UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
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)
c/o: Investors Bank & Trust Company
200 Clarendon Street; Boston, MA 02116
(Address of principal executive offices) (Zip code)
Corporation Trust Incorporated
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: August 31, 2004
Item 1. Reports to Stockholders
2004 ANNUAL REPORT TO SHAREHOLDERS | AUGUST 31, 2004
iSHAR E S M S C I S E R I E S
iSHARESMSCIAUSTRIAINDEXFUND
iSHARESMSCIBELGIUMINDEXFUND | Electronic delivery of this document may be available to you. See inside for details. | |
iSHARESMSCIEMUINDEXFUND | ||
iSHARESMSCIFRANCEINDEXFUND | ||
iSHARESMSCIGERMANYINDEXFUND | ||
iSHARESMSCIITALYINDEXFUND | ||
iSHARESMSCINETHERLANDSINDEXFUND | ||
iSHARESMSCISPAININDEXFUND | ||
iSHARESMSCISWEDENINDEXFUND | ||
iSHARESMSCISWITZERLANDINDEXFUND | ||
iSHARESMSCIUNITEDKINGDOMINDEXFUND |
Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on your iShares holdings. In addition, it’s a way we can all care for our environment. To that end, we are pleased to offer shareholder reports and prospectuses online.
To sign up for electronic delivery, please follow these simple steps:
1. | Go to www.icsdelivery.com. |
2. | From the main page, select the first letter of your brokerage firm’s name. |
3. | Select your brokerage institution from the list that follows. If your brokerage firm is not listed, electronic delivery may not be available. Please contact your brokerage firm or financial adviser. |
4. | Fill out the appropriate information and provide the e-mail address where you would like your information sent. |
Your information and email address will be kept confidential and only used to deliver documents to you. If at any time you are not satisfied, you can cancel electronic delivery at www.icsdelivery.com and once again receive physical delivery of your materials. If you have any questions, please contact your financial adviser or brokerage firm.
Once you have enrolled, you will no longer receive prospectuses and shareholder reports in the mail. Instead, you will receive e-mail notifications announcing that the shareholder report or prospectus has been posted on the iShares website at www.iShares.com.
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European equity markets generally delivered positive returns during the 12-month reporting period ended August 31, 2004. Unlike Japanese and U.S. economic indicators, which generally failed to meet analysts’ forecasts, Europe exceeded expectations, particularly toward the end of the reporting period. Activity in Europe through the first eight months of 2004 generally was stronger than expected, largely thanks to an increase in export orders for many European markets. However, threats to continued export growth appeared late in the reporting period, including a U.S. recovery that became less robust in recent months, surging oil prices, and a strong euro.
Aside from export levels, many European markets appeared to offer good value relative to other areas of the world. Although the profits of European companies have largely kept up with their U.S. counterparts, many European equities trade at a discount when compared to equities in the U.S. and other markets. Of course, while these signs are encouraging, there is no guarantee that European markets will outperform other regions, or that more challenging investment conditions will not return.
As market conditions change, we encourage you to talk with your financial adviser about what blend of investments or asset allocation can best help you meet your financial goals. One trait many successful investors share is the ability to stay focused on their personal financial goals while ignoring market swings. Regardless of market conditions, a sound, disciplined investment plan is essential.
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.
Lee T. Kranefuss |
President and Chairman of the Board of Directors |
iShares, Inc. |
SHAREHOLDER LETTER | 1 |
Managers’ Discussion & Analysis
iSHARES® MSCI AUSTRIA INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
62.70% | 64.50 | % | 63.77 | % | 14.37 | % | 14.54 | % | 14.09 | % | 7.06 | % | 7.19 | % | 7.95 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
62.70% | 64.50 | % | 63.77 | % | 95.67 | % | 97.16 | % | 93.28 | % | 78.21 | % | 80.10 | % | 91.35 | % |
Total returns for the periods 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 one-year period. 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI AUSTRIA INDEX FUND | MSCI AUSTRIA INDEX | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 10,101 | $ | 10,231 | ||
4/30/1996 | $ | 10,009 | $ | 10,298 | ||
5/31/1996 | $ | 10,577 | $ | 10,859 | ||
6/30/1996 | $ | 9,881 | $ | 10,196 | ||
7/31/1996 | $ | 9,698 | $ | 9,972 | ||
8/31/1996 | $ | 9,661 | $ | 10,066 | ||
9/30/1996 | $ | 9,420 | $ | 9,774 | ||
10/31/1996 | $ | 9,457 | $ | 9,842 | ||
11/30/1996 | $ | 9,569 | $ | 10,074 | ||
12/31/1996 | $ | 9,727 | $ | 10,229 | ||
1/31/1997 | $ | 9,420 | $ | 9,815 | ||
2/28/1997 | $ | 9,401 | $ | 9,841 | ||
3/31/1997 | $ | 9,689 | $ | 9,950 | ||
4/30/1997 | $ | 9,318 | $ | 9,540 | ||
5/31/1997 | $ | 9,782 | $ | 10,056 | ||
6/30/1997 | $ | 9,736 | $ | 9,953 | ||
7/31/1997 | $ | 10,488 | $ | 10,571 | ||
8/31/1997 | $ | 9,764 | $ | 9,922 | ||
9/30/1997 | $ | 10,377 | $ | 10,655 | ||
10/31/1997 | $ | 10,145 | $ | 10,410 | ||
11/30/1997 | $ | 9,373 | $ | 9,707 | ||
12/31/1997 | $ | 9,829 | $ | 10,389 | ||
1/31/1998 | $ | 10,042 | $ | 10,741 | ||
2/28/1998 | $ | 10,535 | $ | 11,506 | ||
3/31/1998 | $ | 11,083 | $ | 12,085 | ||
4/30/1998 | $ | 11,928 | $ | 13,119 | ||
5/31/1998 | $ | 12,532 | $ | 13,867 | ||
6/30/1998 | $ | 11,780 | $ | 12,868 | ||
7/31/1998 | $ | 11,900 | $ | 13,071 | ||
8/31/1998 | $ | 9,975 | $ | 10,763 | ||
9/30/1998 | $ | 9,018 | $ | 9,627 | ||
10/31/1998 | $ | 10,024 | $ | 10,814 | ||
11/30/1998 | $ | 9,442 | $ | 10,261 | ||
12/31/1998 | $ | 9,649 | $ | 10,426 | ||
1/31/1999 | $ | 9,027 | $ | 9,802 | ||
2/28/1999 | $ | 9,402 | $ | 10,346 | ||
3/31/1999 | $ | 9,314 | $ | 10,315 | ||
4/30/1999 | $ | 9,738 | $ | 10,754 | ||
5/31/1999 | $ | 8,741 | $ | 9,409 | ||
6/30/1999 | $ | 9,018 | $ | 9,829 | ||
7/31/1999 | $ | 9,037 | $ | 9,886 | ||
8/31/1999 | $ | 9,108 | $ | 9,900 | ||
9/30/1999 | $ | 8,659 | $ | 9,378 | ||
10/31/1999 | $ | 8,499 | $ | 9,263 | ||
11/30/1999 | $ | 8,080 | $ | 8,849 | ||
12/31/1999 | $ | 8,649 | $ | 9,476 | ||
1/31/2000 | $ | 7,941 | $ | 8,645 | ||
2/29/2000 | $ | 7,622 | $ | 8,242 | ||
3/31/2000 | $ | 7,861 | $ | 8,450 | ||
4/30/2000 | $ | 7,422 | $ | 8,009 | ||
5/31/2000 | $ | 7,741 | $ | 8,292 | ||
6/30/2000 | $ | 8,031 | $ | 8,573 | ||
7/31/2000 | $ | 7,941 | $ | 8,570 | ||
8/31/2000 | $ | 7,695 | $ | 8,331 | ||
9/30/2000 | $ | 7,705 | $ | 8,372 | ||
10/31/2000 | $ | 7,264 | $ | 7,916 | ||
11/30/2000 | $ | 7,013 | $ | 7,614 | ||
12/31/2000 | $ | 7,735 | $ | 8,343 | ||
1/31/2001 | $ | 7,956 | $ | 8,589 | ||
2/28/2001 | $ | 8,498 | $ | 9,147 | ||
3/31/2001 | $ | 8,106 | $ | 8,710 | ||
4/30/2001 | $ | 8,277 | $ | 8,914 | ||
5/31/2001 | $ | 7,855 | $ | 8,359 | ||
6/30/2001 | $ | 7,785 | $ | 8,260 | ||
7/31/2001 | $ | 8,227 | $ | 8,740 | ||
8/31/2001 | $ | 8,342 | $ | 8,821 | ||
9/30/2001 | $ | 7,424 | $ | 7,960 | ||
10/31/2001 | $ | 6,965 | $ | 7,493 | ||
11/30/2001 | $ | 7,455 | $ | 8,084 | ||
12/31/2001 | $ | 7,536 | $ | 8,153 | ||
1/31/2002 | $ | 7,506 | $ | 8,114 | ||
2/28/2002 | $ | 7,852 | $ | 8,410 | ||
3/31/2002 | $ | 8,403 | $ | 9,030 | ||
4/30/2002 | $ | 9,056 | $ | 9,777 | ||
5/31/2002 | $ | 9,168 | $ | 9,858 | ||
6/30/2002 | $ | 9,249 | $ | 9,973 | ||
7/31/2002 | $ | 8,372 | $ | 9,035 | ||
8/31/2002 | $ | 8,352 | $ | 9,025 | ||
9/30/2002 | $ | 7,893 | $ | 8,489 | ||
10/31/2002 | $ | 7,985 | $ | 8,615 | ||
11/30/2002 | $ | 7,985 | $ | 8,594 | ||
12/31/2002 | $ | 8,837 | $ | 9,625 | ||
1/31/2003 | $ | 9,126 | $ | 9,817 | ||
2/28/2003 | $ | 9,188 | $ | 9,960 | ||
3/31/2003 | $ | 9,312 | $ | 10,119 | ||
4/30/2003 | $ | 10,148 | $ | 10,896 | ||
5/31/2003 | $ | 10,902 | $ | 11,460 | ||
6/30/2003 | $ | 11,129 | $ | 11,822 | ||
7/31/2003 | $ | 11,088 | $ | 11,742 | ||
8/31/2003 | $ | 10,954 | $ | 11,684 | ||
9/30/2003 | $ | 11,532 | $ | 12,362 | ||
10/31/2003 | $ | 11,996 | $ | 13,041 | ||
11/30/2003 | $ | 12,905 | $ | 13,995 | ||
12/31/2003 | $ | 14,004 | $ | 15,106 | ||
1/31/2004 | $ | 15,259 | $ | 16,432 | ||
2/29/2004 | $ | 15,886 | $ | 16,840 | ||
3/31/2004 | $ | 16,587 | $ | 17,603 | ||
4/30/2004 | $ | 16,670 | $ | 17,705 | ||
5/31/2004 | $ | 16,754 | $ | 17,801 | ||
6/30/2004 | $ | 17,695 | $ | 18,829 | ||
7/31/2004 | $ | 17,905 | $ | 19,165 | ||
8/31/2004 | $ | 17,821 | $ | 19,135 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
2 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Austrian equity market, as measured by the MSCI Austria Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 62.70%, while the Index returned 63.77%.
The Austrian market posted the strongest gains of any of the MSCI country funds during the reporting period. Generally improving economic conditions both in the U.S. and in Europe contributed to the strong market performance. Because the countries that make up the European Union account for the bulk of Austria’s exports, their economic health is vital to Austria’s export market. Export demand grew during the reporting period, in turn benefiting many Austrian companies.
The ten largest holdings in the Fund represented almost 82% of the Fund’s net assets as of August 31, 2004. Among the ten largest holdings, Wienerberger AG (4.71% of the net assets of the Fund as of August 31, 2004) performed well, as did the Class A shares of Oesterreichische Elektrizitaetswirtschafts AG (4.80% of the net assets of the Fund as of August 31, 2004).
VA Technologie AG (4.42% of the net assets of the Fund as of August 31, 2004) enjoyed triple digit gains during the reporting period.
Additionally, several companies among the Fund’s ten largest holdings continued to benefit from their expansion into the emerging, potentially higher growth central and eastern European markets, including Hungary, the Czech Republic and Slovenia. Notably, Erste Bank der Oesterreichischen Sparkassen AG, the largest Fund holding at 20.22% of net assets as of August 31, 2004, and Bank Austria Creditanstalt AG (4.96% of the net assets of the Fund as of August 31, 2004), also posted strong gains during the reporting period.
MANAGERS DISCUSSION & ANALYSIS | 3 |
Managers’ Discussion & Analysis
iSHARES® MSCI BELGIUM INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
42.88% | 44.41 | % | 41.85 | % | 1.18 | % | 1.19 | % | (1.32 | )% | 6.31 | % | 6.40 | % | 6.45 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
42.88% | 44.41 | % | 41.85 | % | 6.05 | % | 6.10 | % | (6.44 | )% | 67.95 | % | 69.20 | % | 69.84 | % |
Total returns for the periods 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 one-year period. 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI BELGIUM INDEX FUND | MSCI BELGIUM INDEX | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 9,759 | $ | 9,806 | ||
4/30/1996 | $ | 9,966 | $ | 10,059 | ||
5/31/1996 | $ | 10,288 | $ | 10,220 | ||
6/30/1996 | $ | 10,322 | $ | 10,267 | ||
7/31/1996 | $ | 10,456 | $ | 10,382 | ||
8/31/1996 | $ | 10,501 | $ | 10,479 | ||
9/30/1996 | $ | 10,543 | $ | 10,612 | ||
10/31/1996 | $ | 10,676 | $ | 10,768 | ||
11/30/1996 | $ | 10,915 | $ | 11,088 | ||
12/31/1996 | $ | 10,895 | $ | 11,133 | ||
1/31/1997 | $ | 11,070 | $ | 11,401 | ||
2/28/1997 | $ | 11,204 | $ | 11,576 | ||
3/31/1997 | $ | 11,365 | $ | 11,745 | ||
4/30/1997 | $ | 11,407 | $ | 11,863 | ||
5/31/1997 | $ | 11,877 | $ | 12,151 | ||
6/30/1997 | $ | 12,318 | $ | 12,404 | ||
7/31/1997 | $ | 12,437 | $ | 12,581 | ||
8/31/1997 | $ | 11,474 | $ | 11,643 | ||
9/30/1997 | $ | 12,090 | $ | 12,319 | ||
10/31/1997 | $ | 11,906 | $ | 12,241 | ||
11/30/1997 | $ | 12,002 | $ | 12,364 | ||
12/31/1997 | $ | 12,185 | $ | 12,642 | ||
1/31/1998 | $ | 12,596 | $ | 13,115 | ||
2/28/1998 | $ | 13,161 | $ | 13,745 | ||
3/31/1998 | $ | 14,122 | $ | 14,901 | ||
4/30/1998 | $ | 15,017 | $ | 15,920 | ||
5/31/1998 | $ | 15,831 | $ | 16,883 | ||
6/30/1998 | $ | 16,616 | $ | 18,117 | ||
7/31/1998 | $ | 17,518 | $ | 19,014 | ||
8/31/1998 | $ | 15,997 | $ | 17,603 | ||
9/30/1998 | $ | 15,692 | $ | 17,253 | ||
10/31/1998 | $ | 16,675 | $ | 18,458 | ||
11/30/1998 | $ | 16,953 | $ | 19,055 | ||
12/31/1998 | $ | 18,483 | $ | 21,206 | ||
1/31/1999 | $ | 17,675 | $ | 20,532 | ||
2/28/1999 | $ | 16,753 | $ | 19,604 | ||
3/31/1999 | $ | 15,884 | $ | 18,488 | ||
4/30/1999 | $ | 15,527 | $ | 17,891 | ||
5/31/1999 | $ | 14,910 | $ | 16,896 | ||
6/30/1999 | $ | 15,049 | $ | 17,096 | ||
7/31/1999 | $ | 15,110 | $ | 17,279 | ||
8/31/1999 | $ | 15,837 | $ | 18,153 | ||
9/30/1999 | $ | 15,364 | $ | 17,603 | ||
10/31/1999 | $ | 15,295 | $ | 17,527 | ||
11/30/1999 | $ | 14,861 | $ | 17,013 | ||
12/31/1999 | $ | 15,886 | $ | 18,182 | ||
1/31/2000 | $ | 12,969 | $ | 14,788 | ||
2/29/2000 | $ | 12,329 | $ | 14,154 | ||
3/31/2000 | $ | 12,378 | $ | 14,183 | ||
4/30/2000 | $ | 11,905 | $ | 13,785 | ||
5/31/2000 | $ | 12,624 | $ | 14,303 | ||
6/30/2000 | $ | 13,541 | $ | 15,266 | ||
7/31/2000 | $ | 13,629 | $ | 15,444 | ||
8/31/2000 | $ | 13,382 | $ | 15,183 | ||
9/30/2000 | $ | 12,897 | $ | 14,566 | ||
10/31/2000 | $ | 12,573 | $ | 14,355 | ||
11/30/2000 | $ | 12,249 | $ | 13,865 | ||
12/31/2000 | $ | 13,329 | $ | 15,119 | ||
1/31/2001 | $ | 13,005 | $ | 14,734 | ||
2/28/2001 | $ | 13,025 | $ | 14,752 | ||
3/31/2001 | $ | 11,787 | $ | 13,423 | ||
4/30/2001 | $ | 11,727 | $ | 13,308 | ||
5/31/2001 | $ | 11,108 | $ | 12,692 | ||
6/30/2001 | $ | 11,351 | $ | 13,071 | ||
7/31/2001 | $ | 11,848 | $ | 13,653 | ||
8/31/2001 | $ | 12,215 | $ | 14,016 | ||
9/30/2001 | $ | 11,139 | $ | 12,867 | ||
10/31/2001 | $ | 10,901 | $ | 12,633 | ||
11/30/2001 | $ | 10,922 | $ | 12,609 | ||
12/31/2001 | $ | 11,598 | $ | 13,213 | ||
1/31/2002 | $ | 11,108 | $ | 12,469 | ||
2/28/2002 | $ | 11,067 | $ | 12,382 | ||
3/31/2002 | $ | 11,442 | $ | 12,607 | ||
4/30/2002 | $ | 12,035 | $ | 13,193 | ||
5/31/2002 | $ | 12,326 | $ | 13,425 | ||
6/30/2002 | $ | 12,243 | $ | 13,173 | ||
7/31/2002 | $ | 10,827 | $ | 11,377 | ||
8/31/2002 | $ | 10,859 | $ | 11,453 | ||
9/30/2002 | $ | 9,099 | $ | 9,552 | ||
10/31/2002 | $ | 9,786 | $ | 10,372 | ||
11/30/2002 | $ | 10,213 | $ | 10,804 | ||
12/31/2002 | $ | 10,512 | $ | 11,110 | ||
1/31/2003 | $ | 10,017 | $ | 10,500 | ||
2/28/2003 | $ | 8,964 | $ | 9,298 | ||
3/31/2003 | $ | 8,900 | $ | 9,195 | ||
4/30/2003 | $ | 10,459 | $ | 10,853 | ||
5/31/2003 | $ | 11,597 | $ | 11,919 | ||
6/30/2003 | $ | 11,576 | $ | 11,902 | ||
7/31/2003 | $ | 11,807 | $ | 12,176 | ||
8/31/2003 | $ | 11,755 | $ | 11,973 | ||
9/30/2003 | $ | 12,450 | $ | 12,703 | ||
10/31/2003 | $ | 13,135 | $ | 13,314 | ||
11/30/2003 | $ | 13,598 | $ | 13,783 | ||
12/31/2003 | $ | 14,828 | $ | 15,033 | ||
1/31/2004 | $ | 15,567 | $ | 15,718 | ||
2/29/2004 | $ | 16,147 | $ | 16,389 | ||
3/31/2004 | $ | 15,305 | $ | 15,503 | ||
4/30/2004 | $ | 15,305 | $ | 15,569 | ||
5/31/2004 | $ | 15,737 | $ | 15,951 | ||
6/30/2004 | $ | 16,238 | $ | 16,434 | ||
7/31/2004 | $ | 16,022 | $ | 16,222 | ||
8/31/2004 | $ | 16,795 | $ | 16,983 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
4 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Belgian equity market, as measured by the MSCI Belgium Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 42.88%, while the Index returned 41.85%.
Regulatory restraints, 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 constituent at its index 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 5% or more in a fund’s portfolio from exceeding 50% of a fund’s total assets. As of August 31, 2004, nearly 73% 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 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 Fund’s return relative to the Index’s return during the reporting period.
The Belgian market posted strong gains during the reporting period; thanks largely to strength among its financial sector and growing export levels. With more than half of its stock market represented by financial stocks, Belgium’s overall market performance in recent history 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. Financial stocks largely posted gains during the reporting period as conditions improved for the sector. Corporate earnings levels and equity valuations rose, investor activity increased, and interest rates remained low.
Within the Fund, the ten largest holdings accounted for more than 80% of net assets as of August 31, 2004. Fortis and Dexia Group, the Fund’s two largest holdings at 24.29% and 12.36% of net assets as of August 31, 2004, respectively, gained during the reporting period. KBC Bankverzekeringsholdings SA (4.96% of the net assets of the Fund as of August 31, 2004) and Groupe Bruxelles Lambert SA (4.89% of the net assets of the Fund as of August 31, 2004) also posted gains during the reporting period.
The vast majority of Belgium’s export trade is within Europe. As economic conditions in Europe improved during the reporting period, so did demand for Belgium’s exports. Pharmaceutical and chemical conglomerates UCB SA (4.75% of the net assets of the Fund as of August 31, 2004) and Solvay SA (4.81% of the net assets of the Fund as of August 31, 2004) benefited from the improved conditions, as did food chain Delhaize Group (4.89% of the net assets of the Fund as of August 31, 2004).
MANAGERS’ DISCUSSION & ANALYSIS | 5 |
Managers’ Discussion & Analysis
iSHARES® MSCI EMU INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||
Year Ended 8/31/04 | Inception to 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
20.07% | 20.53 | % | 20.61 | % | (6.41 | )% | (6.21 | )% | (6.08 | )% | (23.81 | )% | (23.14 | )% | (22.69 | )% |
Total returns for the periods 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.
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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI EMU INDEX FUND | MSCI EMU INDEX | |||||
7/25/2000 | $ | 10,000 | $ | 10,000 | ||
7/31/2000 | $ | 9,668 | $ | 9,657 | ||
8/31/2000 | $ | 9,418 | $ | 9,422 | ||
9/30/2000 | $ | 8,932 | $ | 8,952 | ||
10/31/2000 | $ | 8,806 | $ | 8,840 | ||
11/30/2000 | $ | 8,496 | $ | 8,523 | ||
12/31/2000 | $ | 9,072 | $ | 9,108 | ||
1/31/2001 | $ | 9,121 | $ | 9,159 | ||
2/28/2001 | $ | 8,213 | $ | 8,256 | ||
3/31/2001 | $ | 7,594 | $ | 7,631 | ||
4/30/2001 | $ | 8,232 | $ | 8,248 | ||
5/31/2001 | $ | 7,689 | $ | 7,712 | ||
6/30/2001 | $ | 7,381 | $ | 7,405 | ||
7/31/2001 | $ | 7,383 | $ | 7,408 | ||
8/31/2001 | $ | 7,109 | $ | 7,137 | ||
9/30/2001 | $ | 6,190 | $ | 6,203 | ||
10/31/2001 | $ | 6,477 | $ | 6,498 | ||
11/30/2001 | $ | 6,794 | $ | 6,830 | ||
12/31/2001 | $ | 6,989 | $ | 7,031 | ||
1/31/2002 | $ | 6,610 | $ | 6,649 | ||
2/28/2002 | $ | 6,581 | $ | 6,621 | ||
3/31/2002 | $ | 6,967 | $ | 7,009 | ||
4/30/2002 | $ | 6,846 | $ | 6,892 | ||
5/31/2002 | $ | 6,859 | $ | 6,901 | ||
6/30/2002 | $ | 6,667 | $ | 6,700 | ||
7/31/2002 | $ | 5,720 | $ | 5,751 | ||
8/31/2002 | $ | 5,766 | $ | 5,800 | ||
9/30/2002 | $ | 4,789 | $ | 4,820 | ||
10/31/2002 | $ | 5,407 | $ | 5,443 | ||
11/30/2002 | $ | 5,756 | $ | 5,800 | ||
12/31/2002 | $ | 5,479 | $ | 5,525 | ||
1/31/2003 | $ | 5,296 | $ | 5,344 | ||
2/28/2003 | $ | 5,074 | $ | 5,122 | ||
3/31/2003 | $ | 4,919 | $ | 4,964 | ||
4/30/2003 | $ | 5,712 | $ | 5,770 | ||
5/31/2003 | $ | 6,112 | $ | 6,169 | ||
6/30/2003 | $ | 6,197 | $ | 6,253 | ||
7/31/2003 | $ | 6,345 | $ | 6,410 | ||
8/31/2003 | $ | 6,345 | $ | 6,410 | ||
9/30/2003 | $ | 6,353 | $ | 6,428 | ||
10/31/2003 | $ | 6,823 | $ | 6,905 | ||
11/30/2003 | $ | 7,171 | $ | 7,265 | ||
12/31/2003 | $ | 7,802 | $ | 7,909 | ||
1/31/2004 | $ | 7,932 | $ | 8,046 | ||
2/29/2004 | $ | 8,079 | $ | 8,199 | ||
3/31/2004 | $ | 7,756 | $ | 7,877 | ||
4/30/2004 | $ | 7,650 | $ | 7,770 | ||
5/31/2004 | $ | 7,729 | $ | 7,845 | ||
6/30/2004 | $ | 7,945 | $ | 8,063 | ||
7/31/2004 | $ | 7,641 | $ | 7,752 | ||
8/31/2004 | $ | 7,619 | $ | 7,731 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
6 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the European Monetary Union (“EMU”) equity markets, as measured by the MSCI EMU Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 20.07%, while the Index returned 20.61%.
European markets began to see signs of recovery during the reporting period. Improving economic conditions in the U.S. and Asia, characterized by higher gross domestic product (“GDP”) and consumer spending levels, translated into increased demand for many European markets.
Some discouraging factors did weigh on European markets late in the reporting period, including an inconsistent picture of the U.S. economic recovery, surging oil prices and a strong euro, which continued to rise against the U.S. dollar. During the reporting period, however, export demand from the U.S remained high enough to help compensate for the increase in the euro.
Although higher oil prices posed a threat to economic growth during the reporting period, higher prices did benefit the share prices of oil companies. Total SA (France), the largest Fund holding at 4.63% of net assets as of August 31, 2004, was a strong performer during the reporting period. Royal Dutch Petroleum Co. (Netherlands) (4.26% of the Fund’s net assets as of August 31, 2004) posted more moderate gains.
EMU financial companies generally performed well. ING Groep NV (Netherlands) (1.74% of the net assets of the Fund as of August 31, 2004) was a strong performer during the reporting period. BNP Paribas SA (France) (1.96% of the net assets of the Fund as of August 31, 2004) posted more modest gains.
Telecommunications companies participated in a global rebound for their sector. Spanish telephone company Telefonica SA (2.55% of the net assets of the Fund as of August 31, 2004) logged gains during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 7 |
Managers’ Discussion & Analysis
iSHARES® MSCI FRANCE INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
22.44% | 22.94 | % | 22.72 | % | (0.37 | )% | (0.34 | )% | 0.11 | % | 8.26 | % | 8.33 | % | 8.47 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
22.44% | 22.94 | % | 22.72 | % | (1.85 | )% | (1.71 | )% | 0.56 | % | 95.89 | % | 96.97 | % | 99.33 | % |
Total returns for the periods 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI FRANCE INDEX FUND | MSCI FRANCE INDEX | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 10,596 | $ | 10,620 | ||
4/30/1996 | $ | 10,765 | $ | 10,812 | ||
5/31/1996 | $ | 10,668 | $ | 10,692 | ||
6/30/1996 | $ | 10,998 | $ | 10,885 | ||
7/31/1996 | $ | 10,757 | $ | 10,581 | ||
8/31/1996 | $ | 10,495 | $ | 10,363 | ||
9/30/1996 | $ | 11,072 | $ | 10,934 | ||
10/31/1996 | $ | 11,278 | $ | 11,165 | ||
11/30/1996 | $ | 11,855 | $ | 11,757 | ||
12/31/1996 | $ | 11,938 | $ | 11,872 | ||
1/31/1997 | $ | 12,160 | $ | 12,139 | ||
2/28/1997 | $ | 12,177 | $ | 12,201 | ||
3/31/1997 | $ | 12,523 | $ | 12,578 | ||
4/30/1997 | $ | 11,987 | $ | 12,065 | ||
5/31/1997 | $ | 11,921 | $ | 11,966 | ||
6/30/1997 | $ | 13,001 | $ | 12,961 | ||
7/31/1997 | $ | 13,232 | $ | 13,185 | ||
8/31/1997 | $ | 12,237 | $ | 12,184 | ||
9/30/1997 | $ | 13,478 | $ | 13,474 | ||
10/31/1997 | $ | 12,625 | $ | 12,572 | ||
11/30/1997 | $ | 12,878 | $ | 12,838 | ||
12/31/1997 | $ | 13,307 | $ | 13,291 | ||
1/31/1998 | $ | 13,755 | $ | 13,765 | ||
2/28/1998 | $ | 14,879 | $ | 14,921 | ||
3/31/1998 | $ | 16,435 | $ | 16,584 | ||
4/30/1998 | $ | 16,951 | $ | 17,124 | ||
5/31/1998 | $ | 17,881 | $ | 18,013 | ||
6/30/1998 | �� | $ | 18,447 | $ | 18,434 | |
7/31/1998 | $ | 18,599 | $ | 18,621 | ||
8/31/1998 | $ | 16,492 | $ | 16,487 | ||
9/30/1998 | $ | 15,467 | $ | 15,407 | ||
10/31/1998 | $ | 17,018 | $ | 16,998 | ||
11/30/1998 | $ | 18,001 | $ | 18,065 | ||
12/31/1998 | $ | 18,734 | $ | 18,812 | ||
1/31/1999 | $ | 19,294 | $ | 19,358 | ||
2/28/1999 | $ | 18,010 | $ | 18,089 | ||
3/31/1999 | $ | 18,389 | $ | 18,424 | ||
4/30/1999 | $ | 18,837 | $ | 18,907 | ||
5/31/1999 | $ | 18,406 | $ | 18,468 | ||
6/30/1999 | $ | 19,200 | $ | 19,024 | ||
7/31/1999 | $ | 19,303 | $ | 19,125 | ||
8/31/1999 | $ | 19,958 | $ | 19,821 | ||
9/30/1999 | $ | 20,010 | $ | 20,025 | ||
10/31/1999 | $ | 21,030 | $ | 21,129 | ||
11/30/1999 | $ | 21,710 | $ | 21,827 | ||
12/31/1999 | $ | 24,348 | $ | 24,317 | ||
1/31/2000 | $ | 22,611 | $ | 22,709 | ||
2/29/2000 | $ | 24,562 | $ | 24,744 | ||
3/31/2000 | $ | 24,820 | $ | 25,015 | ||
4/30/2000 | $ | 24,027 | $ | 24,192 | ||
5/31/2000 | $ | 24,731 | $ | 24,843 | ||
6/30/2000 | $ | 25,711 | $ | 25,783 | ||
7/31/2000 | $ | 25,283 | $ | 25,365 | ||
8/31/2000 | $ | 24,637 | $ | 24,749 | ||
9/30/2000 | $ | 23,061 | $ | 23,173 | ||
10/31/2000 | $ | 22,492 | $ | 22,621 | ||
11/30/2000 | $ | 21,428 | $ | 21,570 | ||
12/31/2000 | $ | 23,108 | $ | 23,270 | ||
1/31/2001 | $ | 23,108 | $ | 23,316 | ||
2/28/2001 | $ | 20,505 | $ | 20,704 | ||
3/31/2001 | $ | 19,077 | $ | 19,264 | ||
4/30/2001 | $ | 20,794 | $ | 20,996 | ||
5/31/2001 | $ | 19,460 | $ | 19,636 | ||
6/30/2001 | $ | 18,676 | $ | 18,829 | ||
7/31/2001 | $ | 18,760 | $ | 18,925 | ||
8/31/2001 | $ | 18,266 | $ | 18,437 | ||
9/30/2001 | $ | 15,919 | $ | 16,082 | ||
10/31/2001 | $ | 16,630 | $ | 16,811 | ||
11/30/2001 | $ | 17,013 | $ | 17,206 | ||
12/31/2001 | $ | 17,565 | $ | 17,785 | ||
1/31/2002 | $ | 16,527 | $ | 16,749 | ||
2/28/2002 | $ | 16,723 | $ | 16,962 | ||
3/31/2002 | $ | 17,593 | $ | 17,851 | ||
4/30/2002 | $ | 17,340 | $ | 17,598 | ||
5/31/2002 | $ | 17,527 | $ | 17,760 | ||
6/30/2002 | $ | 17,041 | $ | 17,250 | ||
7/31/2002 | $ | 14,759 | $ | 14,935 | ||
8/31/2002 | $ | 14,516 | $ | 14,698 | ||
9/30/2002 | $ | 12,290 | $ | 12,443 | ||
10/31/2002 | $ | 13,870 | $ | 14,060 | ||
11/30/2002 | $ | 14,460 | $ | 14,654 | ||
12/31/2002 | $ | 14,058 | $ | 14,250 | ||
1/31/2003 | $ | 13,556 | $ | 13,774 | ||
2/28/2003 | $ | 12,894 | $ | 13,099 | ||
3/31/2003 | $ | 12,401 | $ | 12,613 | ||
4/30/2003 | $ | 14,351 | $ | 14,585 | ||
5/31/2003 | $ | 15,393 | $ | 15,612 | ||
6/30/2003 | $ | 15,629 | $ | 15,843 | ||
7/31/2003 | $ | 15,894 | $ | 16,123 | ||
8/31/2003 | $ | 15,999 | $ | 16,242 | ||
9/30/2003 | $ | 16,055 | $ | 16,312 | ||
10/31/2003 | $ | 17,144 | $ | 17,428 | ||
11/30/2003 | $ | 18,015 | $ | 18,327 | ||
12/31/2003 | $ | 19,627 | $ | 19,984 | ||
1/31/2004 | $ | 19,762 | $ | 20,135 | ||
2/29/2004 | $ | 20,251 | $ | 20,647 | ||
3/31/2004 | $ | 19,512 | $ | 19,913 | ||
4/30/2004 | $ | 19,282 | $ | 19,680 | ||
5/31/2004 | $ | 19,762 | $ | 20,133 | ||
6/30/2004 | $ | 20,232 | $ | 20,607 | ||
7/31/2004 | $ | 19,608 | $ | 19,968 | ||
8/31/2004 | $ | 19,589 | $ | 19,934 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
8 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the French equity market, as measured by the MSCI France Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 22.44%, while the Index returned 22.72%.
During the reporting period, France struggled to emerge from economic slowdown. By June, its jobless rate reached 9.9%, the highest level in more than three years. As the euro continued to appreciate against the U.S. dollar, France’s manufacturers struggled with a weak export market. France’s budget deficit has exceeded the 3% of gross domestic product (“GDP”) limit stipulated by the Treaty on European Union (Maastricht Treaty) for two years running and is on schedule to exceed it in 2004 and 2005.
Some positive notes appeared toward the end of the reporting period. Second quarter GDP growth was reported at a healthy 3.2% annual rate, boosted by surprising gains in household consumption, business investments, and exports. After rising for four consecutive months, the unemployment rate fell from 9.9% to 9.8% in July.
Among the ten largest holdings in the Fund as of August 31, 2004, Total SA, the Fund’s largest holding at 15.94% of net assets, contributed significantly to Fund performance during the reporting period. Vivendi Universal SA (3.51% of the net assets of the Fund as of August 31, 2004) was also a strong 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. In August, it received an additional boost from the French government, which allowed it to switch tax plans, providing access to tax credits over the course of the next five years.
In April, France’s largest drug-maker, Aventis SA agreed to merge with Paris-based Sanofi-Synthelabo. The resulting company, Sanofi-Aventis (9.04% of the net assets of the Fund as of August 31, 2004), the world’s third largest pharmaceutical company, performed well during the reporting period.
Financial companies Societe Generale (its Class A shares were 3.92% of the net assets of the Fund as of August 31, 2004) and BNP Paribas SA (6.72% of the net assets of the Fund as of August 31, 2004) rose early in the reporting period. However, they retraced some of their gains late in the reporting period.
Retailer Carrefour SA (3.76% of the Fund’s net assets as of August 31, 2004) declined during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 9 |
Managers’ Discussion & Analysis
iSHARES® MSCI GERMANY INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
20.55% | 21.00 | % | 20.50 | % | (3.83 | )% | (3.64 | )% | (3.43 | )% | 3.93 | % | 3.99 | % | 4.36 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
20.55% | 21.00 | % | 20.50 | % | (17.75 | )% | (16.93 | )% | (15.99 | )% | 38.68 | % | 39.29 | % | 43.65 | % |
Total returns for the periods 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI GERMANY INDEX FUND | MSCI GERMANY INDEX | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 10,181 | $ | 10,209 | ||
4/30/1996 | $ | 9,781 | $ | 9,836 | ||
5/31/1996 | $ | 9,955 | $ | 9,977 | ||
6/30/1996 | $ | 10,144 | $ | 10,179 | ||
7/31/1996 | $ | 10,197 | $ | 10,208 | ||
8/31/1996 | $ | 10,399 | $ | 10,443 | ||
9/30/1996 | $ | 10,468 | $ | 10,510 | ||
10/31/1996 | $ | 10,560 | $ | 10,606 | ||
11/30/1996 | $ | 10,941 | $ | 11,026 | ||
12/31/1996 | $ | 10,948 | $ | 11,060 | ||
1/31/1997 | $ | 10,880 | $ | 11,012 | ||
2/28/1997 | $ | 11,292 | $ | 11,467 | ||
3/31/1997 | $ | 12,084 | $ | 12,309 | ||
4/30/1997 | $ | 11,642 | $ | 11,865 | ||
5/31/1997 | $ | 12,176 | $ | 12,367 | ||
6/30/1997 | $ | 12,717 | $ | 12,912 | ||
7/31/1997 | $ | 13,891 | $ | 14,173 | ||
8/31/1997 | $ | 12,532 | $ | 12,769 | ||
9/30/1997 | $ | 13,462 | $ | 13,751 | ||
10/31/1997 | $ | 12,540 | $ | 12,788 | ||
11/30/1997 | $ | 12,947 | $ | 13,230 | ||
12/31/1997 | $ | 13,439 | $ | 13,777 | ||
1/31/1998 | $ | 13,815 | $ | 14,192 | ||
2/28/1998 | $ | 14,661 | $ | 15,096 | ||
3/31/1998 | $ | 15,675 | $ | 16,111 | ||
4/30/1998 | $ | 16,236 | $ | 16,707 | ||
5/31/1998 | $ | 17,634 | $ | 18,048 | ||
6/30/1998 | $ | 18,403 | $ | 18,804 | ||
7/31/1998 | $ | 18,887 | $ | 19,253 | ||
8/31/1998 | $ | 15,753 | $ | 16,091 | ||
9/30/1998 | $ | 15,504 | $ | 15,881 | ||
10/31/1998 | $ | 16,110 | $ | 16,544 | ||
11/30/1998 | $ | 16,888 | $ | 17,400 | ||
12/31/1998 | $ | 17,239 | $ | 17,832 | ||
1/31/1999 | $ | 17,465 | $ | 18,127 | ||
2/28/1999 | $ | 16,117 | $ | 16,630 | ||
3/31/1999 | $ | 15,673 | $ | 16,180 | ||
4/30/1999 | $ | 16,663 | $ | 17,230 | ||
5/31/1999 | $ | 15,720 | $ | 16,182 | ||
6/30/1999 | $ | 16,577 | $ | 17,082 | ||
7/31/1999 | $ | 16,444 | $ | 16,808 | ||
8/31/1999 | $ | 16,862 | $ | 17,099 | ||
9/30/1999 | $ | 16,392 | $ | 16,869 | ||
10/31/1999 | $ | 17,340 | $ | 17,782 | ||
11/30/1999 | $ | 17,778 | $ | 18,276 | ||
12/31/1999 | $ | 20,836 | $ | 21,406 | ||
1/31/2000 | $ | 19,912 | $ | 20,662 | ||
2/29/2000 | $ | 21,975 | $ | 22,820 | ||
3/31/2000 | $ | 21,553 | $ | 22,453 | ||
4/30/2000 | $ | 19,666 | $ | 20,509 | ||
5/31/2000 | $ | 19,451 | $ | 19,872 | ||
6/30/2000 | $ | 19,363 | $ | 19,813 | ||
7/31/2000 | $ | 19,275 | $ | 19,738 | ||
8/31/2000 | $ | 18,286 | $ | 18,831 | ||
9/30/2000 | $ | 17,151 | $ | 17,846 | ||
10/31/2000 | $ | 17,338 | $ | 17,976 | ||
11/30/2000 | $ | 16,257 | $ | 16,655 | ||
12/31/2000 | $ | 17,508 | $ | 18,069 | ||
1/31/2001 | $ | 18,026 | $ | 18,743 | ||
2/28/2001 | $ | 16,588 | $ | 17,220 | ||
3/31/2001 | $ | 14,916 | $ | 15,417 | ||
4/30/2001 | $ | 15,899 | $ | 16,480 | ||
5/31/2001 | $ | 14,925 | $ | 15,431 | ||
6/30/2001 | $ | 14,809 | $ | 15,325 | ||
7/31/2001 | $ | 14,818 | $ | 15,310 | ||
8/31/2001 | $ | 13,737 | $ | 14,166 | ||
9/30/2001 | $ | 11,377 | $ | 11,759 | ||
10/31/2001 | $ | 11,956 | $ | 12,379 | ||
11/30/2001 | $ | 13,159 | $ | 13,600 | ||
12/31/2001 | $ | 13,557 | $ | 14,034 | ||
1/31/2002 | $ | 12,987 | $ | 13,426 | ||
2/28/2002 | $ | 12,833 | $ | 13,257 | ||
3/31/2002 | $ | 13,873 | $ | 14,346 | ||
4/30/2002 | $ | 13,457 | $ | 13,914 | ||
5/31/2002 | $ | 13,412 | $ | 13,859 | ||
6/30/2002 | $ | 13,023 | $ | 13,448 | ||
7/31/2002 | $ | 10,889 | $ | 11,227 | ||
8/31/2002 | $ | 10,916 | $ | 11,276 | ||
9/30/2002 | $ | 8,275 | $ | 8,530 | ||
10/31/2002 | $ | 9,424 | $ | 9,722 | ||
11/30/2002 | $ | 9,948 | $ | 10,274 | ||
12/31/2002 | $ | 9,179 | $ | 9,485 | ||
1/31/2003 | $ | 8,941 | $ | 9,253 | ||
2/28/2003 | $ | 8,310 | $ | 8,612 | ||
3/31/2003 | $ | 7,999 | $ | 8,287 | ||
4/30/2003 | $ | 9,875 | $ | 10,228 | ||
5/31/2003 | $ | 10,534 | $ | 10,892 | ||
6/30/2003 | $ | 11,074 | $ | 11,445 | ||
7/31/2003 | $ | 11,678 | $ | 12,123 | ||
8/31/2003 | $ | 11,504 | $ | 11,922 | ||
9/30/2003 | $ | 11,440 | $ | 11,835 | ||
10/31/2003 | $ | 12,804 | $ | 13,245 | ||
11/30/2003 | $ | 13,462 | $ | 13,949 | ||
12/31/2003 | $ | 14,971 | $ | 15,538 | ||
1/31/2004 | $ | 15,138 | $ | 15,708 | ||
2/29/2004 | $ | 15,017 | $ | 15,577 | ||
3/31/2004 | $ | 14,331 | $ | 14,841 | ||
4/30/2004 | $ | 14,405 | $ | 14,909 | ||
5/31/2004 | $ | 14,387 | $ | 14,892 | ||
6/30/2004 | $ | 14,869 | $ | 15,397 | ||
7/31/2004 | $ | 14,146 | $ | 14,641 | ||
8/31/2004 | $ | 13,868 | $ | 14,366 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
10 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the German equity market, as measured by the MSCI Germany Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 20.55%, while the Index returned 20.50%.
The German market struggled to recover from economic slowdown during the reporting period. During the last months of 2003, the market rebounded, 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. Over the remaining months, however, unemployment levels rose to 10.6%, dampening consumer spending levels. Because exports typically account for less than 1/3 of the German economy and consumer spending generally represents more than 1/2 of the economy, the positive export growth was unable to offset the weak domestic spending levels. Higher oil prices also weighed on markets, raising energy costs and further hurting sales of automobiles, an important part of the German economy.
Despite the weakness in Germany’s domestic economy, the equity market delivered gains during the reporting period. German stocks had more attractive valuations than some of their U.S. counterparts, which helped to draw investors to some German equities. Additionally, for U.S. dollar-based investors, the strong euro relative to the U.S. dollar boosted returns.
Among the ten largest holdings in the Fund as of August 31, 2004, energy giants RWE AG (4.35% of the net assets of the Fund as of August 31, 2004) and E. ON AG (8.64% of the net assets of the Fund as of August 31, 2004) logged gains during the reporting period as energy prices rose.
Deutsche Telekom AG (8.83% of the net assets of the Fund as of August 31, 2004) and SAP AG (5.98% of the net assets of the Fund as of August 31, 2004) benefited from a rally in technology share prices worldwide, but lost some of their gains late in the reporting period amid investor concerns that customers may be more cautious toward technology spending.
Siemens AG (10.85% of the net assets of the Fund as of August 31, 2004) and DaimlerChrysler AG (7.23% of the net assets of the Fund as of August 31, 2004), both declined during the reporting period, struggling with higher oil prices and low consumer spending levels.
MANAGERS’ DISCUSSION & ANALYSIS | 11 |
Managers’ Discussion & Analysis
iSHARES® MSCI ITALY INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
25.09% | 26.03 | % | 25.29 | % | 2.08 | % | 2.25 | % | 1.84 | % | 9.81 | % | 9.89 | % | 9.66 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
25.09% | 26.03 | % | 25.29 | % | 10.86 | % | 11.77 | % | 9.55 | % | 121.06 | % | 122.35 | % | 118.53 | % |
Total returns for the periods 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iShares MSCI Italy Index Fund | MSCI Italy Index | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 9,875 | $ | 9,910 | ||
4/30/1996 | $ | 11,197 | $ | 11,263 | ||
5/31/1996 | $ | 11,226 | $ | 11,199 | ||
6/30/1996 | $ | 11,300 | $ | 11,241 | ||
7/31/1996 | $ | 10,514 | $ | 10,408 | ||
8/31/1996 | $ | 10,411 | $ | 10,325 | ||
9/30/1996 | $ | 11,083 | $ | 10,986 | ||
10/31/1996 | $ | 10,479 | $ | 10,378 | ||
11/30/1996 | $ | 11,272 | $ | 11,197 | ||
12/31/1996 | $ | 11,295 | $ | 11,220 | ||
1/31/1997 | $ | 12,450 | $ | 12,409 | ||
2/28/1997 | $ | 11,151 | $ | 11,093 | ||
3/31/1997 | $ | 11,408 | $ | 11,369 | ||
4/30/1997 | $ | 11,506 | $ | 11,529 | ||
5/31/1997 | $ | 11,438 | $ | 11,400 | ||
6/30/1997 | $ | 12,586 | $ | 12,480 | ||
7/31/1997 | $ | 13,242 | $ | 13,199 | ||
8/31/1997 | $ | 12,845 | $ | 12,852 | ||
9/30/1997 | $ | 14,718 | $ | 14,713 | ||
10/31/1997 | $ | 13,793 | $ | 13,821 | ||
11/30/1997 | $ | 14,256 | $ | 14,163 | ||
12/31/1997 | $ | 15,334 | $ | 15,201 | ||
1/31/1998 | $ | 16,600 | $ | 16,586 | ||
2/28/1998 | $ | 17,249 | $ | 17,284 | ||
3/31/1998 | $ | 20,615 | $ | 20,678 | ||
4/30/1998 | $ | 20,214 | $ | 20,255 | ||
5/31/1998 | $ | 21,241 | $ | 21,303 | ||
6/30/1998 | $ | 20,198 | $ | 20,243 | ||
7/31/1998 | $ | 22,160 | $ | 22,270 | ||
8/31/1998 | $ | 18,966 | $ | 19,115 | ||
9/30/1998 | $ | 18,055 | $ | 18,239 | ||
10/31/1998 | $ | 19,198 | $ | 19,424 | ||
11/30/1998 | $ | 21,253 | $ | 21,428 | ||
12/31/1998 | $ | 23,037 | $ | 23,185 | ||
1/31/1999 | $ | 21,730 | $ | 21,972 | ||
2/28/1999 | $ | 21,325 | $ | 21,650 | ||
3/31/1999 | $ | 22,202 | $ | 22,487 | ||
4/30/1999 | $ | 21,587 | $ | 21,811 | ||
5/31/1999 | $ | 20,481 | $ | 20,640 | ||
6/30/1999 | $ | 20,195 | $ | 20,166 | ||
7/31/1999 | $ | 19,638 | $ | 19,517 | ||
8/31/1999 | $ | 19,941 | $ | 19,948 | ||
9/30/1999 | $ | 20,403 | $ | 20,354 | ||
10/31/1999 | $ | 19,719 | $ | 19,725 | ||
11/30/1999 | $ | 20,098 | $ | 20,194 | ||
12/31/1999 | $ | 23,160 | $ | 23,124 | ||
1/31/2000 | $ | 21,846 | $ | 21,937 | ||
2/29/2000 | $ | 24,732 | $ | 24,619 | ||
3/31/2000 | $ | 22,947 | $ | 23,070 | ||
4/30/2000 | $ | 21,523 | $ | 21,562 | ||
5/31/2000 | $ | 22,494 | $ | 22,506 | ||
6/30/2000 | $ | 23,826 | $ | 24,034 | ||
7/31/2000 | $ | 23,039 | $ | 23,025 | ||
8/31/2000 | $ | 22,604 | $ | 22,723 | ||
9/30/2000 | $ | 21,587 | $ | 21,401 | ||
10/31/2000 | $ | 21,811 | $ | 21,907 | ||
11/30/2000 | $ | 22,441 | $ | 22,332 | ||
12/31/2000 | $ | 22,888 | $ | 22,817 | ||
1/31/2001 | $ | 23,285 | $ | 23,215 | ||
2/28/2001 | $ | 21,017 | $ | 20,883 | ||
3/31/2001 | $ | 19,645 | $ | 19,568 | ||
4/30/2001 | $ | 20,712 | $ | 20,624 | ||
5/31/2001 | $ | 18,953 | $ | 18,845 | ||
6/30/2001 | $ | 18,231 | $ | 18,100 | ||
7/31/2001 | $ | 18,587 | $ | 18,466 | ||
8/31/2001 | $ | 18,398 | $ | 18,294 | ||
9/30/2001 | $ | 15,719 | $ | 15,658 | ||
10/31/2001 | $ | 16,216 | $ | 16,149 | ||
11/30/2001 | $ | 16,567 | $ | 16,505 | ||
12/31/2001 | $ | 16,774 | $ | 16,738 | ||
1/31/2002 | $ | 16,205 | $ | 16,158 | ||
2/28/2002 | $ | 16,174 | $ | 16,123 | ||
3/31/2002 | $ | 17,229 | $ | 17,156 | ||
4/30/2002 | $ | 17,384 | $ | 17,289 | ||
5/31/2002 | $ | 17,064 | $ | 16,955 | ||
6/30/2002 | $ | 17,157 | $ | 17,037 | ||
7/31/2002 | $ | 15,440 | $ | 15,312 | ||
8/31/2002 | $ | 15,668 | $ | 15,527 | ||
9/30/2002 | $ | 13,455 | $ | 13,387 | ||
10/31/2002 | $ | 14,602 | $ | 14,497 | ||
11/30/2002 | $ | 15,988 | $ | 15,849 | ||
12/31/2002 | $ | 15,646 | $ | 15,583 | ||
1/31/2003 | $ | 15,434 | $ | 15,348 | ||
2/28/2003 | $ | 15,858 | $ | 15,825 | ||
3/31/2003 | $ | 14,702 | $ | 14,576 | ||
4/30/2003 | $ | 16,717 | $ | 16,562 | ||
5/31/2003 | $ | 18,605 | $ | 18,429 | ||
6/30/2003 | $ | 18,287 | $ | 18,073 | ||
7/31/2003 | $ | 18,266 | $ | 18,026 | ||
8/31/2003 | $ | 17,672 | $ | 17,442 | ||
9/30/2003 | $ | 18,361 | $ | 18,110 | ||
10/31/2003 | $ | 19,263 | $ | 18,996 | ||
11/30/2003 | $ | 20,811 | $ | 20,518 | ||
12/31/2003 | $ | 21,723 | $ | 21,478 | ||
1/31/2004 | $ | 22,150 | $ | 21,917 | ||
2/29/2004 | $ | 22,368 | $ | 22,157 | ||
3/31/2004 | $ | 21,592 | $ | 21,398 | ||
4/30/2004 | $ | 21,920 | $ | 21,697 | ||
5/31/2004 | $ | 22,117 | $ | 21,868 | ||
6/30/2004 | $ | 22,883 | $ | 22,620 | ||
7/31/2004 | $ | 22,325 | $ | 22,068 | ||
8/31/2004 | $ | 22,106 | $ | 21,852 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
12 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Italian equity market, as measured by the MSCI Italy Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 25.09%, while the Index returned 25.29%.
Italian markets delivered gains during the reporting period against a backdrop of generally improving global economic conditions. Financial stocks, along with their counterparts around the world, benefited from improving valuations and renewed investor activity as economies expanded around the world. Italian telecommunications companies also moved in sync with the telecommunications sector globally, which rebounded from lows experienced in previous reporting periods. Energy companies were helped by rising oil prices during the reporting period.
Among the Fund’s largest holdings as of August 31, 2004, financial companies generally performed well. Banks Banca Intesa SpA (4.39% of the net assets of the Fund as of August 31, 2004) and Banco Popolare di Verona e Novara Scrl (2.37% of the net assets of the Fund as of August 31, 2004) both posted gains for the reporting period. Insurer Assicurazioni Generali SpA (8.75% of the net assets of the Fund as of August 31, 2004), the largest financial company in Italy and the fourth largest insurance company in Europe, also delivered solid gains. UniCredito Italiano SpA (4.85% of the net assets of the Fund as of August 31, 2004) was the only security among the Fund’s top ten holdings to decline during the reporting period.
The Fund’s largest holdings in telecommunications companies as of August 31, 2004 also performed well during the reporting period. Telecom Italia SpA common shares, Telecom Italia Mobile SpA, and Telecom Italia SpA preferred shares (respectively 8.63%, 7.04%, and 4.60% of the net assets of the Fund as of August 31, 2004) all gained ground during the reporting period.
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 August 31, 2004.
MANAGERS’ DISCUSSION & ANALYSIS | 13 |
Managers’ Discussion & Analysis
iSHARES® MSCI NETHERLANDS INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
12.28% | 12.56 | % | 11.68 | % | (6.45 | )% | (6.43 | )% | (4.98 | )% | 3.19 | % | 3.20 | % | 4.56 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
12.28% | 12.56 | % | 11.68 | % | (28.35 | )% | (28.27 | )% | (22.55 | )% | 30.53 | % | 30.62 | % | 45.90 | % |
Total returns for the periods 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI NETHERLANDS INDEX FUND | MSCI NETHERLANDS INDEX | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 10,434 | $ | 10,398 | ||
4/30/1996 | $ | 10,471 | $ | 10,444 | ||
5/31/1996 | $ | 11,113 | $ | 10,928 | ||
6/30/1996 | $ | 11,094 | $ | 10,953 | ||
7/31/1996 | $ | 10,911 | $ | 10,779 | ||
8/31/1996 | $ | 11,119 | $ | 10,960 | ||
9/30/1996 | $ | 11,394 | $ | 11,239 | ||
10/31/1996 | $ | 11,548 | $ | 11,520 | ||
11/30/1996 | $ | 12,259 | $ | 12,240 | ||
12/31/1996 | $ | 12,498 | $ | 12,528 | ||
1/31/1997 | $ | 12,422 | $ | 12,428 | ||
2/28/1997 | $ | 12,934 | $ | 12,932 | ||
3/31/1997 | $ | 13,152 | $ | 13,243 | ||
4/30/1997 | $ | 12,960 | $ | 13,108 | ||
5/31/1997 | $ | 13,825 | $ | 13,942 | ||
6/30/1997 | $ | 14,684 | $ | 15,036 | ||
7/31/1997 | $ | 15,581 | $ | 16,265 | ||
8/31/1997 | $ | 14,236 | $ | 14,661 | ||
9/30/1997 | $ | 15,453 | $ | 15,949 | ||
10/31/1997 | $ | 14,795 | $ | 15,256 | ||
11/30/1997 | $ | 14,728 | $ | 15,127 | ||
12/31/1997 | $ | 15,012 | $ | 15,506 | ||
1/31/1998 | $ | 15,219 | $ | 15,652 | ||
2/28/1998 | $ | 16,810 | $ | 17,251 | ||
3/31/1998 | $ | 17,339 | $ | 17,797 | ||
4/30/1998 | $ | 17,927 | $ | 18,407 | ||
5/31/1998 | $ | 18,984 | $ | 19,374 | ||
6/30/1998 | $ | 18,683 | $ | 19,044 | ||
7/31/1998 | $ | 18,923 | $ | 19,159 | ||
8/31/1998 | $ | 16,715 | $ | 16,803 | ||
9/30/1998 | $ | 15,819 | $ | 15,822 | ||
10/31/1998 | $ | 16,730 | $ | 16,721 | ||
11/30/1998 | $ | 17,306 | $ | 17,597 | ||
12/31/1998 | $ | 18,635 | $ | 19,107 | ||
1/31/1999 | $ | 17,204 | $ | 17,672 | ||
2/28/1999 | $ | 16,958 | $ | 17,551 | ||
3/31/1999 | $ | 17,240 | $ | 17,732 | ||
4/30/1999 | $ | 18,447 | $ | 18,863 | ||
5/31/1999 | $ | 17,493 | $ | 17,784 | ||
6/30/1999 | $ | 17,457 | $ | 17,836 | ||
7/31/1999 | $ | 17,927 | $ | 18,410 | ||
8/31/1999 | $ | 18,216 | $ | 18,838 | ||
9/30/1999 | $ | 17,501 | $ | 18,154 | ||
10/31/1999 | $ | 17,890 | $ | 18,779 | ||
11/30/1999 | $ | 17,796 | $ | 18,660 | ||
12/31/1999 | $ | 19,474 | $ | 20,423 | ||
1/31/2000 | $ | 17,121 | $ | 17,985 | ||
2/29/2000 | $ | 18,076 | $ | 19,133 | ||
3/31/2000 | $ | 18,534 | $ | 19,693 | ||
4/30/2000 | $ | 17,742 | $ | 19,036 | ||
5/31/2000 | $ | 18,278 | $ | 19,549 | ||
6/30/2000 | $ | 19,327 | $ | 20,634 | ||
7/31/2000 | $ | 18,519 | $ | 19,737 | ||
8/31/2000 | $ | 18,449 | $ | 19,706 | ||
9/30/2000 | $ | 17,673 | $ | 18,946 | ||
10/31/2000 | $ | 17,391 | $ | 18,791 | ||
11/30/2000 | $ | 17,148 | $ | 18,636 | ||
12/31/2000 | $ | 17,955 | $ | 19,588 | ||
1/31/2001 | $ | 17,940 | $ | 19,456 | ||
2/28/2001 | $ | 16,881 | $ | 18,192 | ||
3/31/2001 | $ | 15,368 | $ | 16,547 | ||
4/30/2001 | $ | 16,293 | $ | 17,711 | ||
5/31/2001 | $ | 15,721 | $ | 17,019 | ||
6/30/2001 | $ | 15,172 | $ | 16,588 | ||
7/31/2001 | $ | 14,976 | $ | 16,487 | ||
8/31/2001 | $ | 14,791 | $ | 16,320 | ||
9/30/2001 | $ | 12,818 | $ | 14,127 | ||
10/31/2001 | $ | 12,842 | $ | 14,184 | ||
11/30/2001 | $ | 13,375 | $ | 14,783 | ||
12/31/2001 | $ | 13,654 | $ | 15,161 | ||
1/31/2002 | $ | 13,216 | $ | 14,593 | ||
2/28/2002 | $ | 13,264 | $ | 14,651 | ||
3/31/2002 | $ | 14,444 | $ | 15,927 | ||
4/30/2002 | $ | 14,308 | $ | 15,830 | ||
5/31/2002 | $ | 14,277 | $ | 15,973 | ||
6/30/2002 | $ | 13,886 | $ | 15,483 | ||
7/31/2002 | $ | 11,501 | $ | 12,730 | ||
8/31/2002 | $ | 11,716 | $ | 12,960 | ||
9/30/2002 | $ | 9,683 | $ | 10,652 | ||
10/31/2002 | $ | 10,831 | $ | 12,042 | ||
11/30/2002 | $ | 11,445 | $ | 12,751 | ||
12/31/2002 | $ | 10,853 | $ | 12,065 | ||
1/31/2003 | $ | 10,089 | $ | 11,309 | ||
2/28/2003 | $ | 9,090 | $ | 10,473 | ||
3/31/2003 | $ | 8,806 | $ | 10,169 | ||
4/30/2003 | $ | 10,065 | $ | 11,462 | ||
5/31/2003 | $ | 10,658 | $ | 12,175 | ||
6/30/2003 | $ | 10,763 | $ | 12,268 | ||
7/31/2003 | $ | 11,340 | $ | 12,799 | ||
8/31/2003 | $ | 11,624 | $ | 13,064 | ||
9/30/2003 | $ | 11,446 | $ | 12,890 | ||
10/31/2003 | $ | 12,047 | $ | 13,674 | ||
11/30/2003 | $ | 12,502 | $ | 14,154 | ||
12/31/2003 | $ | 13,643 | $ | 15,454 | ||
1/31/2004 | $ | 13,684 | $ | 15,388 | ||
2/29/2004 | $ | 13,909 | $ | 15,631 | ||
3/31/2004 | $ | 13,177 | $ | 14,850 | ||
4/30/2004 | $ | 13,177 | $ | 14,781 | ||
5/31/2004 | $ | 13,427 | $ | 15,035 | ||
6/30/2004 | $ | 13,709 | $ | 15,350 | ||
7/31/2004 | $ | 13,044 | $ | 14,637 | ||
8/31/2004 | $ | 13,052 | $ | 14,589 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
14 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Dutch equity market, as measured by the MSCI Netherlands Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 12.28%, while the Index returned 11.68%.
Regulatory restraints, 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 constituent at its index 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 its 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, Royal Dutch Petroleum Co. As of August 31, 2004, Royal Dutch Petroleum Co. represented 29.40% of the Index, compared to 24.29% of the Fund’s net assets. Another constraint, the 5/50 Rule, precludes the sum of all the securities weighted 5% or more in a fund’s portfolio from exceeding 50% of a fund’s total assets. As of August 31, 2004, nearly 69% 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 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 Fund’s return relative to the Index’s return during the reporting period.
The Dutch market began to show 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 end 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. Like the U.S. and some European markets, this growth came in fits and starts during the reporting period. Toward the end of the reporting period, though, export demand and output had both experienced a jump, and consumer confidence rose accordingly during June and July.
Financial stocks, which represent a significant percentage of the Dutch market, generally benefited from improved equity valuations and a return of investment to equity markets during the reporting period. ING Groep NV (14.53% of the net assets of the Fund as of August 31, 2004) and ABN AMRO Holding NV (4.90% of the net assets of the Fund as of August 31, 2004) were among the strongest performers of the Fund’s ten largest holdings during the reporting period. AEGON NV (4.01% of the net assets of the Fund as of August 31, 2004), however, suffered declines.
Those companies that were heavily dependent on exports generally experienced a volatile period, but ultimately finished the reporting period in negative territory. Unilever NV CVA (10.04% of the net assets of the Fund as of August 31, 2004) and Koninklijke Philips Electronics NV (4.63% of the net assets of the Fund as of August 31, 2004) both suffered declines during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 15 |
Managers’ Discussion & Analysis
iSHARES® MSCI SPAIN INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
24.28% | 24.74 | % | 24.70 | % | 2.79 | % | 2.98 | % | 2.47 | % | 11.95 | % | 12.03 | % | 12.30 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
24.28% | 24.74 | % | 24.70 | % | 14.77 | % | 15.80 | % | 12.99 | % | 160.35 | % | 161.91 | % | 167.49 | % |
Total returns for the periods 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iShares MSCI Spain Index Fund | MSCI Spain Index | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 10,399 | $ | 10,413 | ||
4/30/1996 | $ | 10,715 | $ | 10,816 | ||
5/31/1996 | $ | 10,640 | $ | 10,732 | ||
6/30/1996 | $ | 11,069 | $ | 11,183 | ||
7/31/1996 | $ | 10,663 | $ | 10,672 | ||
8/31/1996 | $ | 10,845 | $ | 10,901 | ||
9/30/1996 | $ | 11,130 | $ | 11,169 | ||
10/31/1996 | $ | 11,484 | $ | 11,519 | ||
11/30/1996 | $ | 12,361 | $ | 12,490 | ||
12/31/1996 | $ | 13,571 | $ | 13,757 | ||
1/31/1997 | $ | 13,363 | $ | 13,526 | ||
2/28/1997 | $ | 12,893 | $ | 13,047 | ||
3/31/1997 | $ | 13,355 | $ | 13,576 | ||
4/30/1997 | $ | 14,119 | $ | 14,367 | ||
5/31/1997 | $ | 15,229 | $ | 15,475 | ||
6/30/1997 | $ | 16,324 | $ | 16,606 | ||
7/31/1997 | $ | 15,437 | $ | 15,679 | ||
8/31/1997 | $ | 15,091 | $ | 15,357 | ||
9/30/1997 | $ | 17,156 | $ | 17,561 | ||
10/31/1997 | $ | 15,622 | $ | 15,874 | ||
11/30/1997 | $ | 16,470 | $ | 16,821 | ||
12/31/1997 | $ | 16,815 | $ | 17,252 | ||
1/31/1998 | $ | 18,172 | $ | 18,634 | ||
2/28/1998 | $ | 20,476 | $ | 21,024 | ||
3/31/1998 | $ | 23,303 | $ | 23,822 | ||
4/30/1998 | $ | 23,834 | $ | 24,537 | ||
5/31/1998 | $ | 23,916 | $ | 24,727 | ||
6/30/1998 | $ | 23,948 | $ | 24,824 | ||
7/31/1998 | $ | 25,166 | $ | 26,238 | ||
8/31/1998 | $ | 20,008 | $ | 20,559 | ||
9/30/1998 | $ | 19,982 | $ | 20,151 | ||
10/31/1998 | $ | 23,004 | $ | 23,407 | ||
11/30/1998 | $ | 24,447 | $ | 25,049 | ||
12/31/1998 | $ | 25,442 | $ | 25,860 | ||
1/31/1999 | $ | 24,940 | $ | 25,421 | ||
2/28/1999 | $ | 24,387 | $ | 24,935 | ||
3/31/1999 | $ | 23,298 | $ | 24,011 | ||
4/30/1999 | $ | 23,324 | $ | 24,125 | ||
5/31/1999 | $ | 23,043 | $ | 24,038 | ||
6/30/1999 | $ | 23,052 | $ | 24,157 | ||
7/31/1999 | $ | 22,176 | $ | 23,099 | ||
8/31/1999 | $ | 22,686 | $ | 23,674 | ||
9/30/1999 | $ | 22,349 | $ | 23,335 | ||
10/31/1999 | $ | 22,340 | $ | 23,606 | ||
11/30/1999 | $ | 23,865 | $ | 25,639 | ||
12/31/1999 | $ | 24,902 | $ | 27,110 | ||
1/31/2000 | $ | 22,890 | $ | 25,003 | ||
2/29/2000 | $ | 24,902 | $ | 27,501 | ||
3/31/2000 | $ | 25,319 | $ | 27,451 | ||
4/30/2000 | $ | 23,510 | $ | 25,469 | ||
5/31/2000 | $ | 22,854 | $ | 24,710 | ||
6/30/2000 | $ | 23,218 | $ | 25,394 | ||
7/31/2000 | $ | 22,615 | $ | 24,727 | ||
8/31/2000 | $ | 22,274 | $ | 24,240 | ||
9/30/2000 | $ | 22,348 | $ | 24,483 | ||
10/31/2000 | $ | 21,280 | $ | 22,684 | ||
11/30/2000 | $ | 19,871 | $ | 21,038 | ||
12/31/2000 | $ | 21,510 | $ | 22,810 | ||
1/31/2001 | $ | 23,526 | $ | 24,972 | ||
2/28/2001 | $ | 22,578 | $ | 23,557 | ||
3/31/2001 | $ | 21,307 | $ | 22,245 | ||
4/30/2001 | $ | 22,201 | $ | 23,336 | ||
5/31/2001 | $ | 20,865 | $ | 21,763 | ||
6/30/2001 | $ | 19,613 | $ | 20,230 | ||
7/31/2001 | $ | 19,318 | $ | 19,990 | ||
8/31/2001 | $ | 19,786 | $ | 20,349 | ||
9/30/2001 | $ | 17,087 | $ | 17,864 | ||
10/31/2001 | $ | 18,107 | $ | 18,805 | ||
11/30/2001 | $ | 19,369 | $ | 20,222 | ||
12/31/2001 | $ | 19,313 | $ | 20,203 | ||
1/31/2002 | $ | 18,154 | $ | 18,661 | ||
2/28/2002 | $ | 18,376 | $ | 18,917 | ||
3/31/2002 | $ | 18,914 | $ | 19,331 | ||
4/30/2002 | $ | 19,499 | $ | 19,788 | ||
5/31/2002 | $ | 19,601 | $ | 19,883 | ||
6/30/2002 | $ | 18,061 | $ | 18,062 | ||
7/31/2002 | $ | 16,206 | $ | 16,153 | ||
8/31/2002 | $ | 16,651 | $ | 16,872 | ||
9/30/2002 | $ | 14,128 | $ | 14,140 | ||
10/31/2002 | $ | 16,002 | $ | 16,232 | ||
11/30/2002 | $ | 17,532 | $ | 17,874 | ||
12/31/2002 | $ | 16,673 | $ | 17,050 | ||
1/31/2003 | $ | 16,944 | $ | 17,243 | ||
2/28/2003 | $ | 17,160 | $ | 17,480 | ||
3/31/2003 | $ | 16,972 | $ | 17,345 | ||
4/30/2003 | $ | 19,293 | $ | 19,789 | ||
5/31/2003 | $ | 20,359 | $ | 20,733 | ||
6/30/2003 | $ | 20,939 | $ | 21,398 | ||
7/31/2003 | $ | 21,276 | $ | 21,782 | ||
8/31/2003 | $ | 20,949 | $ | 21,450 | ||
9/30/2003 | $ | 21,014 | $ | 21,367 | ||
10/31/2003 | $ | 22,277 | $ | 22,826 | ||
11/30/2003 | $ | 23,381 | $ | 23,966 | ||
12/31/2003 | $ | 26,139 | $ | 27,016 | ||
1/31/2004 | $ | 26,555 | $ | 27,296 | ||
2/29/2004 | $ | 27,604 | $ | 28,375 | ||
3/31/2004 | $ | 26,489 | $ | 27,186 | ||
4/30/2004 | $ | 26,149 | $ | 26,887 | ||
5/31/2004 | $ | 26,224 | $ | 26,973 | ||
6/30/2004 | $ | 26,602 | $ | 27,349 | ||
7/31/2004 | $ | 25,988 | $ | 26,709 | ||
8/31/2004 | $ | 26,035 | $ | 26,747 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
16 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Spanish equity market, as measured by the MSCI Spain Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 24.28%, while the Index returned 24.70%.
The Spanish market performed well during the reporting period as the country’s economy began to recover from the economic slowdown that had weighed down most global markets in recent years. Spain was dealt an additional blow on March 11, 2004, when Islamic terrorists bombed the Madrid train station, killing more than 200 people. The bombings had far reaching political effects, turning the national election on March 14 in favor of the Socialist candidate, Jose Luis Rodriguez Zapatero.
The Fund’s largest holding at 23.21% of the net assets of the Fund as of August 31, 2004, Telefonica SA, saw strong gains early in the reporting period, thanks to a worldwide rebound in the telecommunications sector, but it retraced some of those gains as the sector contracted later in the reporting period.
Also among the Fund’s ten largest holdings as of August 31, 2004, utility company Union Fenosa SA (2.62% of the net assets of the Fund as of August 31, 2004) was a top performer, benefiting from higher energy prices during the reporting period.
Cigarette maker Altadis SA (3.40% of the net assets of the Fund as of August 31, 2004) also performed well, 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.
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. Two such companies in the Fund are Banco Bilbao Vizcaya Argentaria SA (12.56% of the net assets of the Fund as of August 31, 2004) and the utility company Endesa SA (4.96% of the net assets of the Fund as of August 31, 2004).
MANAGERS’ DISCUSSION & ANALYSIS | 17 |
Managers’ Discussion & Analysis
iSHARES® MSCI SWEDEN INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
35.81% | 36.50 | % | 36.55 | % | (0.17 | )% | 0.00 | %* | 0.71 | % | 8.15 | % | 8.21 | % | 9.50 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
35.81% | 36.50 | % | 36.55 | % | (0.83 | )% | (0.02 | )% | 3.61 | % | 94.27 | % | 95.16 | % | 115.83 | % |
* | Rounds to less than 0.01%. |
Total returns for the periods 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 one-year period. 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI SWEDEN INDEX FUND | MSCI SWEDEN INDEX | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 10,424 | $ | 10,452 | ||
4/30/1996 | $ | 10,446 | $ | 10,338 | ||
5/31/1996 | $ | 10,976 | $ | 10,797 | ||
6/30/1996 | $ | 11,127 | $ | 10,941 | ||
7/31/1996 | $ | 10,651 | $ | 10,491 | ||
8/31/1996 | $ | 11,413 | $ | 11,192 | ||
9/30/1996 | $ | 11,856 | $ | 11,655 | ||
10/31/1996 | $ | 12,354 | $ | 12,163 | ||
11/30/1996 | $ | 13,163 | $ | 12,980 | ||
12/31/1996 | $ | 13,233 | $ | 13,086 | ||
1/31/1997 | $ | 13,474 | $ | 13,390 | ||
2/28/1997 | $ | 13,357 | $ | 13,335 | ||
3/31/1997 | $ | 13,926 | $ | 13,963 | ||
4/30/1997 | $ | 12,929 | $ | 12,795 | ||
5/31/1997 | $ | 13,840 | $ | 13,796 | ||
6/30/1997 | $ | 15,001 | $ | 14,996 | ||
7/31/1997 | $ | 15,710 | $ | 15,697 | ||
8/31/1997 | $ | 14,848 | $ | 14,845 | ||
9/30/1997 | $ | 16,614 | $ | 16,619 | ||
10/31/1997 | $ | 14,872 | $ | 14,951 | ||
11/30/1997 | $ | 15,237 | $ | 15,300 | ||
12/31/1997 | $ | 14,689 | $ | 14,777 | ||
1/31/1998 | $ | 14,997 | $ | 15,157 | ||
2/28/1998 | $ | 16,354 | $ | 16,584 | ||
3/31/1998 | $ | 17,524 | $ | 17,749 | ||
4/30/1998 | $ | 18,564 | $ | 18,625 | ||
5/31/1998 | $ | 19,051 | $ | 19,192 | ||
6/30/1998 | $ | 18,816 | $ | 19,072 | ||
7/31/1998 | $ | 18,564 | $ | 18,985 | ||
8/31/1998 | $ | 15,661 | $ | 16,081 | ||
9/30/1998 | $ | 14,290 | $ | 14,681 | ||
10/31/1998 | $ | 15,133 | $ | 15,618 | ||
11/30/1998 | $ | 16,478 | $ | 17,102 | ||
12/31/1998 | $ | 16,314 | $ | 16,840 | ||
1/31/1999 | $ | 17,091 | $ | 17,835 | ||
2/28/1999 | $ | 16,750 | $ | 17,404 | ||
3/31/1999 | $ | 17,211 | $ | 17,747 | ||
4/30/1999 | $ | 17,809 | $ | 18,752 | ||
5/31/1999 | $ | 17,322 | $ | 18,351 | ||
6/30/1999 | $ | 18,749 | $ | 20,117 | ||
7/31/1999 | $ | 19,638 | $ | 20,927 | ||
8/31/1999 | $ | 19,590 | $ | 20,831 | ||
9/30/1999 | $ | 19,573 | $ | 20,697 | ||
10/31/1999 | $ | 21,113 | $ | 23,072 | ||
11/30/1999 | $ | 22,829 | $ | 25,548 | ||
12/31/1999 | $ | 26,742 | $ | 30,268 | ||
1/31/2000 | $ | 26,259 | $ | 30,490 | ||
2/29/2000 | $ | 31,615 | $ | 37,466 | ||
3/31/2000 | $ | 30,885 | $ | 35,628 | ||
4/30/2000 | $ | 30,082 | $ | 35,265 | ||
5/31/2000 | $ | 29,252 | $ | 33,709 | ||
6/30/2000 | $ | 28,649 | $ | 33,165 | ||
7/31/2000 | $ | 27,445 | $ | 31,990 | ||
8/31/2000 | $ | 27,260 | $ | 31,604 | ||
9/30/2000 | $ | 24,509 | $ | 27,478 | ||
10/31/2000 | $ | 22,385 | $ | 25,628 | ||
11/30/2000 | $ | 19,534 | $ | 23,109 | ||
12/31/2000 | $ | 20,394 | $ | 23,825 | ||
1/31/2001 | $ | 22,049 | $ | 25,678 | ||
2/28/2001 | $ | 18,896 | $ | 21,499 | ||
3/31/2001 | $ | 14,893 | $ | 16,704 | ||
4/30/2001 | $ | 17,141 | $ | 19,188 | ||
5/31/2001 | $ | 16,213 | $ | 18,133 | ||
6/30/2001 | $ | 15,274 | $ | 17,140 | ||
7/31/2001 | $ | 15,374 | $ | 17,258 | ||
8/31/2001 | $ | 14,451 | $ | 16,238 | ||
9/30/2001 | $ | 12,039 | $ | 13,507 | ||
10/31/2001 | $ | 13,071 | $ | 14,654 | ||
11/30/2001 | $ | 15,068 | $ | 16,861 | ||
12/31/2001 | $ | 15,528 | $ | 17,312 | ||
1/31/2002 | $ | 14,160 | $ | 15,693 | ||
2/28/2002 | $ | 14,496 | $ | 16,063 | ||
3/31/2002 | $ | 15,001 | $ | 16,623 | ||
4/30/2002 | $ | 13,576 | $ | 14,962 | ||
5/31/2002 | $ | 13,441 | $ | 14,805 | ||
6/30/2002 | $ | 13,082 | $ | 14,422 | ||
7/31/2002 | $ | 11,164 | $ | 12,312 | ||
8/31/2002 | $ | 11,085 | $ | 12,247 | ||
9/30/2002 | $ | 9,200 | $ | 10,176 | ||
10/31/2002 | $ | 10,693 | $ | 11,816 | ||
11/30/2002 | $ | 12,230 | $ | 13,519 | ||
12/31/2002 | $ | 10,908 | $ | 12,066 | ||
1/31/2003 | $ | 10,748 | $ | 11,899 | ||
2/28/2003 | $ | 10,680 | $ | 11,826 | ||
3/31/2003 | $ | 10,419 | $ | 11,542 | ||
4/30/2003 | $ | 12,589 | $ | 13,909 | ||
5/31/2003 | $ | 13,146 | $ | 14,510 | ||
6/30/2003 | $ | 13,237 | $ | 14,607 | ||
7/31/2003 | $ | 14,077 | $ | 15,542 | ||
8/31/2003 | $ | 14,305 | $ | 15,806 | ||
9/30/2003 | $ | 14,782 | $ | 16,337 | ||
10/31/2003 | $ | 16,020 | $ | 17,736 | ||
11/30/2003 | $ | 16,566 | $ | 18,351 | ||
12/31/2003 | $ | 17,914 | $ | 19,851 | ||
1/31/2004 | $ | 18,573 | $ | 20,602 | ||
2/29/2004 | $ | 19,531 | $ | 21,677 | ||
3/31/2004 | $ | 19,127 | $ | 21,268 | ||
4/30/2004 | $ | 19,127 | $ | 21,204 | ||
5/31/2004 | $ | 19,451 | $ | 21,548 | ||
6/30/2004 | $ | 20,017 | $ | 22,214 | ||
7/31/2004 | $ | 19,127 | $ | 21,234 | ||
8/31/2004 | $ | 19,427 | $ | 21,584 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
18 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Swedish equity market, as measured by the MSCI Sweden Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 35.81%, while the Index returned 36.55%.
Sweden’s market delivered one of the strongest returns in Europe during the reporting period, thanks largely to healthy economic conditions. Although unemployment remained high, the economy remained fundamentally sound, with healthy gross domestic product (“GDP”) growth and a surplus in the external accounts. During the second half of the reporting period, export levels increased sharply, suggesting the economy was on track for GDP growth of roughly 2.8% for 2004.
A large contributor to Sweden’s market performance during the reporting period was its largest weighting as of August 31, 2004, cellular phone maker Telefonaktiebolaget LM Ericsson. Its Class B shares, which represented 21.78% of the net assets of the Fund as of August 31, 2004, returned nearly 60% during the reporting period as the telecommunications industry, particularly cellular telecommunications, around the world demonstrated continued strength.
Sweden’s increase in export activity was reflected in the strong performance of carmaker Volvo AB (whose Class B shares represented 4.20% of the net assets of the Fund as of August 31, 2004), which posted strong gains, and, to a lesser extent, of clothing retailer Hennes & Mauritz AB (whose Class B shares made up 6.74% of the net assets of the Fund as of August 31, 2004), which enjoyed more modest gains during the reporting period.
Higher equity valuations, lower interest rates and improving economic environment helped boost the share prices of financial companies, including Nordea AB (9.19% of the net assets of the Fund as of August 31, 2004) and Skandinaviska Enskilda Banken AB, whose Class A shares represented 3.70% of the net assets of the Fund as of August 31, 2004.
MANAGERS’ DISCUSSION & ANALYSIS | 19 |
Managers’ Discussion & Analysis
iSHARES® MSCI SWITZERLAND INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
19.56% | 19.17 | % | 18.90 | % | (0.61 | )% | (0.67 | )% | 0.11 | % | 4.30 | % | 4.29 | % | 5.74 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
19.56% | 19.17 | % | 18.90 | % | (3.00 | )% | (3.33 | )% | 0.54 | % | 42.86 | % | 42.70 | % | 60.51 | % |
Total returns for the periods 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI SWITZERLAND INDEX FUND | MSCI SWITZERLAND INDEX | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 10,298 | $ | 10,352 | ||
4/30/1996 | $ | 10,025 | $ | 9,946 | ||
5/31/1996 | $ | 9,751 | $ | 9,612 | ||
6/30/1996 | $ | 10,207 | $ | 10,089 | ||
7/31/1996 | $ | 9,876 | $ | 9,886 | ||
8/31/1996 | $ | 10,260 | $ | 10,314 | ||
9/30/1996 | $ | 9,959 | $ | 10,065 | ||
10/31/1996 | $ | 9,909 | $ | 10,035 | ||
11/30/1996 | $ | 10,093 | $ | 10,120 | ||
12/31/1996 | $ | 9,951 | $ | 9,919 | ||
1/31/1997 | $ | 10,159 | $ | 10,215 | ||
2/28/1997 | $ | 10,210 | $ | 10,342 | ||
3/31/1997 | $ | 10,769 | $ | 10,943 | ||
4/30/1997 | $ | 11,044 | $ | 11,207 | ||
5/31/1997 | $ | 11,879 | $ | 12,044 | ||
6/30/1997 | $ | 12,781 | $ | 13,026 | ||
7/31/1997 | $ | 13,064 | $ | 13,220 | ||
8/31/1997 | $ | 11,972 | $ | 11,992 | ||
9/30/1997 | $ | 12,944 | $ | 13,219 | ||
10/31/1997 | $ | 12,675 | $ | 13,139 | ||
11/30/1997 | $ | 12,927 | $ | 13,550 | ||
12/31/1997 | $ | 13,456 | $ | 14,307 | ||
1/31/1998 | $ | 13,838 | $ | 14,852 | ||
2/28/1998 | $ | 15,123 | $ | 16,262 | ||
3/31/1998 | $ | 15,583 | $ | 16,614 | ||
4/30/1998 | $ | 15,627 | $ | 16,527 | ||
5/31/1998 | $ | 16,530 | $ | 17,235 | ||
6/30/1998 | $ | 16,391 | $ | 17,238 | ||
7/31/1998 | $ | 17,294 | $ | 18,498 | ||
8/31/1998 | $ | 14,515 | $ | 15,601 | ||
9/30/1998 | $ | 12,770 | $ | 14,247 | ||
10/31/1998 | $ | 14,973 | $ | 16,315 | ||
11/30/1998 | $ | 15,570 | $ | 17,120 | ||
12/31/1998 | $ | 15,915 | $ | 17,674 | ||
1/31/1999 | $ | 15,589 | $ | 17,260 | ||
2/28/1999 | $ | 15,019 | $ | 16,698 | ||
3/31/1999 | $ | 14,935 | $ | 16,511 | ||
4/30/1999 | $ | 15,057 | $ | 16,467 | ||
5/31/1999 | $ | 14,235 | $ | 15,635 | ||
6/30/1999 | $ | 14,254 | $ | 15,378 | ||
7/31/1999 | $ | 14,739 | $ | 15,984 | ||
8/31/1999 | $ | 14,728 | $ | 15,966 | ||
9/30/1999 | $ | 14,785 | $ | 15,928 | ||
10/31/1999 | $ | 15,015 | $ | 16,217 | ||
11/30/1999 | $ | 14,862 | $ | 16,093 | ||
12/31/1999 | $ | 15,398 | $ | 16,433 | ||
1/31/2000 | $ | 13,848 | $ | 14,628 | ||
2/29/2000 | $ | 13,560 | $ | 14,302 | ||
3/31/2000 | $ | 14,604 | $ | 15,458 | ||
4/30/2000 | $ | 14,096 | $ | 14,928 | ||
5/31/2000 | $ | 14,852 | $ | 15,748 | ||
6/30/2000 | $ | 15,369 | $ | 16,354 | ||
7/31/2000 | $ | 15,388 | $ | 16,406 | ||
8/31/2000 | $ | 15,017 | $ | 16,037 | ||
9/30/2000 | $ | 14,341 | $ | 15,153 | ||
10/31/2000 | $ | 14,418 | $ | 15,285 | ||
11/30/2000 | $ | 14,959 | $ | 15,925 | ||
12/31/2000 | $ | 16,302 | $ | 17,395 | ||
1/31/2001 | $ | 15,964 | $ | 17,027 | ||
2/28/2001 | $ | 14,988 | $ | 15,902 | ||
3/31/2001 | $ | 13,616 | $ | 14,337 | ||
4/30/2001 | $ | 13,790 | $ | 14,689 | ||
5/31/2001 | $ | 13,490 | $ | 14,508 | ||
6/30/2001 | $ | 12,959 | $ | 13,973 | ||
7/31/2001 | $ | 13,287 | $ | 13,750 | ||
8/31/2001 | $ | 12,603 | $ | 13,728 | ||
9/30/2001 | $ | 11,766 | $ | 13,096 | ||
10/31/2001 | $ | 11,844 | $ | 13,091 | ||
11/30/2001 | $ | 12,116 | $ | 13,315 | ||
12/31/2001 | $ | 12,238 | $ | 13,577 | ||
1/31/2002 | $ | 11,625 | $ | 12,826 | ||
2/28/2002 | $ | 11,917 | $ | 13,201 | ||
3/31/2002 | $ | 12,783 | $ | 14,049 | ||
4/30/2002 | $ | 13,153 | $ | 14,427 | ||
5/31/2002 | $ | 13,601 | $ | 14,998 | ||
6/30/2002 | $ | 13,085 | $ | 14,402 | ||
7/31/2002 | $ | 11,420 | $ | 12,671 | ||
8/31/2002 | $ | 11,284 | $ | 12,654 | ||
9/30/2002 | $ | 10,486 | $ | 11,825 | ||
10/31/2002 | $ | 10,729 | $ | 12,226 | ||
11/30/2002 | $ | 11,138 | $ | 12,532 | ||
12/31/2002 | $ | 10,836 | $ | 12,207 | ||
1/31/2003 | $ | 10,465 | $ | 11,790 | ||
2/28/2003 | $ | 9,879 | $ | 11,165 | ||
3/31/2003 | $ | 9,821 | $ | 11,101 | ||
4/30/2003 | $ | 10,943 | $ | 12,361 | ||
5/31/2003 | $ | 11,412 | $ | 13,121 | ||
6/30/2003 | $ | 11,412 | $ | 13,106 | ||
7/31/2003 | $ | 11,880 | $ | 13,623 | ||
8/31/2003 | $ | 11,949 | $ | 13,499 | ||
9/30/2003 | $ | 12,378 | $ | 14,085 | ||
10/31/2003 | $ | 12,739 | $ | 14,397 | ||
11/30/2003 | $ | 13,384 | $ | 15,165 | ||
12/31/2003 | $ | 14,433 | $ | 16,368 | ||
1/31/2004 | $ | 14,756 | $ | 16,795 | ||
2/29/2004 | $ | 14,835 | $ | 16,885 | ||
3/31/2004 | $ | 14,512 | $ | 16,466 | ||
4/30/2004 | $ | 14,600 | $ | 16,678 | ||
5/31/2004 | $ | 14,786 | $ | 16,811 | ||
6/30/2004 | $ | 14,805 | $ | 16,817 | ||
7/31/2004 | $ | 14,306 | $ | 16,245 | ||
8/31/2004 | $ | 14,286 | $ | 16,050 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
20 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Swiss equity market, as measured by the MSCI Switzerland Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 19.56%, while the Index returned 18.90%.
Regulatory restraints, 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 constituent at its index 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 5% or more in a fund’s portfolio from exceeding 50% of a fund’s total assets. As of August 31, 2004, approximately 72% 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 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 Fund’s return relative to the Index’s return during the reporting period.
Like many of its European neighbors, Switzerland attempted to revive itself from economic slowdown during the reporting period. Because exports account for about 2/3 of gross domestic product, and about 2/3 of its exports are bought by the Euro region, Sweden’s economic prosperity is largely dependent on the fiscal health of its European neighbors and, to a lesser extent, of the United States. Early in the reporting period, Swiss leading economic indicators rose to top their highest levels in more than 2-1/2 years. The levels proved difficult to sustain, however, as the global economy struggled with recovery.
The ten largest holdings in the Fund represented roughly 71% of its net assets as of August 31, 2004. Among the Fund’s ten largest holdings, cement company Holcim Ltd. (whose registered shares represented 3.95% of the net assets of the Fund as of August 31, 2004) was a top performer during the reporting period.
Pharmaceutical company Novartis AG (the Fund’s largest holding at 19.59% of net assets as of August 31, 2004) in July announced a profit in excess of analysts’ expectations, and delivered gains for the reporting period.
Nestle SA, whose registered shares represented 11.53% of the net assets of the Fund as of August 31, 2004, got off to a strong start in the reporting period, but finished in negative territory. The company, which is the world’s largest food company, declined late in the reporting period.
