shares outstanding | 1,300,000 | 1,800,000 | 1,650,000 | 3,000,000 | 11,800,000 | |||||||||||||||
Net asset value per share | $ | 16.73 | $ | 29.21 | $ | 16.91 | $ | 15.14 | $ | 16.00 | ||||||||||
a | Securities on loan with market values of $374,587, $13,292,632, $7,554,699, $7,464,521 and $730,304, respectively. See Note 5. |
See notes to financial statements.
FINANCIAL STATEMENTS | 65 |
Table of Contents
Statements of Operations (Unaudited)
iSHARES, INC.
For the six months ended February 29, 2004
iShares MSCI | ||||||||||||||||||||||||
Austria Index Fund | Belgium Index Fund | EMU Index Fund | France Index Fund | Germany Index Fund | Italy Index Fund | |||||||||||||||||||
NET INVESTMENT INCOME | ||||||||||||||||||||||||
Dividendsa | $ | — | $ | 20,687 | $ | 470,901 | $ | 13,732 | $ | 309,428 | $ | 14,260 | ||||||||||||
Interest | 732 | 304 | 5,234 | 297 | 3,942 | 618 | ||||||||||||||||||
Securities lending income | 4,453 | 7,540 | 57,842 | 5,811 | 43,480 | 9,515 | ||||||||||||||||||
Total investment income | 5,185 | 28,531 | 533,977 | 19,840 | 356,850 | 24,393 | ||||||||||||||||||
EXPENSES (Note 2) | ||||||||||||||||||||||||
Advisory fees | 66,477 | 44,267 | 669,988 | 163,058 | 363,324 | 80,261 | ||||||||||||||||||
Distribution fees | 28,168 | 18,757 | 283,893 | 69,093 | 153,951 | 34,009 | ||||||||||||||||||
Total expenses | 94,645 | 63,024 | 953,881 | 232,151 | 517,275 | 114,270 | ||||||||||||||||||
Net investment loss | (89,460 | ) | (34,493 | ) | (419,904 | ) | (212,311 | ) | (160,425 | ) | (89,877 | ) | ||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||||||||||
Investments | 372,034 | (40,271 | ) | (3,787,489 | ) | (493,434 | ) | (3,721,778 | ) | (299,341 | ) | |||||||||||||
In-kind redemptions | 2,181,004 | 1,722,264 | — | 1,524,331 | 7,014,115 | 771,285 | ||||||||||||||||||
Foreign currency transactions | 3,988 | (458 | ) | 21,535 | 3,581 | 10,047 | 2,219 | |||||||||||||||||
Net realized gain (loss) | 2,557,026 | 1,681,535 | (3,765,954 | ) | 1,034,478 | 3,302,384 | 474,163 | |||||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||||||
Investments | 5,320,061 | 2,854,581 | 55,102,402 | 12,200,596 | 27,752,487 | 6,038,251 | ||||||||||||||||||
Translation of assets and liabilities in foreign currencies | 1,752 | 6,285 | 44,423 | 11,709 | 4,620 | 8,627 | ||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 5,321,813 | 2,860,866 | 55,146,825 | 12,212,305 | 27,757,107 | 6,046,878 | ||||||||||||||||||
Net realized and unrealized gain | 7,878,839 | 4,542,401 | 51,380,871 | 13,246,783 | 31,059,491 | 6,521,041 | ||||||||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 7,789,379 | $ | 4,507,908 | $ | 50,960,967 | $ | 13,034,472 | $ | 30,899,066 | $ | 6,431,164 | ||||||||||||
a | Net of foreign withholding tax of $—, $3,569, $76,739, $1,206, $54,605 and $1,945, respectively. |
See notes to financial statements.
66 | 2002 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Unaudited) (Continued)
iSHARES, INC.
For the six months ended February 29, 2004
iShares MSCI | ||||||||||||||||||||
Netherlands Index Fund | Spain Index Fund | Sweden Index Fund | Switzerland Index Fund | United Kingdom Index Fund | ||||||||||||||||
NET INVESTMENT INCOME | ||||||||||||||||||||
Dividendsa | $ | 37,040 | $ | 403,236 | $ | — | $ | 140,474 | $ | 1,858,411 | ||||||||||
Interest | 111 | 1,459 | 554 | 573 | 700 | |||||||||||||||
Securities lending income | 3,456 | 17,881 | 5,546 | 2,285 | 2,176 | |||||||||||||||
Total investment income | 40,607 | 422,576 | 6,100 | 143,332 | 1,861,287 | |||||||||||||||
EXPENSES (Note 2) | ||||||||||||||||||||
Advisory fees | 59,602 | 136,917 | 60,926 | 114,990 | 484,171 | |||||||||||||||
Distribution fees | 25,255 | 58,016 | 25,816 | 48,725 | 205,157 | |||||||||||||||
Total expenses | 84,857 | 194,933 | 86,742 | 163,715 | 689,328 | |||||||||||||||
Net investment income (loss) | (44,250 | ) | 227,643 | (80,642 | ) | (20,383 | ) | 1,171,959 | ||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||||||
Investments | (215,287 | ) | (133,358 | ) | (179,986 | ) | (621,097 | ) | (1,796,613 | ) | ||||||||||
In-kind redemptions | — | 2,603,237 | — | — | 1,183,528 | |||||||||||||||
Foreign currency transactions | 7,554 | 1,436 | 1,579 | 21 | 111,309 | |||||||||||||||
Net realized gain (loss) | (207,733 | ) | 2,471,315 | (178,407 | ) | (621,076 | ) | (501,776 | ) | |||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||
Investments | 3,875,007 | 9,959,281 | 6,402,248 | 8,836,180 | 37,973,986 | |||||||||||||||
Translation of assets and liabilities in foreign currencies | 5,948 | 4,826 | (328 | ) | 10,789 | 9,737 | ||||||||||||||
Net change in unrealized appreciation (depreciation) | 3,880,955 | 9,964,107 | 6,401,920 | 8,846,969 | 37,983,723 | |||||||||||||||
Net realized and unrealized gain | 3,673,222 | 12,435,422 | 6,223,513 | 8,225,893 | 37,481,947 | |||||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 3,628,972 | $ | 12,663,065 | $ | 6,142,871 | $ | 8,205,510 | $ | 38,653,906 | ||||||||||
a | Net of foreign withholding tax of $6,536, $71,039, $—, $2,192 and $206,496, respectively. |
see notes to financial statements.
FINANCIAL STATEMENTS | 67 |
Table of Contents
Statement of Changes in Net Assets
iSHARES, INC.
iShares MSCI Austria Index Fund | iShares MSCI Belgium Index Fund | iShares MSCI EMU Index Fund | ||||||||||||||||||||||
For the six months ended 2004 | For the year ended 2003 | For the six 2004 | For the year ended 2003 | For the six 2004 | For the year ended 2003 | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income (loss) | $ | (89,460 | ) | $ | 166,934 | $ | (34,493 | ) | $ | 809,843 | $ | (419,904 | ) | $ | 2,947,241 | |||||||||
Net realized gain (loss) | 2,557,026 | (152,796 | ) | 1,681,535 | 1,821,007 | (3,765,954 | ) | (5,916,411 | ) | |||||||||||||||
Net change in unrealized appreciation (depreciation) | 5,321,813 | 4,589,365 | 2,860,866 | 711,331 | 55,146,825 | 18,491,963 | ||||||||||||||||||
Net increase in net assets resulting | 7,789,379 | 4,603,503 | 4,507,908 | 3,342,181 | 50,960,967 | 15,522,793 | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||||||||||
From net investment income | (272,938 | ) | (208,682 | ) | (884,836 | ) | (132,112 | ) | (3,047,220 | ) | (1,485,447 | ) | ||||||||||||
Total distributions to shareholders | (272,938 | ) | (208,682 | ) | (884,836 | ) | (132,112 | ) | (3,047,220 | ) | (1,485,447 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Proceeds from shares sold | 21,153,879 | 6,782,294 | 7,607,316 | 36,573,861 | 92,094,715 | 20,183,374 | ||||||||||||||||||
Cost of shares redeemed | (6,896,454 | ) | (3,629,301 | ) | (13,220,505 | ) | (28,339,593 | ) | — | — | ||||||||||||||
Net increase (decrease) in net assets from capital share transactions | 14,257,425 | 3,152,993 | (5,613,189 | ) | 8,234,268 | 92,094,715 | 20,183,374 | |||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | 21,773,866 | 7,547,814 | (1,990,117 | ) | 11,444,337 | 140,008,462 | 34,220,720 | |||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of period | 22,288,304 | 14,740,490 | 21,871,213 | 10,426,876 | 165,388,466 | 131,167,746 | ||||||||||||||||||
End of period | $ | 44,062,170 | $ | 22,288,304 | $ | 19,881,096 | $ | 21,871,213 | $ | 305,396,928 | $ | 165,388,466 | ||||||||||||
Undistributed (distributions in excess of) Net investment income included in net assets at end of period | $ | (186,394 | ) | $ | 176,004 | $ | (114,048 | ) | $ | 805,281 | $ | (429,423 | ) | $ | 3,037,701 | |||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 1,400,000 | 700,000 | 520,000 | 3,840,000 | 1,550,000 | 450,000 | ||||||||||||||||||
Shares redeemed | (600,000 | ) | (400,000 | ) | (1,080,000 | ) | (2,880,000 | ) | — | — | ||||||||||||||
Net increase (decrease) in shares outstanding | 800,000 | 300,000 | (560,000 | ) | 960,000 | 1,550,000 | 450,000 | |||||||||||||||||
see notes to financial statements.
68 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES, INC.
iShares MSCI France Index Fund | iShares MSCI Germany Index Fund | iShares MSCI Italy Index Fund | ||||||||||||||||||||||
For the six months ended 2004 | For the year ended August 31, 2003 | For the six 2004 | For the year ended 2003 | For the six months ended 2004 | For the year ended 2003 | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income (loss) | $ | (212,311 | ) | $ | 751,423 | $ | (160,425 | ) | $ | 1,675,435 | $ | (89,877 | ) | $ | 826,393 | |||||||||
Net realized gain (loss) | 1,034,478 | (3,038,659 | ) | 3,302,384 | (7,284,602 | ) | 474,163 | (412,813 | ) | |||||||||||||||
Net change in unrealized appreciation (depreciation) | 12,212,305 | 7,255,337 | 27,757,107 | 16,801,013 | 6,046,878 | 3,106,712 | ||||||||||||||||||
Net increase in net assets resulting from operations | 13,034,472 | 4,968,101 | 30,899,066 | 11,191,846 | 6,431,164 | 3,520,292 | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||||||||||
From net investment income | (794,879 | ) | (567,205 | ) | (1,804,102 | ) | (838,725 | ) | (824,876 | ) | (733,556 | ) | ||||||||||||
Total distributions to shareholders | (794,879 | ) | (567,205 | ) | (1,804,102 | ) | (838,725 | ) | (824,876 | ) | (733,556 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Proceeds from shares sold | — | — | 32,997,769 | 24,678,639 | — | 2,068,633 | ||||||||||||||||||
Cost of shares redeemed | (7,267,190 | ) | — | (18,092,556 | ) | (27,391,209 | ) | (8,001,044 | ) | (4,396,226 | ) | |||||||||||||
Net increase (decrease) in net assets from capital share transactions | (7,267,190 | ) | — | 14,905,213 | (2,712,570 | ) | (8,001,044 | ) | (2,327,593 | ) | ||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | 4,972,403 | 4,400,896 | 44,000,177 | 7,640,551 | (2,394,756 | ) | 459,143 | |||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of period | 54,075,176 | 49,674,280 | 101,800,210 | 94,159,659 | 29,997,227 | 29,538,084 | ||||||||||||||||||
End of period | $ | 59,047,579 | $ | 54,075,176 | $ | 145,800,387 | $ | 101,800,210 | $ | 27,602,471 | $ | 29,997,227 | ||||||||||||
Undistributed net investment income (accumulated net investment loss) included in net assets at end of period | $ | (212,311 | ) | $ | 794,879 | $ | (160,425 | ) | $ | 1,804,102 | $ | (89,877 | ) | $ | 824,876 | |||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | — | — | 2,100,000 | 2,700,000 | — | 150,000 | ||||||||||||||||||
Shares redeemed | (400,000 | ) | — | (1,200,000 | ) | (2,400,000 | ) | (450,000 | ) | (300,000 | ) | |||||||||||||
Net increase (decrease) in shares outstanding | (400,000 | ) | — | 900,000 | 300,000 | (450,000 | ) | (150,000 | ) | |||||||||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 69 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES, INC.
iShares MSCI Netherlands Index Fund | iShares MSCI Spain Index Fund | iShares MSCI Sweden Index Fund | ||||||||||||||||||||||
For the six months ended 2004 | For the year August 31, 2003 | For the six 2004 | For the year ended August 31, 2003 | For the six months ended 2004 | For the 2003 | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income (loss) | $ | (44,250 | ) | $ | 461,181 | $ | 227,643 | $ | 433,459 | $ | (80,642 | ) | $ | 316,152 | ||||||||||
Net realized gain (loss) | (207,733 | ) | (2,384,716 | ) | 2,471,315 | (400,527 | ) | (178,407 | ) | (1,250,998 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) | 3,880,955 | 2,574,851 | 9,964,107 | 10,543,059 | 6,401,920 | 5,001,133 | ||||||||||||||||||
Net increase in net assets resulting from operations | 3,628,972 | 651,316 | 12,663,065 | 10,575,991 | 6,142,871 | 4,066,287 | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||||||||||
From net investment income | (480,580 | ) | (320,678 | ) | (464,559 | ) | (163,361 | ) | (332,115 | ) | (100,930 | ) | ||||||||||||
Total distributions to shareholders | (480,580 | ) | (320,678 | ) | (464,559 | ) | (163,361 | ) | (332,115 | ) | (100,930 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Proceeds from shares sold | — | 12,435,251 | 2,263,744 | 34,361,557 | 5,099,033 | 14,403,629 | ||||||||||||||||||
Cost of shares redeemed | — | (13,270,048 | ) | (12,249,249 | ) | (13,252,013 | ) | — | (9,531,073 | ) | ||||||||||||||
Net increase (decrease) in net assets from capital share transactions | — | (834,797 | ) | (9,985,505 | ) | 21,109,544 | 5,099,033 | 4,872,556 | ||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | 3,148,392 | (504,159 | ) | 2,213,001 | 31,522,174 | 10,909,789 | 8,837,913 | |||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of period | 18,599,256 | 19,103,415 | 50,371,952 | 18,849,778 | 16,991,921 | 8,154,008 | ||||||||||||||||||
End of period | $ | 21,747,648 | $ | 18,599,256 | $ | 52,584,953 | $ | 50,371,952 | $ | 27,901,710 | $ | 16,991,921 | ||||||||||||
Undistributed net investment income (accumulated net investment loss) included in net assets at end of period | $ | (44,250 | ) | $ | 480,580 | $ | 200,586 | $ | 437,502 | $ | (80,642 | ) | $ | 332,115 | ||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | — | 1,050,000 | 75,000 | 1,875,000 | 300,000 | 1,500,000 | ||||||||||||||||||
Shares redeemed | — | (1,050,000 | ) | (525,000 | ) | (675,000 | ) | — | (975,000 | ) | ||||||||||||||
Net increase (decrease) in shares outstanding | — | — | (450,000 | ) | 1,200,000 | 300,000 | 525,000 | |||||||||||||||||
See notes to financial statements.
70 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES, INC.