Financial giant UBS AG (whose registered shares represented 8.94% of the Fund’s net assets as of August 31, 2004) gained during the reporting period, but fellow financial companies Credit Suisse Group (4.59% of the net assets of the Fund as of August 31, 2004), Zurich Financial Services AG (4.21% of the net assets of the Fund as of August 31, 2004) and Swiss Reinsurance Co. (3.85% of the net assets of the Fund as of August 31, 2004) all experienced losses during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 21 |
Managers’ Discussion & Analysis
iSHARES® MSCI UNITED KINGDOM INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
24.77% | 26.59 | % | 25.90 | % | (1.94 | )% | (1.86 | )% | (1.21 | )% | 6.70 | % | 6.83 | % | 7.37 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
24.77% | 26.59 | % | 25.90 | % | (9.32 | )% | (8.98 | )% | (5.92 | )% | 73.21 | % | 75.05 | % | 82.77 | % |
Total returns for the periods 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI UNITED KINGDOM INDEX FUND | MSCI UNITED KINGDOM INDEX | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 10,206 | $ | 10,183 | ||
4/30/1996 | $ | 10,371 | $ | 10,381 | ||
5/31/1996 | $ | 10,470 | $ | 10,503 | ||
6/30/1996 | $ | 10,412 | $ | 10,441 | ||
7/31/1996 | $ | 10,478 | $ | 10,514 | ||
8/31/1996 | $ | 11,041 | $ | 11,059 | ||
9/30/1996 | $ | 11,284 | $ | 11,315 | ||
10/31/1996 | $ | 11,788 | $ | 11,851 | ||
11/30/1996 | $ | 12,418 | $ | 12,527 | ||
12/31/1996 | $ | 12,827 | $ | 12,961 | ||
1/31/1997 | $ | 12,413 | $ | 12,580 | ||
2/28/1997 | $ | 12,768 | $ | 12,973 | ||
3/31/1997 | $ | 12,970 | $ | 13,110 | ||
4/30/1997 | $ | 13,173 | $ | 13,352 | ||
5/31/1997 | $ | 13,806 | $ | 13,962 | ||
6/30/1997 | $ | 13,974 | $ | 14,156 | ||
7/31/1997 | $ | 14,616 | $ | 14,819 | ||
8/31/1997 | $ | 14,405 | $ | 14,576 | ||
9/30/1997 | $ | 15,584 | $ | 15,841 | ||
10/31/1997 | $ | 14,990 | $ | 15,239 | ||
11/30/1997 | $ | 15,051 | $ | 15,314 | ||
12/31/1997 | $ | 15,501 | $ | 15,892 | ||
1/31/1998 | $ | 16,314 | $ | 16,664 | ||
2/28/1998 | $ | 17,432 | $ | 17,820 | ||
3/31/1998 | $ | 18,358 | $ | 18,762 | ||
4/30/1998 | $ | 18,358 | $ | 18,802 | ||
5/31/1998 | $ | 17,659 | $ | 18,108 | ||
6/30/1998 | $ | 18,088 | $ | 18,387 | ||
7/31/1998 | $ | 17,782 | $ | 18,019 | ||
8/31/1998 | $ | 16,564 | $ | 16,714 | ||
9/30/1998 | $ | 16,178 | $ | 16,373 | ||
10/31/1998 | $ | 17,110 | $ | 17,371 | ||
11/30/1998 | $ | 17,854 | $ | 18,148 | ||
12/31/1998 | $ | 18,356 | $ | 18,721 | ||
1/31/1999 | $ | 18,194 | $ | 18,528 | ||
2/28/1999 | $ | 18,581 | $ | 18,939 | ||
3/31/1999 | $ | 19,256 | $ | 19,529 | ||
4/30/1999 | $ | 20,030 | $ | 20,285 | ||
5/31/1999 | $ | 18,905 | $ | 19,162 | ||
6/30/1999 | $ | 18,941 | $ | 19,212 | ||
7/31/1999 | $ | 19,157 | $ | 19,504 | ||
8/31/1999 | $ | 19,102 | $ | 19,428 | ||
9/30/1999 | $ | 18,744 | $ | 19,114 | ||
10/31/1999 | $ | 19,263 | $ | 19,673 | ||
11/30/1999 | $ | 19,404 | $ | 19,916 | ||
12/31/1999 | $ | 20,584 | $ | 21,052 | ||
1/31/2000 | $ | 18,661 | $ | 19,124 | ||
2/29/2000 | $ | 18,007 | $ | 18,520 | ||
3/31/2000 | $ | 19,420 | $ | 19,885 | ||
4/30/2000 | $ | 18,642 | $ | 19,055 | ||
5/31/2000 | $ | 18,094 | $ | 18,412 | ||
6/30/2000 | $ | 18,238 | $ | 18,584 | ||
7/31/2000 | $ | 18,334 | $ | 18,710 | ||
8/31/2000 | $ | 18,528 | $ | 18,909 | ||
9/30/2000 | $ | 17,983 | $ | 18,391 | ||
10/31/2000 | $ | 18,094 | $ | 18,521 | ||
11/30/2000 | $ | 17,054 | $ | 17,432 | ||
12/31/2000 | $ | 18,182 | $ | 18,624 | ||
1/31/2001 | $ | 17,808 | $ | 18,317 | ||
2/28/2001 | $ | 16,727 | $ | 17,105 | ||
3/31/2001 | $ | 15,898 | $ | 16,333 | ||
4/30/2001 | $ | 16,848 | $ | 17,358 | ||
5/31/2001 | $ | 16,323 | $ | 16,780 | ||
6/30/2001 | $ | 15,747 | $ | 16,190 | ||
7/31/2001 | $ | 15,656 | $ | 16,143 | ||
8/31/2001 | $ | 15,526 | $ | 16,003 | ||
9/30/2001 | $ | 14,396 | $ | 14,914 | ||
10/31/2001 | $ | 14,673 | $ | 15,184 | ||
11/30/2001 | $ | 14,910 | $ | 15,435 | ||
12/31/2001 | $ | 15,284 | $ | 15,813 | ||
1/31/2002 | $ | 14,679 | $ | 15,156 | ||
2/28/2002 | $ | 14,585 | $ | 15,081 | ||
3/31/2002 | $ | 15,253 | $ | 15,787 | ||
4/30/2002 | $ | 15,295 | $ | 15,826 | ||
5/31/2002 | $ | 15,096 | $ | 15,620 | ||
6/30/2002 | $ | 14,460 | $ | 14,960 | ||
7/31/2002 | $ | 13,479 | $ | 13,953 | ||
8/31/2002 | $ | 13,323 | $ | 13,808 | ||
9/30/2002 | $ | 11,956 | $ | 12,379 | ||
10/31/2002 | $ | 12,874 | $ | 13,349 | ||
11/30/2002 | $ | 13,250 | $ | 13,751 | ||
12/31/2002 | $ | 12,954 | $ | 13,454 | ||
1/31/2003 | $ | 12,035 | $ | 12,505 | ||
2/28/2003 | $ | 11,843 | $ | 12,304 | ||
3/31/2003 | $ | 11,822 | $ | 12,292 | ||
4/30/2003 | $ | 13,018 | $ | 13,570 | ||
5/31/2003 | $ | 13,808 | $ | 14,403 | ||
6/30/2003 | $ | 13,915 | $ | 14,527 | ||
7/31/2003 | $ | 13,990 | $ | 14,617 | ||
8/31/2003 | $ | 13,883 | $ | 14,517 | ||
9/30/2003 | $ | 14,363 | $ | 15,031 | ||
10/31/2003 | $ | 15,325 | $ | 16,052 | ||
11/30/2003 | $ | 15,762 | $ | 16,528 | ||
12/31/2003 | $ | 16,936 | $ | 17,767 | ||
1/31/2004 | $ | 16,870 | $ | 17,713 | ||
2/29/2004 | $ | 17,630 | $ | 18,522 | ||
3/31/2004 | $ | 17,211 | $ | 18,088 | ||
4/30/2004 | $ | 17,068 | $ | 17,961 | ||
5/31/2004 | $ | 17,432 | $ | 18,352 | ||
6/30/2004 | $ | 17,421 | $ | 18,356 | ||
7/31/2004 | $ | 17,244 | $ | 18,173 | ||
8/31/2004 | $ | 17,321 | $ | 18,277 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
22 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the British equity market, as measured by the MSCI United Kingdom Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 24.77%, while the Index returned 25.90%.
The United Kingdom was one of the fastest growing European economies during the reporting period. A broad-based recovery led to ever increasing consumer spending and fears of the economy becoming overheated. In response, the Bank of England in late 2003 began a course of raising interest rates in small, deliberate steps. By August 2004, the slowest manufacturing growth in six months, combined with weakening retail sales levels suggested that the interest rate tightening was achieving its desired effect, and reduced the likelihood of the Bank of England raising the benchmark interest rate to 5.25%, as most economists had predicted.
BP PLC, the largest Fund holding at 10.01% of net assets as of August 31, 2004, was a strong performer during the reporting period.
Vodafone Group PLC (7.89% of the net assets of the Fund as of August 31, 2004) moved in step with its telecommunications counterparts around the world, posting strong gains during the first half of the reporting period, and then retracing some of those gains to finish the reporting period with more modest gains.
As markets improved and equity valuations rose, financial companies also generally performed well. Barclays PLC (an affiliate of the Fund’s investment adviser and 3.09% of the net assets of the Fund as of August 31, 2004) and Lloyds TSB Group PLC (2.16% of the net assets of the Fund as of August 31, 2004) gained during the reporting period, as did HSBC Holdings PLC (8.84% of the net assets of the Fund as of August 31, 2004).
Pharmaceutical companies showed mixed results during the reporting period. AstraZeneca PLC (3.98% of the net assets of the Fund as of August 31, 2004) posted positive returns for the reporting period. GlaxoSmithKline PLC (6.22% of the net assets of the Fund as of August 31, 2004) lost ground for the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 23 |
iSHARES®, INC.
As a shareholder of an iShares Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares; and (2) ongoing costs, including management fees and other fund expenses. The following Example is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2004 to August 31, 2004.
Actual Expenses
The first line under each Fund in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line for your Fund under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line under each Fund in the table below provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the second line under each Fund in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
iShares MSCI Index Fund | Beginning Account Value (March 1, 2004) | Ending (August 31, 2004) | Annualized Expense Ratio | Expenses Paid During Period* (March 1 to August 31, 2004) | ||||||||
Austria | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,121.80 | 0.74 | % | $ | 3.95 | ||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.40 | 0.74 | 3.76 | ||||||||
Belgium | ||||||||||||
Actual | 1,000.00 | 1,040.20 | 0.74 | 3.79 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.39 | 0.74 | 3.76 | ||||||||
EMU | ||||||||||||
Actual | 1,000.00 | 943.00 | 0.75 | 3.66 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.35 | 0.75 | 3.81 | ||||||||
France | ||||||||||||
Actual | 1,000.00 | 967.30 | 0.75 | 3.71 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.37 | 0.75 | 3.81 |
24 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Shareholder Expenses (Continued)
iSHARES®, INC.
iShares MSCI Index Fund | Beginning Account Value (March 1, 2004) | Ending Account Value (August 31, 2004) | Annualized Expense Ratio | Expenses Paid During Period* (March 1 to August 31, 2004) | ||||||||
Germany | ||||||||||||
Actual | $ | 1,000.00 | $ | 923.40 | 0.77 | % | $ | 3.72 | ||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.28 | 0.77 | 3.91 | ||||||||
Italy | ||||||||||||
Actual | 1,000.00 | 988.30 | 0.81 | 4.05 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.04 | 0.81 | 4.11 | ||||||||
Netherlands | ||||||||||||
Actual | 1,000.00 | 938.40 | 0.74 | 3.61 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.43 | 0.74 | 3.76 | ||||||||
Spain | ||||||||||||
Actual | 1,000.00 | 943.20 | 0.76 | 3.71 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.34 | 0.76 | 3.86 | ||||||||
Sweden | ||||||||||||
Actual | 1,000.00 | 994.70 | 0.97 | 4.86 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,020.24 | 0.97 | 4.93 | ||||||||
Switzerland | ||||||||||||
Actual | 1,000.00 | 963.00 | 0.75 | 3.70 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.35 | 0.75 | 3.81 | ||||||||
United Kingdom | ||||||||||||
Actual | 1,000.00 | 982.50 | 0.73 | 3.64 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.47 | 0.73 | 3.71 |
* | Expenses are calculated using each Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days), and divided by the number of days in the year (366 days). |
SHAREHOLDER EXPENSES | 25 |
iSHARES® MSCI AUSTRIA INDEX FUND
August 31, 2004
Security | Shares | Value | ||||
COMMON STOCKS 99.88% | ||||||
AIRLINES – 0.64% | ||||||
Austrian Airlines AG1 | 28,648 | $ | 368,700 | |||
368,700 | ||||||
BANKS – 25.17% | ||||||
Bank Austria Creditanstalt AG | 45,356 | 2,871,812 | ||||
Erste Bank der Oesterreichischen Sparkassen AG2 | 307,904 | 11,708,584 | ||||
14,580,396 | ||||||
BUILDING MATERIALS – 4.71% | ||||||
Wienerberger Baustoffindustrie AG2 | 75,276 | 2,726,191 | ||||
2,726,191 | ||||||
CHEMICALS – 2.31% | ||||||
Lenzing AG | 6,596 | 1,337,089 | ||||
1,337,089 | ||||||
ELECTRIC – 4.80% | ||||||
Oesterreichische Elektrizitaetswirtschafts AG Class A | 15,368 | 2,781,899 | ||||
2,781,899 | ||||||
ENGINEERING & CONSTRUCTION – 8.48% | ||||||
Flughafen Wien AG | 40,903 | 2,346,781 | ||||
VA Technologie AG1,2 | 39,406 | 2,562,121 | ||||
4,908,902 | ||||||
ENVIRONMENTAL CONTROL – 0.53% | ||||||
BWT AG | 13,770 | 307,249 | ||||
307,249 | ||||||
FOREST PRODUCTS & PAPER – 3.89% | ||||||
Mayr-Melnhof Karton AG | 17,052 | 2,255,109 | ||||
2,255,109 | ||||||
INSURANCE – 2.03% | ||||||
Generali Holding Vienna AG | 38,726 | 1,177,534 | ||||
1,177,534 | ||||||
IRON & STEEL – 8.94% | ||||||
Boehler-Uddeholm AG | 28,764 | 2,405,034 | ||||
Voest-Alpine AG | 56,508 | 2,769,629 | ||||
5,174,663 | ||||||
MANUFACTURING – 2.32% | ||||||
RHI AG1,2 | 62,254 | 1,345,187 | ||||
1,345,187 | ||||||
Security | Shares or Principal | Value | ||||
OIL & GAS – 12.63% | ||||||
OMV AG2 | 32,028 | $ | 7,316,864 | |||
7,316,864 | ||||||
REAL ESTATE – 7.11% | ||||||
CA Immobilien Anlagen AG1,2 | 60,240 | 1,444,427 | ||||
Immofinanz Immobilien Anlage AG1 | 330,276 | 2,673,220 | ||||
4,117,647 | ||||||
TELECOMMUNICATIONS – 16.32% | ||||||
Telekom Austria AG2 | 676,430 | 9,453,752 | ||||
9,453,752 | ||||||
TOTAL COMMON STOCKS | 57,851,182 | |||||
SHORT-TERM INVESTMENTS – 10.78% | ||||||
FLOATING RATE NOTES – 2.78% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/053,4 | $ | 27,233 | 27,230 | |||
1.52%, 10/12/043,4 | 22,694 | 22,694 | ||||
1.56%, 09/15/043,4 | 45,389 | 45,389 | ||||
1.64%, 03/15/053,4 | 22,694 | 22,704 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/043 | 34,042 | 34,041 | ||||
1.38%, 11/22/043 | 11,347 | 11,347 | ||||
1.40%, 10/29/043 | 45,389 | 45,389 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/053,4 | 45,389 | 45,383 | ||||
1.61%, 07/29/053,4 | 45,389 | 45,376 | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/053 | 45,389 | 45,376 | ||||
1.56%, 08/26/053 | 45,389 | 45,375 | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/053 | 45,389 | 45,389 | ||||
Dorada Finance Inc. | ||||||
1.61%, 07/29/053,4 | 37,673 | 37,663 | ||||
Five Finance Inc. | ||||||
1.42%, 04/29/053,4 | 36,311 | 36,309 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/043 | 22,694 | 22,687 |
26 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRIA INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/053 | $ | 29,049 | $ | 29,047 | ||
1.58%, 04/22/053 | 45,389 | 45,389 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/053,4 | 45,389 | 45,384 | ||||
1.57%, 09/27/043,4 | 49,020 | 49,019 | ||||
1.61%, 07/25/053,4 | 22,694 | 22,690 | ||||
Links Finance LLC | ||||||
1.55%, 04/15/053,4 | 45,389 | 45,383 | ||||
1.68%, 04/25/053 | 45,389 | 45,408 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/053 | 45,389 | 45,389 | ||||
1.63%, 12/09/043,4 | 37,673 | 37,504 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/053 | 45,389 | 45,382 | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/053,4 | 43,119 | 43,119 | ||||
Permanent Financing PLC | ||||||
1.52%, 03/10/053 | 45,389 | 45,389 | ||||
1.53%, 12/10/043 | 22,694 | 22,694 | ||||
1.55%, 06/10/053 | 20,425 | 20,425 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/043 | 45,389 | 45,388 | ||||
1.57%, 11/15/043 | 45,389 | 45,388 | ||||
1.59%, 09/15/053 | 34,042 | 34,045 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/053,4 | 16,658 | 16,657 | ||||
1.56%, 01/18/053,4 | 19,971 | 19,970 | ||||
1.59%, 07/25/053,4 | 45,389 | 45,385 | ||||
1.66%, 05/17/053,4 | 37,673 | 37,671 | ||||
1.70%, 02/25/053,4 | 25,418 | 25,415 | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/043 | 11,243 | 11,224 | ||||
1.48%, 06/15/053,4 | 22,694 | 22,690 | ||||
1.56%, 09/15/043,4 | 22,694 | 22,694 | ||||
1.56%, 07/15/053,4 | 34,042 | 34,036 | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/053 | 22,694 | 22,690 | ||||
1.55%, 04/15/053,4 | 34,042 | 34,037 | ||||
1.55%, 07/11/053 | 11,347 | 11,346 | ||||
1.56%, 11/15/043,4 | 27,233 | 27,233 | ||||
Security | Shares or Principal | Value | ||||
1.57%, 06/15/053,4 | $ | 18,609 | $ | 18,609 | ||
1.58%, 03/29/053 | 19,517 | 19,515 | ||||
1.58%, 08/26/053,4 | 22,694 | 22,690 | ||||
1.68%, 05/20/053 | 20,425 | 20,423 | ||||
1,611,680 | ||||||
MONEY MARKET FUNDS – 2.18% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5 | 708,658 | 708,658 | ||||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5 | 499,276 | 499,276 | ||||
BlackRock Temp Cash Money Market Fund3 | 22,913 | 22,913 | ||||
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3 | 30,510 | 30,510 | ||||
1,261,357 | ||||||
COMMERCIAL PAPER – 1.99% | ||||||
Alpine Securitization Corp. | ||||||
1.50%, 09/08/043 | 22,694 | 22,688 | ||||
1.51%, 09/02/043 | 20,425 | 20,424 | ||||
1.54%, 09/14/043 | 22,694 | 22,682 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/043 | 9,078 | 9,075 | ||||
1.53%, 09/16/043 | 22,330 | 22,316 | ||||
1.54%, 09/15/043 | 22,694 | 22,681 | ||||
1.54%, 09/22/043 | 11,347 | 11,337 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/043 | 22,694 | 22,688 | ||||
1.53%, 09/09/043 | 53,010 | 52,992 | ||||
1.53%, 09/13/043 | 32,678 | 32,661 | ||||
1.53%, 09/14/043 | 11,347 | 11,341 | ||||
1.54%, 09/17/043 | 13,617 | 13,607 | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/043 | 22,694 | 22,688 | ||||
1.53%, 09/15/043 | 9,078 | 9,072 | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/043 | 9,078 | 9,072 | ||||
Corporate Asset Funding | ||||||
1.42%, 09/03/043 | 13,617 | 13,616 |
SCHEDULESOF INVESTMENTS | 27 |
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRIA INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/043 | $ | 22,694 | $ | 22,693 | ||
Delaware Funding Corp. | ||||||
1.50%, 09/09/043 | 22,694 | 22,687 | ||||
1.53%, 09/10/043 | 36,311 | 36,297 | ||||
1.53%, 09/20/043 | 15,432 | 15,420 | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/043 | 22,694 | 22,681 | ||||
1.45%, 11/09/043 | 45,389 | 45,263 | ||||
1.52%, 09/08/043 | 45,389 | 45,375 | ||||
1.59%, 12/02/043 | 45,389 | 45,204 | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/043 | 13,617 | 13,616 | ||||
1.53%, 09/07/043 | 22,694 | 22,689 | ||||
1.53%, 09/17/043 | 13,617 | 13,607 | ||||
1.53%, 09/21/043 | 11,347 | 11,338 | ||||
1.53%, 09/22/043 | 22,694 | 22,674 | ||||
1.54%, 09/14/043 | 34,042 | 34,022 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/053 | 22,694 | 22,537 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/043 | 22,694 | 22,687 | ||||
1.55%, 10/15/043 | 29,764 | 29,707 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/043 | 45,389 | 45,308 | ||||
1.44%, 10/27/043 | 45,389 | 45,287 | ||||
1.59%, 11/30/043 | 22,694 | 22,604 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/043 | 11,347 | 11,347 | ||||
1.53%, 09/20/043 | 11,347 | 11,338 | ||||
1.53%, 09/23/043 | 15,886 | 15,871 | ||||
1.54%, 09/15/043 | 27,233 | 27,217 | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/043 | 31,631 | 31,631 | ||||
1.51%, 09/08/043 | 18,156 | 18,150 | ||||
1.52%, 09/09/043 | 11,347 | 11,343 | ||||
1.53%, 09/21/043 | 22,694 | 22,675 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/043 | 13,617 | 13,609 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/043 | 24,964 | 24,964 | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/043 | 15,105 | 15,079 | ||||
1.55%, 09/16/043 | 13,617 | 13,608 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
1.54%, 09/15/043 | 18,156 | 18,145 | ||||
1.54%, 09/23/043 | 11,347 | 11,337 | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/043 | 11,347 | 11,343 | ||||
1.52%, 09/10/043 | 15,886 | 15,880 | ||||
1,154,173 | ||||||
TIME DEPOSITS – 1.75% | ||||||
Abbey National Treasury Services PLC | ||||||
1.25%, 01/06/053 | 45,389 | 45,389 | ||||
1.33%, 02/10/053 | 22,694 | 22,693 | ||||
1.39%, 02/02/053 | 22,694 | 22,693 | ||||
1.39%, 04/08/053 | 31,772 | 31,761 | ||||
1.40%, 10/25/043 | 45,389 | 45,388 | ||||
Bank of New York | ||||||
1.39%, 11/01/043 | 45,389 | 45,388 | ||||
1.60%, 12/03/043 | 11,347 | 11,346 | ||||
Bank of Nova Scotia | ||||||
1.13%, 10/06/043 | 45,389 | 45,389 | ||||
1.24%, 10/07/043 | 34,042 | 34,041 | ||||
1.42%, 10/29/043 | 34,042 | 34,042 | ||||
National City Bank (Cleveland, Ohio) | ||||||
1.25%, 01/06/053 | 45,389 | 45,390 | ||||
1.49%, 08/09/053 | 45,389 | 45,377 | ||||
1.54%, 06/23/053 | 45,389 | 45,378 | ||||
1.56%, 06/10/053 | 22,694 | 22,700 | ||||
Norddeutsche Landesbank | ||||||
1.59%, 07/27/053 | 45,389 | 45,374 | ||||
Prudential Funding LLC | ||||||
1.60%, 12/01/043 | 22,694 | 22,603 | ||||
SouthTrust Bank | ||||||
1.55%, 09/01/043 | 90,778 | 90,778 | ||||
Toronto-Dominion Bank | ||||||
1.22%, 03/23/053 | 79,430 | 79,423 | ||||
1.34%, 02/10/053 | 18,156 | 18,154 | ||||
1.41%, 11/01/043 | 34,042 | 34,042 |
28 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRIA INDEX FUND
August 31, 2004
Security | Principal | Value | |||||
1.53%, 09/13/043 | $ | 22,694 | $ | 22,694 | |||
1.77%, 05/10/053 | 22,694 | 22,693 | |||||
1.90%, 05/11/053 | 22,694 | 22,693 | |||||
UBS Finance (Delaware) | |||||||
1.10%, 09/08/043 | 45,389 | 45,379 | |||||
1.11%, 12/17/043 | 68,083 | 67,859 | |||||
1.14%, 09/29/043 | 45,389 | 45,349 | |||||
1,014,016 | |||||||
REPURCHASE AGREEMENTS – 1.55% | |||||||
Banc of America Securities LLC | |||||||
1.59%, 09/01/043,6 | 136,167 | 136,167 | |||||
Bank of America, N.A | |||||||
1.59%, 09/01/043,6 | 260,986 | 260,986 | |||||
Goldman Sachs & Co. | |||||||
1.59%, 09/01/043,6 | 226,944 | 226,944 | |||||
Merrill Lynch Government Securities Inc. | |||||||
1.57%, 09/01/043,6 | 45,389 | 45,389 | |||||
1.59%, 09/01/043,6 | 226,944 | 226,944 | |||||
896,430 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.28% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.63%, 04/15/053 | 31,772 | 31,835 | |||||
1.80%, 01/18/053 | 21,106 | 20,959 | |||||
1.80%, 01/19/053 | 22,694 | 22,536 | |||||
2.06%, 05/31/053 | 22,628 | 22,275 | |||||
Federal National Mortgage Association | |||||||
2.33%, 07/22/053 | 68,083 | 66,659 | |||||
164,264 | |||||||
MEDIUM-TERM NOTES – 0.25% | |||||||
CC USA Inc. | |||||||
1.29%, 04/15/053,4 | 45,389 | 45,386 | |||||
1.51%, 02/15/053,4 | 29,503 | 29,524 | |||||
Dorada Finance Inc. | |||||||
1.48%, 01/18/053,4 | 34,042 | 34,041 | |||||
K2 USA LLC | |||||||
1.46%, 01/12/053,4 | 22,694 | 22,694 | |||||
WhistleJacket Capital LLC | |||||||
1.32%, 02/04/053,4 | 11,347 | 11,346 | |||||
142,991 | |||||||
TOTAL SHORT-TERM INVESTMENTS | $ | 6,244,911 | |||||
TOTAL INVESTMENTS IN SECURITIES – 110.66% | 64,096,093 | ||||||
Other Assets, Less Liabilities – (10.66%) | (6,175,873 | ) | |||||
NET ASSETS – 100.00% | $ | 57,920,220 | |||||
1 | Non-income earning security. |
2 | All or a portion of this security represents a security on loan. See Note 5. |
3 | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
4 | Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
5 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
6 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Financial | 34.31 | % | $ | 19,875,577 | ||
Communications | 16.32 | 9,453,752 | ||||
Industrial | 16.04 | 9,287,529 | ||||
Basic Materials | 15.14 | 8,766,861 | ||||
Energy | 12.63 | 7,316,864 | ||||
Utilities | 4.80 | 2,781,899 | ||||
Consumer Cyclical | 0.64 | 368,700 | ||||
Short-Term and Other Net Assets | 0.12 | 69,038 | ||||
TOTAL | 100.00 | % | $ | 57,920,220 | ||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 29 |
iSHARES® MSCI BELGIUM INDEX FUND
August 31, 2004
Security | Shares | Value | ||||
COMMON STOCKS – 99.89% | ||||||
BANKS – 41.60% | ||||||
Dexia Group1 | 178,038 | $ | 3,065,957 | |||
Fortis1 | 271,278 | 6,026,626 | ||||
KBC Bankverzekeringsholdings SA1 | 20,454 | 1,230,458 | ||||
10,323,041 | ||||||
BEVERAGES – 4.78% | ||||||
Interbrew SA | 37,002 | 1,185,820 | ||||
1,185,820 | ||||||
CHEMICALS – 4.81% | ||||||
Solvay SA1 | 14,196 | 1,193,003 | ||||
1,193,003 | ||||||
DIVERSIFIED FINANCIAL SERVICES – 0.96% | ||||||
Algemene Maatschappij voor Nijverheidskredit NV | 3,822 | 238,979 | ||||
238,979 | ||||||
ELECTRIC – 10.62% | ||||||
Electrabel SA | 7,854 | 2,634,411 | ||||
2,634,411 | ||||||
ELECTRICAL COMPONENTS & EQUIPMENT – 1.14% | ||||||
Bekaert NV | 4,494 | 282,089 | ||||
282,089 | ||||||
ELECTRONICS – 1.10% | ||||||
Barco NV | 3,276 | 272,721 | ||||
272,721 | ||||||
FOOD – 7.57% | ||||||
Colruyt NV | 5,040 | 663,350 | ||||
Delhaize Group1 | 21,588 | 1,213,673 | ||||
1,877,023 | ||||||
HOLDING COMPANIES – DIVERSIFIED – 4.89% | ||||||
Groupe Bruxelles Lambert SA | 19,404 | 1,214,457 | ||||
1,214,457 | ||||||
MANUFACTURING – 3.57% | ||||||
AGFA-Gevaert NV1 | 32,214 | 886,740 | ||||
886,740 | ||||||
MINING – 2.04% | ||||||
Umicore1 | 7,518 | 506,169 | ||||
506,169 | ||||||
Security | Shares or Principal | Value | ||||
PHARMACEUTICALS – 5.89% | ||||||
Omega Pharma SA | 5,670 | $ | 283,554 | |||
UCB SA | 24,234 | 1,178,063 | ||||
1,461,617 | ||||||
REAL ESTATE INVESTMENT TRUSTS – 2.08% | ||||||
Cofinimmo1 | 3,696 | 515,204 | ||||
515,204 | ||||||
RETAIL – 1.14% | ||||||
SA D’Ieteren NV1 | 1,389 | 282,917 | ||||
282,917 | ||||||
TELECOMMUNICATIONS – 7.14% | ||||||
Belgacom SA1,2 | 36,834 | 1,228,334 | ||||
Mobistar SA2 | 7,938 | 542,647 | ||||
1,770,981 | ||||||
TRANSPORTATION – 0.56% | ||||||
Compagnie Maritime Belge SA1 | 924 | 139,244 | ||||
139,244 | ||||||
TOTAL COMMON STOCKS | 24,784,416 | |||||
SHORT-TERM INVESTMENTS – 44.08% | ||||||
FLOATING RATE NOTES – 11.42% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/053,4 | $ | 47,867 | 47,861 | |||
1.52%, 10/12/043,4 | 39,889 | 39,889 | ||||
1.56%, 09/15/043,4 | 79,779 | 79,778 | ||||
1.64%, 03/15/053,4 | 39,889 | 39,906 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/043 | 59,834 | 59,833 | ||||
1.38%, 11/22/043 | 19,945 | 19,945 | ||||
1.40%, 10/29/043 | 79,779 | 79,778 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/053,4 | 79,779 | 79,768 | ||||
1.61%, 07/29/053,4 | 79,779 | 79,757 | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/053 | 79,779 | 79,756 | ||||
1.56%, 08/26/053 | 79,779 | 79,755 | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/053 | 79,779 | 79,779 |
30 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI BELGIUM INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
Dorada Finance Inc. | ||||||
1.61%, 07/29/053,4 | $ | 66,216 | $ | 66,198 | ||
Five Finance Inc. | ||||||
1.42%, 04/29/053,4 | 63,823 | 63,819 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/043 | 39,889 | 39,876 | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/053 | 51,058 | 51,056 | ||||
1.58%, 04/22/053 | 79,779 | 79,779 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/053,4 | 79,779 | 79,771 | ||||
1.57%, 09/27/043,4 | 86,161 | 86,160 | ||||
1.61%, 07/25/053,4 | 39,889 | 39,882 | ||||
Links Finance LLC | ||||||
1.55%, 04/15/053,4 | 79,779 | 79,769 | ||||
1.68%, 04/25/053 | 79,779 | 79,812 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/053 | 79,779 | 79,779 | ||||
1.63%, 12/09/043,4 | 66,216 | 65,919 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/053 | 79,779 | 79,766 | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/053,4 | 75,790 | 75,790 | ||||
Permanent Financing PLC | ||||||
1.52%, 03/10/053 | 79,779 | 79,779 | ||||
1.53%, 12/10/043 | 39,889 | 39,889 | ||||
1.55%, 06/10/053 | 35,900 | 35,900 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/043 | 79,779 | 79,777 | ||||
1.57%, 11/15/043 | 79,779 | 79,778 | ||||
1.59%, 09/15/053 | 59,834 | 59,839 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/053,4 | 29,279 | 29,277 | ||||
1.56%, 01/18/053,4 | 35,103 | 35,101 | ||||
1.59%, 07/25/053,4 | 79,779 | 79,771 | ||||
1.66%, 05/17/053,4 | 66,216 | 66,214 | ||||
1.70%, 02/25/053,4 | 44,676 | 44,672 | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/043 | 19,761 | 19,727 | ||||
1.48%, 06/15/053,4 | 39,889 | 39,882 | ||||
1.56%, 09/15/043,4 | 39,889 | 39,889 | ||||
1.56%, 07/15/053,4 | 59,834 | 59,823 | ||||
Security | Shares or Principal | Value | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/053 | $ | 39,889 | $ | 39,882 | ||
1.55%, 04/15/053,4 | 59,834 | 59,827 | ||||
1.55%, 07/11/053 | 19,945 | 19,943 | ||||
1.56%, 11/15/043,4 | 47,867 | 47,867 | ||||
1.57%, 06/15/053,4 | 32,709 | 32,710 | ||||
1.58%, 03/29/053 | 34,305 | 34,300 | ||||
1.58%, 08/26/053,4 | 39,889 | 39,881 | ||||
1.68%, 05/20/053 | 35,900 | 35,898 | ||||
2,832,807 | ||||||
MONEY MARKET FUNDS – 8.78% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5 | 1,207,457 | 1,207,457 | ||||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5 | 877,564 | 877,564 | ||||
BlackRock Temp Cash Money Market Fund3 | 40,273 | 40,273 | ||||
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3 | 53,627 | 53,627 | ||||
2,178,921 | ||||||
COMMERCIAL PAPER – 8.18% | ||||||
Alpine Securitization Corp. | �� | |||||
1.50%, 09/08/043 | 39,889 | 39,878 | ||||
1.51%, 09/02/043 | 35,900 | 35,899 | ||||
1.54%, 09/14/043 | 39,889 | 39,867 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/043 | 15,956 | 15,951 | ||||
1.53%, 09/16/043 | 39,249 | 39,224 | ||||
1.54%, 09/15/043 | 39,889 | 39,865 | ||||
1.54%, 09/22/043 | 19,945 | 19,927 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/043 | 39,889 | 39,877 | ||||
1.53%, 09/09/043 | 93,174 | 93,142 | ||||
1.53%, 09/13/043 | 57,437 | 57,408 | ||||
1.53%, 09/14/043 | 19,945 | 19,934 | ||||
1.54%, 09/17/043 | 23,934 | 23,917 |
SCHEDULESOF INVESTMENTS | 31 |
Schedule of Investments (Continued)
iSHARES® MSCI BELGIUM INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/043 | $ | 39,889 | $ | 39,878 | ||
1.53%, 09/15/043 | 15,956 | 15,946 | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/043 | 15,956 | 15,945 | ||||
Corporate Asset Funding | ||||||
1.42%, 09/03/043 | 23,934 | 23,931 | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/043 | 39,889 | 39,886 | ||||
Delaware Funding Corp. | ||||||
1.50%, 09/09/043 | 39,889 | 39,876 | ||||
1.53%, 09/10/043 | 63,823 | 63,798 | ||||
1.53%, 09/20/043 | 27,125 | 27,103 | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/043 | 39,889 | 39,866 | ||||
1.45%, 11/09/043 | 79,779 | 79,557 | ||||
1.52%, 09/08/043 | 79,779 | 79,755 | ||||
1.59%, 12/02/043 | 79,779 | 79,454 | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/043 | 23,934 | 23,932 | ||||
1.53%, 09/07/043 | 39,889 | 39,880 | ||||
1.53%, 09/17/043 | 23,934 | 23,917 | ||||
1.53%, 09/21/043 | 19,945 | 19,928 | ||||
1.53%, 09/22/043 | 39,889 | 39,854 | ||||
1.54%, 09/14/043 | 59,834 | 59,801 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/053 | 39,889 | 39,613 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/043 | 39,889 | 39,876 | ||||
1.55%, 10/15/043 | 52,315 | 52,216 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/043 | 79,779 | 79,637 | ||||
1.44%, 10/27/043 | 79,779 | 79,600 | ||||
1.59%, 11/30/043 | 39,889 | 39,731 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/043 | 19,945 | 19,944 | ||||
1.53%, 09/20/043 | 19,945 | 19,929 | ||||
1.53%, 09/23/043 | 27,922 | 27,896 | ||||
1.54%, 09/15/043 | 47,867 | 47,838 | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/043 | 55,598 | 55,598 | ||||
1.51%, 09/08/043 | 31,911 | 31,902 | ||||
1.52%, 09/09/043 | 19,945 | 19,938 | ||||
1.53%, 09/21/043 | 39,889 | 39,855 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/043 | 23,934 | 23,920 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/043 | 43,878 | 43,879 | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/043 | 26,550 | 26,503 | ||||
1.55%, 09/16/043 | 23,934 | 23,918 | ||||
Thames Asset Global | ||||||
Securitization No. 1 Inc. | ||||||
1.54%, 09/15/043 | 31,911 | 31,892 | ||||
1.54%, 09/23/043 | 19,945 | 19,926 | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/043 | 19,945 | 19,938 | ||||
1.52%, 09/10/043 | 27,922 | 27,912 | ||||
2,028,657 | ||||||
TIME DEPOSITS – 7.18% | ||||||
Abbey National Treasury | ||||||
Services PLC | ||||||
1.25%, 01/06/053 | 79,779 | 79,779 | ||||
1.33%, 02/10/053 | 39,889 | 39,887 | ||||
1.39%, 02/02/053 | 39,889 | 39,887 | ||||
1.39%, 04/08/053 | 55,845 | 55,831 | ||||
1.40%, 10/25/043 | 79,779 | 79,777 | ||||
Bank of New York | ||||||
1.39%, 11/01/043 | 79,779 | 79,777 | ||||
1.60%, 12/03/043 | 19,945 | 19,942 | ||||
Bank of Nova Scotia | ||||||
1.13%, 10/06/043 | 79,779 | 79,779 | ||||
1.24%, 10/07/043 | 59,834 | 59,833 | ||||
1.42%, 10/29/043 | 59,834 | 59,835 | ||||
National City Bank (Cleveland, Ohio) | ||||||
1.25%, 01/06/053 | 79,779 | 79,780 | ||||
1.49%, 08/09/053 | 79,779 | 79,756 | ||||
1.54%, 06/23/053 | 79,779 | 79,759 | ||||
1.56%, 06/10/053 | 39,889 | 39,899 |
32 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI BELGIUM INDEX FUND
August 31, 2004
Security | Principal | Value | |||||
Norddeutsche Landesbank | |||||||
1.59%, 07/27/053 | $ | 79,779 | $ | 79,753 | |||
Prudential Funding LLC | |||||||
1.60%, 12/01/043 | 39,889 | 39,728 | |||||
SouthTrust Bank | |||||||
1.55%, 09/01/043 | 159,557 | 159,557 | |||||
Toronto-Dominion Bank | |||||||
1.22%, 03/23/053 | 139,612 | 139,599 | |||||
1.34%, 02/10/053 | 31,911 | 31,909 | |||||
1.41%, 11/01/043 | 59,834 | 59,833 | |||||
1.53%, 09/13/043 | 39,889 | 39,889 | |||||
1.77%, 05/10/053 | 39,889 | 39,887 | |||||
1.90%, 05/11/053 | 39,889 | 39,887 | |||||
UBS Finance (Delaware) | |||||||
1.10%, 09/08/043 | 79,779 | 79,761 | |||||
1.11%, 12/17/043 | 119,668 | 119,273 | |||||
1.14%, 09/29/043 | 79,779 | 79,708 | |||||
1,782,305 | |||||||
REPURCHASE AGREEMENTS – 6.35% | |||||||
Banc of America Securities LLC | |||||||
1.59%, 09/01/043,6 | 239,336 | 239,336 | |||||
Bank of America, N.A. | |||||||
1.59%, 09/01/043,6 | 458,727 | 458,727 | |||||
Goldman Sachs & Co. | |||||||
1.59%, 09/01/043,6 | 398,893 | 398,893 | |||||
Merrill Lynch Government | |||||||
Securities Inc. | |||||||
1.57%, 09/01/043,6 | 79,779 | 79,779 | |||||
1.59%, 09/01/043,6 | 398,893 | 398,893 | |||||
1,575,628 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 1.16% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.63%, 04/15/053 | 55,845 | 55,956 | |||||
1.80%, 01/18/053 | 37,097 | 36,840 | |||||
1.80%, 01/19/053 | 39,889 | 39,610 | |||||
2.06%, 05/31/053 | 39,772 | 39,153 | |||||
Federal National Mortgage Association | |||||||
2.33%, 07/22/053 | 119,668 | 117,164 | |||||
288,723 | |||||||
MEDIUM-TERM NOTES – 1.01% | |||||||
CC USA Inc. | |||||||
1.29%, 04/15/053,4 | 79,779 | 79,774 | |||||
1.51%, 02/15/053,4 | 51,856 | 51,893 | |||||
Dorada Finance Inc. | |||||||
1.48%, 01/18/053,4 | 59,834 | 59,833 | |||||
K2 USA LLC | |||||||
1.46%, 01/12/053,4 | 39,889 | 39,888 | |||||
WhistleJacket Capital LLC | |||||||
1.32%, 02/04/053,4 | 19,945 | 19,943 | |||||
251,331 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 10,938,372 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 143.97% | 35,722,788 | ||||||
Other Assets, Less Liabilities – (43.97%) | (10,910,183 | ) | |||||
NET ASSETS – 100.00% | $ | 24,812,605 | |||||
1 | All or a portion of this security represents a security on loan. See Note 5. |
2 | Non-income earning security. |
3 | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
4 | Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
5 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
6 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Financial | 44.64 | % | $ | 11,077,224 | ||
Consumer Non-Cyclical | 18.24 | 4,524,460 | ||||
Utilities | 10.62 | 2,634,411 | ||||
Communications | 7.14 | 1,770,981 | ||||
Basic Materials | 6.85 | 1,699,172 | ||||
Industrial | 6.37 | 1,580,794 | ||||
Diversified | 4.89 | 1,214,457 | ||||
Consumer Cyclical | 1.14 | 282,917 | ||||
Short-Term and Other Net Assets | 0.11 | 28,189 | ||||
TOTAL | 100.00 | % | $ | 24,812,605 | ||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 33 |
iSHARES® MSCI EMU INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 97.82% | |||||
AUSTRIA – 0.99% | |||||
Bank Austria Creditanstalt | 5,280 | $ | 334,314 | ||
Boehler-Uddeholm AG | 1,210 | 101,171 | |||
Erste Bank der Oesterreichischen Sparkassen AG | 16,720 | 635,807 | |||
Flughafen Wien AG | 220 | 12,622 | |||
Immofinanz Immobilien Anlage AG1 | 31,082 | 251,575 | |||
Mayr-Melnhof Karton AG | 990 | 130,926 | |||
Oesterreichische Elektrizitaetswirtschafts AG Class A | 880 | 159,297 | |||
OMV AG | 1,980 | 452,335 | |||
RHI AG1,2 | 3,190 | 68,930 | |||
Telekom Austria AG | 35,420 | 495,028 | |||
VA Technologie AG1 | 2,090 | 135,889 | |||
Voest-Alpine AG | 3,300 | 161,743 | |||
Wienerberger Baustoffindustrie AG2 | 8,360 | 302,765 | |||
3,242,402 | |||||
BELGIUM – 3.93% | |||||
AGFA-Gevaert NV | 10,926 | 300,755 | |||
Barco NV2 | 1,870 | 155,674 | |||
Bekaert NV | 2,640 | 165,713 | |||
Belgacom SA1 | 20,240 | 674,960 | |||
Cofinimmo2 | 854 | 119,043 | |||
Colruyt NV | 2,860 | 376,425 | |||
Compagnie Maritime Belge SA2 | 770 | 116,037 | |||
Delhaize Group2 | 9,460 | 531,839 | |||
Dexia Group2 | 87,560 | 1,507,853 | |||
Electrabel SA2 | 3,630 | 1,217,585 | |||
Fortis2 | 155,760 | 3,460,315 | |||
Groupe Bruxelles Lambert SA | 9,662 | 604,725 | |||
Interbrew SA | 21,984 | 704,531 | |||
KBC Bankverzekeringsholding2 | 14,520 | 873,485 | |||
Mobistar SA1 | 3,752 | 256,489 | |||
Omega Pharma SA | 2,860 | 143,027 | |||
SA D’Ieteren NV2 | 440 | 89,621 | |||
Solvay SA | 8,910 | 748,779 | |||
UCB SA | 11,880 | 577,511 | |||
Umicore2 | 3,410 | 229,587 | |||
12,853,954 | |||||
FINLAND – 3.95% | |||||
Amer Group Ltd. | 2,860 | 133,643 | |||
Elisa OYJ Class A1 | 17,710 | 210,064 | |||
Fortum OYJ2 | 44,440 | 623,792 | |||
KCI Konecranes OYJ | 2,310 | 82,929 | |||
Kesko OYJ Class B2 | 8,030 | 175,172 | |||
Kone OYJ Class B | 5,390 | 325,558 | |||
Metso OYJ2 | 15,510 | 199,803 | |||
Nokia OYJ | 591,250 | 6,912,414 | |||
Nokian Renkaat OYJ2 | 1,320 | 135,362 | |||
Orion-Yhtyma OYJ Class B2 | 3,850 | 110,656 | |||
Outokumpu OYJ2 | 15,290 | 239,521 | |||
Pohjola Group PLC Class D2 | 7,590 | 79,696 | |||
Rautaruukki OYJ2 | 16,951 | 154,504 | |||
Sampo OYJ Class A2 | 40,700 | 402,132 | |||
Stora Enso OYJ Class R | 83,490 | 1,115,105 | |||
TietoEnator OYJ2 | 11,330 | 299,483 | |||
UPM-Kymmene OYJ2 | 71,390 | 1,362,136 | |||
Uponor OYJ2 | 5,830 | 199,803 | |||
Wartsila OYJ Class B2 | 5,390 | 126,752 | |||
12,888,525 | |||||
FRANCE – 27.87% | |||||
Accor SA2 | 27,260 | 1,149,579 | |||
Air France1,2 | 14,410 | 220,132 | |||
Alcatel SA Class A1,2 | 161,590 | 1,885,251 | |||
ALSTOM1 | 573,230 | 306,524 | |||
Arcelor2 | 66,135 | 1,126,038 | |||
Atos Origin SA1 | 5,720 | 309,760 | |||
Autoroutes du Sud de la France2 | 10,120 | 441,528 | |||
AXA2 | 184,140 | 3,757,356 | |||
BNP Paribas SA2 | 105,820 | 6,400,574 | |||
Bouygues SA2 | 25,410 | 873,617 | |||
Business Objects SA1 | 7,590 | 140,299 | |||
Cap Gemini SA1 | 15,400 | 435,513 | |||
Carrefour SA2 | 75,680 | 3,548,353 | |||
CNP Assurances2 | 4,400 | 266,510 | |||
Compagnie de Saint-Gobain | 41,030 | 2,058,376 | |||
Compagnie Generale des Etablissements Michelin Class B2 | 19,140 | 1,011,149 | |||
Credit Agricole SA2 | 88,000 | 2,213,790 | |||
Dassault Systemes SA2 | 7,700 | 330,237 |
34 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2004
Security | Shares | Value | |||
Essilor International SA | 12,540 | $ | 768,089 | ||
Etablissements Economiques du Casino Guichard-Perrachon SA2 | 4,290 | 338,104 | |||
European Aeronautic Defense and Space Co.2 | 33,110 | 864,325 | |||
France Telecom | 145,970 | 3,446,830 | |||
Gecina SA2 | 3,094 | 257,005 | |||
Groupe Danone | 31,900 | 2,550,939 | |||
Hermes International2 | 990 | 186,728 | |||
Imerys SA2 | 4,840 | 301,749 | |||
Klepierre2 | 2,886 | 208,337 | |||
Lafarge SA2 | 22,224 | 1,902,772 | |||
Lagardere S.C.A.2 | 16,940 | 1,015,977 | |||
L’Air Liquide SA2 | 14,630 | 2,286,550 | |||
L’Oreal SA2 | 40,260 | 2,673,914 | |||
LVMH Moet Hennessy Louis Vuitton SA | 32,120 | 2,053,264 | |||
Pernod Ricard SA2 | 6,979 | 861,728 | |||
Pinault-Printemps-Redoute SA2 | 8,800 | 802,098 | |||
PSA Peugeot Citroen SA2 | 22,000 | 1,317,847 | |||
Publicis Groupe2 | 15,840 | 427,165 | |||
Renault SA2 | 24,750 | 1,985,193 | |||
Sagem SA2 | 2,349 | 219,815 | |||
Sanofi-Aventis2 | 44,990 | 3,193,099 | |||
Sanofi-Aventis New1,2 | 75,436 | 5,363,126 | |||
Schneider Electric SA | 28,494 | 1,781,650 | |||
Societe BIC SA2 | 4,620 | 197,019 | |||
Societe Generale Class A2 | 43,450 | 3,706,896 | |||
Societe Television Francaise 12 | 15,620 | 438,317 | |||
Sodexho Alliance SA2 | 14,190 | 372,149 | |||
Suez SA2 | 105,792 | 2,048,104 | |||
Technip-Coflexip SA2 | 2,541 | 380,451 | |||
Thales SA2 | 11,550 | 389,519 | |||
Thomson2 | 30,952 | 586,809 | |||
Total SA2 | 77,660 | 15,110,270 | |||
Unibail Holding2 | 5,661 | 639,823 | |||
Valeo SA2 | 10,434 | 410,212 | |||
Veolia Environnement2 | 35,970 | 926,744 | |||
Vinci SA2 | 8,978 | 958,528 | |||
Vivendi Universal SA1 | 135,960 | 3,350,909 | |||
Zodiac SA2 | 6,600 | 217,930 | |||
91,014,570 | |||||
GERMANY – 19.32% | |||||
Adidas-Salomon AG2 | 5,940 | 762,530 | |||
Allianz AG2 | 40,700 | 3,916,952 | |||
ALTANA AG2 | 9,460 | 512,295 | |||
BASF AG2 | 70,070 | 3,781,781 | |||
Bayer AG2 | 87,450 | 2,228,649 | |||
Bayerische Hypo-und Vereinsbank AG1 | 82,099 | 1,342,970 | |||
Beiersdorf AG2 | 2,274 | 220,811 | |||
Celesio AG | 4,180 | 276,451 | |||
Commerzbank AG1 | 61,270 | 1,005,229 | |||
Continental AG2 | 17,160 | 889,238 | |||
DaimlerChrysler AG | 114,730 | 4,760,187 | |||
Deutsche Bank AG | 69,520 | 4,722,015 | |||
Deutsche Boerse AG | 14,630 | 705,326 | |||
Deutsche Lufthansa AG1 | 21,780 | 253,311 | |||
Deutsche Post AG | 58,080 | 1,154,059 | |||
Deutsche Telekom AG1 | 332,420 | 5,789,177 | |||
Douglas Holding AG | 4,070 | 114,655 | |||
E.ON AG2 | 82,170 | 5,822,907 | |||
EPCOS AG1,2 | 6,820 | 102,195 | |||
Fresenius Medical Care AG2 | 4,510 | 328,422 | |||
HeidelbergerCement AG2 | 8,400 | 369,446 | |||
Hypo Real Estate Holding AG1 | 17,434 | 556,385 | |||
Infineon Technologies AG1 | 85,470 | 830,974 | |||
KarstadtQuelle AG2 | 5,830 | 92,178 | |||
Linde AG2 | 11,220 | 600,378 | |||
MAN AG2 | 14,410 | 487,547 | |||
Merck KGaA | 6,270 | 329,486 | |||
METRO AG2 | 19,720 | 914,292 | |||
MLP AG2 | 10,340 | 152,051 | |||
Muenchener Rueckversicherungs-Gesellschaft AG2 | 23,911 | 2,258,759 | |||
Puma AG | 2,090 | 509,824 | |||
RWE AG2 | 52,140 | 2,550,471 | |||
SAP AG2 | 27,280 | 3,970,118 | |||
Schering AG2 | 22,110 | 1,225,822 | |||
Siemens AG2 | 106,370 | 7,268,934 | |||
Suedzucker AG2 | 4,950 | 92,582 | |||
ThyssenKrupp AG2 | 42,240 | 784,388 | |||
TUI AG | 15,400 | 283,167 | |||
Volkswagen AG2 | 29,480 | 1,130,702 | |||
63,096,664 |
SCHEDULESOF INVESTMENTS | 35 |
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2004
Security | Shares | Value | |||
GREECE – 0.96% | |||||
Hellenic Telecommunications Organization SA ADR2 | 193,710 | $ | 1,230,059 | ||
National Bank of Greece SA ADR | 436,305 | 1,919,742 | |||
3,149,801 | |||||
IRELAND – 2.74% | |||||
Allied Irish Banks PLC | 113,740 | 1,794,202 | |||
Bank of Ireland | 128,810 | 1,726,667 | |||
CRH PLC | 71,170 | 1,613,958 | |||
DCC PLC | 11,000 | 192,504 | |||
Depfa Bank PLC | 46,860 | 617,327 | |||
Eircom Group PLC1 | 57,970 | 105,676 | |||
Elan Corp. PLC1 | 50,710 | 1,121,627 | |||
Fyffes PLC | 43,010 | 95,132 | |||
Grafton Group PLC1 | 25,410 | 217,092 | |||
Greencore Group PLC | 26,510 | 95,042 | |||
Independent News & Media PLC | 79,530 | 191,373 | |||
Irish Life & Permanent PLC | 35,090 | 533,914 | |||
Kerry Group PLC Class A | 18,810 | 390,903 | |||
Kingspan Group PLC | 20,570 | 123,994 | |||
Ryanair Holdings PLC1 | 21,760 | 112,655 | |||
Waterford Wedgewood PLC1 | 54,496 | 9,934 | |||
Waterford Wedgewood PLC Restricted | 9,511 | 1,734 | |||
8,943,734 | |||||
ITALY – 11.11% | |||||
Alleanza Assicurazioni SpA2 | 63,580 | 664,511 | |||
Arnoldo Mondadori Editore SpA2 | 17,936 | 163,700 | |||
Assicurazioni Generali SpA2 | 126,720 | 3,301,820 | |||
Autogrill SpA1,2 | 22,442 | 323,194 | |||
Autostrade SpA | 32,340 | 646,924 | |||
Banca Antonveneta SpA1,2 | 33,440 | 689,248 | |||
Banca Fideuram SpA2 | 43,560 | 214,401 | |||
Banca Intesa SpA2 | 429,925 | 1,572,688 | |||
Banca Monte dei Paschi di Siena SpA2 | 150,480 | 438,908 | |||
Banca Nazionale del Lavoro SpA1,2 | 168,025 | 387,980 | |||
Banca Popolare di Milano Scrl2 | 50,490 | 311,098 | |||
Banca Popolare di Verona e Novara Scrl2 | 47,850 | 786,798 | |||
Banche Popolari Unite Scrl2 | 42,380 | 683,979 | |||
Benetton Group SpA2 | 8,030 | 87,537 | |||
Bulgari SpA2 | 15,510 | 144,951 | |||
Capitalia SpA2 | 191,858 | 586,410 | |||
Edison SpA1 | 114,620 | 189,723 | |||
Enel SpA2 | 316,580 | 2,443,097 | |||
ENI SpA2 | 348,260 | 7,114,671 | |||
Fiat SpA1,2 | 64,496 | 461,670 | |||
Fineco SpA1,2 | 25,194 | 135,027 | |||
Finmeccanica SpA2 | 844,140 | 559,106 | |||
Gruppo Editoriale L’Espresso SpA2 | 22,550 | 116,197 | |||
Italcementi SpA2 | 11,770 | 159,920 | |||
Luxottica Group SpA2 | 18,370 | 308,086 | |||
Mediaset SpA2 | 80,190 | 820,570 | |||
Mediobanca SpA2 | 64,020 | 763,252 | |||
Mediolanum SpA2 | 37,918 | 225,340 | |||
Pirelli SpA2 | 276,670 | 266,972 | |||
Riunione Adriatica di Sicurta SpA2 | 39,406 | 694,407 | |||
Sanpaolo IMI SpA2 | 123,750 | 1,382,115 | |||
Seat Pagine Gialle SpA1 | 481,690 | 182,059 | |||
Snam Rete Gas SpA2 | 94,136 | 422,149 | |||
Telecom Italia Media SpA1,2 | 192,963 | 68,711 | |||
Telecom Italia Mobile SpA2 | 496,210 | 2,635,302 | |||
Telecom Italia SpA2 | 1,071,321 | 3,202,862 | |||
Terna SpA Rights1 | 118,433 | 265,554 | |||
Tiscali SpA1,2 | 26,600 | 73,544 | |||
UniCredito Italiano SpA | 580,470 | 2,779,454 | |||
36,273,935 | |||||
NETHERLANDS – 14.45% | |||||
ABN AMRO Holding NV | 204,710 | 4,338,794 | |||
AEGON NV | 179,410 | 1,910,004 | |||
Akzo Nobel NV | 35,530 | 1,193,916 | |||
ASML Holding NV1,2 | 62,920 | 802,900 | |||
Corio NV | 3,542 | 155,482 | |||
DSM NV | 9,790 | 475,674 | |||
Euronext NV2 | 12,650 | 343,138 | |||
Getronics NV1,2 | 66,550 | 112,421 | |||
Hagemeyer NV1,2 | 67,870 | 119,600 | |||
Heineken NV2 | 32,182 | 971,512 | |||
IHC Caland NV2 | 3,190 | 153,134 | |||
ING Groep NV | 233,750 | 5,695,731 | |||
Koninklijke Ahold NV1 | 202,760 | 1,246,856 | |||
Koninklijke KPN NV | 260,370 | 1,996,659 | |||
Koninklijke Numico NV CVA1 | 19,620 | 616,134 | |||
Koninklijke Philips Electronics NV | 172,370 | 3,967,575 |
36 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2004
Security | Shares | Value | |||
Oce NV2 | 10,560 | $ | 159,650 | ||
QIAGEN NV1,2 | 17,380 | 154,612 | |||
Randstad Holdings NV | 5,610 | 170,923 | |||
Reed Elsevier NV2 | 88,770 | 1,135,999 | |||
Rodamco Europe NV | 4,950 | 319,736 | |||
Royal Dutch Petroleum Co.2 | 276,100 | 13,911,668 | |||
TPG NV2 | 41,030 | 948,907 | |||
Unilever NV CVA | 75,130 | 4,494,056 | |||
Vedior NV | 21,340 | 290,466 | |||
VNU NV2 | 30,360 | 773,351 | |||
Wereldhave NV | 1,554 | 132,673 | |||
Wolters Kluwer NV CVA2 | 35,860 | 590,082 | |||
47,181,653 | |||||
PORTUGAL – 1.17% | |||||
Banco BPI SA Registered | 54,516 | 191,472 | |||
Banco Comercial Portugues SA Class R2 | 254,730 | 535,562 | |||
Banco Espirito Santo SA | 17,841 | 291,625 | |||
Brisa-Auto Estradas de Portugal SA | 65,450 | 481,225 | |||
CIMPOR-Cimentos de Portugal SGPS SA | 40,370 | 205,078 | |||
Electricidade de Portugal SA | 232,184 | 643,355 | |||
Jeronimo Martins SGPS SA1 | 8,784 | 94,903 | |||
Portugal Telecom SGPS SA | 107,250 | 1,090,954 | |||
PT Multimedia-Servicos de Telecomunicacoes e Multimedia SGPS SA | 6,710 | 144,745 | |||
Sonae SGPS SA | 139,847 | 146,162 | |||
3,825,081 | |||||
SPAIN – 10.93% | |||||
Abertis Infraestructuras SA2 | 37,918 | 681,081 | |||
Acciona SA2 | 3,080 | 189,215 | |||
Acerinox SA | 27,720 | 375,286 | |||
Actividades de Construcciones y Servicios SA | 34,713 | 590,614 | |||
Altadis SA2 | 37,730 | 1,173,844 | |||
Amadeus Global Travel Distribution SA Class A2 | 45,540 | 309,377 | |||
Antena 3 Television SA1 | 2,809 | 138,736 | |||
Banco Bilbao Vizcaya Argentaria SA2 | 426,470 | 5,664,899 | |||
Banco Popular Espanol SA2 | 21,670 | 1,172,722 | |||
Banco Santander Central Hispano SA2 | 569,030 | 5,559,999 | |||
Corporacion Mapfre SA2 | 15,512 | 176,075 | |||
Endesa SA2 | 125,180 | 2,315,438 | |||
Fomento de Construcciones y | |||||
Contratas SA | 5,720 | 209,380 | |||
Gamesa Corporacion Tecnologica SA | 13,970 | 197,112 | |||
Gas Natural SDG SA2 | 21,450 | 510,676 | |||
Grupo Ferrovial SA2 | 8,360 | 382,419 | |||
Iberdrola SA2 | 102,190 | 2,085,175 | |||
Iberia Lineas Aereas de Espana SA2 | 59,290 | 155,639 | |||
Indra Sistemas SA2 | 17,380 | 221,991 | |||
Industria de Diseno Textil SA2 | 30,037 | 689,560 | |||
Metrovacesa SA | 4,180 | 181,100 | |||
NH Hoteles SA2 | 16,940 | 175,609 | |||
Promotora de Informaciones SA | 10,890 | 172,050 | |||
Repsol YPF SA | 123,640 | 2,554,415 | |||
Sacyr Vallehermoso SA | 15,400 | 210,364 | |||
Sacyr Vallehermoso SA New1,3 | 385 | 5,259 | |||
Sociedad General de Aguas de Barcelona SA Class B2 | 8,580 | 150,257 | |||
Sogecable SA1,2 | 5,170 | 186,859 | |||
Telefonica Publicidad e Informacion SA2 | 24,200 | 158,227 | |||
Telefonica SA | 586,960 | 8,331,723 | |||
Union Fenosa SA2 | 28,490 | 631,886 | |||
Zeltia SA2 | 22,550 | 149,083 | |||
35,706,070 | |||||
SWITZERLAND – 0.40% | |||||
STMicroelectronics NV | 77,772 | 1,315,667 | |||
1,315,667 | |||||
TOTAL COMMON STOCKS | 319,492,056 | ||||
PREFERRED STOCKS – 1.27% | |||||
GERMANY – 0.67% | |||||
Fresenius Medical Care AG2 | 3,740 | 190,899 | |||
Henkel KGaA2 | 7,920 | 573,757 | |||
Porsche AG2 | 1,100 | 668,081 | |||
ProSiebenSat.1 Media AG2 | 11,975 | 206,801 | |||
RWE AG | 4,730 | 196,422 | |||
Volkswagen AG | 13,530 | 358,457 | |||
2,194,417 |
SCHEDULESOF INVESTMENTS | 37 |
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
ITALY – 0.60% | ||||||
Banca Intesa SpA RNC2 | 130,020 | $ | 368,171 | |||
Telecom Italia SpA RNC2 | 720,758 | 1,581,067 | ||||
1,949,238 | ||||||
TOTAL PREFERRED STOCKS | 4,143,655 | |||||
SHORT-TERM INVESTMENTS – 34.28% | ||||||
FLOATING RATE NOTES – 8.87% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/054,5 | $ | 489,578 | 489,512 | |||
1.52%, 10/12/044,5 | 407,982 | 407,977 | ||||
1.56%, 09/15/044,5 | 815,964 | 815,960 | ||||
1.64%, 03/15/054,5 | 407,982 | 408,158 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/044 | 611,973 | 611,964 | ||||
1.38%, 11/22/044 | 203,991 | 203,994 | ||||
1.40%, 10/29/044 | 815,964 | 815,960 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/054,5 | 815,964 | 815,854 | ||||
1.61%, 07/29/054,5 | 815,964 | 815,741 | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/054 | 815,964 | 815,732 | ||||
1.56%, 08/26/054 | 815,964 | 815,723 | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/054 | 815,964 | 815,964 | ||||
Dorada Finance Inc. | ||||||
1.61%, 07/29/054,5 | 677,250 | 677,065 | ||||
Five Finance Inc. | ||||||
1.42%, 04/29/054,5 | 652,771 | 652,728 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/044 | 407,982 | 407,843 | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/054 | 522,217 | 522,186 | ||||
1.58%, 04/22/054 | 815,964 | 815,964 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/054,5 | 815,964 | 815,886 | ||||
1.57%, 09/27/044,5 | 881,241 | 881,231 | ||||
1.61%, 07/25/054,5 | 407,982 | 407,908 | ||||
Security | Principal | Value | ||||
Links Finance LLC | ||||||
1.55%, 04/15/054,5 | $ | 815,964 | $ | 815,862 | ||
1.68%, 04/25/054 | 815,964 | 816,307 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/054 | 815,964 | 815,964 | ||||
1.63%, 12/09/044,5 | 677,250 | 674,214 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/054 | 815,964 | 815,840 | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/054,5 | 775,165 | 775,165 | ||||
Permanent Financing PLC | ||||||
1.52%, 03/10/054 | 815,964 | 815,964 | ||||
1.53%, 12/10/044 | 407,982 | 407,982 | ||||
1.55%, 06/10/054 | 367,184 | 367,184 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/044 | 815,964 | 815,947 | ||||
1.57%, 11/15/044 | 815,964 | 815,951 | ||||
1.59%, 09/15/054 | 611,973 | 612,027 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/054,5 | 299,459 | 299,441 | ||||
1.56%, 01/18/054,5 | 359,024 | 359,010 | ||||
1.59%, 07/25/054,5 | 815,964 | 815,890 | ||||
1.66%, 05/17/054,5 | 677,250 | 677,226 | ||||
1.70%, 02/25/054,5 | 456,940 | 456,895 | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/044 | 202,114 | 201,768 | ||||
1.48%, 06/15/054,5 | 407,982 | 407,908 | ||||
1.56%, 09/15/044,5 | 407,982 | 407,979 | ||||
1.56%, 07/15/054,5 | 611,973 | 611,865 | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/054 | 407,982 | 407,907 | ||||
1.55%, 04/15/054,5 | 611,973 | 611,897 | ||||
1.55%, 07/11/054 | 203,991 | 203,971 | ||||
1.56%, 11/15/044,5 | 489,578 | 489,578 | ||||
1.57%, 06/15/054,5 | 334,545 | 334,545 | ||||
1.58%, 03/29/054 | 350,864 | 350,819 | ||||
1.58%, 08/26/054,5 | 407,982 | 407,902 | ||||
1.68%, 05/20/054 | 367,184 | 367,157 | ||||
28,973,515 |
38 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
MONEY MARKET FUNDS – 6.85% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares4,6 | 12,419,986 | $ | 12,419,986 | |||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares4,6 | 8,975,599 | 8,975,599 | ||||
BlackRock Temp Cash Money Market Fund4 | 411,911 | 411,911 | ||||
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares4 | 548,489 | 548,489 | ||||
22,355,985 | ||||||
COMMERCIAL PAPER – 6.35% | ||||||
Alpine Securitization Corp. | ||||||
1.50%, 09/08/044 | $ | 407,982 | 407,863 | |||
1.51%, 09/02/044 | 367,184 | 367,168 | ||||
1.54%, 09/14/044 | 407,982 | 407,755 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/044 | 163,193 | 163,145 | ||||
1.53%, 09/16/044 | 401,438 | 401,182 | ||||
1.54%, 09/15/044 | 407,982 | 407,737 | ||||
1.54%, 09/22/044 | 203,991 | 203,808 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/044 | 407,982 | 407,860 | ||||
1.53%, 09/09/044 | 952,972 | 952,648 | ||||
1.53%, 09/13/044 | 587,461 | 587,161 | ||||
1.53%, 09/14/044 | 203,991 | 203,878 | ||||
1.54%, 09/17/044 | 244,789 | 244,622 | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/044 | 407,982 | 407,862 | ||||
1.53%, 09/15/044 | 163,193 | 163,096 | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/044 | 163,193 | 163,080 | ||||
Corporate Asset Funding | ||||||
1.42%, 09/03/044 | 244,789 | 244,770 | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/044 | 407,982 | 407,950 | ||||
Delaware Funding Corp. | ||||||
1.50%, 09/09/044 | 407,982 | 407,846 | ||||
1.53%, 09/10/044 | 652,771 | 652,521 | ||||
1.53%, 09/20/044 | 277,428 | 277,204 | ||||
Security | Principal | Value | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/044 | $ | 407,982 | $ | 407,739 | ||
1.45%, 11/09/044 | 815,964 | 813,696 | ||||
1.52%, 09/08/044 | 815,964 | 815,722 | ||||
1.59%, 12/02/044 | 815,964 | 812,648 | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/044 | 244,789 | 244,769 | ||||
1.53%, 09/07/044 | 407,982 | 407,878 | ||||
1.53%, 09/17/044 | 244,789 | 244,623 | ||||
1.53%, 09/21/044 | 203,991 | 203,817 | ||||
1.53%, 09/22/044 | 407,982 | 407,618 | ||||
1.54%, 09/14/044 | 611,972 | 611,633 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/054 | 407,982 | 405,151 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/044 | 407,982 | 407,843 | ||||
1.55%, 10/15/044 | 535,068 | 534,054 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/044 | 815,964 | 814,513 | ||||
1.44%, 10/27/044 | 815,964 | 814,136 | ||||
1.59%, 11/30/044 | 407,982 | 406,360 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/044 | 203,991 | 203,983 | ||||
1.53%, 09/20/044 | 203,991 | 203,826 | ||||
1.53%, 09/23/044 | 285,587 | 285,320 | ||||
1.54%, 09/15/044 | 489,578 | 489,285 | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/044 | 568,645 | 568,645 | ||||
1.51%, 09/08/044 | 326,385 | 326,290 | ||||
1.52%, 09/09/044 | 203,991 | 203,922 | ||||
1.53%, 09/21/044 | 407,982 | 407,635 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/044 | 244,789 | 244,653 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/044 | 448,780 | 448,780 | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/044 | 271,553 | 271,072 | ||||
1.55%, 09/16/044 | 244,789 | 244,631 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
1.54%, 09/15/044 | 326,385 | 326,190 | ||||
1.54%, 09/23/044 | 203,991 | 203,799 |
SCHEDULESOF INVESTMENTS | 39 |
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/044 | $ | 203,991 | $ | 203,922 | ||
1.52%, 09/10/044 | 285,587 | 285,479 | ||||
20,748,788 | ||||||
TIME DEPOSITS – 5.58% | ||||||
Abbey National Treasury Services PLC | ||||||
1.25%, 01/06/054 | 815,964 | 815,964 | ||||
1.33%, 02/10/054 | 407,982 | 407,955 | ||||
1.39%, 02/02/054 | 407,982 | 407,956 | ||||
1.39%, 04/08/054 | 571,174 | 571,123 | ||||
1.40%, 10/25/044 | 815,964 | 815,935 | ||||
Bank of New York | ||||||
1.39%, 11/01/044 | 815,964 | 815,950 | ||||
1.60%, 12/03/044 | 203,991 | 203,965 | ||||
Bank of Nova Scotia | ||||||
1.13%, 10/06/044 | 815,964 | 815,964 | ||||
1.24%, 10/07/044 | 611,973 | 611,967 | ||||
1.42%, 10/29/044 | 611,973 | 611,980 | ||||
National City Bank (Cleveland, Ohio) | ||||||
1.25%, 01/06/054 | 815,964 | 815,978 | ||||
1.49%, 08/09/054 | 815,964 | 815,734 | ||||
1.54%, 06/23/054 | 815,964 | 815,766 | ||||
1.56%, 06/10/054 | 407,982 | 408,081 | ||||
Norddeutsche Landesbank | ||||||
1.59%, 07/27/054 | 815,964 | 815,705 | ||||
Prudential Funding LLC | ||||||
1.60%, 12/01/044 | 407,982 | 406,332 | ||||
SouthTrust Bank | ||||||
1.55%, 09/01/044 | 1,631,927 | 1,631,927 | ||||
Toronto-Dominion Bank | ||||||
1.22%, 03/23/054 | 1,427,936 | 1,427,797 | ||||
1.34%, 02/10/054 | 326,385 | 326,364 | ||||
1.41%, 11/01/044 | 611,973 | 611,962 | ||||
1.53%, 09/13/044 | 407,982 | 407,982 | ||||
1.77%, 05/10/054 | 407,982 | 407,954 | ||||
1.90%, 05/11/054 | 407,982 | 407,954 | ||||
UBS Finance (Delaware) | ||||||
1.10%, 09/08/044 | 815,964 | 815,790 | ||||
1.11%, 12/17/044 | 1,223,945 | 1,219,907 | ||||
1.14%, 09/29/044 | 815,964 | 815,244 | ||||
18,229,236 | ||||||
REPURCHASE AGREEMENTS – 4.94% | ||||||
Banc of America Securities LLC | ||||||
1.59%, 09/01/044,7 | 2,447,891 | 2,447,891 | ||||
Bank of America, N.A. | ||||||
1.59%, 09/01/044,7 | 4,691,791 | 4,691,791 | ||||
Goldman Sachs & Co. | ||||||
1.59%, 09/01/044,7 | 4,079,818 | 4,079,818 | ||||
Merrill Lynch Government Securities Inc. | ||||||
1.57%, 09/01/044,7 | 815,964 | 815,964 | ||||
1.59%, 09/01/044,7 | 4,079,818 | 4,079,818 | ||||
16,115,282 | ||||||
U.S. GOVERNMENT AGENCY NOTES – 0.90% | ||||||
Federal Home Loan Mortgage Corp. | ||||||
1.63%, 04/15/054 | 571,174 | 572,305 | ||||
1.80%, 01/18/054 | 379,423 | 376,786 | ||||
1.80%, 01/19/054 | 407,982 | 405,126 | ||||
2.06%, 05/31/054 | 406,782 | 400,451 | ||||
Federal National Mortgage Association | ||||||
2.33%, 07/22/054 | 1,223,945 | 1,198,334 | ||||
2,953,002 | ||||||
MEDIUM-TERM NOTES – 0.79% | ||||||
CC USA Inc. | ||||||
1.29%, 04/15/054,5 | 815,964 | 815,914 | ||||
1.51%, 02/15/054,5 | 530,376 | 530,753 | ||||
Dorada Finance Inc. | ||||||
1.48%, 01/18/054,5 | 611,973 | 611,961 | ||||
K2 USA LLC | ||||||
1.46%, 01/12/054,5 | 407,982 | 407,967 | ||||
WhistleJacket Capital LLC | ||||||
1.32%, 02/04/054,5 | 203,991 | 203,973 | ||||
2,570,568 | ||||||
TOTAL SHORT-TERM INVESTMENTS | 111,946,376 | |||||
40 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2004
Value | ||||
TOTAL INVESTMENTS IN SECURITIES – 133.37% | $ | 435,582,087 | ||
Other Assets, Less Liabilities – (33.37%) | (108,976,333 | ) | ||
NET ASSETS – 100.00% | $ | 326,605,754 | ||
ADR - American Depositary Receipts
1 | Non-income earning security. |
2 | All or a portion of this security represents a security on loan. See Note 5. |
3 | Security valued at fair value in accordance with procedures approved by the Board of Directors. See Note 1. |
4 | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
5 | Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
6 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Financial | 27.32 | % | $ | 89,236,292 | ||
Communications | 15.38 | 50,199,887 | ||||
Consumer Non-Cyclical | 12.43 | 40,555,420 | ||||
Energy | 12.17 | 39,720,922 | ||||
Industrial | 9.55 | 31,310,137 | ||||
Utilities | 7.11 | 23,202,632 | ||||
Consumer Cyclical | 6.49 | 21,135,161 | ||||
Basic Materials | 5.05 | 16,495,754 | ||||
Technology | 2.72 | 8,929,013 | ||||
Diversified | 0.87 | 2,850,493 | ||||
Short-Term and Other Net Assets | 0.91 | 2,970,043 | ||||
TOTAL | 100.00 | % | $ | 326,605,754 | ||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 41 |
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 97.77% | |||||
ADVERTISING – 0.46% | |||||
Publicis Groupe1 | 10,410 | $ | 280,732 | ||
280,732 | |||||
AEROSPACE & DEFENSE – 1.67% | |||||
European Aeronautic Defense and Space Co.1 | 20,790 | 542,716 | |||
Sagem SA | 1,617 | 151,316 | |||
Thales SA1 | 6,540 | 220,559 | |||
Zodiac SA1 | 3,225 | 106,489 | |||
1,021,080 | |||||
AIRLINES – 0.26% | |||||
Air France1,2 | 10,350 | 158,110 | |||
158,110 | |||||
APPAREL – 0.25% | |||||
Hermes International1 | 810 | 152,778 | |||
152,778 | |||||
AUTO MANUFACTURERS – 3.50% | |||||
PSA Peugeot Citroen SA1 | 14,595 | 874,272 | |||
Renault SA1 | 15,795 | 1,266,914 | |||
2,141,186 | |||||
AUTO PARTS & EQUIPMENT – 1.47% | |||||
Compagnie Generale des Etablissements Michelin Class B | 12,285 | 649,005 | |||
Valeo SA1 | 6,435 | 252,992 | |||
901,997 | |||||
BANKS – 12.98% | |||||
BNP Paribas SA1 | 68,040 | 4,115,432 | |||
Credit Agricole SA1 | 56,670 | 1,425,631 | |||
Societe Generale Class A1 | 28,140 | 2,400,738 | |||
7,941,801 | |||||
BEVERAGES – 0.91% | |||||
Pernod Ricard SA1 | 4,515 | 557,487 | |||
557,487 | |||||
BUILDING MATERIALS – 4.42% | |||||
Compagnie de Saint-Gobain1 | 26,265 | 1,317,652 | |||
Imerys SA1 | 2,640 | 164,590 | |||
Lafarge SA1 | 14,295 | 1,223,908 | |||
2,706,150 | |||||
CHEMICALS – 2.38% | |||||
L’Air Liquide SA1 | 9,310 | 1,455,037 | |||
1,455,037 | |||||
COMMERCIAL SERVICES – 0.42% | |||||
Autoroutes du Sud de la France1 | 5,895 | 257,195 | |||
257,195 | |||||
COMPUTERS – 0.84% | |||||
Atos Origin SA2 | 3,825 | 207,138 | |||
Cap Gemini SA1,2 | 10,860 | 307,121 | |||
514,259 | |||||
COSMETICS & PERSONAL CARE – 2.83% | |||||
L’Oreal SA1 | 26,100 | 1,733,461 | |||
1,733,461 | |||||
DIVERSIFIED FINANCIAL SERVICES – 0.38% | |||||
Euronext NV1 | 8,610 | 233,550 | |||
233,550 | |||||
ENGINEERING & CONSTRUCTION – 2.05% | |||||
Bouygues SA1 | 17,415 | 598,742 | |||
Vinci SA1 | 6,165 | 658,201 | |||
1,256,943 | |||||
FOOD – 6.81% | |||||
Carrefour SA1 | 49,080 | 2,301,178 | |||
Etablissements Economiques du Casino Guichard-Perrachon SA1 | 2,805 | 221,068 | |||
Groupe Danone1 | 20,565 | 1,644,516 | |||
4,166,762 | |||||
FOOD SERVICE – 0.35% | |||||
Sodexho Alliance SA1 | 8,265 | 216,759 | |||
216,759 | |||||
HAND & MACHINE TOOLS – 1.90% | |||||
Schneider Electric SA1 | 18,630 | 1,164,881 | |||
1,164,881 | |||||
HEALTH CARE – PRODUCTS – 0.84% | |||||
Essilor International SA1 | 8,370 | 512,672 | |||
512,672 | |||||
HOLDING COMPANIES – DIVERSIFIED – 2.19% | |||||
LVMH Moet Hennessy Louis Vuitton SA | 20,940 | 1,338,585 | |||
1,338,585 |
42 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2004
Security | Shares | Value | ||||
HOME FURNISHINGS – 0.63% | ||||||
Thomson1 | 20,355 | $ | 385,904 | |||
385,904 | ||||||
HOUSEHOLD PRODUCTS & WARES – 0.19% | ||||||
Societe BIC SA1 | 2,770 | 118,126 | ||||
118,126 | ||||||
INSURANCE – 4.30% | ||||||
AXA1 | 120,480 | 2,458,381 | ||||
CNP Assurances1 | 2,850 | 172,626 | ||||
2,631,007 | ||||||
IRON & STEEL – 1.14% | ||||||
Arcelor | 40,805 | 694,760 | ||||
694,760 | ||||||
LODGING – 1.11% | ||||||
Accor SA1 | 16,170 | 681,904 | ||||
681,904 | ||||||
MACHINERY – DIVERSIFIED – 0.31% | ||||||
ALSTOM2 | 348,825 | 186,528 | ||||
186,528 | ||||||
MEDIA – 5.03% | ||||||
Lagardere S.C.A.1 | 10,695 | 641,433 | ||||
Societe Television Francaise11 | 10,140 | 284,541 | ||||
Vivendi Universal SA2 | 87,255 | 2,150,511 | ||||
3,076,485 | ||||||
OIL & GAS – 15.94% | ||||||
Total SA1 | 50,130 | 9,753,771 | ||||
9,753,771 | ||||||
OIL & GAS SERVICES – 0.41% | ||||||
Technip-Coflexip SA1 | 1,680 | 251,538 | ||||
251,538 | ||||||
PHARMACEUTICALS – 9.04% | ||||||
Sanofi-Aventis1 | 32,505 | 2,306,994 | ||||
Sanofi-Aventis New1,2 | 45,358 | 3,224,729 | ||||
5,531,723 | ||||||
REAL ESTATE – 1.21% | ||||||
Gecina SA1 | 2,220 | 184,406 | ||||
Klepierre | 1,905 | 137,520 | ||||
Unibail Holding1 | 3,675 | 415,359 | ||||
737,285 | ||||||
Security | Shares or Principal | Value | ||||
RETAIL – 0.86% | ||||||
Pinault-Printemps-Redoute SA1 | 5,760 | $ | 525,010 | |||
525,010 | ||||||
SEMICONDUCTORS – 1.39% | ||||||
STMicroelectronics NV | 50,400 | 852,616 | ||||
852,616 | ||||||
SOFTWARE – 0.51% | ||||||
Business Objects SA1,2 | 5,700 | 105,363 | ||||
Dassault Systemes SA1 | 4,860 | 208,435 | ||||
313,798 | ||||||
TELECOMMUNICATIONS – 5.67% | ||||||
Alcatel SA Class A1,2 | 104,625 | 1,220,647 | ||||
France Telecom | 95,370 | 2,251,998 | ||||
3,472,645 | ||||||
WATER – 3.12% | ||||||
Suez SA | 68,655 | 1,329,142 | ||||
Veolia Environnement1 | 22,515 | 580,085 | ||||
1,909,227 | ||||||
TOTAL COMMON STOCKS | 59,833,752 | |||||
SHORT-TERM INVESTMENTS – 34.58% | ||||||
FLOATING RATE NOTES – 8.94% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/053,4 | $ | 92,487 | 92,475 | |||
1.52%, 10/12/043,4 | 77,073 | 77,072 | ||||
1.56%, 09/15/043,4 | 154,146 | 154,145 | ||||
1.64%, 03/15/053,4 | 77,073 | 77,106 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/043 | 115,609 | 115,608 | ||||
1.38%, 11/22/043 | 38,536 | 38,538 | ||||
1.40%, 10/29/043 | 154,146 | 154,145 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/053,4 | 154,146 | 154,125 | ||||
1.61%, 07/29/053,4 | 154,146 | 154,104 | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/053 | 154,146 | 154,102 | ||||
1.56%, 08/26/053 | 154,146 | 154,100 | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/053 | 154,146 | 154,146 |
SCHEDULESOF INVESTMENTS | 43 |
Schedule of Investments (Continued)
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
Dorada Finance Inc. | ||||||
1.61%, 07/29/053,4 | $ | 127,941 | $ | 127,906 | ||
Five Finance Inc. | ||||||
1.42%, 04/29/053,4 | 123,317 | 123,309 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/043 | 77,073 | 77,047 | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/053 | 98,653 | 98,648 | ||||
1.58%, 04/22/053 | 154,146 | 154,146 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/053,4 | 154,146 | 154,131 | ||||
1.57%, 09/27/043,4 | 166,477 | 166,476 | ||||
1.61%, 07/25/053,4 | 77,073 | 77,059 | ||||
Links Finance LLC | ||||||
1.55%, 04/15/053,4 | 154,146 | 154,127 | ||||
1.68%, 04/25/053 | 154,146 | 154,211 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/053 | 154,146 | 154,146 | ||||
1.63%, 12/09/043,4 | 127,941 | 127,367 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/053 | 154,146 | 154,122 | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/053,4 | 146,438 | 146,438 | ||||
Permanent Financing PLC | ||||||
1.52%, 03/10/053 | 154,146 | 154,146 | ||||
1.53%, 12/10/043 | 77,073 | 77,073 | ||||
1.55%, 06/10/053 | 69,366 | 69,366 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/043 | 154,146 | 154,143 | ||||
1.57%, 11/15/043 | 154,146 | 154,143 | ||||
1.59%, 09/15/053 | 115,609 | 115,620 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/053,4 | 56,571 | 56,568 | ||||
1.56%, 01/18/053,4 | 67,824 | 67,822 | ||||
1.59%, 07/25/053,4 | 154,146 | 154,132 | ||||
1.66%, 05/17/053,4 | 127,941 | 127,936 | ||||
1.70%, 02/25/053,4 | 86,322 | 86,313 | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/043 | 38,182 | 38,116 | ||||
1.48%, 06/15/053,4 | 77,073 | 77,060 | ||||
1.56%, 09/15/043,4 | 77,073 | 77,072 | ||||
1.56%, 07/15/053,4 | 115,609 | 115,589 | ||||
Security | Shares or Principal | Value | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/053 | $ | 77,073 | $ | 77,059 | ||
1.55%, 04/15/053,4 | 115,609 | 115,595 | ||||
1.55%, 07/11/053 | 38,536 | 38,533 | ||||
1.56%, 11/15/043,4 | 92,487 | 92,487 | ||||
1.57%, 06/15/053,4 | 63,200 | 63,200 | ||||
1.58%, 03/29/053 | 66,283 | 66,274 | ||||
1.58%, 08/26/053,4 | 77,073 | 77,058 | ||||
1.68%, 05/20/053 | 69,366 | 69,361 | ||||
5,473,465 | ||||||
MONEY MARKET FUNDS – 6.93% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5 | 2,361,398 | 2,361,398 | ||||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5 | 1,695,603 | 1,695,603 | ||||
BlackRock Temp Cash Money Market Fund3 | 77,815 | 77,815 | ||||
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares3 | 103,617 | 103,617 | ||||
4,238,433 | ||||||
COMMERCIAL PAPER – 6.41% | ||||||
Alpine Securitization Corp. | ||||||
1.50%, 09/08/043 | 77,073 | 77,050 | ||||
1.51%, 09/02/043 | 69,366 | 69,363 | ||||
1.54%, 09/14/043 | 77,073 | 77,030 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/043 | 30,829 | 30,820 | ||||
1.53%, 09/16/043 | 75,837 | 75,788 | ||||
1.54%, 09/15/043 | 77,073 | 77,027 | ||||
1.54%, 09/22/043 | 38,536 | 38,502 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/043 | 77,073 | 77,050 | ||||
1.53%, 09/09/043 | 180,028 | 179,967 | ||||
1.53%, 09/13/043 | 110,979 | 110,922 | ||||
1.53%, 09/14/043 | 38,536 | 38,515 | ||||
1.54%, 09/17/043 | 46,244 | 46,212 | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/043 | 77,073 | 77,050 | ||||
1.53%, 09/15/043 | 30,829 | 30,811 |
44 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/043 | $ | 30,829 | $ | 30,808 | ||
Corporate Asset Funding | ||||||
1.42%, 09/03/043 | 46,244 | 46,240 | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/043 | 77,073 | 77,067 | ||||
Delaware Funding Corp. | ||||||
1.50%, 09/09/043 | 77,073 | 77,047 | ||||
1.53%, 09/10/043 | 123,317 | 123,269 | ||||
1.53%, 09/20/043 | 52,410 | 52,367 | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/043 | 77,073 | 77,027 | ||||
1.45%, 11/09/043 | 154,146 | 153,717 | ||||
1.52%, 09/08/043 | 154,146 | 154,100 | ||||
1.59%, 12/02/043 | 154,146 | 153,519 | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/043 | 46,244 | 46,240 | ||||
1.53%, 09/07/043 | 77,073 | 77,053 | ||||
1.53%, 09/17/043 | 46,244 | 46,212 | ||||
1.53%, 09/21/043 | 38,536 | 38,504 | ||||
1.53%, 09/22/043 | 77,073 | 77,004 | ||||
1.54%, 09/14/043 | 115,609 | 115,545 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/053 | 77,073 | 76,538 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/043 | 77,073 | 77,047 | ||||
1.55%, 10/15/043 | 101,081 | 100,890 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/043 | 154,146 | 153,872 | ||||
1.44%, 10/27/043 | 154,146 | 153,800 | ||||
1.59%, 11/30/043 | 77,073 | 76,767 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/043 | 38,536 | 38,535 | ||||
1.53%, 09/20/043 | 38,536 | 38,505 | ||||
1.53%, 09/23/043 | 53,951 | 53,901 | ||||
1.54%, 09/15/043 | 92,487 | 92,432 | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/043 | 107,424 | 107,424 | ||||
1.51%, 09/08/043 | 61,658 | 61,640 | ||||
1.52%, 09/09/043 | 38,536 | 38,523 | ||||
1.53%, 09/21/043 | 77,073 | 77,007 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/043 | 46,244 | 46,218 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/043 | 84,780 | 84,780 | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/043 | 51,300 | 51,209 | ||||
1.55%, 09/16/043 | 46,244 | 46,214 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
1.54%, 09/15/043 | 61,658 | 61,621 | ||||
1.54%, 09/23/043 | 38,536 | 38,500 | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/043 | 38,536 | 38,523 | ||||
1.52%, 09/10/043 | 53,951 | 53,931 | ||||
3,919,703 | ||||||
TIME DEPOSITS – 5.63% | ||||||
Abbey National Treasury Services PLC | ||||||
1.25%, 01/06/053 | 154,146 | 154,143 | ||||
1.33%, 02/10/053 | 77,073 | 77,068 | ||||
1.39%, 02/02/053 | 77,073 | 77,069 | ||||
1.39%, 04/08/053 | 107,902 | 107,892 | ||||
1.40%, 10/25/043 | 154,146 | 154,142 | ||||
Bank of New York | ||||||
1.39%, 11/01/043 | 154,146 | 154,143 | ||||
1.60%, 12/03/043 | 38,536 | 38,531 | ||||
Bank of Nova Scotia | ||||||
1.13%, 10/06/043 | 154,146 | 154,146 | ||||
1.24%, 10/07/043 | 115,609 | 115,608 | ||||
1.42%, 10/29/043 | 115,609 | 115,611 | ||||
National City Bank (Cleveland, Ohio) | ||||||
1.25%, 01/06/053 | 154,146 | 154,148 | ||||
1.49%, 08/09/053 | 154,146 | 154,102 | ||||
1.54%, 06/23/053 | 154,146 | 154,108 | ||||
1.56%, 06/10/053 | 77,073 | 77,092 | ||||
Norddeutsche Landesbank | ||||||
1.59%, 07/27/053 | 154,146 | 154,097 | ||||
Prudential Funding LLC | ||||||
1.60%, 12/01/043 | 77,073 | 76,761 | ||||
SouthTrust Bank | ||||||
1.55%, 09/01/043 | 308,292 | 308,292 | ||||
Toronto-Dominion Bank | ||||||
1.22%, 03/23/053 | 269,755 | 269,729 | ||||
1.34%, 02/10/053 | 61,658 | 61,655 |
SCHEDULESOF INVESTMENTS | 45 |
Schedule of Investments (Continued)
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2004
Security | Principal | Value | |||||
1.41%, 11/01/043 | $ | 115,609 | $ | 115,607 | |||
1.53%, 09/13/043 | 77,073 | 77,073 | |||||
1.77%, 05/10/053 | 77,073 | 77,068 | |||||
1.90%, 05/11/053 | 77,073 | 77,068 | |||||
UBS Finance (Delaware) | |||||||
1.10%, 09/08/043 | 154,146 | 154,113 | |||||
1.11%, 12/17/043 | 231,219 | 230,456 | |||||
1.14%, 09/29/043 | 154,146 | 154,010 | |||||
3,443,732 | |||||||
REPURCHASE AGREEMENTS – 4.97% | |||||||
Banc of America Securities LLC | |||||||
1.59%, 09/01/043,6 | 462,437 | 462,437 | |||||
Bank of America, N.A. | |||||||
1.59%, 09/01/043,6 | 886,338 | 886,338 | |||||
Goldman Sachs & Co. | |||||||
1.59%, 09/01/043,6 | 770,729 | 770,729 | |||||
Merrill Lynch Government Securities Inc. | |||||||
1.57%, 09/01/043,6 | 154,146 | 154,146 | |||||
1.59%, 09/01/043,6 | 770,729 | 770,729 | |||||
3,044,379 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.91% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.63%, 04/15/053 | 107,902 | 108,116 | |||||
1.80%, 01/18/053 | 71,678 | 71,180 | |||||
1.80%, 01/19/053 | 77,073 | 76,533 | |||||
2.06%, 05/31/053 | 76,846 | 75,650 | |||||
Federal National Mortgage Association | |||||||
2.33%, 07/22/053 | 231,219 | 226,380 | |||||
557,859 | |||||||
MEDIUM-TERM NOTES – 0.79% | |||||||
CC USA Inc. | |||||||
1.29%, 04/15/053,4 | 154,146 | 154,136 | |||||
1.51%, 02/15/053,4 | 100,195 | 100,267 | |||||
Dorada Finance Inc. | |||||||
1.48%, 01/18/053,4 | 115,609 | 115,607 | |||||
K2 USA LLC | |||||||
1.46%, 01/12/053,4 | 77,073 | 77,070 | |||||
WhistleJacket Capital LLC | |||||||
1.32%, 02/04/053,4 | 38,536 | 38,533 | |||||
485,613 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 21,163,184 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 132.35% | 80,996,936 | ||||||
Other Assets, Less Liabilities – (32.35%) | (19,796,175 | ) | |||||
NET ASSETS – 100.00% | $ | 61,200,761 | |||||
1 | All or a portion of this security represents a security on loan. See Note 5. |
2 | Non-income earning security. |
3 | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
4 | Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
5 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
6 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Consumer Non-Cyclical | 21.04 | % | $ | 12,877,426 | ||
Financial | 18.87 | 11,543,643 | ||||
Energy | 16.35 | 10,005,309 | ||||
Communications | 11.16 | 6,829,862 | ||||
Industrial | 10.35 | 6,335,582 | ||||
Consumer Cyclical | 8.43 | 5,163,648 | ||||
Basic Materials | 3.52 | 2,149,797 | ||||
Utilities | 3.12 | 1,909,227 | ||||
Technology | 2.74 | 1,680,673 | ||||
Diversified | 2.19 | 1,338,585 | ||||
Short-Term and Other Net Assets | 2.23 | 1,367,009 | ||||
TOTAL | 100.00 | % | $ | 61,200,761 | ||
See notes to financial statements.
46 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
iSHARES® MSCI GERMANY INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 96.15% | |||||
AIRLINES – 0.59% | |||||
Deutsche Lufthansa AG1,2 | 50,056 | $ | 582,172 | ||
582,172 | |||||
APPAREL – 2.02% | |||||
Adidas-Salomon AG2 | 9,218 | 1,183,333 | |||
Puma AG | 3,344 | 815,719 | |||
1,999,052 | |||||
AUTO MANUFACTURERS – 9.01% | |||||
DaimlerChrysler AG | 172,018 | 7,137,086 | |||
Volkswagen AG2 | 45,980 | 1,763,557 | |||
8,900,643 | |||||
AUTO PARTS & EQUIPMENT – 1.47% | |||||
Continental AG2 | 28,006 | 1,451,282 | |||
1,451,282 | |||||
BANKS – 12.44% | |||||
Bayerische Hypo-und Vereinsbank AG1 | 111,980 | 1,831,762 | |||
Commerzbank AG1 | 106,194 | 1,742,277 | |||
Depfa Bank PLC | 66,528 | 876,430 | |||
Deutsche Bank AG2 | 102,234 | 6,944,052 | |||
Hypo Real Estate Holding AG1 | 27,910 | 890,714 | |||
12,285,235 | |||||
BIOTECHNOLOGY – 0.24% | |||||
QIAGEN NV1,2 | 26,972 | 239,943 | |||
239,943 | |||||
BUILDING MATERIALS – 0.44% | |||||
HeidelbergerCement AG2 | 9,822 | 431,988 | |||
431,988 | |||||
CHEMICALS – 8.34% | |||||
BASF AG | 88,660 | 4,785,111 | |||
Bayer AG | 135,256 | 3,446,978 | |||
8,232,089 | |||||
COSMETICS & PERSONAL CARE – 0.42% | |||||
Beiersdorf AG2 | 4,259 | 413,559 | |||
413,559 | |||||
DIVERSIFIED FINANCIAL SERVICES – 1.41% | |||||
Deutsche Boerse AG2 | 23,936 | 1,153,977 | |||
MLP AG2 | 16,022 | 235,606 | |||
1,389,583 | |||||
ELECTRIC – 12.50% | |||||
E.ON AG2 | 120,450 | 8,535,586 | |||
RWE AG2 | 77,968 | 3,813,869 | |||
12,349,455 | |||||
ELECTRONICS – 0.15% | |||||
EPCOS AG1,2 | 10,186 | 152,634 | |||
152,634 | |||||
ENGINEERING & CONSTRUCTION – 1.02% | |||||
Linde AG2 | 18,854 | 1,008,871 | |||
1,008,871 | |||||
FOOD – 1.76% | |||||
METRO AG2 | 31,988 | 1,483,082 | |||
Suedzucker AG2 | 13,596 | 254,292 | |||
1,737,374 | |||||
HEALTH CARE – PRODUCTS – 0.57% | |||||
Fresenius Medical Care AG2 | 7,700 | 560,720 | |||
560,720 | |||||
INSURANCE – 8.18% | |||||
Allianz AG2 | 50,006 | 4,812,558 | |||
Muenchener Rueckversicherungs-Gesellschaft AG2 | 34,576 | 3,266,231 | |||
8,078,789 | |||||
IRON & STEEL – 1.25% | |||||
ThyssenKrupp AG2 | 66,550 | 1,235,819 | |||
1,235,819 | |||||
LEISURE TIME – 0.48% | |||||
TUI AG2 | 25,894 | 476,126 | |||
476,126 | |||||
MACHINERY – DIVERSIFIED – 0.78% | |||||
MAN AG | 22,726 | 768,910 | |||
768,910 | |||||
MANUFACTURING – 10.85% | |||||
Siemens AG | 156,772 | 10,713,221 | |||
10,713,221 | |||||
PHARMACEUTICALS – 3.96% | |||||
ALTANA AG2 | 14,718 | 797,035 | |||
Celesio AG2 | 7,898 | 522,347 | |||
Merck KGaA | 10,340 | 543,363 | |||
Schering AG2 | 36,982 | 2,050,355 | |||
3,913,100 |
SCHEDULESOF INVESTMENTS | 47 |
Schedule of Investments (Continued)
iSHARES® MSCI GERMANY INDEX FUND
August 31, 2004
Security | Shares | Value | ||||
RETAIL – 0.31% | ||||||
Douglas Holding AG2 | 6,952 | $ | 195,842 | |||
KarstadtQuelle AG2 | 6,798 | 107,484 | ||||
303,326 | ||||||
SEMICONDUCTORS – 1.25% | ||||||
Infineon Technologies AG1 | 126,500 | 1,229,884 | ||||
1,229,884 | ||||||
SOFTWARE – 5.98% | ||||||
SAP AG2 | 40,612 | 5,910,353 | ||||
5,910,353 | ||||||
TELECOMMUNICATIONS – 8.83% | ||||||
Deutsche Telekom AG1 | 500,720 | 8,720,163 | ||||
8,720,163 | ||||||
TRANSPORTATION – 1.90% | ||||||
Deutsche Post AG | 94,204 | 1,871,848 | ||||
1,871,848 | ||||||
TOTAL COMMON STOCKS | 94,956,139 | |||||
PREFERRED STOCKS – 3.70% | ||||||
AUTO MANUFACTURERS – 1.60% | ||||||
Porsche AG2 | 1,628 | 988,760 | ||||
Volkswagen AG | 22,484 | 595,681 | ||||
1,584,441 | ||||||
ELECTRIC – 0.49% | ||||||
RWE AG | 11,638 | 483,289 | ||||
483,289 | ||||||
HEALTH CARE – PRODUCTS – 0.30% | ||||||
Fresenius Medical Care AG2 | 5,830 | 297,578 | ||||
297,578 | ||||||
HOUSEHOLD PRODUCTS & WARES – 1.02% | ||||||
Henkel KGaA2 | 13,948 | 1,010,449 | ||||
1,010,449 | ||||||
MEDIA – 0.29% | ||||||
ProSiebenSat.1 Media AG2 | 16,306 | 281,595 | ||||
281,595 | ||||||
TOTAL PREFERRED STOCKS | 3,657,352 | |||||
Security | Principal | Value | ||||
SHORT-TERM INVESTMENTS – 28.49% | ||||||
FLOATING RATE NOTES – 7.37% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/053,4 | $ | 122,985 | $ | 122,969 | ||
1.52%, 10/12/043,4 | 102,488 | 102,486 | ||||
1.56%, 09/15/043,4 | 204,975 | 204,974 | ||||
1.64%, 03/15/053,4 | 102,488 | 102,532 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/043 | 153,731 | 153,730 | ||||
1.38%, 11/22/043 | 51,244 | 51,245 | ||||
1.40%, 10/29/043 | 204,975 | 204,974 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/053,4 | 204,975 | 204,948 | ||||
1.61%, 07/29/053,4 | 204,975 | 204,919 | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/053 | 204,975 | 204,917 | ||||
1.56%, 08/26/053 | 204,975 | 204,915 | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/053 | 204,975 | 204,975 | ||||
Dorada Finance Inc. | ||||||
1.61%, 07/29/053,4 | 170,129 | 170,083 | ||||
Five Finance Inc. | ||||||
1.42%, 04/29/053,4 | 163,980 | 163,969 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/043 | 102,488 | 102,453 | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/053 | 131,184 | 131,176 | ||||
1.58%, 04/22/053 | 204,975 | 204,975 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/053,4 | 204,975 | 204,956 | ||||
1.57%, 09/27/043,4 | 221,373 | 221,371 | ||||
1.61%, 07/25/053,4 | 102,488 | 102,470 | ||||
Links Finance LLC | ||||||
1.55%, 04/15/053,4 | 204,975 | 204,950 | ||||
1.68%, 04/25/053 | 204,975 | 205,061 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/053 | 204,975 | 204,975 | ||||
1.63%, 12/09/043,4 | 170,129 | 169,367 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/053 | 204,975 | 204,944 |
48 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI GERMANY INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/053,4 | $ | 194,726 | $ | 194,726 | ||
Permanent Financing PLC | ||||||
1.52%, 03/10/053 | 204,975 | 204,975 | ||||
1.53%, 12/10/043 | 102,488 | 102,488 | ||||
1.55%, 06/10/053 | 92,239 | 92,239 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/043 | 204,975 | 204,972 | ||||
1.57%, 11/15/043 | 204,975 | 204,972 | ||||
1.59%, 09/15/053 | 153,731 | 153,745 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/053,4 | 75,226 | 75,221 | ||||
1.56%, 01/18/053,4 | 90,189 | 90,186 | ||||
1.59%, 07/25/053,4 | 204,975 | 204,957 | ||||
1.66%, 05/17/053,4 | 170,129 | 170,123 | ||||
1.70%, 02/25/053,4 | 114,786 | 114,775 | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/043 | 50,772 | 50,685 | ||||
1.48%, 06/15/053,4 | 102,488 | 102,469 | ||||
1.56%, 09/15/043,4 | 102,488 | 102,487 | ||||
1.56%, 07/15/053,4 | 153,731 | 153,704 | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/053 | 102,488 | 102,469 | ||||
1.55%, 04/15/053,4 | 153,731 | 153,712 | ||||
1.55%, 07/11/053 | 51,244 | 51,239 | ||||
1.56%, 11/15/043,4 | 122,985 | 122,985 | ||||
1.57%, 06/15/053,4 | 84,040 | 84,040 | ||||
1.58%, 03/29/053 | 88,139 | 88,128 | ||||
1.58%, 08/26/053,4 | 102,488 | 102,467 | ||||
1.68%, 05/20/053 | 92,239 | 92,232 | ||||
7,278,330 | ||||||
MONEY MARKET FUNDS – 5.71% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5 | 3,140,365 | 3,140,365 | ||||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5 | 2,254,725 | 2,254,725 | ||||
BlackRock Temp Cash Money Market Fund3 | 103,475 | 103,475 | ||||
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares3 | 137,784 | 137,784 | ||||
5,636,349 | ||||||
COMMERCIAL PAPER – 5.28% | ||||||
Alpine Securitization Corp. | ||||||
1.50%, 09/08/043 | 102,488 | 102,458 | ||||
1.51%, 09/02/043 | 92,239 | 92,235 | ||||
1.54%, 09/14/043 | 102,488 | 102,431 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/043 | 40,995 | 40,983 | ||||
1.53%, 09/16/043 | 100,844 | 100,779 | ||||
1.54%, 09/15/043 | 102,488 | 102,426 | ||||
1.54%, 09/22/043 | 51,244 | 51,198 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/043 | 102,488 | 102,457 | ||||
1.53%, 09/09/043 | 239,392 | 239,311 | ||||
1.53%, 09/13/043 | 147,574 | 147,499 | ||||
1.53%, 09/14/043 | 51,244 | 51,215 | ||||
1.54%, 09/17/043 | 61,493 | 61,450 | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/043 | 102,488 | 102,457 | ||||
1.53%, 09/15/043 | 40,995 | 40,971 | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/043 | 40,995 | 40,967 | ||||
Corporate Asset Funding | ||||||
1.42%, 09/03/043 | 61,493 | 61,488 | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/043 | 102,488 | 102,479 | ||||
Delaware Funding Corp. | ||||||
1.50%, 09/09/043 | 102,488 | 102,453 | ||||
1.53%, 09/10/043 | 163,980 | 163,918 | ||||
1.53%, 09/20/043 | 69,692 | 69,635 | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/043 | 102,488 | 102,427 | ||||
1.45%, 11/09/043 | 204,975 | 204,405 | ||||
1.52%, 09/08/043 | 204,975 | 204,914 | ||||
1.59%, 12/02/043 | 204,975 | 204,142 | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/043 | 61,493 | 61,487 | ||||
1.53%, 09/07/043 | 102,488 | 102,461 |
SCHEDULESOF INVESTMENTS | 49 |
Schedule of Investments (Continued)
iSHARES® MSCI GERMANY INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
1.53%, 09/17/043 | $ | 61,493 | $ | 61,451 | ||
1.53%, 09/21/043 | 51,244 | 51,200 | ||||
1.53%, 09/22/043 | 102,488 | 102,396 | ||||
1.54%, 09/14/043 | 153,731 | 153,645 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/053 | 102,488 | 101,777 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/043 | 102,488 | 102,453 | ||||
1.55%, 10/15/043 | 134,412 | 134,158 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/043 | 204,975 | 204,611 | ||||
1.44%, 10/27/043 | 204,975 | 204,516 | ||||
1.59%, 11/30/043 | 102,488 | 102,080 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/043 | 51,244 | 51,242 | ||||
1.53%, 09/20/043 | 51,244 | 51,202 | ||||
1.53%, 09/23/043 | 71,741 | 71,674 | ||||
1.54%, 09/15/043 | 122,985 | 122,911 | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/043 | 142,847 | 142,848 | ||||
1.51%, 09/08/043 | 81,990 | 81,966 | ||||
1.52%, 09/09/043 | 51,244 | 51,226 | ||||
1.53%, 09/21/043 | 102,488 | 102,400 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/043 | 61,493 | 61,458 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/043 | 112,736 | 112,736 | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/043 | 68,216 | 68,095 | ||||
1.55%, 09/16/043 | 61,493 | 61,453 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
1.54%, 09/15/043 | 81,990 | 81,941 | ||||
1.54%, 09/23/043 | 51,244 | 51,196 | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/043 | 51,244 | 51,226 | ||||
1.52%, 09/10/043 | 71,741 | 71,715 | ||||
5,212,222 | ||||||
TIME DEPOSITS – 4.63% | ||||||
Abbey National Treasury Services PLC | ||||||
1.25%, 01/06/053 | 204,975 | 204,975 | ||||
1.33%, 02/10/053 | 102,488 | 102,475 | ||||
1.39%, 02/02/053 | 102,488 | 102,481 | ||||
1.39%, 04/08/053 | 143,483 | 143,470 | ||||
1.40%, 10/25/043 | 204,975 | 204,970 | ||||
Bank of New York | ||||||
1.39%, 11/01/043 | 204,975 | 204,972 | ||||
1.60%, 12/03/043 | 51,244 | 51,237 | ||||
Bank of Nova Scotia | ||||||
1.13%, 10/06/043 | 204,975 | 204,975 | ||||
1.24%, 10/07/043 | 153,731 | 153,730 | ||||
1.42%, 10/29/043 | 153,731 | 153,734 | ||||
National City Bank (Cleveland, Ohio) | ||||||
1.25%, 01/06/053 | 204,975 | 204,979 | ||||
1.49%, 08/09/053 | 204,975 | 204,917 | ||||
1.54%, 06/23/053 | 204,975 | 204,925 | ||||
1.56%, 06/10/053 | 102,488 | 102,512 | ||||
Norddeutsche Landesbank | ||||||
1.59%, 07/27/053 | 204,975 | 204,910 | ||||
Prudential Funding LLC | ||||||
1.60%, 12/01/043 | 102,488 | 102,073 | ||||
SouthTrust Bank | ||||||
1.55%, 09/01/043 | 409,950 | 409,950 | ||||
Toronto-Dominion Bank | ||||||
1.22%, 03/23/053 | 358,706 | 358,671 | ||||
1.34%, 02/10/053 | 81,990 | 81,985 | ||||
1.41%, 11/01/043 | 153,731 | 153,729 | ||||
1.53%, 09/13/043 | 102,488 | 102,488 | ||||
1.77%, 05/10/053 | 102,488 | 102,480 | ||||
1.90%, 05/11/053 | 102,488 | 102,480 | ||||
UBS Finance (Delaware) | ||||||
1.10%, 09/08/043 | 204,975 | 204,931 | ||||
1.11%, 12/17/043 | 307,463 | 306,448 | ||||
1.14%, 09/29/043 | 204,975 | 204,794 | ||||
4,579,291 | ||||||
REPURCHASE AGREEMENTS – 4.10% | ||||||
Banc of America Securities LLC | ||||||
1.59%, 09/01/043,6 | 614,926 | 614,926 | ||||
Bank of America, N.A. | ||||||
1.59%, 09/01/043,6 | 1,178,606 | 1,178,606 | ||||
Goldman Sachs & Co. | ||||||
1.59%, 09/01/043,6 | 1,024,875 | 1,024,875 |
50 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI GERMANY INDEX FUND
August 31, 2004
Security | Principal | Value | |||||
Merrill Lynch Government Securities Inc. | |||||||
1.57%, 09/01/043,6 | $ | 204,975 | $ | 204,975 | |||
1.59%, 09/01/043,6 | 1,024,875 | 1,024,875 | |||||
4,048,257 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.75% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.63%, 04/15/053 | 143,483 | 143,767 | |||||
1.80%, 01/18/053 | 95,313 | 94,651 | |||||
1.80%, 01/19/053 | 102,488 | 101,770 | |||||
2.06%, 05/31/053 | 102,186 | 100,596 | |||||
Federal National Mortgage Association | |||||||
2.33%, 07/22/053 | 307,463 | 301,029 | |||||
741,813 | |||||||
MEDIUM-TERM NOTES – 0.65% | |||||||
CC USA Inc. | |||||||
1.29%, 04/15/053,4 | 204,975 | 204,962 | |||||
1.51%, 02/15/053,4 | 133,234 | 133,329 | |||||
Dorada Finance Inc. | |||||||
1.48%, 01/18/053,4 | 153,731 | 153,728 | |||||
K2 USA LLC | |||||||
1.46%, 01/12/053,4 | 102,488 | 102,484 | |||||
WhistleJacket Capital LLC | |||||||
1.32%, 02/04/053,4 | 51,244 | 51,239 | |||||
645,742 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 28,142,004 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 128.34% | 126,755,495 | ||||||
Other Assets, Less Liabilities – (28.34%) | (27,991,760 | ) | |||||
NET ASSETS – 100.00% | $ | 98,763,735 | |||||
1 | Non-income earning security. |
2 | All or a portion of this security represents a security on loan. See Note 5. |
3 | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
4 | Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
5 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
6 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Financial | 22.03 | % | $ | 21,753,607 | ||
Consumer Cyclical | 15.48 | 15,297,042 | ||||
Industrial | 15.14 | 14,947,472 | ||||
Utilities | 12.99 | 12,832,744 | ||||
Basic Materials | 9.59 | 9,467,908 | ||||
Communications | 9.12 | 9,001,758 | ||||
Consumer Non-Cyclical | 8.27 | 8,172,723 | ||||
Technology | 7.23 | 7,140,237 | ||||
Short-Term and Other Net Assets | 0.15 | 150,244 | ||||
TOTAL | 100.00 | % | $ | 98,763,735 | ||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 51 |
iSHARES® MSCI ITALY INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 94.63% | |||||
AEROSPACE & DEFENSE – 1.40% | |||||
Finmeccanica SpA1 | 575,550 | $ | 381,209 | ||
381,209 | |||||
APPAREL – 0.25% | |||||
Benetton Group SpA1 | 6,282 | 68,482 | |||
68,482 | |||||
AUTO MANUFACTURERS – 1.34% | |||||
Fiat SpA1,2 | 50,877 | 364,183 | |||
364,183 | |||||
AUTO PARTS & EQUIPMENT – 0.65% | |||||
Pirelli SpA1 | 182,772 | 176,366 | |||
176,366 | |||||
BANKS – 24.73% | |||||
Banca Antonveneta SpA1,2 | 23,634 | 487,132 | |||
Banca Intesa SpA1 | 327,074 | 1,196,455 | |||
Banca Monte dei Paschi di Siena SpA1 | 120,879 | 352,570 | |||
Banca Nazionale del Lavoro SpA1,2 | 126,621 | 292,377 | |||
Banca Popolare di Milano Scrl1 | 42,390 | 261,189 | |||
Banche Popolari Unite Scrl | 37,215 | 600,620 | |||
Banco Popolare di Verona e Novara Scrl1 | 39,375 | 647,443 | |||
Capitalia SpA | 141,318 | 431,936 | |||
Fineco SpA1,2 | 14,695 | 78,757 | |||
Sanpaolo IMI SpA1 | 96,246 | 1,074,934 | |||
UniCredito Italiano SpA1 | 276,480 | 1,323,864 | |||
6,747,277 | |||||
BUILDING MATERIALS – 0.46% | |||||
Italcementi SpA1 | 9,234 | 125,463 | |||
125,463 | |||||
COMMERCIAL SERVICES – 1.61% | |||||
Autostrade SpA | 21,933 | 438,744 | |||
438,744 | |||||
DIVERSIFIED FINANCIAL SERVICES – 2.67% | |||||
Banca Fideuram SpA1 | 31,653 | 155,795 | |||
Mediobanca SpA1 | 48,114 | 573,620 | |||
729,415 | |||||
ELECTRIC – 6.07% | |||||
Edison SpA1,2 | 88,929 | 147,199 | |||
Enel SpA1 | 168,192 | 1,297,964 | |||
Terna SpA Rights2 | 94,338 | 211,527 | |||
1,656,690 | |||||
GAS – 2.16% | |||||
Snam Rete Gas SpA1 | 131,202 | 588,370 | |||
588,370 | |||||
HEALTH CARE – PRODUCTS – 0.92% | |||||
Luxottica Group SpA1 | 14,976 | 251,165 | |||
251,165 | |||||
INSURANCE – 13.26% | |||||
Alleanza Assicurazioni SpA1 | 47,961 | 501,268 | |||
Assicurazioni Generali SpA1 | 91,602 | 2,386,785 | |||
Mediolanum SpA1 | 27,855 | 165,537 | |||
Riunione Adriatica di Sicurta SpA1 | 31,995 | 563,811 | |||
3,617,401 | |||||
MEDIA – 3.47% | |||||
Arnoldo Mondadori Editore SpA1 | 11,097 | 101,281 | |||
Gruppo Editoriale L’Espresso SpA1 | 16,794 | 86,537 | |||
Mediaset SpA1 | 56,124 | 574,307 | |||
Seat Pagine Gialle SpA1,2 | 387,211 | 146,350 | |||
Telecom Italia Media SpA1,2 | 107,278 | 38,200 | |||
946,675 | |||||
OIL & GAS – 18.77% | |||||
ENI SpA1 | 250,632 | 5,120,209 | |||
5,120,209 | |||||
RETAIL – 1.01% | |||||
Autogrill SpA1,2 | 11,124 | 160,200 | |||
Bulgari SpA1 | 12,456 | 116,409 | |||
276,609 | |||||
TELECOMMUNICATIONS – 15.86% | |||||
Telecom Italia Mobile SpA | 361,755 | 1,921,231 | |||
Telecom Italia SpA1 | 787,483 | 2,354,289 | |||
Tiscali SpA1,2 | 18,567 | 51,334 | |||
4,326,854 | |||||
TOTAL COMMON STOCKS | 25,815,112 |
52 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI ITALY INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
PREFERRED STOCKS – 5.05% | ||||||
BANKS – 0.45% | ||||||
Banca Intesa SpA RNC | 43,821 | $ | 124,086 | |||
124,086 | ||||||
TELECOMMUNICATIONS – 4.60% | ||||||
Telecom Italia SpA RNC1 | 571,519 | 1,253,693 | ||||
1,253,693 | ||||||
TOTAL PREFERRED STOCKS | 1,377,779 | |||||
SHORT-TERM INVESTMENTS – 47.31% | ||||||
FLOATING RATE NOTES – 12.25% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/053,4 | $ | 56,472 | 56,465 | |||
1.52%, 10/12/043,4 | 47,059 | 47,059 | ||||
1.56%, 09/15/043,4 | 94,119 | 94,119 | ||||
1.64%, 03/15/053,4 | 47,059 | 47,080 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/043 | 70,589 | 70,589 | ||||
1.38%, 11/22/043 | 23,530 | 23,530 | ||||
1.40%, 10/29/043 | 94,119 | 94,118 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/053,4 | 94,119 | 94,106 | ||||
1.61%, 07/29/053,4 | 94,119 | 94,093 | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/053 | 94,119 | 94,092 | ||||
1.56%, 08/26/053 | 94,119 | 94,091 | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/053 | 94,119 | 94,119 | ||||
Dorada Finance Inc. | ||||||
1.61%, 07/29/053,4 | 78,119 | 78,097 | ||||
Five Finance Inc. | ||||||
1.42%, 04/29/053,4 | 75,295 | 75,290 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/043 | 47,059 | 47,043 | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/053 | 60,236 | 60,233 | ||||
1.58%, 04/22/053 | 94,119 | 94,119 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/053,4 | 94,119 | 94,110 | ||||
Security | Principal | Value | ||||
1.57%, 09/27/043,4 | $ | 101,648 | $ | 101,647 | ||
1.61%, 07/25/053,4 | 47,059 | 47,051 | ||||
Links Finance LLC | ||||||
1.55%, 04/15/053,4 | 94,119 | 94,107 | ||||
1.68%, 04/25/053 | 94,119 | 94,159 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/053 | 94,119 | 94,119 | ||||
1.63%, 12/09/043,4 | 78,119 | 77,768 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/053 | 94,119 | 94,105 | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/053,4 | 89,413 | 89,413 | ||||
Permanent Financing PLC | ||||||
1.52%, 03/10/053 | 94,119 | 94,119 | ||||
1.53%, 12/10/043 | 47,059 | 47,059 | ||||
1.55%, 06/10/053 | 42,353 | 42,353 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/043 | 94,119 | 94,117 | ||||
1.57%, 11/15/043 | 94,119 | 94,117 | ||||
1.59%, 09/15/053 | 70,589 | 70,595 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/053,4 | 34,542 | 34,540 | ||||
1.56%, 01/18/053,4 | 41,412 | 41,411 | ||||
1.59%, 07/25/053,4 | 94,119 | 94,110 | ||||
1.66%, 05/17/053,4 | 78,119 | 78,116 | ||||
1.70%, 02/25/053,4 | 52,707 | 52,701 | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/043 | 23,313 | 23,273 | ||||
1.48%, 06/15/053,4 | 47,059 | 47,051 | ||||
1.56%, 09/15/043,4 | 47,059 | 47,059 | ||||
1.56%, 07/15/053,4 | 70,589 | 70,577 | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/053 | 47,059 | 47,051 | ||||
1.55%, 04/15/053,4 | 70,589 | 70,580 | ||||
1.55%, 07/11/053 | 23,530 | 23,527 | ||||
1.56%, 11/15/043,4 | 56,471 | 56,471 | ||||
1.57%, 06/15/053,4 | 38,589 | 38,589 | ||||
1.58%, 03/29/053 | 40,471 | 40,466 | ||||
1.58%, 08/26/053,4 | 47,059 | 47,050 | ||||
1.68%, 05/20/053 | 42,353 | 42,350 | ||||
3,342,004 |
SCHEDULESOF INVESTMENTS | 53 |
Schedule of Investments (Continued)
iSHARES® MSCI ITALY INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
MONEY MARKET FUNDS – 9.43% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5 | 1,425,185 | $ | 1,425,185 | |||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5 | 1,035,308 | 1,035,308 | ||||
BlackRock Temp Cash Money Market Fund3 | 47,513 | 47,513 | ||||
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares3 | 63,267 | 63,267 | ||||
2,571,273 | ||||||
COMMERCIAL PAPER – 8.77% | ||||||
Alpine Securitization Corp. | ||||||
1.50%, 09/08/043 | $ | 47,059 | 47,045 | |||
1.51%, 09/02/043 | 42,353 | 42,352 | ||||
1.54%, 09/14/043 | 47,059 | 47,033 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/043 | 18,824 | 18,818 | ||||
1.53%, 09/16/043 | 46,305 | 46,275 | ||||
1.54%, 09/15/043 | 47,059 | 47,031 | ||||
1.54%, 09/22/043 | 23,530 | 23,509 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/043 | 47,059 | 47,045 | ||||
1.53%, 09/09/043 | 109,922 | 109,885 | ||||
1.53%, 09/13/043 | 67,762 | 67,727 | ||||
1.53%, 09/14/043 | 23,530 | 23,517 | ||||
1.54%, 09/17/043 | 28,236 | 28,216 | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/043 | 47,059 | 47,046 | ||||
1.53%, 09/15/043 | 18,824 | 18,813 | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/043 | 18,824 | 18,811 | ||||
Corporate Asset Funding | ||||||
1.42%, 09/03/043 | 28,236 | 28,233 | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/043 | 47,059 | 47,056 | ||||
Delaware Funding Corp. | ||||||
1.50%, 09/09/043 | 47,059 | 47,044 | ||||
1.53%, 09/10/043 | 75,295 | 75,266 | ||||
1.53%, 09/20/043 | 32,000 | 31,975 | ||||
Security | Principal | Value | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/043 | $ | 47,059 | $ | 47,031 | ||
1.45%, 11/09/043 | 94,119 | 93,857 | ||||
1.52%, 09/08/043 | 94,119 | 94,091 | ||||
1.59%, 12/02/043 | 94,119 | 93,736 | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/043 | 28,236 | 28,233 | ||||
1.53%, 09/07/043 | 47,059 | 47,047 | ||||
1.53%, 09/17/043 | 28,236 | 28,216 | ||||
1.53%, 09/21/043 | 23,530 | 23,510 | ||||
1.53%, 09/22/043 | 47,059 | 47,017 | ||||
1.54%, 09/14/043 | 70,590 | 70,550 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/053 | 47,059 | 46,733 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/043 | 47,059 | 47,043 | ||||
1.55%, 10/15/043 | 61,718 | 61,602 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/043 | 94,119 | 93,952 | ||||
1.44%, 10/27/043 | 94,119 | 93,908 | ||||
1.59%, 11/30/043 | 47,059 | 46,872 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/043 | 23,530 | 23,529 | ||||
1.53%, 09/20/043 | 23,530 | 23,511 | ||||
1.53%, 09/23/043 | 32,942 | 32,911 | ||||
1.54%, 09/15/043 | 56,471 | 56,437 | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/043 | 65,591 | 65,591 | ||||
1.51%, 09/08/043 | 37,648 | 37,636 | ||||
1.52%, 09/09/043 | 23,530 | 23,522 | ||||
1.53%, 09/21/043 | 47,059 | 47,019 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/043 | 28,236 | 28,220 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/043 | 51,765 | 51,765 | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/043 | 31,323 | 31,267 | ||||
1.55%, 09/16/043 | 28,236 | 28,217 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
1.54%, 09/15/043 | 37,648 | 37,625 | ||||
1.54%, 09/23/043 | 23,530 | 23,508 |
54 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI ITALY INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/043 | $ | 23,530 | $ | 23,522 | ||
1.52%, 09/10/043 | 32,942 | 32,929 | ||||
2,393,304 | ||||||
TIME DEPOSITS – 7.71% | ||||||
Abbey National Treasury Services PLC | ||||||
1.25%, 01/06/053 | 94,119 | 94,119 | ||||
1.33%, 02/10/053 | 47,059 | 47,056 | ||||
1.39%, 02/02/053 | 47,059 | 47,056 | ||||
1.39%, 04/08/053 | 65,883 | 65,877 | ||||
1.40%, 10/25/043 | 94,119 | 94,117 | ||||
Bank of New York | ||||||
1.39%, 11/01/043 | 94,119 | 94,117 | ||||
1.60%, 12/03/043 | 23,530 | 23,527 | ||||
Bank of Nova Scotia | ||||||
1.13%, 10/06/043 | 94,119 | 94,119 | ||||
1.24%, 10/07/043 | 70,589 | 70,588 | ||||
1.42%, 10/29/043 | 70,589 | 70,590 | ||||
National City Bank (Cleveland, Ohio) | ||||||
1.25%, 01/06/053 | 94,119 | 94,120 | ||||
1.49%, 08/09/053 | 94,119 | 94,093 | ||||
1.54%, 06/23/053 | 94,119 | 94,096 | ||||
1.56%, 06/10/053 | 47,059 | 47,071 | ||||
Norddeutsche Landesbank | ||||||
1.59%, 07/27/053 | 94,119 | 94,090 | ||||
Prudential Funding LLC | ||||||
1.60%, 12/01/043 | 47,059 | 46,870 | ||||
SouthTrust Bank | ||||||
1.55%, 09/01/043 | 188,238 | 188,238 | ||||
Toronto-Dominion Bank | ||||||
1.22%, 03/23/053 | 164,708 | 164,692 | ||||
1.34%, 02/10/053 | 37,648 | 37,645 | ||||
1.41%, 11/01/043 | 70,589 | 70,588 | ||||
1.53%, 09/13/043 | 47,059 | 47,059 | ||||
1.77%, 05/10/053 | 47,059 | 47,056 | ||||
1.90%, 05/11/053 | 47,059 | 47,057 | ||||
UBS Finance (Delaware) | ||||||
1.10%, 09/08/043 | 94,119 | 94,099 | ||||
1.11%, 12/17/043 | 141,178 | 140,713 | ||||
1.14%, 09/29/043 | 94,119 | 94,036 | ||||
2,102,689 | ||||||
REPURCHASE AGREEMENTS – 6.81% | ||||||
Banc of America Securities LLC | ||||||
1.59%, 09/01/043,6 | 282,357 | 282,357 | ||||
Bank of America, N.A. | ||||||
1.59%, 09/01/043,6 | 541,183 | 541,183 | ||||
Goldman Sachs & Co. | ||||||
1.59%, 09/01/043,6 | 470,594 | 470,594 | ||||
Merrill Lynch Government Securities Inc. | ||||||
1.57%, 09/01/043,6 | 94,119 | 94,119 | ||||
1.59%, 09/01/043,6 | 470,594 | 470,594 | ||||
1,858,847 | ||||||
U.S. GOVERNMENT AGENCY NOTES – 1.25% | ||||||
Federal Home Loan Mortgage Corp. | ||||||
1.63%, 04/15/053 | 65,883 | 66,014 | ||||
1.80%, 01/18/053 | 43,765 | 43,462 | ||||
1.80%, 01/19/053 | 47,059 | 46,730 | ||||
2.06%, 05/31/053 | 46,921 | 46,191 | ||||
Federal National Mortgage Association | ||||||
2.33%, 07/22/053 | 141,178 | 138,224 | ||||
340,621 | ||||||
MEDIUM – TERM NOTES – 1.09% | ||||||
CC USA Inc. | ||||||
1.29%, 04/15/053,4 | 94,119 | 94,113 | ||||
1.51%, 02/15/053,4 | 61,177 | 61,221 | ||||
Dorada Finance Inc. | ||||||
1.48%, 01/18/053,4 | 70,589 | 70,588 | ||||
K2 USA LLC | ||||||
1.46%, 01/12/053,4 | 47,059 | 47,058 | ||||
WhistleJacket Capital LLC | ||||||
1.32%, 02/04/053,4 | 23,530 | 23,528 | ||||
296,508 | ||||||
TOTAL SHORT-TERM INVESTMENTS | 12,905,246 | |||||
SCHEDULESOF INVESTMENTS | 55 |
Schedule of Investments (Continued)
iSHARES® MSCI ITALY INDEX FUND
August 31, 2004
Value | ||||
TOTAL INVESTMENTS IN SECURITIES – 146.99% | $ | 40,098,137 | ||
Other Assets, Less Liabilities – (46.99%) | (12,818,725 | ) | ||
NET ASSETS – 100.00% | $ | 27,279,412 | ||
1 | All or a portion of this security represents a security on loan. See Note 5. |
2 | Non-income earning security. |
3 | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
4 | Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
5 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
6 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Financial | 41.11 | % | $ | 11,218,179 | ||
Communications | 23.93 | 6,527,222 | ||||
Energy | 18.77 | 5,120,209 | ||||
Utilities | 8.23 | 2,245,060 | ||||
Consumer Cyclical | 3.25 | 885,640 | ||||
Consumer Non-Cyclical | 2.53 | 689,909 | ||||
Industrial | 1.86 | 506,672 | ||||
Short-Term and Other Net Assets | 0.32 | 86,521 | ||||
TOTAL | 100.00 | % | $ | 27,279,412 | ||
See notes to financial statements.
56 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
iSHARES® MSCI NETHERLANDS INDEX FUND
August 31, 2004
Security | Shares | Value | ||||
COMMON STOCKS – 99.00% | ||||||
BANKS – 4.90% | ||||||
ABN AMRO Holding NV | 65,340 | $ | 1,384,870 | |||
1,384,870 | ||||||
BEVERAGES – 3.83% | ||||||
Heineken NV | 35,863 | 1,082,619 | ||||
1,082,619 | ||||||
CHEMICALS – 5.29% | ||||||
Akzo Nobel NV | 36,720 | 1,233,904 | ||||
DSM NV | 5,400 | 262,374 | ||||
1,496,278 | ||||||
COMMERCIAL SERVICES – 2.49% | ||||||
IHC Caland NV1 | 7,992 | 383,651 | ||||
Randstad Holdings NV | 2,916 | 88,844 | ||||
Vedior NV | 16,920 | 230,304 | ||||
702,799 | ||||||
COMPUTERS – 0.23% | ||||||
Getronics NV1,2 | 38,952 | 65,800 | ||||
65,800 | ||||||
DISTRIBUTION & WHOLESALE – 0.26% | ||||||
Hagemeyer NV1,2 | 41,292 | 72,764 | ||||
72,764 | ||||||
ELECTRONICS – 4.63% | ||||||
Koninklijke Philips Electronics NV | 56,880 | 1,309,252 | ||||
1,309,252 | ||||||
FOOD – 13.96% | ||||||
Koninklijke Ahold NV2 | 120,096 | 738,521 | ||||
Koninklijke Numico NV CVA1,2 | 11,768 | 369,555 | ||||
Unilever NV CVA | 47,448 | 2,838,200 | ||||
3,946,276 | ||||||
INSURANCE – 18.54% | ||||||
AEGON NV | 106,344 | 1,132,141 | ||||
ING Groep NV | 168,552 | 4,107,067 | ||||
5,239,208 | ||||||
MEDIA – 7.61% | ||||||
Reed Elsevier NV | 88,416 | 1,131,469 | ||||
VNU NV | 20,016 | 509,861 | ||||
Wolters Kluwer NV CVA1 | 30,996 | 510,044 | ||||
2,151,374 | ||||||
OFFICE & BUSINESS EQUIPMENT – 1.20% | ||||||
Oce NV1 | 22,500 | 340,163 | ||||
340,163 | ||||||
Security | Shares or Principal | Value | ||||
OIL & GAS – 24.29% | ||||||
Royal Dutch Petroleum Co.1 | 136,260 | $ | 6,865,642 | |||
6,865,642 | ||||||
REAL ESTATE INVESTMENT TRUSTS – 1.44% | ||||||
Corio NV | 2,268 | 99,558 | ||||
Rodamco Europe NV1 | 3,276 | 211,607 | ||||
Wereldhave NV | 1,116 | 95,278 | ||||
406,443 | ||||||
SEMICONDUCTORS – 1.90% | ||||||
ASML Holding NV2 | 42,156 | 537,938 | ||||
537,938 | ||||||
TELECOMMUNICATIONS – 4.28% | ||||||
Koninklijke KPN NV | 157,644 | 1,208,900 | ||||
1,208,900 | ||||||
TRANSPORTATION – 4.15% | ||||||
TPG NV | 50,688 | 1,172,269 | ||||
1,172,269 | ||||||
TOTAL COMMON STOCKS | 27,982,595 | |||||
SHORT-TERM INVESTMENTS – 11.31% | ||||||
FLOATING RATE NOTES – 2.92% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/053,4 | $ | 13,939 | 13,938 | |||
1.52%, 10/12/043,4 | 11,616 | 11,616 | ||||
1.56%, 09/15/043,4 | 23,232 | 23,225 | ||||
1.64%, 03/15/053,4 | 11,616 | 11,622 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/043 | 17,424 | 17,424 | ||||
1.38%, 11/22/043 | 5,808 | 5,808 | ||||
1.40%, 10/29/043 | 23,232 | 23,232 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/053,4 | 23,232 | 23,229 | ||||
1.61%, 07/29/053,4 | 23,232 | 23,226 | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/053 | 23,232 | 23,226 | ||||
1.56%, 08/26/053 | 23,232 | 23,226 | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/053 | 23,232 | 23,232 | ||||
Dorada Finance Inc. | ||||||
1.61%, 07/29/053,4 | 19,283 | 19,278 | ||||
Five Finance Inc. | ||||||
1.42%, 04/29/053,4 | 18,586 | 18,585 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/043 | 11,616 | 11,612 |
SCHEDULESOF INVESTMENTS | 57 |
Schedule of Investments (Continued)
iSHARES® MSCI NETHERLANDS INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/053 | $ | 14,869 | $ | 14,868 | ||
1.58%, 04/22/053 | 23,232 | 23,232 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/053,4 | 23,232 | 23,230 | ||||
1.57%, 09/27/043,4 | 25,091 | 25,091 | ||||
1.61%, 07/25/053,4 | 11,616 | 11,615 | ||||
Links Finance LLC | ||||||
1.55%, 04/15/053,4 | 23,232 | 23,230 | ||||
1.68%, 04/25/053 | 23,232 | 23,242 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/053 | 23,232 | 23,232 | ||||
1.63%, 12/09/043,4 | 19,283 | 19,196 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/053 | 23,232 | 23,229 | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/053,4 | 22,071 | 22,071 | ||||
Permanent Financing PLC | ||||||
1.52%, 03/10/053 | 23,232 | 23,232 | ||||
1.53%, 12/10/043 | 11,616 | 11,616 | ||||
1.55%, 06/10/053 | 10,455 | 10,455 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/043 | 23,232 | 23,232 | ||||
1.57%, 11/15/043 | 23,232 | 23,232 | ||||
1.59%, 09/15/053 | 17,424 | 17,426 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/053,4 | 8,526 | 8,526 | ||||
1.56%, 01/18/053,4 | 10,222 | 10,222 | ||||
1.59%, 07/25/053,4 | 23,232 | 23,230 | ||||
1.66%, 05/17/053,4 | 19,283 | 19,283 | ||||
1.70%, 02/25/053,4 | 13,010 | 13,009 | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/043 | 5,755 | 5,745 | ||||
1.48%, 06/15/053,4 | 11,616 | 11,615 | ||||
1.56%, 09/15/043,4 | 11,616 | 11,617 | ||||
1.56%, 07/15/053,4 | 17,424 | 17,421 | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/053 | 11,616 | 11,614 | ||||
1.55%, 04/15/053,4 | 17,424 | 17,422 | ||||
1.55%, 07/11/053 | 5,808 | 5,808 | ||||
1.56%, 11/15/043,4 | 13,939 | 13,939 | ||||
1.57%, 06/15/053,4 | 9,525 | 9,525 | ||||
1.58%, 03/29/053 | 9,990 | 9,989 | ||||
1.58%, 08/26/053,4 | 11,616 | 11,614 | ||||
1.68%, 05/20/053 | 10,455 | 10,454 | ||||
824,941 | ||||||
Security | Shares or Principal | Value | ||||
MONEY MARKET FUNDS – 2.28% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5 | 363,216 | $ | 363,216 | |||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5 | 255,556 | 255,556 | ||||
BlackRock Temp Cash Money Market Fund3 | 11,728 | 11,728 | ||||
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares3 | 15,617 | 15,617 | ||||
646,117 | ||||||
COMMERCIAL PAPER – 2.09% | ||||||
Alpine Securitization Corp. | ||||||
1.50%, 09/08/043 | $ | 11,616 | 11,613 | |||
1.51%, 09/02/043 | 10,455 | 10,454 | ||||
1.54%, 09/14/043 | 11,616 | 11,610 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/043 | 4,646 | 4,645 | ||||
1.53%, 09/16/043 | 11,430 | 11,423 | ||||
1.54%, 09/15/043 | 11,616 | 11,609 | ||||
1.54%, 09/22/043 | 5,808 | 5,803 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/043 | 11,616 | 11,613 | ||||
1.53%, 09/09/043 | 27,133 | 27,124 | ||||
1.53%, 09/13/043 | 16,726 | 16,718 | ||||
1.53%, 09/14/043 | 5,808 | 5,805 | ||||
1.54%, 09/17/043 | 6,970 | 6,965 | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/043 | 11,616 | 11,613 | ||||
1.53%, 09/15/043 | 4,646 | 4,644 | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/043 | 4,646 | 4,643 | ||||
Corporate Asset Funding | ||||||
1.42%, 09/03/043 | 6,970 | 6,969 | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/043 | 11,616 | 11,615 | ||||
Delaware Funding Corp. | ||||||
1.50%, 09/09/043 | 11,616 | 11,612 | ||||
1.53%, 09/10/043 | 18,586 | 18,579 | ||||
1.53%, 09/20/043 | 7,899 | 7,893 | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/043 | 11,616 | 11,609 | ||||
1.45%, 11/09/043 | 23,232 | 23,168 |
58 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI NETHERLANDS INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
1.52%, 09/08/043 | $ | 23,232 | $ | 23,226 | ||
1.59%, 12/02/043 | 23,232 | 23,138 | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/043 | 6,970 | 6,969 | ||||
1.53%, 09/07/043 | 11,616 | 11,613 | ||||
1.53%, 09/17/043 | 6,970 | 6,965 | ||||
1.53%, 09/21/043 | 5,808 | 5,803 | ||||
1.53%, 09/22/043 | 11,616 | 11,606 | ||||
1.54%, 09/14/043 | 17,424 | 17,415 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/053 | 11,616 | 11,536 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/043 | 11,616 | 11,612 | ||||
1.55%, 10/15/043 | 15,235 | 15,206 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/043 | 23,232 | 23,191 | ||||
1.44%, 10/27/043 | 23,232 | 23,180 | ||||
1.59%, 11/30/043 | 11,616 | 11,570 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/043 | 5,808 | 5,808 | ||||
1.53%, 09/20/043 | 5,808 | 5,804 | ||||
1.53%, 09/23/043 | 8,131 | 8,124 | ||||
1.54%, 09/15/043 | 13,939 | 13,931 | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/043 | 16,191 | 16,191 | ||||
1.51%, 09/08/043 | 9,293 | 9,290 | ||||
1.52%, 09/09/043 | 5,808 | 5,806 | ||||
1.53%, 09/21/043 | 11,616 | 11,606 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/043 | 6,970 | 6,966 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/043 | 12,778 | 12,778 | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/043 | 7,732 | 7,718 | ||||
1.55%, 09/16/043 | 6,970 | 6,965 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
1.54%, 09/15/043 | 9,293 | 9,287 | ||||
1.54%, 09/23/043 | 5,808 | 5,803 | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/043 | 5,808 | 5,806 | ||||
1.52%, 09/10/043 | 8,131 | 8,128 | ||||
590,768 | ||||||
TIME DEPOSITS – 1.84% | ||||||
Abbey National Treasury Services PLC | ||||||
1.25%, 01/06/053 | 23,232 | 23,232 | ||||
1.33%, 02/10/053 | 11,616 | 11,615 | ||||
1.39%, 02/02/053 | 11,616 | 11,615 | ||||
1.39%, 04/08/053 | 16,263 | 16,262 | ||||
1.40%, 10/25/043 | 23,232 | 23,232 | ||||
Bank of New York | ||||||
1.39%, 11/01/043 | 23,232 | 23,233 | ||||
1.60%, 12/03/043 | 5,808 | 5,807 | ||||
Bank of Nova Scotia | ||||||
1.13%, 10/06/043 | 23,232 | 23,232 | ||||
1.24%, 10/07/043 | 17,424 | 17,424 | ||||
1.42%, 10/29/043 | 17,424 | 17,425 | ||||
National City Bank (Cleveland, Ohio) | ||||||
1.25%, 01/06/053 | 23,232 | 23,233 | ||||
1.49%, 08/09/053 | 23,232 | 23,226 | ||||
1.54%, 06/23/053 | 23,232 | 23,227 | ||||
1.56%, 06/10/053 | 11,616 | 11,620 | ||||
Norddeutsche Landesbank | ||||||
1.59%, 07/27/053 | 23,232 | 23,225 | ||||
Prudential Funding LLC | ||||||
1.60%, 12/01/043 | 11,616 | 11,569 | ||||
SouthTrust Bank | ||||||
1.55%, 09/01/043 | 46,465 | 46,465 | ||||
Toronto-Dominion Bank | ||||||
1.22%, 03/23/053 | 40,657 | 40,653 | ||||
1.34%, 02/10/053 | 9,293 | 9,292 | ||||
1.41%, 11/01/043 | 17,424 | 17,425 | ||||
1.53%, 09/13/043 | 11,616 | 11,616 | ||||
1.77%, 05/10/053 | 11,616 | 11,615 | ||||
1.90%, 05/11/053 | 11,616 | 11,615 | ||||
UBS Finance (Delaware) | ||||||
1.10%, 09/08/043 | 23,232 | 23,227 | ||||
1.11%, 12/17/043 | 34,849 | 34,734 | ||||
1.14%, 09/29/043 | 23,232 | 23,212 | ||||
519,031 | ||||||
REPURCHASE AGREEMENTS – 1.62% | ||||||
Banc of America Securities LLC | ||||||
1.59%, 09/01/043,6 | 69,697 | 69,697 |
SCHEDULESOF INVESTMENTS | 59 |
Schedule of Investments (Continued)
iSHARES® MSCI NETHERLANDS INDEX FUND
August 31, 2004
Security | Principal | Value | |||||
Bank of America, N.A. | |||||||
1.59%, 09/01/043,6 | $ | 133,586 | $ | 133,586 | |||
Goldman Sachs & Co. | |||||||
1.59%, 09/01/043,6 | 116,162 | 116,162 | |||||
Merrill Lynch Government Securities Inc. | |||||||
1.57%, 09/01/043,6 | 23,232 | 23,232 | |||||
1.59%, 09/01/043,6 | 116,162 | 116,162 | |||||
458,839 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.30% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.63%, 04/15/053 | 16,263 | 16,295 | |||||
1.80%, 01/18/053 | 10,803 | 10,728 | |||||
1.80%, 01/19/053 | 11,616 | 11,535 | |||||
2.06%, 05/31/053 | 11,582 | 11,402 | |||||
Federal National Mortgage Association | |||||||
2.33%, 07/22/053 | 34,849 | 34,119 | |||||
84,079 | |||||||
MEDIUM-TERM NOTES – 0.26% | |||||||
CC USA Inc. | |||||||
1.29%, 04/15/053,4 | 23,232 | 23,231 | |||||
1.51%, 02/15/053,4 | 15,101 | 15,112 | |||||
Dorada Finance Inc. | |||||||
1.48%, 01/18/053,4 | 17,424 | 17,424 | |||||
K2 USA LLC | |||||||
1.46%, 01/12/053,4 | 11,616 | 11,616 | |||||
WhistleJacket Capital LLC | |||||||
1.32%, 02/04/053,4 | 5,808 | 5,808 | |||||
73,191 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 3,196,966 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 110.31% | 31,179,561 | ||||||
Other Assets, Less Liabilities – (10.31%) | (2,914,556 | ) | |||||
NET ASSETS – 100.00% | $ | 28,265,005 | |||||
1 | All or a portion of this security represents a security on loan. See Note 5. |
2 | Non-income earning security. |
3 | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
4 | Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
5 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
6 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Financial | 24.88 | % | $ | 7,030,521 | ||
Energy | 24.29 | 6,865,642 | ||||
Consumer Non-Cyclical | 20.28 | 5,731,694 | ||||
Communications | 11.89 | 3,360,274 | ||||
Industrial | 8.78 | 2,481,521 | ||||
Basic Materials | 5.29 | 1,496,278 | ||||
Technology | 3.33 | 943,901 | ||||
Consumer Cyclical | 0.26 | 72,764 | ||||
Short-Term and Other Net Assets | 1.00 | 282,410 | ||||
TOTAL | 100.00 | % | $ | 28,265,005 | ||
See notes to financial statements.
60 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
iSHARES® MSCI SPAIN INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.88% | |||||
ADVERTISING – 0.64% | |||||
Telefonica Publicidad e Informacion SA | 44,704 | $ | 292,289 | ||
292,289 | |||||
AGRICULTURE – 3.40% | |||||
Altadis SA1 | 49,610 | 1,543,450 | |||
1,543,450 | |||||
AIRLINES – 0.46% | |||||
Iberia Lineas Aereas de Espana SA1 | 78,826 | 206,922 | |||
206,922 | |||||
BANKS – 30.99% | |||||
Banco Bilbao Vizcaya Argentaria SA | 429,770 | 5,708,733 | |||
Banco Popular Espanol SA | 36,300 | 1,964,458 | |||
Banco Santander Central Hispano SA1 | 609,928 | 5,959,614 | |||
Bankinter SA1 | 12,386 | 454,441 | |||
14,087,246 | |||||
BIOTECHNOLOGY – 0.45% | |||||
Zeltia SA1 | 30,954 | 204,644 | |||
204,644 | |||||
BUILDING MATERIALS – 0.63% | |||||
Uralita SA1,2 | 75,482 | 286,208 | |||
286,208 | |||||
COMMERCIAL SERVICES – 1.89% | |||||
Abertis Infraestructuras SA1 | 47,811 | 858,788 | |||
858,788 | |||||
COMPUTERS – 0.70% | |||||
Indra Sistemas SA1 | 24,882 | 317,813 | |||
317,813 | |||||
ELECTRIC – 12.45% | |||||
Endesa SA | 121,902 | 2,254,805 | |||
Iberdrola SA | 108,328 | 2,210,421 | |||
Union Fenosa SA1 | 53,790 | 1,193,021 | |||
5,658,247 | |||||
ENERGY – ALTERNATE SOURCES – 0.57% | |||||
Gamesa Corporacion Tecnologica SA | 18,216 | 257,021 | |||
257,021 | |||||
ENGINEERING & CONSTRUCTION – 5.09% | |||||
Acciona SA1 | 5,148 | 316,259 | |||
Actividades de Construcciones y Servicios SA | 59,519 | 1,012,668 | |||
Fomento de Construcciones y Contratas SA | 15,026 | 550,024 | |||
Grupo Ferrovial SA1 | 9,504 | 434,750 | |||
2,313,701 | |||||
FOOD – 1.01% | |||||
Ebro Puleva SA | 22,953 | 264,722 | |||
Viscofan SA | 20,900 | 195,324 | |||
460,046 | |||||
FOREST PRODUCTS & PAPER – 0.53% | |||||
Grupo Empresarial ENCE SA | 8,800 | 241,378 | |||
241,378 | |||||
GAS – 2.22% | |||||
Gas Natural SDG SA1 | 42,416 | 1,009,829 | |||
1,009,829 | |||||
INSURANCE – 1.04% | |||||
Corporacion Mapfre SA1 | 41,797 | 474,434 | |||
474,434 | |||||
IRON & STEEL – 1.33% | |||||
Acerinox SA | 44,792 | 606,414 | |||
606,414 | |||||
LODGING – 0.78% | |||||
NH Hoteles SA1 | 34,210 | 354,638 | |||
354,638 | |||||
MEDIA – 1.43% | |||||
Antena 3 Television SA2 | 2,551 | 125,993 | |||
Promotora de Informaciones SA | 29,480 | 465,752 | |||
Sogecable SA1,2 | 1,562 | 56,455 | |||
648,200 | |||||
OIL & GAS – 4.99% | |||||
Repsol YPF SA | 109,890 | 2,270,338 | |||
2,270,338 | |||||
PHARMACEUTICALS – 1.07% | |||||
FAES FARMA SA1 | 32,498 | 486,576 | |||
486,576 | |||||
REAL ESTATE – 0.82% | |||||
Metrovacesa SA1 | 660 | 28,595 | |||
Sacyr Vallehermoso SA | 24,442 | 333,877 | |||
Sacyr Vallehermoso SA New2,3 | 611 | 8,346 | |||
370,818 |
SCHEDULESOF INVESTMENTS | 61 |
Schedule of Investments (Continued)
iSHARES® MSCI SPAIN INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
RETAIL – 2.19% | ||||||
Industria de Diseno Textil SA | 43,406 | $ | 996,472 | |||
996,472 | ||||||
TELECOMMUNICATIONS – 23.21% | ||||||
Telefonica SA1 | 743,121 | 10,548,383 | ||||
10,548,383 | ||||||
TRANSPORTATION – 0.78% | ||||||
Amadeus Global Travel Distribution SA Class A | 52,316 | 355,410 | ||||
355,410 | ||||||
WATER – 1.21% | ||||||
Sociedad General de Aguas de Barcelona SA Class B1 | 31,504 | 551,713 | ||||
551,713 | ||||||
TOTAL COMMON STOCKS | 45,400,978 | |||||
SHORT-TERM INVESTMENTS – 26.47% | ||||||
FLOATING RATE NOTES – 6.85% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/054,5 | $ | 52,612 | 52,604 | |||
1.52%, 10/12/044,5 | 43,843 | 43,842 | ||||
1.56%, 09/15/044,5 | 87,686 | 87,680 | ||||
1.64%, 03/15/054,5 | 43,843 | 43,862 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/044 | 65,764 | 65,763 | ||||
1.38%, 11/22/044 | 21,921 | 21,922 | ||||
1.40%, 10/29/044 | 87,686 | 87,686 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/054,5 | 87,686 | 87,674 | ||||
1.61%, 07/29/054,5 | 87,686 | 87,662 | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/054 | 87,686 | 87,661 | ||||
1.56%, 08/26/054 | 87,686 | 87,660 | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/054 | 87,686 | 87,686 | ||||
Dorada Finance Inc. | ||||||
1.61%, 07/29/054,5 | 72,779 | 72,759 | ||||
Five Finance Inc. | ||||||
1.42%, 04/29/054,5 | 70,149 | 70,144 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/044 | 43,843 | 43,828 | ||||
Security | Principal | Value | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/054 | $ | 56,119 | $ | 56,116 | ||
1.58%, 04/22/054 | 87,686 | 87,686 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/054,5 | 87,686 | 87,678 | ||||
1.57%, 09/27/044,5 | 94,701 | 94,700 | ||||
1.61%, 07/25/054,5 | 43,843 | 43,835 | ||||
Links Finance LLC | ||||||
1.55%, 04/15/054,5 | 87,686 | 87,675 | ||||
1.68%, 04/25/054 | 87,686 | 87,723 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/054 | 87,686 | 87,686 | ||||
1.63%, 12/09/044,5 | 72,779 | 72,453 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/054 | 87,686 | 87,673 | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/054,5 | 83,302 | 83,302 | ||||
Permanent Financing PLC | ||||||
1.52%, 03/10/054 | 87,686 | 87,686 | ||||
1.53%, 12/10/044 | 43,843 | 43,843 | ||||
1.55%, 06/10/054 | 39,459 | 39,459 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/044 | 87,686 | 87,684 | ||||
1.57%, 11/15/044 | 87,686 | 87,685 | ||||
1.59%, 09/15/054 | 65,764 | 65,770 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/054,5 | 32,181 | 32,179 | ||||
1.56%, 01/18/054,5 | 38,582 | 38,580 | ||||
1.59%, 07/25/054,5 | 87,686 | 87,678 | ||||
1.66%, 05/17/054,5 | 72,779 | 72,777 | ||||
1.70%, 02/25/054,5 | 49,104 | 49,099 | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/044 | 21,720 | 21,683 | ||||
1.48%, 06/15/054,5 | 43,843 | 43,835 | ||||
1.56%, 09/15/044,5 | 43,843 | 43,843 | ||||
1.56%, 07/15/054,5 | 65,764 | 65,753 | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/054 | 43,843 | 43,835 | ||||
1.55%, 04/15/054,5 | 65,764 | 65,756 | ||||
1.55%, 07/11/054 | 21,921 | 21,919 | ||||
1.56%, 11/15/044,5 | 52,612 | 52,612 | ||||
1.57%, 06/15/054,5 | 35,951 | 35,951 | ||||
1.58%, 03/29/054 | 37,705 | 37,700 | ||||
1.58%, 08/26/054,5 | 43,843 | 43,834 | ||||
1.68%, 05/20/054 | 39,459 | 39,456 | ||||
3,113,577 |
62 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI SPAIN INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
MONEY MARKET FUNDS – 5.29% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares4,6 | 1,337,924 | $ | 1,337,924 | |||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares4,6 | 964,545 | 964,545 | ||||
BlackRock Temp Cash Money Market Fund4 | 44,266 | 44,266 | ||||
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares4 | 58,942 | 58,942 | ||||
2,405,677 | ||||||
COMMERCIAL PAPER – 4.90% | ||||||
Alpine Securitization Corp. | ||||||
1.50%, 09/08/044 | $ | 43,843 | 43,830 | |||
1.51%, 09/02/044 | 39,459 | 39,457 | ||||
1.54%, 09/14/044 | 43,843 | 43,819 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/044 | 17,537 | 17,532 | ||||
1.53%, 09/16/044 | 43,140 | 43,113 | ||||
1.54%, 09/15/044 | 43,843 | 43,817 | ||||
1.54%, 09/22/044 | 21,921 | 21,902 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/044 | 43,843 | 43,830 | ||||
1.53%, 09/09/044 | 102,409 | 102,375 | ||||
1.53%, 09/13/044 | 63,130 | 63,098 | ||||
1.53%, 09/14/044 | 21,921 | 21,909 | ||||
1.54%, 09/17/044 | 26,306 | 26,288 | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/044 | 43,843 | 43,830 | ||||
1.53%, 09/15/044 | 17,537 | 17,527 | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/044 | 17,537 | 17,525 | ||||
Corporate Asset Funding | ||||||
1.42%, 09/03/044 | 26,306 | 26,304 | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/044 | 43,843 | 43,839 | ||||
Delaware Funding Corp. | ||||||
1.50%, 09/09/044 | 43,843 | 43,828 | ||||
1.53%, 09/10/044 | 70,149 | 70,122 | ||||
1.53%, 09/20/044 | 29,813 | 29,789 | ||||
Security | Principal | Value | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/044 | $ | 43,843 | $ | 43,817 | ||
1.45%, 11/09/044 | 87,686 | 87,442 | ||||
1.52%, 09/08/044 | 87,686 | 87,660 | ||||
1.59%, 12/02/044 | 87,686 | 87,330 | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/044 | 26,306 | 26,304 | ||||
1.53%, 09/07/044 | 43,843 | 43,832 | ||||
1.53%, 09/17/044 | 26,306 | 26,288 | ||||
1.53%, 09/21/044 | 21,921 | 21,903 | ||||
1.53%, 09/22/044 | 43,843 | 43,804 | ||||
1.54%, 09/14/044 | 65,764 | 65,728 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/054 | 43,843 | 43,539 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/044 | 43,843 | 43,828 | ||||
1.55%, 10/15/044 | 57,500 | 57,391 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/044 | 87,686 | 87,530 | ||||
1.44%, 10/27/044 | 87,686 | 87,489 | ||||
1.59%, 11/30/044 | 43,843 | 43,669 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/044 | 21,921 | 21,921 | ||||
1.53%, 09/20/044 | 21,921 | 21,904 | ||||
1.53%, 09/23/044 | 30,690 | 30,661 | ||||
1.54%, 09/15/044 | 52,612 | 52,580 | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/044 | 61,108 | 61,108 | ||||
1.51%, 09/08/044 | 35,074 | 35,064 | ||||
1.52%, 09/09/044 | 21,921 | 21,914 | ||||
1.53%, 09/21/044 | 43,843 | 43,806 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/044 | 26,306 | 26,291 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/044 | 48,227 | 48,227 | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/044 | 29,182 | 29,130 | ||||
1.55%, 09/16/044 | 26,306 | 26,289 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
1.54%, 09/15/044 | 35,074 | 35,053 | ||||
1.54%, 09/23/044 | 21,921 | 21,901 |
SCHEDULESOF INVESTMENTS | 63 |
Schedule of Investments (Continued)
iSHARES® MSCI SPAIN INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/044 | $ | 21,921 | $ | 21,914 | ||
1.52%, 09/10/044 | 30,690 | 30,678 | ||||
2,229,729 | ||||||
TIME DEPOSITS – 4.31% | ||||||
Abbey National Treasury Services PLC | ||||||
1.25%, 01/06/054 | 87,686 | 87,686 | ||||
1.33%, 02/10/054 | 43,843 | 43,840 | ||||
1.39%, 02/02/054 | 43,843 | 43,840 | ||||
1.39%, 04/08/054 | 61,380 | 61,375 | ||||
1.40%, 10/25/044 | 87,686 | 87,684 | ||||
Bank of New York | ||||||
1.39%, 11/01/044 | 87,686 | 87,684 | ||||
1.60%, 12/03/044 | 21,921 | 21,919 | ||||
Bank of Nova Scotia | ||||||
1.13%, 10/06/044 | 87,686 | 87,686 | ||||
1.24%, 10/07/044 | 65,764 | 65,764 | ||||
1.42%, 10/29/044 | 65,764 | 65,766 | ||||
National City Bank (Cleveland, Ohio) | ||||||
1.25%, 01/06/054 | 87,686 | 87,687 | ||||
1.49%, 08/09/054 | 87,686 | 87,661 | ||||
1.54%, 06/23/054 | 87,686 | 87,665 | ||||
1.56%, 06/10/054 | 43,843 | 43,854 | ||||
Norddeutsche Landesbank | ||||||
1.59%, 07/27/054 | 87,686 | 87,658 | ||||
Prudential Funding LLC | ||||||
1.60%, 12/01/044 | 43,843 | 43,666 | ||||
SouthTrust Bank | ||||||
1.55%, 09/01/044 | 175,372 | 175,372 | ||||
Toronto-Dominion Bank | ||||||
1.22%, 03/23/054 | 153,450 | 153,435 | ||||
1.34%, 02/10/054 | 35,074 | 35,072 | ||||
1.41%, 11/01/044 | 65,764 | 65,763 | ||||
1.53%, 09/13/044 | 43,843 | 43,843 | ||||
1.77%, 05/10/054 | 43,843 | 43,840 | ||||
1.90%, 05/11/054 | 43,843 | 43,840 | ||||
UBS Finance (Delaware) | ||||||
1.10%, 09/08/044 | 87,686 | 87,667 | ||||
1.11%, 12/17/044 | 131,529 | 131,095 | ||||
1.14%, 09/29/044 | 87,686 | 87,608 | ||||
1,958,970 | ||||||
REPURCHASE AGREEMENTS – 3.81% | ||||||
Banc of America Securities LLC | ||||||
1.59%, 09/01/044,7 | 263,058 | 263,058 | ||||
Bank of America, N.A. | ||||||
1.59%, 09/01/044,7 | 504,193 | 504,193 | ||||
Goldman Sachs & Co. | ||||||
1.59%, 09/01/044,7 | 438,429 | 438,429 | ||||
Merrill Lynch Government Securities Inc. | ||||||
1.57%, 09/01/044,7 | 87,686 | 87,686 | ||||
1.59%, 09/01/044,7 | 438,429 | 438,429 | ||||
1,731,795 | ||||||
U.S. GOVERNMENT AGENCY NOTES – 0.70% | ||||||
Federal Home Loan | ||||||
Mortgage Corp. | ||||||
1.63%, 04/15/054 | 61,380 | 61,502 | ||||
1.80%, 01/18/054 | 40,774 | 40,491 | ||||
1.80%, 01/19/054 | 43,843 | 43,536 | ||||
2.06%, 05/31/054 | 43,714 | 43,034 | ||||
Federal National Mortgage Association | ||||||
2.33%, 07/22/054 | 131,529 | 128,777 | ||||
317,340 | ||||||
MEDIUM-TERM NOTES – 0.61% | ||||||
CC USA Inc. | ||||||
1.29%, 04/15/054,5 | 87,686 | 87,680 | ||||
1.51%, 02/15/054,5 | 56,996 | 57,036 | ||||
Dorada Finance Inc. | ||||||
1.48%, 01/18/054,5 | 65,764 | 65,763 | ||||
K2 USA LLC | ||||||
1.46%, 01/12/054,5 | 43,843 | 43,841 | ||||
WhistleJacket Capital LLC | ||||||
1.32%, 02/04/054,5 | 21,921 | 21,920 | ||||
276,240 | ||||||
TOTAL SHORT-TERM INVESTMENTS | 12,033,328 | |||||
64 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI SPAIN INDEX FUND
August 31, 2004
Value | ||||
TOTAL INVESTMENTS IN SECURITIES – 126.35% | $ | 57,434,306 | ||
Other Assets, Less Liabilities – (26.35%) | (11,977,979 | ) | ||
NET ASSETS – 100.00% | $ | 45,456,327 | ||
1 | All or a portion of this security represents a security on loan. See Note 5. |
2 | Non-income earning security. |
3 | Security valued at fair value in accordance with procedures approved by the Board of Directors. See Note 1. |
4 | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
5 | Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
6 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Financial | 32.85 | % | $ | 14,932,498 | ||
Communications | 25.28 | 11,488,872 | ||||
Utilities | 15.88 | 7,219,789 | ||||
Consumer Non-Cyclical | 7.82 | 3,553,504 | ||||
Industrial | 6.50 | 2,955,319 | ||||
Energy | 5.56 | 2,527,359 | ||||
Consumer Cyclical | 3.43 | 1,558,032 | ||||
Basic Materials | 1.86 | 847,792 | ||||
Technology | 0.70 | 317,813 | ||||
Short-Term and Other Net Assets | 0.12 | 55,349 | ||||
TOTAL | 100.00 | % | $ | 45,456,327 | ||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 65 |
iSHARES® MSCI SWEDEN INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.90% | |||||
AGRICULTURE - 1.89% | |||||
Swedish Match AB1 | 51,810 | $ | 524,113 | ||
524,113 | |||||
AIRLINES - 0.32% | |||||
SAS AB1,2 | 11,638 | 89,847 | |||
89,847 | |||||
AUTO MANUFACTURERS - 7.61% | |||||
Scania AB Class B | 14,696 | 479,251 | |||
Volvo AB Class A1 | 14,300 | 468,241 | |||
Volvo AB Class B1 | 34,122 | 1,164,984 | |||
2,112,476 | |||||
BANKS - 18.60% | |||||
Nordea AB | 333,322 | 2,551,115 | |||
Skandinaviska Enskilda Banken AB Class A1 | 73,216 | 1,028,150 | |||
Svenska Handelsbanken AB Class A1 | 82,632 | 1,583,831 | |||
5,163,096 | |||||
COMMERCIAL SERVICES - 2.03% | |||||
Securitas AB Class B | 45,430 | 563,884 | |||
563,884 | |||||
COMPUTERS - 0.34% | |||||
WM-Data AB Class B | 48,642 | 92,910 | |||
92,910 | |||||
COSMETICS & PERSONAL CARE - 0.38% | |||||
Oriflame Cosmetics SA SDR2 | 4,554 | 104,260 | |||
104,260 | |||||
DIVERSIFIED FINANCIAL SERVICES - 0.72% | |||||
D Carnegie AB | 8,800 | 77,894 | |||
OM AB1,2 | 11,550 | 122,221 | |||
200,115 | |||||
ENGINEERING & CONSTRUCTION - 1.84% | |||||
Skanska AB Class B1 | 56,694 | 509,377 | |||
509,377 | |||||
FOOD - 0.41% | |||||
Axfood AB | 4,488 | 114,996 | |||
114,996 | |||||
FOREST PRODUCTS & PAPER - 5.28% | |||||
Billerud AB | 8,272 | 128,273 | |||
Holmen AB Class B1 | 7,568 | 216,076 | |||
Svenska Cellulosa AB Class B | 29,876 | 1,121,424 | |||
1,465,773 | |||||
HAND & MACHINE TOOLS - 4.18% | |||||
Sandvik AB1 | 34,012 | 1,161,229 | |||
1,161,229 | |||||
HEALTH CARE - PRODUCTS - 2.95% | |||||
Elekta AB Class B2 | 4,378 | 99,357 | |||
Gambro AB Class A | 27,082 | 290,185 | |||
Gambro AB Class B1 | 14,652 | 154,559 | |||
Getinge AB Class B | 24,860 | 275,476 | |||
819,577 | |||||
HEALTH CARE - SERVICES - 0.38% | |||||
Capio AB2 | 11,484 | 106,619 | |||
106,619 | |||||
HOME FURNISHINGS - 2.87% | |||||
Electrolux AB Series B | 43,464 | 795,482 | |||
795,482 | |||||
INSURANCE - 2.04% | |||||
Skandia Forsakrings AB1 | 157,256 | 567,250 | |||
567,250 | |||||
IRON & STEEL - 0.84% | |||||
Svenskt Stal AB Class A | 9,218 | 161,347 | |||
Svenskt Stal AB Class B | 4,224 | 70,561 | |||
231,908 | |||||
MACHINERY - CONSTRUCTION & MINING - 3.45% | |||||
Atlas Copco AB Class A1 | 17,204 | 609,129 | |||
Atlas Copco AB Class B | 10,758 | 347,965 | |||
957,094 | |||||
MANUFACTURING - 1.29% | |||||
Alfa Laval AB | 12,804 | 180,655 | |||
Trelleborg AB Class B | 11,902 | 178,226 | |||
358,881 | |||||
MEDIA - 1.19% | |||||
Eniro AB1 | 24,309 | 183,625 | |||
Modern Times Group AB Class B2 | 7,788 | 147,720 | |||
331,345 |
66 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI SWEDEN INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
METAL FABRICATE & HARDWARE - 4.20% | ||||||
Assa Abloy AB Class B | 45,364 | $ | 544,950 | |||
Hoganas AB Class B | 4,136 | 93,865 | ||||
SKF AB Class B1 | 14,322 | 527,105 | ||||
1,165,920 | ||||||
OIL & GAS - 0.45% | ||||||
Lundin Petroleum AB1,2 | 25,102 | 124,628 | ||||
124,628 | ||||||
REAL ESTATE - 1.27% | ||||||
Castellum AB | 6,468 | 161,855 | ||||
Fabege AB2 | 6,330 | 91,839 | ||||
Wihlborgs Fastigheter AB | 7,040 | 97,924 | ||||
351,618 | ||||||
RETAIL - 6.74% | ||||||
Hennes & Mauritz AB Class B1 | 71,940 | 1,872,041 | ||||
1,872,041 | ||||||
TELECOMMUNICATIONS - 28.63% | ||||||
Tele2 AB Class B1 | 14,916 | 561,871 | ||||
Telefonaktiebolaget LM | ||||||
Ericsson Class B2 | 2,248,180 | 6,044,782 | ||||
TeliaSonera AB2 | 284,240 | 1,339,327 | ||||
7,945,980 | ||||||
TOTAL COMMON STOCKS | 27,730,419 | |||||
SHORT-TERM INVESTMENTS - 35.64% | ||||||
FLOATING RATE NOTES - 9.23% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/053,4 | $ | 43,276 | 43,258 | |||
1.52%, 10/12/043,4 | 36,063 | 36,063 | ||||
1.56%, 09/15/043,4 | 72,126 | 72,126 | ||||
1.64%, 03/15/053,4 | 36,063 | 36,079 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/043 | 54,095 | 54,094 | ||||
1.38%, 11/22/043 | 18,032 | 18,032 | ||||
1.40%, 10/29/043 | 72,126 | 72,126 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/053,4 | 72,126 | 72,116 | ||||
1.61%, 07/29/053,4 | 72,126 | 72,106 | ||||
Security | Principal | Value | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/053 | $ | 72,126 | $ | 72,106 | ||
1.56%, 08/26/053 | 72,126 | 72,105 | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/053 | 72,126 | 72,126 | ||||
Dorada Finance Inc. | ||||||
1.61%, 07/29/053,4 | 59,865 | 59,848 | ||||
Five Finance Inc. | ||||||
1.42%, 04/29/053,4 | 57,701 | 57,697 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/043 | 36,063 | 36,051 | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/053 | 46,161 | 46,158 | ||||
1.58%, 04/22/053 | 72,126 | 72,126 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/053,4 | 72,126 | 72,119 | ||||
1.57%, 09/27/043,4 | 77,896 | 77,895 | ||||
1.61%, 07/25/053,4 | 36,063 | 36,057 | ||||
Links Finance LLC | ||||||
1.55%, 04/15/053,4 | 72,126 | 72,117 | ||||
1.68%, 04/25/053 | 72,126 | 72,157 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/053 | 72,126 | 72,126 | ||||
1.63%, 12/09/043,4 | 59,865 | 59,596 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/053 | 72,126 | 72,115 | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/053,4 | 68,520 | 68,520 | ||||
Permanent Financing PLC | ||||||
1.52%, 03/10/053 | 72,126 | 72,126 | ||||
1.53%, 12/10/043 | 36,063 | 36,064 | ||||
1.55%, 06/10/053 | 32,457 | 32,457 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/043 | 72,126 | 72,125 | ||||
1.57%, 11/15/043 | 72,126 | 72,125 | ||||
1.59%, 09/15/053 | 54,095 | 54,099 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/053,4 | 26,470 | 26,469 | ||||
1.56%, 01/18/053,4 | 31,735 | 31,734 | ||||
1.59%, 07/25/053,4 | 72,126 | 72,120 | ||||
1.66%, 05/17/053,4 | 59,865 | 59,862 | ||||
1.70%, 02/25/053,4 | 40,391 | 40,387 |
SCHEDULESOF INVESTMENTS | 67 |
Schedule of Investments (Continued)
iSHARES® MSCI SWEDEN INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/043 | $ | 17,866 | $ | 17,835 | ||
1.48%, 06/15/053,4 | 36,063 | 36,057 | ||||
1.56%, 09/15/043,4 | 36,063 | 36,063 | ||||
1.56%, 07/15/053,4 | 54,095 | 54,085 | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/053 | 36,063 | 36,056 | ||||
1.55%, 04/15/053,4 | 54,095 | 54,088 | ||||
1.55%, 07/11/053 | 18,032 | 18,030 | ||||
1.56%, 11/15/043,4 | 43,276 | 43,276 | ||||
1.57%, 06/15/053,4 | 29,572 | 29,572 | ||||
1.58%, 03/29/053 | 31,014 | 31,010 | ||||
1.58%, 08/26/053,4 | 36,063 | 36,056 | ||||
1.68%, 05/20/053 | 32,457 | 32,454 | ||||
2,561,069 | ||||||
MONEY MARKET FUNDS – 7.11% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5 | 1,095,736 | 1,095,736 | ||||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5 | 793,386 | 793,386 | ||||
BlackRock Temp Cash Money Market Fund3 | 36,410 | 36,410 | ||||
Short-Term Investment Co.- Prime Money Market Portfolio, Institutional Shares3 | 48,483 | 48,483 | ||||
1,974,015 | ||||||
COMMERCIAL PAPER – 6.61% | ||||||
Alpine Securitization Corp. | ||||||
1.50%, 09/08/043 | 36,063 | 36,052 | ||||
1.51%, 09/02/043 | 32,457 | 32,455 | ||||
1.54%, 09/14/043 | 36,063 | 36,043 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/043 | 14,425 | 14,421 | ||||
1.53%, 09/16/043 | 35,485 | 35,462 | ||||
1.54%, 09/15/043 | 36,063 | 36,042 | ||||
1.54%, 09/22/043 | 18,032 | 18,016 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/043 | 36,063 | 36,052 | ||||
1.53%, 09/09/043 | 84,237 | 84,208 | ||||
Security | Principal | Value | ||||
1.53%, 09/13/043 | $ | 51,928 | $ | 51,901 | ||
1.53%, 09/14/043 | 18,032 | 18,022 | ||||
1.54%, 09/17/043 | 21,638 | 21,623 | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/043 | 36,063 | 36,052 | ||||
1.53%, 09/15/043 | 14,425 | 14,417 | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/043 | 14,425 | 14,415 | ||||
Corporate Asset Funding | ||||||
1.42%, 09/03/043 | 21,638 | 21,636 | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/043 | 36,063 | 36,060 | ||||
Delaware Funding Corp. | ||||||
1.50%, 09/09/043 | 36,063 | 36,051 | ||||
1.53%, 09/10/043 | 57,701 | 57,679 | ||||
1.53%, 09/20/043 | 24,523 | 24,503 | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/043 | 36,063 | 36,042 | ||||
1.45%, 11/09/043 | 72,126 | 71,926 | ||||
1.52%, 09/08/043 | 72,126 | 72,105 | ||||
1.59%, 12/02/043 | 72,126 | 71,833 | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/043 | 21,638 | 21,636 | ||||
1.53%, 09/07/043 | 36,063 | 36,054 | ||||
1.53%, 09/17/043 | 21,638 | 21,623 | ||||
1.53%, 09/21/043 | 18,032 | 18,016 | ||||
1.53%, 09/22/043 | 36,063 | 36,031 | ||||
1.54%, 09/14/043 | 54,095 | 54,064 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/053 | 36,063 | 35,813 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/043 | 36,063 | 36,051 | ||||
1.55%, 10/15/043 | 47,297 | 47,207 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/043 | 72,126 | 71,998 | ||||
1.44%, 10/27/043 | 72,126 | 71,964 | ||||
1.59%, 11/30/043 | 36,063 | 35,920 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/043 | 18,032 | 18,031 | ||||
1.53%, 09/20/043 | 18,032 | 18,017 | ||||
1.53%, 09/23/043 | 25,244 | 25,221 | ||||
1.54%, 09/15/043 | 43,276 | 43,250 |
68 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI SWEDEN INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/043 | $ | 50,265 | $ | 50,265 | ||
1.51%, 09/08/043 | 28,850 | 28,842 | ||||
1.52%, 09/09/043 | 18,032 | 18,025 | ||||
1.53%, 09/21/043 | 36,063 | 36,032 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/043 | 21,638 | 21,626 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/043 | 39,669 | 39,670 | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/043 | 24,004 | 23,961 | ||||
1.55%, 09/16/043 | 21,638 | 21,624 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
1.54%, 09/15/043 | 28,850 | 28,833 | ||||
1.54%, 09/23/043 | 18,032 | 18,015 | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/043 | 18,032 | 18,025 | ||||
1.52%, 09/10/043 | 25,244 | 25,235 | ||||
1,834,065 | ||||||
TIME DEPOSITS – 5.80% | ||||||
Abbey National Treasury Services PLC | ||||||
1.25%, 01/06/053 | 72,126 | 72,126 | ||||
1.33%, 02/10/053 | 36,063 | 36,061 | ||||
1.39%, 02/02/053 | 36,063 | 36,061 | ||||
1.39%, 04/08/053 | 50,488 | 50,484 | ||||
1.40%, 10/25/043 | 72,126 | 72,124 | ||||
Bank of New York | ||||||
1.39%, 11/01/043 | 72,126 | 72,125 | ||||
1.60%, 12/03/043 | 18,032 | 18,029 | ||||
Bank of Nova Scotia | ||||||
1.13%, 10/06/043 | 72,126 | 72,126 | ||||
1.24%, 10/07/043 | 54,095 | 54,094 | ||||
1.42%, 10/29/043 | 54,095 | 54,095 | ||||
National City Bank (Cleveland, Ohio) | ||||||
1.25%, 01/06/053 | 72,126 | 72,127 | ||||
1.49%, 08/09/053 | 72,126 | 72,106 | ||||
1.54%, 06/23/053 | 72,126 | 72,109 | ||||
1.56%, 06/10/053 | 36,063 | 36,072 | ||||
Norddeutsche Landesbank | ||||||
1.59%, 07/27/053 | 72,126 | 72,103 | ||||
Prudential Funding LLC | ||||||
1.60%, 12/01/043 | 36,063 | 35,917 | ||||
SouthTrust Bank | ||||||
1.55%, 09/01/043 | 144,252 | 144,252 | ||||
Toronto-Dominion Bank | ||||||
1.22%, 03/23/053 | 126,221 | 126,208 | ||||
1.34%, 02/10/053 | 28,850 | 28,848 | ||||
1.41%, 11/01/043 | 54,095 | 54,094 | ||||
1.53%, 09/13/043 | 36,063 | 36,064 | ||||
1.77%, 05/10/053 | 36,063 | 36,061 | ||||
1.90%, 05/11/053 | 36,063 | 36,061 | ||||
UBS Finance (Delaware) | ||||||
1.10%, 09/08/043 | 72,126 | 72,111 | ||||
1.11%, 12/17/043 | 108,189 | 107,832 | ||||
1.14%, 09/29/043 | 72,126 | 72,062 | ||||
1,611,352 | ||||||
REPURCHASE AGREEMENTS – 5.13% | ||||||
Banc of America Securities LLC | ||||||
1.59%, 09/01/043,6 | 216,378 | 216,378 | ||||
Bank of America, N.A | ||||||
1.59%, 09/01/043,6 | 414,725 | 414,725 | ||||
Goldman Sachs & Co. | ||||||
1.59%, 09/01/043,6 | 360,630 | 360,630 | ||||
Merrill Lynch Government Securities Inc. | ||||||
1.57%, 09/01/043,6 | 72,126 | 72,126 | ||||
1.59%, 09/01/043,6 | 360,630 | 360,630 | ||||
1,424,489 | ||||||
U.S. GOVERNMENT AGENCY NOTES – 0.94% | ||||||
Federal Home Loan Mortgage Corp. | ||||||
1.63%, 04/15/053 | 50,488 | 50,588 | ||||
1.80%, 01/18/053 | 33,539 | 33,306 | ||||
1.80%, 01/19/053 | 36,063 | 35,811 | ||||
2.06%, 05/31/053 | 35,957 | 35,397 | ||||
Federal National Mortgage Association | ||||||
2.33%, 07/22/053 | 108,189 | 105,925 | ||||
261,027 |
SCHEDULESOF INVESTMENTS | 69 |
Schedule of Investments (Continued)
iSHARES® MSCI SWEDEN INDEX FUND
August 31, 2004
Security | Principal | Value | |||||
MEDIUM-TERM NOTES – 0.82% | |||||||
CC USA Inc. | |||||||
1.29%, 04/15/053,4 | $ | 72,126 | $ | 72,122 | |||
1.51%, 02/15/053,4 | 46,882 | 46,915 | |||||
Dorada Finance Inc. | |||||||
1.48%, 01/18/053,4 | 54,095 | 54,093 | |||||
K2 USA LLC | |||||||
1.46%, 01/12/053,4 | 36,063 | 36,062 | |||||
WhistleJacket Capital LLC | |||||||
1.32%, 02/04/053,4 | 18,032 | 18,030 | |||||
227,222 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 9,893,239 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 135.54% | 37,623,658 | ||||||
Other Assets, Less Liabilities – (35.54%) | (9,865,461 | ) | |||||
NET ASSETS – 100.00% | $ | 27,758,197 | |||||
SDR - Swedish Depositary Receipts
1 | All or a portion of this security represents a security on loan. See Note 5. |
2 | Non-income earning security. |
3 | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
4 | Security exempt from registration pursuant to Rule-144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
5 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
6 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Communications | 29.82 | % | $ | 8,277,325 | ||
Financial | 22.63 | 6,282,079 | ||||
Consumer Cyclical | 17.54 | 4,869,846 | ||||
Industrial | 14.96 | 4,152,501 | ||||
Consumer Non-Cyclical | 8.04 | 2,233,449 | ||||
Basic Materials | 6.12 | 1,697,681 | ||||
Energy | 0.45 | 124,628 | ||||
Technology | 0.34 | 92,910 | ||||
Short-Term and Other Net Assets | 0.10 | 27,778 | ||||
TOTAL | 100.00 | % | $ | 27,758,197 | ||
See Notes to Financial Statements.