iShares MSCI Switzerland Index Fund | iShares MSCI United Kingdom Index Fund | |||||||||||||||
For the six months ended | For the year ended August 31, 2003 | For the six months ended February 29, 2004 (Unaudited) | For the year ended August 31, 2003 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income (loss) | $ | (20,383 | ) | $ | 124,078 | $ | 1,171,959 | $ | 4,728,393 | |||||||
Net realized gain (loss) | (621,076 | ) | (2,929,581 | ) | (501,776 | ) | 2,870,683 | |||||||||
Net change in unrealized appreciation (depreciation) | 8,846,969 | 4,321,125 | 37,983,723 | 4,860,539 | ||||||||||||
Net increase in net assets resulting from operations | 8,205,510 | 1,515,622 | 38,653,906 | 12,459,615 | ||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (146,432 | ) | (73,589 | ) | (5,320,972 | ) | (2,770,755 | ) | ||||||||
Total distributions to shareholders | (146,432 | ) | (73,589 | ) | (5,320,972 | ) | (2,770,755 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 3,722,133 | 2,976,574 | 12,685,389 | 76,462,198 | ||||||||||||
Cost of shares redeemed | — | (2,658,605 | ) | (8,011,981 | ) | (55,409,169 | ) | |||||||||
Net increase in net assets from capital share transactions | 3,722,133 | 317,969 | 4,673,408 | 21,053,029 | ||||||||||||
INCREASE IN NET ASSETS | 11,781,211 | 1,760,002 | 38,006,342 | 30,741,889 | ||||||||||||
NET ASSETS: | ||||||||||||||||
Beginning of period | 33,643,288 | 31,883,286 | 150,809,242 | 120,067,353 | ||||||||||||
End of period | $ | 45,424,499 | $ | 33,643,288 | $ | 188,815,584 | $ | 150,809,242 | ||||||||
Undistributed net investment income (accumulated net investment loss) included in net assets at end of period | $ | (20,383 | ) | $ | 146,432 | $ | 292,908 | $ | 4,441,921 | |||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||
Shares sold | 250,000 | 250,000 | 800,000 | 6,600,000 | ||||||||||||
Shares redeemed | — | (250,000 | ) | (600,000 | ) | (4,400,000 | ) | |||||||||
Net increase in shares outstanding | 250,000 | — | 200,000 | 2,200,000 | ||||||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 71 |
Table of Contents
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Austria Index Fund | ||||||||||||||||||||||||
Six months Feb. 29, 2004 | Year Ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | Year ended Aug. 31, 1999 | |||||||||||||||||||
Net asset value, beginning of period | $ | 10.61 | $ | 8.19 | $ | 8.18 | $ | 7.67 | $ | 9.13 | $ | 10.11 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)3 | (0.05 | ) | 0.09 | 0.13 | 0.13 | 0.04 | 0.10 | |||||||||||||||||
Net realized and unrealized gain (loss) | 4.80 | 2.43 | (0.12 | ) | 0.52 | (1.46 | ) | (0.08 | ) | |||||||||||||||
Total from investment operations | 4.75 | 2.52 | 0.01 | 0.65 | (1.42 | ) | (0.88 | ) | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.17 | ) | (0.10 | ) | — | (0.14 | ) | (0.04 | ) | (0.08 | ) | |||||||||||||
Return of capital | — | — | — | (0.00 | )5 | — | (0.02 | ) | ||||||||||||||||
Total distributions | (0.17 | ) | (0.10 | ) | — | (0.14 | ) | (0.04 | ) | (0.10 | ) | |||||||||||||
Net asset value, end of period | $ | 15.19 | $ | 10.61 | $ | 8.19 | $ | 8.18 | $ | 7.67 | $ | 9.13 | ||||||||||||
Total return | 45.03 | %6 | 31.15 | % | 0.12 | % | 8.41 | % | (15.51 | )% | (8.69 | )% | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 44,062 | $ | 22,288 | $ | 14,740 | $ | 11,447 | $ | 10,741 | $ | 12,776 | ||||||||||||
Ratio of expenses to average net assets7 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | %1 | 1.16 | %1 | 1.31 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets7 | (0.79 | )% | 0.98 | % | 1.57 | % | 1.69 | %2 | 0.51 | %2 | 1.04 | % | ||||||||||||
Portfolio turnover rate4 | 8 | % | 26 | % | 32 | % | 66 | % | 34 | % | 50 | % |
1 | Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the years ended August 31, 2001 and August 31, 2000 were 0.97% and 1.20%, respectively. |
2 | Ratio of net investment income to average net assets prior to waived fees and reimbursed expenses for the years ended August 31, 2001 and August 31, 2000 were 1.55% and 0.47%, respectively. |
3 | Based on average shares outstanding throughout the period. |
4 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
5 | Rounds to less than $0.01. |
6 | Not annualized. |
7 | Annualized for periods of less than one year. |
See notes to financial statements.
72 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Belgium Index Fund | ||||||||||||||||||||||||
Six months Feb. 29, 2004 | Year Ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | Year ended Aug. 31, 1999 | |||||||||||||||||||
Net asset value, beginning of period | $ | 11.16 | $ | 10.43 | $ | 11.81 | $ | 13.23 | $ | 16.07 | $ | 18.40 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)3 | (0.03 | ) | 0.41 | 0.25 | 0.19 | 0.19 | 0.08 | |||||||||||||||||
Net realized and unrealized gain (loss) | 4.08 | 0.43 | (1.56 | ) | (1.34 | ) | (2.67 | ) | (0.30 | ) | ||||||||||||||
Total from investment operations | 4.05 | 0.84 | (1.31 | ) | (1.15 | ) | (2.48 | ) | (0.22 | ) | ||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (1.01 | ) | (0.11 | ) | (0.07 | ) | (0.27 | ) | (0.36 | ) | (0.01 | ) | ||||||||||||
Net realized gain | — | — | — | — | — | (1.19 | ) | |||||||||||||||||
Return of capital | — | — | — | — | — | (0.91 | ) | |||||||||||||||||
Total distributions | (1.01 | ) | (0.11 | ) | (0.07 | ) | (0.27 | ) | (0.36 | ) | (2.11 | ) | ||||||||||||
Net asset value, end of period | $ | 14.20 | $ | 11.16 | $ | 10.43 | $ | 11.81 | $ | 13.23 | $ | 16.07 | ||||||||||||
Total return | 37.36 | %5 | 8.25 | % | (11.10 | )% | (8.72 | )% | (15.50 | )% | (1.00 | )% | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 19,881 | $ | 21,871 | $ | 10,427 | $ | 9,918 | $ | 13,230 | $ | 13,496 | ||||||||||||
Ratio of expenses to average net assets6 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | %1 | 1.13 | % | 1.24 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets6 | (0.46 | )% | 4.10 | % | 2.26 | % | 1.60 | %2 | 1.36 | % | 0.45 | % | ||||||||||||
Portfolio turnover rate4 | 4 | % | 8 | % | 18 | % | 36 | % | 53 | % | 63 | % |
1 | Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2001 was 0.87%. |
2 | Ratio of net investment income to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2001 was 1.57%. |
3 | Based on average shares outstanding throughout the period. |
4 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
5 | Not annualized. |
6 | Annualized for periods of less than one year. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 73 |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI EMU Index Fund | ||||||||||||||||||||
Six months Feb. 29, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Period From Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of period | $ | 50.12 | $ | 46.02 | $ | 56.74 | $ | 76.02 | $ | 80.72 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income (loss)3 | (0.11 | ) | 0.93 | 0.75 | 0.72 | (0.00 | )5 | |||||||||||||
Net realized and unrealized gain (loss) | 13.75 | 3.62 | (11.47 | ) | (19.32 | ) | (4.70 | ) | ||||||||||||
Total from investment operations | 13.64 | 4.55 | (10.72 | ) | (18.60 | ) | (4.70 | ) | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.79 | ) | (0.45 | ) | — | (0.42 | ) | — | ||||||||||||
Return of capital | — | — | — | (0.26 | ) | — | ||||||||||||||
Total distributions | (0.79 | ) | (0.45 | ) | — | (0.68 | ) | — | ||||||||||||
Net asset value, end of period | $ | 62.97 | $ | 50.12 | $ | 46.02 | $ | 56.74 | $ | 76.02 | ||||||||||
Total return | 27.33 | %6 | 10.05 | % | (18.89 | )% | (24.51 | )% | (5.82 | )%6 | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of period (000s) | $ | 305,397 | $ | 165,388 | $ | 131,168 | $ | 90,779 | $ | 41,811 | ||||||||||
Ratio of expenses to average net assets7 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | %1 | ||||||||||
Ratio of net investment income (loss) to average net assets7 | (0.37 | )% | 2.08 | % | 1.44 | % | 1.13 | % | 0.03 | %2 | ||||||||||
Portfolio turnover rate4 | 3 | % | 7 | % | 3 | % | 24 | % | 0 | % |
1 | Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was 1.57%. |
2 | Ratio of net investment loss to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was (0.70)%. |
3 | Based on average shares outstanding throughout the period. |
4 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
5 | Rounds to less than $0.01. |
6 | Not annualized. |
7 | Annualized for periods of less than one year. |
8 | Commencement of operations. |
See notes to financial statements.