70 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
iSHARES® MSCI SWITZERLAND INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.73% | |||||
BANKS – 15.91% | |||||
Banque Cantonale Vaudoise | 2,346 | $ | 266,875 | ||
Credit Suisse Group1 | 61,722 | 1,922,652 | |||
Julius Baer Holding AG2 | 1,718 | 461,322 | |||
UBS AG Registered | 55,991 | 3,748,776 | |||
Vontobel Holding AG Registered | 13,800 | 269,895 | |||
6,669,520 | |||||
BUILDING MATERIALS – 4.26% | |||||
Geberit AG Registered | 184 | 130,884 | |||
Holcim Ltd. Registered | 30,935 | 1,655,250 | |||
1,786,134 | |||||
CHEMICALS – 8.67% | |||||
Ciba Specialty Chemicals AG Registered1 | 13,690 | 831,300 | |||
Clariant AG Registered | 13,846 | 168,155 | |||
Givaudan SA Registered | 2,093 | 1,295,694 | |||
Lonza Group AG Registered | 3,590 | 159,109 | |||
Syngenta AG1 | 13,156 | 1,180,155 | |||
3,634,413 | |||||
COMMERCIAL SERVICES – 2.12% | |||||
Adecco SA Registered | 10,512 | 486,617 | |||
Societe Generale de Surveillance Holding SA | 736 | 401,650 | |||
888,267 | |||||
COMPUTERS – 0.36% | |||||
Logitech International SA Registered1 | 3,360 | 151,565 | |||
151,565 | |||||
ENGINEERING & CONSTRUCTION – 1.78% | |||||
ABB Ltd.1 | 132,095 | 746,912 | |||
746,912 | |||||
FOOD – 11.53% | |||||
Nestle SA Registered | 20,470 | 4,834,797 | |||
4,834,797 | |||||
HAND & MACHINE TOOLS – 2.21% | |||||
Schindler Holding AG Participation Certificates | 2,208 | 605,957 | |||
Schindler Holding AG Registered | 1,012 | 319,230 | |||
925,187 | |||||
HEALTH CARE – PRODUCTS – 4.73% | |||||
Nobel Biocare Holding AG | 2,576 | 363,632 | |||
Phonak Holding AG Registered | 5,796 | 174,604 | |||
Straumann Holding AG Registered | 851 | 166,435 | |||
Synthes Inc. | 11,960 | 1,278,010 | |||
1,982,681 | |||||
INSURANCE – 8.06% | |||||
Swiss Reinsurance Co. | 28,560 | 1,614,883 | |||
Zurich Financial Services AG1 | 12,661 | 1,764,782 | |||
3,379,665 | |||||
LEISURE TIME – 0.02% | |||||
Kuoni Reisen Holding AG Registered | 23 | 8,325 | |||
8,325 | |||||
MANUFACTURING – 0.31% | |||||
Sulzer AG Registered | 460 | 128,780 | |||
128,780 | |||||
PHARMACEUTICALS – 30.18% | |||||
Novartis AG | 177,888 | 8,213,669 | |||
Roche Holding AG Genusschein2 | 37,053 | 3,586,811 | |||
Serono SA | 1,334 | 850,023 | |||
12,650,503 | |||||
RETAIL – 6.61% | |||||
Compagnie Financiere Richemont AG Class-A | 46,000 | 1,173,534 | |||
Swatch Group (The) AG Class-B2 | 5,198 | 638,452 | |||
Swatch Group (The) AG Registered | 23,299 | 593,476 | |||
Valora Holding AG Registered | 1,679 | 366,770 | |||
2,772,232 | |||||
TELECOMMUNICATIONS – 2.98% | |||||
Kudelski SA Bearer1 | 1,909 | 55,100 | |||
Swisscom AG Registered2 | 3,611 | 1,191,754 | |||
1,246,854 | |||||
TOTAL COMMON STOCKS | 41,805,835 |
SCHEDULESOF INVESTMENTS | 71 |
Schedule of Investments (Continued)
iSHARES® MSCI SWITZERLAND INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
SHORT-TERM INVESTMENTS – 3.85% | ||||||
FLOATING RATE NOTES – 0.98% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/053,4 | $ | 6,976 | $ | 6,975 | ||
1.52%, 10/12/043,4 | 5,813 | 5,813 | ||||
1.56%, 09/15/043,4 | 11,627 | 11,627 | ||||
1.64%, 03/15/053,4 | 5,813 | 5,816 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/043 | 8,720 | 8,720 | ||||
1.38%, 11/22/043 | 2,907 | 2,907 | ||||
1.40%, 10/29/043 | 11,627 | 11,627 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/053,4 | 11,627 | 11,625 | ||||
1.61%, 07/29/053,4 | 11,627 | 11,623 | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/053 | 11,627 | 11,623 | ||||
1.56%, 08/26/053 | 11,627 | 11,623 | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/053 | 11,627 | 11,627 | ||||
Dorada Finance Inc. | ||||||
1.61%, 07/29/053,4 | 9,650 | 9,647 | ||||
Five Finance Inc. | ||||||
1.42%, 04/29/053,4 | 9,301 | 9,301 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/043 | 5,813 | 5,811 | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/053 | 7,441 | 7,441 | ||||
1.58%, 04/22/053 | 11,627 | 11,627 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/053,4 | 11,627 | 11,625 | ||||
1.57%, 09/27/043,4 | 12,557 | 12,557 | ||||
1.61%, 07/25/053,4 | 5,813 | 5,812 | ||||
Links Finance LLC | ||||||
1.55%, 04/15/053,4 | 11,627 | 11,625 | ||||
1.68%, 04/25/053 | 11,627 | 11,631 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/053 | 11,627 | 11,627 | ||||
1.63%, 12/09/043,4 | 9,650 | 9,607 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/053 | 11,627 | 11,625 | ||||
Security | Shares or Principal | Value | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/053,4 | $ | 11,045 | $ | 11,045 | ||
Permanent Financing PLC | ||||||
1.52%, 03/10/053 | 11,627 | 11,627 | ||||
1.53%, 12/10/043 | 5,813 | 5,813 | ||||
1.55%, 06/10/053 | 5,232 | 5,232 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/043 | 11,627 | 11,626 | ||||
1.57%, 11/15/043 | 11,627 | 11,626 | ||||
1.59%, 09/15/053 | 8,720 | 8,721 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/053,4 | 4,267 | 4,267 | ||||
1.56%, 01/18/053,4 | 5,116 | 5,116 | ||||
1.59%, 07/25/053,4 | 11,627 | 11,626 | ||||
1.66%, 05/17/053,4 | 9,650 | 9,650 | ||||
1.70%, 02/25/053,4 | 6,511 | 6,510 | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/043 | 2,880 | 2,875 | ||||
1.48%, 06/15/053,4 | 5,813 | 5,812 | ||||
1.56%, 09/15/043,4 | 5,813 | 5,813 | ||||
1.56%, 07/15/053,4 | 8,720 | 8,719 | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/053 | 5,813 | 5,812 | ||||
1.55%, 04/15/053,4 | 8,720 | 8,719 | ||||
1.55%, 07/11/053 | 2,907 | 2,906 | ||||
1.56%, 11/15/043,4 | 6,976 | 6,976 | ||||
1.57%, 06/15/053,4 | 4,767 | 4,767 | ||||
1.58%, 03/29/053 | 4,999 | 4,999 | ||||
1.58%, 08/26/053,4 | 5,813 | 5,812 | ||||
1.68%, 05/20/053 | 5,232 | 5,232 | ||||
412,843 | ||||||
MONEY MARKET FUNDS – 0.80% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5 | 195,904 | 195,904 | ||||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5 | 127,893 | 127,893 | ||||
BlackRock Temp Cash Money Market Fund3 | 5,869 | 5,869 | ||||
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3 | 7,815 | 7,815 | ||||
337,481 |
72 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI SWITZERLAND INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
COMMERCIAL PAPER – 0.71% | ||||||
Alpine Securitization Corp. | ||||||
1.50%, 09/08/043 | $ | 5,813 | 5,812 | |||
1.51%, 09/02/043 | 5,232 | 5,232 | ||||
1.54%, 09/14/043 | 5,813 | 5,810 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/043 | 2,325 | 2,325 | ||||
1.53%, 09/16/043 | 5,720 | 5,717 | ||||
1.54%, 09/15/043 | 5,813 | 5,810 | ||||
1.54%, 09/22/043 | 2,907 | 2,904 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/043 | 5,813 | 5,812 | ||||
1.53%, 09/09/043 | 13,579 | 13,574 | ||||
1.53%, 09/13/043 | 8,371 | 8,366 | ||||
1.53%, 09/14/043 | 2,907 | 2,905 | ||||
1.54%, 09/17/043 | 3,488 | 3,486 | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/043 | 5,813 | 5,812 | ||||
1.53%, 09/15/043 | 2,325 | 2,324 | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/043 | 2,325 | 2,324 | ||||
Corporate Asset Funding | ||||||
1.42%, 09/03/043 | 3,488 | 3,488 | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/043 | 5,813 | 5,813 | ||||
Delaware Funding Corp. | ||||||
1.50%, 09/09/043 | 5,813 | 5,811 | ||||
1.53%, 09/10/043 | 9,301 | 9,298 | ||||
1.53%, 09/20/043 | 3,953 | 3,950 | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/043 | 5,813 | 5,810 | ||||
1.45%, 11/09/043 | 11,627 | 11,594 | ||||
1.52%, 09/08/043 | 11,627 | 11,623 | ||||
1.59%, 12/02/043 | 11,627 | 11,579 | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/043 | 3,488 | 3,488 | ||||
1.53%, 09/07/043 | 5,813 | 5,812 | ||||
Security | Principal | Value | ||||
1.53%, 09/17/043 | $ | 3,488 | $ | 3,486 | ||
1.53%, 09/21/043 | 2,907 | 2,904 | ||||
1.53%, 09/22/043 | 5,813 | 5,809 | ||||
1.54%, 09/14/043 | 8,715 | 8,715 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/053 | 5,813 | 5,773 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/043 | 5,813 | 5,811 | ||||
1.55%, 10/15/043 | 7,624 | 7,610 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/043 | 11,627 | 11,606 | ||||
1.44%, 10/27/043 | 11,627 | 11,601 | ||||
1.59%, 11/30/043 | 5,813 | 5,790 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/043 | 2,907 | 2,907 | ||||
1.53%, 09/20/043 | 2,907 | 2,905 | ||||
1.53%, 09/23/043 | 4,069 | 4,066 | ||||
1.54%, 09/15/043 | 6,976 | 6,972 | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/043 | 8,103 | 8,103 | ||||
1.51%, 09/08/043 | 4,651 | 4,649 | ||||
1.52%, 09/09/043 | 2,907 | 2,906 | ||||
1.53%, 09/21/043 | 5,813 | 5,808 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/043 | 3,488 | 3,486 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/043 | 6,395 | 6,395 | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/043 | 3,869 | 3,862 | ||||
1.55%, 09/16/043 | 3,488 | 3,486 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
1.54%, 09/15/043 | 4,651 | 4,648 | ||||
1.54%, 09/23/043 | 2,907 | 2,904 | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/043 | 2,907 | 2,906 | ||||
1.52%, 09/10/043 | 4,069 | 4,068 | ||||
295,655 | ||||||
TIME DEPOSITS – 0.62% | ||||||
Abbey National Treasury Services PLC | ||||||
1.25%, 01/06/053 | 11,627 | 11,612 |
SCHEDULESOF INVESTMENTS | 73 |
Schedule of Investments (Continued)
iSHARES® MSCI SWITZERLAND INDEX FUND
August 31, 2004
Security | Principal | Value | |||||
1.33%, 02/10/053 | $ | 5,813 | $ | 5,813 | |||
1.39%, 02/02/053 | 5,813 | 5,813 | |||||
1.39%, 04/08/053 | 8,139 | 8,138 | |||||
1.40%, 10/25/043 | 11,627 | 11,626 | |||||
Bank of New York | |||||||
1.39%, 11/01/043 | 11,627 | 11,626 | |||||
1.60%, 12/03/043 | 2,907 | 2,906 | |||||
Bank of Nova Scotia | |||||||
1.13%, 10/06/043 | 11,627 | 11,627 | |||||
1.24%, 10/07/043 | 8,720 | 8,720 | |||||
1.42%, 10/29/043 | 8,720 | 8,720 | |||||
National City Bank (Cleveland, Ohio) | |||||||
1.25%, 01/06/053 | 11,627 | 11,627 | |||||
1.49%, 08/09/053 | 11,627 | 11,623 | |||||
1.54%, 06/23/053 | 11,627 | 11,624 | |||||
1.56%, 06/10/053 | 5,813 | 5,815 | |||||
Norddeutsche Landesbank | |||||||
1.59%, 07/27/053 | 11,627 | 11,623 | |||||
Prudential Funding LLC | |||||||
1.60%, 12/01/043 | 5,813 | 5,790 | |||||
SouthTrust Bank | |||||||
1.55%, 09/01/043 | 23,253 | 23,253 | |||||
Toronto-Dominion Bank | |||||||
1.22%, 03/23/053 | 20,347 | 20,345 | |||||
1.34%, 02/10/053 | 4,651 | 4,650 | |||||
1.41%, 11/01/043 | 8,720 | 8,720 | |||||
1.53%, 09/13/043 | 5,813 | 5,813 | |||||
1.77%, 05/10/053 | 5,813 | 5,813 | |||||
1.90%, 05/11/053 | 5,813 | 5,813 | |||||
UBS Finance (Delaware) | |||||||
1.10%, 09/08/043 | 11,627 | 11,625 | |||||
1.11%, 12/17/043 | 17,440 | 17,382 | |||||
1.14%, 09/29/043 | 11,627 | 11,616 | |||||
259,733 | |||||||
REPURCHASE AGREEMENTS – 0.55% | |||||||
Banc of America Securities LLC | |||||||
1.59%, 09/01/043,6 | 34,880 | 34,880 | |||||
Bank of America, N.A. | |||||||
1.59%, 09/01/043,6 | 66,853 | 66,853 | |||||
Goldman Sachs & Co. | |||||||
1.59%, 09/01/043,6 | 58,133 | 58,133 | |||||
Merrill Lynch Government Securities Inc. | |||||||
1.57%, 09/01/043,6 | 11,627 | 11,627 | |||||
1.59%, 09/01/043,6 | 58,133 | 58,133 | |||||
229,626 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.10% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.63%, 04/15/053 | 8,139 | 8,155 | |||||
1.80%, 01/18/053 | 5,406 | 5,369 | |||||
1.80%, 01/19/053 | 5,813 | 5,773 | |||||
2.06%, 05/31/053 | 5,796 | 5,706 | |||||
Federal National Mortgage Association | |||||||
2.33%, 07/22/053 | 17,440 | 17,075 | |||||
42,078 | |||||||
MEDIUM-TERM NOTES – 0.09% | |||||||
CC USA Inc. | |||||||
1.29%, 04/15/053,4 | 11,627 | 11,626 | |||||
1.51%, 02/15/053,4 | 7,557 | 7,563 | |||||
Dorada Finance Inc. | |||||||
1.48%, 01/18/053,4 | 8,720 | 8,720 | |||||
K2 USA LLC | |||||||
1.46%, 01/12/053,4 | 5,813 | 5,813 | |||||
WhistleJacket Capital LLC | |||||||
1.32%, 02/04/053,4 | 2,907 | 2,907 | |||||
36,629 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 1,614,045 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 103.58% | 43,419,880 | ||||||
Other Assets, Less Liabilities – (3.58%) | (1,499,711 | ) | |||||
NET ASSETS – 100.00% | $ | 41,920,169 | |||||
1 | Non-income earning security. |
2 | All or a portion of this security represents a security on loan. See Note 5. |
3 | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
4 | Security exempt from registration pursuant to Rule-144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
5 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
6 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
74 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI SWITZERLAND INDEX FUND
August 31, 2004
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Consumer Non-Cyclical | 48.56 | % | $ | 20,356,248 | ||
Financial | 23.97 | 10,049,185 | ||||
Basic Materials | 8.67 | 3,634,413 | ||||
Industrial | 8.56 | 3,587,013 | ||||
Consumer Cyclical | 6.63 | 2,780,557 | ||||
Communications | 2.98 | 1,246,854 | ||||
Technology | 0.36 | 151,565 | ||||
Short-Term and Other Net Assets | 0.27 | 114,334 | ||||
TOTAL | 100.00 | % | $ | 41,920,169 | ||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 75 |
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.26% | |||||
ADVERTISING – 0.61% | |||||
Aegis Group PLC | 253,296 | $ | 380,482 | ||
WPP Group PLC | 265,104 | 2,365,468 | |||
2,745,950 | |||||
AEROSPACE & DEFENSE – 1.13% | |||||
BAE Systems PLC | 715,248 | 2,579,824 | |||
Cobham PLC | 26,496 | 648,244 | |||
Meggitt PLC | 101,088 | 412,805 | |||
Rolls-Royce Group PLC | 353,376 | 1,473,248 | |||
5,114,121 | |||||
AGRICULTURE – 2.03% | |||||
British American Tobacco PLC | 361,728 | 5,449,869 | |||
Imperial Tobacco Group PLC | 170,208 | 3,747,835 | |||
9,197,704 | |||||
AIRLINES – 0.11% | |||||
British Airways PLC1 | 125,712 | 506,575 | |||
506,575 | |||||
AUTO PARTS & EQUIPMENT – 0.15% | |||||
GKN PLC | 174,528 | 693,867 | |||
693,867 | |||||
BANKS – 20.84% | |||||
Barclays PLC2 | 1,510,416 | 13,979,803 | |||
HBOS PLC | 910,656 | 11,131,736 | |||
HSBC Holdings PLC | 2,578,896 | 40,037,202 | |||
Lloyds TSB Group PLC | 1,304,784 | 9,787,996 | |||
Royal Bank of Scotland Group PLC | 697,824 | 19,420,272 | |||
94,357,009 | |||||
BEVERAGES – 2.74% | |||||
Diageo PLC | 714,528 | 8,785,710 | |||
SABMiller PLC | 186,912 | 2,323,455 | |||
Scottish & Newcastle PLC | 184,464 | 1,314,922 | |||
12,424,087 | |||||
BUILDING MATERIALS – 0.69% | |||||
BPB PLC | 115,200 | 837,764 | |||
Hanson PLC | 172,368 | 1,173,658 | |||
Pilkington PLC | 247,536 | 395,208 | |||
RMC Group PLC | 63,792 | 729,291 | |||
3,135,921 | |||||
CHEMICALS – 0.84% | |||||
BOC Group PLC | 116,784 | 1,879,242 | |||
Imperial Chemical Industries PLC | 277,920 | 1,099,921 | |||
Johnson Matthey PLC | 51,408 | 839,260 | |||
3,818,423 | |||||
COMMERCIAL SERVICES – 1.67% | |||||
Aggreko PLC | 61,632 | 168,527 | |||
Brambles Industries PLC | 169,776 | 740,640 | |||
Bunzl PLC | 102,816 | 784,234 | |||
Capita Group PLC | 152,640 | 870,456 | |||
Davis Service Group PLC | 47,232 | 333,075 | |||
De La Rue PLC | 41,184 | 230,784 | |||
Group 4 Securicor PLC1 | 253,259 | 531,913 | |||
Hays PLC | 414,720 | 884,082 | |||
Intertek Group PLC | 36,432 | 374,885 | |||
Kidde PLC | 195,984 | 415,146 | |||
Rank Group PLC | 139,392 | 719,679 | |||
Rentokil Initial PLC | 430,128 | 1,162,603 | |||
Serco Group PLC | 94,176 | 337,142 | |||
7,553,166 | |||||
COMPUTERS – 0.12% | |||||
LogicaCMG PLC | 180,291 | 520,557 | |||
520,557 | |||||
DISTRIBUTION & WHOLESALE – 0.57% | |||||
Inchcape PLC | 16,992 | 507,425 | |||
Wolseley PLC | 136,224 | 2,079,335 | |||
2,586,760 | |||||
DIVERSIFIED FINANCIAL SERVICES – 1.10% | |||||
AMVESCAP PLC | 163,584 | 853,410 | |||
Cattles PLC | 80,064 | 460,900 | |||
Close Brothers Group PLC | 27,648 | 348,162 | |||
ICAP PLC | 105,408 | 426,179 | |||
London Stock Exchange PLC | 57,997 | 372,471 | |||
Man Group PLC | 64,368 | 1,531,965 | |||
Provident Financial PLC | 60,624 | 648,359 | |||
Schroders PLC | 30,816 | 337,885 | |||
4,979,331 | |||||
ELECTRIC – 2.76% | |||||
International Power PLC1 | 259,776 | 635,561 | |||
International Power PLC Rights1 | 82,154 | 77,960 |
76 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2004
Security | Shares | Value | |||
National Grid Transco PLC | 721,296 | $ | 6,017,506 | ||
Scottish & Southern Energy PLC | 198,000 | 2,625,136 | |||
Scottish Power PLC | 434,016 | 3,140,660 | |||
12,496,823 | |||||
ELECTRONICS – 0.20% | |||||
Electrocomponents PLC | 104,544 | 608,875 | |||
Premier Farnell PLC | 89,856 | 312,786 | |||
921,661 | |||||
ENGINEERING & CONSTRUCTION – 0.74% | |||||
AMEC PLC | 71,568 | 409,094 | |||
BAA PLC | 250,128 | 2,497,321 | |||
Balfour Beatty PLC | 94,896 | 453,243 | |||
3,359,658 | |||||
ENTERTAINMENT – 0.77% | |||||
EMI Group PLC | 186,336 | 745,840 | |||
Hilton Group PLC | 372,096 | 1,747,087 | |||
William Hill PLC | 100,656 | 984,143 | |||
3,477,070 | |||||
FOOD – 4.45% | |||||
Cadbury Schweppes PLC | 481,248 | 3,856,876 | |||
J Sainsbury PLC1,3 | 313,984 | 1,470,000 | |||
Tate & Lyle PLC | 96,768 | 623,209 | |||
Tesco PLC | 1,808,784 | 8,655,406 | |||
Unilever PLC | 647,280 | 5,542,660 | |||
20,148,151 | |||||
FOOD SERVICE – 0.62% | |||||
Compass Group PLC | 498,816 | 2,788,500 | |||
2,788,500 | |||||
GAS - 0.98% | |||||
Centrica PLC | 1,002,960 | 4,438,516 | |||
4,438,516 | |||||
HEALTH CARE – PRODUCTS – 0.48% | |||||
Smith & Nephew PLC | 217,152 | 1,953,228 | |||
SSL International PLC | 41,616 | 211,120 | |||
2,164,348 | |||||
HOLDING COMPANIES – DIVERSIFIED – 0.18% | |||||
Tomkins PLC | 177,696 | 830,333 | |||
830,333 | |||||
HOME BUILDERS – 0.80% | |||||
Barratt Developments PLC | 57,312 | 610,360 | |||
Bellway PLC | 26,352 | 364,315 | |||
Berkeley Group (The) PLC | 24,912 | 546,748 | |||
Persimmon PLC | 63,792 | 768,883 | |||
Taylor Woodrow PLC | 139,248 | 686,370 | |||
Wimpey (George) PLC | 86,688 | 654,979 | |||
3,631,655 | |||||
HOME FURNISHINGS – 0.07% | |||||
MFI Furniture Group PLC | 144,000 | 320,573 | |||
320,573 | |||||
HOUSEHOLD PRODUCTS & WARES – 0.80% | |||||
Reckitt Benckiser PLC | 138,096 | 3,627,046 | |||
3,627,046 | |||||
INSURANCE – 2.96% | |||||
Aviva PLC | 529,056 | 5,053,767 | |||
Friends Provident PLC | 441,504 | 1,062,301 | |||
Legal & General Group PLC | 1,519,800 | 2,720,374 | |||
Prudential PLC | 469,008 | 3,703,939 | |||
Royal & Sun Alliance Insurance Group PLC | 673,632 | 857,370 | |||
13,397,751 | |||||
IRON & STEEL – 0.17% | |||||
Corus Group PLC1 | 971,136 | 768,691 | |||
768,691 | |||||
LEISURE TIME – 0.41% | |||||
Carnival PLC | 39,069 | 1,875,155 | |||
1,875,155 | |||||
LODGING – 0.38% | |||||
InterContinental Hotels Group PLC | 169,776 | 1,727,142 | |||
1,727,142 | |||||
MANUFACTURING – 0.84% | |||||
BBA Group PLC | 103,968 | 487,222 | |||
Cookson Group PLC1 | 446,832 | 267,273 | |||
FKI PLC | 144,144 | 313,762 | |||
IMI PLC | 86,112 | 545,287 | |||
Invensys PLC1 | 1,300,773 | 345,154 | |||
Invensys PLC Deferred4 | 338,403 | — | |||
Novar PLC | 103,824 | 227,864 | |||
Smiths Group PLC | 131,184 | 1,637,795 | |||
3,824,357 |
SCHEDULESOF INVESTMENTS | 77 |
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2004
Security | Shares | Value | |||
MEDIA – 3.33% | |||||
British Sky Broadcasting Group PLC | 294,192 | $ | 2,529,751 | ||
Daily Mail & General Trust PLC Class A | 71,856 | 881,590 | |||
EMAP PLC | 59,616 | 789,332 | |||
ITV PLC | 978,048 | 1,821,041 | |||
Pearson PLC | 187,632 | 2,091,064 | |||
Reed Elsevier PLC | 296,496 | 2,624,237 | |||
Reuters Group PLC | 334,800 | 1,927,323 | |||
Trinity Mirror PLC | 66,960 | 776,952 | |||
United Business Media PLC | 77,184 | 659,538 | |||
Yell Group | 162,288 | 994,813 | |||
15,095,641 | |||||
MINING – 2.57% | |||||
BHP Billiton PLC | 577,914 | 5,437,309 | |||
Rio Tinto PLC | 249,552 | 6,190,766 | |||
11,628,075 | |||||
OIL & GAS – 14.77% | |||||
BG Group PLC | 827,424 | 5,098,093 | |||
BP PLC | 5,113,440 | 45,327,200 | |||
Shell Transport & Trading Co. PLC | 2,257,056 | 16,464,642 | |||
66,889,935 | |||||
PACKAGING & CONTAINERS – 0.23% | |||||
Rexam PLC | 128,016 | 1,016,750 | |||
1,016,750 | |||||
PHARMACEUTICALS – 10.37% | |||||
Alliance Unichem PLC | 59,328 | 718,814 | |||
AstraZeneca PLC | 392,544 | 18,042,568 | |||
GlaxoSmithKline PLC | 1,384,848 | 28,176,290 | |||
46,937,672 | |||||
REAL ESTATE – 1.42% | |||||
British Land Co. PLC | 114,336 | 1,479,902 | |||
Great Portland Estates PLC | 28,906 | 143,259 | |||
Hammerson PLC | 64,944 | 856,955 | |||
Land Securities Group PLC | 108,879 | 2,252,481 | |||
Liberty International PLC | 57,744 | 861,673 | |||
Slough Estates PLC | 99,936 | 826,987 | |||
6,421,257 | |||||
RETAIL – 4.27% | |||||
Boots Group PLC | 180,432 | 2,200,708 | |||
Dixons Group PLC | 457,344 | 1,295,814 | |||
Enterprise Inns PLC | 78,192 | 769,429 | |||
GUS PLC | 236,304 | 3,606,966 | |||
HMV Group PLC | 87,120 | 349,887 | |||
Kesa Electricals PLC | 123,889 | 626,265 | |||
Kingfisher PLC | 542,304 | 2,702,350 | |||
Marks & Spencer Group PLC | 528,912 | 3,349,232 | |||
Mitchells & Butlers PLC | 120,725 | 559,777 | |||
Next PLC | 61,488 | 1,645,934 | |||
Punch Taverns PLC | 56,736 | 465,417 | |||
Signet Group PLC | 398,016 | 750,021 | |||
Whitebread PLC | 70,128 | 1,028,808 | |||
19,350,608 | |||||
SEMICONDUCTORS – 0.07% | |||||
ARM Holdings PLC | 230,832 | 328,052 | |||
328,052 | |||||
SOFTWARE – 0.29% | |||||
Misys PLC | 136,080 | 427,790 | |||
Sage Group PLC | 299,232 | 880,126 | |||
1,307,916 | |||||
TELECOMMUNICATIONS – 9.70% | |||||
BT Group PLC | 2,014,571 | 6,632,126 | |||
Cable & Wireless PLC | 559,152 | 1,086,358 | |||
Marconi Corp. PLC1 | 46,080 | 479,966 | |||
Vodafone Group PLC | 15,728,976 | 35,723,247 | |||
43,921,697 | |||||
TRANSPORTATION – 0.85% | |||||
Arriva PLC | 48,240 | 374,028 | |||
Associated British Ports Holdings PLC | 78,480 | 608,140 | |||
Exel PLC | 69,840 | 877,586 | |||
FirstGroup PLC | 93,888 | 495,299 | |||
National Express Group PLC | 30,960 | 374,831 | |||
Peninsular & Oriental Steam Navigation Co. (The) | 176,256 | 760,982 | |||
Stagecoach Group PLC1 | 235,152 | 376,494 | |||
3,867,360 | |||||
VENTURE CAPITAL – 0.33% | |||||
3i Group PLC | 143,424 | 1,479,701 | |||
1,479,701 | |||||
WATER – 0.85% | |||||
Kelda Group PLC | 90,000 | 854,051 |
78 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
Severn Trent PLC | 79,344 | $ | 1,236,093 | |||
United Utilities PLC | 131,328 | 1,293,482 | ||||
United Utilities PLC Class A | 70,877 | 466,028 | ||||
3,849,654 | ||||||
TOTAL COMMON STOCKS | 449,525,219 | |||||
SHORT-TERM INVESTMENTS – 0.36% | ||||||
MONEY MARKET FUNDS – 0.12% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2,5 | 431,176 | 431,176 | ||||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares2,5 | 108,580 | 108,580 | ||||
BlackRock Temp Cash Money Market Fund5 | 4,983 | 4,983 | ||||
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares5 | 6,635 | 6,635 | ||||
551,374 | ||||||
FLOATING RATE NOTES – 0.08% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/055,6 | 5,923 | 5,922 | ||||
1.52%, 10/12/045,6 | 4,935 | 4,935 | ||||
1.56%, 09/15/045,6 | 9,871 | 9,871 | ||||
1.64%, 03/15/055,6 | 4,935 | 4,938 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/045 | 7,403 | 7,403 | ||||
1.38%, 11/22/045 | 2,468 | 2,468 | ||||
1.40%, 10/29/045 | 9,871 | 9,871 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/055,6 | 9,871 | 9,870 | ||||
1.61%, 07/29/055,6 | 9,871 | 9,868 | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/055 | 9,871 | 9,868 | ||||
1.56%, 08/26/055 | 9,871 | 9,868 | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/055 | 9,871 | 9,871 | ||||
Security | Principal | Value | ||||
Dorada Finance Inc. | ||||||
1.61%, 07/29/055,6 | $ | 8,193 | $ | 8,191 | ||
Five Finance Inc. | ||||||
1.42%, 04/29/055,6 | 7,897 | 7,896 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/045 | 4,935 | 4,934 | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/055 | 6,317 | 6,317 | ||||
1.58%, 04/22/055 | 9,871 | 9,871 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/055,6 | 9,871 | 9,870 | ||||
1.57%, 09/27/045,6 | 10,661 | 10,660 | ||||
1.61%, 07/25/055,6 | 4,935 | 4,935 | ||||
Links Finance LLC | ||||||
1.55%, 04/15/055,6 | 9,871 | 9,870 | ||||
1.68%, 04/25/055 | 9,871 | 9,875 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/055 | 9,871 | 9,871 | ||||
1.63%, 12/09/045,6 | 8,193 | 8,156 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/055 | 9,871 | 9,869 | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/055,6 | 9,377 | 9,377 | ||||
Permanent Financing PLC | ||||||
1.52%, 03/10/055 | 9,871 | 9,871 | ||||
1.53%, 12/10/045 | 4,935 | 4,935 | ||||
1.55%, 06/10/055 | 4,442 | 4,442 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/045 | 9,871 | 9,871 | ||||
1.57%, 11/15/045 | 9,871 | 9,871 | ||||
1.59%, 09/15/055 | 7,403 | 7,404 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/055,6 | 3,623 | 3,622 | ||||
1.56%, 01/18/055,6 | 4,343 | 4,343 | ||||
1.59%, 07/25/055,6 | 9,871 | 9,870 | ||||
1.66%, 05/17/055,6 | 8,193 | 8,193 | ||||
1.70%, 02/25/055,6 | 5,528 | 5,527 | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/045 | 2,445 | 2,441 | ||||
1.48%, 06/15/055,6 | 4,935 | 4,935 | ||||
1.56%, 09/15/045,6 | 4,935 | 4,935 | ||||
1.56%, 07/15/055,6 | 7,403 | 7,402 |
SCHEDULESOF INVESTMENTS | 79 |
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/055 | $ | 4,935 | $ | 4,935 | ||
1.55%, 04/15/055,6 | 7,403 | 7,402 | ||||
1.55%, 07/11/055 | 2,468 | 2,467 | ||||
1.56%, 11/15/045,6 | 5,923 | 5,923 | ||||
1.57%, 06/15/055,6 | 4,047 | 4,047 | ||||
1.58%, 03/29/055 | 4,244 | 4,244 | ||||
1.58%, 08/26/055,6 | 4,935 | 4,934 | ||||
1.68%, 05/20/055 | 4,442 | 4,442 | ||||
350,501 | ||||||
COMMERCIAL PAPER – 0.05% | ||||||
Alpine Securitization Corp. | ||||||
1.50%, 09/08/045 | 4,935 | 4,934 | ||||
1.51%, 09/02/045 | 4,442 | 4,442 | ||||
1.54%, 09/14/045 | 4,935 | 4,933 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/045 | 1,974 | 1,974 | ||||
1.53%, 09/16/045 | 4,856 | 4,853 | ||||
1.54%, 09/15/045 | 4,935 | 4,932 | ||||
1.54%, 09/22/045 | 2,468 | 2,465 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/045 | 4,935 | 4,934 | ||||
1.53%, 09/09/045 | 11,528 | 11,524 | ||||
1.53%, 09/13/045 | 7,107 | 7,104 | ||||
1.53%, 09/14/045 | 2,468 | 2,466 | ||||
1.54%, 09/17/045 | 2,961 | 2,959 | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/045 | 4,935 | 4,934 | ||||
1.53%, 09/15/045 | 1,974 | 1,973 | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/045 | 1,974 | 1,973 | ||||
Corporate Asset Funding | ||||||
1.42%, 09/03/045 | 2,961 | 2,962 | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/045 | 4,935 | 4,935 | ||||
Delaware Funding Corp. | ||||||
1.50%, 09/09/045 | 4,935 | 4,934 | ||||
1.53%, 09/10/045 | 7,897 | 7,894 | ||||
1.53%, 09/20/045 | 3,356 | 3,353 | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/045 | 4,935 | 4,932 | ||||
1.45%, 11/09/045 | 9,871 | 9,843 | ||||
1.52%, 09/08/045 | 9,871 | 9,868 | ||||
1.59%, 12/02/045 | 9,871 | 9,831 | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/045 | 2,961 | 2,961 | ||||
1.53%, 09/07/045 | 4,935 | 4,934 | ||||
1.53%, 09/17/045 | 2,961 | 2,959 | ||||
1.53%, 09/21/045 | 2,468 | 2,466 | ||||
1.53%, 09/22/045 | 4,935 | 4,931 | ||||
1.54%, 09/14/045 | 7,399 | 7,399 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/055 | 4,935 | 4,901 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/045 | 4,935 | 4,934 | ||||
1.55%, 10/15/045 | 6,473 | 6,461 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/045 | 9,871 | 9,853 | ||||
1.44%, 10/27/045 | 9,871 | 9,849 | ||||
1.59%, 11/30/045 | 4,935 | 4,916 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/045 | 2,468 | 2,468 | ||||
1.53%, 09/20/045 | 2,468 | 2,466 | ||||
1.53%, 09/23/045 | 3,455 | 3,452 | ||||
1.54%, 09/15/045 | 5,923 | 5,919 | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/045 | 6,879 | 6,880 | ||||
1.51%, 09/08/045 | 3,948 | 3,947 | ||||
1.52%, 09/09/045 | 2,468 | 2,467 | ||||
1.53%, 09/21/045 | 4,935 | 4,931 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/045 | 2,961 | 2,960 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/045 | 5,429 | 5,429 | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/045 | 3,285 | 3,280 | ||||
1.55%, 09/16/045 | 2,961 | 2,959 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
1.54%, 09/15/045 | 3,948 | 3,946 | ||||
1.54%, 09/23/045 | 2,468 | 2,465 |
80 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/045 | $ | 2,468 | $ | 2,467 | ||
1.52%, 09/10/045 | 3,455 | 3,453 | ||||
251,005 | ||||||
TIME DEPOSITS – 0.05% | ||||||
Abbey National Treasury Services PLC | ||||||
1.25%, 01/06/055 | 9,871 | 9,871 | ||||
1.33%, 02/10/055 | 4,935 | 4,936 | ||||
1.39%, 02/02/055 | 4,935 | 4,931 | ||||
1.39%, 04/08/055 | 6,910 | 6,909 | ||||
1.40%, 10/25/045 | 9,871 | 9,871 | ||||
Bank of New York | ||||||
1.39%, 11/01/045 | 9,871 | 9,871 | ||||
1.60%, 12/03/045 | 2,468 | 2,467 | ||||
Bank of Nova Scotia | ||||||
1.13%, 10/06/045 | 9,871 | 9,871 | ||||
1.24%, 10/07/045 | 7,403 | 7,403 | ||||
1.42%, 10/29/045 | 7,403 | 7,403 | ||||
National City Bank (Cleveland, Ohio) | ||||||
1.25%, 01/06/055 | 9,871 | 9,871 | ||||
1.49%, 08/09/055 | 9,871 | 9,868 | ||||
1.54%, 06/23/055 | 9,871 | 9,868 | ||||
1.56%, 06/10/055 | 4,935 | 4,937 | ||||
Norddeutsche Landesbank | ||||||
1.59%, 07/27/055 | 9,871 | 9,868 | ||||
Prudential Funding LLC | ||||||
1.60%, 12/01/045 | 4,935 | 4,915 | ||||
SouthTrust Bank | ||||||
1.55%, 09/01/045 | 19,742 | 19,742 | ||||
Toronto-Dominion Bank | ||||||
1.22%, 03/23/055 | 17,274 | 17,272 | ||||
1.34%, 02/10/055 | 3,948 | 3,948 | ||||
1.41%, 11/01/045 | 7,403 | 7,403 | ||||
1.53%, 09/13/045 | 4,935 | 4,935 | ||||
1.77%, 05/10/055 | 4,935 | 4,935 | ||||
1.90%, 05/11/055 | 4,935 | 4,935 | ||||
UBS Finance (Delaware) | ||||||
1.10%, 09/08/045 | 9,871 | 9,869 | ||||
1.11%, 12/17/045 | 14,806 | 14,757 | ||||
1.14%, 09/29/045 | 9,871 | 9,862 | ||||
220,518 | ||||||
REPURCHASE AGREEMENTS – 0.04% | ||||||
Banc of America Securities LLC | ||||||
1.59%, 09/01/045,7 | 29,613 | 29,613 | ||||
Bank of America, N.A. | ||||||
1.59%, 09/01/045,7 | 56,757 | 56,757 | ||||
Goldman Sachs & Co. | ||||||
1.59%, 09/01/045,7 | 49,354 | 49,354 | ||||
Merrill Lynch Government Securities Inc. | ||||||
1.57%, 09/01/045,7 | 9,871 | 9,871 | ||||
1.59%, 09/01/045,7 | 49,354 | 49,354 | ||||
194,949 | ||||||
U.S. GOVERNMENT AGENCY NOTES – 0.01% | ||||||
Federal Home Loan Mortgage Corp. | ||||||
1.63%, 04/15/055 | 6,910 | 6,923 | ||||
1.80%, 01/18/055 | 4,590 | 4,558 | ||||
1.80%, 01/19/055 | 4,935 | 4,901 | ||||
2.06%, 05/31/055 | 4,921 | 4,844 | ||||
Federal National Mortgage Association | ||||||
2.33%, 07/22/055 | 14,806 | 14,496 | ||||
35,722 | ||||||
MEDIUM-TERM NOTES – 0.01% | ||||||
CC USA Inc. | ||||||
1.29%, 04/15/055,6 | 9,871 | 9,870 | ||||
1.51%, 02/15/055,6 | 6,416 | 6,421 | ||||
Dorada Finance Inc. | ||||||
1.48%, 01/18/055,6 | 7,403 | 7,403 | ||||
K2 USA LLC | ||||||
1.46%, 01/12/055,6 | 4,935 | 4,935 | ||||
WhistleJacket Capital LLC | ||||||
1.32%, 02/04/055,6 | 2,468 | 2,468 | ||||
31,097 | ||||||
TOTAL SHORT-TERM INVESTMENTS | 1,635,166 | |||||
SCHEDULESOF INVESTMENTS | 81 |
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2004
Value | |||
TOTAL INVESTMENTS IN SECURITIES – 99.62% | $ | 451,160,385 | |
Other Assets, Less Liabilities – 0.38% | 1,709,713 | ||
NET ASSETS – 100.00% | $ | 452,870,098 | |
1 | Non-income earning security. |
2 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
3 | All or a portion of this security represents a security on loan. See Note 5. |
4 | Security valued at fair value in accordance with procedures approved by the Board of Directors. See Note 1. |
5 | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
6 | Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Financial | 26.65 | % | $ | 120,635,049 | ||
Consumer Non-Cyclical | 22.54 | 102,052,174 | ||||
Energy | 14.77 | 66,889,935 | ||||
Communications | 13.64 | 61,763,288 | ||||
Consumer Cyclical | 8.15 | 36,957,905 | ||||
Industrial | 4.68 | 21,239,828 | ||||
Utilities | 4.59 | 20,784,993 | ||||
Basic Materials | 3.58 | 16,215,189 | ||||
Technology | 0.48 | 2,156,525 | ||||
Diversified | 0.18 | 830,333 | ||||
Short-Term and Other Net Assets | 0.74 | 3,344,879 | ||||
TOTAL | 100.00 | % | $ | 452,870,098 | ||
See notes to financial statements.
82 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 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: | ||||||||||||||||||||||||
Unaffiliated issuers | $ | 50,943,876 | $ | 32,696,714 | $ | 412,902,584 | $ | 78,314,696 | $ | 153,401,434 | $ | 37,257,192 | ||||||||||||
Affiliates of the investment adviser | $ | 1,207,934 | $ | 2,085,021 | $ | 21,395,585 | $ | 4,057,001 | $ | 5,395,090 | $ | 2,460,493 | ||||||||||||
Foreign currency, at cost | $ | 47,418 | $ | 10,654 | $ | 2,588,366 | $ | 1,322,370 | $ | 607,799 | $ | 32,087 | ||||||||||||
Investments in securities, at value (including securities on loana) (Note 1): | ||||||||||||||||||||||||
Unaffiliated issuers | $ | 62,888,159 | $ | 33,637,767 | $ | 414,186,502 | $ | 76,939,935 | $ | 121,360,405 | $ | 37,637,644 | ||||||||||||
Affiliates of the investment adviser | 1,207,934 | 2,085,021 | 21,395,585 | 4,057,001 | 5,395,090 | 2,460,493 | ||||||||||||||||||
Foreign currency, at value | 46,699 | 10,572 | 2,560,650 | 1,304,204 | 606,939 | 31,456 | ||||||||||||||||||
Receivables: | ||||||||||||||||||||||||
Investment securities sold | — | 252,671 | 2,179,661 | 227,291 | — | 333,610 | ||||||||||||||||||
Dividends and interest | 47,775 | 20,778 | 684,944 | 72,767 | 107,467 | 66,723 | ||||||||||||||||||
Total Assets | 64,190,567 | 36,006,809 | 441,007,342 | 82,601,198 | 127,469,901 | 40,529,926 | ||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Payables: | ||||||||||||||||||||||||
Investment securities purchased | — | 244,017 | 2,316,813 | 230,344 | 531,891 | 332,868 | ||||||||||||||||||
Collateral for securities on loan (Note 5) | 6,216,382 | 10,926,359 | 111,753,218 | 21,111,588 | 28,073,093 | 12,890,388 | ||||||||||||||||||
Investment advisory fees (Note 2) | 53,965 | 23,828 | 331,557 | 58,505 | 101,182 | 27,258 | ||||||||||||||||||
Total Liabilities | 6,270,347 | 11,194,204 | 114,401,588 | 21,400,437 | 28,706,166 | 13,250,514 | ||||||||||||||||||
NET ASSETS | $ | 57,920,220 | $ | 24,812,605 | $ | 326,605,754 | $ | 61,200,761 | $ | 98,763,735 | $ | 27,279,412 | ||||||||||||
Net assets consist of: | ||||||||||||||||||||||||
Paid-in capital | $ | 49,030,999 | $ | 26,399,101 | $ | 335,945,062 | $ | 68,481,263 | $ | 162,732,266 | $ | 31,344,707 | ||||||||||||
Undistributed net investment income | 480,630 | 533,300 | 6,691,251 | 724,345 | 1,573,473 | 792,629 | ||||||||||||||||||
Accumulated net realized loss | (3,535,020 | ) | (3,064,051 | ) | (17,295,073 | ) | (6,614,126 | ) | (33,495,073 | ) | (5,252,396 | ) | ||||||||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | 11,943,611 | 944,255 | 1,264,514 | (1,390,721 | ) | (32,046,931 | ) | 394,472 | ||||||||||||||||
NET ASSETS | $ | 57,920,220 | $ | 24,812,605 | $ | 326,605,754 | $ | 61,200,761 | $ | 98,763,735 | $ | 27,279,412 | ||||||||||||
Shares outstanding | 3,400,000 | 1,680,000 | 5,500,000 | 3,000,000 | 6,600,000 | 1,350,000 | ||||||||||||||||||
Net asset value per share | $ | 17.04 | $ | 14.77 | $ | 59.38 | $ | 20.40 | $ | 14.96 | $ | 20.21 | ||||||||||||
a | Securities on loan with market values of $5,918,010, $10,398,945, $106,247,071, $20,107,907, $26,726,911 and $12,223,903, respectively. See Note 5. |
See notes to financial statements.
FINANCIAL STATEMENTS | 83 |
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2004
iShares MSCI | ||||||||||||||||||||
Netherlands Index Fund | Spain Index Fund | Sweden Index Fund | Switzerland Index Fund | United Kingdom Index Fund | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Investments, at cost: | ||||||||||||||||||||
Unaffiliated issuers | $ | 34,248,795 | $ | 46,721,860 | $ | 31,396,335 | $ | 39,905,563 | $ | 441,412,822 | ||||||||||
Affiliates of the investment adviser | $ | 618,772 | $ | 2,302,469 | $ | 1,889,122 | $ | 323,797 | $ | 12,848,516 | ||||||||||
Foreign currency, at cost | $ | 21,281 | $ | 77,089 | $ | 6,161 | $ | 34,525 | $ | 669,865 | ||||||||||
Investments in securities, at value | ||||||||||||||||||||
Unaffiliated issuers | $ | 30,560,789 | $ | 55,131,837 | $ | 35,734,536 | $ | 43,096,083 | $ | 436,640,826 | ||||||||||
Affiliates of the investment adviser | 618,772 | 2,302,469 | 1,889,122 | 323,797 | 14,519,559 | |||||||||||||||
Foreign currency, at value | 21,165 | 76,755 | 6,099 | 33,431 | 662,378 | |||||||||||||||
Receivables: | ||||||||||||||||||||
Investment securities sold | 46,218 | 452,964 | 175,034 | 225,643 | 637,991 | |||||||||||||||
Dividends and interest | 263,711 | 4,331 | 2,107 | 105,453 | 2,953,194 | |||||||||||||||
Capital shares sold | — | — | — | — | 151,609 | |||||||||||||||
Total Assets | 31,510,655 | 57,968,356 | 37,806,898 | 43,784,407 | 455,565,557 | |||||||||||||||
LIABILITIES | ||||||||||||||||||||
Payables: | ||||||||||||||||||||
Investment securities purchased | 35,840 | 457,502 | 143,205 | 229,953 | 937,911 | |||||||||||||||
Collateral for securities on loan (Note 5) | 3,181,876 | 12,009,336 | 9,878,277 | 1,592,362 | 1,351,900 | |||||||||||||||
Investment advisory fees (Note 2) | 27,934 | 45,191 | 27,219 | 41,923 | 405,648 | |||||||||||||||
Total Liabilities | 3,245,650 | 12,512,029 | 10,048,701 | 1,864,238 | 2,695,459 | |||||||||||||||
NET ASSETS | $ | 28,265,005 | $ | 45,456,327 | $ | 27,758,197 | $ | 41,920,169 | $ | 452,870,098 | ||||||||||
Net assets consist of: | ||||||||||||||||||||
Paid-in capital | $ | 39,581,064 | $ | 40,924,478 | $ | 30,061,447 | $ | 45,728,388 | $ | 476,195,048 | ||||||||||
Undistributed net investment income | 558,614 | 759,103 | 420,504 | 269,799 | 6,931,580 | |||||||||||||||
Accumulated net realized loss | (8,186,705 | ) | (4,636,855 | ) | (7,061,802 | ) | (7,278,025 | ) | (27,113,445 | ) | ||||||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | (3,687,968 | ) | 8,409,601 | 4,338,048 | 3,200,007 | (3,143,085 | ) | |||||||||||||
NET ASSETS | $ | 28,265,005 | $ | 45,456,327 | $ | 27,758,197 | $ | 41,920,169 | $ | 452,870,098 | ||||||||||
Shares outstanding | 1,800,000 | 1,650,000 | 1,650,000 | 2,875,000 | 28,800,000 | |||||||||||||||
Net asset value per share | $ | 15.70 | $ | 27.55 | $ | 16.82 | $ | 14.58 | $ | 15.72 | ||||||||||
a | Securities on loan with market values of $3,026,938, $11,414,043, $9,390,487, $1,516,298 and $1,276,747, respectively. See Note 5. |
See notes to financial statements.
84 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Statements of Operations
iSHARES®, INC.
Year Ended August 31, 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 | $ | 758,642 | $ | 634,605 | $ | 8,493,140 | $ | 1,093,976 | $ | 2,395,773 | $ | 970,447 | |||||||||||
Interestb | 205 | 193 | 1,630 | 334 | 776 | 154 | |||||||||||||||||
Securities lending incomeb | 21,492 | 38,601 | 376,345 | 54,817 | 176,961 | 32,901 | |||||||||||||||||
Total investment income | 780,339 | 673,399 | 8,871,115 | 1,149,127 | 2,573,510 | 1,003,502 | |||||||||||||||||
EXPENSES (Note 2) | |||||||||||||||||||||||
Investment advisory fees | 213,811 | 110,619 | 1,687,063 | 333,419 | 731,209 | 160,439 | |||||||||||||||||
Distribution fees | 67,990 | 36,909 | 576,486 | 116,817 | 267,711 | 56,600 | |||||||||||||||||
Stock dividend taxes | — | — | 17,897 | — | — | 8,851 | |||||||||||||||||
Total expenses | 281,801 | 147,528 | 2,281,446 | 450,236 | 998,920 | 225,890 | |||||||||||||||||
Net investment income | 498,538 | 525,871 | 6,589,669 | 698,891 | 1,574,590 | 777,612 | |||||||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | |||||||||||||||||||||||
Net realized gain (loss) from: | |||||||||||||||||||||||
Investments | 327,576 | (484,167 | ) | (6,452,133 | ) | 238,145 | (4,839,717 | ) | (336,405 | ) | |||||||||||||
In-kind redemptions | 3,588,367 | 2,714,511 | 15,210,486 | 1,524,334 | 14,686,409 | 771,285 | |||||||||||||||||
Foreign currency transactions | 3,488 | 6,518 | 98,982 | 25,454 | (1,117 | ) | 15,017 | ||||||||||||||||
Net realized gain | 3,919,431 | 2,236,862 | 8,857,335 | 1,787,933 | 9,845,575 | 449,897 | |||||||||||||||||
Net change in unrealized appreciation (depreciation) on: | |||||||||||||||||||||||
Investments | 8,636,259 | 2,626,709 | 19,815,097 | 8,615,597 | 9,718,946 | 4,873,540 | |||||||||||||||||
Translation of assets and liabilities in foreign currencies | 1,300 | 253 | (22,978 | ) | (16,415 | ) | (1,272 | ) | 7,056 | ||||||||||||||
Net change in unrealized appreciation (depreciation) | 8,637,559 | 2,626,962 | 19,792,119 | 8,599,182 | 9,717,674 | 4,880,596 | |||||||||||||||||
Net realized and unrealized gain | 12,556,990 | 4,863,824 | 28,649,454 | 10,387,115 | 19,563,249 | 5,330,493 | |||||||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 13,055,528 | $ | 5,389,695 | $ | 35,239,123 | $ | 11,086,006 | $ | 21,137,839 | $ | 6,108,105 | |||||||||||
a | Net of foreign withholding tax of $70,374, $38,940, $414,246, $45,333, $126,512 and $35,864, respectively. |
b | Includes income earned from affiliates of the Funds’ investment adviser. See Note 2. |
See notes to financial statements.
FINANCIAL STATEMENTS | 85 |
Statements of Operations (Continued)
iSHARES®, INC.
Year Ended August 31, 2004
iShares MSCI | ||||||||||||||||||||
Netherlands Index Fund | Spain Index Fund | Sweden Index Fund | Switzerland Index Fund | United Kingdom Index Fund | ||||||||||||||||
NET INVESTMENT INCOME | ||||||||||||||||||||
Dividendsa | $ | 701,633 | $ | 1,113,686 | $ | 603,054 | $ | 580,381 | $ | 9,594,862b | ||||||||||
Interestb | 121 | 211 | 153 | 151 | 2,120 | |||||||||||||||
Securities lending incomeb | 20,506 | 48,303 | 39,633 | 17,088 | 16,943 | |||||||||||||||
Total investment income | 722,260 | 1,162,200 | 642,840 | 597,620 | 9,613,925 | |||||||||||||||
EXPENSES (Note 2) | ||||||||||||||||||||
Investment advisory fees | 131,004 | 279,745 | 142,121 | 244,345 | 1,454,776 | |||||||||||||||
Distribution fees | 43,809 | 99,673 | 48,845 | 86,032 | 446,684 | |||||||||||||||
Foreign taxes | — | — | 30,947 | — | — | |||||||||||||||
Total expenses | 174,813 | 379,418 | 221,913 | 330,377 | 1,901,460 | |||||||||||||||
Net investment income | 547,447 | 782,782 | 420,927 | 267,243 | 7,712,465 | |||||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||||||
Investments | (231,738 | ) | (66,102 | ) | 16,165 | (747,078 | ) | (3,511,657 | ) | |||||||||||
In-kind redemptions | — | 4,021,667 | — | 626,973 | 1,183,528 | |||||||||||||||
Foreign currency transactions | 11,167 | 3,378 | (422 | ) | 2,554 | 98,166 | ||||||||||||||
Net realized gain (loss) | (220,571 | ) | 3,958,943 | 15,743 | (117,551 | ) | (2,229,963 | ) | ||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||
Investments | 1,714,975 | 5,004,231 | 5,562,711 | 6,450,291 | 28,405,088 | |||||||||||||||
Translation of assets and liabilities in foreign currencies | 6,000 | 4,608 | (23 | ) | 9,155 | (20,827 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) | 1,720,975 | 5,008,839 | 5,562,688 | 6,459,446 | 28,384,261 | |||||||||||||||
Net realized and unrealized gain | 1,500,404 | 8,967,782 | 5,578,431 | 6,341,895 | 26,154,298 | |||||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 2,047,851 | $ | 9,750,564 | $ | 5,999,358 | $ | 6,609,138 | $ | 33,866,763 | ||||||||||
a | Net of foreign withholding tax of $57,329, $105,758, $25,984, $15,054 and $831,317, respectively. |
b | Includes income earned from affiliates of the Funds’ investment adviser. See Note 2. |
See notes to financial statements.
86 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Austria Index Fund | iShares MSCI Belgium Index Fund | iShares MSCI EMU Index Fund | ||||||||||||||||||||||
For the year ended | For the year ended | For the year ended | For the year ended | For the year ended | For the year ended | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income | $ | 498,538 | $ | 166,934 | $ | 525,871 | $ | 809,843 | $ | 6,589,669 | $ | 2,947,241 | ||||||||||||
Net realized gain (loss) | 3,919,431 | (152,796 | ) | 2,236,862 | 1,821,007 | 8,857,335 | (5,916,411 | ) | ||||||||||||||||
Net change in unrealized appreciation (depreciation) | 8,637,559 | 4,589,365 | 2,626,962 | 711,331 | 19,792,119 | 18,491,963 | ||||||||||||||||||
Net increase in net assets resulting from operations | 13,055,528 | 4,603,503 | 5,389,695 | 3,342,181 | 35,239,123 | 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 | 32,913,587 | 6,782,294 | 19,364,816 | 36,573,861 | 175,480,082 | 20,183,374 | ||||||||||||||||||
Cost of shares redeemed | (10,064,261 | ) | (3,629,301 | ) | (20,928,283 | ) | (28,339,593 | ) | (46,454,697 | ) | — | |||||||||||||
Net increase (decrease) in net assets from capital share transactions | 22,849,326 | 3,152,993 | (1,563,467 | ) | 8,234,268 | 129,025,385 | 20,183,374 | |||||||||||||||||
INCREASE IN NET ASSETS | 35,631,916 | 7,547,814 | 2,941,392 | 11,444,337 | 161,217,288 | 34,220,720 | ||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 22,288,304 | 14,740,490 | 21,871,213 | 10,426,876 | 165,388,466 | 131,167,746 | ||||||||||||||||||
End of year | $ | 57,920,220 | $ | 22,288,304 | $ | 24,812,605 | $ | 21,871,213 | $ | 326,605,754 | $ | 165,388,466 | ||||||||||||
Undistributed net investment income included in net assets at end of year | $ | 480,630 | $ | 176,004 | $ | 533,300 | $ | 805,281 | $ | 6,691,251 | $ | 3,037,701 | ||||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 2,100,000 | 700,000 | 1,360,000 | 3,840,000 | 2,950,000 | 450,000 | ||||||||||||||||||
Shares redeemed | (800,000 | ) | (400,000 | ) | (1,640,000 | ) | (2,880,000 | ) | (750,000 | ) | — | |||||||||||||
Net increase (decrease) in shares outstanding | 1,300,000 | 300,000 | (280,000 | ) | 960,000 | 2,200,000 | 450,000 | |||||||||||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 87 |
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 year ended | For the year ended | For the year ended | For the year ended | For the year ended | For the year ended | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income | $ | 698,891 | $ | 751,423 | $ | 1,574,590 | $ | 1,675,435 | $ | 777,612 | $ | 826,393 | ||||||||||||
Net realized gain (loss) | 1,787,933 | (3,038,659 | ) | 9,845,575 | (7,284,602 | ) | 449,897 | (412,813 | ) | |||||||||||||||
Net change in unrealized appreciation (depreciation) | 8,599,182 | 7,255,337 | 9,717,674 | 16,801,013 | 4,880,596 | 3,106,712 | ||||||||||||||||||
Net increase in net assets resulting from operations | 11,086,006 | 4,968,101 | 21,137,839 | 11,191,846 | 6,108,105 | 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 | 4,101,648 | — | 37,742,897 | 24,678,639 | — | 2,068,633 | ||||||||||||||||||
Cost of shares redeemed | (7,267,190 | ) | — | (60,113,109 | ) | (27,391,209 | ) | (8,001,044 | ) | (4,396,226 | ) | |||||||||||||
Net decrease in net assets from capital share transactions | (3,165,542 | ) | — | (22,370,212 | ) | (2,712,570 | ) | (8,001,044 | ) | (2,327,593 | ) | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | 7,125,585 | 4,400,896 | (3,036,475 | ) | 7,640,551 | (2,717,815 | ) | 459,143 | ||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 54,075,176 | 49,674,280 | 101,800,210 | 94,159,659 | 29,997,227 | 29,538,084 | ||||||||||||||||||
End of year | $ | 61,200,761 | $ | 54,075,176 | $ | 98,763,735 | $ | 101,800,210 | $ | 27,279,412 | $ | 29,997,227 | ||||||||||||
Undistributed net investment income included in net assets at end of year | $ | 724,345 | $ | 794,879 | $ | 1,573,473 | $ | 1,804,102 | $ | 792,629 | $ | 824,876 | ||||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 200,000 | — | 2,400,000 | 2,700,000 | — | 150,000 | ||||||||||||||||||
Shares redeemed | (400,000 | ) | — | (3,900,000 | ) | (2,400,000 | ) | (450,000 | ) | (300,000 | ) | |||||||||||||
Net increase (decrease) in shares outstanding | (200,000 | ) | — | (1,500,000 | ) | 300,000 | (450,000 | ) | (150,000 | ) | ||||||||||||||
See notes to financial statements
88 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 year ended | For the year ended | For the year ended | For the year ended | For the year ended | For the year ended | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income | $ | 547,447 | $ | 461,181 | $ | 782,782 | $ | 433,459 | $ | 420,927 | $ | 316,152 | ||||||||||||
Net realized gain (loss) | (220,571 | ) | (2,384,716 | ) | 3,958,943 | (400,527 | ) | 15,743 | (1,250,998 | ) | ||||||||||||||
Net change in unrealized appreciation (depreciation) | 1,720,975 | 2,574,851 | 5,008,839 | 10,543,059 | 5,562,688 | 5,001,133 | ||||||||||||||||||
Net increase in net assets resulting from operations | 2,047,851 | 651,316 | 9,750,564 | 10,575,991 | 5,999,358 | 4,066,287 | ||||||||||||||||||
DISTRIBUTIONS TO SHARE HOLDERS: | ||||||||||||||||||||||||
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 | 8,098,478 | 12,435,251 | 2,263,744 | 34,361,557 | 5,099,033 | 14,403,629 | ||||||||||||||||||
Cost of shares redeemed | — | (13,270,048 | ) | (16,465,374 | ) | (13,252,013 | ) | — | (9,531,073 | ) | ||||||||||||||
Net increase (decrease) in net assets from capital share transactions | 8,098,478 | (834,797 | ) | (14,201,630 | ) | 21,109,544 | 5,099,033 | 4,872,556 | ||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | 9,665,749 | (504,159 | ) | (4,915,625 | ) | 31,522,174 | 10,766,276 | 8,837,913 | ||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 18,599,256 | 19,103,415 | 50,371,952 | 18,849,778 | 16,991,921 | 8,154,008 | ||||||||||||||||||
End of year | $ | 28,265,005 | $ | 18,599,256 | $ | 45,456,327 | $ | 50,371,952 | $ | 27,758,197 | $ | 16,991,921 | ||||||||||||
Undistributed net investment income included in net assets at end of year | $ | 558,614 | $ | 480,580 | $ | 759,103 | $ | 437,502 | $ | 420,504 | $ | 332,115 | ||||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 500,000 | 1,050,000 | 75,000 | 1,875,000 | 300,000 | 1,500,000 | ||||||||||||||||||
Shares redeemed | — | (1,050,000 | ) | (675,000 | ) | (675,000 | ) | — | (975,000 | ) | ||||||||||||||
Net increase (decrease) in shares outstanding | 500,000 | — | (600,000 | ) | 1,200,000 | 300,000 | 525,000 | |||||||||||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 89 |
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Switzerland Index Fund | iShares MSCI United Kingdom Index Fund | |||||||||||||||
For the year ended | For the year ended | For the year ended | For the year ended | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 267,243 | $ | 124,078 | $ | 7,712,465 | $ | 4,728,393 | ||||||||
Net realized gain (loss) | (117,551 | ) | (2,929,581 | ) | (2,229,963 | ) | 2,870,683 | |||||||||
Net change in unrealized appreciation (depreciation) | 6,459,446 | 4,321,125 | 28,384,261 | 4,860,539 | ||||||||||||
Net increase in net assets resulting from operations | 6,609,138 | 1,515,622 | 33,866,763 | 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 | 3,722,134 | 2,976,574 | 281,527,046 | 76,462,198 | ||||||||||||
Cost of shares redeemed | (1,907,959 | ) | (2,658,605 | ) | (8,011,981 | ) | (55,409,169 | ) | ||||||||
Net increase in net assets from capital share transactions | 1,814,175 | 317,969 | 273,515,065 | 21,053,029 | ||||||||||||
INCREASE IN NET ASSETS | 8,276,881 | 1,760,002 | 302,060,856 | 30,741,889 | ||||||||||||
NET ASSETS: | ||||||||||||||||
Beginning of year | 33,643,288 | 31,883,286 | 150,809,242 | 120,067,353 | ||||||||||||
End of year | $ | 41,920,169 | $ | 33,643,288 | $ | 452,870,098 | $ | 150,809,242 | ||||||||
Undistributed net investment income included in net assets at end of year | $ | 269,799 | $ | 146,432 | $ | 6,931,580 | $ | 4,441,921 | ||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||
Shares sold | 250,000 | 250,000 | 17,800,000 | 6,600,000 | ||||||||||||
Shares redeemed | (125,000 | ) | (250,000 | ) | (600,000 | ) | (4,400,000 | ) | ||||||||
Net increase in shares outstanding | 125,000 | — | 17,200,000 | 2,200,000 | ||||||||||||
See notes to financial statements.
90 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Austria Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 10.61 | $ | 8.19 | $ | 8.18 | $ | 7.67 | $ | 9.13 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomec | 0.21 | 0.09 | 0.13 | 0.13 | 0.04 | |||||||||||||||
Net realized and unrealized gain (loss) | 6.39 | 2.43 | (0.12 | ) | 0.52 | (1.46 | ) | |||||||||||||
Total from investment operations | 6.60 | 2.52 | 0.01 | 0.65 | (1.42 | ) | ||||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.17 | ) | (0.10 | ) | — | (0.14 | ) | (0.04 | ) | |||||||||||
Return of capital | — | — | — | (0.00 | )e | — | ||||||||||||||
Total distributions | (0.17 | ) | (0.10 | ) | — | (0.14 | ) | (0.04 | ) | |||||||||||
Net asset value, end of year | $ | 17.04 | $ | 10.61 | $ | 8.19 | $ | 8.18 | $ | 7.67 | ||||||||||
Total return | 62.70 | % | 31.15 | % | 0.12 | % | 8.41 | % | (15.51 | )% | ||||||||||
Ratios/supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 57,920 | $ | 22,288 | $ | 14,740 | $ | 11,447 | $ | 10,741 | ||||||||||
Ratio of expenses to average net assets | 0.77 | % | 0.84 | % | 0.84 | % | 0.84 | %a | 1.16 | %a | ||||||||||
Ratio of net investment income to average net assets | 1.37 | % | 0.98 | % | 1.57 | % | 1.69 | %b | 0.51 | %b | ||||||||||
Portfolio turnover rated | 11 | % | 26 | % | 32 | % | 66 | % | 34 | % |
a | 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. |
b | 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. |
c | Based on average shares outstanding throughout the period. |
d | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
e | Rounds to less than $0.01. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 91 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Belgium Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 11.16 | $ | 10.43 | $ | 11.81 | $ | 13.23 | $ | 16.07 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomec | 0.37 | 0.41 | 0.25 | 0.19 | 0.19 | |||||||||||||||
Net realized and unrealized gain (loss) | 4.25 | 0.43 | (1.56 | ) | (1.34 | ) | (2.67 | ) | ||||||||||||
Total from investment operations | 4.62 | 0.84 | (1.31 | ) | (1.15 | ) | (2.48 | ) | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.01 | ) | (0.11 | ) | (0.07 | ) | (0.27 | ) | (0.36 | ) | ||||||||||
Total distributions | (1.01 | ) | (0.11 | ) | (0.07 | ) | (0.27 | ) | (0.36 | ) | ||||||||||
Net asset value, end of year | $ | 14.77 | $ | 11.16 | $ | 10.43 | $ | 11.81 | $ | 13.23 | ||||||||||
Total return | 42.88 | % | 8.25 | % | (11.10 | )% | (8.72 | )% | (15.50 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 24,813 | $ | 21,871 | $ | 10,427 | $ | 9,918 | $ | 13,230 | ||||||||||
Ratio of expenses to average net assets | 0.78 | % | 0.84 | % | 0.84 | % | 0.84 | %a | 1.13 | % | ||||||||||
Ratio of net investment income to average net assets | 2.79 | % | 4.10 | % | 2.26 | % | 1.60 | %b | 1.36 | % | ||||||||||
Portfolio turnover rated | 21 | % | 8 | % | 18 | % | 36 | % | 53 | % |
a | Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2001 was 0.87%. |
b | 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%. |
c | Based on average shares outstanding throughout the period. |
d | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
92 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI EMU Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 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)c | 1.36 | 0.93 | 0.75 | 0.72 | (0.00 | )e | ||||||||||||||
Net realized and unrealized gain (loss) | 8.69 | 3.62 | (11.47 | ) | (19.32 | ) | (4.70 | ) | ||||||||||||
Total from investment operations | 10.05 | 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 | $ | 59.38 | $ | 50.12 | $ | 46.02 | $ | 56.74 | $ | 76.02 | ||||||||||
Total return | 20.07 | % | 10.05 | % | (18.89 | )% | (24.51 | )% | (5.82 | )%f | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of period (000s) | $ | 326,606 | $ | 165,388 | $ | 131,168 | $ | 90,779 | $ | 41,811 | ||||||||||
Ratio of expenses to average net assetsg | 0.79 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | %a | ||||||||||
Ratio of expenses to average net assets exclusive of foreign taxes on stock dividendsg | 0.79 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of net investment income to average net assetsg | 2.29 | % | 2.08 | % | 1.44 | % | 1.13 | % | 0.03 | %b | ||||||||||
Portfolio turnover rated | 11 | % | 7 | % | 3 | % | 24 | % | 0 | % |
a | Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was 1.57%. |
b | 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)%. |
c | Based on average shares outstanding throughout the period. |
d | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
e | Rounds to less than $0.01. |
f | Not annualized. |
g | Annualized for periods of less than one year. |
h | Commencement of operations. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 93 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI France Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 16.90 | $ | 15.52 | $ | 19.53 | $ | 26.41 | $ | 22.90 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.24 | 0.23 | 0.18 | 0.06 | 0.10 | |||||||||||||||
Net realized and unrealized gain (loss) | 3.54 | 1.33 | (4.19 | ) | (6.89 | ) | 5.21 | |||||||||||||
Total from investment operations | 3.78 | 1.56 | (4.01 | ) | (6.83 | ) | 5.31 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.28 | ) | (0.18 | ) | — | (0.04 | ) | (0.11 | ) | |||||||||||
Net realized gain | — | — | — | (0.00 | )c | (1.67 | ) | |||||||||||||
Return of capital | — | — | — | (0.01 | ) | (0.02 | ) | |||||||||||||
Total distributions | (0.28 | ) | (0.18 | ) | — | (0.05 | ) | (1.80 | ) | |||||||||||
Net asset value, end of year | $ | 20.40 | $ | 16.90 | $ | 15.52 | $ | 19.53 | $ | 26.41 | ||||||||||
Total return | 22.44 | % | 10.22 | % | (20.53 | )% | (25.86 | )% | 23.45 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 61,201 | $ | 54,075 | $ | 49,674 | $ | 58,602 | $ | 95,116 | ||||||||||
Ratio of expenses to average net assets | 0.79 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.96 | % | ||||||||||
Ratio of net investment income to average net assets | 1.23 | % | 1.56 | % | 1.00 | % | 0.28 | % | 0.36 | % | ||||||||||
Portfolio turnover rateb | 9 | % | 9 | % | 3 | % | 14 | % | 17 | % |
a | Based on average shares outstanding throughout the period. |
b | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
c | Rounds to less than $0.01. |
See notes to financial statements.
94 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Germany Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 12.57 | $ | 12.07 | $ | 15.19 | $ | 20.46 | $ | 21.17 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.19 | 0.21 | 0.11 | 0.18 | 0.18 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.40 | 0.41 | (3.23 | ) | (5.26 | ) | 1.64 | |||||||||||||
Total from investment operations | 2.59 | 0.62 | (3.12 | ) | (5.08 | ) | 1.82 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.20 | ) | (0.12 | ) | — | (0.19 | ) | (0.17 | ) | |||||||||||
Net realized gain | — | — | — | — | (2.32 | ) | ||||||||||||||
Return of capital | — | — | — | (0.00 | )c | (0.04 | ) | |||||||||||||
Total distributions | (0.20 | ) | (0.12 | ) | — | (0.19 | ) | (2.53 | ) | |||||||||||
Net asset value, end of year | $ | 14.96 | $ | 12.57 | $ | 12.07 | $ | 15.19 | $ | 20.46 | ||||||||||
Total return | 20.55 | % | 5.39 | % | (20.54 | )% | (24.87 | )% | 8.44 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 98,764 | $ | 101,800 | $ | 94,160 | $ | 118,525 | $ | 153,487 | ||||||||||
Ratio of expenses to average net assets | 0.80 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.94 | % | ||||||||||
Ratio of net investment income to average net assets | 1.27 | % | 1.98 | % | 0.77 | % | 0.99 | % | 0.73 | % | ||||||||||
Portfolio turnover rateb | 9 | % | 11 | % | 9 | % | 20 | % | 56 | % |
a | Based on average shares outstanding throughout the period. |
b | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
c | Rounds to less than $0.01. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 95 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Italy Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 16.67 | $ | 15.15 | $ | 17.79 | $ | 22.23 | $ | 21.56 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.56 | 0.43 | 0.37 | 0.24 | 0.39 | |||||||||||||||
Net realized and unrealized gain (loss) | 3.59 | 1.47 | (3.01 | ) | (4.37 | ) | 2.51 | |||||||||||||
Total from investment operations | 4.15 | 1.90 | (2.64 | ) | (4.13 | ) | 2.90 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.61 | ) | (0.38 | ) | — | (0.24 | ) | (0.12 | ) | |||||||||||
Net realized gain | — | — | — | (0.07 | ) | (1.80 | ) | |||||||||||||
Return of capital | — | — | — | (0.00 | )c | (0.31 | ) | |||||||||||||
Total distributions | (0.61 | ) | (0.38 | ) | — | (0.31 | ) | (2.23 | ) | |||||||||||
Net asset value, end of year | $ | 20.21 | $ | 16.67 | $ | 15.15 | $ | 17.79 | $ | 22.23 | ||||||||||
Total return | 25.09 | % | 12.79 | % | (14.84 | )% | (18.61 | )% | 13.35 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 27,279 | $ | 29,997 | $ | 29,538 | $ | 34,682 | $ | 50,008 | ||||||||||
Ratio of expenses to average net assets | 0.83 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.99 | % | ||||||||||
Ratio of expenses to average net assets exclusive of foreign taxes on stock dividends | 0.79 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.99 | % | ||||||||||
Ratio of net investment income to average net assets | 2.85 | % | 2.84 | % | 2.34 | % | 1.16 | % | 1.61 | % | ||||||||||
Portfolio turnover rateb | 9 | % | 22 | % | 10 | % | 20 | % | 40 | %. |
a | Based on average shares outstanding throughout the period. |
b | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
c | Rounds to less than $0.01. |
See notes to financial statements.
96 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Netherlands Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 14.31 | $ | 14.69 | $ | 18.59 | $ | 23.53 | $ | 23.45 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.39 | 0.30 | 0.25 | 0.28 | 0.13 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.37 | (0.43 | ) | (4.11 | ) | (4.94 | ) | 0.18 | ||||||||||||
Total from investment operations | 1.76 | (0.13 | ) | (3.86 | ) | (4.66 | ) | 0.31 | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.37 | ) | (0.25 | ) | (0.04 | ) | (0.28 | ) | (0.08 | ) | ||||||||||
Net realized gain | — | — | — | — | (0.11 | ) | ||||||||||||||
Return of capital | — | — | — | — | (0.04 | ) | ||||||||||||||
Total distributions | (0.37 | ) | (0.25 | ) | (0.04 | ) | (0.28 | ) | (0.23 | ) | ||||||||||
Net asset value, end of year | $ | 15.70 | $ | 14.31 | $ | 14.69 | $ | 18.59 | $ | 23.53 | ||||||||||
Total return | 12.28 | % | (0.78 | )% | (20.79 | )% | (19.83 | )% | 1.28 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 28,265 | $ | 18,599 | $ | 19,103 | $ | 24,184 | $ | 30,613 | ||||||||||
Ratio of expenses to average net assets | 0.78 | % | 0.84 | % | 0.84 | % | 0.84 | % | 1.03 | % | ||||||||||
Ratio of net investment income to average net assets | 2.45 | % | 2.37 | % | 1.48 | % | 1.34 | % | 0.53 | % | ||||||||||
Portfolio turnover rateb | 9 | % | 18 | % | 15 | % | 35 | % | 22 | % |
a | Based on average shares outstanding throughout the period. |
b | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 97 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Spain Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 22.39 | $ | 17.95 | $ | 21.33 | $ | 24.19 | $ | 25.59 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.44 | 0.24 | 0.17 | 0.19 | 0.15 | |||||||||||||||
Net realized and unrealized gain (loss) | 4.99 | 4.36 | (3.55 | ) | (2.89 | ) | (0.60 | ) | ||||||||||||
Total from investment operations | 5.43 | 4.60 | (3.38 | ) | (2.70 | ) | (0.45 | ) | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.27 | ) | (0.16 | ) | — | (0.16 | ) | (0.14 | ) | |||||||||||
Net realized gain | — | — | — | — | (0.80 | ) | ||||||||||||||
Return of capital | — | — | — | (0.00 | )c | (0.01 | ) | |||||||||||||
Total distributions | (0.27 | ) | (0.16 | ) | — | (0.16 | ) | (0.95 | ) | |||||||||||
Net asset value, end of year | $ | 27.55 | $ | 22.39 | $ | 17.95 | $ | 21.33 | $ | 24.19 | ||||||||||
Total return | 24.28 | % | 25.81 | % | (15.85 | )% | (11.17 | )% | (1.81 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 45,456 | $ | 50,372 | $ | 18,850 | $ | 27,198 | $ | 39,913 | ||||||||||
Ratio of expenses to average net assets | 0.80 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.99 | % | ||||||||||
Ratio of net investment income to average net assets | 1.64 | % | 1.22 | % | 0.85 | % | 0.82 | % | 0.57 | % | ||||||||||
Portfolio turnover rateb | 6 | % | 17 | % | 14 | % | 26 | % | 39 | % |
a | Based on average shares outstanding throughout the period. |
b | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
c | Rounds to less than $0.01. |
See notes to financial statements.
98 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Sweden Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 12.59 | $ | 9.88 | $ | 12.88 | $ | 24.38 | $ | 22.26 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.28 | 0.25 | 0.12 | 0.07 | 0.14 | |||||||||||||||
Net realized and unrealized gain (loss) | 4.20 | 2.58 | (3.12 | ) | (11.52 | ) | 8.38 | |||||||||||||
Total from investment operations | 4.48 | 2.83 | (3.00 | ) | (11.45 | ) | 8.52 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.25 | ) | (0.12 | ) | — | (0.05 | ) | (0.14 | ) | |||||||||||
Net realized gain | — | — | — | — | (6.22 | ) | ||||||||||||||
Return of capital | — | — | — | (0.00 | )c | (0.04 | ) | |||||||||||||
Total distributions | (0.25 | ) | (0.12 | ) | — | (0.05 | ) | (6.40 | ) | |||||||||||
Net asset value, end of year | $ | 16.82 | $ | 12.59 | $ | 9.88 | $ | 12.88 | $ | 24.38 | ||||||||||
Total return | 35.81 | % | 29.04 | % | (23.29 | )% | (46.99 | )% | 39.15 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 27,758 | $ | 16,992 | $ | 8,154 | $ | 10,630 | $ | 23,774 | ||||||||||
Ratio of expenses to average net assets | 0.92 | % | 0.84 | % | 0.84 | % | 0.84 | % | 1.03 | % | ||||||||||
Ratio of expenses to average net assets exclusive of foreign taxes | 0.79 | % | 0.84 | % | 0.84 | % | 0.84 | % | 1.03 | % | ||||||||||
Ratio of net investment income to average net assets | 1.74 | % | 2.44 | % | 0.98 | % | 0.40 | % | 0.46 | % | ||||||||||
Portfolio turnover rateb | 9 | % | 12 | % | 31 | % | 43 | % | 90 | % |
a | Based on average shares outstanding throughout the period. |
b | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
c | Rounds to less than $0.01. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 99 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Switzerland Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 12.23 | $ | 11.59 | $ | 12.95 | $ | 15.54 | $ | 15.39 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.09 | 0.05 | 0.03 | 0.04 | 0.04 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.31 | 0.62 | (1.38 | ) | (2.54 | ) | 0.27 | |||||||||||||
Total from investment operations | 2.40 | 0.67 | (1.35 | ) | (2.50 | ) | 0.31 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.05 | ) | (0.03 | ) | (0.01 | ) | (0.05 | ) | (0.04 | ) | ||||||||||
Net realized gain | — | — | — | (0.04 | ) | (0.11 | ) | |||||||||||||
Return of capital | — | — | — | — | (0.01 | ) | ||||||||||||||
Total distributions | (0.05 | ) | (0.03 | ) | (0.01 | ) | (0.09 | ) | (0.16 | ) | ||||||||||
Net asset value, end of year | $ | 14.58 | $ | 12.23 | $ | 11.59 | $ | 12.95 | $ | 15.54 | ||||||||||
Total return | 19.56 | % | 5.89 | % | (10.47 | )% | (16.08 | )% | 1.96 | % | ||||||||||
Ratios/supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 41,920 | $ | 33,643 | $ | 31,883 | $ | 32,384 | $ | 44,685 | ||||||||||
Ratio of expenses to average net assets | 0.79 | % | 0.84 | % | 0.84 | % | 0.84 | % | 1.01 | % | ||||||||||
Ratio of net investment income to average net assets | 0.64 | % | 0.43 | % | 0.20 | % | 0.29 | % | 0.23 | % | ||||||||||
Portfolio turnover rateb | 4 | % | 10 | % | 12 | % | 34 | % | 35 | % |
a | Based on average shares outstanding throughout the period. |
b | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
100 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI United Kingdom Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 13.00 | $ | 12.77 | $ | 15.11 | $ | 18.35 | $ | 20.25 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.48 | 0.39 | 0.48 | 0.26 | 0.27 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.72 | 0.12 | (2.60 | ) | (3.23 | ) | (0.85 | ) | ||||||||||||
Total from investment operations | 3.20 | 0.51 | (2.12 | ) | (2.97 | ) | (0.58 | ) | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.48 | ) | (0.28 | ) | (0.22 | ) | (0.25 | ) | (0.25 | ) | ||||||||||
Net realized gain | — | — | — | (0.02 | ) | (1.03 | ) | |||||||||||||
Return of capital | — | — | — | — | (0.04 | ) | ||||||||||||||
Total distributions | (0.48 | ) | (0.28 | ) | (0.22 | ) | (0.27 | ) | (1.32 | ) | ||||||||||
Net asset value, end of year | $ | 15.72 | $ | 13.00 | $ | 12.77 | $ | 15.11 | $ | 18.35 | ||||||||||
Total return | 24.77 | % | 4.20 | % | (14.19 | )% | (16.20 | )% | (3.00 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 452,870 | $ | 150,809 | $ | 120,067 | $ | 117,883 | $ | 146,803 | ||||||||||
Ratio of expenses to average net assets | 0.77 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.94 | % | ||||||||||
Ratio of net investment income to average net assets | 3.11 | % | 3.23 | % | 3.39 | % | 1.57 | % | 1.39 | % | ||||||||||
Portfolio turnover rateb | 6 | % | 6 | % | 14 | % | 30 | % | 33 | % |
a | Based on average shares outstanding throughout the period. |
b | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 101 |
Notes to the Financial Statements
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 pursuant to amended and restated Articles of Incorporation. As of August 31, 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 equity 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 adviser 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 affecting these companies.
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 Company’s organizational documents, the Funds’ 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.
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 that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenue and expenses during the reporting period. 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. The reclassifications had no impact on prior year net assets, net income or distributions.
102 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
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 and debt securities maturing in 60 days or less are valued at amortized cost. Securities of investment companies, other than investment companies whose shares are traded on an exchange, are valued at the investment company’s published net asset value per share. 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 (the “Board”).
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. 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 currencies, investment securities 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 adviser 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
Italy and Greece may levy taxes on stock dividends at rates of 27.0% and 3.0%, respectively, based on the par value of stock dividends received by the iShares MSCI Italy and iShares MSCI EMU Index Funds. These taxes are paid by the Funds receiving the stock dividends and, if any, are disclosed in their respective Statements of Operations.
During the year ended August 31, 2004, the iShares MSCI Sweden Index Fund paid foreign taxes on certain taxable corporate events (i.e., spin-offs and tender offers) by Swedish companies whose securities are held by the Fund. The foreign taxes paid by the Fund are disclosed in its Statement 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.
NOTESTOTHE FINANCIAL STATEMENTS | 103 |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
At August 31, 2004, 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 Losses | Total Distributable Earnings (Accumulated Losses) | |||||||||||
Austria | $ | 634,690 | $ | 11,664,201 | $ | (3,409,670 | ) | $ | 8,889,221 | ||||||
Belgium | 613,600 | 331,679 | (2,531,775 | ) | (1,586,496 | ) | |||||||||
EMU | 6,789,991 | (6,245,138 | ) | (9,884,161 | ) | (9,339,308 | ) | ||||||||
France | 724,345 | (1,559,360 | ) | (6,445,487 | ) | (7,280,502 | ) | ||||||||
Germany | 1,573,473 | (35,513,677 | ) | (30,028,327 | ) | (63,968,531 | ) | ||||||||
Italy | 792,629 | 199,034 | (5,056,958 | ) | (4,065,295 | ) | |||||||||
Netherlands | 558,614 | (4,482,874 | ) | (7,391,799 | ) | (11,316,059 | ) | ||||||||
Spain | 759,103 | 8,200,485 | (4,427,739 | ) | 4,531,849 | ||||||||||
Sweden | 420,504 | 3,480,112 | (6,203,866 | ) | (2,303,250 | ) | |||||||||
Switzerland | 269,799 | 2,656,328 | (6,734,346 | ) | (3,808,219 | ) | |||||||||
United Kingdom | 6,976,148 | (8,089,189 | ) | (22,211,909 | ) | (23,324,950 | ) |
The differences between the components of distributable earnings (accumulated losses) on a tax basis and the amounts reflected in the Statements of Assets and Liabilities are primarily due to differing treatments of wash sales.
For the years ended August 31, 2004 and August 31, 2003, 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.
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 by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its 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 year ended August 31, 2004.
From November 1, 2003 to August 31, 2004, certain Funds incurred net realized capital losses and net foreign currency losses. As permitted by tax regulations, these Funds have elected to defer those losses and treat them as arising in the year ending August 31, 2005, as follows:
iShares MSCI Index Fund | Deferred Net Realized | ||
Belgium | $ | 15,331 | |
EMU | 2,057,503 | ||
Germany | 2,241,687 | ||
Italy | 330,798 | ||
Netherlands | 129,137 | ||
Spain | 64,528 | ||
Switzerland | 710,991 | ||
United Kingdom | 1,546,042 |
104 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
The Funds had tax basis net capital loss carryforwards at August 31, 2004, the tax year-end of the Funds, as follows:
iShares MSCI Index Fund | Expiring in 2007 | Expiring in 2008 | Expiring in 2009 | Expiring in 2010 | Expiring in 2011 | Expiring in 2012 | Total | ||||||||||||||
Austria | $ | 4,273 | $ | 551,208 | $ | 336,553 | $ | 1,291,324 | $ | 370,948 | $ | 855,364 | $ | 3,409,670 | |||||||
Belgium | — | 94,675 | 450,543 | 1,677,678 | 117,767 | 175,781 | 2,516,444 | ||||||||||||||
EMU | — | — | 443 | 1,923,552 | 1,144,756 | 4,757,907 | 7,826,658 | ||||||||||||||
France | — | — | — | 3,807,513 | 236,944 | 2,401,030 | 6,445,487 | ||||||||||||||
Germany | — | — | 86,860 | 13,573,336 | 5,469,732 | 8,656,712 | 27,786,640 | ||||||||||||||
Italy | — | — | — | 3,335,772 | 848,408 | 541,980 | 4,726,160 | ||||||||||||||
Netherlands | — | — | 60,885 | 3,222,792 | 1,497,810 | 2,481,175 | 7,262,662 | ||||||||||||||
Spain | — | — | 20,276 | 2,081,931 | 678,910 | 1,582,094 | 4,363,211 | ||||||||||||||
Sweden | — | — | 126,557 | 3,350,244 | 1,577,551 | 1,149,514 | 6,203,866 | ||||||||||||||
Switzerland | — | — | — | 2,855,879 | 1,018,305 | 2,149,171 | 6,023,355 | ||||||||||||||
United Kingdom | — | — | — | 9,945,254 | 6,448,554 | 4,272,059 | 20,665,867 |
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, as “passive foreign investment companies”, such Funds may elect to mark-to-market annually the shares of the passive foreign investment companies, and would be required to distribute to shareholders any such mark-to-market gains.
At August 31, 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 | $ | 52,431,220 | $ | 11,664,873 | $ | — | $ | 11,664,873 | ||||||
Belgium | 35,394,311 | 763,041 | (434,564 | ) | 328,477 | |||||||||
EMU | 441,807,821 | 17,801,516 | (24,027,250 | ) | (6,225,734 | ) | ||||||||
France | 82,540,336 | 10,949,207 | (12,492,607 | ) | (1,543,400 | ) | ||||||||
Germany | 162,263,270 | 3,137,216 | (38,644,991 | ) | (35,507,775 | ) | ||||||||
Italy | 39,913,123 | 3,943,360 | (3,758,346 | ) | 185,014 | |||||||||
Netherlands | 35,662,474 | — | (4,482,913 | ) | (4,482,913 | ) | ||||||||
Spain | 49,233,445 | 8,309,192 | (108,331 | ) | 8,200,861 | |||||||||
Sweden | 34,143,393 | 4,120,742 | (640,477 | ) | 3,480,265 | |||||||||
Switzerland | 40,773,039 | 5,424,404 | (2,777,563 | ) | 2,646,841 | |||||||||
United Kingdom | 459,207,442 | 20,859,186 | (28,906,243 | ) | (8,047,057 | ) |
NOTESTOTHE FINANCIAL STATEMENTS | 105 |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
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 Funds, 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. At August 31, 2004 a portion of the Funds’ cash collateral for securities on loan was invested in repurchase agreements as disclosed in the Funds’ Schedules of Investments. For further information, see Note 5, below.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
Pursuant to an Investment Advisory Agreement with the Company, as amended on December 28, 2001, Barclays Global Fund Advisors (“BGFA”) manages the investment of each Fund’s assets. BGFA is a California corporation indirectly owned by Barclays Bank PLC.
Under the Investment Advisory Agreement, BGFA is responsible for all of the expenses (“Covered Expenses”) of each of the Funds, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except interest, taxes, brokerage commissions and other expenses connected with the executions of portfolio transactions, distribution fees and extraordinary expenses.
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:
Investment 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.
106 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
BGI serves as securities lending agent for the Company. BGI is an affiliate of BGFA, the Funds’ investment adviser. 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 year ended August 31, 2004, BGI earned securities lending agent fees as follows:
iShares MSCI Index Fund | Securities Lending Agent Fees | ||
Austria | $ | 21,501 | |
Belgium | 38,576 | ||
EMU | 376,951 | ||
France | 54,991 | ||
Germany | 176,596 | ||
Italy | 33,334 | ||
Netherlands | 20,421 | ||
Spain | 48,320 | ||
Sweden | 39,655 | ||
Switzerland | 17,090 | ||
United Kingdom | 16,947 |
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. Prior to July 1, 2004, the Company had in effect a distribution plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Distributor was 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 expenses and services. At the Board meeting held on March 16, 2004, the Directors voted to terminate the Plan, effective July 1, 2004.
As defined under Section 2(a)(3) of the 1940 Act, certain broker-dealers may be deemed to be an “affiliated person” of a Fund by virtue of being a DTC Participant that owned of record 5% or more of the outstanding shares of such Fund. The broker-dealers identified to be an “affiliated person” of a Fund (other than BGIS) did not execute any portfolio transactions with the Funds during the year.
Pursuant to Rule 17a-7 of the 1940 Act, certain Funds executed cross trades for the year ended August 31, 2004. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment adviser. The Board reviewed all such transactions executed during the first ten months of the fiscal year and concluded that they 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 last two months of the fiscal year.
Pursuant to an exemptive order issued by the U.S. 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 adviser. The IMMF and PMMF are open-end money market funds available to institutional and accredited 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 investment advisory fee, the Master Portfolios in which they invest do charge an investment 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.