74 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI France Index Fund | ||||||||||||||||||||||||
Six months Feb. 29, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | Year ended Aug. 31, 1999 | |||||||||||||||||||
Net asset value, beginning of period | $ | 16.90 | $ | 15.52 | $ | 19.53 | $ | 26.41 | $ | 22.90 | $ | 19.13 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)1 | (0.07 | ) | 0.23 | 0.18 | 0.06 | 0.10 | 0.14 | |||||||||||||||||
Net realized and unrealized gain (loss) | 4.54 | 1.33 | (4.19 | ) | (6.89 | ) | 5.21 | 3.88 | ||||||||||||||||
Total from investment operations | 4.47 | 1.56 | (4.01 | ) | (6.83 | ) | 5.31 | 4.02 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.28 | ) | (0.18 | ) | — | (0.04 | ) | (0.11 | ) | (0.12 | ) | |||||||||||||
Net realized gain | — | — | — | (0.00 | )3 | (1.67 | ) | (0.05 | ) | |||||||||||||||
Return of capital | — | — | — | (0.01 | ) | (0.02 | ) | (0.08 | ) | |||||||||||||||
Total distributions | (0.28 | ) | (0.18 | ) | — | (0.05 | ) | (1.80 | ) | (0.25 | ) | |||||||||||||
Net asset value, end of period | $ | 21.09 | $ | 16.90 | $ | 15.52 | $ | 19.53 | $ | 26.41 | $ | 22.90 | ||||||||||||
Total return | 26.58 | %4 | 10.22 | % | (20.53 | )% | (25.86 | )% | 23.45 | % | 21.01 | % | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 59,048 | $ | 54,075 | $ | 49,674 | $ | 58,602 | $ | 95,116 | $ | 77,885 | ||||||||||||
Ratio of expenses to average net assets5 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.96 | % | 1.06 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets5 | (0.77 | )% | 1.56 | % | 1.00 | % | 0.28 | % | 0.36 | % | 0.67 | % | ||||||||||||
Portfolio turnover rate2 | 2 | % | 9 | % | 3 | % | 14 | % | 17 | % | 0 | % |
1 | Based on average shares outstanding throughout the period. |
2 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
3 | Rounds to less than $0.01. |
4 | Not annualized. |
5 | Annualized for periods of less than one year. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 75 |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Germany Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 29, | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | Year ended Aug. 31, 1999 | |||||||||||||||||||
Net asset value, beginning of period | $ | 12.57 | $ | 12.07 | $ | 15.19 | $ | 20.46 | $ | 21.17 | $ | 20.25 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)1 | (0.02 | ) | 0.21 | 0.11 | 0.18 | 0.18 | 0.12 | |||||||||||||||||
Net realized and unrealized gain (loss) | 3.85 | 0.41 | (3.23 | ) | (5.26 | ) | 1.64 | 1.31 | ||||||||||||||||
Total from investment operations | 3.83 | 0.62 | (3.12 | ) | (5.08 | ) | 1.82 | 1.43 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.20 | ) | (0.12 | ) | — | (0.19 | ) | (0.17 | ) | (0.11 | ) | |||||||||||||
Net realized gain | — | — | — | — | (2.32 | ) | (0.39 | ) | ||||||||||||||||
Return of capital | — | — | — | (0.00 | )3 | (0.04 | ) | (0.01 | ) | |||||||||||||||
Total distributions | (0.20 | ) | (0.12 | ) | — | (0.19 | ) | (2.53 | ) | (0.51 | ) | |||||||||||||
Net asset value, end of period | $ | 16.20 | $ | 12.57 | $ | 12.07 | $ | 15.19 | $ | 20.46 | $ | 21.17 | ||||||||||||
Total return | 30.54 | %4 | 5.39 | % | (20.54 | )% | (24.87 | )% | 8.44 | % | 7.04 | % | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 145,800 | $ | 101,800 | $ | 94,160 | $ | 118,525 | $ | 153,487 | $ | 101,645 | ||||||||||||
Ratio of expenses to average net assets5 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.94 | % | 1.00 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets5 | (0.26 | )% | 1.98 | % | 0.77 | % | 0.99 | % | 0.73 | % | 0.57 | % | ||||||||||||
Portfolio turnover rate2 | 6 | % | 11 | % | 9 | % | 20 | % | 56 | % | 14 | % |
1 | Based on average shares outstanding throughout the period. |
2 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
3 | Rounds to less than $0.01. |
4 | Not annualized. |
5 | Annualized for periods of less than one year. |
See notes to financial statements.
76 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Italy Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 29, (Unaudited) | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | Year ended Aug. 31, 1999 | |||||||||||||||||||
Net asset value, beginning of period | $ | 16.67 | $ | 15.15 | $ | 17.79 | $ | 22.23 | $ | 21.56 | $ | 22.89 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)1 | (0.06 | ) | 0.43 | 0.37 | 0.24 | 0.39 | 0.17 | |||||||||||||||||
Net realized and unrealized gain (loss) | 4.45 | 1.47 | (3.01 | ) | (4.37 | ) | 2.51 | 1.05 | ||||||||||||||||
Total from investment operations | 4.39 | 1.90 | (2.64 | ) | (4.13 | ) | 2.90 | 1.22 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.61 | ) | (0.38 | ) | — | (0.24 | ) | (0.12 | ) | (0.06 | ) | |||||||||||||
Net realized gain | — | — | — | (0.07 | ) | (1.80 | ) | (2.24 | ) | |||||||||||||||
Return of capital | — | — | — | (0.00 | )3 | (0.31 | ) | (0.25 | ) | |||||||||||||||
Total distributions | (0.61 | ) | (0.38 | ) | — | (0.31 | ) | (2.23 | ) | (2.55 | ) | |||||||||||||
Net asset value, end of period | $ | 20.45 | $ | 16.67 | $ | 15.15 | $ | 17.79 | $ | 22.23 | $ | 21.56 | ||||||||||||
Total return | 26.58 | %4 | 12.79 | % | (14.84 | )% | (18.61 | )% | 13.35 | % | 5.14 | % | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 27,602 | $ | 29,997 | $ | 29,538 | $ | 34,682 | $ | 50,008 | $ | 58,224 | ||||||||||||
Ratio of expenses to average net assets5 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.99 | % | 1.03 | % | ||||||||||||
Ratio of investment income (loss) to average net assets5 | (0.66 | )% | 2.84 | % | 2.34 | % | 1.16 | % | 1.61 | % | 0.70 | % | ||||||||||||
Portfolio turnover rate2 | 4 | % | 22 | % | 10 | % | 20 | % | 40 | % | 8 | % |
1 | Based on average shares outstanding throughout the period. |
2 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
3 | Rounds to less than $0.01. |
4 | Not annualized. |
5 | Annualized for periods of less than one year. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 77 |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Netherlands Index Fund | ||||||||||||||||||||||||
Six months Feb. 29, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | Year ended Aug. 31, 1999 | |||||||||||||||||||
Net asset value, beginning of period | $ | 14.31 | $ | 14.69 | $ | 18.59 | $ | 23.53 | $ | 23.45 | $ | 23.50 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)1 | (0.03 | ) | 0.30 | 0.25 | 0.28 | 0.13 | 0.53 | |||||||||||||||||
Net realized and unrealized gain (loss) | 2.82 | (0.43 | ) | (4.11 | ) | (4.94 | ) | 0.18 | 1.60 | |||||||||||||||
Total from investment operations | 2.79 | (0.13 | ) | (3.86 | ) | (4.66 | ) | 0.31 | 2.13 | |||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.37 | ) | (0.25 | ) | (0.04 | ) | (0.28 | ) | (0.08 | ) | (0.44 | ) | ||||||||||||
Net realized gain | — | — | — | — | (0.11 | ) | (1.66 | ) | ||||||||||||||||
Return of capital | — | — | — | — | (0.04 | ) | (0.08 | ) | ||||||||||||||||
Total distributions | (0.37 | ) | (0.25 | ) | (0.04 | ) | (0.28 | ) | (0.23 | ) | (2.18 | ) | ||||||||||||
Net asset value, end of period | $ | 16.73 | $ | 14.31 | $ | 14.69 | $ | 18.59 | $ | 23.53 | $ | 23.45 | ||||||||||||
Total return | 19.65 | %3 | (0.78 | )% | (20.79 | )% | (19.83 | )% | 1.28 | % | 8.98 | % | ||||||||||||
Ratios/supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 21,748 | $ | 18,599 | $ | 19,103 | $ | 24,184 | $ | 30,613 | $ | 31,685 | ||||||||||||
Ratio of expenses to average net assets4 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 1.03 | % | 1.07 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets4 | (0.44 | )% | 2.37 | % | 1.48 | % | 1.34 | % | 0.53 | % | 2.20 | % | ||||||||||||
Portfolio turnover rate2 | 4 | % | 18 | % | 15 | % | 35 | % | 22 | % | 32 | % |
1 | Based on average shares outstanding throughout the period. |
2 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
3 | Not annualized. |
4 | Annualized for periods of less than one year. |
See notes to financial statements.
78 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Spain Index Fund | ||||||||||||||||||||||||
Six months Feb. 29, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | Year ended Aug. 31, 1999 | |||||||||||||||||||
Net asset value, beginning of period | $ | 22.39 | $ | 17.95 | $ | 21.33 | $ | 24.19 | $ | 25.59 | $ | 23.84 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income1 | 0.13 | 0.24 | 0.17 | 0.19 | 0.15 | 0.09 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 6.96 | 4.36 | (3.55 | ) | (2.89 | ) | (0.60 | ) | 3.14 | |||||||||||||||
Total from investment operations | 7.09 | 4.60 | (3.38 | ) | (2.70 | ) | (0.45 | ) | 3.23 | |||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.27 | ) | (0.16 | ) | — | (0.16 | ) | (0.14 | ) | (0.09 | ) | |||||||||||||
Net realized gain | — | — | — | — | (0.80 | ) | (1.35 | ) | ||||||||||||||||
Return of capital | — | — | — | (0.00 | )3 | (0.01 | ) | (0.04 | ) | |||||||||||||||
Total distributions | (0.27 | ) | (0.16 | ) | — | (0.16 | ) | (0.95 | ) | (1.48 | ) | |||||||||||||
Net asset value, end of period | $ | 29.21 | $ | 22.39 | $ | 17.95 | $ | 21.33 | $ | 24.19 | $ | 25.59 | ||||||||||||
Total return | 31.77 | %4 | 25.81 | % | (15.85 | )% | (11.17 | )% | (1.81 | )% | 13.39 | % | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 52,585 | $ | 50,372 | $ | 18,850 | $ | 27,198 | $ | 39,913 | $ | 36,469 | ||||||||||||
Ratio of expenses to average net assets5 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.99 | % | 1.04 | % | ||||||||||||
Ratio of net investment income to average net assets5 | 0.98 | % | 1.22 | % | 0.85 | % | 0.82 | % | 0.57 | % | 0.31 | % | ||||||||||||
Portfolio turnover rate2 | 3 | % | 17 | % | 14 | % | 26 | % | 39 | % | 17 | % |
1 | Based on average shares outstanding throughout the period. |
2 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
3 | Rounds to less than $0.01. |
4 | Not annualized. |
5 | Annualized for periods of less than one year. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 79 |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Sweden Index Fund | ||||||||||||||||||||||||
Six months Feb. 29, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | Year ended Aug. 31, 1999 | |||||||||||||||||||
Net asset value, beginning of period | $ | 12.59 | $ | 9.88 | $ | 12.88 | $ | 24.38 | $ | 22.26 | $ | 18.39 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)1 | (0.06 | ) | 0.25 | 0.12 | 0.07 | 0.14 | 0.10 | |||||||||||||||||
Net realized and unrealized gain (loss) | 4.63 | 2.58 | (3.12 | ) | (11.52 | ) | 8.38 | 4.52 | ||||||||||||||||
Total from investment operations | 4.57 | 2.83 | (3.00 | ) | (11.45 | ) | 8.52 | 4.62 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.25 | ) | (0.12 | ) | — | (0.05 | ) | (0.14 | ) | (0.10 | ) | |||||||||||||
Net realized gain | — | — | — | — | (6.22 | ) | (0.63 | ) | ||||||||||||||||
Return of capital | — | — | — | (0.00 | )3 | (0.04 | ) | (0.02 | ) | |||||||||||||||
Total distributions | (0.25 | ) | (0.12 | ) | — | (0.05 | ) | (6.40 | ) | (0.75 | ) | |||||||||||||
Net asset value, end of period | $ | 16.91 | $ | 12.59 | $ | 9.88 | $ | 12.88 | $ | 24.38 | $ | 22.26 | ||||||||||||
Total return | 36.54 | %4 | 29.04 | % | (23.29 | )% | (46.99 | )% | 39.15 | % | 25.09 | % | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 27,902 | $ | 16,992 | $ | 8,154 | $ | 10,630 | $ | 23,774 | $ | 20,034 | ||||||||||||
Ratio of expenses to average net assets5 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 1.03 | % | 1.13 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets5 | (0.78 | )% | 2.44 | % | 0.98 | % | 0.40 | % | 0.46 | % | 0.49 | % | ||||||||||||
Portfolio turnover rate2 | 1 | % | 12 | % | 31 | % | 43 | % | 90 | % | 33 | % |
1 | Based on average shares outstanding throughout the period. |
2 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
3 | Rounds to less than $0.01. |
4 | Not annualized. |
5 | Annualized for periods of less than one year. |
See notes to financial statements.
80 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI Switzerland Index Fund | ||||||||||||||||||||||||
Six months Feb. 29, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | Year ended Aug. 31, 1999 | |||||||||||||||||||
Net asset value, beginning of period | $ | 12.23 | $ | 11.59 | $ | 12.95 | $ | 15.54 | $ | 15.39 | $ | 15.55 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)1 | (0.01 | ) | 0.05 | 0.03 | 0.04 | 0.04 | 0.04 | |||||||||||||||||
Net realized and unrealized gain (loss) | 2.97 | 0.62 | (1.38 | ) | (2.54 | ) | 0.27 | 0.19 | ||||||||||||||||
Total from investment operations | 2.96 | 0.67 | (1.35 | ) | (2.50 | ) | 0.31 | 0.23 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.05 | ) | (0.03 | ) | (0.01 | ) | (0.05 | ) | (0.04 | ) | (0.07 | ) | ||||||||||||
Net realized gain | — | — | — | (0.04 | ) | (0.11 | ) | (0.31 | ) | |||||||||||||||
Return of capital | — | — | — | — | (0.01 | ) | (0.01 | ) | ||||||||||||||||
Total distributions | (0.05 | ) | (0.03 | ) | (0.01 | ) | (0.09 | ) | (0.16 | ) | (0.39 | ) | ||||||||||||
Net asset value, end of period | $ | 15.14 | $ | 12.23 | $ | 11.59 | $ | 12.95 | $ | 15.54 | $ | 15.39 | ||||||||||||
Total return | 24.15 | %4 | 5.89 | % | (10.47 | )% | (16.08 | )% | 1.96 | % | 1.47 | % | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 45,424 | $ | 33,643 | $ | 31,883 | $ | 32,384 | $ | 44,685 | $ | 38,499 | ||||||||||||
Ratio of expenses to average net assets3 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 1.01 | % | 1.09 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets3 | (0.10 | )% | 0.43 | % | 0.20 | % | 0.29 | % | 0.23 | % | 0.24 | % | ||||||||||||
Portfolio turnover rate2 | 2 | % | 10 | % | 12 | % | 34 | % | 35 | % | 35 | % |
1 | Based on average shares outstanding throughout the period. |
2 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
3 | Annualized for periods of less than one year. |
4 | Not annualized. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 81 |
Table of Contents
Financial Highlights (Continued)
iSHARES, INC.
(For a share outstanding throughout each period)
iShares MSCI United Kingdom Index Fund | ||||||||||||||||||||||||
Six months Feb. 29, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | Year ended Aug. 31, 1999 | |||||||||||||||||||
Net asset value, beginning of period | $ | 13.00 | $ | 12.77 | $ | 15.11 | $ | 18.35 | $ | 20.25 | $ | 18.48 | ||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income1 | 0.11 | 0.39 | 0.48 | 0.26 | 0.27 | 0.44 | ||||||||||||||||||
Net realized and unrealized gain (loss) | 3.37 | 0.12 | (2.60 | ) | (3.23 | ) | (0.85 | ) | 2.40 | |||||||||||||||
Total from investment operations | 3.48 | 0.51 | (2.12 | ) | (2.97 | ) | (0.58 | ) | 2.84 | |||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.48 | ) | (0.28 | ) | (0.22 | ) | (0.25 | ) | (0.25 | ) | (0.37 | ) | ||||||||||||
Net realized gain | — | — | — | (0.02 | ) | (1.03 | ) | (0.62 | ) | |||||||||||||||
Return of capital | — | — | — | — | (0.04 | ) | (0.08 | ) | ||||||||||||||||
Total distributions | (0.48 | ) | (0.28 | ) | (0.22 | ) | (0.27 | ) | (1.32 | ) | (1.07 | ) | ||||||||||||
Net asset value, end of period | $ | 16.00 | $ | 13.00 | $ | 12.77 | $ | 15.11 | $ | 18.35 | $ | 20.25 | ||||||||||||
Total return | 26.99 | %4 | 4.20 | % | (14.19 | )% | (16.20 | )% | (3.00 | )% | 15.33 | % | ||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 188,816 | $ | 150,809 | $ | 120,067 | $ | 117,883 | $ | 146,803 | $ | 113,402 | ||||||||||||
Ratio of expenses to average net assets3 | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.94 | % | 0.97 | % | ||||||||||||
Ratio of net investment income to average net assets3 | 1.43 | % | 3.23 | % | 3.39 | % | 1.57 | % | 1.39 | % | 2.16 | % | ||||||||||||
Portfolio turnover rate2 | 2 | % | 6 | % | 14 | % | 30 | % | 33 | % | 13 | % |
1 | Based on average shares outstanding throughout the period. |
2 | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
3 | Not annualized. |
4 | Annualized for periods of less than one year. |
See notes to financial statements.