NOTESTOTHE FINANCIAL STATEMENTS | 107 |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
The following table provides information about the investments of each iShares Fund in shares of issuers affiliated with BGFA for the year ended August 31, 2004, including income earned from affiliated issuers and net realized gains from sales of affiliated issuers.
iShares MSCI Index Fund and Name | Number of (in 000S) | Gross Additions (in 000S) | Gross Reductions (in 000S) | Number of (in 000S) | Value at End of Year | Dividend and Interest Income | Net Realized Gain | ||||||||||
Austria | |||||||||||||||||
IMMF | 12 | 3,040 | 3,023 | 29 | $ | 28,529 | $ | 205 | $ | — | |||||||
Belgium | |||||||||||||||||
IMMF | 15 | 3,381 | 3,384 | 12 | 12,013 | 193 | — | ||||||||||
EMU | |||||||||||||||||
IMMF | 56 | 21,930 | 21,793 | 193 | 193,158 | 1,630 | — | ||||||||||
France | |||||||||||||||||
IMMF | 55 | 4,363 | 4,366 | 52 | 51,595 | 334 | — | ||||||||||
Germany | |||||||||||||||||
IMMF | 61 | 11,982 | 11,974 | 69 | 68,911 | 776 | — | ||||||||||
Italy | |||||||||||||||||
IMMF | 28 | 2,811 | 2,824 | 15 | 14,858 | 154 | — | ||||||||||
Netherlands | |||||||||||||||||
IMMF | — | 2,160 | 2,145 | 15 | 15,090 | 121 | — | ||||||||||
Spain | |||||||||||||||||
IMMF | 62 | 3,594 | 3,632 | 24 | 23,992 | 211 | — | ||||||||||
Sweden | |||||||||||||||||
IMMF | 6 | 1,678 | 1,669 | 15 | 14,962 | 153 | — | ||||||||||
Switzerland | |||||||||||||||||
IMMF | 3 | 2,419 | 2,400 | 22 | 21,684 | 151 | — | ||||||||||
United Kingdom | |||||||||||||||||
IMMF | 85 | 18,181 | 17,983 | 283 | 283,266 | 2,120 | — | ||||||||||
Barclays PLC | 624 | 974 | 88 | 1,510 | 13,979,803 | 408,840 | 30,813 |
The Funds invested cash collateral from securities on loan in the IMMF and PMMF. Due to the nature of the structure of the joint account used for the investment of the collateral for securities on loan, the information reported above for each Fund does not include the Funds’ holdings of the IMMF and PMMF in connection with the investment of collateral for securities on loan.
As of August 31, 2004, certain directors and officers of the Company are also officers of BGI.
108 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2004, were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||
Austria | $ | 4,981,837 | $ | 3,989,246 | ||
Belgium | 3,845,791 | 4,455,064 | ||||
EMU | 36,049,159 | 31,593,032 | ||||
France | 4,785,130 | 5,833,182 | ||||
Germany | 10,752,845 | 11,113,853 | ||||
Italy | 2,526,641 | 2,561,057 | ||||
Netherlands | 1,974,876 | 1,871,131 | ||||
Spain | 3,154,225 | 2,872,051 | ||||
Sweden | 2,265,432 | 2,197,968 | ||||
Switzerland | 1,888,039 | 1,783,248 | ||||
United Kingdom | 16,103,044 | 13,819,544 |
In-kind transactions (see Note 4) for the year ended August 31, 2004, were as follows:
iShares MSCI Index Fund | In-kind Purchases | In-kind Sales | ||||
Austria | $ | 32,097,067 | $ | 10,044,123 | ||
Belgium | 18,313,479 | 19,594,664 | ||||
EMU | 171,098,827 | 45,319,034 | ||||
France | 3,785,232 | 7,259,010 | ||||
Germany | 37,650,258 | 59,924,853 | ||||
Italy | — | 7,980,456 | ||||
Netherlands | 7,971,726 | — | ||||
Spain | 2,261,166 | 16,449,517 | ||||
Sweden | 5,100,204 | — | ||||
Switzerland | 3,712,739 | 1,874,413 | ||||
United Kingdom | 279,583,258 | 7,938,348 |
NOTESTOTHE FINANCIAL STATEMENTS | 109 |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
4. CAPITAL SHARE TRANSACTIONS
The Company has authorized 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 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 the purchase of Creation Units of a Fund generally consists of 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 may not return the securities when due.
As of August 31, 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 August 31, 2004, and the value of the related collateral received are disclosed in the Statements of Assets and Liabilities. Securities lending income, which is disclosed in the Funds’ Statements of Operations, is presented net of rebates paid to, or fees paid by, borrowers.
110 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
iShares, Inc.
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the iShares MSCI Austria Index Fund, iShares MSCI Belgium Index Fund, iShares MSCI EMU Index Fund, iShares MSCI France Index Fund, iShares MSCI Germany Index Fund, iShares MSCI Italy Index Fund, iShares MSCI Netherlands Index Fund, iShares MSCI Spain Index Fund, iShares MSCI Sweden Index Fund, iShares MSCI Switzerland Index Fund and iShares MSCI United Kingdom Index Fund, each a portfolio of the iShares MSCI Index Fund Series (the “Funds”) at August 31, 2004, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the four years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2004 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
The financial statements of the Funds as of August 31, 2000 and for the year then ended were audited by other auditors, whose report dated October 13, 2000 expressed an unqualified opinion on those statements.
PricewaterhouseCoopers LLP
San Francisco, California
October 22, 2004
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 111 |
iSHARES®, INC.
For the year ended August 31, 2004, the Funds earned foreign source income and paid foreign taxes which they intend to pass through to their shareholders pursuant to Section 853 of the Internal Revenue Code (the “Code”) as follows:
iShares Msci Index Fund | Foreign Source Income Earned | Foreign Taxes Paid | ||||
Austria | $ | 829,016 | $ | 63,119 | ||
Belgium | 673,545 | 32,514 | ||||
EMU | 8,907,386 | 372,284 | ||||
France | 1,139,309 | 29,424 | ||||
Germany | 2,522,285 | 74,850 | ||||
Italy | 1,006,311 | 36,123 | ||||
Netherlands | 758,962 | 54,428 | ||||
Spain | 1,219,444 | 66,568 | ||||
Sweden | 629,038 | 56,931 | ||||
Switzerland | 595,435 | 10,741 | ||||
United Kingdom | 10,426,179 | 797,772 |
Under Section 854(b)(2) of the Code, the Funds hereby designate the following maximum amounts as qualified dividends for purposes of the maximum rate under Section 1(h)(11) of the Code for the year ended August 31, 2004:
iShares MSCI Index Fund | Qualified Dividend Income | ||
Austria | $ | 455,106 | |
Belgium | 199,604 | ||
EMU | 2,689,404 | ||
France | 579,493 | ||
Germany | 659,329 | ||
Italy | 239,006 | ||
Netherlands | 345,888 | ||
Spain | 447,649 | ||
Sweden | 224,894 | ||
Switzerland | 98,341 | ||
United Kingdom | 7,894,608 |
In January 2005, shareholders will receive Form 1099-DIV which will include their share of qualified dividends distributed during the calendar year 2004. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their individual income tax returns.
112 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Supplemental Information (Unaudited)
iSHARES®, INC.
The tables that follow present information about the differences between the daily market price on secondary markets for shares of an iShares Fund and that Fund’s net asset value. Net asset value, or “NAV”, is the price per share at which each Fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of each iShares Fund generally is determined using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of such Fund is listed for trading, as of the time that the Fund’s NAV is calculated. Each Fund’s Market Price may be at, above or below its NAV. The NAV of each Fund will fluctuate with changes in the market value of its portfolio holdings. The Market Price of each Fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.
Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of a Fund on a given day, generally at the time NAV is calculated. A premium is the amount that a Fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that a Fund is trading below the reported NAV, expressed as a percentage of the NAV.
The following information shows the frequency distributions of premiums and discounts for each of the iShares Funds included in this report. Except for the iShares MSCI EMU Index Fund, the information shown for each Fund is for the period from January 1, 1999 through June 30, 2004, the date of the most recent calendar quarter-end. The information shown for the iShares MSCI EMU Index Fund is for each full calendar quarter completed after the launch date of that Fund through June 30, 2004. The specific periods covered for each Fund are disclosed in the table for such Fund.
Each line in the table shows the number of trading days in which the ishares fund traded within the premium/discount range indicated. The number of trading days in each premium/discount range is also shown as a percentage of the total number of trading days in the period covered by each table. All data presented here represents past performance, which cannot be used to predict future results.
iShares MSCI Austria Index Fund
Period Covered: January 1, 1999 Through June 30, 2004
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 3.0% | 10 | 0.72 | % | ||
Greater than 2.5% and Less than 3.0% | 8 | 0.58 | |||
Greater than 2.0% and Less than 2.5% | 9 | 0.65 | |||
Greater than 1.5% and Less than 2.0% | 36 | 2.61 | |||
Greater than 1.0% and Less than 1.5% | 101 | 7.32 | |||
Greater than 0.5% and Less than 1.0% | 221 | 16.01 | |||
Between 0.5% And – 0.5% | 736 | 53.34 | |||
Less than – 0.5% and Greater than – 1.0% | 169 | 12.25 | |||
Less than – 1.0% and Greater than – 1.5% | 60 | 4.35 | |||
Less than – 1.5% and Greater than – 2.0% | 18 | 1.30 | |||
Less than – 2.0% and Greater than – 2.5% | 7 | 0.51 | |||
Less than – 2.5% | 5 | 0.36 | |||
1,380 | 100.00 | % | |||
SUPPLEMENTAL INFORMATION | 113 |
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Belgium Index Fund
Period Covered: January 1, 1999 through June 30, 2004
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 2.5% | 11 | 0.80 | % | ||
Greater than 2.0% and Less than 2.5% | 12 | 0.87 | |||
Greater than 1.5% and Less than 2.0% | 30 | 2.17 | |||
Greater than 1.0% and Less than 1.5% | 95 | 6.88 | |||
Greater than 0.5% and Less than 1.0% | 248 | 17.97 | |||
Between 0.5% and – 0.5% | 690 | 50.01 | |||
Less than – 0.5% and Greater than – 1.0% | 189 | 13.7 | |||
Less than – 1.0% and Greater than – 1.5% | 70 | 5.07 | |||
Less than – 1.5% and Greater than – 2.0% | 20 | 1.45 | |||
Less than – 2.0% and Greater than – 2.5% | 10 | 0.72 | |||
Less than – 2.5% | 5 | 0.36 | |||
1,380 | 100.00 | % | |||
iShares MSCI EMU Index Fund
Period Covered: October 1, 2000 through June 30, 2004
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 2.5% | 7 | 0.75 | % | ||
Greater than 2.0% and Less than 2.5% | 7 | 0.75 | |||
Greater than 1.5% and Less than 2.0% | 23 | 2.45 | |||
Greater than 1.0% and Less than 1.5% | 79 | 8.41 | |||
Greater than 0.5% and Less than 1.0% | 260 | 27.69 | |||
Between 0.5% and – 0.5% | 468 | 49.84 | |||
Less than – 0.5% and Greater than – 1.0% | 68 | 7.24 | |||
Less than – 1.0% and Greater than – 1.5% | 19 | 2.02 | |||
Less than – 1.5% | 8 | 0.85 | |||
939 | 100.00 | % | |||
114 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI France Index Fund
Period Covered: January 1, 1999 through June 30, 2004
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 2.0% | 5 | 0.36 | % | ||
Greater than 1.5% and Less than 2.0% | 11 | 0.80 | |||
Greater than 1.0% and Less than 1.5% | 52 | 3.77 | |||
Greater than 0.5% and Less than 1.0% | 150 | 10.87 | |||
Between 0.5% and – 0.5% | 979 | 70.94 | |||
Less than – 0.5% and Greater than – 1.0% | 135 | 9.78 | |||
Less than – 1.0% and Greater than – 1.5% | 35 | 2.54 | |||
Less than – 1.5% and Greater than – 2.0% | 6 | 0.43 | |||
Less than – 2.0% | 7 | 0.51 | |||
1,380 | 100.00 | % | |||
iShares MSCI Germany Index Fund
Period Covered: January 1, 1999 through June 30, 2004
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 2.5% | 7 | 0.51 | % | ||
Greater than 2.0% and Less than 2.5% | 7 | 0.51 | |||
Greater than 1.5% and Less than 2.0% | 31 | 2.25 | |||
Greater than 1.0% and Less than 1.5% | 74 | 5.36 | |||
Greater than 0.5% and Less than 1.0% | 209 | 15.14 | |||
Between 0.5% and – 0.5% | 805 | 58.34 | |||
Less than – 0.5% and Greater than – 1.0% | 160 | 11.59 | |||
Less than – 1.0% and Greater than – 1.5% | 58 | 4.20 | |||
Less than – 1.5% and Greater than – 2.0% | 18 | 1.30 | |||
Less than – 2.0% and Greater than – 2.5% | 4 | 0.29 | |||
Less than – 2.5% | 7 | 0.51 | |||
1,380 | 100.00 | % | |||
SUPPLEMENTAL INFORMATION | 115 |
Supplemental Information (Unaudited) (Continued)
iSHARE®, INC.
iShares MSCI Italy Index Fund
Period Covered: January 1, 1999 through June 30, 2004
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 2.0% | 10 | 0.72 | % | ||
Greater than 1.5% and Less than 2.0% | 13 | 0.94 | |||
Greater than 1.0% and Less than 1.5% | 35 | 2.54 | |||
Greater than 0.5% and Less than 1.0% | 159 | 11.52 | |||
Between 0.5% and – 0.5% | 973 | 70.51 | |||
Less than – 0.5% and Greater than – 1.0% | 137 | 9.93 | |||
Less than – 1.0% and Greater than – 1.5% | 31 | 2.25 | |||
Less than – 1.5% and Greater than – 2.0% | 13 | 0.94 | |||
Less than – 2.0% | 9 | 0.65 | |||
1,380 | 100.00 | % | |||
iShares MSCI Netherlands Index Fund
Period Covered: January 1, 1999 through June 30, 2004
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 2.5% | 12 | 0.87 | % | ||
Greater than 2.0% and Less than 2.5% | 7 | 0.51 | |||
Greater than 1.5% and Less than 2.0% | 22 | 1.59 | |||
Greater than 1.0% and Less than 1.5% | 51 | 3.70 | |||
Greater than 0.5% and Less than 1.0% | 241 | 17.46 | |||
Between 0.5% and – 0.5% | 855 | 61.96 | |||
Less than – 0.5% and Greater than – 1.0% | 119 | 8.62 | |||
Less than – 1.0% and Greater than – 1.5% | 53 | 3.84 | |||
Less than – 1.5% and Greater than – 2.0% | 13 | 0.94 | |||
Less than – 2.0% | 7 | 0.51 | |||
1,380 | 100.00 | % | |||
116 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Supplemental Information (Unaudited) (Continued)
iSHARE®, INC.
iShares MSCI Spain Index Fund
Period Covered: January 1, 1999 through June 30, 2004
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 3.0% | 6 | 0.43 | % | ||
Greater than 2.0% and Less than 3.0% | 11 | 0.80 | |||
Greater than 1.5% and Less than 2.0% | 13 | 0.94 | |||
Greater than 1.0% and Less than 1.5% | 46 | 3.33 | |||
Greater than 0.5% and Less than 1.0% | 173 | 12.54 | |||
Between 0.5% and – 0.5% | 933 | 67.61 | |||
Less than – 0.5% and Greater than – 1.0% | 136 | 9.86 | |||
Less than – 1.0% and Greater than – 1.5% | 45 | 3.26 | |||
Less than – 1.5% and Greater than – 2.0% | 10 | 0.72 | |||
Less than – 2.0% | 7 | 0.51 | |||
1,380 | 100.00 | % | |||
iShares MSCI Sweden Index Fund
Period Covered: January 1, 1999 through June 30, 2004
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 2.5% | 12 | 0.87 | % | ||
Greater than 2.0% and Less than 2.5% | 17 | 1.23 | |||
Greater than 1.5% and Less than 2.0% | 25 | 1.81 | |||
Greater than 1.0% and Less than 1.5% | 84 | 6.09 | |||
Greater than 0.5% and Less than 1.0% | 251 | 18.19 | |||
Between 0.5% and – 0.5% | 776 | 56.23 | |||
Less than – 0.5% and Greater than – 1.0% | 114 | 8.26 | |||
Less than – 1.0% and Greater than – 1.5% | 57 | 4.13 | |||
Less than – 1.5% and Greater than – 2.0% | 17 | 1.23 | |||
Less than – 2.0% and Greater than – 2.5% | 15 | 1.09 | |||
Less than – 2.5% | 12 | 0.87 | |||
1,380 | 100.00 | % | |||
SUPPLEMENTAL INFORMATION | 117 |
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Switzerland Index Fund
Period Covered: January 1, 1999 through June 30, 2004
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 3.0% | 2 | 0.14 | % | ||
Greater than 2.5% and Less than 3.0% | 8 | 0.58 | |||
Greater than 2.0% and Less than 2.5% | 8 | 0.58 | |||
Greater than 1.5% and Less than 2.0% | 33 | 2.39 | |||
Greater than 1.0% and Less than 1.5% | 116 | 8.41 | |||
Greater than 0.5% and Less than 1.0% | 277 | 20.07 | |||
Between 0.5% and – 0.5% | 763 | 55.29 | |||
Less than – 0.5% and Greater than – 1.0% | 108 | 7.83 | |||
Less than – 1.0% and Greater than – 1.5% | 38 | 2.75 | |||
Less than – 1.5% and Greater than – 2.0% | 19 | 1.38 | |||
Less than – 2.0% | 8 | 0.58 | |||
1,380 | 100.00 | % | |||
iShares MSCI United Kingdom Index Fund
Period Covered: January 1, 1999 through June 30, 2004
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 3.5% and Less than 4.0% | 7 | 0.51 | % | ||
Greater than 2.5% and Less than 3.5% | 9 | 0.65 | |||
Greater than 2.0% and Less than 2.5% | 20 | 1.45 | |||
Greater than 1.5% and Less than 2.0% | 80 | 5.80 | |||
Greater than 1.0% and Less than 1.5% | 212 | 15.36 | |||
Greater than 0.5% and Less than 1.0% | 345 | 25.00 | |||
Between 0.5% and – 0.5% | 620 | 44.93 | |||
Less than – 0.5% and Greater than – 1.0% | 61 | 4.42 | |||
Less than – 1.0% and Greater than – 1.5% | 14 | 1.01 | |||
Less than – 1.5% and Greater than – 2.5% | 8 | 0.58 | |||
Less than – 2.5% | 4 | 0.29 | |||
1,380 | 100.00 | % | |||
118 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Director Information (Unaudited)
iSHARES®, INC.
The Board of Directors has responsibility for the overall management and operations of the Company, including general supervision of the duties performed by BGFA and other service providers. Each Director serves until his or her successor is duly elected or appointed and qualified.
iShares, Inc., iShares Trust, Barclays Global Investors Funds and Master Investment Portfolio are considered to be members of the same fund complex, as defined in Form N-1A under the 1940 Act. Each Director of iShares, Inc. also serves as a Trustee for iShares Trust and oversees 97 portfolios within the fund complex. In addition, Lee T. Kranefuss and Richard K. Lyons each serves as a Trustee for Barclays Global Investors Funds and Master Investment Portfolio and oversees 124 portfolios within the fund complex.
Unless otherwise noted in the tables below, the address for each Director is 45 Fremont Street, San Francisco, California 94105. Additional information about the Funds’ Directors may be found in the Funds’ Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-474-2737.
Interested Directors
Name and Age | Position(s), Length of Service | Principal Occupation(s) During Past 5 Years | Other Directorships Held | |||
*Lee T. Kranefuss(43) | Director, Chairman, and President (since June 18, 2003) | Chief Executive Officer of the Intermediary Investors and Exchange Traded Products Business of BGI (since 2003); Chief Executive Officer of the Individual Investor Business of BGI (1997-2003). | Trustee (since June 18, 2003) of iShares Trust; Board of Trustees (since 2001) for Barclays Global Investors Funds and Master Investment Portfolio. | |||
*Nathan Most(90) | Director (since December 16, 1996) | Consultant to BGI (1998-2002), American Stock Exchange (1996-2000) and the Hong Kong Stock Exchange (since 1998); Consultant to the Amsterdam Stock Exchange (1997-1998); Consultant to the Pacific Stock Exchange (1997-1998). | Trustee (since 2000) and President (2000-2002) of iShares Trust. | |||
*John E. Martinez(42) | Director (since December 5, 2003) | Co-CEO of Global Index and Markets Group of BGI (2001-2003); Chairman of Barclays Global Investors Services (2000-2003); CEO of Capital Markets Groups of BGI (1996-2001) | Trustee (since December 5, 2003) of iShares Trust; Director (since November 2003) of Barclays Global Investors UK Holdings. |
* | Lee T. Kranefuss, Nathan Most and John E. Martinez are deemed to be “interested persons” (as defined in the 1940 Act) of the Company due to their affiliations with BGFA, the Funds’ investment adviser and BGI, the parent company of BGFA. John E. Martinez is also deemed to be an “interested person” because of his affiliation with Barclays Global Investors Services, an affiliate of BGFA and BGI. |
DIRECTOR INFORMATION | 119 |
Director Information (Unaudited) (Continued)
iSHARES®, INC.
Independent Directors
Name and Age | Position(s), Length of Service | Principal Occupation(s) During Past 5 Years | Other Directorships Held | |||
John B. Carroll (69) | Director (since December 16, 1996) | Retired Vice President of Investment Management (1984-2000) of Verizon Corporation; Advisory Board member of Ibbotson Associates (1992-1998); former Vice Chairman and Executive Committee Member (1994-1998) of the Committee on Investment of Employee Benefit Assets of the Financial Executive Institute. | Trustee (since 2002) of iShares Trust; Trustee and member of the Executive Committee (since 1991) of The Common Fund Institutional Funds, a non-profit organization; Member of the Board of Managers of JP Morgan Private Equity Funds. | |||
Richard K. Lyons (43) | Director (since February 28, 2002) | Professor, University of California, Berkeley: Haas School of Business (since 1993); Consultant for IMF World Bank, Federal Reserve Bank, and Citibank N.A. (since 2000). | Trustee (since 2000) of iShares Trust; Director (since 2003) of the BGI Cayman Prime Money Market Fund, Ltd.; Trustee (since 2001) of Barclays Global Investors Funds and Master Investment Portfolio; Board of Trustees: Matthews Asian Funds since 1995 (oversees 6 portfolios). | |||
George C. Parker (65) | Director (since February 28, 2002) | Dean Witter Distinguished Professor of Finance (since 1994); Associate Dean for Academic Affairs, Director of MBA Program, and Professor, Stanford University: Graduate School of Business (1993-2001). | Trustee (since 2000) of iShares Trust; Director (since 1985) of Bailard, Biehl and Kaiser, Inc.; Director (since 1978) of California Casualty Group of Insurance Companies; Director (since 1996) of Continental Airlines, Inc.; Director (since 1995) of Community First Financial Group; Director (1994-2002) of Dresdner/RCM Mutual Funds; Director (since 1999) of Tyon Ranch Company. | |||
W. Allen Reed (57) | Director (since December 16, 1996) | President and Chief Executive Officer (since 1994) of General Motors Investment Management Corporation. | Trustee (since 2002) of iShares Trust; Director (since 1994) of General Motors Investment Management Corporation; Director (1995-1998) of Taubman Centers, Inc. (a real estate investment trust); Director (since 1992) of FLIR Systems (an imaging technology company); Director (since 1994) of General Motors Acceptance Corporation; Director (since 1994) of GMAC Insurance Holdings, Inc.; Director (since 1995) of Global Emerging Markets Fund; Director (since 2000) of Temple Inland Industries; Chairman (since 1995) of the Investment Advisory Committee of Howard Hughes Medical Institute. |
120 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Director Information (Unaudited) (Continued)
iSHARES®, INC.
Officer
Name and Age | Position | Principal Occupation(s) During Past 5 Years | Directorships Held by Officers | |||
Michael A. Latham (39) | Secretary, Treasurer and Principal Financial Officer (since February 28, 2002) | Chief Operating Officer of the Intermediary Investors and Exchange Traded Products Business of BGI (since 2003); Director of Mutual Fund Delivery in the U.S. Individual Investor Business of BGI (2000-2003); Head of Operations, BGI Europe (1997-2000). | None. |
DIRECTOR INFORMATION | 121 |
The following is a list of iShares Funds being offered, 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 that 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.
iShares S&P Domestic Index Funds
iShares S&P 1500 (ISI)
iShares S&P 500 (IVV)
iShares S&P 500/BARRA Growth (IVW)
iShares S&P 500/BARRA Value (IVE)
iShares S&P MidCap 400 (IJH)
iShares S&P MidCap 400/BARRA Growth (IJK)
iShares S&P MidCap 400/BARRA Value (IJJ)
iShares S&P SmallCap 600 (IJR)
iShares S&P SmallCap 600/BARRA Growth (IJT)
iShares S&P SmallCap 600/BARRA Value (IJS)
iShares S&P 100 (OEF)
iShares Sector and Specialty Index Funds
iShares Cohen & Steers Realty Majors (ICF)
iShares Dow Jones U.S. Basic Materials Sector (IYM)
iShares Dow Jones U.S. Consumer Cyclical Sector (IYC)
iShares Dow Jones U.S. Consumer Non-Cyclical Sector (IYK)
iShares Dow Jones U.S. Energy Sector (IYE)
iShares Dow Jones U.S. Financial Sector (IYF)
iShares Dow Jones U.S. Financial Services (IYG)
iShares Dow Jones U.S. Healthcare Sector (IYH)
iShares Dow Jones U.S. Industrial Sector (IYJ)
iShares Dow Jones U.S. Real Estate (IYR)
iShares Dow Jones Select Dividend (DVY)
iShares Dow Jones U.S. Technology Sector (IYW)
iShares Dow Jones U.S. Telecommunications Sector (IYZ)
iShares Dow Jones U.S. Total Market (IYY)
iShares Dow Jones Transportation Average (IYT)
iShares Dow Jones U.S. Utilities Sector (IDU)
iShares Goldman Sachs Natural Resources (IGE)
iShares Goldman Sachs Networking (IGN)
iShares Goldman Sachs Semiconductor (IGW)
iShares Goldman Sachs Software (IGV)
iShares Goldman Sachs Technology (IGM)
iShares Nasdaq Biotechnology (IBB)
iShares S&P Global Energy Sector (IXC)
iShares S&P Global Financials Sector (IXG)
iShares S&P Global Healthcare Sector (IXJ)
iShares S&P Global Technology Sector (IXN)
iShares S&P Global Telecommunications Sector (IXP)
iShares Russell Index Funds
iShares Russell 3000 (IWV)
iShares Russell 3000 Growth (IWZ)
iShares Russell 3000 Value (IWW)
iShares Russell 1000 (IWB)
iShares Russell 1000 Growth (IWF)
iShares Russell 1000 Value (IWD)
iShares Russell Midcap (IWR)
iShares Russell Midcap Growth (IWP)
iShares Russell Midcap Value (IWS)
iShares Russell 2000 (IWM)
iShares Russell 2000 Growth (IWO)
iShares Russell 2000 Value (IWN)
iShares International Index Funds
iShares FTSE/Xinhua China 25 (FXI)
iShares MSCI Australia (EWA)
iShares MSCI Austria (EWO)
iShares MSCI Belgium (EWK)
iShares MSCI Brazil (EWZ)
iShares MSCI Canada (EWC)
iShares MSCI EAFE (EFA)
iShares MSCI Emerging Markets (EEM)
iShares MSCI EMU (EZU)
iShares MSCI France (EWQ)
iShares MSCI Germany (EWG)
iShares MSCI Hong Kong (EWH)
iShares MSCI Italy (EWI)
iShares MSCI Japan (EWJ)
iShares MSCI Malaysia (EWM)
iShares MSCI Mexico (EWW)
iShares MSCI Netherlands (EWN)
iShares MSCI Pacific ex-Japan (EPP)
iShares MSCI Singapore (EWS)
iShares MSCI South Africa (EZA)
iShares MSCI South Korea (EWY)
iShares MSCI Spain (EWP)
iShares MSCI Sweden (EWD)
iShares MSCI Switzerland (EWL)
iShares MSCI Taiwan (EWT)
iShares MSCI United Kingdom (EWU)
iShares S&P Europe 350 (IEV)
iShares S&P Global 100 (IOO)
iShares S&P Latin America 40 (ILF)
iShares S&P/TOPIX 150 (ITF)
iShares Bond Funds
iShares Lehman Aggregate (AGG)
iShares Lehman TIPS (TIP)
iShares Lehman 1-3 Year Treasury (SHY)
iShares Lehman 7-10 Year Treasury (IEF)
iShares Lehman 20+ Year Treasury (TLT)
iShares GS $ InvesTopTM Corporate (LQD)
iShares NYSE Index Funds
iShares NYSE 100 (NY)
iShares NYSE Composite (NYC)
iShares Morningstar Index Funds
iShares Morningstar Large Core (JKD)
iShares Morningstar Large Growth (JKE)
iShares Morningstar Large Value (JKF)
iShares Morningstar Mid Core (JKG)
iShares Morningstar Mid Growth (JKH)
iShares Morningstar Mid Value (JKI)
iShares Morningstar Small Core (JKJ)
iShares Morningstar Small Growth (JKK)
iShares Morningstar Small Value (JKL)
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., FTSE/Xinhua Index Limited, Morgan Stanley Capital International, Morningstar, Inc., The Nasdaq Stock Market, Inc., New York Stock Exchange, 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 the companies listed above. “GS $ InvesTop™” and “Goldman Sachs®” are trademarks of Goldman, Sachs & Co.
An investment in the Fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
This advertising section does not constitute part of the 2004 Annual Report.
1353-iS-0904
122 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
The iShares Funds are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an adviser 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.
©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.
Investing involves risk, including possible loss of principal.
A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, 2004 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.
Beginning January 31, 2005, the Funds will be filing their complete schedules of portfolio holdings with the Securities and Exchange Commission for the first and third quarter of each fiscal year on Form N-Q, which when filed, will be available on the Commission’s website at www.sec.gov. When filed, the Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily and monthly basis on the Funds’ website at www.iShares.com.
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.
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2004ANNUALREPORTTOSHAREHOLDERS | AUGUST 31, 2004
iSHARES MSCI SERIES
iSHARESMSCIAUSTRALIAINDEXFUND iSHARESMSCIBRAZILINDEXFUND iSHARESMSCICANADAINDEXFUND iSHARESMSCIEMERGINGMARKETSINDEXFUND iSHARESMSCIHONGKONGINDEXFUND iSHARESMSCIMALAYSIAINDEXFUND iSHARESMSCIMEXICOINDEXFUND iSHARESMSCIPACIFICEX-JAPANINDEXFUND iSHARESMSCISINGAPOREINDEXFUND iSHARESMSCISOUTHAFRICAINDEXFUND iSHARESMSCISOUTHKOREAINDEXFUND iSHARESMSCITAIWANINDEXFUND | Electronic delivery of this document may be available to you. See inside for details. |
Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on your iShares holdings. In addition, it’s a way we can all care for our environment. To that end, we are pleased to offer shareholder reports and prospectuses online.
To sign up for electronic delivery, please follow these simple steps:
1. | Go to www.icsdelivery.com. |
2. | From the main page, select the first letter of your brokerage firm’s name. |
3. | Select your brokerage institution from the list that follows. If your brokerage firm is not listed, electronic delivery may not be available. Please contact your brokerage firm or financial adviser. |
4. | Fill out the appropriate information and provide the e-mail address where you would like your information sent. |
Your information and email address will be kept confidential and only used to deliver documents to you. If at any time you are not satisfied, you can cancel electronic delivery at www.icsdelivery.com and once again receive physical delivery of your materials. If you have any questions, please contact your brokerage firm or financial adviser.
Once you have enrolled, you will no longer receive prospectuses and shareholder reports in the mail. Instead, you will receive e-mail notifications announcing that the shareholder report or prospectus has been posted on the iShares website at www.iShares.com.
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Global markets generally delivered strong performance during the 12-month reporting period ended August 31, 2004. For most of the markets included in this report, performance was driven largely by escalating export demand early in the reporting period. To a large extent, this demand came from the U.S., and was fueled by improving economic growth in the U.S. Burgeoning economic expansion in China also translated into rising export growth, particularly among China’s Asian neighbors, but also from Brazil.
During the course of the reporting period, though, market strength slowed somewhat. Oil prices surged about 40% during the reporting period, ultimately weighing on global economic growth and dampening export demand. The U.S. dollar weakened, making exports to the U.S. more expensive and therefore weakening demand. Canada, Australia, and South Africa, in particular, felt the dampening effects of a rising local currency against the U.S. dollar. In addition, mixed economic signals from the U.S. and abroad suggested that the global economic recovery might be faltering. China’s economy also gave signs of slowing after reporting a robust 9.8% gross domestic product (GDP) annual growth rate for the first quarter of 2004 and 9.6% in the second quarter. By July, money and credit growth had slowed in China, as had import levels for basic materials.
As market conditions change, we encourage you to talk with your financial adviser about what blend of investments or asset allocation can best help you meet your financial goals. One trait many successful investors share is the ability to stay focused on their personal financial goals while ignoring market swings. Regardless of market conditions, a sound, disciplined investment plan is essential.
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.
Lee T. Kranefuss |
President and Chairman of the Board of Directors |
iShares, Inc. |
SHAREHOLDER LETTER | 1 |
Managers’ Discussion & Analysis
iSHARES® MSCI AUSTRALIA INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
24.95% | 23.50 | % | 24.31 | % | 8.74 | % | 8.62 | % | 8.74 | % | 6.49 | % | 6.46 | % | 6.76 | % |
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
24.95% | 23.50 | % | 24.31 | % | 52.05 | % | 51.20 | % | 52.06 | % | 70.42 | % | 69.92 | % | 74.19 | % |
Total returns for the periods 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI AUSTRALIA INDEX FUND | MSCI AUSTRALIA INDEX | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 10,161 | $ | 10,156 | ||
4/30/1996 | $ | 10,633 | $ | 10,655 | ||
5/31/1996 | $ | 10,523 | $ | 10,573 | ||
6/30/1996 | $ | 10,261 | $ | 10,224 | ||
7/31/1996 | $ | 9,769 | $ | 9,744 | ||
8/31/1996 | $ | 10,388 | $ | 10,368 | ||
9/30/1996 | $ | 10,378 | $ | 10,378 | ||
10/31/1996 | $ | 10,787 | $ | 10,776 | ||
11/30/1996 | $ | 11,238 | $ | 11,216 | ||
12/31/1996 | $ | 11,235 | $ | 11,184 | ||
1/31/1997 | $ | 10,769 | $ | 10,729 | ||
2/28/1997 | $ | 11,048 | $ | 11,039 | ||
3/31/1997 | $ | 11,059 | $ | 10,999 | ||
4/30/1997 | $ | 11,338 | $ | 11,297 | ||
5/31/1997 | $ | 11,545 | $ | 11,503 | ||
6/30/1997 | $ | 11,979 | $ | 11,878 | ||
7/31/1997 | $ | 11,886 | $ | 11,786 | ||
8/31/1997 | $ | 11,035 | $ | 10,974 | ||
9/30/1997 | $ | 11,590 | $ | 11,500 | ||
10/31/1997 | $ | 10,022 | $ | 9,947 | ||
11/30/1997 | $ | 9,863 | $ | 9,736 | ||
12/31/1997 | $ | 10,090 | $ | 10,016 | ||
1/31/1998 | $ | 10,702 | $ | 10,678 | ||
2/28/1998 | $ | 10,799 | $ | 10,864 | ||
3/31/1998 | $ | 10,842 | $ | 10,897 | ||
4/30/1998 | $ | 10,724 | $ | 10,735 | ||
5/31/1998 | $ | 10,058 | $ | 10,117 | ||
6/30/1998 | $ | 10,015 | $ | 10,139 | ||
7/31/1998 | $ | 9,865 | $ | 10,076 | ||
8/31/1998 | $ | 8,485 | $ | 8,711 | ||
9/30/1998 | $ | 9,077 | $ | 9,286 | ||
10/31/1998 | $ | 9,843 | $ | 10,081 | ||
11/30/1998 | $ | 10,434 | $ | 10,707 | ||
12/31/1998 | $ | 10,310 | $ | 10,624 | ||
1/31/1999 | $ | 10,847 | $ | 11,264 | ||
2/28/1999 | $ | 10,606 | $ | 10,978 | ||
3/31/1999 | $ | 11,122 | $ | 11,439 | ||
4/30/1999 | $ | 12,350 | $ | 12,610 | ||
5/31/1999 | $ | 11,374 | $ | 11,573 | ||
6/30/1999 | $ | 11,922 | $ | 12,149 | ||
7/31/1999 | $ | 11,900 | $ | 12,139 | ||
8/31/1999 | $ | 11,208 | $ | 11,455 | ||
9/30/1999 | $ | 11,298 | $ | 11,501 | ||
10/31/1999 | $ | 10,961 | $ | 11,233 | ||
11/30/1999 | $ | 11,500 | $ | 11,828 | ||
12/31/1999 | $ | 12,293 | $ | 12,496 | ||
1/31/2000 | $ | 11,709 | $ | 12,045 | ||
2/29/2000 | $ | 11,372 | $ | 11,762 | ||
3/31/2000 | $ | 11,316 | $ | 11,659 | ||
4/30/2000 | $ | 10,956 | $ | 11,345 | ||
5/31/2000 | $ | 10,507 | $ | 10,942 | ||
6/30/2000 | $ | 12,012 | $ | 12,523 | ||
7/31/2000 | $ | 11,304 | $ | 11,761 | ||
8/31/2000 | $ | 11,415 | $ | 11,885 | ||
9/30/2000 | $ | 10,932 | $ | 11,362 | ||
10/31/2000 | $ | 10,265 | $ | 10,631 | ||
11/30/2000 | $ | 10,507 | $ | 10,867 | ||
12/31/2000 | $ | 10,877 | $ | 11,252 | ||
1/31/2001 | $ | 11,292 | $ | 11,706 | ||
2/28/2001 | $ | 10,773 | $ | 11,172 | ||
3/31/2001 | $ | 9,666 | $ | 9,986 | ||
4/30/2001 | $ | 10,796 | $ | 11,161 | ||
5/31/2001 | $ | 10,842 | $ | 11,225 | ||
6/30/2001 | $ | 11,234 | $ | 11,581 | ||
7/31/2001 | $ | 10,634 | $ | 10,968 | ||
8/31/2001 | $ | 10,870 | $ | 11,209 | ||
9/30/2001 | $ | 9,459 | $ | 9,746 | ||
10/31/2001 | $ | 10,376 | $ | 10,693 | ||
11/30/2001 | $ | 10,976 | $ | 11,307 | ||
12/31/2001 | $ | 11,130 | $ | 11,462 | ||
1/31/2002 | $ | 11,165 | $ | 11,514 | ||
2/28/2002 | $ | 11,272 | $ | 11,623 | ||
3/31/2002 | $ | 11,638 | $ | 11,988 | ||
4/30/2002 | $ | 11,520 | $ | 11,871 | ||
5/31/2002 | $ | 12,264 | $ | 12,646 | ||
6/30/2002 | $ | 11,673 | $ | 12,022 | ||
7/31/2002 | $ | 10,799 | $ | 11,121 | ||
8/31/2002 | $ | 11,059 | $ | 11,385 | ||
9/30/2002 | $ | 10,444 | $ | 10,749 | ||
10/31/2002 | $ | 11,012 | $ | 11,326 | ||
11/30/2002 | $ | 11,319 | $ | 11,624 | ||
12/31/2002 | $ | 11,098 | $ | 11,407 | ||
1/31/2003 | $ | 11,293 | $ | 11,613 | ||
2/28/2003 | $ | 11,135 | $ | 11,448 | ||
3/31/2003 | $ | 11,536 | $ | 11,852 | ||
4/30/2003 | $ | 12,435 | $ | 12,791 | ||
5/31/2003 | $ | 12,861 | $ | 13,219 | ||
6/30/2003 | $ | 13,371 | $ | 13,731 | ||
7/31/2003 | $ | 13,323 | $ | 13,687 | ||
8/31/2003 | $ | 13,639 | $ | 14,012 | ||
9/30/2003 | $ | 14,186 | $ | 14,553 | ||
10/31/2003 | $ | 15,377 | $ | 15,784 | ||
11/30/2003 | $ | 15,341 | $ | 15,719 | ||
12/31/2003 | $ | 16,627 | $ | 17,050 | ||
1/31/2004 | $ | 16,602 | $ | 17,026 | ||
2/29/2004 | $ | 17,368 | $ | 17,811 | ||
3/31/2004 | $ | 17,632 | $ | 18,061 | ||
4/30/2004 | $ | 16,577 | $ | 16,990 | ||
5/31/2004 | $ | 16,614 | $ | 17,031 | ||
6/30/2004 | $ | 16,677 | $ | 17,064 | ||
7/31/2004 | $ | 16,715 | $ | 17,108 | ||
8/31/2004 | $ | 17,042 | $ | 17,420 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
2 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Australian equity market, as measured by the MSCI Australia Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 24.95%, while the Index returned 24.31%.
One factor that may cause the performance of a fund to differ from that of its benchmark index is called “revenue differential”. In the case of the Fund, revenue differential is due to the difference in the foreign taxes withheld on the dividend income earned. The Index assumes the full foreign tax withholding rate of 30%, whereas the Fund is subject to a more favorable withholding tax rate of 15%. The reduced tax rate had a positive impact on the Fund’s performance for the reporting period, relative to the Index’s performance.
Now in its 13th year of economic expansion, characterized by low inflation and low interest rates, Australia’s economy began to see signs of slowing during the reporting period. Two factors posed a threat to Australia’s economic boom: an overheated housing market and a strong local currency.
Thanks in part to low interest rates, Australia experienced a housing boom during the reporting period, lifting consumer spending levels. By mid-2004, interest rates had started to rise, and housing prices began to fall. As housing prices fell, so did consumer spending levels, which contributed to a slow down in the overall economy.
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 potential gains during the reporting period. However, for U.S.-based investors, the strengthening Australian currency meant enhanced returns on Australian-based investments during the reporting period.
Within the Fund, top holding BHP Billiton Ltd. (8.93% of the net assets of the Fund as of August 31, 2004) posted gains during the reporting period, in part due to increased demand from China. Westfield Group (3.99% of the net assets of the Fund as of August 31, 2004), which owns and manages shopping centers around the world, benefited from strong real estate prices in Australia and abroad during the reporting period.
Australian banks in the Fund’s top ten holdings generally performed well, with Commonwealth Bank of Australia, Australia & New Zealand Banking Group Ltd., and Westpac Banking Corp. Ltd. (6.83%, 6.01%, and 5.37%, respectively, of the net assets of the Fund as of August 31, 2004) all posting gains during the reporting period. National Australia Bank Ltd. (7.27% of the net assets of the Fund as of August 31, 2004), however, declined during the reporting period.
Publication and entertainment giant The News Corp. Ltd. (whose preferred and common shares represent 5.15% and 2.73%, respectively, of the net assets of the Fund as of August 31, 2004) declined during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 3 |
Managers’ Discussion & Analysis
iSHARES® MSCI BRAZIL INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||
Year Ended 8/31/04 | Inception to 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
41.42% | 41.83 | % | 42.35 | % | (1.72 | )% | (1.63 | )% | 0.65 | % | (6.94 | )% | (6.59 | )% | 2.74 | % |
Total returns for the periods 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 one-year period. 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI BRAZIL INDEX FUND | MSCI BRAZIL INDEX | |||||
7/10/2000 | $ | 10,000 | $ | 10,000 | ||
7/31/2000 | $ | 9,466 | $ | 9,457 | ||
8/31/2000 | $ | 9,703 | $ | 9,697 | ||
9/30/2000 | $ | 8,972 | $ | 9,078 | ||
10/31/2000 | $ | 8,216 | $ | 8,368 | ||
11/30/2000 | $ | 7,278 | $ | 7,432 | ||
12/31/2000 | $ | 8,259 | $ | 8,481 | ||
1/31/2001 | $ | 9,338 | $ | 9,608 | ||
2/28/2001 | $ | 8,359 | $ | 8,619 | ||
3/31/2001 | $ | 7,477 | $ | 7,641 | ||
4/30/2001 | $ | 7,765 | $ | 8,033 | ||
5/31/2001 | $ | 7,381 | $ | 7,617 | ||
6/30/2001 | $ | 7,296 | $ | 7,505 | ||
7/31/2001 | $ | 6,600 | $ | 6,882 | ||
8/31/2001 | $ | 5,965 | $ | 6,245 | ||
9/30/2001 | $ | 4,964 | $ | 5,235 | ||
10/31/2001 | $ | 5,182 | $ | 5,447 | ||
11/30/2001 | $ | 5,853 | $ | 6,096 | ||
12/31/2001 | $ | 6,647 | $ | 6,955 | ||
1/31/2002 | $ | 6,178 | $ | 6,454 | ||
2/28/2002 | $ | 7,014 | $ | 7,363 | ||
3/31/2002 | $ | 7,014 | $ | 7,367 | ||
4/30/2002 | $ | 6,924 | $ | 7,284 | ||
5/31/2002 | $ | 6,338 | $ | 6,701 | ||
6/30/2002 | $ | 5,172 | $ | 5,467 | ||
7/31/2002 | $ | 3,611 | $ | 3,884 | ||
8/31/2002 | $ | 4,421 | $ | 4,769 | ||
9/30/2002 | $ | 3,089 | $ | 3,326 | ||
10/31/2002 | $ | 3,936 | $ | 4,275 | ||
11/30/2002 | $ | 3,968 | $ | 4,325 | ||
12/31/2002 | $ | 4,340 | $ | 4,728 | ||
1/31/2003 | $ | 4,189 | $ | 4,571 | ||
2/28/2003 | $ | 4,022 | $ | 4,398 | ||
3/31/2003 | $ | 4,556 | $ | 5,003 | ||
4/30/2003 | $ | 5,517 | $ | 6,057 | ||
5/31/2003 | $ | 5,657 | $ | 6,202 | ||
6/30/2003 | $ | 5,679 | $ | 6,212 | ||
7/31/2003 | $ | 5,959 | $ | 6,554 | ||
8/31/2003 | $ | 6,580 | $ | 7,218 | ||
9/30/2003 | $ | 6,726 | $ | 7,348 | ||
10/31/2003 | $ | 7,455 | $ | 8,146 | ||
11/30/2003 | $ | 7,903 | $ | 8,634 | ||
12/31/2003 | $ | 9,245 | $ | 10,165 | ||
1/31/2004 | $ | 8,850 | $ | 9,757 | ||
2/29/2004 | $ | 9,174 | $ | 10,123 | ||
3/31/2004 | $ | 9,185 | $ | 10,124 | ||
4/30/2004 | $ | 7,846 | $ | 8,637 | ||
5/31/2004 | $ | 7,682 | $ | 8,485 | ||
6/30/2004 | $ | 8,077 | $ | 8,914 | ||
7/31/2004 | $ | 8,686 | $ | 9,664 | ||
8/31/2004 | $ | 9,306 | $ | 10,274 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
4 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Brazilian equity market, as measured by the MSCI Brazil Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 41.42%, while the Index returned 42.35%.
Brazil continued to deliver one of the strongest equity market and currency performances in the world during the reporting period. Of course, there can be no guarantee of future performance.
During the reporting period, Brazil’s stock market gained amid prospects for accelerating economic expansion. During the course of the reporting period, President Luiz Inacio Lula da Silva continued to implement fiscal austerity measures in an attempt to attract investors from the global financial community. In September 2003, 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. These actions seemingly paid off as economic growth improved. For the second quarter of 2004, gross domestic product (“GDP”) annual growth was a healthy 5.7%, marking three consecutive quarters of strong GDP growth.
Oil company Petroleo Brasileiro SA performed well during the reporting period. Its preferred and common shares, which represented 12.89% and 10.75%, respectively, of the net assets of the Fund as of August 31, 2004, benefited from higher oil prices.
The world’s largest iron ore exporter, Companhia Vale do Rio Doce (whose Class A preferred shares and ADR shares represented 8.69% and 7.11%, respectively, of the net assets of the Fund as of August 31, 2004) posted strong gains during the reporting period as demand from China had driven up the price of iron ore. Steel company Gerdau SA (whose preferred shares represented 3.12% of the Fund’s net assets as of August 31, 2004) also benefited from increased demand during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 5 |
Managers’ Discussion & Analysis
iSHARES® MSCI CANADA INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
18.70% | 19.12 | % | 18.83 | % | 8.22 | % | 8.29 | % | 8.63 | % | 9.65 | % | 9.74 | % | 10.31 | % |
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
18.70% | 19.12 | % | 18.83 | % | 48.40 | % | 48.88 | % | 51.28 | % | 118.30 | % | 119.88 | % | 129.77 | % |
Total returns for the periods 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI CANADA INDEX FUND | MSCI CANADA INDEX | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 10,088 | $ | 10,091 | ||
4/30/1996 | $ | 10,462 | $ | 10,506 | ||
5/31/1996 | $ | 10,639 | $ | 10,672 | ||
6/30/1996 | $ | 10,344 | $ | 10,380 | ||
7/31/1996 | $ | 10,030 | $ | 10,062 | ||
8/31/1996 | $ | 10,463 | $ | 10,511 | ||
9/30/1996 | $ | 10,877 | $ | 10,928 | ||
10/31/1996 | $ | 11,726 | $ | 11,783 | ||
11/30/1996 | $ | 12,546 | $ | 12,640 | ||
12/31/1996 | $ | 12,115 | $ | 12,204 | ||
1/31/1997 | $ | 12,678 | $ | 12,803 | ||
2/28/1997 | $ | 12,569 | $ | 12,701 | ||
3/31/1997 | $ | 11,907 | $ | 12,063 | ||
4/30/1997 | $ | 12,174 | $ | 12,345 | ||
5/31/1997 | $ | 13,183 | $ | 13,377 | ||
6/30/1997 | $ | 13,351 | $ | 13,612 | ||
7/31/1997 | $ | 14,211 | $ | 14,497 | ||
8/31/1997 | $ | 13,445 | $ | 13,733 | ||
9/30/1997 | $ | 14,226 | $ | 14,533 | ||
10/31/1997 | $ | 13,545 | $ | 13,846 | ||
11/30/1997 | $ | 13,165 | $ | 13,426 | ||
12/31/1997 | $ | 13,436 | $ | 13,765 | ||
1/31/1998 | $ | 13,215 | $ | 13,519 | ||
2/28/1998 | $ | 14,322 | $ | 14,665 | ||
3/31/1998 | $ | 15,318 | $ | 15,770 | ||
4/30/1998 | $ | 15,369 | $ | 15,845 | ||
5/31/1998 | $ | 15,157 | $ | 15,653 | ||
6/30/1998 | $ | 14,533 | $ | 15,022 | ||
7/31/1998 | $ | 13,466 | $ | 13,953 | ||
8/31/1998 | $ | 10,529 | $ | 10,911 | ||
9/30/1998 | $ | 10,986 | $ | 11,193 | ||
10/31/1998 | $ | 12,029 | $ | 12,325 | ||
11/30/1998 | $ | 12,454 | $ | 12,778 | ||
12/31/1998 | $ | 12,567 | $ | 12,920 | ||
1/31/1999 | $ | 13,518 | $ | 13,991 | ||
2/28/1999 | $ | 12,717 | $ | 13,193 | ||
3/31/1999 | $ | 13,283 | $ | 13,736 | ||
4/30/1999 | $ | 14,651 | $ | 15,133 | ||
5/31/1999 | $ | 14,213 | $ | 14,716 | ||
6/30/1999 | $ | 14,844 | $ | 15,329 | ||
7/31/1999 | $ | 14,886 | $ | 15,439 | ||
8/31/1999 | $ | 14,710 | $ | 15,189 | ||
9/30/1999 | $ | 15,122 | $ | 15,627 | ||
10/31/1999 | $ | 15,990 | $ | 16,678 | ||
11/30/1999 | $ | 16,435 | $ | 17,349 | ||
12/31/1999 | $ | 18,364 | $ | 19,864 | ||
1/31/2000 | $ | 18,119 | $ | 19,924 | ||
2/29/2000 | $ | 18,943 | $ | 21,113 | ||
3/31/2000 | $ | 20,022 | $ | 22,999 | ||
4/30/2000 | $ | 19,800 | $ | 22,154 | ||
5/31/2000 | $ | 20,034 | $ | 21,737 | ||
6/30/2000 | $ | 21,937 | $ | 24,467 | ||
7/31/2000 | $ | 22,582 | $ | 25,208 | ||
8/31/2000 | $ | 24,598 | $ | 27,422 | ||
9/30/2000 | $ | 23,320 | $ | 24,652 | ||
10/31/2000 | $ | 21,693 | $ | 22,496 | ||
11/30/2000 | $ | 19,385 | $ | 20,478 | ||
12/31/2000 | $ | 19,771 | $ | 20,924 | ||
1/31/2001 | $ | 20,900 | $ | 21,946 | ||
2/28/2001 | $ | 17,780 | $ | 18,446 | ||
3/31/2001 | $ | 16,176 | $ | 16,756 | ||
4/30/2001 | $ | 17,439 | $ | 17,949 | ||
5/31/2001 | $ | 17,691 | $ | 18,279 | ||
6/30/2001 | $ | 16,963 | $ | 17,578 | ||
7/31/2001 | $ | 16,844 | $ | 17,451 | ||
8/31/2001 | $ | 16,001 | $ | 16,588 | ||
9/30/2001 | $ | 14,625 | $ | 15,167 | ||
10/31/2001 | $ | 14,670 | $ | 15,227 | ||
11/30/2001 | $ | 16,001 | $ | 16,626 | ||
12/31/2001 | $ | 16,240 | $ | 16,890 | ||
1/31/2002 | $ | 16,136 | $ | 16,783 | ||
2/28/2002 | $ | 15,971 | $ | 16,622 | ||
3/31/2002 | $ | 16,540 | $ | 17,226 | ||
4/30/2002 | $ | 16,390 | $ | 17,073 | ||
5/31/2002 | $ | 16,779 | $ | 17,497 | ||
6/30/2002 | $ | 15,821 | $ | 16,502 | ||
7/31/2002 | $ | 14,040 | $ | 14,645 | ||
8/31/2002 | $ | 14,205 | $ | 14,824 | ||
9/30/2002 | $ | 13,052 | $ | 13,628 | ||
10/31/2002 | $ | 13,441 | $ | 14,038 | ||
11/30/2002 | $ | 14,190 | $ | 14,857 | ||
12/31/2002 | $ | 14,097 | $ | 14,736 | ||
1/31/2003 | $ | 14,473 | $ | 15,148 | ||
2/28/2003 | $ | 14,983 | $ | 15,675 | ||
3/31/2003 | $ | 14,773 | $ | 15,467 | ||
4/30/2003 | $ | 15,704 | $ | 16,449 | ||
5/31/2003 | $ | 17,025 | $ | 17,853 | ||
6/30/2003 | $ | 17,460 | $ | 18,323 | ||
7/31/2003 | $ | 17,505 | $ | 18,381 | ||
8/31/2003 | $ | 18,391 | $ | 19,336 | ||
9/30/2003 | $ | 18,691 | $ | 19,667 | ||
10/31/2003 | $ | 19,937 | $ | 20,991 | ||
11/30/2003 | $ | 20,538 | $ | 21,612 | ||
12/31/2003 | $ | 21,617 | $ | 22,784 | ||
1/31/2004 | $ | 21,785 | $ | 23,023 | ||
2/29/2004 | $ | 22,257 | $ | 23,521 | ||
3/31/2004 | $ | 22,181 | $ | 23,405 | ||
4/30/2004 | $ | 20,337 | $ | 21,453 | ||
5/31/2004 | $ | 20,657 | $ | 21,825 | ||
6/30/2004 | $ | 21,754 | $ | 22,955 | ||
7/31/2004 | $ | 21,830 | $ | 22,973 | ||
8/31/2004 | $ | 21,830 | $ | 22,978 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
6 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Canadian equity market, as measured by the MSCI Canada Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 18.70%, while the Index returned 18.83%.
Although the Canadian market entered the reporting period better poised than many for economic recovery, its growth was far from stellar over the course of the reporting period. Canada depends heavily on exports to the U.S., which generally account for 85% of Canada’s total exports, for its economic prosperity. During the reporting period, the Canadian currency appreciated swiftly against the U.S. dollar. The rise made Canadian exports more expensive to the American market, and export levels to the U.S. shrank, as the U.S. turned instead to less costly suppliers, such as China and Mexico.
Among the Fund’s ten largest holdings as of August 31, 2004, financial companies generally moved in step with their counterparts around the world. The Fund’s largest holding at 6.44% of net assets as of August 31, 2004, Manulife Financial Corp. logged strong gains during the reporting period, as did Sun Life Financial Inc. (3.57% of the net assets of the Fund as of August 31, 2004). Bank of Nova Scotia, Bank of Montreal and Canadian Imperial Bank of Commerce (5.81%, 4.40%, and 3.99%, respectively, of the net assets of the Fund as of August 31, 2004) all performed well during the reporting period. Royal Bank of Canada (6.31% of the net assets of the Fund as of August 31, 2004), on the other hand, posted a slight decline during the reporting period, largely due to underperformance in its U.S. business.
Nortel Networks Corp. (3.25% of the net assets of the Fund as of August 31, 2004) rebounded early in the reporting period, but lost traction and finished the period with modest gains.
MANAGERS’ DISCUSSION & ANALYSIS | 7 |
Managers’ Discussion & Analysis
iSHARES® MSCI EMERGING MARKETS INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||
Year Ended 8/31/04 | Inception to 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
20.21% | 18.49 | % | 20.12 | % | 40.24 | % | 39.94 | % | 39.16 | % | 60.71 | % | 60.22 | % | 58.83 | % |
Total returns for the periods since inception are calculated from the inception date of the Fund (4/7/03). “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.
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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI EMERGING MARKETS INDEX FUND | MSCI EMERGING MARKETS INDEX | |||||
4/07/2003 | $ | 10,000 | $ | 10,000 | ||
4/30/2003 | $ | 10,388 | $ | 10,305 | ||
5/31/2003 | $ | 11,238 | $ | 11,042 | ||
6/30/2003 | $ | 11,785 | $ | 11,668 | ||
7/31/2003 | $ | 12,483 | $ | 12,394 | ||
8/31/2003 | $ | 13,371 | $ | 13,223 | ||
9/30/2003 | $ | 13,457 | $ | 13,319 | ||
10/31/2003 | $ | 14,633 | $ | 14,453 | ||
11/30/2003 | $ | 14,878 | $ | 14,629 | ||
12/31/2003 | $ | 16,068 | $ | 15,688 | ||
1/31/2004 | $ | 16,545 | $ | 16,236 | ||
2/29/2004 | $ | 17,165 | $ | 16,980 | ||
3/31/2004 | $ | 17,300 | $ | 17,193 | ||
4/30/2004 | $ | 15,874 | $ | 15,785 | ||
5/31/2004 | $ | 15,869 | $ | 15,571 | ||
6/30/2004 | $ | 15,930 | $ | 15,536 | ||
7/31/2004 | $ | 15,541 | $ | 15,251 | ||
8/31/2004 | $ | 16,070 | $ | 15,884 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
8 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 20.21%, while the Index returned 20.12%.
Emerging markets generally posted 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 lift share prices. For some emerging markets, however, a weak U.S. dollar limited export growth.
South Korea, South Africa and Taiwan, the three largest markets in the Fund, represent approximately 43% of the Fund’s net assets as of August 31, 2004.
South Korea grappled with a number of obstacles during the reporting period, but ultimately posted modest gains. Early in the reporting period, the International Monetary Fund cut its growth outlook for the country from 5.0% to 2.5%. Surging oil prices also hurt South 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. Samsung Electronics Co. Ltd., the largest Fund holding at 6.98% of net assets as of August 31, 2004, benefited from the increased export demand, but retraced most of its gains when demand for LCD televisions waned late in the reporting period. Korean steel manufacturer POSCO (2.87% of the net assets of the Fund as of August 31, 2004) continued to benefit from global growth as well as Korea’s strong currency as it converted foreign gains back into the local currency.
South Africa 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 (3.82% of the Fund’s net assets as of August 31, 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.
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 improving economic conditions in the U.S. helped Taiwan’s export market, growing demand from China and Japan also contributed to export growth, helping Taiwan’s local economy. Demand in the electronics sector waned late in the reporting period, causing Taiwan Semiconductor Manufacturing Co. Ltd. (2.95% of the net assets of the Fund as of August 31, 2004) to post a loss during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 9 |
Manager’s Discussion & Analysis
iSHARES® MSCI HONG KONG INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
22.69% | 22.59 | % | 23.40 | % | 0.18 | % | 0.26 | % | 1.34 | % | 0.80 | % | 0.84 | % | 2.89 | % |
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
22.69% | 22.59 | % | 23.40 | % | 0.89 | % | 1.31 | % | 6.86 | % | 6.99 | % | 7.36 | % | 27.30 | % |
Total returns for the periods 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI HONG KONG INDEX FUND | MSCI HONG KONG INDEX | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 10,429 | $ | 10,460 | ||
4/30/1996 | $ | 10,468 | $ | 10,484 | ||
5/31/1996 | $ | 10,826 | $ | 10,799 | ||
6/30/1996 | $ | 10,569 | $ | 10,549 | ||
7/31/1996 | $ | 10,031 | $ | 10,068 | ||
8/31/1996 | $ | 10,322 | $ | 10,398 | ||
9/30/1996 | $ | 10,979 | $ | 11,108 | ||
10/31/1996 | $ | 11,414 | $ | 11,575 | ||
11/30/1996 | $ | 12,418 | $ | 12,523 | ||
12/31/1996 | $ | 12,315 | $ | 12,458 | ||
1/31/1997 | $ | 11,948 | $ | 12,191 | ||
2/28/1997 | $ | 11,869 | $ | 12,171 | ||
3/31/1997 | $ | 11,048 | $ | 11,364 | ||
4/30/1997 | $ | 11,207 | $ | 11,549 | ||
5/31/1997 | $ | 12,609 | $ | 13,009 | ||
6/30/1997 | $ | 13,175 | $ | 13,675 | ||
7/31/1997 | $ | 13,900 | $ | 14,529 | ||
8/31/1997 | $ | 12,160 | $ | 12,625 | ||
9/30/1997 | $ | 12,911 | $ | 13,424 | ||
10/31/1997 | $ | 9,122 | $ | 9,549 | ||
11/30/1997 | $ | 9,006 | $ | 9,422 | ||
12/31/1997 | $ | 9,022 | $ | 9,557 | ||
1/31/1998 | $ | 7,648 | $ | 8,226 | ||
2/28/1998 | $ | 9,197 | $ | 9,855 | ||
3/31/1998 | $ | 8,964 | $ | 9,651 | ||
4/30/1998 | $ | 7,989 | $ | 8,630 | ||
5/31/1998 | $ | 6,881 | $ | 7,453 | ||
6/30/1998 | $ | 6,540 | $ | 7,058 | ||
7/31/1998 | $ | 6,056 | $ | 6,535 | ||
8/31/1998 | $ | 5,566 | $ | 6,098 | ||
9/30/1998 | $ | 6,452 | $ | 7,100 | ||
10/31/1998 | $ | 8,415 | $ | 9,459 | ||
11/30/1998 | $ | 8,397 | $ | 9,443 | ||
12/31/1998 | $ | 8,191 | $ | 9,279 | ||
1/31/1999 | $ | 7,568 | $ | 8,661 | ||
2/28/1999 | $ | 7,629 | $ | 8,747 | ||
3/31/1999 | $ | 8,648 | $ | 9,895 | ||
4/30/1999 | $ | 10,614 | $ | 12,102 | ||
5/31/1999 | $ | 9,921 | $ | 11,133 | ||
6/30/1999 | $ | 10,913 | $ | 12,197 | ||
7/31/1999 | $ | 10,588 | $ | 11,805 | ||
8/31/1999 | $ | 10,604 | $ | 11,913 | ||
9/30/1999 | $ | 10,210 | $ | 11,437 | ||
10/31/1999 | $ | 10,631 | $ | 12,036 | ||
11/30/1999 | $ | 11,734 | $ | 13,599 | ||
12/31/1999 | $ | 12,614 | $ | 14,801 | ||
1/31/2000 | $ | 11,637 | $ | 13,677 | ||
2/29/2000 | $ | 12,117 | $ | 14,481 | ||
3/31/2000 | $ | 12,361 | $ | 14,871 | ||
4/30/2000 | $ | 11,537 | $ | 13,479 | ||
5/31/2000 | $ | 10,370 | $ | 11,941 | ||
6/30/2000 | $ | 11,139 | $ | 12,870 | ||
7/31/2000 | $ | 11,791 | $ | 13,743 | ||
8/31/2000 | $ | 12,167 | $ | 13,868 | ||
9/30/2000 | $ | 11,092 | $ | 12,734 | ||
10/31/2000 | $ | 10,228 | $ | 11,882 | ||
11/30/2000 | $ | 9,851 | $ | 11,465 | ||
12/31/2000 | $ | 10,846 | $ | 12,619 | ||
1/31/2001 | $ | 11,225 | $ | 12,987 | ||
2/28/2001 | $ | 11,068 | $ | 12,691 | ||
3/31/2001 | $ | 9,867 | $ | 11,354 | ||
4/30/2001 | $ | 9,858 | $ | 11,350 | ||
5/31/2001 | $ | 9,738 | $ | 11,222 | ||
6/30/2001 | $ | 9,229 | $ | 10,635 | ||
7/31/2001 | $ | 8,989 | $ | 10,370 | ||
8/31/2001 | $ | 8,409 | $ | 9,727 | ||
9/30/2001 | $ | 7,232 | $ | 8,399 | ||
10/31/2001 | $ | 7,505 | $ | 8,712 | ||
11/30/2001 | $ | 8,353 | $ | 9,700 | ||
12/31/2001 | $ | 8,787 | $ | 10,177 | ||
1/31/2002 | $ | 8,559 | $ | 9,929 | ||
2/28/2002 | $ | 8,218 | $ | 9,505 | ||
3/31/2002 | $ | 8,702 | $ | 10,062 | ||
4/30/2002 | $ | 9,223 | $ | 10,637 | ||
5/31/2002 | $ | 8,910 | $ | 10,303 | ||
6/30/2002 | $ | 8,360 | $ | 9,680 | ||
7/31/2002 | $ | 7,991 | $ | 9,281 | ||
8/31/2002 | $ | 7,574 | $ | 8,827 | ||
9/30/2002 | $ | 6,986 | $ | 8,198 | ||
10/31/2002 | $ | 7,261 | $ | 8,493 | ||
11/30/2002 | $ | 7,725 | $ | 9,025 | ||
12/31/2002 | $ | 7,118 | $ | 8,348 | ||
1/31/2003 | $ | 7,166 | $ | 8,395 | ||
2/28/2003 | $ | 7,069 | $ | 8,294 | ||
3/31/2003 | $ | 6,673 | $ | 7,865 | ||
4/30/2003 | $ | 6,654 | $ | 7,854 | ||
5/31/2003 | $ | 7,214 | $ | 8,524 | ||
6/30/2003 | $ | 7,311 | $ | 8,639 | ||
7/31/2003 | $ | 7,774 | $ | 9,188 | ||
8/31/2003 | $ | 8,721 | $ | 10,316 | ||
9/30/2003 | $ | 9,223 | $ | 10,893 | ||
10/31/2003 | $ | 9,619 | $ | 11,361 | ||
11/30/2003 | $ | 9,561 | $ | 11,299 | ||
12/31/2003 | $ | 9,738 | $ | 11,527 | ||
1/31/2004 | $ | 10,689 | $ | 12,651 | ||
2/29/2004 | $ | 11,013 | $ | 13,060 | ||
3/31/2004 | $ | 10,336 | $ | 12,279 | ||
4/30/2004 | $ | 9,846 | $ | 11,684 | ||
5/31/2004 | $ | 9,836 | $ | 11,694 | ||
6/30/2004 | $ | 9,856 | $ | 11,726 | ||
7/31/2004 | $ | 9,983 | $ | 11,885 | ||
8/31/2004 | $ | 10,699 | $ | 12,729 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
10 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Hong Kong equity market, as measured by the MSCI Hong Kong Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 22.69%, while the Index returned 23.40%.
The Hong Kong market delivered solid gains during the reporting period. Recovering from the conditions of the previous reporting period, when rising unemployment, the SARS virus and a global economic slowdown all took their toll, Hong Kong’s economy appeared to be coming back strongly during the reporting period. By some estimates, gross domestic product (GDP) is on track to grow a healthy 6.5% in 2004. Importantly, real estate – an important segment of Hong Kong’s economy – sprang back to life after languishing in prior reporting periods.
The recovering real estate market was a driver of both market and Fund performance during the reporting period. The strongest performer among the Fund’s ten largest holdings as of August 31, 2004 was Wharf (Holdings) Ltd. (2.82% of the net assets of the Fund as of August 31, 2004), which gained over 40%. The Fund’s three largest holdings, Hutchison Whampoa Ltd., Cheung Kong (Holdings) Ltd., and Sun Hung Kai Properties Ltd. (13.44%, 9.49%, and 9.09%, respectively, of the net assets of the Fund as of August 31, 2004) all posted gains during the reporting period. Swire Pacific Ltd. Class A shares (4.76% of the Fund’s net assets as of August 31, 2004) and BOC Hong Kong Holdings Ltd. (4.72% of the net assets of the Fund as of August 31, 2004) also performed well during the reporting period, logging some of the best gains among the Fund’s ten largest holdings as of August 31, 2004.
As the economic landscape strengthened in Hong Kong and the region, utilities companies also gained ground. CLP Holdings Ltd., Hong Kong & China Gas Co. Ltd. and Hongkong Electric Holdings Ltd. (7.78%, 4.62% and 4.36%, respectively, of the Fund’s net assets as of August 31, 2004) all performed well during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 11 |
Managers’ Discussion & Analysis
iSHARES® MSCI MALAYSIA INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
11.01% | 7.88 | % | 12.16 | % | 4.47 | % | 3.83 | % | 5.37 | % | (6.11 | )% | (6.40 | )% | (4.92 | )% | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
11.01% | 7.88 | % | 12.16 | % | 24.44 | % | 20.69 | % | 29.87 | % | (41.38 | )% | (42.91 | )% | (34.81 | )% |
Total returns for the periods 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI MALAYSIA INDEX FUND | MSCI MALAYSIA INDEX | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 10,438 | $ | 10,445 | ||
4/30/1996 | $ | 10,899 | $ | 10,993 | ||
5/31/1996 | $ | 10,498 | $ | 10,565 | ||
6/30/1996 | $ | 10,551 | $ | 10,607 | ||
7/31/1996 | $ | 9,894 | $ | 9,962 | ||
8/31/1996 | $ | 10,428 | $ | 10,503 | ||
9/30/1996 | $ | 10,542 | $ | 10,680 | ||
10/31/1996 | $ | 10,783 | $ | 10,902 | ||
11/30/1996 | $ | 11,237 | $ | 11,348 | ||
12/31/1996 | $ | 11,320 | $ | 11,460 | ||
1/31/1997 | $ | 11,418 | $ | 11,642 | ||
2/28/1997 | $ | 11,834 | $ | 12,152 | ||
3/31/1997 | $ | 11,169 | $ | 11,473 | ||
4/30/1997 | $ | 9,922 | $ | 10,185 | ||
5/31/1997 | $ | 10,141 | $ | 10,398 | ||
6/30/1997 | $ | 9,877 | $ | 10,126 | ||
7/31/1997 | $ | 8,879 | $ | 9,138 | ||
8/31/1997 | $ | 6,229 | $ | 6,378 | ||
9/30/1997 | $ | 5,812 | $ | 5,913 | ||
10/31/1997 | $ | 4,622 | $ | 4,680 | ||
11/30/1997 | $ | 3,713 | $ | 3,685 | ||
12/31/1997 | $ | 3,744 | $ | 3,669 | ||
1/31/1998 | $ | 3,325 | $ | 3,257 | ||
2/28/1998 | $ | 4,877 | $ | 4,887 | ||
3/31/1998 | $ | 4,763 | $ | 4,761 | ||
4/30/1998 | $ | 4,048 | $ | 4,012 | ||
5/31/1998 | $ | 3,340 | $ | 3,311 | ||
6/30/1998 | $ | 2,572 | $ | 2,566 | ||
7/31/1998 | $ | 2,298 | $ | 2,292 | ||
8/31/1998 | $ | 1,648 | $ | 1,658 | ||
9/30/1998 | $ | 2,094 | $ | 1,546 | ||
10/31/1998 | $ | 1,851 | $ | 1,707 | ||
11/30/1998 | $ | 2,253 | $ | 2,147 | ||
12/31/1998 | $ | 2,646 | $ | 2,539 | ||
1/31/1999 | $ | 2,663 | $ | 2,578 | ||
2/28/1999 | $ | 2,428 | $ | 2,839 | ||
3/31/1999 | $ | 2,251 | $ | 2,628 | ||
4/30/1999 | $ | 4,058 | $ | 3,651 | ||
5/31/1999 | $ | 4,570 | $ | 4,074 | ||
6/30/1999 | $ | 4,999 | $ | 4,506 | ||
7/31/1999 | $ | 4,747 | $ | 4,299 | ||
8/31/1999 | $ | 4,711 | $ | 5,020 | ||
9/30/1999 | $ | 4,112 | $ | 4,373 | ||
10/31/1999 | $ | 4,652 | $ | 4,948 | ||
11/30/1999 | $ | 4,601 | $ | 4,892 | ||
12/31/1999 | $ | 5,107 | $ | 5,441 | ||
1/31/2000 | $ | 5,832 | $ | 6,250 | ||
2/29/2000 | $ | 6,303 | $ | 6,711 | ||
3/31/2000 | $ | 6,228 | $ | 6,652 | ||
4/30/2000 | $ | 5,781 | $ | 6,138 | ||
5/31/2000 | $ | 5,958 | $ | 6,328 | ||
6/30/2000 | $ | 5,351 | $ | 5,666 | ||
7/31/2000 | $ | 5,115 | $ | 5,406 | ||
8/31/2000 | $ | 5,067 | $ | 5,359 | ||
9/30/2000 | $ | 4,481 | $ | 4,720 | ||
10/31/2000 | $ | 4,761 | $ | 5,036 | ||
11/30/2000 | $ | 4,634 | $ | 4,919 | ||
12/31/2000 | $ | 4,297 | $ | 4,573 | ||
1/31/2001 | $ | 4,638 | $ | 4,936 | ||
2/28/2001 | $ | 4,536 | $ | 4,823 | ||
3/31/2001 | $ | 4,135 | $ | 4,400 | ||
4/30/2001 | $ | 3,692 | $ | 3,952 | ||
5/31/2001 | $ | 3,598 | $ | 3,862 | ||
6/30/2001 | $ | 3,726 | $ | 4,001 | ||
7/31/2001 | $ | 4,178 | $ | 4,491 | ||
8/31/2001 | $ | 4,397 | $ | 4,739 | ||
9/30/2001 | $ | 3,984 | $ | 4,284 | ||
10/31/2001 | $ | 3,907 | $ | 4,200 | ||
11/30/2001 | $ | 4,139 | $ | 4,459 | ||
12/31/2001 | $ | 4,493 | $ | 4,842 | ||
1/31/2002 | $ | 4,770 | $ | 5,149 | ||
2/28/2002 | $ | 4,710 | $ | 5,078 | ||
3/31/2002 | $ | 5,099 | $ | 5,512 | ||
4/30/2002 | $ | 5,428 | $ | 5,873 | ||
5/31/2002 | $ | 5,073 | $ | 5,494 | ||
6/30/2002 | $ | 4,995 | $ | 5,417 | ||
7/31/2002 | $ | 4,969 | $ | 5,405 | ||
8/31/2002 | $ | 4,917 | $ | 5,349 | ||
9/30/2002 | $ | 4,415 | $ | 4,803 | ||
10/31/2002 | $ | 4,597 | $ | 5,011 | ||
11/30/2002 | $ | 4,415 | $ | 4,811 | ||
12/31/2002 | $ | 4,523 | $ | 4,944 | ||
1/31/2003 | $ | 4,699 | $ | 5,136 | ||
2/28/2003 | $ | 4,567 | $ | 4,996 | ||
3/31/2003 | $ | 4,461 | $ | 4,888 | ||
4/30/2003 | $ | 4,443 | $ | 4,873 | ||
5/31/2003 | $ | 4,743 | $ | 5,207 | ||
6/30/2003 | $ | 4,919 | $ | 5,398 | ||
7/31/2003 | $ | 5,140 | $ | 5,655 | ||
8/31/2003 | $ | 5,281 | $ | 5,813 | ||
9/30/2003 | $ | 5,193 | $ | 5,720 | ||
10/31/2003 | $ | 5,863 | $ | 6,466 | ||
11/30/2003 | $ | 5,625 | $ | 6,217 | ||
12/31/2003 | $ | 5,656 | $ | 6,259 | ||
1/31/2004 | $ | 5,889 | $ | 6,523 | ||
2/29/2004 | $ | 6,355 | $ | 7,044 | ||
3/31/2004 | $ | 6,472 | $ | 7,175 | ||
4/30/2004 | $ | 6,024 | $ | 6,683 | ||
5/31/2004 | $ | 5,755 | $ | 6,384 | ||
6/30/2004 | $ | 5,826 | $ | 6,475 | ||
7/31/2004 | $ | 5,916 | $ | 6,569 | ||
8/31/2004 | $ | 5,862 | $ | 6,519 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
12 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Malaysian equity market, as measured by the MSCI Malaysia Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 11.01%, while the Index returned 12.16%.
Recovering from the repercussions of a sluggish global economy, the SARS virus and the terrorist bombings in neighboring Bali, the Malaysian market rebounded during the reporting period.
Because Malaysia’s economy relies heavily on exports, it generally benefited during the reporting period from the upswing in economic growth both in the U.S. and among its Asian neighbors. However, Malaysia competes with China for much of its export trade with Europe and other Asian countries. Malaysia’s currency, the ringgit, is pegged to the U.S. dollar. During the reporting period, the U.S. dollar experienced volatility against both the euro and the Japanese yen, affecting Malaysia’s exporters. Nevertheless, export-based companies generally logged gains during the year. Tourism, another important industry for Malaysia, also rebounded during the reporting period as economic conditions in Asia improved.
One of Malaysia’s leading exports is palm oil. IOI Corp. Bhd., a major producer of palm oil and rubber, which represented 3.67% of the Fund’s net assets as of August 31, 2004, was the best performer among the Fund’s ten largest holdings, thanks largely to increased regional demand.
Export-related companies Malaysia International Shipping Corp. Bhd. (3.82% of the net assets of the Fund as of August 31, 2004), British American Tobacco (Malaysia) Bhd. (3.81% of the net assets of the Fund as of August 31, 2004) and Sime Darby Bhd. (4.26% of the net assets of the Fund as of August 31, 2004) also benefited from the increase in foreign demand and a healthier economic environment.
The improved economic climate also benefited Telekom Malaysia Bhd. (5.80% of the net assets of the Fund as of August 31, 2004), which was a strong performer during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 13 |
Managers’ Discussion & Analysis
iSHARES® MSCI MEXICO INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
30.28% | 30.84 | % | 28.28 | % | 9.72 | % | 9.92 | % | 10.79 | % | 10.45 | % | 10.50 | % | 12.33 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
30.28% | 30.84 | % | 28.28 | % | 58.99 | % | 60.49 | % | 66.94 | % | 132.18 | % | 133.05 | % | 168.11 | % |
Total returns for the periods 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI MEXICO INDEX FUND | MSCI MEXICO INDEX | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 10,864 | $ | 10,916 | ||
4/30/1996 | $ | 11,437 | $ | 11,543 | ||
5/31/1996 | $ | 11,618 | $ | 11,621 | ||
6/30/1996 | $ | 11,427 | $ | 11,489 | ||
7/31/1996 | $ | 10,683 | $ | 10,746 | ||
8/31/1996 | $ | 11,593 | $ | 11,740 | ||
9/30/1996 | $ | 11,683 | $ | 11,723 | ||
10/31/1996 | $ | 10,828 | $ | 11,020 | ||
11/30/1996 | $ | 11,311 | $ | 11,492 | ||
12/31/1996 | $ | 11,552 | $ | 11,787 | ||
1/31/1997 | $ | 12,408 | $ | 12,801 | ||
2/28/1997 | $ | 12,820 | $ | 13,258 | ||
3/31/1997 | $ | 12,629 | $ | 12,993 | ||
4/30/1997 | $ | 12,619 | $ | 13,054 | ||
5/31/1997 | $ | 13,283 | $ | 13,823 | ||
6/30/1997 | $ | 14,813 | $ | 15,407 | ||
7/31/1997 | $ | 17,027 | $ | 17,756 | ||
8/31/1997 | $ | 15,675 | $ | 16,326 | ||
9/30/1997 | $ | 17,874 | $ | 18,776 | ||
10/31/1997 | $ | 14,575 | $ | 15,294 | ||
11/30/1997 | $ | 15,893 | $ | 16,780 | ||
12/31/1997 | $ | 17,159 | $ | 18,142 | ||
1/31/1998 | $ | 14,782 | $ | 15,596 | ||
2/28/1998 | $ | 15,311 | $ | 16,141 | ||
3/31/1998 | $ | 16,017 | $ | 16,986 | ||
4/30/1998 | $ | 16,349 | $ | 17,368 | ||
5/31/1998 | $ | 14,107 | $ | 15,038 | ||
6/30/1998 | $ | 13,225 | $ | 14,108 | ||
7/31/1998 | $ | 13,287 | $ | 13,935 | ||
8/31/1998 | $ | 8,749 | $ | 9,162 | ||
9/30/1998 | $ | 10,011 | $ | 10,916 | ||
10/31/1998 | $ | 11,381 | $ | 12,225 | ||
11/30/1998 | $ | 10,723 | $ | 11,472 | ||
12/31/1998 | $ | 11,153 | $ | 12,060 | ||
1/31/1999 | $ | 11,110 | $ | 11,906 | ||
2/28/1999 | $ | 12,107 | $ | 13,075 | ||
3/31/1999 | $ | 14,329 | $ | 15,528 | ||
4/30/1999 | $ | 15,922 | $ | 17,356 | ||
5/31/1999 | $ | 15,185 | $ | 16,918 | ||
6/30/1999 | $ | 16,746 | $ | 18,369 | ||
7/31/1999 | $ | 15,131 | $ | 16,603 | ||
8/31/1999 | $ | 14,604 | $ | 16,060 | ||
9/30/1999 | $ | 14,451 | $ | 15,848 | ||
10/31/1999 | $ | 15,062 | $ | 16,691 | ||
11/30/1999 | $ | 17,243 | $ | 19,036 | ||
12/31/1999 | $ | 19,642 | $ | 21,716 | ||
1/31/2000 | $ | 17,341 | $ | 19,510 | ||
2/29/2000 | $ | 19,632 | $ | 22,178 | ||
3/31/2000 | $ | 20,057 | $ | 22,697 | ||
4/30/2000 | $ | 17,854 | $ | 20,204 | ||
5/31/2000 | $ | 16,469 | $ | 18,161 | ||
6/30/2000 | $ | 18,094 | $ | 20,422 | ||
7/31/2000 | $ | 17,974 | $ | 19,957 | ||
8/31/2000 | $ | 18,723 | $ | 20,892 | ||
9/30/2000 | $ | 17,110 | $ | 19,276 | ||
10/31/2000 | $ | 17,301 | $ | 19,694 | ||
11/30/2000 | $ | 15,632 | $ | 17,685 | ||
12/31/2000 | $ | 15,169 | $ | 17,266 | ||
1/31/2001 | $ | 17,263 | $ | 19,870 | ||
2/28/2001 | $ | 16,024 | $ | 18,513 | ||
3/31/2001 | $ | 15,675 | $ | 17,917 | ||
4/30/2001 | $ | 16,959 | $ | 19,631 | ||
5/31/2001 | $ | 18,322 | $ | 21,260 | ||
6/30/2001 | $ | 18,614 | $ | 21,588 | ||
7/31/2001 | $ | 17,871 | $ | 20,959 | ||
8/31/2001 | $ | 17,408 | $ | 20,273 | ||
9/30/2001 | $ | 14,312 | $ | 17,013 | ||
10/31/2001 | $ | 15,060 | $ | 18,111 | ||
11/30/2001 | $ | 15,763 | $ | 18,860 | ||
12/31/2001 | $ | 17,214 | $ | 20,457 | ||
1/31/2002 | $ | 18,672 | $ | 22,148 | ||
2/28/2002 | $ | 18,125 | $ | 21,515 | ||
3/31/2002 | $ | 20,153 | $ | 23,863 | ||
4/30/2002 | $ | 19,869 | $ | 23,448 | ||
5/31/2002 | $ | 18,342 | $ | 21,613 | ||
6/30/2002 | $ | 16,314 | $ | 19,414 | ||
7/31/2002 | $ | 15,300 | $ | 18,039 | ||
8/31/2002 | $ | 15,551 | $ | 18,493 | ||
9/30/2002 | $ | 14,001 | $ | 16,505 | ||
10/31/2002 | $ | 14,856 | $ | 17,591 | ||
11/30/2002 | $ | 15,505 | $ | 18,424 | ||
12/31/2002 | $ | 14,954 | $ | 17,657 | ||
1/31/2003 | $ | 14,077 | $ | 16,725 | ||
2/28/2003 | $ | 13,781 | $ | 16,335 | ||
3/31/2003 | $ | 13,900 | $ | 16,611 | ||
4/30/2003 | $ | 16,009 | $ | 19,067 | ||
5/31/2003 | $ | 16,601 | $ | 19,596 | ||
6/30/2003 | $ | 17,289 | $ | 20,383 | ||
7/31/2003 | $ | 18,071 | $ | 21,258 | ||
8/31/2003 | $ | 17,822 | $ | 20,900 | ||
9/30/2003 | $ | 18,260 | $ | 21,324 | ||
10/31/2003 | $ | 18,876 | $ | 21,868 | ||
11/30/2003 | $ | 19,516 | $ | 22,682 | ||
12/31/2003 | $ | 20,374 | $ | 23,453 | ||
1/31/2004 | $ | 22,174 | $ | 25,449 | ||
2/29/2004 | $ | 23,518 | $ | 26,861 | ||
3/31/2004 | $ | 24,622 | $ | 28,121 | ||
4/30/2004 | $ | 22,762 | $ | 26,108 | ||
5/31/2004 | $ | 23,002 | $ | 26,414 | ||
6/30/2004 | $ | 23,350 | $ | 26,894 | ||
7/31/2004 | $ | 22,930 | $ | 26,477 | ||
8/31/2004 | $ | 23,218 | $ | 26,812 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
14 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Mexican equity market, as measured by the MSCI Mexico Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 30.28%, while the Index returned 28.28%.
Regulatory restraints, 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 constituent at its index weight, resulting in differences between a fund’s holdings and the securities in its underlying index. Once such constraint, the 5/50 Rule, precludes the sum of all the securities weighted 5% or more in a fund’s portfolio from exceeding 50% of a fund’s total assets. As of August 31, 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 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 Fund’s return relative to the Index’s return during the reporting period.
Mexico’s equity markets delivered gains for the reporting period. Because Mexico depends on the U.S. for 80% of its exports, its economic health is closely tied to that of the U.S. As economic conditions improved during the reporting period, demand for Mexico’s products, particularly commodities, increased. The growth was not all positive as mixed economic news in the U. S., in addition to rising oil prices, put some pressure on Mexican markets.
A growing housing market also contributed to market performance. Although Mexico’s President Fox has not had great success in passing economic reform, he has taken steps designed to improve the mortgage market. These steps have contributed to a housing boom that has increased construction levels as well as consumer spending. Benefiting from both export and domestic demand, cement company Cemex SA de CV (9.20% of the net assets of the Fund as of August 31, 2004) performed well during the reporting period.
Because more than 37% of the Fund’s net assets as of August 31, 2004 are comprised of Mexico’s two largest telecommunications companies, the sector’s performance is important to the Fund’s performance. Global telecommunications companies, particularly wireless telecommunications, generally posted gains during the reporting period, and Mexico’s telecommunications companies moved in step with this trend. The largest Fund holding at 20.27% of net assets as of August 31, 2004, America Movil SA de CV Series L, was a strong performer during the reporting period. Telefonos de Mexico SA de CV Series L (17.50% of the net assets of the Fund as of August 31, 2004) also posted gains.
MANAGERS’ DISCUSSION & ANALYSIS | 15 |
Managers’ Discussion & Analysis
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||
Year Ended 8/31/04 | Inception to 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
24.74% | 23.03 | % | 24.33 | % | 17.43 | % | 17.43 | % | 17.40 | % | 58.12 | % | 58.11 | % | 57.95 | % |
Total returns for the periods 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.
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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI PACIFIC EX-JAPAN INDEX FUND | MSCI PACIFIC FREE EX-JAPAN INDEX | |||||
10/25/2001 | $ | 10,000 | $ | 10,000 | ||
10/31/2001 | $ | 9,890 | $ | 9,895 | ||
11/30/2001 | $ | 10,630 | $ | 10,623 | ||
12/31/2001 | $ | 10,958 | $ | 10,961 | ||
1/31/2002 | $ | 11,067 | $ | 11,093 | ||
2/28/2002 | $ | 10,944 | $ | 10,969 | ||
3/31/2002 | $ | 11,390 | $ | 11,419 | ||
4/30/2002 | $ | 11,436 | $ | 11,462 | ||
5/31/2002 | $ | 11,800 | $ | 11,831 | ||
6/30/2002 | $ | 11,183 | $ | 11,205 | ||
7/31/2002 | $ | 10,508 | $ | 10,526 | ||
8/31/2002 | $ | 10,551 | $ | 10,567 | ||
9/30/2002 | $ | 9,870 | $ | 9,874 | ||
10/31/2002 | $ | 10,412 | $ | 10,417 | ||
11/30/2002 | $ | 10,657 | $ | 10,666 | ||
12/31/2002 | $ | 10,330 | $ | 10,340 | ||
1/31/2003 | $ | 10,416 | $ | 10,432 | ||
2/28/2003 | $ | 10,283 | $ | 10,296 | ||
3/31/2003 | $ | 10,397 | $ | 10,402 | ||
4/30/2003 | $ | 10,955 | $ | 10,969 | ||
5/31/2003 | $ | 11,511 | $ | 11,525 | ||
6/30/2003 | $ | 11,942 | $ | 11,942 | ||
7/31/2003 | $ | 12,141 | $ | 12,148 | ||
8/31/2003 | $ | 12,676 | $ | 12,704 | ||
9/30/2003 | $ | 13,228 | $ | 13,240 | ||
10/31/2003 | $ | 14,158 | $ | 14,176 | ||
11/30/2003 | $ | 14,131 | $ | 14,136 | ||
12/31/2003 | $ | 15,054 | $ | 15,070 | ||
1/31/2004 | $ | 15,436 | $ | 15,458 | ||
2/29/2004 | $ | 16,035 | $ | 16,051 | ||
3/31/2004 | $ | 15,976 | $ | 15,983 | ||
4/30/2004 | $ | 15,139 | $ | 15,147 | ||
5/31/2004 | $ | 15,125 | $ | 15,132 | ||
6/30/2004 | $ | 15,212 | $ | 15,210 | ||
7/31/2004 | $ | 15,342 | $ | 15,341 | ||
8/31/2004 | $ | 15,811 | $ | 15,795 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
16 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Australia, Hong Kong, New Zealand and Singapore equity markets, as measured by the MSCI Pacific Free ex-Japan Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 24.74%, while the Index returned 24.33%.
The markets comprising the Index – Australia, Hong Kong, New Zealand and Singapore – all posted gains during the reporting period, responding in accordance with the overall global economic recovery.
Australia’s economy, now in its 13th year of economic prosperity, began to see signs of slowing during the reporting period. Partly to blame was 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 Fund’s overall performance during the reporting period. BHP Billiton Ltd. (5.74% of the net assets of the Fund as of August 31, 2004) logged gains. Westfield Group (2.57% of the net assets of the Fund as of August 31, 2004), which owns and manages shopping centers around the world, benefited from strong real estate prices in Australia and abroad during the reporting period. The financial sector also performed well, with Commonwealth Bank of Australia, Australia & New Zealand Banking Group Ltd., and Westpac Banking Corp. Ltd. (4.44%, 3.86% and 3.46%, respectively, of the Fund’s net assets as of August 31, 2004) all posting gains during the reporting period.
For Hong Kong, a recovering 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., Cheung Kong (Holdings) Ltd. and Sun Hung Kai Properties Ltd. (2.80%, 2.16%, and 1.96%, respectively, of the net assets of the Fund as of August 31, 2004) all posted gains during the reporting period.
Singapore’s economic livelihood is largely dependent on exports, both to the U.S. and to its Asian neighbors. During the reporting period, regional trade strengthened, particularly with China. Improving economic conditions in the U.S. also helped the Singapore market as demand for exports to the U.S. continued to grow.
MANAGERS’ DISCUSSION & ANALYSIS | 17 |
Managers’ Discussion & Analysis
iSHARES® MSCI SINGAPORE INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
23.47% | 23.31 | % | 23.48 | % | (1.90 | )% | (2.05 | )% | (2.29 | )% | (5.60 | )% | (5.54 | )% | (4.99 | )% | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
23.47% | 23.31 | % | 23.48 | % | (9.16 | )% | (9.86 | )% | (10.92 | )% | (38.62 | )% | (38.33 | )% | (35.24 | )% |
Total returns for the periods 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI SINGAPORE INDEX FUND | MSCI SINGAPORE INDEX | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 10,278 | $ | 10,303 | ||
4/30/1996 | $ | 10,302 | $ | 10,279 | ||
5/31/1996 | $ | 9,714 | $ | 9,687 | ||
6/30/1996 | $ | 9,722 | $ | 9,567 | ||
7/31/1996 | $ | 8,979 | $ | 8,824 | ||
8/31/1996 | $ | 9,327 | $ | 9,191 | ||
9/30/1996 | $ | 9,352 | $ | 9,203 | ||
10/31/1996 | $ | 8,934 | $ | 8,771 | ||
11/30/1996 | $ | 9,548 | $ | 9,354 | ||
12/31/1996 | $ | 9,720 | $ | 9,578 | ||
1/31/1997 | $ | 9,999 | $ | 9,934 | ||
2/28/1997 | $ | 9,720 | $ | 9,665 | ||
3/31/1997 | $ | 8,803 | $ | 8,716 | ||
4/30/1997 | $ | 8,524 | $ | 8,412 | ||
5/31/1997 | $ | 9,073 | $ | 8,981 | ||
6/30/1997 | $ | 8,934 | $ | 8,938 | ||
7/31/1997 | $ | 8,942 | $ | 8,886 | ||
8/31/1997 | $ | 7,137 | $ | 6,958 | ||
9/30/1997 | $ | 7,294 | $ | 7,183 | ||
10/31/1997 | $ | 5,991 | $ | 5,948 | ||
11/30/1997 | $ | 6,066 | $ | 6,220 | ||
12/31/1997 | $ | 5,456 | $ | 5,702 | ||
1/31/1998 | $ | 4,508 | $ | 4,813 | ||
2/28/1998 | $ | 5,687 | $ | 5,975 | ||
3/31/1998 | $ | 5,588 | $ | 5,823 | ||
4/30/1998 | $ | 5,167 | $ | 5,400 | ||
5/31/1998 | $ | 4,154 | $ | 4,380 | ||
6/30/1998 | $ | 3,560 | $ | 3,774 | ||
7/31/1998 | $ | 3,577 | $ | 3,855 | ||
8/31/1998 | $ | 2,763 | $ | 3,106 | ||
9/30/1998 | $ | 3,307 | $ | 3,668 | ||
10/31/1998 | $ | 4,404 | $ | 4,698 | ||
11/30/1998 | $ | 5,191 | $ | 5,514 | ||
12/31/1998 | $ | 5,159 | $ | 5,498 | ||
1/31/1999 | $ | 4,981 | $ | 5,315 | ||
2/28/1999 | $ | 4,914 | $ | 5,244 | ||
3/31/1999 | $ | 5,117 | $ | 5,478 | ||
4/30/1999 | $ | 6,605 | $ | 7,083 | ||
5/31/1999 | $ | 6,334 | $ | 6,609 | ||
6/30/1999 | $ | 6,977 | $ | 7,342 | ||
7/31/1999 | $ | 6,943 | $ | 7,451 | ||
8/31/1999 | $ | 6,756 | $ | 7,270 | ||
9/30/1999 | $ | 6,560 | $ | 7,076 | ||
10/31/1999 | $ | 6,892 | $ | 7,421 | ||
11/30/1999 | $ | 7,224 | $ | 7,861 | ||
12/31/1999 | $ | 8,014 | $ | 8,806 | ||
1/31/2000 | $ | 6,981 | $ | 7,634 | ||
2/29/2000 | $ | 6,361 | $ | 6,948 | ||
3/31/2000 | $ | 6,499 | $ | 6,958 | ||
4/30/2000 | $ | 6,732 | $ | 7,377 | ||
5/31/2000 | $ | 5,638 | $ | 5,999 | ||
6/30/2000 | $ | 6,508 | $ | 6,810 | ||
7/31/2000 | $ | 6,482 | $ | 6,814 | ||
8/31/2000 | $ | 6,669 | $ | 7,047 | ||
9/30/2000 | $ | 6,079 | $ | 6,450 | ||
10/31/2000 | $ | 6,035 | $ | 6,445 | ||
11/30/2000 | $ | 5,921 | $ | 6,326 | ||
12/31/2000 | $ | 6,006 | $ | 6,365 | ||
1/31/2001 | $ | 6,006 | $ | 6,384 | ||
2/28/2001 | $ | 5,863 | $ | 6,235 | ||
3/31/2001 | $ | 4,878 | $ | 5,184 | ||
4/30/2001 | $ | 4,968 | $ | 5,244 | ||
5/31/2001 | $ | 4,771 | $ | 5,026 | ||
6/30/2001 | $ | 4,842 | $ | 5,095 | ||
7/31/2001 | $ | 4,735 | $ | 4,974 | ||
8/31/2001 | $ | 4,808 | $ | 5,067 | ||
9/30/2001 | $ | 3,917 | $ | 4,090 | ||
10/31/2001 | $ | 3,944 | $ | 4,113 | ||
11/30/2001 | $ | 4,205 | $ | 4,419 | ||
12/31/2001 | $ | 4,611 | $ | 4,857 | ||
1/31/2002 | $ | 5,156 | $ | 5,441 | ||
2/28/2002 | $ | 4,938 | $ | 5,210 | ||
3/31/2002 | $ | 5,147 | $ | 5,490 | ||
4/30/2002 | $ | 5,002 | $ | 5,321 | ||
5/31/2002 | $ | 4,947 | $ | 5,257 | ||
6/30/2002 | $ | 4,675 | $ | 4,928 | ||
7/31/2002 | $ | 4,584 | $ | 4,828 | ||
8/31/2002 | $ | 4,548 | $ | 4,818 | ||
9/30/2002 | $ | 4,021 | $ | 4,269 | ||
10/31/2002 | $ | 4,393 | $ | 4,680 | ||
11/30/2002 | $ | 4,166 | $ | 4,433 | ||
12/31/2002 | $ | 4,056 | $ | 4,330 | ||
1/31/2003 | $ | 3,880 | $ | 4,141 | ||
2/28/2003 | $ | 3,862 | $ | 4,100 | ||
3/31/2003 | $ | 3,807 | $ | 4,040 | ||
4/30/2003 | $ | 3,834 | $ | 4,076 | ||
5/31/2003 | $ | 4,213 | $ | 4,445 | ||
6/30/2003 | $ | 4,463 | $ | 4,703 | ||
7/31/2003 | $ | 4,786 | $ | 5,050 | ||
8/31/2003 | $ | 4,971 | $ | 5,244 | ||
9/30/2003 | $ | 5,155 | $ | 5,413 | ||
10/31/2003 | $ | 5,451 | $ | 5,733 | ||
11/30/2003 | $ | 5,405 | $ | 5,689 | ||
12/31/2003 | $ | 5,666 | $ | 5,958 | ||
1/31/2004 | $ | 5,968 | $ | 6,258 | ||
2/29/2004 | $ | 6,015 | $ | 6,330 | ||
3/31/2004 | $ | 5,996 | $ | 6,300 | ||
4/30/2004 | $ | 5,855 | $ | 6,197 | ||
5/31/2004 | $ | 5,751 | $ | 6,062 | ||
6/30/2004 | $ | 5,855 | $ | 6,162 | ||
7/31/2004 | $ | 6,005 | $ | 6,330 | ||
8/31/2004 | $ | 6,137 | $ | 6,476 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
18 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Singaporean equity market, as measured by the MSCI Singapore Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 23.47%, while the Index returned 23.48%.
Singapore rebounded from the difficulties in previous reporting periods to deliver solid gains during the reporting period. Because Singapore’s economy relies heavily on its export market, to both the U.S. and its Asian neighbors, it responded positively to signs of renewed economic strength in the U.S. economy and among its neighbors. Regional demand strengthened, due largely to China’s strong growth during the reporting period. Thanks largely to export growth, Singapore’s gross domestic product (GDP), which grew at a 1.1% pace in 2003, is on track to grow by 8.6% in 2004.
The ten largest holdings in the Fund account for roughly 70% of the Fund’s net assets as of August 31, 2004. Among the ten largest holdings, the improved economic conditions translated into gains for companies like Keppel Corp. Ltd. (3.82% of the net assets of the Fund as of August 31, 2004). Singapore Telecommunications Ltd. (11.70% of the net assets of the Fund as of August 31, 2004) and City Developments Ltd. (3.41% of the net assets of the Fund as of August 31, 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 13.98% of the net assets of the Fund as of August 31, 2004, DBS Group Holdings Ltd. performed well during the reporting period, as did Oversea-Chinese Banking Corp. Ltd. (10.73% of the net assets of the Fund as of August 31, 2004).
Singapore Airlines Ltd. (3.98% of the net assets of the Fund as of August 31, 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 setback, finishing the reporting period with a slight loss.
MANAGERS’ DISCUSSION & ANALYSIS | 19 |
Managers’ Discussion & Analysis
iSHARES® MSCI SOUTH AFRICA INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||
Year Ended 8/31/04 | Inception to 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
31.30% | 33.09 | % | 31.41 | % | 34.08 | % | 34.78 | % | 35.62 | % | 58.73 | % | 60.03 | % | 61.84 | % |
Total returns for the periods 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.
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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI SOUTH AFRICA INDEX FUND | MSCI SOUTH AFRICA INDEX | |||||
2/3/2003 | $ | 10,000 | $ | 10,000 | ||
2/28/2003 | $ | 9,990 | $ | 10,031 | ||
3/31/2003 | $ | 9,434 | $ | 9,539 | ||
4/30/2003 | $ | 9,997 | $ | 10,098 | ||
5/31/2003 | $ | 10,297 | $ | 10,416 | ||
6/30/2003 | $ | 10,715 | $ | 10,836 | ||
7/31/2003 | $ | 11,408 | $ | 11,564 | ||
8/31/2003 | $ | 12,089 | $ | 12,315 | ||
9/30/2003 | $ | 12,265 | $ | 12,476 | ||
10/31/2003 | $ | 13,541 | $ | 13,768 | ||
11/30/2003 | $ | 14,558 | $ | 14,790 | ||
12/31/2003 | $ | 14,792 | $ | 15,021 | ||
1/31/2004 | $ | 14,633 | $ | 14,913 | ||
2/29/2004 | $ | 15,454 | $ | 15,792 | ||
3/31/2004 | $ | 16,084 | $ | 16,394 | ||
4/30/2004 | $ | 13,965 | $ | 14,222 | ||
5/31/2004 | $ | 14,821 | $ | 15,103 | ||
6/30/2004 | $ | 15,155 | $ | 15,447 | ||
7/31/2004 | $ | 15,314 | $ | 15,609 | ||
8/31/2004 | $ | 15,872 | $ | 16,184 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
20 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the South African equity market, as measured by the MSCI South Africa Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 31.30%, while the Index returned 31.41%.
The South African economy is predominantly driven by metals, mining, and materials companies. During the reporting period, prices for gold and other metals climbed. Because these companies generally make their revenues in U.S. dollars but incur costs in South African rand, the local currency’s rapid gains cut into profits. Since the end of 2001, the rand has appreciated 96% against the U.S. dollar, putting pressure on the profits of South African exporters. In August, however, the rand weakened in response to an unexpected 0.50% interest rate cut by the local monetary policy committee, a move that can only help South African companies. For U.S. investors, the strengthening rand during the reporting period helped performance.
The currency’s strength severely hindered companies like Anglo American PLC, the largest mining company in the world and the largest Fund holding at 24.06% of net assets as of August 31, 2004, which implemented cost-cutting measures to counter the rand’s rise. Although Anglo American posted gains for the reporting period, other top ten Fund holdings did not fare as well. Impala Platinum Holdings Ltd., Gold Fields Ltd. and AngloGold Ashanti Ltd. (4.17%, 3.68%, and 3.46%, respectively, of the net assets of the Fund as of August 31, 2004) all declined during the reporting period.
Telecommunications company MTN Group Ltd. (4.59% of the net assets of the Fund as of August 31, 2004) was the top performer among the Fund’s ten largest holdings, benefiting from strength in the telecommunications industry globally.
Financial companies also generally performed well, with Standard Bank Group Ltd., Old Mutual PLC, and Sanlam Ltd. (6.43%, 5.80%, and 2.84%, respectively, of the net assets of the Fund as of August 31, 2004) all posted gains during the reporting period.
MANAGERS’ DISCUSSION & ANALYSIS | 21 |
Managers’ Discussion & Analysis
iSHARES® MSCI SOUTH KOREA INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||
Year Ended 8/31/04 | Inception to 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
5.83% | 5.27 | % | 8.64 | % | 4.47 | % | 4.50 | % | 4.92 | % | 20.78 | % | 20.91 | % | 23.05 | % |
Total returns for the periods 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.
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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI SOUTH KOREA INDEX FUND | MSCI SOUTH KOREA INDEX | |||||
5/9/2000 | $ | 10,000 | $ | 10,000 | ||
5/31/2000 | $ | 9,455 | $ | 9,437 | ||
6/30/2000 | $ | 10,717 | $ | 10,761 | ||
7/31/2000 | $ | 9,111 | $ | 9,035 | ||
8/31/2000 | $ | 8,919 | $ | 8,748 | ||
9/30/2000 | $ | 7,913 | $ | 7,660 | ||
10/31/2000 | $ | 6,557 | $ | 6,211 | ||
11/30/2000 | $ | 6,095 | $ | 5,804 | ||
12/31/2000 | $ | 5,909 | $ | 5,583 | ||
1/31/2001 | $ | 7,471 | $ | 7,119 | ||
2/28/2001 | $ | 6,930 | $ | 6,608 | ||
3/31/2001 | $ | 5,997 | $ | 5,695 | ||
4/30/2001 | $ | 6,822 | $ | 6,492 | ||
5/31/2001 | $ | 7,348 | $ | 6,984 | ||
6/30/2001 | $ | 6,955 | $ | 6,590 | ||
7/31/2001 | $ | 6,419 | $ | 6,114 | ||
8/31/2001 | $ | 6,557 | $ | 6,255 | ||
9/30/2001 | $ | 5,468 | $ | 5,209 | ||
10/31/2001 | $ | 6,369 | $ | 6,074 | ||
11/30/2001 | $ | 8,042 | $ | 7,658 | ||
12/31/2001 | $ | 8,670 | $ | 8,288 | ||
1/31/2002 | $ | 9,348 | $ | 8,941 | ||
2/28/2002 | $ | 10,318 | $ | 9,888 | ||
3/31/2002 | $ | 11,263 | $ | 10,669 | ||
4/30/2002 | $ | 11,150 | $ | 10,744 | ||
5/31/2002 | $ | 11,214 | $ | 10,747 | ||
6/30/2002 | $ | 10,749 | $ | 10,344 | ||
7/31/2002 | $ | 10,457 | $ | 10,070 | ||
8/31/2002 | $ | 10,476 | $ | 10,113 | ||
9/30/2002 | $ | 8,947 | $ | 8,679 | ||
10/31/2002 | $ | 9,309 | $ | 9,110 | ||
11/30/2002 | $ | 10,501 | $ | 10,273 | ||
12/31/2002 | $ | 9,195 | $ | 8,974 | ||
1/31/2003 | $ | 8,848 | $ | 8,585 | ||
2/28/2003 | $ | 8,388 | $ | 8,161 | ||
3/31/2003 | $ | 7,512 | $ | 7,384 | ||
4/30/2003 | $ | 8,571 | $ | 8,433 | ||
5/31/2003 | $ | 9,071 | $ | 8,949 | ||
6/30/2003 | $ | 9,803 | $ | 9,656 | ||
7/31/2003 | $ | 10,788 | $ | 10,709 | ||
8/31/2003 | $ | 11,412 | $ | 11,326 | ||
9/30/2003 | $ | 10,704 | $ | 10,598 | ||
10/31/2003 | $ | 11,808 | $ | 11,807 | ||
11/30/2003 | $ | 11,818 | $ | 11,787 | ||
12/31/2003 | $ | 12,297 | $ | 12,117 | ||
1/31/2004 | $ | 13,217 | $ | 13,352 | ||
2/29/2004 | $ | 13,677 | $ | 13,830 | ||
3/31/2004 | $ | 14,046 | $ | 14,350 | ||
4/30/2004 | $ | 13,092 | $ | 13,439 | ||
5/31/2004 | $ | 12,417 | $ | 12,790 | ||
6/30/2004 | $ | 11,958 | $ | 12,242 | ||
7/31/2004 | $ | 11,038 | $ | 11,240 | ||
8/31/2004 | $ | 12,078 | $ | 12,305 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
22 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the South Korean equity market, as measured by the MSCI South Korea Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 5.83%, while the Index returned 8.64%.
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 index 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 its 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. As of August 31, 2004, Samsung Electronics represented 32.16% of the Index, compared to 22.35% of the Fund’s net assets. This weight difference had a negative impact on the Fund’s performance relative to the performance of the Index.
The South Korean market grappled with issues on multiple fronts to deliver gains during the reporting period. Early in the reporting 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.
Early in the reporting period, these problems were offset by South Korea’s export market, which expanded as demand for cars, semiconductors and computers accelerated in the U.S., China, and Europe. The country’s exports grew 45% in February and reached a record high in March, according to a government report. As the reporting period progressed, rising interest rates began to sap demand from these markets. In an attempt to revive the economy, the central bank left its key interest rate at a record low.
The world’s largest maker of liquid crystal displays (“LCD”) for televisions, Samsung Electronics Co. Ltd. represented 22.35% of the net assets of the Fund as of August 31, 2004. Its performance, therefore, had a large impact on the Fund as a whole during the reporting period. During the first half of the reporting period, Samsung saw its share price climb, thanks in part to increasing demand for LCD televisions. By summer, the demand had dropped, and Samsung anticipated that supply would exceed demand during the second half of 2004. The gains that Samsung’s share price had made early in the reporting period were nearly erased in the final months, but the company finished the reporting period with a slight gain.
Cellular phone maker LG Electronics Inc. (3.83% of the net assets of the Fund as of August 31, 2004) also experienced a drop in demand during the reporting period, and its share price declined.
Steel manufacturer POSCO (7.13% of the net assets of the Fund as of August 31, 2004) continued to benefit from global growth as well as Korea’s strong currency as it converted foreign gains back into the local currency.
MANAGERS’ DISCUSSION & ANALYSIS | 23 |
Managers’ Discussion & Analysis
iSHARES® MSCI TAIWAN INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||
Year Ended 8/31/04 | Inception to 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
(1.10)% | (5.30 | )% | (0.39 | )% | (12.45 | )% | (12.74 | )% | (11.59 | )% | (42.79 | )% | (43.57 | )% | (40.38 | )% |
Total returns for the periods 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.
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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES MSCI TAIWAN INDEX FUND | MSCI TAIWAN INDEX | |||||
6/20/2000 | $ | 10,000 | $ | 10,000 | ||
6/30/2000 | $ | 9,638 | $ | 9,604 | ||
7/31/2000 | $ | 9,393 | $ | 9,376 | ||
8/31/2000 | $ | 8,790 | $ | 8,785 | ||
9/30/2000 | $ | 7,403 | $ | 7,373 | ||
10/31/2000 | $ | 6,449 | $ | 6,417 | ||
11/30/2000 | $ | 5,951 | $ | 5,922 | ||
12/31/2000 | $ | 5,469 | $ | 5,441 | ||
1/31/2001 | $ | 7,055 | $ | 7,032 | ||
2/28/2001 | $ | 6,540 | $ | 6,522 | ||
3/31/2001 | $ | 6,433 | $ | 6,422 | ||
4/30/2001 | $ | 5,973 | $ | 5,968 | ||
5/31/2001 | $ | 5,555 | $ | 5,557 | ||
6/30/2001 | $ | 5,330 | $ | 5,354 | ||
7/31/2001 | $ | 4,735 | $ | 4,767 | ||
8/31/2001 | $ | 4,826 | $ | 4,880 | ||
9/30/2001 | $ | 3,771 | $ | 3,816 | ||
10/31/2001 | $ | 4,108 | $ | 4,156 | ||
11/30/2001 | $ | 4,714 | $ | 4,779 | ||
12/31/2001 | $ | 5,742 | $ | 5,823 | ||
1/31/2002 | $ | 6,005 | $ | 6,094 | ||
2/28/2002 | $ | 5,742 | $ | 5,838 | ||
3/31/2002 | $ | 6,289 | $ | 6,400 | ||
4/30/2002 | $ | 6,106 | $ | 6,208 | ||
5/31/2002 | $ | 5,828 | $ | 5,925 | ||
6/30/2002 | $ | 5,330 | $ | 5,424 | ||
7/31/2002 | $ | 4,982 | $ | 5,084 | ||
8/31/2002 | $ | 4,724 | $ | 4,835 | ||
9/30/2002 | $ | 4,012 | $ | 4,104 | ||
10/31/2002 | $ | 4,446 | $ | 4,556 | ||
11/30/2002 | $ | 4,542 | $ | 4,653 | ||
12/31/2002 | $ | 4,269 | $ | 4,372 | ||
1/31/2003 | $ | 4,783 | $ | 4,903 | ||
2/28/2003 | $ | 4,205 | $ | 4,313 | ||
3/31/2003 | $ | 4,141 | $ | 4,249 | ||
4/30/2003 | $ | 4,017 | $ | 4,131 | ||
5/31/2003 | $ | 4,435 | $ | 4,563 | ||
6/30/2003 | $ | 4,762 | $ | 4,904 | ||
7/31/2003 | $ | 5,335 | $ | 5,501 | ||
8/31/2003 | $ | 5,785 | $ | 5,985 | ||
9/30/2003 | $ | 5,806 | $ | 6,021 | ||
10/31/2003 | $ | 6,203 | $ | 6,434 | ||
11/30/2003 | $ | 5,839 | $ | 6,058 | ||
12/31/2003 | $ | 5,974 | $ | 6,205 | ||
1/31/2004 | $ | 6,489 | $ | 6,748 | ||
2/29/2004 | $ | 6,741 | $ | 7,014 | ||
3/31/2004 | $ | 6,569 | $ | 6,835 | ||
4/30/2004 | $ | 6,124 | $ | 6,376 | ||
5/31/2004 | $ | 6,151 | $ | 6,408 | ||
6/30/2004 | $ | 5,786 | $ | 6,027 | ||
7/31/2004 | $ | 5,351 | $ | 5,557 | ||
8/31/2004 | $ | 5,721 | $ | 5,962 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
24 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Taiwanese equity market, as measured by the MSCI Taiwan Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 the Fund declined 1.10%, while the Index declined 0.39%.
Taiwan got off to a strong start for the reporting period, due largely to improving economic conditions in the U.S. and China. 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.
During the second half of the reporting period, Taiwan struggled with political upheaval and a downturn in the electronics industry. In March, President Chen Shui-bian defeated his opponent Lien Chan amid cries of fraud. In the coming months, Chen Shui-bian reiterated planned constitutional revisions, despite warnings from mainland China. The tensions with China hurt markets, as many investors feared damage to export trade. In June, Taiwan was dealt a second blow, when the global semiconductor industry was downgraded. Because technology accounts for more than 50% of Taiwan’s economy, the downgrade spurred market declines.
Among the ten largest Fund holdings, performance was mixed during the reporting period. Electronics-related companies generally posted losses for the reporting period. The two largest holdings, Taiwan Semiconductor Manufacturing Co. Ltd. (12.43% of the net assets of the Fund as of August 31, 2004) and United Microelectronics Corp. (5.91% of the net assets of the Fund as of August 31, 2004) both declined. Hon Hai Precision Industry Co. Ltd. (4.03% of the net assets of the Fund as of August 31, 2004) also lost ground for the reporting period.
Taiwan’s largest steel producer China Steel Corp. (3.68% of the net assets of the Fund as of August 31, 2004), on the other hand, benefited from demand during the reporting period.
Financial company Cathay Financial Holdings Co. Ltd. (4.26% of the net assets of the Fund as of August 31, 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 | 25 |
iSHARES®, INC.
As a shareholder of an iShares Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares; and (2) ongoing costs, including management fees and other fund expenses. The following Example is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2004 to August 31, 2004.
Actual Expenses
The first line under each Fund in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line for your Fund under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line under each Fund in the table below provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the second line under each Fund in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
iShares MSCI Index Fund | Beginning Account Value (March 1, 2004) | Ending Account Value (August 31, 2004) | Annualized Expense Ratio | Expenses Paid During Period* (March 1 to August 31, 2004) | ||||||||
Australia | ||||||||||||
Actual | $ | 1,000.00 | $ | 981.20 | 0.75 | % | $ | 3.74 | ||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.35 | 0.75 | 3.81 | ||||||||
Brazil | ||||||||||||
Actual | 1,000.00 | 1,014.40 | 0.91 | 4.61 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,020.56 | 0.91 | 4.62 | ||||||||
Canada | ||||||||||||
Actual | 1,000.00 | 980.80 | 0.60 | 2.99 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.13 | 0.60 | 3.05 | ||||||||
Emerging Markets | ||||||||||||
Actual | 1,000.00 | 936.30 | 0.77 | 3.75 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.25 | 0.77 | 3.91 |
26 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Shareholder Expenses (Continued)
iSHARES®, INC.
iShares MSCI Index Fund | Beginning Account Value (March 1, 2004) | Ending Account Value (August 31, 2004) | Annualized Expense Ratio | Expenses Paid During Period* | ||||||||
Hong Kong | ||||||||||||
Actual | $ | 1,000.00 | $ | 971.50 | 0.76 | % | $ | 3.77 | ||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.33 | 0.76 | 3.86 | ||||||||
Malaysia | ||||||||||||
Actual | 1,000.00 | 922.40 | 0.76 | 3.67 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.33 | 0.76 | 3.86 | ||||||||
Mexico | ||||||||||||
Actual | 1,000.00 | 987.20 | 0.74 | 3.70 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.40 | 0.74 | 3.76 | ||||||||
Pacific ex-Japan | ||||||||||||
Actual | 1,000.00 | 986.10 | 0.50 | 2.50 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.62 | 0.50 | 2.54 | ||||||||
Singapore | ||||||||||||
Actual | 1,000.00 | 1,020.40 | 0.75 | 3.81 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.35 | 0.75 | 3.81 | ||||||||
South Africa | ||||||||||||
Actual | 1,000.00 | 1,027.10 | 0.90 | 4.59 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,020.59 | 0.90 | 4.57 | ||||||||
South Korea | ||||||||||||
Actual | 1,000.00 | 883.10 | 0.91 | 4.31 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,020.54 | 0.91 | 4.62 | ||||||||
Taiwan | ||||||||||||
Actual | 1,000.00 | 848.70 | 1.39 | 6.46 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,018.14 | 1.39 | 7.05 |
* | Expenses are calculated using each Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days), and divided by the number of days in the year (366 days). |
SHAREHOLDER EXPENSES | 27 |
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 93.96% | |||||
BANKS – 26.92% | |||||
Australia & New Zealand Banking Group Ltd. | 829,686 | $ | 10,750,949 | ||
Commonwealth Bank of Australia | 573,012 | 12,219,899 | |||
National Australia Bank Ltd. | 691,878 | 13,020,381 | |||
Suncorp-Metway Ltd. | 245,586 | 2,583,966 | |||
Westpac Banking Corp. Ltd. | 808,434 | 9,619,255 | |||
48,194,450 | |||||
BEVERAGES – 3.07% | |||||
Coca-Cola Amatil Ltd. | 209,286 | 1,069,980 | |||
Foster’s Group Ltd. | 922,812 | 3,043,176 | |||
Lion Nathan Ltd. | 134,442 | 674,047 | |||
Southcorp Ltd.1 | 295,350 | 715,366 | |||
5,502,569 | |||||
BIOTECHNOLOGY – 0.41% | |||||
Sonic Healthcare Ltd. | 111,474 | 736,007 | |||
736,007 | |||||
BUILDING MATERIALS – 3.06% | |||||
Boral Ltd. | 266,442 | 1,320,799 | |||
CSR Ltd. | 417,516 | 678,107 | |||
James Hardie Industries NV | 210,936 | 810,301 | |||
Rinker Group Ltd. | 434,346 | 2,668,407 | |||
5,477,614 | |||||
COMMERCIAL SERVICES – 1.19% | |||||
Brambles Industries Ltd.2 | 445,302 | 2,122,538 | |||
2,122,538 | |||||
COMPUTERS – 0.25% | |||||
Computershare Ltd. | 178,068 | 447,644 | |||
447,644 | |||||
DIVERSIFIED FINANCIAL SERVICES – 1.93% | |||||
Australian Stock Exchange Ltd.2 | 47,190 | 519,176 | |||
Macquarie Bank Ltd. | 99,000 | 2,369,910 | |||
Perpetual Trustees Australia Ltd.2 | 17,622 | 572,414 | |||
3,461,500 | |||||
ENGINEERING & CONSTRUCTION – 0.24% | |||||
Leighton Holdings Ltd.2 | 62,238 | 430,704 | |||
430,704 | |||||
ENTERTAINMENT – 1.78% | |||||
Aristocrat Leisure Ltd.2 | 143,418 | 711,961 | |||
TABCORP Holdings Ltd.2 | 232,624 | 2,468,940 | |||
3,180,901 | |||||
FOOD – 2.34% | |||||
Woolworths Ltd. | 467,808 | 4,178,834 | |||
4,178,834 | |||||
FOREST PRODUCTS & PAPER – 0.43% | |||||
PaperlinX Ltd. | 204,864 | 763,830 | |||
763,830 | |||||
GAS – 1.10% | |||||
Australian Gas Light Co. Ltd. | 208,626 | 1,960,846 | |||
1,960,846 | |||||
HEALTH CARE – PRODUCTS – 0.19% | |||||
Cochlear Ltd.2 | 25,014 | 339,672 | |||
339,672 | |||||
HOLDING COMPANIES – DIVERSIFIED – 0.48% | |||||
Patrick Corp. Ltd.2 | 229,878 | 857,094 | |||
857,094 | |||||
HOUSEHOLD PRODUCTS & WARES – 0.25% | |||||
Pacific Brands Ltd. | 224,730 | 442,754 | |||
442,754 | |||||
INSURANCE – 5.60% | |||||
AMP Ltd. | 850,542 | 3,753,814 | |||
AXA Asia Pacific Holdings Ltd. | 321,420 | 876,107 | |||
Insurance Australia Group Ltd. | 729,366 | 2,616,412 | |||
QBE Insurance Group Ltd.2 | 311,850 | 2,785,693 | |||
10,032,026 | |||||
INVESTMENT COMPANIES – 1.24% | |||||
Macquarie Infrastructure Group | 885,852 | 2,220,683 | |||
2,220,683 | |||||
IRON & STEEL – 1.34% | |||||
BHP Steel Ltd. | 337,194 | 1,869,160 | |||
OneSteel Ltd. | 255,948 | 524,139 | |||
2,393,299 | |||||
MANUFACTURING – 3.26% | |||||
Ansell Ltd.2 | 73,736 | 439,980 | |||
Futuris Corp. Ltd.2 | 251,130 | 317,430 |
28 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2004
Security | Shares | Value | ||||
Orica Ltd. | 124,344 | $ | 1,422,449 | |||
Wesfarmers Ltd. | 172,524 | 3,662,144 | ||||
5,842,003 | ||||||
MEDIA – 3.67% | ||||||
John Fairfax Holdings Ltd. | 411,488 | 1,109,986 | ||||
News Corp. Ltd. (The)2 | 627,132 | 4,884,627 | ||||
Publishing & Broadcasting Ltd.2 | 60,258 | 580,398 | ||||
6,575,011 | ||||||
MINING – 14.21% | ||||||
Alumina Ltd. | 532,092 | 2,040,250 | ||||
BHP Billiton Ltd. | 1,723,062 | 15,975,799 | ||||
Iluka Resources Ltd. | 105,468 | 346,314 | ||||
Newcrest Mining Ltd. | 151,602 | 1,595,101 | ||||
Rio Tinto Ltd.2 | 142,758 | 3,634,149 | ||||
WMC Resources Ltd. | 528,462 | 1,836,013 | ||||
25,427,626 | ||||||
OIL & GAS – 2.94% | ||||||
Origin Energy Ltd. | 306,570 | 1,277,258 | ||||
Santos Ltd. | 270,270 | 1,259,618 | ||||
Woodside Petroleum Ltd. | 214,434 | 2,731,663 | ||||
5,268,539 | ||||||
PACKAGING & CONTAINERS – 1.16% | ||||||
Amcor Ltd. | 402,006 | 2,080,815 | ||||
2,080,815 | ||||||
PHARMACEUTICALS – 1.38% | ||||||
CSL Ltd. | 89,430 | 1,632,453 | ||||
Mayne Group Ltd. | 294,166 | 845,442 | ||||
2,477,895 | ||||||
REAL ESTATE – 10.58% | ||||||
Centro Properties Group | 292,578 | 937,982 | ||||
Commonwealth Property Office Fund | 596,046 | 509,286 | ||||
Deutsche Office Trust | 513,876 | 431,820 | ||||
Gandel Retail Trust | 636,240 | 678,414 | ||||
General Property Trust | 925,254 | 2,319,457 | ||||
ING Industrial Fund | 301,158 | 414,692 | ||||
Investa Property Group | 651,504 | 915,518 | ||||
Lend Lease Corp Ltd. | 168,570 | 1,326,058 | ||||
Macquarie Goodman Industrial Trust | 733,128 | 926,680 | ||||
Security | Shares or Principal | Value | ||||
Mirvac Group | 325,776 | $ | 1,039,811 | |||
Stockland Trust Group | 580,734 | 2,300,579 | ||||
Westfield Group1,2 | 655,084 | 7,137,722 | ||||
18,938,019 | ||||||
RETAIL – 2.06% | ||||||
Coles Myer Ltd. | 502,656 | 3,187,456 | ||||
Harvey Norman Holdings Ltd. | 241,494 | 503,066 | ||||
3,690,522 | ||||||
TELECOMMUNICATIONS – 2.40% | ||||||
Telstra Corp. Ltd. | 985,512 | 3,340,413 | ||||
Transurban Group | 241,428 | 954,713 | ||||
4,295,126 | ||||||
TRANSPORTATION – 0.48% | ||||||
Toll Holdings Ltd. | 110,286 | 852,769 | ||||
852,769 | ||||||
TOTAL COMMON STOCKS | 168,191,290 | |||||
PREFERRED STOCKS – 5.15% | ||||||
MEDIA – 5.15% | ||||||
News Corp. Ltd. (The) | 1,242,120 | 9,209,792 | ||||
9,209,792 | ||||||
TOTAL PREFERRED STOCKS | 9,209,792 | |||||
SHORT-TERM INVESTMENTS – 11.49% | ||||||
FLOATING RATE NOTES – 2.96% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/053,4 | $ | 89,614 | 89,602 | |||
1.52%, 10/12/043,4 | 74,678 | 74,678 | ||||
1.56%, 09/15/043,4 | 149,357 | 149,356 | ||||
1.64%, 03/15/053,4 | 74,678 | 74,711 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/043 | 112,017 | 112,016 | ||||
1.38%, 11/22/043 | 37,339 | 37,340 | ||||
1.40%, 10/29/043 | 149,357 | 149,356 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/053,4 | 149,357 | 149,337 | ||||
1.61%, 07/29/053,4 | 149,357 | 149,316 |
SCHEDULESOF INVESTMENTS | 29 |
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/053 | $ | 149,357 | $ | 149,314 | ||
1.56%, 08/26/053 | 149,357 | 149,313 | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/053 | 149,357 | 149,357 | ||||
Dorada Finance Inc. | ||||||
1.61%, 07/29/053,4 | 123,966 | 123,932 | ||||
Five Finance Inc. | ||||||
1.42%, 04/29/053,4 | 119,485 | 119,477 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/043 | 74,678 | 74,653 | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/053 | 95,588 | 95,583 | ||||
1.58%, 04/22/053 | 149,357 | 149,357 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/053,4 | 149,357 | 149,343 | ||||
1.57%, 09/27/043,4 | 161,305 | 161,303 | ||||
1.61%, 07/25/053,4 | 74,678 | 74,665 | ||||
Links Finance LLC | ||||||
1.55%, 04/15/053,4 | 149,357 | 149,338 | ||||
1.68%, 04/25/053 | 149,357 | 149,420 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/053 | 149,357 | 149,357 | ||||
1.63%, 12/09/043,4 | 123,966 | 123,410 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/053 | 149,357 | 149,335 | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/053,4 | 141,889 | 141,889 | ||||
Permanent Financing PLC | ||||||
1.52%, 03/10/053 | 149,357 | 149,357 | ||||
1.53%, 12/10/043 | 74,678 | 74,678 | ||||
1.55%, 06/10/053 | 67,210 | 67,210 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/043 | 149,357 | 149,354 | ||||
1.57%, 11/15/043 | 149,357 | 149,354 | ||||
1.59%, 09/15/053 | 112,017 | 112,028 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/053,4 | 54,814 | 54,811 | ||||
1.56%, 01/18/053,4 | 65,717 | 65,715 | ||||
1.59%, 07/25/053,4 | 149,357 | 149,343 | ||||
1.66%, 05/17/053,4 | 123,966 | 123,962 | ||||
1.70%, 02/25/053,4 | 83,640 | 83,632 | ||||
Security | Shares or Principal | Value | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/043 | $ | 36,996 | $ | 36,932 | ||
1.48%, 06/15/053,4 | 74,678 | 74,665 | ||||
1.56%, 09/15/043,4 | 74,678 | 74,678 | ||||
1.56%, 07/15/053,4 | 112,017 | 111,998 | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/053 | 74,678 | 74,665 | ||||
1.55%, 04/15/053,4 | 112,017 | 112,004 | ||||
1.55%, 07/11/053 | 37,339 | 37,336 | ||||
1.56%, 11/15/043,4 | 89,614 | 89,614 | ||||
1.57%, 06/15/053,4 | 61,236 | 61,236 | ||||
1.58%, 03/29/053 | 64,223 | 64,215 | ||||
1.58%, 08/26/053,4 | 74,678 | 74,664 | ||||
1.68%, 05/20/053 | 67,210 | 67,206 | ||||
5,303,415 | ||||||
MONEY MARKET FUNDS – 2.33% | ||||||
Barclays Global Investors Funds | 2,357,761 | 2,357,761 | ||||
Barclays Global Investors Funds | 1,642,923 | 1,642,923 | ||||
BlackRock Temp Cash Money Market Fund3 | 75,398 | 75,398 | ||||
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3 | 100,397 | 100,397 | ||||
4,176,479 | ||||||
COMMERCIAL PAPER – 2.12% | ||||||
Alpine Securitization Corp. | ||||||
1.50%, 09/08/043 | 74,678 | 74,657 | ||||
1.51%, 09/02/043 | 67,210 | 67,208 | ||||
1.54%, 09/14/043 | 74,678 | 74,637 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/043 | 29,871 | 29,863 | ||||
1.53%, 09/16/043 | 73,480 | 73,434 | ||||
1.54%, 09/15/043 | 74,678 | 74,634 | ||||
1.54%, 09/22/043 | 37,339 | 37,306 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/043 | 74,678 | 74,656 | ||||
1.53%, 09/09/043 | 174,435 | 174,376 |
30 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
1.53%, 09/13/043 | $ | 107,531 | $ | 107,476 | ||
1.53%, 09/14/043 | 37,339 | 37,319 | ||||
1.54%, 09/17/043 | 44,807 | 44,776 | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/043 | 74,678 | 74,657 | ||||
1.53%, 09/15/043 | 29,871 | 29,854 | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/043 | 29,871 | 29,851 | ||||
Corporate Asset Funding | ||||||
1.42%, 09/03/043 | 44,807 | 44,803 | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/043 | 74,678 | 74,672 | ||||
Delaware Funding Corp. | ||||||
1.50%, 09/09/043 | 74,678 | 74,653 | ||||
1.53%, 09/10/043 | 119,485 | 119,440 | ||||
1.53%, 09/20/043 | 50,781 | 50,740 | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/043 | 74,678 | 74,634 | ||||
1.45%, 11/09/043 | 149,357 | 148,942 | ||||
1.52%, 09/08/043 | 149,357 | 149,313 | ||||
1.59%, 12/02/043 | 149,357 | 148,750 | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/043 | 44,807 | 44,803 | ||||
1.53%, 09/07/043 | 74,678 | 74,659 | ||||
1.53%, 09/17/043 | 44,807 | 44,777 | ||||
1.53%, 09/21/043 | 37,339 | 37,307 | ||||
1.53%, 09/22/043 | 74,678 | 74,612 | ||||
1.54%, 09/14/043 | 582,017 | 111,955 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/053 | 74,678 | 74,160 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/043 | 74,678 | 74,653 | ||||
1.55%, 10/15/043 | 97,941 | 97,755 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/043 | 149,357 | 149,091 | ||||
1.44%, 10/27/043 | 149,357 | 149,023 | ||||
1.59%, 11/30/043 | 74,678 | 74,381 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/043 | 37,339 | 37,338 | ||||
1.53%, 09/20/043 | 37,339 | 37,309 | ||||
1.53%, 09/23/043 | 52,275 | 52,226 | ||||
1.54%, 09/15/043 | 89,614 | 89,560 | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/043 | 104,087 | 104,087 | ||||
1.51%, 09/08/043 | 59,743 | 59,725 | ||||
1.52%, 09/09/043 | 37,339 | 37,327 | ||||
1.53%, 09/21/043 | 74,678 | 74,615 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/043 | 44,807 | 44,782 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/043 | 82,146 | 82,146 | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/043 | 49,706 | 49,618 | ||||
1.55%, 09/16/043 | 44,807 | 44,778 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
1.54%, 09/15/043 | 59,743 | 59,707 | ||||
1.54%, 09/23/043 | 37,339 | 37,304 | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/043 | 37,339 | 37,327 | ||||
1.52%, 09/10/043 | 52,275 | 52,255 | ||||
3,797,931 | ||||||
TIME DEPOSITS – 1.87% | ||||||
Abbey National Treasury Services PLC | ||||||
1.25%, 01/06/053 | 149,357 | 149,357 | ||||
1.33%, 02/10/053 | 74,678 | 74,673 | ||||
1.39%, 02/02/053 | 74,668 | 74,664 | ||||
1.39%, 04/08/053 | 104,550 | 104,540 | ||||
1.40%, 10/25/043 | 149,357 | 149,353 | ||||
Bank of New York | ||||||
1.39%, 11/01/043 | 149,357 | 149,354 | ||||
1.60%, 12/03/043 | 37,339 | 37,334 | ||||
Bank of Nova Scotia | ||||||
1.13%, 10/06/043 | 149,357 | 149,357 | ||||
1.24%, 10/07/043 | 112,017 | 112,016 | ||||
1.42%, 10/29/043 | 112,017 | 112,019 | ||||
National City Bank (Cleveland, Ohio) | ||||||
1.25%, 01/06/053 | 149,357 | 149,359 | ||||
1.49%, 08/09/053 | 149,357 | 149,315 | ||||
1.54%, 06/23/053 | 149,357 | 149,320 | ||||
1.56%, 06/10/053 | 74,678 | 74,696 |
SCHEDULEOF INVESTMENTS | 31 |
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2004
Security | Principal | Value | |||||
Norddeutsche Landesbank | |||||||
1.59%, 07/27/053 | $ | 149,357 | $ | 149,309 | |||
Prudential Funding LLC | |||||||
1.60%, 12/01/043 | 74,678 | 74,376 | |||||
SouthTrust Bank | |||||||
1.55%, 09/01/043 | 298,713 | 298,713 | |||||
Toronto-Dominion Bank | |||||||
1.22%, 03/23/053 | 261,374 | 261,349 | |||||
1.34%, 02/10/053 | 59,743 | 59,739 | |||||
1.41%, 11/01/043 | 112,017 | 112,016 | |||||
1.53%, 09/13/043 | 74,678 | 74,678 | |||||
1.77%, 05/10/053 | 74,678 | 74,673 | |||||
1.90%, 05/11/053 | 74,678 | 74,674 | |||||
UBS Finance (Delaware) | |||||||
1.10%, 09/08/043 | 149,357 | 149,325 | |||||
1.11%, 12/17/043 | 224,035 | 223,296 | |||||
1.14%, 09/29/043 | 149,357 | 149,225 | |||||
3,336,730 | |||||||
REPURCHASE AGREEMENTS – 1.65% | |||||||
Banc of America Securities LLC | |||||||
1.59%, 09/01/043,6 | 448,070 | 448,070 | |||||
Bank of America, N.A. | |||||||
1.59%, 09/01/043,6 | 858,800 | 858,800 | |||||
Goldman Sachs & Co. | |||||||
1.59%, 09/01/043,6 | 746,783 | 746,783 | |||||
Merrill Lynch Government Securities Inc. | |||||||
1.57%, 09/01/043,6 | 149,357 | 149,357 | |||||
1.59%, 09/01/043,6 | 746,783 | 746,783 | |||||
2,949,793 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.30% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.63%, 04/15/053 | 104,550 | 104,757 | |||||
1.80%, 01/18/053 | 69,451 | 68,968 | |||||
1.80%, 01/19/053 | 74,678 | 74,156 | |||||
2.06%, 05/31/053 | 74,459 | 73,300 | |||||
Federal National Mortgage Association | |||||||
2.33%, 07/22/053 | 224,035 | 219,347 | |||||
540,528 | |||||||
MEDIUM-TERM NOTES – 0.26% | |||||||
CC USA Inc. | |||||||
1.29%, 04/15/053,4 | 149,357 | 149,347 | |||||
1.51%, 02/15/053,4 | 97,082 | 97,151 | |||||
Dorada Finance Inc. | |||||||
1.48%, 01/18/053,4 | 112,017 | 112,015 | |||||
K2 USA LLC | |||||||
1.46%, 01/12/053,4 | 74,678 | 74,676 | |||||
WhistleJacket Capital LLC | |||||||
1.32%, 02/04/053,4 | 37,339 | 37,336 | |||||
470,525 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 20,575,401 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 110.60% | 197,976,483 | ||||||
Other Assets, Less Liabilities – (10.60%) | (18,978,057 | ) | |||||
NET ASSETS – 100.00% | $ | 178,998,426 | |||||
1 | Non-income earning security. |
2 | All or a portion of this security represents a security on loan. See Note 5. |
3 | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
4 | Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
5 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
6 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
32 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2004
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Financial | 46.27 | % | $ | 82,846,678 | ||
Basic Materials | 15.98 | 28,584,755 | ||||
Communications | 11.22 | 20,079,929 | ||||
Consumer Non-Cyclical | 8.83 | 15,800,269 | ||||
Industrial | 8.20 | 14,683,905 | ||||
Consumer Cyclical | 3.84 | 6,871,423 | ||||
Energy | 2.94 | 5,268,539 | ||||
Utilities | 1.10 | 1,960,846 | ||||
Diversified | 0.48 | 857,094 | ||||
Technology | 0.25 | 447,644 | ||||
Short-Term and Other Net Assets | 0.89 | 1,597,344 | ||||
TOTAL | 100.00 | % | $ | 178,998,426 | ||
See notes to financial statements.
SCHEDULEOF INVESTMENTS | 33 |
Schedule of Investments
iSHARES® MSCI BRAZIL INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 27.97% | |||||
AGRICULTURE – 0.97% | |||||
Souza Cruz SA | 206,200 | $ | 2,029,583 | ||
2,029,583 | |||||
BANKS – 2.73% | |||||
Unibanco Holdings SA | 1,241,110 | 5,726,242 | |||
5,726,242 | |||||
ELECTRIC – 2.33% | |||||
Centrais Eletricas Brasileiras SA | 355,231,000 | 4,880,480 | |||
4,880,480 | |||||
IRON & STEEL – 2.61% | |||||
Companhia Siderurgica Nacional SA | 352,884 | 5,469,340 | |||
5,469,340 | |||||
MINING – 7.11% | |||||
Companhia Vale do Rio Doce ADR | 257,868 | 14,897,034 | |||
14,897,034 | |||||
OIL & GAS – 10.75% | |||||
Petroleo Brasileiro SA | 728,900 | 22,519,672 | |||
22,519,672 | |||||
TELECOMMUNICATIONS – 0.85% | |||||
Brasil Telecom Participacoes SA | 210,444,000 | 1,521,152 | |||
Tele Norte Leste Participacoes SA | 20,012 | 260,920 | |||
1,782,072 | |||||
WATER – 0.62% | |||||
Companhia de Saneamento Basico do Estado de Sao Paulo | 27,170,000 | 1,293,779 | |||
1,293,779 | |||||
TOTAL COMMON STOCKS | 58,598,202 | ||||
PREFERRED STOCKS – 71.17% | |||||
AEROSPACE & DEFENSE – 2.75% | |||||
Embraer-Empresa Brasileira de Aeronautica SA | 864,543 | 5,761,650 | |||
5,761,650 | |||||
BANKS – 9.15% | |||||
Banco Bradesco SA | 191,673 | 9,347,801 | |||
Banco Itau Holding Financeira SA | 96,824,000 | 9,828,000 | |||
19,175,801 | |||||
BEVERAGES – 6.48% | |||||
Companhia de Bebidas das Americas | 62,244,000 | 13,572,213 | |||
13,572,213 | |||||
BUILDING MATERIALS – 0.79% | |||||
Duratex SA | 46,687,000 | 1,659,415 | |||
1,659,415 | |||||
CHEMICALS – 1.14% | |||||
Braskem SA Class A1 | 82,659,000 | 2,395,585 | |||
2,395,585 | |||||
ELECTRIC – 4.49% | |||||
Centrais Eletricas Brasileiras SA Class B | 209,209,000 | 2,717,715 | |||
Companhia Energetica de Minas Gerais | 295,165,467 | 5,447,347 | |||
Companhia Paranaense de Energia Class B | 360,659,000 | 1,232,599 | |||
9,397,661 | |||||
FOOD – 2.02% | |||||
Companhia Brasileira de Distribuicao Grupo Pao de Acucar | 102,258,000 | 2,128,337 | |||
Sadia SA | 1,235,000 | 2,110,390 | |||
4,238,727 | |||||
FOREST PRODUCTS & PAPER – 4.72% | |||||
Aracruz Celulose SA Class B | 1,482,000 | 5,216,883 | |||
Klabin SA | 1,482,000 | 2,355,195 | |||
Votorantim Celulose e Papel SA | 32,851,000 | 2,324,045 | |||
9,896,123 | |||||
IRON & STEEL – 6.02% | |||||
Companhia Siderurgica de Tubarao | 41,990,000 | 1,757,955 | |||
Gerdau SA | 395,378 | 6,546,843 | |||
Usinas Siderurgicas de Minas Gerais SA Class A | 271,700 | 4,299,286 | |||
12,604,084 | |||||
MINING – 9.70% | |||||
Caemi Mineracao e Metalurgica SA1 | 3,952,000 | 2,120,519 | |||
Companhia Vale do Rio Doce Class A | 1,111,500 | 18,210,974 | |||
20,331,493 |
34 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI BRAZIL INDEX FUND
August 31, 2004
Security | Shares | Value | ||||
OIL & GAS – 12.89% | ||||||
Petroleo Brasileiro SA | 963,300 | $ | 26,996,104 | |||
26,996,104 | ||||||
TELECOMMUNICATIONS – 10.57% | ||||||
Brasil Telecom Participacoes SA | 724,204,000 | 4,695,196 | ||||
Embratel Participacoes SA | 660,781,000 | 1,716,312 | ||||
Tele Celular Sul Participacoes SA | 690,631,000 | 953,568 | ||||
Tele Centro Oeste Celular Participacoes SA | 763,798,000 | 2,393,720 | ||||
Tele Nordeste Celular Participacoes SA | 712,870,000 | 896,569 | ||||
Tele Norte Leste Participacoes SA | 522,652 | 7,164,584 | ||||
Telemig Celular Participacoes SA | 712,193,000 | 1,063,667 | ||||
Telesp Celular Participacoes SA1 | 1,244,984,000 | 3,259,256 | ||||
22,142,872 | ||||||
TEXTILES – 0.45% | ||||||
Companhia de Tecidos Norte de Minas | 10,868,400 | 943,463 | ||||
943,463 | ||||||
TOTAL PREFERRED STOCKS | 149,115,191 | |||||
SHORT-TERM INVESTMENTS – 0.47% | ||||||
MONEY MARKET FUNDS – 0.47% | ||||||
Barclays Global Investors Funds | ||||||
Institutional Money Market Fund, | ||||||
Institutional Shares2 | 980,912 | 980,912 | ||||
980,912 | ||||||
TOTAL SHORT-TERM INVESTMENTS | 980,912 | |||||
TOTAL INVESTMENTS IN SECURITIES – 99.61% | 208,694,305 | |||||
Other Assets, Less Liabilities – 0.39% | 809,279 | |||||
NET ASSETS – 100.00% | $ | 209,503,584 | ||||
ADR - American Depositary Receipts | ||||||
1 Non-income earning security. | ||||||
2 Issuer is an affiliate of the Fund’s investment adviser. See Note 2. | ||||||
SECTOR DIVERSIFICATION | ||||||
Sector | % of Net Assets | Value | ||||
Basic Materials | 31.30 | % | $ | 65,593,659 | ||
Energy | 23.64 | 49,515,776 | ||||
Financial | 11.88 | 24,902,043 | ||||
Communications | 11.42 | 23,924,944 | ||||
Consumer Non-Cyclical | 9.47 | 19,840,523 | ||||
Utilities | 7.44 | 15,571,920 | ||||
Industrial | 3.54 | 7,421,065 | ||||
Consumer Cyclical | 0.45 | 943,463 | ||||
Short-Term and Other Net Assets | 0.86 | 1,790,191 | ||||
TOTAL | 100.00 | % | $ | 209,503,584 | ||
See notes to financial statements.
SCHEDULEOF INVESTMENTS | 35 |
Schedule of Investments
iSHARES® MSCI CANADA INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.76% | |||||
AEROSPACE & DEFENSE – 0.14% | |||||
CAE Inc. | 104,420 | $ | 455,688 | ||
455,688 | |||||
AUTO PARTS & EQUIPMENT – 1.49% | |||||
Magna International Inc. Class A | 64,922 | 4,845,499 | |||
4,845,499 | |||||
BANKS – 21.80% | |||||
Bank of Montreal | 347,764 | 14,326,525 | |||
Bank of Nova Scotia | 691,896 | 18,893,760 | |||
Canadian Imperial Bank of Commerce | 255,148 | 12,970,411 | |||
National Bank of Canada | 128,255 | 4,205,082 | |||
Royal Bank of Canada | 455,175 | 20,527,094 | |||
70,922,872 | |||||
BEVERAGES – 0.23% | |||||
Molson Inc. Class A | 30,233 | 745,729 | |||
745,729 | |||||
BUILDING MATERIALS – 0.29% | |||||
Masonite International Corp.1 | 37,682 | 943,766 | |||
943,766 | |||||
CHEMICALS – 2.53% | |||||
Agrium Inc. | 91,708 | 1,428,935 | |||
Methanex Corp. | 39,952 | 530,328 | |||
NOVA Chemicals Corp. | 63,560 | 2,054,991 | |||
Potash Corp. of Saskatchewan Inc. | 75,818 | 4,218,441 | |||
8,232,695 | |||||
COMMERCIAL SERVICES – 0.20% | |||||
Quebecor World Inc. | 29,737 | 652,246 | |||
652,246 | |||||
COMPUTERS – 0.36% | |||||
CGI Group Inc.1 | 182,971 | 1,173,425 | |||
1,173,425 | |||||
DIVERSIFIED FINANCIAL SERVICES – 0.95% | |||||
C.I. Fund Management Inc. | 89,548 | 1,098,961 | |||
IGM Financial Inc. | 77,634 | 1,988,576 | |||
3,087,537 | |||||
ELECTRONICS – 0.50% | |||||
Celestica Inc.1 | 112,725 | 1,610,113 | |||
1,610,113 | |||||
ENERGY – ALTERNATE SOURCES – 0.05% | |||||
Ballard Power Systems Inc.1 | 22,927 | 147,905 | |||
147,905 | |||||
ENGINEERING & CONSTRUCTION – 0.37% | |||||
SNC-Lavalin Group Inc. | 33,142 | 1,202,831 | |||
1,202,831 | |||||
ENTERTAINMENT – 0.14% | |||||
Intrawest Corp. | 29,056 | 462,876 | |||
�� | |||||
462,876 | |||||
FOOD – 1.48% | |||||
George Weston Ltd. | 17,802 | 1,179,369 | |||
Loblaw Companies Ltd. | 79,904 | 3,638,616 | |||
4,817,985 | |||||
FOREST PRODUCTS & PAPER – 0.71% | |||||
Abitibi-Consolidated Inc. | 101,015 | 597,227 | |||
Domtar Inc. | 141,875 | 1,717,446 | |||
2,314,673 | |||||
HAND & MACHINE TOOLS – 0.36% | |||||
Finning International Inc. | 50,394 | 1,184,886 | |||
1,184,886 | |||||
HEALTH CARE – SERVICES – 0.44% | |||||
MDS Inc. | 99,426 | 1,432,229 | |||
1,432,229 | |||||
HOLDING COMPANIES – DIVERSIFIED – 1.86% | |||||
Brascan Corp. Class A | 172,630 | 4,880,440 | |||
Onex Corp. | 91,286 | 1,159,088 | |||
6,039,528 | |||||
INSURANCE – 14.23% | |||||
Fairfax Financial Holdings Ltd. | 9,534 | 1,252,893 | |||
Great-West Lifeco Inc. | 94,209 | 3,667,973 | |||
Manulife Financial Corp. | 506,798 | 20,962,728 | |||
Power Corp. of Canada | 227,454 | 4,885,358 | |||
Power Financial Corp. | 176,152 | 3,918,500 | |||
Sun Life Financial Inc. | 419,042 | 11,605,072 | |||
46,292,524 |
36 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI CANADA INDEX FUND
August 31, 2004
Security | Shares | Value | |||
IRON & STEEL – 0.53% | |||||
Dofasco Inc. | 56,523 | $ | 1,715,938 | ||
1,715,938 | |||||
LODGING – 0.43% | |||||
Fairmont Hotels & Resorts Inc. | 14,755 | 396,423 | |||
Four Seasons Hotels Inc. | 17,258 | 989,427 | |||
1,385,850 | |||||
MANUFACTURING – 0.60% | |||||
Bombardier Inc. Class B | 842,732 | 1,937,977 | |||
1,937,977 | |||||
MEDIA – 2.86% | |||||
Rogers Communications Inc. Class B | 109,414 | 1,944,806 | |||
Shaw Communications Inc. Class B | 124,680 | 1,930,383 | |||
Thomson Corp. | 165,029 | 5,439,594 | |||
9,314,783 | |||||
MINING – 12.67% | |||||
Agnico-Eagle Mines Ltd. | 54,026 | 732,320 | |||
Alcan Inc. | 256,056 | 11,102,367 | |||
Barrick Gold Corp. | 359,114 | 7,168,107 | |||
Cameco Corp. | 40,639 | 2,644,804 | |||
Falconbridge Ltd. | 58,793 | 1,405,570 | |||
Glamis Gold Ltd.1 | 87,849 | 1,458,149 | |||
Goldcorp Inc. | 101,923 | 1,310,394 | |||
Inco Ltd.1 | 131,433 | 4,486,837 | |||
Kinross Gold Corp.1 | 96,702 | 593,746 | |||
Meridian Gold Inc.1 | 60,382 | 795,561 | |||
Noranda Inc. | 120,083 | 1,960,371 | |||
Placer Dome Inc. | 288,290 | 5,052,077 | |||
Teck Cominco Ltd. Class B | 128,255 | 2,506,501 | |||
41,216,804 | |||||
OIL & GAS – 17.37% | |||||
Canadian Natural Resources Ltd. | 181,156 | 5,872,171 | |||
EnCana Corp. | 308,266 | 12,554,306 | |||
Husky Energy Inc. | 91,937 | 1,952,335 | |||
Imperial Oil Ltd. | 90,800 | 4,241,606 | |||
Nexen Inc. | 89,217 | 3,172,295 | |||
Penn West Petroleum Ltd. | 36,329 | 1,834,923 | |||
Petro-Canada | 157,765 | 7,363,804 | |||
Precision Drilling Corp. Class A1 | 38,596 | 1,895,235 | |||
Shell Canada Ltd. | 50,848 | 2,516,930 | |||
Suncor Energy Inc. | 318,481 | 8,820,106 | |||
Talisman Energy Inc. | 275,805 | 6,292,273 | |||
56,515,984 | |||||
PHARMACEUTICALS – 0.74% | |||||
Angiotech Pharmaceuticals Inc.1 | 22,927 | 392,557 | |||
Biovail Corp.1 | 83,990 | 1,265,332 | |||
QLT Corp.1 | 48,168 | 744,674 | |||
2,402,563 | |||||
PIPELINES – 3.59% | |||||
Enbridge Inc. | 114,862 | 4,587,157 | |||
TransCanada Corp. | 339,592 | 7,085,143 | |||
11,672,300 | |||||
REAL ESTATE – 0.87% | |||||
Brookfield Properties Corp. | 65,382 | 2,062,292 | |||
MI Developments Inc. Class A | 33,120 | 766,667 | |||
2,828,959 | |||||
RETAIL – 1.46% | |||||
Canadian Tire Corp. Class A | 55,630 | 2,045,171 | |||
Hudson’s Bay Co. | 53,345 | 566,811 | |||
Shoppers Drug Mart Corp.1 | 82,855 | 2,138,031 | |||
4,750,013 | |||||
SEMICONDUCTORS – 0.75% | |||||
ATI Technologies Inc.1 | 169,811 | 2,452,568 | |||
2,452,568 | |||||
SOFTWARE – 0.55% | |||||
Cognos Inc.1 | 53,572 | 1,682,867 | |||
Open Text Corp.1 | 5,683 | 121,717 | |||
1,804,584 | |||||
TELECOMMUNICATIONS – 5.18% | |||||
Aliant Inc. | 7,344 | 146,033 | |||
BCE Inc. | 214,061 | 4,443,358 | |||
Nortel Networks Corp.1 | 2,802,542 | 10,571,216 | |||
TELUS Corp. | 89,452 | 1,674,170 | |||
16,834,777 | |||||
TRANSPORTATION – 4.03% | |||||
Canadian National Railway Co. | 209,067 | 9,518,768 | |||
Canadian Pacific Railway Ltd. | 113,046 | 2,863,043 | |||
CP Ships Ltd. | 61,517 | 718,539 | |||
13,100,350 | |||||
TOTAL COMMON STOCKS | 324,498,457 |
SCHEDULEOF INVESTMENTS | 37 |
Schedule of Investments (Continued)
iSHARES® MSCI CANADA INDEX FUND
August 31, 2004
Security | Shares | Value | ||||
SHORT-TERM INVESTMENTS – 0.06% | ||||||
MONEY MARKET FUNDS – 0.06% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2 | 199,282 | $ | 199,282 | |||
199,282 | ||||||
TOTAL SHORT-TERM INVESTMENTS | 199,282 | |||||
TOTAL INVESTMENTS IN SECURITIES – 99.82% | 324,697,739 | |||||
Other Assets, Less Liabilities – 0.18% | 600,076 | |||||
NET ASSETS – 100.00% | $ | 325,297,815 | ||||
1 Non-income earning security. | ||||||
2 Issuer is an affiliate of the Fund’s investment adviser. See Note 2. | ||||||
SECTOR DIVERSIFICATION | ||||||
Sector | % of Net Assets | Value | ||||
Financial | 37.85 | % | $ | 123,131,892 | ||
Energy | 21.01 | 68,336,189 | ||||
Basic Materials | 16.44 | 53,480,110 | ||||
Communications | 8.04 | 26,149,560 | ||||
Industrial | 6.28 | 20,435,611 | ||||
Consumer Cyclical | 3.52 | 11,444,238 | ||||
Consumer Non-Cyclical | 3.09 | 10,050,752 | ||||
Diversified | 1.86 | 6,039,528 | ||||
Technology | 1.67 | 5,430,577 | ||||
Short-Term and Other Net Assets | 0.24 | 799,358 | ||||
TOTAL | 100.00 | % | $ | 325,297,815 | ||
See notes to financial statements.
38 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 96.75% | |||||
ARGENTINA – 0.71% | |||||
Petrobras Energia Participaciones SA ADR | 493,385 | $ | 4,642,753 | ||
Tenaris SA ADR | 238,993 | 9,213,180 | |||
13,855,933 | |||||
BRAZIL – 7.05% | |||||
Aracruz Celulose SA ADR1 | 160,716 | 5,594,524 | |||
Banco Bradesco SA ADR1 | 282,656 | 13,779,480 | |||
Banco Itau Holding Financiera SA ADR1 | 342,816 | 17,277,926 | |||
Brasil Telecom Participacoes SA ADR1 | 193,521 | 6,314,590 | |||
Companhia Brasileira de Distribuicao Grupo Pao de Acucar ADR | 235,591 | 4,853,175 | |||
Companhia Vale do Rio Doce ADR | 377,520 | 21,809,330 | |||
Companhia Vale do Rio Doce Sponsored ADR | 475,587 | 23,161,087 | |||
Empresa Brasileira de Aeronautica SA ADR | 330,572 | 8,776,687 | |||
Petroleo Brasileiro SA ADR1 | 662,304 | 20,365,848 | |||
Tele Norte Leste Participacoes SA ADR1 | 804,309 | 11,019,033 | |||
Telesp Celular Partcipacoes SA ADR1 | 525,676 | 3,380,097 | |||
Votorantim Celulose e Papel ADR | 51,067 | 1,793,984 | |||
138,125,761 | |||||
CHILE – 2.29% | |||||
Banco Santander Chile SA ADR | 479,475 | 13,089,667 | |||
Compania de Telecomunicaciones de Chile SA ADR1 | 834,229 | 10,277,701 | |||
Enersis SA Chile ADR1 | 1,461,680 | 9,676,322 | |||
Sociedad Quimica y Minera de Chile SA ADR1 | 261,380 | 11,688,914 | |||
44,732,604 | |||||
CHINA – 5.27% | |||||
Aluminum Corp. of China Ltd.1 | 2,420,000 | 1,186,738 | |||
Angang New Steel Co. Ltd. Class H1 | 4,356,000 | 1,605,587 | |||
Beijing Capital International Airport Co. Ltd. Class H | 1,940,000 | 677,761 | |||
China Eastern Airlines Corp. Ltd. Class H1 | 7,260,000 | 1,452,009 | |||
China Life Insurance Co. Ltd.1 | 14,400,000 | 8,584,670 | |||
China Petroleum and Chemical Corp. Class H1 | 39,852,000 | 15,583,254 | |||
China Shipping Development Co. Ltd.1 | 4,374,000 | 3,028,173 | |||
China Southern Airlines Co. Ltd.1 | 3,394,000 | 1,174,854 | |||
China Telecom Corp. Ltd. Class H1 | 20,898,000 | 6,698,120 | |||
Cofco International Ltd.1 | 1,458,000 | 588,811 | |||
Cosco Pacific Ltd.1 | 1,458,000 | 2,187,014 | |||
Datang International Power Generation Co. Ltd.1 | 1,944,000 | 1,520,317 | |||
Guangshen Railway Co. Ltd. Class H1 | 15,558,363 | 4,288,551 | |||
Huadian Power International Corp. Ltd.1 | 8,262,000 | 2,409,765 | |||
Huaneng Power International Inc. Class H1 | 5,832,000 | 4,336,643 | |||
Jiangsu Expressway Co. Ltd. Class H | 1,458,000 | 588,811 | |||
Jiangxi Copper Co. Ltd.1 | 4,858,000 | 2,226,598 | |||
Maanshan Iron & Steel Co. Ltd.1 | 3,388,000 | 1,183,636 | |||
PetroChina Co. Ltd. Class H1 | 51,516,000 | 25,923,281 | |||
Ping An Insurance (Group) Co. of China Ltd.1 | 2,783,000 | 3,639,331 | |||
Qingling Motors Co. Ltd.1 | 3,402,000 | 427,434 | |||
Semiconductor Manufacturing International Corp.1 | 7,260,000 | 1,489,240 | |||
Sinopec Beijing Yanhua Petrochemical Co. Ltd. Class H1 | 3,388,000 | 1,172,777 | |||
Sinopec Shanghai Petrochemical Co. Ltd.1 | 5,832,000 | 2,018,782 | |||
Travelsky Technology Ltd. Class H1 | 486,000 | 345,810 | |||
Tsingtao Brewery Co. Ltd. Class H1 | 972,000 | 891,006 | |||
Yanzhou Coal Mining Co. Ltd. Class H1 | 3,402,000 | 3,685,524 | |||
Yizheng Chemical Fibre Co. Ltd. Class H1 | 1,944,000 | 378,833 | |||
Zhejiang Expressway Co. Ltd.1 | 5,832,000 | 3,962,795 | |||
103,256,125 |
SCHEDULEOF INVESTMENTS | 39 |
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2004
Security | Shares | Value | |||
CZECH REPUBLIC – 1.96% | |||||
CEZ AS | 1,416,880 | $ | 11,108,386 | ||
Komercni Banka AS | 69,417 | 7,415,816 | |||
Philip Morris CR AS | 27,192 | 15,477,730 | |||
Unipetrol AS1 | 1,402,700 | 4,410,630 | |||
38,412,562 | |||||
HONG KONG – 4.27% | |||||
Beijing Enterprises Holdings Ltd.1 | 972,000 | 1,227,469 | |||
China Everbright Pacific Ltd.1 | 5,662,000 | 2,322,887 | |||
China Merchants Holdings International Co. Ltd. | 972,000 | 1,476,702 | |||
China Mobile Ltd. | 11,421,000 | 33,311,463 | |||
China Overseas Land & Investment Ltd. | 7,754,000 | 1,540,869 | |||
China Resources Enterprises Ltd. | 3,402,000 | 4,514,221 | |||
China Resources Land Ltd.1 | 7,776,000 | 1,016,868 | |||
China Travel International Investment Hong Kong Ltd.1 | 17,226,951 | 3,533,756 | |||
Citic Pacific Ltd.1 | 2,673,000 | 6,819,621 | |||
CNOOC Ltd. | 35,649,000 | 16,682,011 | |||
Denway Motors Ltd.1 | 10,692,000 | 4,215,143 | |||
Lenovo Group Ltd.1 | 10,164,000 | 3,192,559 | |||
Shanghai Industrial Holdings Ltd.1 | 972,000 | 1,788,242 | |||
Shenzhen Investment Ltd. | 2,430,000 | 295,963 | |||
TCL International Holdings Ltd.1 | 4,860,000 | 1,744,627 | |||
83,682,401 | |||||
HUNGARY – 2.31% | |||||
Gedeon Richter Rt | 120,946 | 12,917,280 | |||
MATAV Rt | 1,017,698 | 4,109,460 | |||
Mol Magyar Olaj-es Gazipari Rt | 186,824 | 8,113,384 | |||
OTP Bank Rt | 923,820 | 20,093,597 | |||
45,233,721 | |||||
INDIA – 5.42% | |||||
HDFC Bank Ltd. ADR1 | 613,470 | 17,244,642 | |||
ICICI Bank Ltd. ADR | 948,231 | 11,568,418 | |||
Infosys Technologies Ltd. ADR1 | 558,536 | 29,155,579 | |||
Mahanagar Telephone Nigam Ltd. ADR | 1,552,242 | 10,182,708 | |||
Satyam Computer Services Ltd. ADR1 | 710,056 | 13,931,299 | |||
Videsh Sanchar Nigam Ltd. ADR1 | 1,546,167 | 11,426,174 | |||
Wipro Ltd. ADR1 | 731,808 | 12,616,370 | |||
106,125,190 | |||||
INDONESIA – 2.58% | |||||
PT Aneka Tambang Tbk | 18,232,455 | 2,430,994 | |||
PT Astra International Inc. Tbk | 6,685,230 | 4,528,129 | |||
PT Bank Central Asia Tbk | 12,150,000 | 2,332,800 | |||
PT Bank Danamon Indonesia Tbk | 3,761,987 | 1,344,283 | |||
PT Bank Mandiri Tbk | 12,757,500 | 1,701,000 | |||
PT Bank Pan Indonesia Tbk | 49,309,918 | 1,393,827 | |||
PT Bank Rakyat Indonesia Tbk | 11,163,061 | 2,054,003 | |||
PT Bumi Resources Tbk | 22,143,000 | 1,476,200 | |||
PT Gudang Garam Tbk | 2,430,987 | 3,306,142 | |||
PT Hanjaya Mandala Sampoerna Tbk | 6,563,667 | 3,710,660 | |||
PT Kalbe Farma Tbk | 73,669,156 | 3,103,927 | |||
PT Matahari Putra Prima Tbk | 21,271,194 | 1,134,464 | |||
PT Perusahaan Gas Negara Tbk | 6,790,500 | 832,968 | |||
PT Ramayana Lestari Sentosa Tbk | 4,861,974 | 2,035,546 | |||
PT Semen Gresik (Persero) Tbk | 137,000 | 146,133 | |||
PT Telekomunikasi Indonesia Tbk | 22,243,593 | 18,150,772 | |||
PT Tempo Scan Pacific Tbk | 293,376 | 208,101 | |||
PT United Tractors Tbk | 4,782,771 | 701,473 | |||
50,591,422 | |||||
ISRAEL – 4.74% | |||||
Alvarion Ltd. | 217,800 | 2,443,716 | |||
AudioCodes Ltd.1 | 207,646 | 2,352,629 | |||
Bank Hapoalim Ltd. | 2,810,997 | 7,625,676 | |||
Bank Leumi Le-Israel | 3,680,249 | 7,408,505 | |||
Check Point Software Technologies Ltd.1 | 289,798 | 5,083,057 | |||
Clal Industries and Investments Ltd. | 131,890 | 545,289 | |||
Clal Insurance Co. Ltd. | 23,958 | 379,154 | |||
ECI Telecom Ltd. | 118,822 | 819,872 | |||
Elbit Systems Ltd. | 185,372 | 3,888,181 | |||
Elite Industries Ltd. | 54,450 | 507,903 | |||
Given Imaging Ltd.1 | 36,542 | 1,297,241 | |||
Israel Chemicals Ltd. | 2,139,671 | 3,908,459 | |||
Israel Corp. Ltd. (The) | 2,662 | 474,840 | |||
Israel Discount Bank Class A | 4,218,835 | 4,618,480 | |||
Koor Industries Ltd. | 78,465 | 3,183,358 | |||
Lipman Electronic Engineering Ltd. | 25,652 | 546,644 | |||
Makhteshim-Agan Industries Ltd. | 850,996 | 3,390,437 | |||
M-Systems Flash Disk Pioneers Ltd.1 | 204,974 | 2,398,196 | |||
NICE Systems Ltd. | 24,300 | 467,089 |
40 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2004
Security | Shares | Value | |||
Orbotech Ltd. | 186,098 | $ | 3,105,976 | ||
Supersol Ltd. | 475,673 | 1,095,846 | |||
Teva Pharmaceutical Industries Ltd. | 1,182,148 | 32,696,598 | |||
United Mizrahi Bank Ltd. | 1,324,396 | 4,526,899 | |||
92,827,045 | |||||
MEXICO – 7.25% | |||||
Alfa SA de CV Class A | 1,021,189 | 3,348,205 | |||
America Movil SA de CV Series L | 17,116,500 | 29,390,679 | |||
Cemex SA de CV Series CPO | 2,139,671 | 12,144,002 | |||
Consorcio Ara SA de CV2 | 1,701,000 | 4,556,717 | |||
Controladora Comercial Mexicana SA de CV | 2,357,100 | 2,575,409 | |||
Fomento Economico Mexicano SA de CV Class UBD | 1,482,300 | 6,410,650 | |||
Grupo Carso SA de CV Series A1 | 72,931 | 334,052 | |||
Grupo Continental SA | 1,288,675 | 1,973,957 | |||
Grupo Financiero Banorte SA de CV Series O | 730,114 | 2,875,439 | |||
Grupo Mexico SA de CV Series B2 | 1,093,500 | 3,902,236 | |||
Grupo Modelo SA de CV Series C | 3,185,222 | 7,601,114 | |||
Grupo Televisa SA Series CPO | 5,008,807 | 12,054,043 | |||
Industrias Penoles SA de CV Series CP | 218,824 | 897,937 | |||
Kimberly-Clark de Mexico SA de CV Class A | 1,774,954 | 4,879,545 | |||
Telefonos de Mexico SA de CV Series L | 18,017,181 | 29,259,820 | |||
TV Azteca SA de CV Series CPO2 | 2,332,800 | 1,348,191 | |||
Vitro SA de CV Series A | 3,549,939 | 3,117,947 | |||
Wal-Mart de Mexico SA de CV Series V | 4,829,890 | 15,343,825 | |||
142,013,768 | |||||
PERU – 0.38% | |||||
Companhia de Minas Buenaventura SA ADR | 326,292 | 7,413,354 | |||
7,413,354 | |||||
PHILIPPINE ISLANDS – 1.72% | |||||
ABS-CBN Broadcasting Corp. | 6,904,496 | 2,427,483 | |||
Ayala Corp. | 36,650,480 | 3,523,143 | |||
Ayala Land Inc. Class B | 6,852,327 | 646,503 | |||
Bank of the Philippine Islands | 4,785,207 | 3,535,133 | |||
Equitable PCI Bank | 2,856,509 | 2,135,708 | |||
Filinvest Land Inc. | 60,141,112 | 1,006,366 | |||
Globe Telecom Inc. | 138,572 | 2,158,442 | |||
Jollibee Foods Corp. | 10,455,293 | 4,653,001 | |||
Manila Electric Co. Class B | 2,674,612 | 1,011,758 | |||
Megaworld Corp. | 41,331,068 | 794,616 | |||
Metropolitan Bank & Trust Co. | 40 | 18 | |||
Petron Corp. | 48,603,600 | 2,249,566 | |||
Philippine Long Distance Telephone Co. | 301,475 | 6,788,890 | |||
SM Prime Holdings Inc. | 26,989,306 | 2,738,568 | |||
33,669,195 | |||||
RUSSIA – 4.46% | |||||
JSC MMC Norilsk Nickel ADR7 | 167,844 | 9,466,402 | |||
LUKOIL ADR7 | 350,779 | 41,777,779 | |||
Rostelecom ADR1 | 176,039 | 2,147,676 | |||
Surgutneftegaz ADR1,7 | 891,533 | 31,052,094 | |||
Tatneft ADR1 | 65,641 | 1,712,574 | |||
YUKOS ADR7 | 67,000 | 1,124,260 | |||
87,280,785 | |||||
SOUTH AFRICA – 15.96% | |||||
African Bank Investments Ltd. | 2,355,723 | 4,190,311 | |||
Alexander Forbes Ltd. | 2,341,006 | 3,794,848 | |||
Anglo American Platinum Corp. Ltd.1 | 131,768 | 5,849,757 | |||
Anglo American PLC | 3,303,868 | 74,850,448 | |||
AngloGold Ashanti Ltd. | 266,726 | 9,416,805 | |||
Anglovaal Industries Ltd. | 985,472 | 3,018,783 | |||
Barloworld Ltd. | 511,308 | 5,761,217 | |||
Bidvest Group Ltd. | 603,984 | 5,430,752 | |||
Bidvest Group Ltd. Warrants (Expiring 12/8/06)2 | 18,430 | 23,535 | |||
FirstRand Ltd.1 | 6,953,985 | 11,168,165 | |||
Foschini Ltd. | 2,264,666 | 8,199,579 | |||
Gold Fields Ltd. | 853,580 | 10,355,168 | |||
Impala Platinum Holdings Ltd. | 114,515 | 9,608,507 | |||
Imperial Holdings Ltd. | 632,415 | 7,295,872 | |||
Investec Ltd. | 212,263 | 3,795,781 | |||
Iscor Ltd. | 869,221 | 6,137,598 | |||
JD Group Ltd. | 688,336 | 4,705,245 | |||
Liberty Group Ltd. | 420,881 | 3,477,702 | |||
Metro Cash & Carry Ltd.2 | 7,879,126 | 3,077,668 |
SCHEDULEOF INVESTMENTS | 41 |
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2004
Security | Shares | Value | |||
MTN Group Ltd. | 2,525,560 | $ | 11,572,519 | ||
Nampak Ltd. | 1,865,169 | 3,922,985 | |||
Naspers Ltd. | 948,015 | 6,973,118 | |||
Nedcor Ltd. | 762,785 | 6,418,567 | |||
Network Healthcare Holdings Ltd.2 | 4,187,228 | 3,006,941 | |||
New Africa Capital Ltd. | 2,144,045 | 2,464,142 | |||
Old Mutual PLC | 8,509,629 | 16,261,781 | |||
Pick’n Pay Stores Ltd. | 1,109,342 | 3,199,905 | |||
Sanlam Ltd. | 6,597,044 | 8,890,214 | |||
Sappi Ltd. | 470,484 | 6,622,294 | |||
Sasol Ltd. | 1,393,470 | 23,863,533 | |||
Shoprite Holdings Ltd. | 2,820,511 | 4,025,518 | |||
Standard Bank Group Ltd. | 2,333,466 | 15,561,699 | |||
Steinhoff International Holdings Ltd. | 406,802 | 500,538 | |||
Telkom South Africa Ltd. | 293,213 | 3,491,024 | |||
Tiger Brands Ltd. | 389,260 | 5,590,724 | |||
Tongaat-Hulett Group Ltd. | 352,299 | 2,418,789 | |||
Truworths International Ltd. | 2,162,757 | 3,444,165 | |||
Woolworths Holdings Ltd. | 3,539,496 | 4,216,819 | |||
312,603,016 | |||||
SOUTH KOREA – 16.18% | |||||
Kookmin Bank ADR1 | 1,204,806 | 38,493,552 | |||
Korea Electric Power Corp. ADR1 | 3,787,300 | 38,024,492 | |||
KT Corp. ADR1 | 1,289,647 | 22,594,615 | |||
POSCO ADR | 1,556,060 | 56,298,251 | |||
Samsung Electronics Co. Ltd. GDR3 | 705,523 | 136,695,081 | |||
SK Telecom Co. Ltd. ADR1 | 1,315,162 | 24,856,562 | |||
316,962,553 | |||||
TAIWAN – 9.51% | |||||
AU Optronics Corp. ADR1 | 1,704,653 | 21,120,648 | |||
Chunghwa Telecom Co. Ltd. ADR1 | 1,964,220 | 33,509,593 | |||
Siliconware Precision Industries Co. ADR1 | 8,691,165 | 31,288,194 | |||
Taiwan Semiconductor Manufacturing Co. Ltd. ADR1 | 7,655,567 | 57,799,531 | |||
United Microelectronics Corp. ADR1 | 11,167,751 | 42,437,454 | |||
186,155,420 | |||||
THAILAND – 3.54% | |||||
Advanced Info Service PCL | 1,871,100 | 4,200,428 | |||
Bangkok Bank PCL | 1,749,600 | 4,158,713 | |||
Bangkok Expressway PCL | 4,519,800 | 2,571,891 | |||
Banpu PCL | 729,000 | 2,467,923 | |||
Charoen Pokphand Foods PCL | 28,000 | 2,555 | |||
Electricity Generating PCL | 1,613,300 | 2,788,898 | |||
Kasikornbank PCL | 3,474,900 | 4,004,687 | |||
Kiatnakin Finance PCL | 753,300 | 551,636 | |||
Kim Eng Securities Thailand PCL | 259,800 | 219,879 | |||
Krung Thai Bank PCL | 1,876,900 | 365,015 | |||
Land and House PCL | 6,126,700 | 1,456,286 | |||
National Finance PCL | 3,037,500 | 904,322 | |||
National Petrochemical PCL | 972,000 | 2,450,420 | |||
PTT Exploration & Production PCL | 777,600 | 5,227,563 | |||
PTT PCL | 3,990,800 | 14,372,629 | |||
Ratchaburi Electricity Generating Holding PCL | 7,997,800 | 7,344,918 | |||
Sahaviriya Steel Industry PCL | 3,475,300 | 2,232,036 | |||
Shin Corp. PCL | 2,867,400 | 2,461,214 | |||
Siam Cement PCL | 729,000 | 4,235,726 | |||
Siam City Cement PCL | 145,800 | 728,125 | |||
Siam Makro PCL | 3,280,500 | 3,780,648 | |||
Thai Airways International PCL | 164,600 | 211,431 | |||
Thai Union Frozen Products PCL | 2,916,000 | 1,680,288 | |||
TISCO Finance PCL | 607,500 | 341,308 | |||
United Broadcasting Corp. PCL | 1,287,900 | 606,071 | |||
69,364,610 | |||||
TURKEY – 0.93% | |||||
Adana Cimento TAS Class A | 354,047,980 | 1,195,075 | |||
Akbank TAS | 722,370,497 | 3,074,936 | |||
Akcansa Cimento AS | 129,651,500 | 364,335 | |||
Arcelik AS | 218,042,250 | 1,138,431 | |||
Dogan Yayin Holding AS | 347,996,400 | 1,249,871 | |||
Eregli Demir ve Celik Fabrikalari TAS | 516,670,000 | 1,769,770 | |||
Hurriyet Gazetecilik ve Matbaacilik AS | 499,681,748 | 947,187 | |||
Trakya Cam Sanayii AS | 289,263,921 | 735,905 | |||
Tupras Turkiye Petrol Rafinerileri AS | 199,166,000 | 1,536,632 | |||
Turk Sise ve Cam Fabrikalari | 1,235,693,164 | 2,732,748 | |||
Turkiye Garanti Bankasi AS | 552,970,323 | 1,811,359 | |||
Vestel Elektronik Sanayi ve Ticaret AS | 454,234,000 | 1,646,544 | |||
Yapi VE Kredi Bankasi AS | 25,410,000 | 60,842 | |||
18,263,635 |
42 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
VENEZUELA – 0.22% | ||||||
Companhia Anonima Nacional Telefonos de Venezuela ADR | 215,179 | $ | 4,264,848 | |||
4,264,848 | ||||||
TOTAL COMMON STOCKS | 1,894,833,948 | |||||
PREFERRED STOCKS – 1.54% | ||||||
BRAZIL – 1.44% | ||||||
Petroleo Brasileiro SA ADR | 1,013,170 | 28,257,311 | ||||
28,257,311 | ||||||
THAILAND – 0.10% | ||||||
Siam Commercial Bank PCL | 1,628,100 | 1,876,322 | ||||
1,876,322 | ||||||
TOTAL PREFERRED STOCKS | 30,133,633 | |||||
EXCHANGE-TRADED FUNDS – 1.17% | ||||||
iShares MSCI Malaysia Index Fund1,4 | 850,996 | 5,488,924 | ||||
iShares MSCI South Korea Index Fund1,4 | 298,628 | 7,241,729 | ||||
iShares MSCI Taiwan Index Fund1,4 | 965,096 | 10,268,622 | ||||
TOTAL EXCHANGE-TRADED FUNDS | 22,999,275 | |||||
SHORT-TERM INVESTMENTS – 22.94% | ||||||
FLOATING RATE NOTES – 5.87% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/053,5 | $ | 1,944,473 | 1,944,212 | |||
1.52%, 10/12/043,5 | 1,620,394 | 1,620,376 | ||||
1.56%, 09/15/043,5 | 3,240,788 | 3,240,776 | ||||
1.64%, 03/15/053,5 | 1,620,394 | 1,621,094 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/045 | 2,430,591 | 2,430,555 | ||||
1.38%, 11/22/045 | 810,197 | 810,211 | ||||
1.40%, 10/29/045 | 3,240,788 | 3,240,775 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/053,5 | 3,240,788 | 3,240,353 | ||||
1.61%, 07/29/053,5 | 3,240,788 | 3,239,904 | ||||
Security | Principal | Value | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/055 | $ | 3,240,788 | $ | 3,239,869 | ||
1.56%, 08/26/055 | 3,240,788 | 3,239,832 | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/055 | 3,240,788 | 3,240,788 | ||||
Dorada Finance Inc. | ||||||
1.61%, 07/29/053,5 | 2,689,854 | 2,689,120 | ||||
Five Finance Inc. | ||||||
1.42%, 04/29/053,5 | 2,592,631 | 2,592,460 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/045 | 1,620,394 | 1,619,843 | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/055 | 2,074,104 | 2,073,984 | ||||
1.58%, 04/22/055 | 3,240,788 | 3,240,788 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/053,5 | 3,240,788 | 3,240,482 | ||||
1.57%, 09/27/043,5 | 3,500,051 | 3,500,014 | ||||
1.61%, 07/25/053,5 | 1,620,394 | 1,620,103 | ||||
Links Finance LLC | ||||||
1.55%, 04/15/053,5 | 3,240,788 | 3,240,387 | ||||
1.68%, 04/25/055 | 3,240,788 | 3,242,154 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/055 | 3,240,788 | 3,240,788 | ||||
1.63%, 12/09/043,5 | 2,689,854 | 2,677,797 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/055 | 3,240,788 | 3,240,296 | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/053,5 | 3,078,749 | 3,078,749 | ||||
Permanent Financing PLC | ||||||
1.52%, 03/10/055 | 3,240,788 | 3,240,788 | ||||
1.53%, 12/10/045 | 1,620,394 | 1,620,394 | ||||
1.55%, 06/10/055 | 1,458,355 | 1,458,355 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/045 | 3,240,788 | 3,240,724 | ||||
1.57%, 11/15/045 | 3,240,788 | 3,240,737 | ||||
1.59%, 09/15/055 | 2,430,591 | 2,430,808 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/053,5 | 1,189,369 | 1,189,298 | ||||
1.56%, 01/18/053,5 | 1,425,947 | 1,425,892 | ||||
1.59%, 07/25/053,5 | 3,240,788 | 3,240,497 | ||||
1.66%, 05/17/053,5 | 2,689,854 | 2,689,759 | ||||
1.70%, 02/25/053,5 | 1,814,841 | 1,814,666 |
SCHEDULEOF INVESTMENTS | 43 |
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/045 | $ | 802,743 | $ | 801,367 | ||
1.48%, 06/15/053,5 | 1,620,394 | 1,620,102 | ||||
1.56%, 09/15/043,5 | 1,620,394 | 1,620,382 | ||||
1.56%, 07/15/053,5 | 2,430,591 | 2,430,162 | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/055 | 1,620,394 | 1,620,096 | ||||
1.55%, 04/15/053,5 | 2,430,591 | 2,430,290 | ||||
1.55%, 07/11/055 | 810,197 | 810,119 | ||||
1.56%, 11/15/043,5 | 1,944,473 | 1,944,473 | ||||
1.57%, 06/15/053,5 | 1,328,723 | 1,328,723 | ||||
1.58%, 03/29/055 | 1,393,539 | 1,393,359 | ||||
1.58%, 08/26/053,5 | 1,620,394 | 1,620,075 | ||||
1.68%, 05/20/055 | 1,458,355 | 1,458,250 | ||||
115,075,026 | ||||||
MONEY MARKET FUNDS – 4.77% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares4,5 | 53,993,452 | 53,993,452 | ||||
Barclays Global Investors Funds | ||||||
Prime Money Market Fund, Institutional Shares4,5 | 35,648,671 | 35,648,671 | ||||
BlackRock Temp Cash Money Market Fund5 | 1,636,001 | 1,636,001 | ||||
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares5 | 2,178,453 | 2,178,453 | ||||
93,456,577 | ||||||
COMMERCIAL PAPER – 4.21% | ||||||
Alpine Securitization Corp. | ||||||
1.50%, 09/08/045 | 1,620,394 | 1,619,921 | ||||
1.51%, 09/02/045 | 1,458,355 | 1,458,294 | ||||
1.54%, 09/14/045 | 1,620,394 | 1,619,493 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/045 | 648,158 | 647,970 | ||||
1.53%, 09/16/045 | 1,594,403 | 1,593,387 | ||||
1.54%, 09/15/045 | 1,620,394 | 1,619,424 | ||||
1.54%, 09/22/045 | 810,197 | 809,469 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/045 | 1,620,394 | 1,619,912 | ||||
1.53%, 09/09/045 | 3,784,949 | 3,783,662 | ||||
Security | Principal | Value | ||||
1.53%, 09/13/045 | $ | 2,333,238 | $ | 2,332,048 | ||
1.53%, 09/14/045 | 810,197 | 809,749 | ||||
1.54%, 09/17/045 | 972,236 | 971,572 | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/045 | 1,620,394 | 1,619,918 | ||||
1.53%, 09/15/045 | 648,158 | 647,772 | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/045 | 648,158 | 647,711 | ||||
Corporate Asset Funding | ||||||
1.42%, 09/03/045 | 972,236 | 972,160 | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/045 | 1,620,394 | 1,620,266 | ||||
Delaware Funding Corp. | ||||||
1.50%, 09/09/045 | 1,620,394 | 1,619,854 | ||||
1.53%, 09/10/045 | 2,592,631 | 2,591,639 | ||||
1.53%, 09/20/045 | 1,101,868 | 1,100,978 | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/045 | 1,620,394 | 1,619,431 | ||||
1.45%, 11/09/045 | 3,240,788 | 3,231,781 | ||||
1.52%, 09/08/045 | 3,240,788 | 3,239,830 | ||||
1.59%, 12/02/045 | 3,240,788 | 3,227,620 | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/045 | 972,236 | 972,157 | ||||
1.53%, 09/07/045 | 1,620,394 | 1,619,981 | ||||
1.53%, 09/17/045 | 972,236 | 971,575 | ||||
1.53%, 09/21/045 | 810,197 | 809,508 | ||||
1.53%, 09/22/045 | 1,620,394 | 1,618,948 | ||||
1.54%, 09/14/045 | 2,430,591 | 2,429,241 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/055 | 1,620,394 | 1,609,153 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/045 | 1,620,394 | 1,619,841 | ||||
1.55%, 10/15/045 | 2,125,147 | 2,121,121 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/045 | 3,240,788 | 3,235,026 | ||||
1.44%, 10/27/045 | 3,240,788 | 3,233,529 | ||||
1.59%, 11/30/045 | 1,620,394 | 1,613,953 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/045 | 810,197 | 810,164 | ||||
1.53%, 09/20/045 | 810,197 | 809,543 | ||||
1.53%, 09/23/045 | 1,134,276 | 1,133,215 | ||||
1.54%, 09/15/045 | 1,944,473 | 1,943,308 |
44 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/045 | $ | 2,258,505 | $ | 2,258,505 | ||
1.51%, 09/08/045 | 1,296,315 | 1,295,935 | ||||
1.52%, 09/09/045 | 810,197 | 809,923 | ||||
1.53%, 09/21/045 | 1,620,394 | 1,619,017 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/045 | 972,236 | 971,696 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/045 | 1,782,434 | 1,782,434 | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/045 | 1,078,534 | 1,076,624 | ||||
1.55%, 09/16/045 | 972,236 | 971,609 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
1.54%, 09/15/045 | 1,296,315 | 1,295,539 | ||||
1.54%, 09/23/045 | 810,197 | 809,435 | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/045 | 810,197 | 809,923 | ||||
1.52%, 09/10/045 | 1,134,276 | 1,133,845 | ||||
82,408,609 | ||||||
TIME DEPOSITS – 3.70% | ||||||
Abbey National Treasury Services PLC | ||||||
1.25%, 01/06/055 | 3,240,788 | 3,240,788 | ||||
1.33%, 02/10/055 | 1,620,394 | 1,620,286 | ||||
1.39%, 02/02/055 | 1,620,394 | 1,620,289 | ||||
1.39%, 04/08/055 | 2,268,552 | 2,268,348 | ||||
1.40%, 10/25/045 | 3,240,788 | 3,240,716 | ||||
Bank of New York | ||||||
1.39%, 11/01/045 | 3,240,788 | 3,240,734 | ||||
1.60%, 12/03/045 | 810,197 | 810,092 | ||||
Bank of Nova Scotia | ||||||
1.13%, 10/06/045 | 3,240,788 | 3,240,788 | ||||
1.24%, 10/07/045 | 2,430,591 | 2,430,567 | ||||
1.42%, 10/29/045 | 2,430,591 | 2,430,620 | ||||
National City Bank (Cleveland, Ohio) | ||||||
1.25%, 01/06/055 | 3,240,788 | 3,240,844 | ||||
1.49%, 08/09/055 | 3,240,788 | 3,239,878 | ||||
1.54%, 06/23/055 | 3,240,788 | 3,240,003 | ||||
1.56%, 06/10/055 | 1,620,394 | 1,620,786 | ||||
Norddeutsche Landesbank | ||||||
1.59%, 07/27/055 | 3,240,788 | 3,239,760 | ||||
Prudential Funding LLC | ||||||
1.60%, 12/01/045 | 1,620,394 | 1,613,840 | ||||
SouthTrust Bank | ||||||
1.55%, 09/01/045 | 6,481,576 | 6,481,576 | ||||
Toronto-Dominion Bank | ||||||
1.22%, 03/23/055 | 5,671,379 | 5,670,827 | ||||
1.34%, 02/10/055 | 1,296,315 | 1,296,229 | ||||
1.41%, 11/01/045 | 2,430,591 | 2,430,551 | ||||
1.53%, 09/13/045 | 1,620,394 | 1,620,394 | ||||
1.77%, 05/10/055 | 1,620,394 | 1,620,284 | ||||
1.90%, 05/11/055 | 1,620,394 | 1,620,283 | ||||
UBS Finance (Delaware) | ||||||
1.10%, 09/08/045 | 3,240,788 | 3,240,095 | ||||
1.11%, 12/17/045 | 4,861,182 | 4,845,145 | ||||
1.14%, 09/29/045 | 3,240,788 | 3,237,927 | ||||
72,401,650 | ||||||
REPURCHASE AGREEMENTS – 3.27% | ||||||
Banc of America Securities LLC | ||||||
1.59%, 09/01/045,6 | 9,722,365 | 9,722,365 | ||||
Bank of America, N.A. | ||||||
1.59%, 09/01/045,6 | 18,634,532 | 18,634,532 | ||||
Goldman Sachs & Co. | ||||||
1.59%, 09/01/045,6 | 16,203,941 | 16,203,941 | ||||
Merrill Lynch Government Securities Inc. | ||||||
1.57%, 09/01/045,6 | 3,240,788 | 3,240,788 | ||||
1.59%, 09/01/045,6 | 16,203,941 | 16,203,941 | ||||
64,005,567 | ||||||
U.S. GOVERNMENT AGENCY NOTES – 0.60% | ||||||
Federal Home Loan Mortgage Corp. | ||||||
1.63%, 04/15/055 | 2,268,552 | 2,273,042 | ||||
1.80%, 01/18/055 | 1,506,967 | 1,496,493 | ||||
1.80%, 01/19/055 | 1,620,394 | 1,609,051 | ||||
2.06%, 05/31/055 | 1,615,630 | 1,590,484 | ||||
Federal National Mortgage Association | 4,861,182 | 4,759,462 | ||||
11,728,532 |
SCHEDULEOF INVESTMENTS | 45 |
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2004
Security | Principal | Value | |||||
MEDIUM-TERM NOTES – 0.52% | |||||||
CC USA Inc. | |||||||
1.29%, 04/15/053,5 | $ | 3,240,788 | $ | 3,240,588 | |||
1.51%, 02/15/053,5 | 2,106,512 | 2,108,010 | |||||
Dorada Finance Inc. | |||||||
1.48%, 01/18/053,5 | 2,430,591 | 2,430,545 | |||||
K2 USA LLC | |||||||
1.46%, 01/12/053,5 | 1,620,394 | 1,620,336 | |||||
WhistleJacket Capital LLC | |||||||
1.32%, 02/04/053,5 | 810,197 | 810,128 | |||||
10,209,607 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 449,285,568 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 122.40% | 2,397,252,424 | ||||||
Other Assets, Less Liabilities – (22.40%) | (438,656,074 | ) | |||||
NET ASSETS – 100.00% | $ | 1,958,596,350 | |||||
ADR - American Depositary Receipts
GDR - Global Depositary Receipts
1 | All or a portion of this security represents a security on loan. See Note 5. |
2 | Non-income earning security. |
3 | Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
4 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
5 | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
6 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
7 | Security valued at fair value in accordance with procedures approved by the Board of Directors. See Note 1. |
SECTOR DIVERSIFICATION
Sectors | % of Net Assets | Value | ||||
Communications | 16.76 | % | $ | 328,338,755 | ||
Basic Materials | 15.83 | 310,008,888 | ||||
Financial | 15.82 | 309,793,561 | ||||
Energy | 12.63 | 247,414,073 | ||||
Industrial | 10.62 | 207,981,415 | ||||
Technology | 9.97 | 195,200,876 | ||||
Consumer Non-Cyclical | 5.89 | 115,403,503 | ||||
Consumer Cyclical | 4.30 | 84,246,151 | ||||
Utilities | 4.04 | 79,054,467 | ||||
Diversified | 2.43 | 47,525,892 | ||||
Exchange-Traded Funds | 1.17 | 22,999,275 | ||||
Short-Term and Other Net Assets | 0.54 | 10,629,494 | ||||
TOTAL | 100.00 | % | $ | 1,958,596,350 | ||
See notes to financial statements.