82 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to the Financial Statements (Unaudited)
iSHARES, INC.
1. SIGNIFICANT ACCOUNTING POLICIES
iShares, 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 September 1, 1994. As of February 29, 2004, the Company offered 24 investment portfolios or funds.
These financial statements relate only to the iShares MSCI Austria, iShares MSCI Belgium, iShares MSCI EMU, iShares MSCI France, iShares MSCI Germany, iShares MSCI Italy, iShares MSCI Netherlands, iShares MSCI Spain, iShares MSCI Sweden, iShares MSCI Switzerland and iShares MSCI United Kingdom Index Funds (each a “Fund”, collectively the “Funds”).
The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in a particular market, as measured by a particular equity securities index compiled by Morgan Stanley Capital International Inc. (“MSCI”). The investment advisor utilizes a “passive” or index approach to achieve each Fund’s investment objective. Each of the Funds is classified as a non-diversified fund under the 1940 Act. Non-diversified funds generally hold stocks in fewer companies than diversified funds and may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence.
Each Fund invests in the securities of foreign issuers of a single country or region, which 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 of expropriation of assets; and the risk of war.
Under the Funds’ organizational documents, their officers and directors are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.
The following significant accounting policies are consistently followed by the Company in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for investment companies. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. Actual results could differ from those estimates.
Certain prior year amounts in the financial statements have been reclassified to be consistent with the current period presentation.
SECURITY VALUATION
Portfolio securities for which market prices are readily available are valued using the official closing price of the primary exchange on which they are traded. The methodology used to determine such closing prices varies among markets. Such prices are generally the same as those used by MSCI in calculating the benchmark indices used by the Funds. Short-term investments are valued at amortized cost, which approximates market value. Mutual fund shares are valued at net asset value. Any securities, including restricted securities or other assets for which market quotations are not readily available, or for which a significant event has occurred since the time of the most recent market quotation, are valued in accordance with fair value pricing policies approved by the Company’s Board of Directors.
NOTESTOTHE FINANCIAL STATEMENTS | 83 |
Table of Contents
Notes to the Financial Statements (Unaudited) (Continued)
iSHARES, INC.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, and interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the prevailing rates of exchange at the end of each day. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective dates of such transactions.
Foreign currency and assets and liabilities denominated in foreign currency are generally converted into U.S. dollars using the same exchange rates utilized by MSCI in the calculation of the relevant MSCI Indices (currently, the exchange rates as of 4:00 p.m. London time). However, the Company may use a different exchange rate from the rate used by MSCI in the event that the investment advisor concludes that such rate is more appropriate.
Each 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 Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income, if any, including any net foreign currency gains, are declared and distributed at least annually by each Fund. Distributions of net realized gains, if any, generally are declared and distributed once a year. 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 Funds.
At August 31, 2003, the tax year-end of the Funds, the components of distributable earnings (accumulated losses) on a tax basis were as follows:
iShares MSCI Index Fund | Undistributed Income | Unrealized Appreciation (Depreciation) | Capital and Other Losses | Total Distributable Earnings (Accumulated Losses) | |||||||||||
Austria | $ | 272,938 | $ | 3,091,009 | $ | (3,798,347 | ) | $ | (434,400 | ) | |||||
Belgium | 884,836 | (2,123,900 | ) | (2,582,642 | ) | (3,821,706 | ) | ||||||||
EMU | 3,047,220 | (23,538,270 | ) | (7,516,772 | ) | (28,007,822 | ) | ||||||||
France | 794,879 | 9,255,419 | (6,671,662 | ) | 3,378,636 | ||||||||||
Germany | 1,804,102 | (44,771,009 | ) | (27,125,009 | ) | (70,091,916 | ) | ||||||||
Italy | 824,876 | (4,820,694 | ) | (4,726,165 | ) | (8,721,983 | ) | ||||||||
Netherlands | 480,580 | (6,102,051 | ) | (7,261,859 | ) | (12,883,330 | ) | ||||||||
Spain | 437,502 | 2,850,065 | (4,363,211 | ) | (1,075,644 | ) | |||||||||
Sweden | 332,115 | (1,750,242 | ) | (6,552,366 | ) | (7,970,493 | ) | ||||||||
Switzerland | 146,432 | (3,788,234 | ) | (6,023,354 | ) | (9,665,156 | ) | ||||||||
United Kingdom | 4,486,489 | (34,524,058 | ) | (20,665,867 | ) | (50,703,436 | ) |
For the years ended August 31, 2003 and August 31, 2002, the tax characterization of distributions paid for each Fund was equal to the book characterization of distributions paid. The total distributions and distributions per share are disclosed in the accompanying Statements of Changes in Net Assets and the Financial Highlights for all the Funds.
84 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Notes to the Financial Statements (Unaudited) (Continued)
iSHARES, INC.
FEDERAL INCOME TAXES
Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company, as defined in Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute all of its net income and any net 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 was required for the six months ended February 29, 2004.
The Funds had tax basis net capital loss carryforwards at August 31, 2003, the tax year-end of the Funds, as follows:
iShares MSCI Index Fund | Expiring 2007 | Expiring 2008 | Expiring 2009 | Expiring 2010 | Expiring 2011 | Total | ||||||||||||
Austria | $ | 4,273 | $ | 551,208 | $ | 336,553 | $ | 1,291,324 | $ | 370,948 | $ | 2,554,306 | ||||||
Belgium | — | 94,675 | 450,543 | 1,677,678 | 117,767 | 2,340,663 | ||||||||||||
EMU | — | — | 443 | 1,923,552 | 1,144,756 | 3,068,751 | ||||||||||||
France | — | — | — | 3,807,513 | 236,944 | 4,044,457 | ||||||||||||
Germany | — | — | 86,860 | 13,573,336 | 5,469,732 | 19,129,928 | ||||||||||||
Italy | — | — | — | 3,335,772 | 848,408 | 4,184,180 | ||||||||||||
Netherlands | — | — | 60,885 | 3,222,792 | 1,497,810 | 4,781,487 | ||||||||||||
Spain | — | — | 20,276 | 2,081,931 | 678,910 | 2,781,117 | ||||||||||||
Sweden | — | — | 126,557 | 3,350,244 | 1,577,551 | 5,054,352 | ||||||||||||
Switzerland | — | — | — | 2,855,879 | 1,018,305 | 3,874,184 | ||||||||||||
United Kingdom | — | — | — | 9,945,254 | 6,448,554 | 16,393,808 |
Net capital loss carryforwards may be applied against any net realized taxable gains in each succeeding year, or until their respective expiration date, whichever occurs first.
If any of the Funds own shares in certain foreign investment entities, referred to, under U.S. tax law code, as “passive foreign investment companies”, such Funds may elect to mark-to-market annually the shares of the passive foreign investment company, and would be required to distribute to shareholders any such mark-to-market gains.
For the year ended August 31, 2003, each Fund reclassified certain amounts to paid-in-capital from accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss), respectively, as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies and realized foreign currency gains and losses and gains and losses on in-kind redemptions. These reclassifications have no effect on net assets or net asset values per share.
REPURCHASE AGREEMENTS
Each Fund may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as an investment by the Fund, collateralized by securities, which are delivered to the Funds’ custodian or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest. Repurchase agreements held by the Funds at February 29, 2004 represent collateral from securities on loan. For further information, see Note 5, below.
NOTESTOTHE FINANCIAL STATEMENTS | 85 |
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Notes to the Financial Statements (Unaudited) (Continued)
iSHARES, INC.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
Barclays Global Fund Advisors (“BGFA”) acts as investment advisor to the Company and is responsible for the investment management of each Fund. BGFA is a California corporation indirectly owned by Barclays Bank PLC. BGFA serves as investment advisor to each Fund pursuant to an Advisory Agreement between the Company and BGFA, as amended on December 28, 2001. Under this agreement, BGFA is responsible for placing purchase and sale orders, providing continuous supervision of the investment portfolio of each Fund, and the general management of the Company’s affairs.