46 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments
iSHARES® MSCI HONG KONG INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.72% | |||||
AIRLINES – 1.29% | |||||
Cathay Pacific Airways Ltd. | 3,300,000 | $ | 5,796,191 | ||
5,796,191 | |||||
APPAREL – 0.89% | |||||
Yue Yuen Industrial Holdings Ltd.1 | 1,650,000 | 3,976,949 | |||
3,976,949 | |||||
BANKS – 15.48% | |||||
Bank of East Asia Ltd. | 4,290,100 | 11,770,350 | |||
BOC Hong Kong Holdings Ltd.1 | 11,825,000 | 21,224,495 | |||
Hang Seng Bank Ltd. | 2,750,000 | 36,666,902 | |||
69,661,747 | |||||
CHEMICALS – 0.46% | |||||
Kingboard Chemical Holdings Co. Ltd. | 1,108,000 | 2,081,065 | |||
2,081,065 | |||||
DISTRIBUTION & WHOLESALE – 4.22% | |||||
Esprit Holdings Ltd. | 2,477,000 | 11,940,487 | |||
Li & Fung Ltd. | 5,500,000 | 7,051,327 | |||
18,991,814 | |||||
DIVERSIFIED FINANCIAL SERVICES – 1.60% | |||||
Hong Kong Exchanges & Clearing Ltd.1 | 3,300,000 | 7,213,508 | |||
7,213,508 | |||||
ELECTRIC – 12.14% | |||||
CLP Holdings Ltd. | 6,050,200 | 34,982,791 | |||
Hongkong Electric Holdings Ltd. | 4,400,000 | 19,630,895 | |||
54,613,686 | |||||
ELECTRICAL COMPONENTS & EQUIPMENT – 1.05% | |||||
Johnson Electric Holdings Ltd. | 4,675,000 | 4,734,966 | |||
4,734,966 | |||||
ENGINEERING & CONSTRUCTION – 2.52% | |||||
Cheung Kong Infrastructure Holdings Ltd. | 1,650,000 | 4,093,296 | |||
New World Development Co. Ltd. | 7,700,800 | 7,256,570 | |||
11,349,866 | |||||
GAS – 4.63% | |||||
Hong Kong & China Gas Co. Ltd. | 11,550,663 | 20,806,135 | |||
20,806,135 | |||||
HAND & MACHINE TOOLS – 0.96% | |||||
Techtronic Industries Co. Ltd.1 | 2,750,000 | 4,336,566 | |||
4,336,566 | |||||
HOLDING COMPANIES – DIVERSIFIED – 21.03% | |||||
Hutchison Whampoa Ltd. | 7,700,800 | 60,471,413 | |||
Swire Pacific Ltd. Class A | 3,025,000 | 21,427,221 | |||
Wharf Holdings Ltd. (The) | 3,850,000 | 12,710,017 | |||
94,608,651 | |||||
LODGING – 0.68% | |||||
Shangri-La Asia Ltd.1 | 3,300,000 | 3,067,327 | |||
3,067,327 | |||||
MEDIA – 1.29% | |||||
SCMP Group Ltd. | 3,300,000 | 1,248,085 | |||
Television Broadcasts Ltd. | 1,100,000 | 4,555,157 | |||
5,803,242 | |||||
REAL ESTATE – 25.68% | |||||
Cheung Kong Holdings Ltd. | 4,950,000 | 42,678,158 | |||
Hang Lung Properties Ltd.1 | 4,400,000 | 6,402,605 | |||
Henderson Land Development Co. Ltd.1 | 2,200,000 | 10,746,223 | |||
Hopewell Holdings Ltd. | 2,200,000 | 4,766,697 | |||
Hysan Development Co. Ltd. | 2,200,000 | 3,807,717 | |||
Kerry Properties Ltd. | 1,650,000 | 2,982,711 | |||
Sino Land Co. Ltd.1 | 4,400,000 | 3,271,816 | |||
Sun Hung Kai Properties Ltd. | 4,400,000 | 40,897,698 | |||
115,553,625 | |||||
RETAIL – 0.69% | |||||
Giordano International Ltd. | 5,500,000 | 3,084,956 | |||
3,084,956 | |||||
SEMICONDUCTORS – 0.41% | |||||
ASM Pacific Technology Ltd.1 | 550,000 | 1,836,870 | |||
1,836,870 | |||||
TELECOMMUNICATIONS – 1.98% | |||||
PCCW Ltd.1,2 | 11,554,576 | 7,703,100 | |||
SmarTone Telecommunications Holdings Ltd. | 1,102,000 | 1,200,905 | |||
8,904,005 | |||||
TEXTILES – 0.42% | |||||
Texwinca Holdings Ltd.1 | 2,200,000 | 1,889,756 | |||
1,889,756 |
SCHEDULEOF INVESTMENTS | 47 |
Schedule of Investments (Continued)
iSHARES® MSCI HONG KONG INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
TRANSPORTATION – 2.30% | ||||||
MTR Corp. Ltd.1 | 4,400,083 | $ | 6,741,196 | |||
Orient Overseas International Ltd.1 | 1,100,000 | 3,603,228 | ||||
10,344,424 | ||||||
TOTAL COMMON STOCKS | 448,655,349 | |||||
SHORT-TERM INVESTMENTS – 12.81% | ||||||
FLOATING RATE NOTES – 3.31% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/053,4 | $ | 251,670 | 251,637 | |||
1.52%, 10/12/043,4 | 209,725 | 209,723 | ||||
1.56%, 09/15/043,4 | 419,451 | 419,449 | ||||
1.64%, 03/15/053,4 | 209,725 | 209,816 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/043 | 314,588 | 314,583 | ||||
1.38%, 11/22/043 | 104,863 | 104,865 | ||||
1.40%, 10/29/043 | 419,451 | 419,449 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/053,4 | 419,451 | 419,395 | ||||
1.61%, 07/29/053,4 | 419,451 | 419,336 | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/053 | 419,451 | 419,332 | ||||
1.56%, 08/26/053 | 419,451 | 419,327 | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/053 | 419,451 | 419,451 | ||||
Dorada Finance Inc. | ||||||
1.61%, 07/29/053,4 | 348,144 | 348,049 | ||||
Five Finance Inc. | ||||||
1.42%, 04/29/053,4 | 335,561 | 335,539 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/043 | 209,725 | 209,655 | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/053 | 268,449 | 268,433 | ||||
1.58%, 04/22/053 | 419,451 | 419,451 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/053,4 | 419,451 | 419,411 | ||||
1.57%, 09/27/043,4 | 453,007 | 453,002 | ||||
1.61%, 07/25/053,4 | 209,725 | 209,688 | ||||
Security | Principal | Value | ||||
Links Finance LLC | ||||||
1.55%, 04/15/053,4 | $ | 419,451 | $ | 419,399 | ||
1.68%, 04/25/053 | 419,451 | 419,628 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/053 | 419,451 | 419,451 | ||||
1.63%, 12/09/043,4 | 348,144 | 346,584 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/053 | 419,451 | 419,387 | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/053,4 | 398,478 | 398,478 | ||||
Permanent Financing PLC | ||||||
1.52%, 03/10/053 | 419,451 | 419,451 | ||||
1.53%, 12/10/043 | 209,725 | 209,725 | ||||
1.55%, 06/10/053 | 188,753 | 188,753 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/043 | 419,451 | 419,443 | ||||
1.57%, 11/15/043 | 419,451 | 419,444 | ||||
1.59%, 09/15/053 | 314,588 | 314,616 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/053,4 | 153,938 | 153,929 | ||||
1.56%, 01/18/053,4 | 184,558 | 184,551 | ||||
1.59%, 07/25/053,4 | 419,451 | 419,413 | ||||
1.66%, 05/17/053,4 | 348,144 | 348,132 | ||||
1.70%, 02/25/053,4 | 234,892 | 234,870 | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/043 | 103,898 | 103,720 | ||||
1.48%, 06/15/053,4 | 209,725 | 209,688 | ||||
1.56%, 09/15/043,4 | 209,725 | 209,724 | ||||
1.56%, 07/15/053,4 | 314,588 | 314,533 | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/053 | 209,725 | 209,687 | ||||
1.55%, 04/15/053,4 | 314,588 | 314,549 | ||||
1.55%, 07/11/053 | 104,863 | 104,853 | ||||
1.56%, 11/15/043,4 | 251,670 | 251,670 | ||||
1.57%, 06/15/053,4 | 171,975 | 171,975 | ||||
1.58%, 03/29/053 | 180,364 | 180,341 | ||||
1.58%, 08/26/053,4 | 209,725 | 209,684 | ||||
1.68%, 05/20/053 | 188,753 | 188,739 | ||||
14,894,008 |
48 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI HONG KONG INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
MONEY MARKET FUNDS – 2.58% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5 | 6,498,491 | $ | 6,498,491 | |||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5 | 4,613,959 | 4,613,959 | ||||
BlackRock Temp Cash Money Market Fund3 | 211,745 | 211,745 | ||||
Short-Term Investment Co. - Prime Money Market Portfolio, Institutional Shares3 | 281,954 | 281,954 | ||||
11,606,149 | ||||||
COMMERCIAL PAPER – 2.37% | ||||||
Alpine Securitization Corp. | ||||||
1.50%, 09/08/043 | $ | 209,725 | 209,664 | |||
1.51%, 09/02/043 | 188,753 | 188,745 | ||||
1.54%, 09/14/043 | 209,725 | 209,609 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/043 | 83,890 | 83,866 | ||||
1.53%, 09/16/043 | 206,361 | 206,230 | ||||
1.54%, 09/15/043 | 209,725 | 209,600 | ||||
1.54%, 09/22/043 | 104,863 | 104,769 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/043 | 209,725 | 209,663 | ||||
1.53%, 09/09/043 | 489,881 | 489,714 | ||||
1.53%, 09/13/043 | 301,988 | 301,834 | ||||
1.53%, 09/14/043 | 104,863 | 104,805 | ||||
1.54%, 09/17/043 | 125,835 | 125,749 | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/043 | 209,725 | 209,664 | ||||
1.53%, 09/15/043 | 83,890 | 83,840 | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/043 | 83,890 | 83,832 | ||||
Corporate Asset Funding | ||||||
1.42%, 09/03/043 | 125,835 | 125,826 | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/043 | 209,725 | 209,709 | ||||
Security | Principal | Value | ||||
Delaware Funding Corp. | ||||||
1.50%, 09/09/043 | $ | 209,725 | $ | 209,656 | ||
1.53%, 09/10/043 | 335,561 | 335,433 | ||||
1.53%, 09/20/043 | 142,613 | 142,498 | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/043 | 209,725 | 209,601 | ||||
1.45%, 11/09/043 | 419,451 | 418,286 | ||||
1.52%, 09/08/043 | 419,451 | 419,327 | ||||
1.59%, 12/02/043 | 419,451 | 417,746 | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/043 | 125,835 | 125,825 | ||||
1.53%, 09/07/043 | 209,725 | 209,672 | ||||
1.53%, 09/17/043 | 125,835 | 125,750 | ||||
1.53%, 09/21/043 | 104,863 | 104,774 | ||||
1.53%, 09/22/043 | 209,725 | 209,538 | ||||
1.54%, 09/14/043 | 314,588 | 314,413 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/053 | 209,725 | 208,270 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/043 | 209,725 | 209,654 | ||||
1.55%, 10/15/043 | 275,055 | 274,534 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/043 | 419,451 | 418,705 | ||||
1.44%, 10/27/043 | 419,451 | 418,511 | ||||
1.59%, 11/30/043 | 209,725 | 208,892 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/043 | 104,863 | 104,858 | ||||
1.53%, 09/20/043 | 104,863 | 104,778 | ||||
1.53%, 09/23/043 | 146,808 | 146,671 | ||||
1.54%, 09/15/043 | 251,670 | 251,520 | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/043 | 292,315 | 292,315 | ||||
1.51%, 09/08/043 | 167,780 | 167,731 | ||||
1.52%, 09/09/043 | 104,863 | 104,827 | ||||
1.53%, 09/21/043 | 209,725 | 209,547 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/043 | 125,835 | 125,765 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/043 | 230,698 | 230,698 |
SCHEDULESOF INVESTMENTS | 49 |
Schedule of Investments (Continued)
iSHARES® MSCI HONG KONG INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/043 | $ | 139,593 | $ | 139,346 | ||
1.55%, 09/16/043 | 125,835 | 125,754 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
1.54%, 09/15/043 | 167,780 | 167,680 | ||||
1.54%, 09/23/043 | 104,863 | 104,764 | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/043 | 104,863 | 104,827 | ||||
1.52%, 09/10/043 | 146,808 | 146,753 | ||||
10,666,038 | ||||||
TIME DEPOSITS – 2.08% | ||||||
Abbey National Treasury Services PLC | ||||||
1.25%, 01/06/053 | 419,451 | 419,451 | ||||
1.33%, 02/10/053 | 209,725 | 209,704 | ||||
1.39%, 02/02/053 | 209,725 | 209,712 | ||||
1.39%, 04/08/053 | 293,616 | 293,589 | ||||
1.40%, 10/25/043 | 419,451 | 419,442 | ||||
Bank of New York | ||||||
1.39%, 11/01/043 | 419,451 | 419,444 | ||||
1.60%, 12/03/043 | 104,863 | 104,849 | ||||
Bank of Nova Scotia | ||||||
1.13%, 10/06/043 | 419,451 | 419,451 | ||||
1.24%, 10/07/043 | 314,588 | 314,585 | ||||
1.42%, 10/29/043 | 314,588 | 314,592 | ||||
National City Bank (Cleveland, Ohio) | ||||||
1.25%, 01/06/053 | 419,451 | 419,458 | ||||
1.49%, 08/09/053 | 419,451 | 419,333 | ||||
1.54%, 06/23/053 | 419,451 | 419,349 | ||||
1.56%, 06/10/053 | 209,725 | 209,776 | ||||
Norddeutsche Landesbank | ||||||
1.59%, 07/27/053 | 419,451 | 419,318 | ||||
Prudential Funding LLC | ||||||
1.60%, 12/01/043 | 209,725 | 208,877 | ||||
SouthTrust Bank | ||||||
1.55%, 09/01/043 | 838,902 | 838,902 | ||||
Toronto-Dominion Bank | ||||||
1.22%, 03/23/053 | 734,039 | 733,968 | ||||
1.34%, 02/10/053 | 167,780 | 167,769 | ||||
1.41%, 11/01/043 | 314,588 | 314,583 | ||||
1.53%, 09/13/043 | 209,725 | 209,725 | ||||
1.77%, 05/10/053 | 209,725 | 209,711 | ||||
1.90%, 05/11/053 | 209,725 | 209,712 | ||||
UBS Finance (Delaware) | ||||||
1.10%, 09/08/043 | 419,451 | 419,361 | ||||
1.11%, 12/17/043 | 629,176 | 627,100 | ||||
1.14%, 09/29/043 | 419,451 | 419,081 | ||||
9,370,842 | ||||||
REPURCHASE AGREEMENTS – 1.84% | ||||||
Banc of America Securities LLC | ||||||
1.59%, 09/01/043,6 | 1,258,352 | 1,258,352 | ||||
Bank of America, N.A. | ||||||
1.59%, 09/01/043,6 | 2,411,842 | 2,411,842 | ||||
Goldman Sachs & Co. | ||||||
1.59%, 09/01/043,6 | 2,097,254 | 2,097,254 | ||||
Merrill Lynch Government Securities Inc. | ||||||
1.57%, 09/01/043,6 | 419,451 | 419,451 | ||||
1.59%, 09/01/043,6 | 2,097,254 | 2,097,254 | ||||
8,284,153 | ||||||
U.S. GOVERNMENT AGENCY NOTES – 0.34% | ||||||
Federal Home Loan Mortgage Corp. | ||||||
1.63%, 04/15/053 | 293,616 | 294,197 | ||||
1.80%, 01/18/053 | 195,045 | 193,689 | ||||
1.80%, 01/19/053 | 209,725 | 208,257 | ||||
2.06%, 05/31/053 | 209,109 | 205,854 | ||||
Federal National Mortgage Association | ||||||
2.33%, 07/22/053 | 629,176 | 616,011 | ||||
1,518,008 |
50 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI HONG KONG INDEX FUND
August 31, 2004
Security | Principal | Value | |||||
MEDIUM-TERM NOTES – 0.29% | |||||||
CC USA Inc. | |||||||
1.29%, 04/15/053,4 | $ | 419,451 | $ | 419,425 | |||
1.51%, 02/15/053,4 | 272,643 | 272,837 | |||||
Dorada Finance Inc. | |||||||
1.48%, 01/18/053,4 | 314,588 | 314,582 | |||||
K2 USA LLC | |||||||
1.46%, 01/12/053,4 | 209,725 | 209,718 | |||||
WhistleJacket Capital LLC | |||||||
1.32%, 02/04/053,4 | 104,863 | 104,854 | |||||
1,321,416 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 57,660,614 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 112.53% | 506,315,963 | ||||||
Other Assets, Less Liabilities – (12.53%) | (56,393,170 | ) | |||||
NET ASSETS - 100.00% | $ | 449,922,793 | |||||
(1) | All or a portion of this security represents a security on loan. See Note 5. |
(2) | Non-income earning security. |
(3) | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
(4) | Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
(5) | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
(6) | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Financial | 42.76 | % | $ | 192,428,880 | ||
Diversified | 21.03 | 94,608,651 | ||||
Utilities | 16.77 | 75,419,821 | ||||
Consumer Cyclical | 8.19 | 36,806,993 | ||||
Industrial | 6.83 | 30,765,822 | ||||
Communications | 3.27 | 14,707,247 | ||||
Basic Materials | 0.46 | 2,081,065 | ||||
Technology | 0.41 | 1,836,870 | ||||
Short-Term and Other Net Assets | 0.28 | 1,267,444 | ||||
TOTAL | 100.00 | % | $ | 449,922,793 | ||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 51 |
Schedule of Investments
iSHARES® MSCI MALAYSIA INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.83% | |||||
AGRICULTURE – 9.54% | |||||
British American Tobacco (Malaysia) Bhd | 639,800 | $ | 8,544,697 | ||
Golden Hope Plantations Bhd | 1,508,100 | 1,389,039 | |||
Highlands & Lowlands Bhd | 868,300 | 822,600 | |||
IOI Corp. Bhd | 3,610,300 | 8,218,183 | |||
Kuala Lumpur Kepong Bhd | 1,416,700 | 2,423,303 | |||
21,397,822 | |||||
AIRLINES – 0.72% | |||||
Malaysian Airline System Bhd1 | 1,416,700 | 1,603,108 | |||
1,603,108 | |||||
AUTO MANUFACTURERS – 2.56% | |||||
DRB-Hicom Bhd | 2,239,300 | 1,213,936 | |||
Oriental Holdings Bhd | 868,700 | 946,426 | |||
Proton Holdings Bhd1 | 1,416,700 | 2,889,322 | |||
Tan Chong Motor Holdings Bhd | 1,919,400 | 691,994 | |||
5,741,678 | |||||
AUTO PARTS & EQUIPMENT – 0.60% | |||||
UMW Holdings Bhd | 1,051,100 | 1,355,366 | |||
1,355,366 | |||||
BANKS – 24.85% | |||||
AMMB Holdings Bhd | 5,164,100 | 4,457,435 | |||
CIMB Bhd | 959,700 | 1,262,763 | |||
Commerce Asset Holdings Bhd | 8,226,000 | 9,957,789 | |||
Hong Leong Bank Bhd | 2,650,600 | 3,473,681 | |||
Malayan Banking Bhd | 9,094,300 | 24,889,663 | |||
Public Bank Bhd | 5,529,700 | 9,895,253 | |||
RHB Capital Bhd | 3,518,900 | 1,777,971 | |||
55,714,555 | |||||
BEVERAGES – 0.47% | |||||
Guinness Anchor Bhd | 776,900 | 1,042,682 | |||
1,042,682 | |||||
BUILDING MATERIALS – 2.65% | |||||
Jaya Tiasa Holdings Bhd | 411,300 | 430,783 | |||
Malayan Cement Bhd | 6,489,400 | 1,374,728 | |||
OYL Industries Bhd | 411,433 | 3,870,718 | |||
WTK Holdings Bhd | 182,800 | 254,958 | |||
5,931,187 | |||||
CHEMICALS – 0.52% | |||||
Malaysian Oxygen Bhd | 365,600 | 1,173,768 | |||
1,173,768 | |||||
COMMERCIAL SERVICE – 2.06% | |||||
PLUS Expressways Bhd | 7,037,800 | 4,611,611 | |||
4,611,611 | |||||
DIVERSIFIED FINANCIAL SERVICES – 1.19% | |||||
Hong Leong Credit Bhd | 1,188,600 | 1,313,716 | |||
OSK Holdings Bhd | 1,462,400 | 615,747 | |||
TA Enterprise Bhd | 3,747,400 | 739,618 | |||
2,669,081 | |||||
ELECTRIC – 7.44% | |||||
Malakoff Bhd | 2,924,800 | 4,849,010 | |||
Tenaga Nasional Bhd | 4,387,200 | 11,545,263 | |||
TIME Engineering Bhd1 | 1,553,800 | 294,404 | |||
16,688,677 | |||||
ELECTRONIC – 0.24% | |||||
Hong Leong Industries Bhd | 502,700 | 539,741 | |||
Hume Industries Bhd | 667 | 790 | |||
540,531 | |||||
ENGINEERING & CONSTRUCTION – 6.30% | |||||
Gamuda Bhd | 3,061,900 | 4,149,680 | |||
IJM Corp. Bhd | 1,659,300 | 2,095,958 | |||
Malaysia Airports Holdings Bhd | 1,553,800 | 547,919 | |||
Malaysian Resources Corp. Bhd1 | 2,793,200 | 529,238 | |||
MMC Corp. Bhd | 1,599,500 | 795,541 | |||
Road Builder (Malaysia) Holdings Bhd | 2,194,100 | 1,379,973 | |||
Transmile Group Bhd | 594,100 | 1,094,395 | |||
YTL Corp. Bhd | 2,925,420 | 3,541,298 | |||
14,134,002 | |||||
ENTERTAINMENT – 7.05% | |||||
Berjaya Sports Toto Bhd | 2,924,800 | 2,647,714 | |||
Magnum Corp. Bhd | 4,844,200 | 3,059,495 | |||
Resorts World Bhd | 2,787,700 | 6,492,407 | |||
Tanjong PLC | 1,096,800 | 3,607,895 | |||
15,807,511 | |||||
ENVIRONMENTAL CONTROL – 0.21% | |||||
Puncak Niaga Holding Bhd1 | 776,900 | 468,184 | |||
468,184 |
52 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI MALAYSIA INDEX FUND
August 31, 2004
Security | Shares | Value | ||||
FOOD – 1.81% | ||||||
Nestle (Malaysia) Bhd | 411,300 | $ | 2,446,153 | |||
PPB Group Bhd | 960,033 | 1,616,898 | ||||
4,063,051 | ||||||
GAS – 1.87% | ||||||
Petronas Gas Bhd | 2,239,300 | 4,183,955 | ||||
4,183,955 | ||||||
HOLDING COMPANIES – DIVERSIFIED – 5.01% | ||||||
Mulpha International Bhd1 | 4,707,100 | 798,968 | ||||
Multi-Purpose Holdings Bhd1 | 3,199,000 | 883,934 | ||||
Sime Darby Bhd | 6,535,100 | 9,544,685 | ||||
11,227,587 | ||||||
INSURANCE – 0.31% | ||||||
MAA Holdings Bhd | 548,400 | 692,716 | ||||
692,716 | ||||||
LODGING – 3.67% | ||||||
Genting Bhd | 1,965,100 | 8,222,392 | ||||
8,222,392 | ||||||
MEDIA – 2.77% | ||||||
Astro All Asia Networks PLC1 | 3,245,600 | 3,826,392 | ||||
New Straits Times Press Bhd1 | 685,500 | 681,892 | ||||
Star Publications (Malaysia) Bhd | 1,005,400 | 1,706,534 | ||||
6,214,818 | ||||||
OIL & GAS – 0.57% | ||||||
Petronas Dagangan Bhd | 685,500 | 1,280,803 | ||||
1,280,803 | ||||||
REAL ESTATE – 2.55% | ||||||
Bandar Raya Developments Bhd | 1,188,200 | 619,115 | ||||
IGB Corp. Bhd | 3,336,100 | 1,053,505 | ||||
IOI Properties Bhd | 365,750 | 745,937 | ||||
MK Land Holdings Bhd | 1,645,200 | 995,779 | ||||
SP Setia Bhd | 2,422,600 | 2,295,095 | ||||
5,709,431 | ||||||
RETAIL – 0.31% | ||||||
Courts Mammoth Bhd | 731,200 | 375,221 | ||||
Edaran Otomobil Nasional Bhd | 411,300 | 324,711 | ||||
699,932 | ||||||
SEMICONDUCTORS – 1.12% | ||||||
Malaysian Pacific Industries Bhd | 457,000 | 1,707,737 | ||||
Unisem (Malaysia) Bhd | 457,000 | 811,776 | ||||
2,519,513 | ||||||
TELECOMMUNICATIONS – 9.28% | ||||||
Maxis Communications Bhd | 3,473,200 | 7,814,700 | ||||
Telekom Malaysia Bhd | 4,661,400 | 13,002,853 | ||||
20,817,553 | ||||||
TRANSPORTATION – 4.16% | ||||||
Malaysia International Shipping Corp. Bhd | 2,604,900 | 8,568,750 | ||||
Malaysian Bulk Carriers Bhd | 1,325,300 | 756,816 | ||||
9,325,566 | ||||||
TOTAL COMMON STOCKS | 223,837,080 | |||||
SHORT-TERM INVESTMENTS – 0.18% | ||||||
MONEY MARKET FUNDS – 0.18% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2 | 393,844 | 393,844 | ||||
393,844 | ||||||
TOTAL SHORT-TERM INVESTMENTS | 393,844 | |||||
TOTAL INVESTMENTS IN SECURITIES – 100.01% | 224,230,924 | |||||
Other Assets, Less Liabilities – (0.01%) | (12,811 | ) | ||||
NET ASSETS – 100.00% | $ | 224,218,113 | ||||
1 | Non-income earning security. |
2 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
SCHEDULESOF INVESTMENTS | 53 |
Schedule of Investments (Continued)
iSHARES® MSCI MALAYSIA INDEX FUND
August 31, 2004
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Financial | 28.89 | % | $ | 64,785,783 | ||
Consumer Cyclical | 14.91 | 33,429,987 | ||||
Consumer Non-Cyclical | 13.88 | 31,115,166 | ||||
Industrial | 13.56 | 30,399,470 | ||||
Communications | 12.06 | 27,032,371 | ||||
Utilities | 9.31 | 20,872,632 | ||||
Diversified | 5.01 | 11,227,587 | ||||
Technology | 1.12 | 2,519,513 | ||||
Energy | 0.57 | 1,280,803 | ||||
Basic Materials | 0.52 | 1,173,768 | ||||
Short-Term and Other Net Assets | 0.17 | 381,033 | ||||
TOTAL | 100.00 | % | $ | 224,218,113 | ||
See notes to financial statements.
54 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments
iSHARES® MSCI MEXICO INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.93% | |||||
BEVERAGES – 10.26% | |||||
Coca-Cola Femsa SA de CV ADR1 | 95,073 | $ | 1,937,588 | ||
Fomento Economico Mexicano SA de CV Class UBD | 1,407,000 | 6,084,992 | |||
Grupo Continental SA | 675,494 | 1,034,703 | |||
Grupo Modelo SA de CV Series C | 1,778,381 | 4,243,873 | |||
13,301,156 | |||||
BUILDING MATERIALS – 9.20% | |||||
Cemex SA de CV Series CPO | 2,100,651 | 11,922,539 | |||
11,922,539 | |||||
DIVERSIFIED FINANCIAL SERVICES – 2.18% | |||||
Grupo Financiero Banorte SA de CV Series O | 716,900 | 2,823,398 | |||
2,823,398 | |||||
ENGINEERING & CONSTRUCTION – 1.16% | |||||
Grupo Aeroportuario del Sureste SA de CV ADR | 70,685 | 1,498,522 | |||
1,498,522 | |||||
ENTERTAINMENT – 1.77% | |||||
Corporaion Interamericana de Entretenimiento SA de CV Class B1 | 1,109,654 | 2,300,104 | |||
2,300,104 | |||||
FOOD – 1.90% | |||||
Grupo Bimbo SA Series A | 1,127,744 | 2,459,434 | |||
2,459,434 | |||||
FOREST PRODUCTS & PAPER – 3.83% | |||||
Kimberly-Clark de Mexico SA de CV Class A | 1,807,459 | 4,968,905 | |||
4,968,905 | |||||
HOLDING COMPANIES – DIVERSIFIED – 6.08% | |||||
Alfa SA de CV Class A | 670,670 | 2,198,947 | |||
Grupo Carso SA de CV Series A1 | 1,241,979 | 5,688,745 | |||
7,887,692 | |||||
HOME BUILDERS – 0.72% | |||||
Corporacion GEO SA de CV Series B1 | 719,647 | 937,365 | |||
937,365 | |||||
HOUSEWARES – 0.63% | |||||
Vitro SA de CV Series A | 933,444 | 819,853 | |||
819,853 | |||||
MEDIA – 6.79% | |||||
Grupo Televisa SA Series CPO | 2,672,429 | 6,431,387 | |||
TV Azteca SA de CV Series CPO1 | 4,093,700 | 2,365,864 | |||
8,797,251 | |||||
METAL FABRICATE & HARDWARE – 0.00% | |||||
Hylsamex SA de CV Class B1 | 1 | 2 | |||
2 | |||||
MINING – 3.06% | |||||
Grupo Mexico SA de CV Series B1 | 717,883 | 2,561,818 | |||
Industrias Penoles SA de CV Series CP | 341,700 | 1,402,154 | |||
3,963,972 | |||||
REAL ESTATE – 1.65% | |||||
Consorcio Ara SA de CV1 | 799,846 | 2,142,664 | |||
2,142,664 | |||||
RETAIL – 8.38% | |||||
Controladora Comercial Mexicana SA de CV | 1,427,100 | 1,559,275 | |||
Grupo Sanborns SA Series B11 | 673,417 | 1,129,706 | |||
Organizacion Soriana SA de CV Series B | 607,154 | 1,783,253 | |||
Wal-Mart de Mexico SA de CV Series V | 2,011,474 | 6,390,147 | |||
10,862,381 | |||||
TELECOMMUNICATIONS – 42.32% | |||||
America Movil SA de CV Series L | 15,302,800 | 26,276,381 | |||
America Telecom SA de CV Series A11 | 1,301,688 | 2,435,199 | |||
Carso Global Telecom SA de CV Class A11 | 2,357,127 | 3,453,241 | |||
Telefonos de Mexico SA de CV Series L | 13,969,500 | 22,686,404 | |||
54,851,225 | |||||
TOTAL COMMON STOCKS | 129,536,463 |
SCHEDULESOF INVESTMENTS | 55 |
Schedule of Investments (Continued)
iSHARES® MSCI MEXICO INDEX FUND
August 31, 2004
Security | Shares | Value | |||
SHORT-TERM INVESTMENTS – 0.07% | |||||
MONEY MARKET FUNDS – 0.07% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2 | 85,281 | $ | 85,281 | ||
85,281 | |||||
TOTAL SHORT-TERM INVESTMENTS | 85,281 | ||||
TOTAL INVESTMENTS IN SECURITIES – 100.00% | 129,621,744 | ||||
Other Assets, Less Liabilities – 0.00% | 1,035 | ||||
NET ASSETS – 100.00% | $ | 129,622,779 | |||
ADR – American Depositary Receipts
1 | Non-income earning security. |
2 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Communications | 49.10 | % | $ | 63,648,476 | ||
Consumer Non-Cyclical | 12.16 | 15,760,590 | ||||
Consumer Cyclical | 11.51 | 14,919,703 | ||||
Industrial | 10.35 | 13,421,063 | ||||
Basic Materials | 6.89 | 8,932,877 | ||||
Diversified | 6.09 | 7,887,692 | ||||
Financial | 3.83 | 4,966,062 | ||||
Short-Term and Other Net Assets | 0.07 | 86,316 | ||||
TOTAL | 100.00 | % | $ | 129,622,779 | ||
See notes to financial statements.
56 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 95.89% | |||||
AUSTRALIA – 60.36% | |||||
Alumina Ltd. | 1,238,056 | $ | 4,747,195 | ||
Amcor Ltd. | 930,262 | 4,815,110 | |||
AMP Ltd. | 1,974,067 | 8,712,421 | |||
Ansell Ltd.1 | 195,570 | 1,166,960 | |||
Aristocrat Leisure Ltd.1 | 311,320 | 1,545,466 | |||
Australia & New Zealand Banking Group Ltd. | 1,941,450 | 25,157,023 | |||
Australian Gas Light Co. Ltd. | 485,470 | 4,562,863 | |||
Australian Stock Exchange Ltd. | 116,616 | 1,282,988 | |||
AXA Asia Pacific Holdings Ltd. | 707,952 | 1,929,692 | |||
BHP Billiton Ltd. | 4,031,594 | 37,379,930 | |||
BHP Steel Ltd. | 807,282 | 4,474,988 | |||
Boral Ltd. | 631,240 | 3,129,166 | |||
Brambles Industries Ltd.1 | 1,033,902 | 4,928,107 | |||
Centro Properties Group | 671,488 | 2,152,737 | |||
Coca-Cola Amatil Ltd.1 | 498,542 | 2,548,809 | |||
Cochlear Ltd.1 | 53,062 | 720,543 | |||
Coles Myer Ltd. | 1,197,034 | 7,590,664 | |||
Commonwealth Bank of Australia | 1,354,758 | 28,891,203 | |||
Commonwealth Property Office Fund | 1,538,196 | 1,314,298 | |||
Computershare Ltd. | 458,638 | 1,152,967 | |||
CSL Ltd. | 209,926 | 3,831,985 | |||
CSR Ltd.1 | 1,058,402 | 1,718,998 | |||
Deutsche Office Trust | 1,359,144 | 1,142,114 | |||
Foster’s Group Ltd. | 2,184,572 | 7,204,108 | |||
Futuris Corp. Ltd.1 | 607,762 | 768,216 | |||
Gandel Retail Trust | 1,491,243 | 1,590,092 | |||
General Property Trust | 2,151,548 | 5,393,570 | |||
Harvey Norman Holdings Ltd. | 615,158 | 1,281,462 | |||
Iluka Resources Ltd. | 280,360 | 920,589 | |||
ING Industrial Fund | 697,030 | 959,805 | |||
Insurance Australia Group Ltd. | 1,733,674 | 6,219,108 | |||
Investa Property Group1 | 1,437,513 | 2,020,049 | |||
John Fairfax Holdings Ltd. | 935,078 | 2,522,366 | |||
Leighton Holdings Ltd.1 | 146,200 | 1,011,744 | |||
Lend Lease Corp Ltd. | 413,832 | 3,255,414 | |||
Lion Nathan Ltd. | 299,624 | 1,502,214 | |||
Macquarie Bank Ltd. | 231,856 | 5,550,281 | |||
Macquarie Goodman Industrial Trust | 1,684,310 | 2,128,982 | |||
Macquarie Infrastructure Group | 2,109,752 | 5,288,795 | |||
Mayne Group Ltd. | 728,764 | 2,094,490 | |||
Mirvac Group | 763,336 | 2,436,414 | |||
National Australia Bank Ltd. | 1,617,918 | 30,447,433 | |||
Newcrest Mining Ltd. | 357,502 | 3,761,506 | |||
News Corp. Ltd. (The)1 | 1,469,482 | 11,445,552 | |||
OneSteel Ltd.1 | 581,446 | 1,190,705 | |||
Orica Ltd. | 300,140 | 3,433,491 | |||
Origin Energy Ltd. | 714,144 | 2,975,327 | |||
Pacific Brands Ltd. | 539,564 | 1,063,027 | |||
PaperlinX Ltd. | 466,550 | 1,739,519 | |||
Patrick Corp. Ltd.1 | 518,838 | 1,934,473 | |||
Perpetual Trustees Australia Ltd.1 | 38,270 | 1,243,121 | |||
Publishing & Broadcasting Ltd.1 | 134,762 | 1,298,012 | |||
QBE Insurance Group Ltd.1 | 722,572 | 6,454,589 | |||
Rinker Group Ltd. | 1,039,310 | 6,385,006 | |||
Rio Tinto Ltd.1 | 337,464 | 8,590,722 | |||
Santos Ltd. | 630,122 | 2,936,740 | |||
Sonic Healthcare Ltd. | 256,022 | 1,690,386 | |||
Southcorp Ltd.2 | 688,517 | 1,667,653 | |||
Stockland Trust Group | 1,359,321 | 5,384,952 | |||
Suncorp-Metway Ltd.1 | 582,908 | 6,133,145 | |||
TABCORP Holdings Ltd.1 | 550,383 | 5,841,454 | |||
Telstra Corp. Ltd.1 | 2,340,576 | 7,933,429 | |||
Toll Holdings Ltd. | 250,862 | 1,939,751 | |||
Transurban Group | 538,360 | 2,128,912 | |||
Wesfarmers Ltd. | 406,694 | 8,632,840 | |||
Westfield Group1,2 | 1,534,378 | 16,718,421 | |||
Westpac Banking Corp. Ltd. | 1,895,612 | 22,555,181 | |||
WMC Resources Ltd. | 1,222,748 | 4,248,142 | |||
Woodside Petroleum Ltd.1 | 506,368 | 6,450,595 | |||
Woolworths Ltd. | 1,102,176 | 9,845,515 | |||
393,113,525 | |||||
HONG KONG – 21.75% | |||||
ASM Pacific Technology Ltd.1 | 172,000 | 574,440 | |||
Bank of East Asia Ltd. | 1,444,800 | 3,963,964 | |||
BOC Hong Kong Holdings Ltd.1 | 3,956,000 | 7,100,558 | |||
Cathay Pacific Airways Ltd. | 1,118,000 | 1,963,679 | |||
Cheung Kong Holdings Ltd. | 1,634,000 | 14,088,103 | |||
Cheung Kong Infrastructure Holdings Ltd. | 516,000 | 1,280,085 | |||
CLP Holdings Ltd. | 1,935,000 | 11,188,341 |
SCHEDULESOF INVESTMENTS | 57 |
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2004
Security | Shares | Value | |||
Esprit Holdings Ltd. | 774,000 | $ | 3,731,101 | ||
Giordano International Ltd. | 1,548,000 | 868,275 | |||
Hang Lung Properties Ltd.1 | 1,290,500 | 1,877,855 | |||
Hang Seng Bank Ltd. | 825,600 | 11,008,071 | |||
Henderson Land Development Co. Ltd.1 | 774,000 | 3,780,717 | |||
Hong Kong & China Gas Co. Ltd. | 3,956,600 | 7,126,998 | |||
Hong Kong Exchanges & Clearing Ltd.1 | 1,204,000 | 2,631,837 | |||
Hongkong Electric Holdings Ltd. | 1,505,000 | 6,714,658 | |||
Hopewell Holdings Ltd. | 688,000 | 1,490,676 | |||
Hutchison Whampoa Ltd. | 2,322,000 | 18,233,771 | |||
Hysan Development Co. Ltd. | 688,000 | 1,190,777 | |||
Johnson Electric Holdings Ltd. | 1,505,000 | 1,524,305 | |||
Kerry Properties Ltd. | 516,000 | 932,775 | |||
Kingboard Chemical Holdings Co. Ltd. | 516,000 | 969,160 | |||
MTR Corp. Ltd. | 1,419,000 | 2,173,995 | |||
New World Development Co. Ltd. | 2,408,799 | 2,269,844 | |||
Orient Overseas International Ltd.1 | 344,000 | 1,126,828 | |||
PCCW Ltd.2 | 3,784,600 | 2,523,083 | |||
SCMP Group Ltd. | 1,376,000 | 520,414 | |||
Shangri-La Asia Ltd.1 | 1,204,000 | 1,119,110 | |||
Sino Land Co. Ltd.1 | 1,204,000 | 895,288 | |||
SmarTone Telecommunications Holdings Ltd. | 301,000 | 328,015 | |||
Sun Hung Kai Properties Ltd. | 1,376,000 | 12,789,826 | |||
Swire Pacific Ltd. Class A | 989,000 | 7,005,461 | |||
Techtronic Industries Co. Ltd.1 | 1,032,000 | 1,627,395 | |||
Television Broadcasts Ltd. | 258,000 | 1,068,392 | |||
Texwinca Holdings Ltd. | 688,000 | 590,978 | |||
Wharf Holdings Ltd. (The) | 1,290,000 | 4,258,681 | |||
Yue Yuen Industrial Holdings Ltd. | 473,000 | 1,140,059 | |||
141,677,515 | |||||
NEW ZEALAND – 2.85% | |||||
Auckland International Airport Ltd. | 266,869 | 1,290,532 | |||
Carter Holt Harvey Ltd. | 675,315 | 1,090,046 | |||
Contact Energy Ltd.1 | 328,606 | 1,250,566 | |||
Fisher & Paykel Appliances Holdings Ltd.1 | 272,706 | 751,531 | |||
Fisher & Paykel Healthcare Corp. Ltd.1 | 104,232 | 919,870 | |||
Fletcher Building Ltd.1 | 448,748 | 1,516,397 | |||
Independent Newspapers Ltd. | 130,509 | 423,884 | |||
NGC Holdings Ltd. | 144,449 | 290,028 | |||
Sky City Entertainment Group Ltd.1 | 465,432 | 1,383,431 | |||
Sky Network Television Ltd.1,2 | 102,168 | 357,981 | |||
Telecom Corp. of New Zealand Ltd.1 | 2,067,182 | 7,758,502 | |||
Tenon Ltd.2 | 87,418 | 114,145 | |||
Tower Ltd.2 | 474,850 | 576,410 | |||
Warehouse Group Ltd. (The) | 154,284 | 466,686 | |||
Waste Management NZ Ltd. | 111,886 | 367,070 | |||
18,557,079 | |||||
SINGAPORE – 10.93% | |||||
Allgreen Properties Ltd. | 516,000 | 319,402 | |||
Ascendas Real Estate Investment Trust | 688,000 | 602,645 | |||
Capitaland Ltd.1 | 1,131,000 | 1,050,127 | |||
CapitaMall Trust | 602,000 | 590,592 | |||
Chartered Semiconductor Manufacturing Ltd.1,2 | 946,000 | 602,143 | |||
City Developments Ltd. | 516,000 | 1,913,399 | |||
ComfortDelGro Corp. Ltd. | 1,806,000 | 1,328,833 | |||
Creative Technology Ltd.1 | 64,500 | 689,276 | |||
DBS Group Holdings Ltd. | 1,204,000 | 10,968,145 | |||
Fraser & Neave Ltd. | 172,830 | 1,412,958 | |||
Haw Par Corp. Ltd. | 86,397 | 252,261 | |||
Jardine Cycle & Carriage Ltd. | 86,000 | 349,032 | |||
Keppel Corp. Ltd.1 | 602,000 | 2,495,956 | |||
Keppel Land Ltd.1 | 430,000 | 451,984 | |||
Neptune Orient Lines Ltd. | 1,118,000 | 1,841,082 | |||
Oversea-Chinese Banking Corp. Ltd. | 1,118,000 | 8,683,115 | |||
Overseas Union Enterprise Ltd. | 86,000 | 361,587 | |||
Parkway Holdings Ltd. | 516,000 | 385,693 | |||
SembCorp Industries Ltd. | 1,032,000 | 789,465 | |||
SembCorp Logistics Ltd. | 344,000 | 437,922 | |||
SembCorp Marine Ltd. | 602,000 | 358,574 | |||
Singapore Airlines Ltd. | 602,000 | 3,902,129 | |||
Singapore Exchange Ltd. | 860,000 | 893,924 | |||
Singapore Land Ltd. | 172,000 | 435,913 | |||
Singapore Post Ltd. | 1,376,000 | 630,769 | |||
Singapore Press Holdings Ltd. | 1,720,500 | 4,340,308 | |||
Singapore Technologies Engineering Ltd. | 1,462,000 | 1,792,870 |
58 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
Singapore Telecommunications Ltd. | 6,708,000 | $ | 8,970,376 | |||
SMRT Corp. Ltd. | 860,000 | 349,032 | ||||
STATS ChipPAC Ltd.1,2 | 1,032,000 | 680,989 | ||||
United Overseas Bank Ltd. | 1,290,000 | 10,018,979 | ||||
United Overseas Land Ltd. | 344,000 | 445,958 | ||||
Venture Corp. Ltd. | 258,000 | 2,561,243 | ||||
Wing Tai Holdings Ltd. | 516,333 | 269,857 | ||||
71,176,538 | ||||||
TOTAL COMMON STOCKS | 624,524,657 | |||||
PREFERRED STOCKS – 3.33% | ||||||
AUSTRALIA – 3.31% | ||||||
News Corp. Ltd. (The)1 | 2,901,984 | 21,516,978 | ||||
21,516,978 | ||||||
NEW ZEALAND – 0.02% | ||||||
Tenon Ltd.2 | 117,899 | 153,172 | ||||
153,172 | ||||||
TOTAL PREFERRED STOCKS | 21,670,150 | |||||
SHORT-TERM INVESTMENTS – 12.39% | ||||||
FLOATING RATE NOTES – 3.20% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/053,4 | $ | 352,092 | 352,045 | |||
1.52%, 10/12/043,4 | 293,410 | 293,407 | ||||
1.56%, 09/15/043,4 | 586,820 | 586,818 | ||||
1.64%, 03/15/053,4 | 293,410 | 293,537 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/043 | 440,115 | 440,109 | ||||
1.38%, 11/22/043 | 146,705 | 146,708 | ||||
1.40%, 10/29/043 | 586,820 | 586,818 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/053,4 | 586,820 | 586,742 | ||||
1.61%, 07/29/053,4 | 586,820 | 586,660 | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/053 | 586,820 | 586,654 | ||||
1.56%, 08/26/053 | 586,820 | 586,648 | ||||
Security | Principal | Value | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/053 | $ | 586,820 | $ | 586,820 | ||
Dorada Finance Inc. | ||||||
1.61%, 07/29/053,4 | 487,061 | 486,928 | ||||
Five Finance Inc. | ||||||
1.42%, 04/29/053,4 | 469,456 | 469,426 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/043 | 293,410 | 293,310 | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/053 | 375,565 | 375,543 | ||||
1.58%, 04/22/053 | 586,820 | 586,820 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/053,4 | 586,820 | 586,765 | ||||
1.57%, 09/27/043,4 | 633,766 | 633,759 | ||||
1.61%, 07/25/053,4 | 293,410 | 293,358 | ||||
Links Finance LLC | ||||||
1.55%, 04/15/053,4 | 586,820 | 586,748 | ||||
1.68%, 04/25/053 | 586,820 | 587,068 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/053 | 586,820 | 586,820 | ||||
1.63%, 12/09/043,4 | 487,061 | 484,878 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/053 | 586,820 | 586,731 | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/053,4 | 557,479 | 557,479 | ||||
Permanent Financing PLC | ||||||
1.52%, 03/10/053 | 586,820 | 586,820 | ||||
1.53%, 12/10/043 | 293,410 | 293,410 | ||||
1.55%, 06/10/053 | 264,069 | 264,070 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/043 | 586,820 | 586,809 | ||||
1.57%, 11/15/043 | 586,820 | 586,811 | ||||
1.59%, 09/15/053 | 440,115 | 440,155 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/053,4 | 215,363 | 215,350 | ||||
1.56%, 01/18/053,4 | 258,201 | 258,191 | ||||
1.59%, 07/25/053,4 | 586,820 | 586,768 | ||||
1.66%, 05/17/053,4 | 487,061 | 487,044 | ||||
1.70%, 02/25/053,4 | 328,619 | 328,588 | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/043 | 145,355 | 145,104 | ||||
1.48%, 06/15/053,4 | 293,410 | 293,357 |
SCHEDULESOF INVESTMENTS | 59 |
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
1.56%, 09/15/043,4 | $ | 293,410 | $ | 293,408 | ||
1.56%, 07/15/053,4 | 440,115 | 440,038 | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/053 | 293,410 | 293,356 | ||||
1.55%, 04/15/053,4 | 440,115 | 440,061 | ||||
1.55%, 07/11/053 | 146,705 | 146,691 | ||||
1.56%, 11/15/043,4 | 352,092 | 352,092 | ||||
1.57%, 06/15/053,4 | 240,596 | 240,596 | ||||
1.58%, 03/29/053 | 252,333 | 252,300 | ||||
1.58%, 08/26/053,4 | 293,410 | 293,353 | ||||
1.68%, 05/20/053 | 264,069 | 264,050 | ||||
20,837,021 | ||||||
MONEY MARKET FUNDS – 2.50% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5 | 9,100,876 | 9,100,876 | ||||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5 | 6,455,025 | 6,455,025 | ||||
BlackRock Temp Cash Money Market Fund3 | 296,236 | 296,236 | ||||
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares3 | 394,460 | 394,460 | ||||
16,246,597 | ||||||
COMMERCIAL PAPER – 2.29% | ||||||
Alpine Securitization Corp. | ||||||
1.50%, 09/08/043 | 293,410 | 293,325 | ||||
1.51%, 09/02/043 | 264,069 | 264,058 | ||||
1.54%, 09/14/043 | 293,410 | 293,247 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/043 | 117,364 | 117,330 | ||||
1.53%, 09/16/043 | 288,704 | 288,520 | ||||
1.54%, 09/15/043 | 293,410 | 293,235 | ||||
1.54%, 09/22/043 | 146,705 | 146,573 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/043 | 293,410 | 293,323 | ||||
1.53%, 09/09/043 | 685,353 | 685,120 | ||||
1.53%, 09/13/043 | 422,487 | 422,272 | ||||
1.53%, 09/14/043 | 146,705 | 146,624 | ||||
1.54%, 09/17/043 | 176,046 | 175,926 | ||||
Security | Principal | Value | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/043 | $ | 293,410 | $ | 293,324 | ||
1.53%, 09/15/043 | 117,364 | 117,294 | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/043 | 117,364 | 117,283 | ||||
Corporate Asset Funding | ||||||
1.42%, 09/03/043 | 176,046 | 176,032 | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/043 | 293,410 | 293,387 | ||||
Delaware Funding Corp. | ||||||
1.50%, 09/09/043 | 293,410 | 293,312 | ||||
1.53%, 09/10/043 | 469,456 | 469,277 | ||||
1.53%, 09/20/043 | 199,519 | 199,358 | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/043 | 293,410 | 293,236 | ||||
1.45%, 11/09/043 | 586,820 | 585,190 | ||||
1.52%, 09/08/043 | 586,820 | 586,647 | ||||
1.59%, 12/02/043 | 586,820 | 584,436 | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/043 | 176,046 | 176,032 | ||||
1.53%, 09/07/043 | 293,410 | 293,335 | ||||
1.53%, 09/17/043 | 176,046 | 175,926 | ||||
1.53%, 09/21/043 | 146,705 | 146,580 | ||||
1.53%, 09/22/043 | 293,410 | 293,148 | ||||
1.54%, 09/14/043 | 440,115 | 439,871 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/053 | 293,410 | 291,375 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/043 | 293,410 | 293,310 | ||||
1.55%, 10/15/043 | 384,808 | 384,079 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/043 | 586,820 | 585,777 | ||||
1.44%, 10/27/043 | 586,820 | 585,506 | ||||
1.59%, 11/30/043 | 293,410 | 292,244 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/043 | 146,705 | 146,699 | ||||
1.53%, 09/20/043 | 146,705 | 146,587 | ||||
1.53%, 09/23/043 | 205,387 | 205,195 | ||||
1.54%, 09/15/043 | 352,092 | 351,881 |
60 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/043 | $ | 408,955 | $ | 408,955 | ||
1.51%, 09/08/043 | 234,728 | 234,659 | ||||
1.52%, 09/09/043 | 146,705 | 146,656 | ||||
1.53%, 09/21/043 | 293,410 | 293,161 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/043 | 176,046 | 175,948 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/043 | 322,751 | 322,751 | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/043 | 195,294 | 194,948 | ||||
1.55%, 09/16/043 | 176,046 | 175,932 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
1.54%, 09/15/043 | 234,728 | 234,588 | ||||
1.54%, 09/23/043 | 146,705 | 146,567 | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/043 | 146,705 | 146,656 | ||||
1.52%, 09/10/043 | 205,387 | 205,309 | ||||
14,922,004 | ||||||
TIME DEPOSITS – 2.01% | ||||||
Abbey National Treasury Services PLC | ||||||
1.25%, 01/06/053 | 586,820 | 586,820 | ||||
1.33%, 02/10/053 | 293,410 | 293,391 | ||||
1.39%, 02/02/053 | 293,410 | 293,392 | ||||
1.39%, 04/08/053 | 410,774 | 410,737 | ||||
1.40%, 10/25/043 | 586,820 | 586,807 | ||||
Bank of New York | ||||||
1.39%, 11/01/043 | 586,820 | 586,811 | ||||
1.60%, 12/03/043 | 146,705 | 146,686 | ||||
Bank of Nova Scotia | ||||||
1.13%, 10/06/043 | 586,820 | 586,820 | ||||
1.24%, 10/07/043 | 440,115 | 440,111 | ||||
1.42%, 10/29/043 | 440,115 | 440,121 | ||||
National City Bank (Cleveland, Ohio) | ||||||
1.25%, 01/06/053 | 586,820 | 586,831 | ||||
1.49%, 08/09/053 | 586,820 | 586,656 | ||||
1.54%, 06/23/053 | 586,820 | 586,678 | ||||
1.56%, 06/10/053 | 293,410 | 293,481 | ||||
Norddeutsche Landesbank | ||||||
1.59%, 07/27/053 | 586,820 | 586,634 | ||||
Prudential Funding LLC | ||||||
1.60%, 12/01/043 | 293,410 | 292,224 | ||||
SouthTrust Bank | ||||||
1.55%, 09/01/043 | 1,173,641 | 1,173,641 | ||||
Toronto-Dominion Bank | ||||||
1.22%, 03/23/053 | 1,026,936 | 1,026,836 | ||||
1.34%, 02/10/053 | 234,728 | 234,713 | ||||
1.41%, 11/01/043 | 440,115 | 440,109 | ||||
1.53%, 09/13/043 | 293,410 | 293,410 | ||||
1.77%, 05/10/053 | 293,410 | 293,390 | ||||
1.90%, 05/11/053 | 293,410 | 293,390 | ||||
UBS Finance (Delaware) | ||||||
1.10%, 09/08/043 | 586,820 | 586,695 | ||||
1.11%, 12/17/043 | 880,231 | 877,327 | ||||
1.14%, 09/29/043 | 586,820 | 586,302 | ||||
13,110,013 | ||||||
REPURCHASE AGREEMENTS – 1.78% | ||||||
Banc of America Securities LLC | ||||||
1.59%, 09/01/043,6 | 1,760,461 | 1,760,461 | ||||
Bank of America, N.A. | ||||||
1.59%, 09/01/043,6 | 3,374,218 | 3,374,218 | ||||
Goldman Sachs & Co. | ||||||
1.59%, 09/01/043,6 | 2,934,103 | 2,934,103 | ||||
Merrill Lynch Government Securities Inc. | ||||||
1.57%, 09/01/043,6 | 586,820 | 586,820 | ||||
1.59%, 09/01/043,6 | 2,934,103 | 2,934,103 | ||||
11,589,705 | ||||||
U.S. GOVERNMENT AGENCY NOTES – 0.33% | ||||||
Federal Home Loan Mortgage Corp. | ||||||
1.63%, 04/15/053 | 410,774 | 411,587 | ||||
1.80%, 01/18/053 | 272,872 | 270,975 | ||||
1.80%, 01/19/053 | 293,410 | 291,356 | ||||
2.06%, 05/31/053 | 292,548 | 287,994 |
SCHEDULESOF INVESTMENTS | 61 |
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2004
Security | Principal | Value | |||||
Federal National Mortgage Association | |||||||
2.33%, 07/22/053 | $ | 880,231 | $ | 861,812 | |||
2,123,724 | |||||||
MEDIUM-TERM NOTES – 0.28% | |||||||
CC USA Inc. | |||||||
1.29%, 04/15/053,4 | 586,820 | 586,784 | |||||
1.51%, 02/15/053,4 | 381,433 | 381,705 | |||||
Dorada Finance Inc. | |||||||
1.48%, 01/18/053,4 | 440,115 | 440,107 | |||||
K2 USA LLC | |||||||
1.46%, 01/12/053,4 | 293,410 | 293,400 | |||||
WhistleJacket Capital LLC | |||||||
1.32%, 02/04/053,4 | 146,705 | 146,693 | |||||
1,848,689 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 80,677,753 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 111.61% | 726,872,560 | ||||||
Other Assets, Less Liabilities – (11.61%) | (75,622,510 | ) | |||||
NET ASSETS – 100.00% | $ | 651,250,050 | |||||
1 | All or a portion of this security represents a security on loan. See Note 5. |
2 | Non-income earning security. |
3 | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
4 | Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
5 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
6 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Financial | 45.11 | % | $ | 293,756,609 | ||
Communications | 11.16 | 72,712,320 | ||||
Basic Materials | 10.61 | 69,112,502 | ||||
Industrial | 8.68 | 56,534,840 | ||||
Consumer Non-Cyclical | 6.11 | 39,815,358 | ||||
Diversified | 5.25 | 34,180,603 | ||||
Consumer Cyclical | 5.05 | 32,886,644 | ||||
Utilities | 4.78 | 31,133,454 | ||||
Energy | 1.90 | 12,362,662 | ||||
Technology | 0.57 | 3,699,815 | ||||
Short-Term and Other Net Assets | 0.78 | 5,055,243 | ||||
TOTAL | 100.00 | % | $ | 651,250,050 | ||
See notes to financial statements.
62 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments
iSHARES® MSCI SINGAPORE INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.08% | |||||
AIRLINES – 3.98% | |||||
Singapore Airlines Ltd. | 1,044,000 | $ | 6,767,147 | ||
6,767,147 | |||||
BANKS – 36.63% | |||||
DBS Group Holdings Ltd.1 | 2,610,000 | 23,776,461 | |||
Oversea-Chinese Banking Corp. Ltd. | 2,349,000 | 18,243,861 | |||
United Overseas Bank Ltd. | 2,610,000 | 20,270,957 | |||
62,291,279 | |||||
BEVERAGES – 2.51% | |||||
Fraser & Neave Ltd. | 522,000 | 4,267,570 | |||
4,267,570 | |||||
COMPUTERS – 0.98% | |||||
Creative Technology Ltd.1 | 156,600 | 1,673,497 | |||
1,673,497 | |||||
DISTRIBUTION & WHOLESALE – 0.62% | |||||
Jardine Cycle & Carriage Ltd.1 | 261,000 | 1,059,272 | |||
1,059,272 | |||||
DIVERSIFIED FINANCIAL SERVICES – 2.23% | |||||
Singapore Exchange Ltd. | 3,654,000 | 3,798,137 | |||
3,798,137 | |||||
ELECTRONICS – 3.05% | |||||
Venture Corp. Ltd. | 522,000 | 5,182,049 | |||
5,182,049 | |||||
ENGINEERING & CONSTRUCTION – 4.30% | |||||
SembCorp Industries Ltd. | 2,871,000 | 2,196,274 | |||
Singapore Technologies Engineering Ltd.1 | 4,176,000 | 5,121,084 | |||
7,317,358 | |||||
HEALTH CARE – SERVICES – 0.92% | |||||
Parkway Holdings Ltd. | 2,088,000 | 1,560,711 | |||
1,560,711 | |||||
HOLDING COMPANIES – DIVERSIFIED – 4.71% | |||||
Haw Par Corp. Ltd. | 522,000 | 1,524,132 | |||
Keppel Corp. Ltd.1 | 1,566,000 | 6,492,803 | |||
8,016,935 | |||||
LODGING – 0.65% | |||||
Overseas Union Enterprise Ltd. | 261,000 | 1,097,375 | |||
1,097,375 | |||||
MEDIA – 4.65% | |||||
Singapore Press Holdings Ltd. | 3,132,000 | 7,901,101 | |||
7,901,101 | |||||
REAL ESTATE – 9.02% | |||||
Allgreen Properties Ltd. | 2,349,000 | 1,454,022 | |||
Capitaland Ltd.1 | 3,393,000 | 3,150,381 | |||
City Developments Ltd. | 1,566,000 | 5,806,943 | |||
Keppel Land Ltd.1 | 1,305,000 | 1,371,719 | |||
Singapore Land Ltd. | 522,000 | 1,322,947 | |||
United Overseas Land Ltd.1 | 1,305,000 | 1,691,787 | |||
Wing Tai Holdings Ltd.1 | 1,044,000 | 545,639 | |||
15,343,438 | |||||
REAL ESTATE INVESTMENT TRUSTS – 1.86% | |||||
Ascendas Real Estate Investment Trust | 1,566,000 | 1,371,719 | |||
CapitaMall Trust | 1,827,000 | 1,792,379 | |||
3,164,098 | |||||
SEMICONDUCTORS – 2.09% | |||||
Chartered Semiconductor Manufacturing Ltd.1,2 | 2,871,000 | 1,827,434 | |||
STATS ChipPAC Ltd.1,2 | 2,610,000 | 1,722,269 | |||
3,549,703 | |||||
SHIPBUILDING – 0.82% | |||||
SembCorp Marine Ltd. | 2,349,000 | 1,399,153 | |||
1,399,153 | |||||
TELECOMMUNICATIONS – 12.05% | |||||
Datacraft Asia Ltd.1,2 | 783,000 | 591,165 | |||
Singapore Telecommunications Ltd. | 14,877,000 | 19,894,496 | |||
20,485,661 | |||||
TRANSPORTATION – 8.01% | |||||
ComfortDelGro Corp. Ltd. | 5,220,000 | 3,840,813 | |||
Neptune Orient Lines Ltd.1 | 2,871,000 | 4,727,858 | |||
SembCorp Logistics Ltd. | 1,044,000 | 1,329,043 | |||
Singapore Post Ltd. | 4,176,000 | 1,914,310 | |||
SMRT Corp. Ltd. | 4,437,000 | 1,800,762 | |||
13,612,786 | |||||
TOTAL COMMON STOCKS | 168,487,270 |
SCHEDULESOF INVESTMENTS | 63 |
Schedule of Investments (Continued)
iSHARES® MSCI SINGAPORE INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
SHORT-TERM INVESTMENTS – 12.55% | ||||||
FLOATING RATE NOTES – 3.24% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/053,4 | $ | 93,113 | $ | 93,101 | ||
1.52%, 10/12/043,4 | 77,595 | 77,594 | ||||
1.56%, 09/15/043,4 | 155,189 | 155,189 | ||||
1.64%, 03/15/053,4 | 77,595 | 77,628 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/043 | 116,392 | 116,390 | ||||
1.38%, 11/22/043 | 38,797 | 38,798 | ||||
1.40%, 10/29/043 | 155,189 | 155,188 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/053,4 | 155,189 | 155,168 | ||||
1.61%, 07/29/053,4 | 155,189 | 155,147 | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/053 | 155,189 | 155,145 | ||||
1.56%, 08/26/053 | 155,189 | 155,143 | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/053 | 155,189 | 155,190 | ||||
Dorada Finance Inc. | ||||||
1.61%, 07/29/053,4 | 128,807 | 128,772 | ||||
Five Finance Inc. | ||||||
1.42%, 04/29/053,4 | 124,151 | 124,143 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/043 | 77,595 | 77,568 | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/053 | 99,321 | 99,315 | ||||
1.58%, 04/22/053 | 155,189 | 155,190 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/053,4 | 155,189 | 155,174 | ||||
1.57%, 09/27/043,4 | 167,604 | 167,602 | ||||
1.61%, 07/25/053,4 | 77,595 | 77,581 | ||||
Links Finance LLC | ||||||
1.55%, 04/15/053,4 | 155,189 | 155,170 | ||||
1.68%, 04/25/053 | 155,189 | 155,255 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/053 | 155,189 | 155,190 | ||||
1.63%, 12/09/043,4 | 128,807 | 128,230 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/053 | 155,189 | 155,166 | ||||
Security | Shares or Principal | Value | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/053,4 | $ | 147,430 | $ | 147,430 | ||
Permanent Financing PLC | ||||||
1.52%, 03/10/053 | 155,189 | 155,190 | ||||
1.53%, 12/10/043 | 77,595 | 77,595 | ||||
1.55%, 06/10/053 | 69,835 | 69,835 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/043 | 155,189 | 155,186 | ||||
1.57%, 11/15/043 | 155,189 | 155,187 | ||||
1.59%, 09/15/053 | 116,392 | 116,402 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/053,4 | 56,954 | 56,951 | ||||
1.56%, 01/18/053,4 | 68,283 | 68,281 | ||||
1.59%, 07/25/053,4 | 155,189 | 155,175 | ||||
1.66%, 05/17/053,4 | 128,807 | 128,803 | ||||
1.70%, 02/25/053,4 | 86,906 | 86,897 | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/043 | 38,440 | 38,374 | ||||
1.48%, 06/15/053,4 | 77,595 | 77,581 | ||||
1.56%, 09/15/043,4 | 77,595 | 77,594 | ||||
1.56%, 07/15/053,4 | 116,392 | 116,371 | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/053 | 77,595 | 77,580 | ||||
1.55%, 04/15/053,4 | 116,392 | 116,377 | ||||
1.55%, 07/11/053 | 38,797 | 38,794 | ||||
1.56%, 11/15/043,4 | 93,113 | 93,113 | ||||
1.57%, 06/15/053,4 | 63,628 | 63,628 | ||||
1.58%, 03/29/053 | 66,731 | 66,723 | ||||
1.58%, 08/26/053,4 | 77,595 | 77,579 | ||||
1.68%, 05/20/053 | 69,835 | 69,830 | ||||
5,510,513 | ||||||
MONEY MARKET FUNDS – 2.53% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5 | 2,412,796 | 2,412,796 | ||||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5 | 1,707,080 | 1,707,080 | ||||
BlackRock Temp Cash Money Market Fund3 | 78,342 | 78,342 |
64 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI SINGAPORE INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
Short-Term Investment Co. – Prime Money Market Portfolio, Institutional Shares3 | 104,318 | $ | 104,318 | |||
4,302,536 | ||||||
COMMERCIAL PAPER – 2.32% | ||||||
Alpine Securitization Corp. | ||||||
1.50%, 09/08/043 | $ | 77,595 | 77,572 | |||
1.51%, 09/02/043 | 69,835 | 69,832 | ||||
1.54%, 09/14/043 | 77,595 | 77,552 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/043 | 31,038 | 31,029 | ||||
1.53%, 09/16/043 | 76,350 | 76,301 | ||||
1.54%, 09/15/043 | 77,595 | 77,548 | ||||
1.54%, 09/22/043 | 38,797 | 38,762 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/043 | 77,595 | 77,571 | ||||
1.53%, 09/09/043 | 181,247 | 181,185 | ||||
1.53%, 09/13/043 | 111,730 | 111,673 | ||||
1.53%, 09/14/043 | 38,797 | 38,776 | ||||
1.54%, 09/17/043 | 46,557 | 46,525 | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/043 | 77,595 | 77,572 | ||||
1.53%, 09/15/043 | 31,038 | 31,019 | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/043 | 31,038 | 31,016 | ||||
Corporate Asset Funding | ||||||
1.42%, 09/03/043 | 46,557 | 46,553 | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/043 | 77,595 | 77,588 | ||||
Delaware Funding Corp. | ||||||
1.50%, 09/09/043 | 77,595 | 77,569 | ||||
1.53%, 09/10/043 | 124,151 | 124,104 | ||||
1.53%, 09/20/043 | 52,764 | 52,722 | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/043 | 77,595 | 77,548 | ||||
1.45%, 11/09/043 | 155,189 | 154,758 | ||||
1.52%, 09/08/043 | 155,189 | 155,143 | ||||
1.59%, 12/02/043 | 155,189 | 154,559 | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/043 | 46,557 | 46,553 | ||||
1.53%, 09/07/043 | 77,595 | 77,575 | ||||
Security | Principal | Value | ||||
1.53%, 09/17/043 | $ | 46,557 | $ | 46,525 | ||
1.53%, 09/21/043 | 38,797 | 38,764 | ||||
1.53%, 09/22/043 | 77,595 | 77,525 | ||||
1.54%, 09/14/043 | 116,392 | 116,327 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/053 | 77,595 | 77,056 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/043 | 77,595 | 77,568 | ||||
1.55%, 10/15/043 | 101,765 | 101,572 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/043 | 155,189 | 154,913 | ||||
1.44%, 10/27/043 | 155,189 | 154,841 | ||||
1.59%, 11/30/043 | 77,595 | 77,286 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/043 | 38,797 | 38,796 | ||||
1.53%, 09/20/043 | 38,797 | 38,766 | ||||
1.53%, 09/23/043 | 54,316 | 54,266 | ||||
1.54%, 09/15/043 | 93,113 | 93,058 | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/043 | 108,151 | 108,151 | ||||
1.51%, 09/08/043 | 62,076 | 62,057 | ||||
1.52%, 09/09/043 | 38,797 | 38,784 | ||||
1.53%, 09/21/043 | 77,595 | 77,529 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/043 | 46,557 | 46,531 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/043 | 85,354 | 85,355 | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/043 | 51,647 | 51,555 | ||||
1.55%, 09/16/043 | 46,557 | 46,527 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
1.54%, 09/15/043 | 62,076 | 62,038 | ||||
1.54%, 09/23/043 | 38,797 | 38,761 | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/043 | 38,797 | 38,784 | ||||
1.52%, 09/10/043 | 54,316 | 54,296 | ||||
3,946,236 |
SCHEDULESOF INVESTMENTS | 65 |
Schedule of Investments (Continued)
iSHARES® MSCI SINGAPORE INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
TIME DEPOSITS – 2.04% | ||||||
Abbey National Treasury Services PLC | ||||||
1.25%, 01/06/053 | $ | 155,189 | $ | 155,190 | ||
1.33%, 02/10/053 | 77,595 | 77,589 | ||||
1.39%, 02/02/053 | 77,595 | 77,590 | ||||
1.39%, 04/08/053 | 108,632 | 108,623 | ||||
1.40%, 10/25/043 | 155,189 | 155,186 | ||||
Bank of New York | ||||||
1.39%, 11/01/043 | 155,189 | 155,187 | ||||
1.60%, 12/03/043 | 38,797 | 38,792 | ||||
Bank of Nova Scotia | ||||||
1.13%, 10/06/043 | 155,189 | 155,190 | ||||
1.24%, 10/07/043 | 116,392 | 116,391 | ||||
1.42%, 10/29/043 | 116,392 | 116,393 | ||||
National City Bank (Cleveland, Ohio) | ||||||
1.25%, 01/06/053 | 155,189 | 155,192 | ||||
1.49%, 08/09/053 | 155,189 | 155,145 | ||||
1.54%, 06/23/053 | 155,189 | 155,151 | ||||
1.56%, 06/10/053 | 77,595 | 77,613 | ||||
Norddeutsche Landesbank | ||||||
1.59%, 07/27/053 | 155,189 | 155,140 | ||||
Prudential Funding LLC | ||||||
1.60%, 12/01/043 | 77,595 | 77,281 | ||||
SouthTrust Bank | ||||||
1.55%, 09/01/043 | 310,378 | 310,379 | ||||
Toronto-Dominion Bank | ||||||
1.22%, 03/23/053 | 271,581 | 271,554 | ||||
1.34%, 02/10/053 | 62,076 | 62,072 | ||||
1.41%, 11/01/043 | 116,392 | 116,390 | ||||
1.53%, 09/13/043 | 77,595 | 77,595 | ||||
1.77%, 05/10/053 | 77,595 | 77,589 | ||||
1.90%, 05/11/053 | 77,595 | 77,589 | ||||
UBS Finance (Delaware) | ||||||
1.10%, 09/08/043 | 155,189 | 155,156 | ||||
1.11%, 12/17/043 | 232,784 | 232,016 | ||||
1.14%, 09/29/043 | 155,189 | 155,053 | ||||
3,467,046 | ||||||
REPURCHASE AGREEMENTS – 1.80% | ||||||
Banc of America Securities LLC | ||||||
1.59%, 09/01/043,6 | 465,567 | 465,567 | ||||
Bank of America, N.A. | ||||||
1.59%, 09/01/043,6 | 892,338 | 892,338 | ||||
Goldman Sachs & Co. | ||||||
1.59%, 09/01/043,6 | 775,946 | 775,946 | ||||
Merrill Lynch Government Securities Inc. | ||||||
1.57%, 09/01/043,6 | 155,190 | 155,190 | ||||
1.59%, 09/01/043,6 | 775,946 | 775,946 | ||||
3,064,987 | ||||||
U.S. GOVERNMENT AGENCY NOTES – 0.33% | ||||||
Federal Home Loan Mortgage Corp. | ||||||
1.63%, 04/15/053 | 108,632 | 108,847 | ||||
1.80%, 01/18/053 | 72,163 | 71,662 | ||||
1.80%, 01/19/053 | 77,595 | 77,051 | ||||
2.06%, 05/31/053 | 77,366 | 76,162 | ||||
Federal National Mortgage Association | ||||||
2.33%, 07/22/053 | 232,784 | 227,913 | ||||
561,635 | ||||||
MEDIUM-TERM NOTES – 0.29% | ||||||
CC USA Inc. | ||||||
1.29%, 04/15/053,4 | 155,189 | 155,179 | ||||
1.51%, 02/15/053,4 | 100,873 | 100,945 | ||||
Dorada Finance Inc. | ||||||
1.48%, 01/18/053,4 | 116,392 | 116,390 | ||||
K2 USA LLC | ||||||
1.46%, 01/12/053,4 | 77,595 | 77,592 | ||||
WhistleJacket Capital LLC | ||||||
1.32%, 02/04/053,4 | 38,797 | 38,784 | ||||
488,890 | ||||||
TOTAL SHORT-TERM INVESTMENTS | 21,341,843 | |||||
66 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI SINGAPORE INDEX FUND
August 31, 2004
Security | Value | |||
TOTAL INVESTMENTS IN SECURITIES – 111.63% | $ | 189,829,113 | ||
Other Assets, Less Liabilities – (11.63%) | (19,782,603 | ) | ||
NET ASSETS – 100.00% | $ | 170,046,510 | ||
1 | All or a portion of this security represents a security on loan. See Note 5. |
2 | Non-income earning security. |
3 | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
4 | Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
5 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
6 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Financial | 49.74 | % | $ | 84,596,952 | ||
Communications | 16.70 | 28,386,762 | ||||
Industrial | 16.18 | 27,511,346 | ||||
Consumer Cyclical | 5.25 | 8,923,794 | ||||
Diversified | 4.71 | 8,016,935 | ||||
Consumer Non-Cyclical | 3.43 | 5,828,281 | ||||
Technology | 3.07 | 5,223,200 | ||||
Short-Term and Other Net Assets | 0.92 | 1,559,240 | ||||
TOTAL | 100.00 | % | $ | 170,046,510 | ||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 67 |
Schedule of Investments
iSHARES® MSCI SOUTH AFRICA INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.68% | |||||
BANKS – 10.41% | |||||
FirstRand Ltd. | 2,223,794 | $ | 3,571,434 | ||
Nedcor Ltd. | 14,247 | 119,883 | |||
Standard Bank Group Ltd. | 896,055 | 5,975,719 | |||
9,667,036 | |||||
DISTRIBUTION & WHOLESALE – 0.57% | |||||
Metro Cash & Carry Ltd.1 | 1,345,953 | 525,743 | |||
525,743 | |||||
DIVERSIFIED FINANCIAL SERVICES – 1.69% | |||||
African Bank Investments Ltd. | 339,936 | 604,671 | |||
Alexander Forbes Ltd. | 278,070 | 450,761 | |||
Investec Ltd. | 28,489 | 509,453 | |||
1,564,885 | |||||
ELECTRONICS – 0.35% | |||||
Reunert Ltd. | 83,390 | 328,236 | |||
328,236 | |||||
ENGINEERING & CONSTRUCTION – 0.56% | |||||
Aveng Ltd. | 153,109 | 186,318 | |||
Murray & Roberts Holdings Ltd. | 182,482 | 337,206 | |||
523,524 | |||||
FOOD – 2.50% | |||||
Shoprite Holdings Ltd. | 342,875 | 489,361 | |||
Tiger Brands Ltd. | 127,778 | 1,835,204 | |||
2,324,565 | |||||
FOREST PRODUCTS & PAPER – 2.42% | |||||
Sappi Ltd. | 159,991 | 2,251,952 | |||
2,251,952 | |||||
HEALTH CARE – SERVICES – 0.71% | |||||
Network Healthcare Holdings Ltd.1 | 915,213 | 657,235 | |||
657,235 | |||||
HOLDING COMPANIES – DIVERSIFIED – 6.58% | |||||
Anglovaal Industries Ltd. | 266,569 | 816,577 | |||
Barloworld Ltd. | 159,750 | 1,800,000 | |||
Bidvest Group Ltd. | 197,963 | 1,779,994 | |||
Bidvest Group Ltd. Warrants (Expiring 12/8/06)1 | 17,071 | 21,800 | |||
Imperial Holdings Ltd. | 138,849 | 1,601,835 | |||
Tongaat-Hulett Group Ltd. | 13,082 | 89,817 | |||
6,110,023 | |||||
HOME FURNISHINGS – 0.55% | |||||
Steinhoff International Holdings Ltd. | 418,159 | 514,512 | |||
514,512 | |||||
INSURANCE – 10.22% | |||||
Liberty Group Ltd. | 115,785 | 956,721 | |||
New Africa Capital Ltd. | 449,190 | 516,252 | |||
Old Mutual PLC | 2,818,737 | 5,386,567 | |||
Sanlam Ltd. | 1,955,584 | 2,635,356 | |||
9,494,896 | |||||
IRON & STEEL – 1.13% | |||||
Iscor Ltd. | 149,067 | 1,052,567 | |||
1,052,567 | |||||
MEDIA – 1.63% | |||||
Naspers Ltd. | 205,933 | 1,514,739 | |||
1,514,739 | |||||
MINING – 40.14% | |||||
Anglo American Platinum Corp. Ltd. | 49,197 | 2,184,070 | |||
Anglo American PLC | 986,482 | 22,349,143 | |||
AngloGold Ashanti Ltd. | 91,140 | 3,217,713 | |||
Gold Fields Ltd. | 281,387 | 3,413,634 | |||
Harmony Gold Mining Co. Ltd. | 181,970 | 2,241,187 | |||
Impala Platinum Holdings Ltd. | 46,183 | 3,875,036 | |||
37,280,783 | |||||
OIL & GAS – 7.59% | |||||
Sasol Ltd. | 411,385 | 7,045,074 | |||
7,045,074 | |||||
PACKAGING & CONTAINERS – 1.04% | |||||
Nampak Ltd. | 458,490 | 964,336 | |||
964,336 | |||||
RETAIL – 4.88% | |||||
Edgars Consolidated Stores Ltd. | 29,109 | 730,322 | |||
Foschini Ltd. | 166,981 | 604,581 | |||
JD Group Ltd. | 101,866 | 696,323 | |||
Massmart Holdings Ltd. | 112,747 | 591,324 | |||
Pick’n Pay Stores Ltd. | 184,760 | 532,941 | |||
Truworths International Ltd. | 364,901 | 581,101 | |||
Woolworths Holdings Ltd. | 665,725 | 793,119 | |||
4,529,711 |
68 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH AFRICA INDEX FUND
August 31, 2004
Security | Shares | Value | |||
TELECOMMUNICATIONS – 6.71% | |||||
MTN Group Ltd. | 931,067 | $ | 4,266,298 | ||
Telkom South Africa Ltd. | 165,044 | 1,965,031 | |||
6,231,329 | |||||
TOTAL COMMON STOCKS | 92,581,146 | ||||
SHORT-TERM INVESTMENTS – 0.06% | |||||
MONEY MARKET FUNDS – 0.06% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2 | 57,702 | 57,702 | |||
57,702 | |||||
TOTAL SHORT-TERM INVESTMENTS | 57,702 | ||||
TOTAL INVESTMENTS IN SECURITIES – 99.74% | 92,638,848 | ||||
Other Assets, Less Liabilities – 0.26% | 243,358 | ||||
NET ASSETS – 100.00% | $ | 92,882,206 | |||
1 | Non-income earning security. |
2 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Basic Materials | 43.70 | % | $ | 40,585,302 | ||
Financial | 22.31 | 20,726,817 | ||||
Communications | 8.34 | 7,746,068 | ||||
Energy | 7.58 | 7,045,074 | ||||
Diversified | 6.58 | 6,110,023 | ||||
Consumer Cyclical | 6.00 | 5,569,966 | ||||
Consumer Non-Cyclical | 3.21 | 2,981,800 | ||||
Industrial | 1.96 | 1,816,096 | ||||
Short-Term and Other Net Assets | 0.32 | 301,060 | ||||
TOTAL | 100.00 | % | $ | 92,882,206 | ||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 69 |
Schedule of Investments
iSHARES® MSCI SOUTH KOREA INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 98.47% | |||||
ADVERTISING – 0.65% | |||||
Cheil Communications Inc. | 15,660 | $ | 2,046,126 | ||
2,046,126 | |||||
AGRICULTURE – 1.52% | |||||
KT&G Corp. | 187,920 | 4,796,499 | |||
4,796,499 | |||||
AIRLINES – 0.35% | |||||
Korean Air Co. Ltd.1 | 78,300 | 1,108,035 | |||
1,108,035 | |||||
AUTO MANUFACTURERS – 5.47% | |||||
Hyundai Motor Co. Ltd. | 326,250 | 14,133,676 | |||
Kia Motors Corp. | 354,960 | 3,112,468 | |||
17,246,144 | |||||
AUTO PARTS & EQUIPMENT – 3.28% | |||||
Hankook Tire Co. Ltd. | 373,230 | 3,434,682 | |||
Hyundai Mobis Co. | 140,946 | 6,925,853 | |||
10,360,535 | |||||
BANKS – 8.52% | |||||
Hana Bank | 245,733 | 5,514,779 | |||
Kookmin Bank1 | 608,139 | 19,429,192 | |||
Korea Exchange Bank1 | 328,860 | 1,927,165 | |||
26,871,136 | |||||
BEVERAGES – 0.45% | |||||
Hite Brewery Co. Ltd. | 20,880 | 1,432,061 | |||
1,432,061 | |||||
CHEMICALS – 2.90% | |||||
Hanwha Chemical Corp. | 87,560 | 600,533 | |||
Honam Petrochemical Corp. | 39,150 | 1,509,103 | |||
Kumgang Korea Chemical Co. Ltd. | 13,050 | 1,404,870 | |||
LG Chem Ltd. | 99,180 | 3,771,397 | |||
LG Petrochemical Co. Ltd. | 73,080 | 1,690,829 | |||
Samsung Fine Chemicals Co. Ltd. | 13,050 | 172,210 | |||
9,148,942 | |||||
COMMERCIAL SERVICES – 0.66% | |||||
S1 Corp. | 80,910 | 2,082,720 | |||
2,082,720 | |||||
COMPUTERS – 0.00% | |||||
Gateway Inc.1 | 7 | 19 | |||
19 | |||||
COSMETICS & PERSONAL CARE – 0.63% | |||||
Amorepacific Corp. | 10,440 | 1,984,946 | |||
1,984,946 | |||||
DISTRIBUTION & WHOLESALE – 1.32% | |||||
Hyosung Corp. | 5 | 41 | |||
Samsung Corp. | 344,520 | 4,157,510 | |||
4,157,551 | |||||
DIVERSIFIED FINANCIAL SERVICES – 4.51% | |||||
Daewoo Securities Co. Ltd.1 | 148,770 | 446,885 | |||
Daishin Securities Co. Ltd. | 83,520 | 1,044,136 | |||
Dongwon Financial Holding Co. Ltd. | 5 | 26 | |||
Hyundai Securities Co. Ltd.1 | 354,960 | 1,342,059 | |||
LG Investment & Securities Co. Ltd.1 | 193,140 | 1,279,384 | |||
Samsung Securities Co. | 109,620 | 1,884,339 | |||
Shinhan Financial Group Ltd. | 485,460 | 8,218,492 | |||
14,215,321 | |||||
ELECTRIC – 2.69% | |||||
Korea Electric Power Corp. | 482,850 | 8,488,703 | |||
8,488,703 | |||||
ELECTRICAL COMPONENTS & EQUIPMENT – 26.40% | |||||
LG Cable Ltd. | 46,980 | 672,978 | |||
LG Electronics Inc. | 253,176 | 12,088,970 | |||
Samsung Electronics Co. Ltd. | 180,090 | 70,513,166 | |||
83,275,114 | |||||
ELECTRONICS – 7.64% | |||||
Daeduck Electronics Co. Ltd. | 548,141 | 4,596,989 | |||
Samsung Electro-Mechanics Co. Ltd.1 | 281,880 | 7,463,941 | |||
Samsung SDI Co. Ltd. | 117,450 | 12,032,035 | |||
24,092,965 | |||||
ENGINEERING & CONSTRUCTION – 1.29% | |||||
Daelim Industrial Co. Ltd. | 67,860 | 2,577,484 | |||
Daewoo Engineering & Construction Co. Ltd. | 86,130 | 363,782 | |||
LG Engineering & Construction Co. Ltd. | 60,030 | 1,130,921 | |||
4,072,187 |
70 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH KOREA INDEX FUND
August 31, 2004
Security | Shares | Value | |||
FOOD – 1.13% | |||||
Cheil Jedang Corp. | 36,540 | $ | 1,865,305 | ||
Nong Shim Co. Ltd. | 8,172 | 1,709,816 | |||
3,575,121 | |||||
HOLDING COMPANIES – DIVERSIFIED – 0.00% | |||||
GS Holdings Corp.1 | 2 | 37 | |||
LG Corp. | 3 | 40 | |||
77 | |||||
HOME BUILDERS – 0.08% | |||||
Hyundai Development Co. | 23,490 | 255,936 | |||
255,936 | |||||
HOUSEHOLD PRODUCTS & WARES – 0.19% | |||||
LG Household & Health Care Ltd. | 23,490 | 589,366 | |||
589,366 | |||||
INSURANCE – 1.53% | |||||
Samsung Fire & Marine Insurance Co. Ltd. | 80,910 | 4,825,730 | |||
4,825,730 | |||||
INTERNET – 2.45% | |||||
Daum Communications Corp.1 | 36,801 | 1,038,358 | |||
NCsoft Corp.1 | 48,044 | 3,470,296 | |||
NHN Corp. | 37,584 | 3,213,981 | |||
7,722,635 | |||||
IRON & STEEL – 7.13% | |||||
POSCO | 156,600 | 22,500,586 | |||
22,500,586 | |||||
LODGING – 0.94% | |||||
Kangwon Land Inc. | 270,062 | 2,954,188 | |||
2,954,188 | |||||
MACHINERY – DIVERSIFIED – 0.41% | |||||
Daewoo Heavy Industries & Machinery Ltd.1 | 167,040 | 1,293,568 | |||
1,293,568 | |||||
MANUFACTURING – 0.39% | |||||
Cheil Industries Inc. | 91,350 | 1,245,123 | |||
1,245,123 | |||||
MINING – 0.05% | |||||
Poongsan Corp. | 18,270 | 172,890 | |||
172,890 | |||||
OIL & GAS – 3.77% | |||||
SK Corp. | 195,750 | 7,426,553 | |||
S-Oil Corp. | 104,620 | 4,468,728 | |||
11,895,281 | |||||
PHARMACEUTICALS – 0.20% | |||||
Dong-A Pharmaceutical Co. Ltd. | 9 | 128 | |||
YuHan Corp. | 10,756 | 637,787 | |||
637,915 | |||||
RETAIL – 2.30% | |||||
Hyundai Department Store Co. Ltd. | 36,540 | 1,089,681 | |||
Shinsegae Department Store Co. Ltd. | 23,490 | 6,158,771 | |||
7,248,452 | |||||
SHIPBUILDING – 2.24% | |||||
Daewoo Shipbuilding & Marine Engineering Co. Ltd. | 245,340 | 2,758,304 | |||
Hyundai Heavy Industries Co. Ltd. | 114,840 | 2,592,213 | |||
Samsung Heavy Industries Co. Ltd. | 388,890 | 1,711,744 | |||
7,062,261 | |||||
TELECOMMUNICATIONS – 6.85% | |||||
KT Corp. | 229,380 | 7,258,672 | |||
KT Corp. ADR | 101,949 | 1,768,815 | |||
SK Telecom Co. Ltd. | 80,020 | 12,053,193 | |||
SK Telecom Co. Ltd. ADR | 28,971 | 544,655 | |||
21,625,335 | |||||
TRANSPORTATION – 0.53% | |||||
Hanjin Shipping Co. Ltd. | 96,570 | 1,672,589 | |||
1,672,589 | |||||
TOTAL COMMON STOCKS | 310,656,057 | ||||
PREFERRED STOCKS – 1.26% | |||||
AUTO MANUFACTURERS – 0.45% | |||||
Hyundai Motor Co. Ltd. | 60,030 | 1,430,589 | |||
1,430,589 | |||||
ELECTRICAL COMPONENTS & EQUIPMENT – 0.81% | |||||
LG Electronics Inc. | 96,570 | 2,544,515 | |||
2,544,515 | |||||
TOTAL PREFERRED STOCKS | 3,975,104 |
SCHEDULESOF INVESTMENTS | 71 |
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH KOREA INDEX FUND
August 31, 2004
Security | Shares | Value | |||
SHORT-TERM INVESTMENTS – 0.23% | |||||
MONEY MARKET FUNDS – 0.23% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares2 | 720,743 | $ | 720,743 | ||
720,743 | |||||
TOTAL SHORT-TERM INVESTMENTS | 720,743 | ||||
TOTAL INVESTMENTS IN SECURITIES – 99.96% | 315,351,904 | ||||
OTHER ASSETS, LESS LIABILITIES – 0.04% | 111,798 | ||||
NET ASSETS – 100.00% | $ | 315,463,702 | |||
ADR - American Depositary Receipts
1 Non-income earning security.
2 Issuer is an affiliate of the Fund’s investment adviser. See Note 2.
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Industrial | 39.71 | % | $ | 125,258,418 | ||
Financial | 14.56 | 45,912,187 | ||||
Consumer Cyclical | 14.19 | 44,761,430 | ||||
Basic Materials | 10.08 | 31,822,418 | ||||
Communications | 9.95 | 31,394,096 | ||||
Consumer Non-Cyclical | 4.78 | 15,098,628 | ||||
Energy | 3.77 | 11,895,281 | ||||
Utilities | 2.69 | 8,488,703 | ||||
Short-Term and Other Net Assets | 0.27 | 832,541 | ||||
TOTAL | 100.00 | % | $ | 315,463,702 | ||
See notes to financial statements.