Under the Advisory Agreement, BGFA is responsible for all of the expenses (“Covered Expenses”) of each of the Funds, other than interest, taxes, brokerage commissions and other expenses connected with the executions of portfolio transactions, extraordinary expenses, distribution fees and advisory fees.
For its investment advisory services to the Funds, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate net assets of all the funds offered by the Company (except for the iShares MSCI Brazil, iShares MSCI Emerging Markets, iShares MSCI Pacific ex-Japan, iShares MSCI South Africa, iShares MSCI South Korea, and iShares MSCI Taiwan Index Funds) as follows:
Advisory Fee | Aggregate Net Assets | |
0.59% | First $7 billion | |
0.54 | Over $7 billion, up to and including $11 billion | |
0.49 | Over $11 billion |
Barclays Global Investors, N.A. (“BGI”) has a license agreement with MSCI for the use of the relevant MSCI indices. Under a sub-license agreement between BGI and the Funds, the fees for the use of such MSCI indices are paid directly by BGI to MSCI.
Investors Bank & Trust Company (“Investors Bank”) serves as administrator, custodian and transfer agent for the Company. As compensation for its services, Investors Bank receives certain out-of-pocket costs, transaction fees, and asset-based fees, which are accrued daily and paid monthly. These fees are Covered Expenses as defined above.
BGI serves as securities lending agent for the Company. BGI is an affiliate of BGFA, the Funds’ investment advisor. As securities lending agent, BGI receives as fees, a share of the income earned on investment of the cash collateral received for the loan of securities. For the six months ended February 29, 2004, BGI earned securities lending agent fees as follows:
iShares MSCI Index Fund | Securities Lending Agent Fees | ||
Austria | $ | 5,156 | |
Belgium | 7,704 | ||
EMU | 63,926 | ||
France | 5,966 | ||
Germany | 47,205 | ||
Italy | 10,742 | ||
Netherlands | 3,471 | ||
Spain | 19,186 | ||
Sweden | 6,080 | ||
Switzerland | 3,232 | ||
United Kingdom | 2,216 |
86 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Notes to the Financial Statements (Unaudited) (Continued)
iSHARES, INC.
SEI Investments Distribution Co. (the “Distributor”) serves as each Fund’s underwriter and distributor of the shares of each Fund, pursuant to a Distribution Agreement with the Company. The Company has adopted a distribution plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Distributor is entitled to receive a distribution fee from each Fund, not to exceed 0.25% of the average daily net assets of such Fund, for distribution-related services.
Pursuant to an exemptive order issued by the Securities and Exchange Commission, each Fund may invest in the Institutional Shares of the Institutional Money Market Fund (“IMMF”) and Prime Money Market Fund (“PMMF”) of Barclays Global Investors Funds. The IMMF and PMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Money Market Master Portfolio and Prime Money Market Master Portfolio (collectively, the “Master Portfolios”), respectively, which are managed by BGFA, the Funds’ investment advisor. The IMMF and PMMF are open-end money market funds available only to institutional investors, including other investment companies managed by BGFA. The IMMF and PMMF seek a high level of income consistent with liquidity and the preservation of capital. While the IMMF and PMMF do not directly charge an advisory fee, the Master Portfolios in which they invest do charge an advisory fee. Income distributions from the IMMF and PMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Funds from temporary cash investments or from investment of securities lending collateral are recorded as either interest income or securities lending income, respectively, in the accompanying Statements of Operations.
Pursuant to Rule 17a-7 of the 1940 Act, certain Funds executed cross trades for the six months ended February 29, 2004. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment advisor. The Board has concluded that all transactions executed during the first four months of the fiscal year were in compliance with the requirements and restrictions set forth by Rule 17a-7. The Board is scheduled at its next meeting to review all such transactions executed during the months of January and February 2004.
As a result of using an index approach to investing, the iShares MSCI United Kingdom Index Fund held shares of Barclays PLC, with a current market value of $5,541,922 as of February 29, 2004. Barclays PLC is an affiliate of BGFA, the Funds’ investment advisor.
As of February 29, 2004, certain directors and officers of the Company are also officers of BGI.
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended February 29, 2004, were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||
Austria | $ | 1,783,185 | $ | 2,140,191 | ||
Belgium | 567,431 | 1,247,516 | ||||
EMU | 5,985,378 | 8,752,466 | ||||
France | 1,311,854 | 2,313,954 | ||||
Germany | 6,824,678 | 8,632,290 | ||||
Italy | 964,962 | 1,848,368 | ||||
Netherlands | 732,418 | 1,078,128 | ||||
Spain | 1,173,293 | 1,421,115 | ||||
Sweden | 218,934 | 630,236 | ||||
Switzerland | 646,803 | 889,106 | ||||
United Kingdom | 2,457,040 | 5,708,246 |
NOTESTOTHE FINANCIAL STATEMENTS | 87 |
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Notes to the Financial Statements (Unaudited) (Continued)
iSHARES, INC.
In-kind transactions for the six months ended February 29, 2004, were as follows:
iShares MSCI Index Fund | In-kind Purchases | In-kind Sales | ||||
Austria | $ | 21,131,002 | $ | 6,887,674 | ||
Belgium | 7,329,082 | 13,194,614 | ||||
EMU | 91,749,740 | — | ||||
France | — | 7,259,010 | ||||
Germany | 32,911,638 | 18,085,138 | ||||
Italy | — | 7,980,456 | ||||
Spain | 2,261,166 | 12,234,884 | ||||
Sweden | 5,100,204 | — | ||||
Switzerland | 3,712,739 | — | ||||
United Kingdom | 12,647,162 | 7,938,348 |
At February 29, 2004, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:
iShares MSCI Index Fund | Tax Cost | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||
Austria | $ | 46,268,358 | $ | 8,471,047 | $ | — | $ | 8,471,047 | ||||||
Belgium | 22,098,685 | 1,440,361 | (582,139 | ) | 858,222 | |||||||||
EMU | 351,700,516 | 34,388,179 | (6,276,001 | ) | 28,112,178 | |||||||||
France | 59,337,908 | 12,075,896 | (10,046,122 | ) | 2,029,774 | |||||||||
Germany | 206,722,411 | 8,149,686 | (26,124,070 | ) | (17,974,384 | ) | ||||||||
Italy | 34,471,435 | 4,310,464 | (2,931,775 | ) | 1,378,689 | |||||||||
Netherlands | 24,355,656 | 968,219 | (3,186,302 | ) | (2,218,083 | ) | ||||||||
Spain | 53,413,866 | 13,241,721 | (115,412 | ) | 13,126,309 | |||||||||
Sweden | 31,450,530 | 4,758,894 | (359,479 | ) | 4,399,415 | |||||||||
Switzerland | 48,071,940 | 6,570,762 | (1,574,951 | ) | 4,995,811 | |||||||||
United Kingdom | 182,661,635 | 27,251,891 | (20,783,946 | ) | 6,467,945 |
88 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Notes to the Financial Statements (Unaudited) (Continued)
iSHARES, INC.
4. CAPITAL SHARE TRANSACTIONS
The Company’s authorized shares are 10.9 billion shares of $.001 par value capital stock. The number of shares authorized to each Fund are as follows:
iShares MSCI Index Fund | Authorized Shares | |
Austria | 19,800,000 | |
Belgium | 136,200,000 | |
EMU | 500,000,000 | |
France | 340,200,000 | |
Germany | 382,200,000 | |
Italy | 63,600,000 | |
Netherlands | 255,000,000 | |
Spain | 127,800,000 | |
Sweden | 63,600,000 | |
Switzerland | 318,625,000 | |
United Kingdom | 943,200,000 |
The Company issues and redeems capital shares of each Fund only in aggregations of a specified number of shares (each, a “Creation Unit”) at net asset value. Except when aggregated in Creation Units, shares of each fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Statements of Changes in Net Assets.
The consideration for purchase of Creation Units of a Fund is generally the in-kind deposit of a designated portfolio of equity securities constituting a portfolio sampling representation of the corresponding MSCI Index and an amount of cash. A purchase transaction fee and a redemption transaction fee are charged to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.
5. LOANS OF PORTFOLIO SECURITIES
Each Fund may lend its investment securities to approved borrowers such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by each Fund is required to have a value equal to at least 105% of the market value of the loaned securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Funds of securities lending are that the borrower may not provide additional collateral when required, or return the securities when due.
As of February 29, 2004, the Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in a joint account with other funds managed by BGFA, which invests in securities with remaining maturities of 397 days or less, repurchase agreements and money market mutual funds including money market funds managed by BGFA. Repurchase agreements held in the joint account are fully collateralized by U.S. Government securities. Income from the joint account is allocated daily to each Fund, based on each Fund’s portion of the total cash collateral received. The market value of the securities on loan at February 29, 2004, and the value of the related collateral received are disclosed in the Statements of Assets and Liabilities. Securities lending income is presented net of broker rebates and fees paid to BGI.
NOTESTOTHE FINANCIAL STATEMENTS | 89 |
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The following is a list of iShares Funds being offered as of February 29, 2004, along with their respective exchange trading symbols. Please call iShares at 1-800-iShares (1-800-474-2737) to obtain a prospectus for any iShares fund. The prospectus contains more complete information, including charges, expenses, investment objectives and risk factors which should be carefully considered to determine if the fund(s) are an appropriate investment for you. Read the prospectus(es) carefully before investing. Investing involves risk, including possible loss of principal.
Broad Market
iShares Dow Jones U.S. Total Market Index Fund (IYY)
iShares Russell 3000 Index Fund (IWV)
iShares Russell 3000 Growth Index Fund (IWZ)
iShares Russell 3000 Value Index Fund (IWW)
iShares S&P 1500 Index Fund (ISI)
Large Cap
iShares Russell 1000 Index Fund (IWB)
iShares Russell 1000 Growth Index Fund (IWF)
iShares Russell 1000 Value Index Fund (IWD)
iShares S&P 100 Index Fund (OEF)
iShares S&P 500 Index Fund (IVV)
iShares S&P 500/BARRA Growth Index Fund (IVW)
iShares S&P 500/BARRA Value Index Fund (IVE)
Mid Cap
iShares Russell Midcap Index Fund (IWR)
iShares Russell Midcap Growth Index Fund (IWP)
iShares Russell Midcap Value Index Fund (IWS)
iShares S&P MidCap 400 Index Fund (IJH)
iShares S&P MidCap 400/BARRA Growth Index Fund (IJK)
iShares S&P MidCap 400/BARRA Value Index Fund (IJJ)
Small Cap
iShares Russell 2000 Index Fund (IWM)
iShares Russell 2000 Growth Index Fund (IWO)
iShares Russell 2000 Value Index Fund (IWN)
iShares S&P SmallCap 600 Index Fund (IJR)
iShares S&P SmallCap 600/BARRA Growth Index Fund (IJT)
iShares S&P SmallCap 600/BARRA Value Index Fund (IJS)
Sector & Industry
iShares Cohen & Steers Realty Majors Index Fund (ICF)
iShares Dow Jones Transportation Average Index Fund (IYT)
iShares Dow Jones U.S. Basic Materials Sector Index Fund (IYM)
iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund (IYC)
iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund (IYK)
iShares Dow Jones U.S. Energy Sector Index Fund (IYE)
iShares Dow Jones U.S. Financial Sector Index Fund (IYF)
iShares Dow Jones U.S. Financial Services Index Fund (IYG)
iShares Dow Jones U.S. Healthcare Sector Index Fund (IYH)
iShares Dow Jones U.S. Industrial Sector Index Fund (IYJ)
iShares Dow Jones U.S. Real Estate Index Fund (IYR)
iShares Dow Jones U.S. Technology Sector Index Fund (IYW)
iShares Dow Jones U.S. Telecommunications Sector Index Fund (IYZ)
iShares Dow Jones U.S. Utilities Sector Index Fund (IDU)
iShares Goldman Sachs Natural Resources Index Fund (IGE)
iShares Goldman Sachs Networking Index Fund (IGN)
iShares Goldman Sachs Semiconductor Index Fund (IGW)
iShares Goldman Sachs Software Index Fund (IGV)
iShares Goldman Sachs Technology Index Fund (IGM)
iShares Nasdaq Biotechnology Index Fund (IBB)
Global Sector
iShares S&P Global Energy Sector Index Fund (IXC)
iShares S&P Global Financials Sector Index Fund (IXG)
iShares S&P Global Healthcare Sector Index Fund (IXJ)
iShares S&P Global Technology Sector Index Fund (IXN)
iShares S&P Global Telecommunications Sector Index Fund (IXP)
International/Broad Market
iShares MSCI EAFE Index Fund (EFA)
iShares MSCI Emerging Markets Index Fund (EEM)
International/Regional
iShares MSCI EMU Index Fund (EZU)
iShares MSCI Pacific ex-Japan Index Fund (EPP)
iShares S&P Europe 350 Index Fund (IEV)
International/Developed Country
iShares MSCI Australia Index Fund (EWA)
iShares MSCI Austria Index Fund (EWO)
iShares MSCI Belgium Index Fund (EWK)
iShares MSCI Canada Index Fund (EWC)
iShares MSCI France Index Fund (EWQ)
iShares MSCI Germany Index Fund (EWG)
iShares MSCI Hong Kong Index Fund (EWH)
iShares MSCI Italy Index Fund (EWI)
iShares MSCI Japan Index Fund (EWJ)
iShares MSCI Netherlands Index Fund (EWN)
iShares MSCI Singapore Index Fund (EWS)
iShares MSCI Spain Index Fund (EWP)
iShares MSCI Sweden Index Fund (EWD)
iShares MSCI Switzerland Index Fund (EWL)
iShares MSCI United Kingdom Index Fund (EWU)
iShares S&P/TOPIX 150 Index Fund (ITF)
International/Emerging Country
iShares MSCI Brazil Index Fund (EWZ)
iShares MSCI Malaysia Index Fund (EWM)
iShares MSCI Mexico Index Fund (EWW)
iShares MSCI South Africa Index Fund (EZA)
iShares MSCI South Korea Index Fund (EWY)
iShares MSCI Taiwan Index Fund (EWT)
iShares S&P Latin America 40 Index Fund (ILF)
Global/Broad Market
iShares S&P Global 100 Index Fund (IOO)
Fixed Income
iShares GS $ InvesTop™ Corporate Bond Fund (LQD)
iShares Lehman 1-3 Year Treasury Bond Fund (SHY)
iShares Lehman 7-10 Year Treasury Bond Fund (IEF)
iShares Lehman 20+ Year Treasury Bond Fund (TLT)
iShares Lehman Aggregate Bond Fund (AGG)
iShares Lehman TIPS Bond Fund (TIP)
An investment in the fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Specialty
iShares Dow Jones Select Dividend Index Fund (DVY)
iShares is a registered trademark of Barclays Global Investors, N.A. The iShares Funds are not sponsored, endorsed or issued by Goldman, Sachs & Co. or Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., Morgan Stanley Capital International, The Nasdaq Stock Market, Inc., Frank Russell Company, or Standard & Poor’s. None of these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with Goldman, Sachs & Co. or Lehman Brothers. “GS $ InvesTop™” and “Goldman Sachs®” are trademarks of Goldman, Sachs & Co.
This advertising section does not constitute part of the 2004 Semi-Annual Report.
90 | 2004 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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The iShares Funds are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BCFA) serves as an advisor to the iShares Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the iShares Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., a wholly owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI.
The iShares Funds are not sponsored, issued, endorsed, sold or promoted by Morgan Stanley Capital International, Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds.
Investing involves risks, including possible loss of principal.
©2004 Barclays Global Investors. All rights reserved. iShares is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling toll-free 1 800 474 2737; on the Funds’ website at www.iShares.com; and on the Securities and Exchange Commission’s website at www.sec.gov.
This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
iShares® Industrial strength investment tools from BARCLAYS GLOBAL INVESTORS
I 800 iSHARES (I 800 474 2737) www.iSHARES.COM
BGI-F-036-02004
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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 filing.
Item 6. | Schedule of Investments. |
Not applicable to this filing.
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable to the Registrant.
Item 8. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable to the Registrant.
Item 9. | Submission of Matters to a Vote of Security Holders. |
Not applicable.
Item 10. | Controls and Procedures. |
(a) The President and 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 the attached certification, Section 4 (a).
(b) Not applicable.
Item 11. | Exhibits. |
(a) (1) Not applicable to this semi-annual filing.
(a) (2) Section 302 Certifications are attached.
(b) Section 906 Certifications are attached.
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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, Inc. |
By: /s/ Lee T. Kranefuss |
Lee T. Kranefuss, President |
Date: May 7, 2004 |
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/ Lee T. Kranefuss |
Lee T. Kranefuss, President |
Date: May 7, 2004 |
By: /s/ Michael A. Latham |
Michael A. Latham, Principal Financial Officer |
Date: May 7, 2004 |