72 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments
iSHARES® MSCI TAIWAN INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.31% | |||||
AIRLINES – 0.44% | |||||
China Airlines | 1,539,196 | $ | 809,389 | ||
EVA Airways Corp. | 2,281,273 | 911,437 | |||
1,720,826 | |||||
APPAREL – 0.68% | |||||
Pou Chen Corp. | 2,928,616 | 2,658,468 | |||
2,658,468 | |||||
AUTO MANUFACTURERS – 0.81% | |||||
China Motor Co. Ltd. | 1,464,330 | 1,707,811 | |||
Yulon Motor Co. Ltd. | 1,486,835 | 1,467,616 | |||
3,175,427 | |||||
AUTO PARTS & EQUIPMENT – 0.27% | |||||
Cheng Shin Rubber Industry Co. Ltd. | 804,661 | 1,040,102 | |||
1,040,102 | |||||
BANKS – 11.39% | |||||
Chang Hwa Commercial Bank Ltd.1 | 7,320,446 | 3,978,503 | |||
Chinatrust Financial Holding Co. Ltd. | 10,248,123 | 10,808,097 | |||
E.Sun Financial Holding Co. Ltd. | 1,512,071 | 861,756 | |||
First Financial Holding Co. Ltd.1 | 8,052,050 | 5,606,157 | |||
Hua Nan Financial Holdings Co. Ltd. | 6,913,379 | 4,833,679 | |||
International Bank of Taipei | 3,844,756 | 2,541,334 | |||
Mega Financial Holding Co. Ltd. | 18,300,136 | 11,074,700 | |||
Taishin Financial Holdings Co. Ltd. | 6,230,310 | 4,740,453 | |||
44,444,679 | |||||
BUILDING MATERIALS – 1.09% | |||||
Asia Cement Corp. | 2,342,453 | 1,355,650 | |||
Taiwan Cement Corp. | 3,031,513 | 1,513,975 | |||
Taiwan Glass Industrial Corp. | 1,584,492 | 1,391,784 | |||
4,261,409 | |||||
CHEMICALS – 9.40% | |||||
China Synthetic Rubber Corp.1 | 236 | 76 | |||
Eternal Chemical Co. Ltd. | 732,100 | 443,045 | |||
Formosa Chemicals & Fibre Co. | 4,754,001 | 7,611,429 | |||
Formosa Plastic Co. | 8,052,273 | 12,064,216 | |||
Nan Ya Plastic Corp. | 10,980,571 | 15,161,188 | |||
Oriental Union Chemical Corp. | 845,962 | 839,998 | |||
Taiwan Styrene Monomer Corp. | 732,600 | 544,500 | |||
36,664,452 | |||||
COMMERCIAL SERVICES – 0.19% | |||||
Taiwan Secom Co. Ltd. | 732,486 | 753,144 | |||
753,144 | |||||
COMPUTERS – 9.51% | |||||
Acer Inc. | 4,619,787 | 6,147,954 | |||
Advantech Co. Ltd. | 769,792 | 1,560,389 | |||
Arima Computer Corp.1 | 2,196,600 | 671,112 | |||
Benq Corp. | 4,412,019 | 4,510,525 | |||
CMC Magnetics Corp. | 5,856,400 | 2,890,350 | |||
Compal Electronics Inc. | 5,856,914 | 5,540,324 | |||
Inventec Co. Ltd. | 3,848,525 | 2,057,672 | |||
Lite-On Technology Corp. | 4,392,894 | 4,103,820 | |||
Prodisc Technology Inc. | 967,902 | 483,382 | |||
Quanta Computer Inc. | 4,037,123 | 6,878,764 | |||
Ritek Corp. | 4,506,389 | 1,721,006 | |||
Systex Corp.1 | 1,464,772 | 555,099 | |||
37,120,397 | |||||
DISTRIBUTION & WHOLESALE – 0.00% | |||||
Aurora Corp.1 | 610 | 371 | |||
371 | |||||
DIVERSIFIED FINANCIAL SERVICES – 2.87% | |||||
Fubon Financial Holding Co. Ltd. | 8,052,000 | 7,380,212 | |||
Polaris Securities Co. Ltd. | 777,666 | 365,530 | |||
SinoPac Holdings Co. | 6,898,641 | 3,465,534 | |||
11,211,276 | |||||
ELECTRICAL COMPONENTS & EQUIPMENT – 2.63% | |||||
Delta Electronics Inc. | 2,309,224 | 2,957,761 | |||
Pacific Electric Wire & Cable Co. Ltd.1,2 | 986 | 15 | |||
Phoenixtec Power Co. Ltd. | 734,438 | 765,939 | |||
Tatung Co. Ltd.1 | 8,784,120 | 3,651,448 | |||
Walsin Lihwa Corp.1 | 5,856,779 | 2,873,332 | |||
10,248,495 | |||||
ELECTRONICS – 14.63% | |||||
Asustek Computer Inc. | 4,392,171 | 9,806,257 | |||
AU Optronics Corp. | 8,052,740 | 10,337,977 | |||
Chi Mei Optoelectronics Corp. | 4,392,674 | 5,561,817 | |||
Chunghwa Picture Tubes Ltd.1 | 7,320,873 | 3,182,988 | |||
Compeq Manufacturing Co. Ltd.1 | 1,464,200 | 501,114 | |||
Elitegroup Computer Systems Co. Ltd. | 769,215 | 273,428 | |||
Gigabyte Technology Co. Ltd. | 1,537,921 | 1,915,624 |
SCHEDULEOF INVESTMENTS | 73 |
Schedule of Investments (Continued)
iSHARES® MSCI TAIWAN INDEX FUND
August 31, 2004
Security | Shares | Value | |||
Hon Hai Precision Industry Co. Ltd. | 4,800,773 | $ | 15,725,211 | ||
Micro Star International Co. Ltd. | 807,113 | 647,303 | |||
Picvue Electronics Ltd.1 | 1,464,040 | 341,925 | |||
Quanta Display Inc.1 | 5,124,000 | 2,649,307 | |||
Synnex Technology International Corp. | 1,613,436 | 2,393,611 | |||
WU’S Printed Circuit Co. Ltd. | 754,503 | 367,942 | |||
Ya Hsin Industrial Co. Ltd. | 1,691,347 | 1,575,079 | |||
Yageo Corp.1 | 4,392,100 | 1,825,741 | |||
57,105,324 | |||||
ENGINEERING & CONSTRUCTION – 0.25% | |||||
BES Engineering Corp.1 | 2,196,366 | 319,389 | |||
Continental Engineering Corp. | 1,494,262 | 643,095 | |||
962,484 | |||||
FOOD – 0.78% | |||||
Uni-President Enterprises Co. | 6,588,637 | 3,058,181 | |||
3,058,181 | |||||
FOREST PRODUCTS & PAPER – 0.19% | |||||
Yuen Foong Yu Paper Manufacturing Co. Ltd. | 1,584,320 | 753,995 | |||
753,995 | |||||
HAND & MACHINE TOOLS – 0.11% | |||||
Shihlin Electric & Engineering Corp. | 732,080 | 425,828 | |||
425,828 | |||||
HOME FURNISHINGS – 0.82% | |||||
Nien Made Enterprise Co. Ltd. | 942,560 | 1,481,403 | |||
Sampo Corp. | 2,308,955 | 593,518 | |||
Teco Electric and Machinery Co. Ltd. | 3,660,092 | 1,118,242 | |||
3,193,163 | |||||
INSURANCE – 5.01% | |||||
Cathay Financial Holding Co. Ltd. | 9,517,055 | 16,635,275 | |||
Shin Kong Financial Holding Co. Ltd. | 3,930,153 | 2,897,968 | |||
19,533,243 | |||||
INVESTMENT COMPANIES – 2.33% | |||||
China Development Financial Holding Co.1 | 20,496,338 | 9,092,089 | |||
9,092,089 | |||||
IRON & STEEL – 3.68% | |||||
China Steel Corp. | 15,372,706 | 14,361,106 | |||
Tung Ho Steel Enterprise Corp. | 210 | 176 | |||
14,361,282 | |||||
LEISURE TIME – 0.25% | |||||
Giant Manufacturing Co. Ltd. | 732,914 | 968,893 | |||
968,893 | |||||
MANUFACTURING – 0.17% | |||||
Premier Image Technology Corp. | 769,857 | 678,487 | |||
678,487 | |||||
METAL FABRICATE & HARDWARE – 0.27% | |||||
Yieh Phui Enterprise | 1,464,000 | 1,032,197 | |||
1,032,197 | |||||
MULTIPLE UTILITIES – 0.35% | |||||
Fu Sheng Industrial Co. Ltd. | 883,000 | 1,361,854 | |||
1,361,854 | |||||
OFFICE & BUSINESS EQUIPMENT – 0.25% | |||||
Kinpo Electronics Inc. | 2,376,733 | 987,978 | |||
987,978 | |||||
REAL ESTATE – 0.29% | |||||
Cathay Real Estate Development Co. Ltd. | 2,196,493 | 1,135,672 | |||
1,135,672 | |||||
RETAIL – 0.59% | |||||
Far Eastern Department Stores Co. Ltd. | 160 | 79 | |||
President Chain Store Corp. | 1,562,640 | 2,318,253 | |||
2,318,332 | |||||
SEMICONDUCTORS – 24.45% | |||||
Advanced Semiconductor Engineering Inc.1 | 6,195,727 | 4,513,926 | |||
Macronix International Co. Ltd.1 | 9,516,200 | 2,418,188 | |||
MediaTek Inc. | 1,026,036 | 7,234,096 | |||
Realtek Semiconductor Corp. | 1,541,860 | 1,798,233 | |||
Siliconware Precision Industries Co. Ltd. | 4,035,577 | 2,963,849 | |||
Taiwan Semiconductor Manufacturing Co. Ltd. | 35,136,717 | 48,514,268 | |||
United Microelectronics Corp.1 | 34,003,390 | 23,075,156 | |||
Via Technologies Inc.1 | 2,196,502 | 1,509,934 | |||
Winbond Electronics Corp.1 | 8,052,280 | 3,382,715 | |||
95,410,365 | |||||
TELECOMMUNICATIONS – 3.38% | |||||
Accton Technology Corp.1 | 1,464,259 | 679,650 | |||
Chunghwa Telecom Co. Ltd. | 3,660,000 | 5,806,110 |
74 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI TAIWAN INDEX FUND
August 31, 2004
Security | Shares | Value | |||
D-Link Corp. | 770,853 | $ | 874,117 | ||
Microelectronics Technology Inc.1 | 420 | 160 | |||
Taiwan Cellular Corp. | 4,392,920 | 4,129,655 | |||
Zyxel Communications Corp. | 843,817 | 1,685,651 | |||
13,175,343 | |||||
TEXTILES – 1.12% | |||||
Far Eastern Textile Ltd. | 4,701,807 | 2,790,144 | |||
Formosa Taffeta Co. Ltd. | 2,241,777 | 935,171 | |||
Nien Hsing Textile Co. Ltd. | 732,800 | 630,759 | |||
4,356,074 | |||||
TRANSPORTATION – 1.11% | |||||
Evergreen Marine Corp. Ltd. | 1,464,319 | 1,329,244 | |||
Wan Hai Lines Ltd. | 1,083,986 | 974,441 | |||
Yang Ming Marine Transport Corp. | 2,306,667 | 2,019,350 | |||
4,323,035 | |||||
TOTAL COMMON STOCKS | 387,532,865 | ||||
SHORT-TERM INVESTMENTS – 0.09% | |||||
MONEY MARKET FUNDS – 0.09% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3 | 365,977 | 365,977 | |||
365,977 | |||||
TOTAL SHORT-TERM INVESTMENTS | 365,977 | ||||
TOTAL INVESTMENTS IN SECURITIES – 99.40% | 387,898,842 | ||||
OTHER ASSETS, LESS LIABILITIES – 0.60% | 2,329,235 | ||||
NET ASSETS – 100.00% | $ | 390,228,077 | |||
1 | Non-income earning security. |
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 adviser. See Note 2. |
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Technology | 34.21 | % | $ | 133,518,740 | ||
Financial | 21.89 | 85,416,959 | ||||
Industrial | 20.26 | 79,037,259 | ||||
Basic Materials | 13.27 | 51,779,729 | ||||
Consumer Cyclical | 5.33 | 20,793,510 | ||||
Communications | 3.38 | 13,175,343 | ||||
Consumer Non-Cyclical | 0.97 | 3,811,325 | ||||
Short-Term and Other Net Assets | 0.69 | 2,695,212 | ||||
TOTAL | 100.00 | % | $ | 390,228,077 | ||
See notes to financial statements.
SCHEDULEOF INVESTMENTS | 75 |
Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 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: | ||||||||||||||||||||||||
Unaffiliated issuers | $ | 175,272,548 | $ | 169,496,982 | $ | 262,998,434 | $ | 2,256,200,239 | $ | 459,032,910 | $ | 183,174,054 | ||||||||||||
Affiliates of the investment adviser | $ | 4,000,684 | $ | 980,912 | $ | 199,282 | $ | 112,910,276 | $ | 11,112,450 | $ | 393,844 | ||||||||||||
Foreign currency, at cost | $ | 310,049 | $ | — | $ | 725,559 | $ | 2,569,044 | $ | 588,089 | $ | — | ||||||||||||
Investments in securities, at value (including securities on loana) (Note 1): | ||||||||||||||||||||||||
Unaffiliated issuers | $ | 193,975,799 | $ | 207,713,393 | $ | 324,498,457 | $ | 2,284,611,027 | $ | 495,203,513 | $ | 223,837,080 | ||||||||||||
Affiliates of the investment adviser | 4,000,684 | 980,912 | 199,282 | 112,641,397 | 11,112,450 | 393,844 | ||||||||||||||||||
Foreign currency, at value | 310,023 | — | 727,279 | 2,516,769 | 588,061 | — | ||||||||||||||||||
Receivables: | ||||||||||||||||||||||||
Investment securities sold | 306,342 | — | 962,038 | 1,660,304 | — | 438,014 | ||||||||||||||||||
Dividends and interest | 1,275,022 | 1,056,398 | 383,680 | 4,520,610 | 878,703 | 225,259 | ||||||||||||||||||
Reimbursement of distribution fees | — | — | 91,294 | — | — | — | ||||||||||||||||||
Total Assets | 199,867,870 | 209,750,703 | 326,862,030 | 2,405,950,107 | 507,782,727 | 224,894,197 | ||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Payables: | ||||||||||||||||||||||||
Investment securities purchased | 237,477 | — | 1,245,753 | 1,115,767 | — | 437,979 | ||||||||||||||||||
Collateral for securities on loan (Note 5) | 20,455,679 | — | — | 443,853,797 | 57,447,396 | — | ||||||||||||||||||
Investment advisory fees (Note 2) | 176,288 | 247,119 | 318,462 | 2,384,193 | 412,538 | 238,105 | ||||||||||||||||||
Total Liabilities | 20,869,444 | 247,119 | 1,564,215 | 447,353,757 | 57,859,934 | 676,084 | ||||||||||||||||||
NET ASSETS | $ | 178,998,426 | $ | 209,503,584 | $ | 325,297,815 | $ | 1,958,596,350 | $ | 449,922,793 | $ | 224,218,113 | ||||||||||||
Net assets consist of: | ||||||||||||||||||||||||
Paid-in capital | $ | 167,552,582 | $ | 226,966,877 | $ | 275,892,723 | $ | 1,931,226,972 | $ | 420,462,955 | $ | 216,015,575 | ||||||||||||
Undistributed net investment income | 3,368,610 | 4,543,117 | 1,875,638 | 24,561,384 | 8,931,316 | 2,754,991 | ||||||||||||||||||
Accumulated net realized loss | (10,620,148 | ) | (60,232,239 | ) | (13,972,850 | ) | (25,258,562 | ) | (15,642,028 | ) | (35,215,479 | ) | ||||||||||||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies | 18,697,382 | 38,225,829 | 61,502,304 | 28,066,556 | 36,170,550 | 40,663,026 | ||||||||||||||||||
NET ASSETS | $ | 178,998,426 | $ | 209,503,584 | $ | 325,297,815 | $ | 1,958,596,350 | $ | 449,922,793 | $ | 224,218,113 | ||||||||||||
Shares outstanding | 13,200,000 | 12,350,000 | 22,700,000 | 12,100,000 | 41,250,000 | 34,275,000 | ||||||||||||||||||
Net asset value per share | $ | 13.56 | $ | 16.96 | $ | 14.33 | $ | 161.87 | $ | 10.91 | $ | 6.54 | ||||||||||||
a | Securities on loan with market values of $19,423,901, $-, $-, $420,759,267, $54,155,831 and $-, respectively. See Note 5. |
See notes to financial statements.
76 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 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: | ||||||||||||||||||||||||
Unaffiliated issuers | $ | 137,325,177 | $ | 645,426,801 | $ | 165,574,461 | $ | 66,324,470 | $ | 264,336,055 | $ | 378,436,735 | ||||||||||||
Affiliates of the investment adviser | $ | 85,281 | $ | 15,555,901 | $ | 4,119,876 | $ | 57,702 | $ | 720,743 | $ | 365,977 | ||||||||||||
Foreign currency, at cost | $ | 333,494 | $ | 2,417,494 | $ | 1,421,098 | $ | 186,632 | $ | — | $ | 3,200,196 | ||||||||||||
Investments in securities, at value (including securities on loana) (Note 1): | ||||||||||||||||||||||||
Unaffiliated issuers | $ | 129,536,463 | $ | 711,316,659 | $ | 185,709,237 | $ | 92,581,146 | $ | 314,631,161 | $ | 387,532,865 | ||||||||||||
Affiliates of the investment adviser | 85,281 | 15,555,901 | 4,119,876 | 57,702 | 720,743 | 365,977 | ||||||||||||||||||
Foreign currency, at value | 333,494 | 2,421,227 | 1,421,988 | 178,099 | — | 3,192,836 | ||||||||||||||||||
Cash | — | — | — | — | 587 | — | ||||||||||||||||||
Receivables: | ||||||||||||||||||||||||
Investment securities sold | — | 4,344,276 | 2,365,582 | 833,470 | — | 409,827 | ||||||||||||||||||
Dividends and interest | 5,271 | 3,537,484 | 368,820 | 183,843 | 71,054 | 2,238,753 | ||||||||||||||||||
Capital shares sold | 5,876 | — | — | — | 389,987 | — | ||||||||||||||||||
Reimbursement of distribution fees | — | — | — | — | — | 98,218 | ||||||||||||||||||
Total Assets | 129,966,385 | 737,175,547 | 193,985,503 | 93,834,260 | 315,813,532 | 393,838,476 | ||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Payables: | ||||||||||||||||||||||||
Investment securities purchased | 202,778 | 5,013,042 | 2,436,120 | 839,035 | — | 2,747,106 | ||||||||||||||||||
Collateral for securities on loan (Note 5) | — | 80,370,106 | 21,254,482 | — | — | — | ||||||||||||||||||
Foreign taxes on stock dividends | — | — | — | — | — | 385,073 | ||||||||||||||||||
Investment advisory fees (Note 2) | 140,828 | 542,349 | 137,990 | 113,019 | 349,830 | 478,220 | ||||||||||||||||||
Custodian fees | — | — | 2,167 | — | — | — | ||||||||||||||||||
Accrued expenses | — | — | 108,234 | — | — | — | ||||||||||||||||||
Total Liabilities | 343,606 | 85,925,497 | 23,938,993 | 952,054 | 349,830 | 3,610,399 | ||||||||||||||||||
NET ASSETS | $ | 129,622,779 | $ | 651,250,050 | $ | 170,046,510 | $ | 92,882,206 | $ | 315,463,702 | $ | 390,228,077 | ||||||||||||
Net assets consist of: | ||||||||||||||||||||||||
Paid-in capital | $ | 143,246,119 | $ | 578,544,440 | $ | 165,222,145 | $ | 66,156,734 | $ | 286,230,625 | $ | 436,584,410 | ||||||||||||
Undistributed net investment income | 1,235,457 | 14,410,596 | 4,042,788 | 1,344,870 | 1,634,773 | 4,632,113 | ||||||||||||||||||
Accumulated net realized loss | (7,069,227 | ) | (7,584,156 | ) | (19,353,521 | ) | (866,231 | ) | (22,696,802 | ) | (60,074,566 | ) | ||||||||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | (7,789,570 | ) | 65,879,170 | 20,135,098 | 26,246,833 | 50,295,106 | 9,086,120 | |||||||||||||||||
NET ASSETS | $ | 129,622,779 | $ | 651,250,050 | $ | 170,046,510 | $ | 92,882,206 | $ | 315,463,702 | $ | 390,228,077 | ||||||||||||
Shares outstanding | 6,700,000 | 8,600,000 | 26,100,000 | 1,550,000 | 13,050,000 | 36,600,000 | ||||||||||||||||||
Net asset value per share | $ | 19.35 | $ | 75.73 | $ | 6.52 | $ | 59.92 | $ | 24.17 | $ | 10.66 | ||||||||||||
a | Securities on loan with market values of $-, $76,033,491, $19,855,109, $-, $- and $-, respectively. See Note 5. |
See notes to financial statements.
FINANCIAL STATEMENTS | 77 |
Statements of Operations
iSHARES®, INC.
Year Ended August 31, 2004
iShares MSCI | ||||||||||||||||||||||||
Australia Index Fund | Brazil Index Fund | Canada Index Fund | Emerging Index Fund | Hong Kong Index Fund | Malaysia Index Fund | |||||||||||||||||||
NET INVESTMENT INCOME | ||||||||||||||||||||||||
Dividendsa | $ | 6,459,328 | $ | 10,949,012 | $ | 5,303,731 | $ | 37,752,347b | $ | 14,855,386 | $ | 5,523,994 | ||||||||||||
Interestb | 1,440 | 7,763 | 2,115 | 21,011 | 2,312 | 4,561 | ||||||||||||||||||
Securities lending incomeb | 35,332 | — | — | 1,612,316 | 208,399 | — | ||||||||||||||||||
Total investment income | 6,496,100 | 10,956,775 | 5,305,846 | 39,385,674 | 15,066,097 | 5,528,555 | ||||||||||||||||||
EXPENSES (Note 2) | ||||||||||||||||||||||||
Investment advisory fees | 915,983 | 1,782,540 | 2,058,670 | 10,195,674 | 2,474,937 | 1,177,810 | ||||||||||||||||||
Distribution fees | 314,500 | 518,750 | 739,089 | — | 876,349 | 399,705 | ||||||||||||||||||
Stock dividend taxes | — | — | — | 302,416 | — | — | ||||||||||||||||||
Total expenses | 1,230,483 | 2,301,290 | 2,797,759 | 10,498,090 | 3,351,286 | 1,577,515 | ||||||||||||||||||
Less reimbursement of distribution fees | — | — | (331,405 | ) | — | — | — | |||||||||||||||||
Net expenses | 1,230,483 | 2,301,290 | 2,466,354 | 10,498,090 | 3,351,286 | 1,577,515 | ||||||||||||||||||
Net investment income | 5,265,617 | 8,655,485 | 2,839,492 | 28,887,584 | 11,714,811 | 3,951,040 | ||||||||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||||||||||
Investments | (1,769,194 | ) | 45,418,023 | (7,647,811 | ) | (24,783,142 | ) | (1,023,760 | ) | (8,023,460 | ) | |||||||||||||
In-kind redemptions | 11,407,062 | — | 100,774,741 | 59,382,027 | 24,557,258 | — | ||||||||||||||||||
Foreign currency transactions | 48,557 | (310,291 | ) | 80,273 | (30,236 | ) | 6,585 | (9,152 | ) | |||||||||||||||
Net realized gain (loss) | 9,686,425 | 45,107,732 | 93,207,203 | 34,568,649 | 23,540,083 | (8,032,612 | ) | |||||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||||||
Investments | 7,651,304 | 22,990,386 | (24,883,855 | ) | (1,667,217 | ) | 25,672,038 | 10,040,748 | ||||||||||||||||
Translation of assets and liabilities in foreign currencies | 5 | 33,892 | 2,118 | (73,121 | ) | 31 | — | |||||||||||||||||
Net change in unrealized appreciation (depreciation) | 7,651,309 | 23,024,278 | (24,881,737 | ) | (1,740,338 | ) | 25,672,069 | 10,040,748 | ||||||||||||||||
Net realized and unrealized gain | 17,337,734 | 68,132,010 | 68,325,466 | 32,828,311 | 49,212,152 | 2,008,136 | ||||||||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 22,603,351 | $ | 76,787,495 | $ | 71,164,958 | $ | 61,715,895 | $ | 60,926,963 | $ | 5,959,176 | ||||||||||||
a | Net of foreign withholding tax of $52,607, $1,470,957, $935,953, $4,547,228, $- and $1,676,097, respectively. |
b | Includes income earned from affiliates of the Funds’ investment adviser. See Note 2. |
See notes to financial statements.
78 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Statements of Operations (Continued)
iSHARES®, INC.
Year Ended August 31, 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 | $ | 2,218,004 | $ | 22,120,292 | $ | 6,814,159 | $ | 2,781,059 | $ | 4,530,372 | $ | 9,206,062 | ||||||||||||
Interestb | 726 | 3,144 | 1,096 | 209 | 3,956 | 1,871 | ||||||||||||||||||
Securities lending incomeb | — | 144,332 | 71,380 | — | — | — | ||||||||||||||||||
Total investment income | 2,218,730 | 22,267,768 | 6,886,635 | 2,781,268 | 4,534,328 | 9,207,933 | ||||||||||||||||||
EXPENSES (Note 2) | ||||||||||||||||||||||||
Investment advisory fees | 598,057 | 2,664,892 | 751,097 | 647,324 | 1,851,713 | 2,810,061 | ||||||||||||||||||
Distribution fees | 194,535 | — | 328,530 | 180,539 | 507,356 | 787,666 | ||||||||||||||||||
Custodian fees and expenses | — | — | 111,362 | — | — | — | ||||||||||||||||||
Directors’ fees | — | — | 4,985 | — | — | — | ||||||||||||||||||
Professional fees | — | — | 28,837 | — | — | — | ||||||||||||||||||
Federal and state registration fees | — | — | 1,669 | — | — | — | ||||||||||||||||||
Insurance | — | — | 1,524 | — | — | — | ||||||||||||||||||
Printing | — | — | 34,904 | — | — | — | ||||||||||||||||||
AMEX listing fee | — | — | 450 | — | — | — | ||||||||||||||||||
Stock dividend taxes | — | — | — | — | 1,580 | 1,020,279 | ||||||||||||||||||
Total expenses | 792,592 | 2,664,892 | 1,263,358 | 827,863 | 2,360,649 | 4,618,006 | ||||||||||||||||||
Less reimbursement of distribution fees | — | — | — | — | — | (98,218 | ) | |||||||||||||||||
Net expenses | 792,592 | 2,664,892 | 1,263,358 | 827,863 | 2,360,649 | 4,519,788 | ||||||||||||||||||
Net investment income | 1,426,138 | 19,602,876 | 5,623,277 | 1,953,405 | 2,173,679 | 4,688,145 | ||||||||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||||||||||
Investments | (163,467 | ) | (4,591,423 | ) | (4,108,531 | ) | (438,406 | ) | (14,435,168 | ) | (20,138,794 | ) | ||||||||||||
In-kind redemptions | 10,599,999 | 17,435,458 | 4,389,133 | 7,768,296 | — | — | ||||||||||||||||||
Foreign currency transactions | 286 | 51,192 | (16,112 | ) | (13,440 | ) | 133,044 | (56,032 | ) | |||||||||||||||
Net realized gain (loss) | 10,436,818 | 12,895,227 | 264,490 | 7,316,450 | (14,302,124 | ) | (20,194,826 | ) | ||||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||||||
Investments | (648,455 | ) | 43,122,222 | 23,413,236 | 13,796,315 | 4,228,087 | (8,410,390 | ) | ||||||||||||||||
Translation of assets and liabilities in foreign currencies | 3,551 | (4,594 | ) | 206 | (11,584 | ) | — | (17,075 | ) | |||||||||||||||
Net change in unrealized appreciation (depreciation) | (644,904 | ) | 43,117,628 | 23,413,442 | 13,784,731 | 4,228,087 | (8,427,465 | ) | ||||||||||||||||
Net realized and unrealized gain (loss) | 9,791,914 | 56,012,855 | 23,677,932 | 21,101,181 | (10,074,037 | ) | (28,622,291 | ) | ||||||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 11,218,052 | $ | 75,615,731 | $ | 29,301,209 | $ | 23,054,586 | $ | (7,900,358 | ) | $ | (23,934,146 | ) | ||||||||||
a | Net of foreign withholding tax of $-, $764,179, $1,298,086, $57,040, $895,875 and $2,272,445, respectively. |
b | Includes income earned from affiliates of the Funds’ investment adviser. See Note 2. |
See notes to financial statements.
FINANCIAL STATEMENTS | 79 |
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 year ended | For the year ended | For the year ended | For the year ended | For the year ended | For the year ended | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income | $ | 5,265,617 | $ | 2,634,052 | $ | 8,655,485 | $ | 2,200,072 | $ | 2,839,492 | $ | 4,043,853 | ||||||||||||
Net realized gain (loss) | 9,686,425 | 3,417,876 | 45,107,732 | (38,109,067 | ) | 93,207,203 | 43,873,019 | |||||||||||||||||
Net change in unrealized appreciation (depreciation) | 7,651,309 | 12,038,862 | 23,024,278 | 53,071,314 | (24,881,737 | ) | 100,028,939 | |||||||||||||||||
Net increase in net assets resulting from operations | 22,603,351 | 18,090,790 | 76,787,495 | 17,162,319 | 71,164,958 | 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 | 106,224,512 | 8,283,804 | 265,754,092 | 52,276,580 | 98,535,887 | 505,287,212 | ||||||||||||||||||
Cost of shares redeemed | (32,899,563 | ) | (13,383,892 | ) | (230,355,301 | ) | (49,458,528 | ) | (343,415,496 | ) | (215,179,302 | ) | ||||||||||||
Net increase (decrease) in net assets from capital share transactions | 73,324,949 | (5,100,088 | ) | 35,398,791 | 2,818,052 | (244,879,609 | ) | 290,107,910 | ||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | 91,457,661 | 10,810,018 | 106,468,973 | 19,246,821 | (178,108,999 | ) | 436,986,391 | |||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 87,540,765 | 76,730,747 | 103,034,611 | 83,787,790 | 503,406,814 | 66,420,423 | ||||||||||||||||||
End of year | $ | 178,998,426 | $ | 87,540,765 | $ | 209,503,584 | $ | 103,034,611 | $ | 325,297,815 | $ | 503,406,814 | ||||||||||||
Undistributed net investment income included in net assets at end of year | $ | 3,368,610 | $ | 2,067,131 | $ | 4,543,117 | $ | 1,915,236 | $ | 1,875,638 | $ | 3,350,221 | ||||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 8,000,000 | 800,000 | 18,600,000 | 5,350,000 | 7,200,000 | 53,800,000 | ||||||||||||||||||
Shares redeemed | (2,600,000 | ) | (1,200,000 | ) | (14,700,000 | ) | (7,000,000 | ) | (25,600,000 | ) | (19,700,000 | ) | ||||||||||||
Net increase (decrease) in shares outstanding | 5,400,000 | (400,000 | ) | 3,900,000 | (1,650,000 | ) | (18,400,000 | ) | 34,100,000 | |||||||||||||||
See notes to financial statements.
80 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 year ended | For the Period to August 31, 2003 | For the year ended | For the year ended | For the year ended | For the year ended | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income | $ | 28,887,584 | $ | 707,065 | $ | 11,714,811 | $ | 4,118,499 | $ | 3,951,040 | $ | 1,483,772 | ||||||||||||
Net realized gain (loss) | 34,568,649 | (485,246 | ) | 23,540,083 | (1,557,634 | ) | (8,032,612 | ) | (1,306,184 | ) | ||||||||||||||
Net change in unrealized appreciation (depreciation) | (1,740,338 | ) | 29,806,894 | 25,672,069 | 32,371,162 | 10,040,748 | 4,269,454 | |||||||||||||||||
Net increase in net assets resulting from operations | 61,715,895 | 30,028,713 | 60,926,963 | 34,932,027 | 5,959,176 | 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 | 1,833,607,273 | 267,817,496 | 262,371,854 | 168,140,088 | 180,819,437 | 22,654,462 | ||||||||||||||||||
Cost of shares redeemed | (229,574,799 | ) | — | (117,791,065 | ) | (49,620,095 | ) | (60,126,782 | ) | (19,290,970 | ) | |||||||||||||
Net increase in net assets from capital share transactions | 1,604,032,474 | 267,817,496 | 144,580,789 | 118,519,993 | 120,692,655 | 3,363,492 | ||||||||||||||||||
INCREASE IN NET ASSETS | 1,660,750,141 | 297,846,209 | 199,295,853 | 151,124,818 | 124,488,533 | 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 | $ | 1,958,596,350 | $ | 297,846,209 | $ | 449,922,793 | $ | 250,626,940 | $ | 224,218,113 | $ | 99,729,580 | ||||||||||||
Undistributed net investment income included in net assets at end of period | $ | 24,561,384 | $ | 702,264 | $ | 8,931,316 | $ | 3,358,893 | $ | 2,754,991 | $ | 976,401 | ||||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 11,350,000 | 2,200,000 | 25,650,000 | 21,525,000 | 26,925,000 | 3,975,000 | ||||||||||||||||||
Shares redeemed | (1,450,000 | ) | — | (12,150,000 | ) | (6,225,000 | ) | (9,300,000 | ) | (3,750,000 | ) | |||||||||||||
Net increase in shares outstanding | 9,900,000 | 2,200,000 | 13,500,000 | 15,300,000 | 17,625,000 | 225,000 | ||||||||||||||||||
a | Commencement of operations. |
See notes to financial statements.
FINANCIAL STATEMENTS | 81 |
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 year ended | For the year ended | For the year ended | For the year ended | For the year ended | For the year ended | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income | $ | 1,426,138 | $ | 791,154 | $ | 19,602,876 | $ | 5,444,061 | $ | 5,623,277 | $ | 2,205,148 | ||||||||||||
Net realized gain (loss) | 10,436,818 | (11,129,490 | ) | 12,895,227 | 188,729 | 264,490 | (4,645,255 | ) | ||||||||||||||||
Net change in unrealized appreciation (depreciation) | (644,904 | ) | 16,146,586 | 43,117,628 | 27,848,209 | 23,413,442 | 11,587,071 | |||||||||||||||||
Net increase in net assets resulting from operations | 11,218,052 | 5,808,250 | 75,615,731 | 33,480,999 | 29,301,209 | 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 | 228,974,858 | 35,186,944 | 424,290,639 | 104,747,751 | 49,430,368 | 17,230,968 | ||||||||||||||||||
Cost of shares redeemed | (169,936,912 | ) | (49,848,527 | ) | (61,991,273 | ) | (17,225,922 | ) | (13,716,664 | ) | (4,970,610 | ) | ||||||||||||
Net increase (decrease) in net assets from capital share transactions | 59,037,946 | (14,661,583 | ) | 362,299,366 | 87,521,829 | 35,713,704 | 12,260,358 | |||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | 69,467,344 | (10,838,389 | ) | 427,952,525 | 118,268,712 | 61,844,080 | 20,076,054 | |||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 60,155,435 | 70,993,824 | 223,297,525 | 105,028,813 | 108,202,430 | 88,126,376 | ||||||||||||||||||
End of year | $ | 129,622,779 | $ | 60,155,435 | $ | 651,250,050 | $ | 223,297,525 | $ | 170,046,510 | $ | 108,202,430 | ||||||||||||
Undistributed net investment income included in net assets at end of year | $ | 1,235,457 | $ | 597,687 | $ | 14,410,596 | $ | 4,181,906 | $ | 4,042,788 | $ | 1,491,917 | ||||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 12,300,000 | 2,500,000 | 5,900,000 | 1,900,000 | 8,200,000 | 3,500,000 | ||||||||||||||||||
Shares redeemed | (9,600,000 | ) | (3,700,000 | ) | (900,000 | ) | (300,000 | ) | (2,200,000 | ) | (1,000,000 | ) | ||||||||||||
Net increase (decrease) in shares outstanding | 2,700,000 | (1,200,000 | ) | 5,000,000 | 1,600,000 | 6,000,000 | 2,500,000 | |||||||||||||||||
See notes to financial statements.
82 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 year ended | For the period August 31, 2003 | For the year ended | For the year ended | For the year ended | For the year ended | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income | $ | 1,953,405 | $ | 1,528,524 | $ | 2,173,679 | $ | 1,123,273 | $ | 4,688,145 | $ | 643,699 | ||||||||||||
Net realized gain (loss) | 7,316,450 | (473,013 | ) | (14,302,124 | ) | (4,733,350 | ) | (20,194,826 | ) | (15,291,942 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) | 13,784,731 | 12,462,102 | 4,228,087 | 18,288,979 | (8,427,465 | ) | 52,075,339 | |||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 23,054,586 | 13,517,613 | (7,900,358 | ) | 14,678,902 | (23,934,146 | ) | 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 | 14,747,859 | 68,396,211 | 213,845,316 | 66,418,682 | 223,498,562 | 55,256,747 | ||||||||||||||||||
Cost of shares redeemed | (24,651,115 | ) | — | (43,152,032 | ) | (22,948,093 | ) | (43,426,617 | ) | — | ||||||||||||||
Net increase (decrease) in net assets from capital share transactions | (9,903,256 | ) | 68,396,211 | 170,693,284 | 43,470,589 | 180,071,945 | 55,256,747 | |||||||||||||||||
INCREASE IN NET ASSETS | 10,968,382 | 81,913,824 | 160,978,187 | 58,149,491 | 155,500,797 | 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 | $ | 92,882,206 | $ | 81,913,824 | $ | 315,463,702 | $ | 154,485,515 | $ | 390,228,077 | $ | 234,727,280 | ||||||||||||
Undistributed net investment income included in net assets at end of period | $ | 1,344,870 | $ | 1,587,853 | $ | 1,634,773 | $ | 1,142,788 | $ | 4,632,113 | $ | 637,002 | ||||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 250,000 | 1,750,000 | 8,150,000 | 3,300,000 | 18,800,000 | 5,650,000 | ||||||||||||||||||
Shares redeemed | (450,000 | ) | — | (1,800,000 | ) | (1,150,000 | ) | (3,950,000 | ) | — | ||||||||||||||
Net increase (decrease) in shares outstanding | (200,000 | ) | 1,750,000 | 6,350,000 | 2,150,000 | 14,850,000 | 5,650,000 | |||||||||||||||||
a | Commencement of operations. |
See notes to financial statements.
FINANCIAL STATEMENTS | 83 |
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Australia Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 11.22 | $ | 9.36 | $ | 9.24 | $ | 9.93 | $ | 9.99 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.45 | 0.32 | 0.23 | 0.24 | 0.23 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.32 | 1.81 | (0.07 | ) | (0.71 | ) | (0.04 | ) | ||||||||||||
Total from investment operations | 2.77 | 2.13 | 0.16 | (0.47 | ) | 0.19 | ||||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.43 | ) | (0.27 | ) | (0.04 | ) | (0.20 | ) | (0.23 | ) | ||||||||||
Return of capital | — | — | — | (0.02 | ) | (0.02 | ) | |||||||||||||
Total distributions | (0.43 | ) | (0.27 | ) | (0.04 | ) | (0.22 | ) | (0.25 | ) | ||||||||||
Net asset value, end of year | $ | 13.56 | $ | 11.22 | $ | 9.36 | $ | 9.24 | $ | 9.93 | ||||||||||
Total return | 24.95 | % | 23.33 | % | 1.74 | % | (4.77 | )% | 1.84 | % | ||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 178,998 | $ | 87,541 | $ | 76,731 | $ | 57,312 | $ | 61,574 | ||||||||||
Ratio of expenses to average net assets | 0.79 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.95 | % | ||||||||||
Ratio of net investment income to average net assets | 3.37 | % | 3.21 | % | 2.47 | % | 2.54 | % | 2.22 | % | ||||||||||
Portfolio turnover rateb | 9 | % | 8 | % | 5 | % | 23 | % | 36 | % |
a | Based on average shares outstanding throughout each period. |
b | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
84 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Brazil Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 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 | $ | 12.19 | $ | 8.30 | $ | 11.20 | $ | 19.25 | $ | 20.22 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomec | 0.55 | 0.32 | 0.38 | 0.68 | 0.02 | |||||||||||||||
Net realized and unrealized gain (loss) | 4.49 | 3.68 | (3.28 | ) | (8.09 | ) | (0.63 | ) | ||||||||||||
Total from investment operations | 5.04 | 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 | $ | 16.96 | $ | 12.19 | $ | 8.30 | $ | 11.20 | $ | 19.25 | ||||||||||
Total return | 41.42 | % | 48.85 | % | (25.89 | )% | (38.52 | )% | (2.97 | )%e | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of period (000s) | $ | 209,504 | $ | 103,035 | $ | 83,788 | $ | 14,004 | $ | 18,283 | ||||||||||
Ratio of expenses to average net assetsf | 0.96 | % | 0.99 | % | 0.99 | % | 0.99 | % | 0.99 | %a | ||||||||||
Ratio of net investment income to average net assetsf | 3.59 | % | 3.59 | % | 3.50 | % | 4.44 | % | 0.77 | %b | ||||||||||
Portfolio turnover rated | 106 | % | 85 | % | 103 | % | 43 | % | 64 | % |
a | Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was 1.40%. |
b | 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%. |
c | Based on average shares outstanding throughout each period. |
d | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
e | Not annualized. |
f | Annualized for periods of less than one year. |
g | Commencement of operations. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 85 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Canada Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 12.25 | $ | 9.49 | $ | 10.70 | $ | 16.94 | $ | 13.22 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomec | 0.11 | 0.10 | 0.07 | 0.05 | 0.70 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.17 | 2.69 | (1.27 | ) | (5.92 | ) | 8.08 | |||||||||||||
Total from investment operations | 2.28 | 2.79 | (1.20 | ) | (5.87 | ) | 8.78 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.20 | ) | (0.03 | ) | (0.01 | ) | (0.02 | ) | (0.55 | ) | ||||||||||
Net realized gain | — | — | — | (0.31 | ) | (4.39 | ) | |||||||||||||
Return of capital | — | — | — | (0.04 | ) | (0.12 | ) | |||||||||||||
Total distributions | (0.20 | ) | (0.03 | ) | (0.01 | ) | (0.37 | ) | (5.06 | ) | ||||||||||
Net asset value, end of year | $ | 14.33 | $ | 12.25 | $ | 9.49 | $ | 10.70 | $ | 16.94 | ||||||||||
Total return | 18.70 | % | 29.47 | % | (11.23 | )% | (34.95 | )% | 67.21 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 325,298 | $ | 503,407 | $ | 66,420 | $ | 28,889 | $ | 22,028 | ||||||||||
Ratio of expenses to average net assets | 0.70 | %e | 0.84 | % | 0.84 | % | 0.84 | % | 1.17 | %a | ||||||||||
Ratio of net investment income to average net assets | 0.81 | %f | 0.98 | % | 0.70 | % | 0.44 | % | 4.07 | %b | ||||||||||
Portfolio turnover rated | 10 | % | 10 | % | 5 | % | 63 | % | 64 | % |
a | Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2000 was 1.19%. |
b | 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%. |
c | Based on average shares outstanding throughout each period. |
d | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
e | Ratio of expenses to average net assets prior to reimbursed distribution fees for the year ended August 31, 2004 was 0.80%. |
f | Ratio of net investment income to average net assets prior to reimbursed distribution fees for the year ended August 31, 2004 was 0.71%. |
See notes to financial statements.
86 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Emerging Markets Index Fund | ||||||||
Year ended Aug. 31, 2004 | Period from Aug. 31, 2003 | |||||||
Net asset value, beginning of period | $ | 135.38 | $ | 101.25 | ||||
Income from investment operations: | ||||||||
Net investment incomea | 3.38 | 0.78 | ||||||
Net realized and unrealized gain | 23.92 | 33.35 | ||||||
Total from investment operations | 27.30 | 34.13 | ||||||
Less distributions from: | ||||||||
Net investment income | (0.81 | ) | — | |||||
Total distributions | (0.81 | ) | — | |||||
Net asset value, end of period | $ | 161.87 | $ | 135.38 | ||||
Total return | 20.21 | % | 33.72 | %b | ||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 1,958,596 | $ | 297,846 | ||||
Ratio of expenses to average net assetsc | 0.76 | % | 0.78 | % | ||||
Ratio of expenses to average net assets exclusive of foreign taxes on stock dividendsc | 0.74 | % | 0.72 | % | ||||
Ratio of net investment income to average net assetsc | 2.10 | % | 1.58 | % | ||||
Portfolio turnover rated | 8 | % | 10 | % |
a | Based on average shares outstanding throughout each period. |
b | Not annualized. |
c | Annualized for periods of less than one year. |
d | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
e | Commencement of operations. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 87 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Hong Kong Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 9.03 | $ | 7.99 | $ | 8.93 | $ | 13.24 | $ | 11.83 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.28 | 0.23 | 0.23 | 0.23 | 0.33 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.75 | 0.95 | (1.11 | ) | (4.30 | ) | 1.42 | |||||||||||||
Total from investment operations | 2.03 | 1.18 | (0.88 | ) | (4.07 | ) | 1.75 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.15 | ) | (0.14 | ) | (0.06 | ) | (0.23 | ) | (0.32 | ) | ||||||||||
Return of capital | — | — | — | (0.01 | ) | (0.02 | ) | |||||||||||||
Total distributions | (0.15 | ) | (0.14 | ) | (0.06 | ) | (0.24 | ) | (0.34 | ) | ||||||||||
Net asset value, end of year | $ | 10.91 | $ | 9.03 | $ | 7.99 | $ | 8.93 | $ | 13.24 | ||||||||||
Total return | 22.69 | % | 15.14 | % | (9.94 | )% | (30.88 | )% | 14.73 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 449,923 | $ | 250,627 | $ | 99,502 | $ | 52,946 | $ | 79,479 | ||||||||||
Ratio of expenses to average net assets | 0.80 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.94 | % | ||||||||||
Ratio of net investment income to average net assets | 2.78 | % | 3.06 | % | 2.56 | % | 2.11 | % | 2.57 | % | ||||||||||
Portfolio turnover rateb | 5 | % | 10 | % | 15 | % | 43 | % | 21 | % |
a | Based on average shares outstanding throughout each period. |
b | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
88 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Malaysia Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 5.99 | $ | 5.68 | $ | 5.11 | $ | 5.96 | $ | 5.59 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.13 | 0.10 | 0.08 | 0.06 | 0.05 | |||||||||||||||
Net realized and unrealized gain (loss) | 0.52 | 0.30 | 0.52 | (0.85 | ) | 0.37 | ||||||||||||||
Total from investment operations | 0.65 | 0.40 | 0.60 | (0.79 | ) | 0.42 | ||||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.10 | ) | (0.09 | ) | (0.03 | ) | (0.06 | ) | (0.05 | ) | ||||||||||
Return of capital | — | — | — | (0.00 | )c | (0.00 | )c | |||||||||||||
Total distributions | (0.10 | ) | (0.09 | ) | (0.03 | ) | (0.06 | ) | (0.05 | ) | ||||||||||
Net asset value, end of year | $ | 6.54 | $ | 5.99 | $ | 5.68 | $ | 5.11 | $ | 5.96 | ||||||||||
Total return | 11.01 | % | 7.39 | % | 11.82 | % | (13.22 | )% | 7.57 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 224,218 | $ | 99,730 | $ | 93,262 | $ | 80,877 | $ | 99,206 | ||||||||||
Ratio of expenses to average net assets | 0.79 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.96 | % | ||||||||||
Ratio of net investment income to average net assets | 1.97 | % | 1.91 | % | 1.53 | % | 1.19 | % | 0.81 | % | ||||||||||
Portfolio turnover rateb | 39 | % | 35 | % | 37 | % | 37 | % | 18 | % |
a | Based on average shares outstanding throughout each period. |
b | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
c | Rounds to less than $0.01. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 89 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Mexico Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 15.04 | $ | 13.65 | $ | 15.35 | $ | 16.72 | $ | 13.39 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomec | 0.26 | 0.19 | 0.32 | 0.17 | 0.06 | |||||||||||||||
Net realized and unrealized gain (loss) | 4.26 | 1.72 | (1.95 | ) | (1.36 | ) | 3.69 | |||||||||||||
Total from investment operations | 4.52 | 1.91 | (1.63 | ) | (1.19 | ) | 3.75 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.21 | ) | (0.52 | ) | (0.07 | ) | (0.15 | ) | — | |||||||||||
Net realized gain | — | — | — | (0.03 | ) | (0.42 | ) | |||||||||||||
Total distributions | (0.21 | ) | (0.52 | ) | (0.07 | ) | (0.18 | ) | (0.42 | ) | ||||||||||
Net asset value, end of year | $ | 19.35 | $ | 15.04 | $ | 13.65 | $ | 15.35 | $ | 16.72 | ||||||||||
Total return | 30.28 | % | 14.60 | % | (10.67 | )% | (7.02 | )% | 28.20 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 129,623 | $ | 60,155 | $ | 70,994 | $ | 46,056 | $ | 40,127 | ||||||||||
Ratio of expenses to average net assets | 0.78 | % | 0.84 | % | 0.84 | % | 0.84 | % | 1.04 | %a | ||||||||||
Ratio of net investment income to average net assets | 1.40 | % | 1.43 | % | 2.05 | % | 1.12 | % | 0.35 | %b | ||||||||||
Portfolio turnover rated | 12 | % | 13 | % | 8 | % | 34 | % | 24 | % |
a | Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2000 was 1.04%. |
b | 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%. |
c | Based on average shares outstanding throughout each period. |
d | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
90 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Pacific ex-Japan Index Fund | ||||||||||||
Year ended Aug. 31, 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 incomea | 2.68 | 1.87 | 1.35 | |||||||||
Net realized and unrealized gain | 12.53 | 8.53 | 1.40 | |||||||||
Total from investment operations | 15.21 | 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 | $ | 75.73 | $ | 62.03 | $ | 52.51 | ||||||
Total return | 24.74 | % | 20.15 | % | 5.51 | %c | ||||||
Ratios/Supplemental data: | ||||||||||||
Net assets, end of period (000s) | $ | 651,250 | $ | 223,298 | $ | 105,029 | ||||||
Ratio of expenses to average net assetsd | 0.50 | % | 0.50 | % | 0.50 | % | ||||||
Ratio of net investment income to average net assetsd | 3.68 | % | 3.47 | % | 2.87 | % | ||||||
Portfolio turnover rateb | 8 | % | 8 | % | 5 | % |
a | Based on average shares outstanding throughout each period. |
b | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Commencement of operations. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 91 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Singapore Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 5.38 | $ | 5.01 | $ | 5.34 | $ | 7.58 | $ | 7.93 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.22 | 0.12 | 0.07 | 0.07 | 0.13 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.04 | 0.33 | (0.36 | ) | (2.16 | ) | (0.21 | ) | ||||||||||||
Total from investment operations | 1.26 | 0.45 | (0.29 | ) | (2.09 | ) | (0.08 | ) | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.12 | ) | (0.08 | ) | (0.04 | ) | (0.07 | ) | (0.11 | ) | ||||||||||
Net realized gain | — | — | — | (0.06 | ) | (0.14 | ) | |||||||||||||
Return of capital | — | — | — | (0.02 | ) | (0.02 | ) | |||||||||||||
Total distributions | (0.12 | ) | (0.08 | ) | (0.04 | ) | (0.15 | ) | (0.27 | ) | ||||||||||
Net asset value, end of year | $ | 6.52 | $ | 5.38 | $ | 5.01 | $ | 5.34 | $ | 7.58 | ||||||||||
Total return | 23.47 | % | 9.30 | % | (5.42 | )% | (27.89 | )% | (1.29 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 170,047 | $ | 108,202 | $ | 88,126 | $ | 73,704 | $ | 88,719 | ||||||||||
Ratio of expenses to average net assets | 0.79 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.94 | % | ||||||||||
Ratio of net investment income to average net assets | 3.50 | % | 2.67 | % | 1.44 | % | 1.15 | % | 1.60 | % | ||||||||||
Portfolio turnover rateb | 9 | % | 14 | % | 9 | % | 32 | % | 52 | % |
a | Based on average shares outstanding throughout each period. |
b | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
92 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI South Africa Index Fund | ||||||||
Year ended Aug. 31, 2004 | Period from Aug. 31, 2003 | |||||||
Net asset value, beginning of period | $ | 46.81 | $ | 38.72 | ||||
Income from investment operations: | ||||||||
Net investment incomea | 1.23 | 0.89 | ||||||
Net realized and unrealized gain | 13.24 | 7.20 | ||||||
Total from investment operations | 14.47 | 8.09 | ||||||
Less distributions from: | ||||||||
Net investment income | (1.36 | ) | — | |||||
Total distributions | (1.36 | ) | — | |||||
Net asset value, end of period | $ | 59.92 | $ | 46.81 | ||||
Total return | 31.30 | % | 20.89 | %b | ||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 92,882 | $ | 81,914 | ||||
Ratio of expenses to average net assetsc | 0.95 | % | 0.99 | % | ||||
Ratio of net investment income to average net assetsc | 2.23 | % | 3.86 | % | ||||
Portfolio turnover rated | 13 | % | 17 | % |
a | Based on average shares outstanding throughout each period. |
b | Not annualized. |
c | Annualized for periods of less than one year. |
d | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
e | Commencement of operations. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 93 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI South Korea Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 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)c | 0.22 | 0.19 | (0.00 | )e | 0.09 | (0.04 | ) | |||||||||||||
Net realized and unrealized gain (loss) | 1.13 | 1.70 | 7.92 | (4.90 | ) | (2.16 | ) | |||||||||||||
Total from investment operations | 1.35 | 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 | $ | 24.17 | $ | 23.06 | $ | 21.17 | $ | 13.25 | $ | 18.16 | ||||||||||
Total return | 5.83 | % | 8.93 | % | 59.77 | % | (26.49 | )% | (10.81 | )%g | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of period (000s) | $ | 315,464 | $ | 154,486 | $ | 96,336 | $ | 37,767 | $ | 13,622 | ||||||||||
Ratio of expenses to average net assetsg | 0.94 | % | 0.99 | % | 1.00 | % | 1.01 | % | 0.99 | %a | ||||||||||
Ratio of expenses to average net assets exclusive of foreign taxes on stock dividendsg | 0.94 | % | 0.99 | % | 0.99 | % | 0.99 | % | 0.99 | % | ||||||||||
Ratio of net investment income (loss) to average net assetsg | 0.87 | % | 0.98 | % | (0.01 | )% | 0.64 | % | (0.63 | )%b | ||||||||||
Portfolio turnover rated | 29 | % | 39 | % | 25 | % | 39 | % | 55 | % |
a | Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was 1.38%. |
b | 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)%. |
c | Based on average shares outstanding throughout each period. |
d | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
e | Rounds to less than $0.01. |
f | Not annualized. |
g | Annualized for periods of less than one year. |
h | Commencement of operations. |
See notes to financial statements.
94 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Taiwan Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 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)c | 0.14 | 0.04 | (0.03 | ) | (0.03 | ) | (0.01 | ) | ||||||||||||
Net realized and unrealized gain (loss) | (0.25 | ) | 1.93 | (0.16 | ) | (7.37 | ) | (2.31 | ) | |||||||||||
Total from investment operations | (0.11 | ) | 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 | $ | 10.66 | $ | 10.79 | $ | 8.82 | $ | 9.01 | $ | 16.41 | ||||||||||
Total return | (1.10 | )% | 22.45 | % | (2.11 | )% | (45.09 | )% | (12.10 | )%e | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of period (000s) | $ | 390,228 | $ | 234,727 | $ | 142,043 | $ | 110,786 | $ | 42,667 | ||||||||||
Ratio of expenses to average net assetsf | 1.19 | %h | 1.31 | % | 1.33 | % | 1.60 | % | 1.56 | %a | ||||||||||
Ratio of expenses to average net assets exclusive of foreign taxes on stock dividendsf | 0.92 | % | 0.99 | % | 0.99 | % | 0.99 | % | 0.99 | % | ||||||||||
Ratio of net investment income (loss) to average net assetsf | 1.23 | %i | 0.43 | % | (0.28 | )% | (0.23 | )% | (0.28 | )%b | ||||||||||
Portfolio turnover rated | 19 | % | 15 | % | 11 | % | 30 | % | 52 | % |
a | Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the period ended August 31, 2000 was 2.16%. |
b | 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)%. |
c | Based on average shares outstanding throughout each period. |
d | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
e | Not annualized. |
f | Annualized for periods of less than one year. |
g | Commencement of operations. |
h | Ratio of expenses to average net assets prior to reimbursed distribution fees for the year ended August 31, 2004 was 1.22%. |
i | Ratio of net investment income to average net assets prior to reimbursed distribution fees for the year ended August 31, 2004 was 1.21%. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 95 |
Notes to the Financial Statements
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 pursuant to amended and restated Articles of Incorporation. As of August 31, 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 equity 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 adviser 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 affecting these companies.
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 Company’s organizational documents, the Funds’ 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.
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 that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
96 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
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 and debt securities maturing in 60 days or less are valued at amortized cost. Securities of investment companies, other than investment companies whose shares are traded on an exchange, are valued at the investment company’s published net asset value per share. 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 (the “Board”).
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. 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 currencies, investment securities 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 adviser concludes that such rate is more appropriate. With respect to the iShares MSCI Brazil Index Fund, currency values are converted into U.S. dollars as of the close of the Brazilian markets (3:00 p.m. Eastern Standard Time or 4:00 p.m. Eastern Daylight Saving Time).
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 may levy taxes on stock dividends 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.
NOTESTOTHE FINANCIAL STATEMENTS | 97 |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
At August 31, 2004, 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 Losses | Total Distributable Earnings (Accumulated Losses) | |||||||||||
Australia | $ | 5,429,570 | $ | 14,568,318 | $ | (8,552,044 | ) | $ | 11,445,844 | ||||||
Brazil | 4,543,117 | 34,654,996 | (56,661,406 | ) | (17,463,293 | ) | |||||||||
Canada | 1,875,638 | 56,305,316 | (8,775,862 | ) | 49,405,092 | ||||||||||
Emerging Markets | 24,561,384 | 25,136,070 | (22,328,076 | ) | 27,369,378 | ||||||||||
Hong Kong | 8,935,684 | 35,590,687 | (15,066,533 | ) | 29,459,838 | ||||||||||
Malaysia | 2,837,795 | 34,334,322 | (28,969,579 | ) | 8,202,538 | ||||||||||
Mexico | 1,235,457 | (8,061,393 | ) | (6,797,404 | ) | (13,623,340 | ) | ||||||||
Pacific ex-Japan | 18,973,843 | 59,784,427 | (6,052,660 | ) | 72,705,610 | ||||||||||
Singapore | 4,608,572 | 17,491,740 | (17,275,947 | ) | 4,824,365 | ||||||||||
South Africa | 1,344,870 | 26,207,263 | (826,661 | ) | 26,725,472 | ||||||||||
South Korea | 1,634,773 | 43,579,808 | (15,981,504 | ) | 29,233,077 | ||||||||||
Taiwan | 4,632,113 | (8,554,539 | ) | (42,433,907 | ) | (46,356,333 | ) |
The differences between the components of distributable earnings (accumulated losses) on a tax basis and the amounts reflected in the Statements of Assets and Liabilities are primarily due to differing treatments of wash sales.
For the years ended August 31, 2004 and August 31, 2003, 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 by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its 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 year ended August 31, 2004.
From November 1, 2003 to August 31, 2004, certain Funds incurred net realized capital losses and net foreign currency losses. As permitted by tax regulations, these Funds have elected to defer those losses and treat them as arising in the year ending August 31, 2005, as follows:
iShares MSCI Index Fund | Deferred Net Realized | ||
Australia | $ | 402,651 | |
Canada | 5,510,655 | ||
Emerging Markets | 21,487,298 | ||
Hong Kong | 807,840 | ||
Malaysia | 6,822,635 | ||
Mexico | 12,912 | ||
Pacific ex-Japan | 3,160,085 | ||
Singapore | 3,780,444 | ||
South Africa | 133,060 | ||
South Korea | 10,890,832 | ||
Taiwan | 12,082,009 |
98 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
The Funds had tax basis net capital loss carryforwards at August 31, 2004, the tax year-end of the Funds, as follows:
iShares MSCI Index | Expiring in 2007 | Expiring in 2008 | Expiring in 2009 | Expiring in 2010 | Expiring in 2011 | Expiring in 2012 | Total | ||||||||||||||
Australia | $ | 674,889 | $ | 630,985 | $ | 1,971,994 | $ | 3,625,203 | $ | 650,082 | $ | 596,240 | $ | 8,149,393 | |||||||
Brazil | — | — | — | — | 56,661,406 | — | 56,661,406 | ||||||||||||||
Canada | — | — | — | 780,114 | 21,276 | 2,463,817 | 3,265,207 | ||||||||||||||
Emerging Markets | — | — | — | — | — | 840,778 | 840,778 | ||||||||||||||
Hong Kong | 4,085,707 | — | — | 4,971,970 | 2,870,602 | 2,330,414 | 14,258,693 | ||||||||||||||
Malaysia | 8,654,333 | — | — | 9,819,029 | 2,898,105 | 775,477 | 22,146,944 | ||||||||||||||
Mexico | — | — | — | 1,319,032 | 2,329,290 | 3,136,170 | 6,784,492 | ||||||||||||||
Pacific ex-Japan | — | — | — | — | 329,461 | 2,563,114 | 2,892,575 | ||||||||||||||
Singapore | — | — | — | 4,810,766 | 4,428,316 | 4,256,421 | 13,495,503 | ||||||||||||||
South Africa | — | — | — | — | — | 693,601 | 693,601 | ||||||||||||||
South Korea | — | — | 556,540 | 666,642 | 504,041 | 3,363,449 | 5,090,672 | ||||||||||||||
Taiwan | — | — | — | 12,532,361 | 8,689,663 | 9,129,874 | 30,351,898 |
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, as “passive foreign investment companies”, such Funds may elect to mark-to-market annually the shares of the passive foreign investment companies, and would be required to distribute to shareholders any such mark-to-market gains.
At August 31, 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) | ||||||||||
Australia | $ | 183,402,296 | $ | 17,826,492 | $ | (3,252,305 | ) | $ | 14,574,187 | |||||
Brazil | 174,048,727 | 35,546,190 | (900,612 | ) | 34,645,578 | |||||||||
Canada | 268,394,704 | 58,845,751 | (2,542,716 | ) | 56,303,035 | |||||||||
Emerging Markets | 2,372,041,001 | 120,847,171 | (95,635,748 | ) | 25,211,423 | |||||||||
Hong Kong | 470,725,223 | 46,451,492 | (10,860,752 | ) | 35,590,740 | |||||||||
Malaysia | 189,896,602 | 37,786,317 | (3,451,995 | ) | 34,334,322 | |||||||||
Mexico | 137,682,281 | 667,369 | (8,727,906 | ) | (8,060,537 | ) | ||||||||
Pacific ex-Japan | 667,077,445 | 66,259,242 | (6,464,127 | ) | 59,795,115 | |||||||||
Singapore | 172,337,695 | 19,870,766 | (2,379,348 | ) | 17,491,418 | |||||||||
South Africa | 66,421,742 | 26,782,064 | (564,958 | ) | 26,217,106 | |||||||||
South Korea | 271,772,096 | 54,484,325 | (10,904,517 | ) | 43,579,808 | |||||||||
Taiwan | 396,443,371 | 26,162,354 | (34,706,883 | ) | (8,544,529 | ) |
NOTESTOTHE FINANCIAL STATEMENTS | 99 |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
For the year ended August 31, 2004, 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 Funds, 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. At August 31, 2004 a portion of certain Funds’ cash collateral for securities on loan was invested in repurchase agreements as disclosed in each Fund’s Schedule of Investments. For further information, see Note 5, below.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
Pursuant to an Investment Advisory Agreement with the Company, as amended on December 28, 2001, Barclays Global Fund Advisors (“BGFA”) manages the investment of each Fund’s assets. BGFA is a California corporation indirectly owned by Barclays Bank PLC.
Under the Investment Advisory Agreement, BGFA is responsible for all of the expenses (“Covered Expenses”) of each of the Funds, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except interest, taxes, brokerage commissions and other expenses connected with the executions of portfolio transactions, distribution fees and extraordinary expenses.
Prior to December 28, 2001 and pursuant to the prior investment 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 investment 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:
Investment 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 |
100 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
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:
Investment 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%.
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 adviser. 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 year ended August 31, 2004, BGI earned securities lending agent fees as follows:
iShares MSCI Index Fund | Securities Lending Agent Fees | ||
Australia | $ | 35,359 | |
Emerging Markets | 1,628,142 | ||
Hong Kong | 208,626 | ||
Pacific ex-Japan Index | 144,839 | ||
Singapore | 71,444 |
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. Prior to July 1, 2004, the Company had in effect a distribution plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Distributor was 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 expenses and services. At the Board meeting held on March 16, 2004, the Directors voted to terminate the Plan, effective July 1, 2004.
For the year ended August 31, 2004, the Distributor voluntarily reimbursed the iShares MSCI Canada Index Fund and iShares MSCI Taiwan Index Fund for distribution fees in the amount of $331,405 and $98,218, respectively.
NOTESTOTHE FINANCIAL STATEMENTS | 101 |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
Pursuant to Rule 17a-7 of the 1940 Act, certain Funds executed cross trades for the year ended August 31, 2004. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment adviser. The Board reviewed all such transactions executed during the first ten months of the fiscal year and concluded that they 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 last two months of the fiscal year.
Pursuant to an exemptive order issued by the U.S. 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 adviser. The IMMF and PMMF are open-end money market funds available to institutional and accredited 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 investment advisory fee, the Master Portfolios in which they invest do charge an investment 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.
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 August 31, 2004, the iShares MSCI Emerging Markets Index Fund held shares of the iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds.
The following table provides information about the investments of each Fund in shares of issuers affiliated with BGFA for the year ended August 31, 2004, including income earned from affiliated issuers and net realized gains from sales of affiliated issuers.
iShares MSCI Index Fund and Name of Affiliated Issuer | Number of Shares Held Beginning of Year (In 000’s) | Gross Additions (In 000’s) | Gross Reductions (In 000’s) | Number of Shares Held End of Year (In 000’s) | Value At End of Year | Dividend and Interest Income | Net Realized Gain | ||||||||||
Australia | |||||||||||||||||
IMMF | 1 | 24,501 | 24,382 | 120 | $ | 119,722 | $ | 1,440 | $ | — | |||||||
Brazil | |||||||||||||||||
IMMF | 370 | 107,818 | 107,207 | 981 | 980,912 | 7,763 | — | ||||||||||
Canada | |||||||||||||||||
IMMF | 308 | 30,190 | 30,299 | 199 | 199,282 | 2,115 | — | ||||||||||
Emerging Markets | |||||||||||||||||
IMMF | 886 | 198,500 | 193,954 | 5,432 | 5,431,771 | 21,011 | — | ||||||||||
iShares MSCI Malaysia Index Fund | 295 | 966 | 408 | 851 | 5,488,924 | 52,919 | 108,056 | ||||||||||
iShares MSCI South Korea Index Fund | 123 | 353 | 177 | 299 | 7,241,729 | 43,908 | 82,820 | ||||||||||
iShares MSCI Taiwan Index Fund | 392 | 1,297 | 724 | 965 | 10,268,622 | 15,757 | 5,575 | ||||||||||
Hong Kong | |||||||||||||||||
IMMF | 148 | 42,385 | 42,320 | 213 | 213,217 | 2,312 | — |
102 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
iShares MSCI Index Fund and Name of Affiliated Issuer | Number of Shares Held Beginning of Year (In 000’s) | Gross Additions (In 000’s) | Gross Reductions (In 000’s) | Number of Shares Held End of Year (In 000’s) | Value At End of Year | Dividend and Interest Income | Net Realized Gain | ||||||||||
Malaysia | |||||||||||||||||
IMMF | 174 | 45,498 | 45,278 | 394 | $ | 393,844 | $ | 4,561 | $ | — | |||||||
Mexico | |||||||||||||||||
IMMF | 27 | 6,177 | 6,119 | 85 | 85,281 | 726 | — | ||||||||||
Pacific Ex-japan | |||||||||||||||||
IMMF | 359 | 55,916 | 55,967 | 308 | 307,648 | 3,144 | — | ||||||||||
Singapore | |||||||||||||||||
IMMF | 28 | 15,257 | 15,198 | 87 | 87,362 | 1,096 | — | ||||||||||
South Africa | |||||||||||||||||
IMMF | 13 | 3,225 | 3,180 | 58 | 57,702 | 209 | — | ||||||||||
South Korea | |||||||||||||||||
IMMF | 246 | 38,006 | 37,531 | 721 | 720,743 | 3,956 | — | ||||||||||
Taiwan | |||||||||||||||||
IMMF | 226 | 28,776 | 28,636 | 366 | 365,977 | 1,871 | — |
Certain Funds invested cash collateral from securities on loan in the IMMF and PMMF. Due to the nature of the structure of the joint account used for the investment of the cash collateral for securities on loan, the information reported above for these Funds does not include the Funds’ holdings of the IMMF and PMMF in connection with the investment of collateral for securities on loan.
As of August 31, 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 year ended August 31, 2004, were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||
Australia | $ | 14,768,995 | $ | 14,421,073 | ||
Brazil | 279,960,556 | 243,070,923 | ||||
Canada | 33,702,225 | 37,174,564 | ||||
Emerging Markets | 143,536,841 | 111,263,465 | ||||
Hong Kong | 26,702,890 | 21,583,667 | ||||
Malaysia | 199,838,254 | 77,629,758 | ||||
Mexico | 12,971,679 | 12,300,994 | ||||
Pacific ex-Japan | 51,607,841 | 43,011,130 | ||||
Singapore | 16,057,621 | 14,734,199 | ||||
South Africa | 11,180,726 | 11,470,917 | ||||
South Korea | 243,990,938 | 73,615,641 | ||||
Taiwan | 254,102,662 | 72,002,981 |
NOTESTOTHE FINANCIAL STATEMENTS | 103 |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
In-kind transactions (see Note 4) for the year ended August 31, 2004, were as follows:
iShares MSCI Index Fund | In-kind Purchases | In-kind Sales | ||||
Australia | $ | 105,452,914 | $ | 32,807,809 | ||
Canada | 97,159,404 | 339,738,649 | ||||
Emerging Markets | 1,810,567,056 | 224,647,444 | ||||
Hong Kong | 261,689,199 | 116,865,940 | ||||
Mexico | 228,413,647 | 169,460,634 | ||||
Pacific ex-Japan | 420,883,626 | 61,513,894 | ||||
Singapore | 49,322,629 | 13,553,027 | ||||
South Africa | 14,738,796 | 24,635,199 |
4. CAPITAL SHARE TRANSACTIONS
The Company has authorized 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 | |
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 the purchase of Creation Units of a Fund generally consists of 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.
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 may not return the securities when due.
104 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2004, certain 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 August 31, 2004, and the value of the related collateral received are disclosed in the Statements of Assets and Liabilities. Securities lending income, which is disclosed in the Funds’ Statements of Operations, is presented net of rebates paid to, or fees paid by, borrowers.
NOTESTOTHE FINANCIAL STATEMENTS | 105 |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
iShares, Inc.
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the iShares MSCI Australia Index Fund, iShares MSCI Brazil Index Fund, iShares MSCI Canada Index Fund, iShares MSCI Emerging Markets Index Fund, iShares MSCI Hong Kong Index Fund, iShares MSCI Malaysia Index Fund, iShares MSCI Mexico Index Fund, iShares MSCI Pacific ex-Japan Index Fund, iShares MSCI Singapore Index Fund, iShares MSCI South Africa Index Fund, iShares MSCI South Korea Index Fund and iShares MSCI Taiwan Index Fund, each a portfolio of the iShares MSCI Index Fund Series (the “Funds”), at August 31, 2004, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the periods presented, and the financial highlights for each of the four years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2004 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
The financial statements of the Funds as of August 31, 2000 and the year then ended were audited by other auditors, whose report dated October 13, 2000 expressed an unqualified opinion on those statements.
PricewaterhouseCoopers LLP
San Francisco, California
October 22, 2004
106 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
iSHARES®, INC.
For the year ended August 31, 2004, certain of the Funds earned foreign source income and paid foreign taxes which they intend to pass through to their shareholders pursuant to Section 853 of the Internal Revenue Code (the “Code”) as follows:
iShares MSCI Index Fund | Foreign Source Income Earned | Foreign Taxes Paid | ||||
Australia | $ | 6,511,935 | $ | 47,468 | ||
Brazil | 12,419,969 | 1,334,273 | ||||
Canada | 6,239,684 | 935,953 | ||||
Emerging Markets | 42,299,575 | 4,572,123 | ||||
Malaysia | 7,200,091 | 1,571,800 | ||||
Pacific ex-Japan | 22,884,471 | 567,415 | ||||
Singapore | 8,112,245 | 1,057,649 | ||||
South Africa | 2,838,099 | 57,040 | ||||
South Korea | 5,426,247 | 897,455 | ||||
Taiwan | 11,478,507 | 3,292,724 |
Under Section 854(b)(2) of the Code, certain of the Funds hereby designate the following maximum amounts as qualified dividends for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended August 31, 2004:
iShares MSCI Index Fund | Qualified Dividend Income | ||
Australia | $ | 4,752,630 | |
Brazil | 254,583 | ||
Canada | 3,855,718 | ||
Emerging Markets | 31,005,416 | ||
Pacific ex-Japan | 10,722,179 | ||
South Africa | 1,997,005 | ||
South Korea | 3,204,178 |
In January 2005, shareholders will receive Form 1099-DIV which will include their share of qualified dividends distributed during the calendar year 2004. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their individual income tax returns.
TAX INFORMATION | 107 |
S upplemental Information (Unaudited)
iSHARES®, INC.
The tables that follow present information about the differences between the daily market price on secondary markets for shares of an iShares Fund and that Fund’s net asset value. Net asset value, or “NAV”, is the price per share at which each Fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of each iShares Fund generally is determined using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of such Fund is listed for trading, as of the time that the Fund’s NAV is calculated. In the case of the iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds, the NAVs of which are determined prior to the opening of the regular trading day on the American Stock Exchange (the “AMEX”), the Market Price is determined using the midpoint of the bid/ask spread as of the opening of regular trading on the AMEX. Each Fund’s Market Price may be at, above or below its NAV. The NAV of each Fund will fluctuate with changes in the market value of its portfolio holdings. The Market Price of each Fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.
Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of a Fund on a given day, generally at the time NAV is calculated. A premium is the amount that a Fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that a Fund is trading below the reported NAV, expressed as a percentage of the NAV.
The following information shows the frequency distributions of premiums and discounts for each of the iShares Funds included in this report. Except as noted below, the information shown for each Fund is for the period from January 1, 1999 through June 30, 2004, the date of the most recent calendar quarter end. The information shown for the iShares MSCI Brazil, iShare MSCI Emerging Markets, iShares MSCI Pacific ex-Japan, iShares MSCI South Africa, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds is for each full calendar quarter completed after the inception date of each Fund through June 30, 2004. Each line in the table shows the number of trading days in which the iShares Fund traded within the premium/discount range indicated. The number of trading days in each premium/discount range is also shown as a percentage of the total number of trading days in the period covered by each table. All data presented here represents past performance, which cannot be used to predict future results.
iShares MSCI Australia Index Fund
Period Covered: January 1, 1999 through June 30, 2004
Number of Days | Percentage of Total Days | ||||
Greater than 2.5% | 11 | 0.80 | % | ||
Greater than 2.0% and Less than 2.5% | 17 | 1.23 | |||
Greater than 1.5% and Less than 2.0% | 65 | 4.71 | |||
Greater than 1.0% and Less than 1.5% | 151 | 10.94 | |||
Greater than 0.5% and Less than 1.0% | 308 | 22.32 | |||
Between 0.5% and – 0.5% | 630 | 45.65 | |||
Less than – 0.5% and Greater than – 1.0% | 115 | 8.33 | |||
Less than – 1.0% and Greater than – 1.5% | 43 | 3.12 | |||
Less than – 1.5% and Greater than – 2.0% | 25 | 1.81 | |||
Less than – 2.0% and Greater than – 2.5% | 7 | 0.51 | |||
Less than – 2.5% | 8 | 0.58 | |||
1,380 | 100.00 | % | |||
108 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Brazil Index Fund
Period Covered: October 1, 2000 through June 30, 2004
Number of Days | Percentage of Total Days | ||||
Greater than 3.0% | 7 | 0.75 | % | ||
Greater than 2.5% and Less than 3.0% | 14 | 1.49 | |||
Greater than 2.0% and Less than 2.5% | 23 | 2.45 | |||
Greater than 1.5% and Less than 2.0% | 37 | 3.94 | |||
Greater than 1.0% and Less than 1.5% | 86 | 9.16 | |||
Greater than 0.5% and Less than 1.0% | 157 | 16.72 | |||
Between 0.5% and – 0.5% | 368 | 39.19 | |||
Less than – 0.5% and Greater than – 1.0% | 108 | 11.50 | |||
Less than – 1.0% and Greater than – 1.5% | 38 | 4.05 | |||
Less than – 1.5% and Greater than – 2.0% | 36 | 3.83 | |||
Less than – 2.0% and Greater than – 2.5% | 25 | 2.66 | |||
Less than – 2.5% and Greater than – 3.0% | 11 | 1.17 | |||
Less than – 3.0% and Greater than – 3.5% | 8 | 0.85 | |||
Less than – 3.5% and Greater than – 4.0% | 7 | 0.75 | |||
Less than – 4.0% and Greater than – 4.5% | 6 | 0.64 | |||
Less than – 4.5% | 8 | 0.85 | |||
939 | 100.00 | % | |||
iShares MSCI Canada Index Fund
Period Covered: January 1, 1999 through June 30, 2004
Number of Days | Percentage of Total Days | ||||
Greater than 3.0% | 6 | 0.43 | % | ||
Greater than 2.5% and Less than 3.0% | 17 | 1.23 | |||
Greater than 2.0% and Less than 2.5% | 25 | 1.81 | |||
Greater than 1.5% and Less than 2.0% | 56 | 4.06 | |||
Greater than 1.0% and Less than 1.5% | 117 | 8.48 | |||
Greater than 0.5% and Less than 1.0% | 237 | 17.17 | |||
Between 0.5% and – 0.5% | 725 | 52.55 | |||
Less than – 0.5% and Greater than – 1.0% | 134 | 9.71 | |||
Less than – 1.0% and Greater than – 1.5% | 45 | 3.26 | |||
Less than – 1.5% and Greater than – 2.0% | 10 | 0.72 | |||
Less than – 2.0% | 8 | 0.58 | |||
1,380 | 100.00 | % | |||
SUPPLEMENTAL INFORMATION | 109 |
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Index Fund
Period Covered: April 1, 2003 through June 30, 2004
Number of Days | Percentage of Total Days | ||||
Greater than 1.5% | 12 | 4.78 | % | ||
Greater than 1.0% and Less than 1.5% | 27 | 10.76 | |||
Greater than 0.5% and Less than 1.0% | 82 | 32.67 | |||
Between 0.5% and – 0.5% | 112 | 44.61 | |||
Less than – 0.5% and Greater than – 1.0% | 13 | 5.18 | |||
Less than – 1.0% and Greater than – 1.5% | 3 | 1.20 | |||
Less than – 1.5% | 2 | 0.80 | |||
251 | 100.00 | % | |||
iShares MSCI Hong Kong Index Fund
Period Covered: January 1, 1999 through June 30, 2004
Number of Days | Percentage of Total Days | ||||
Greater than 3.5% | 13 | 0.94 | % | ||
Greater than 3.0% and Less than 3.5% | 6 | 0.43 | |||
Greater than 2.5% and Less than 3.0% | 10 | 0.72 | |||
Greater than 2.0% and Less than 2.5% | 31 | 2.25 | |||
Greater than 1.5% and Less than 2.0% | 65 | 4.71 | |||
Greater than 1.0% and Less than 1.5% | 132 | 9.57 | |||
Greater than 0.5% and Less than 1.0% | 213 | 15.43 | |||
Between 0.5% and – 0.5% | 464 | 33.64 | |||
Less than – 0.5% and Greater than – 1.0% | 171 | 12.39 | |||
Less than – 1.0% and Greater than – 1.5% | 104 | 7.54 | |||
Less than – 1.5% and Greater than – 2.0% | 78 | 5.65 | |||
Less than – 2.0% and Greater than – 2.5% | 41 | 2.97 | |||
Less than – 2.5% and Greater than – 3.0% | 26 | 1.88 | |||
Less than – 3.0% and Greater than – 3.5% | 11 | 0.80 | |||
Less than – 3.5% and Greater than – 4.0% | 9 | 0.65 | |||
Less than – 4.0% | 6 | 0.43 | |||
1,380 | 100.00 | % | |||
110 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Malaysia Index Fund
Period Covered: January 1, 1999 through June 30, 2004
Number of Days | Percentage of Total Days | ||||
Greater than 6.0% | 147 | 10.65 | % | ||
Greater than 5.5% and Less than 6.0% | 4 | 0.29 | |||
Greater than 5.0% and Less than 5.5% | 6 | 0.43 | |||
Greater than 4.5% and Less than 5.0% | 3 | 0.22 | |||
Greater than 4.0% and Less than 4.5% | 10 | 0.72 | |||
Greater than 3.5% and Less than 4.0% | 16 | 1.16 | |||
Greater than 3.0% and Less than 3.5% | 15 | 1.09 | |||
Greater than 2.5% and Less than 3.0% | 19 | 1.38 | |||
Greater than 2.0% and Less than 2.5% | 42 | 3.04 | |||
Greater than 1.5% and Less than 2.0% | 63 | 4.57 | |||
Greater than 1.0% and Less than 1.5% | 84 | 6.09 | |||
Greater than 0.5% and Less than 1.0% | 111 | 8.04 | |||
Between 0.5% and – 0.5% | 258 | 18.69 | |||
Less than – 0.5% and Greater than – 1.0% | 104 | 7.54 | |||
Less than – 1.0% and Greater than – 1.5% | 107 | 7.75 | |||
Less than – 1.5% and Greater than – 2.0% | 89 | 6.45 | |||
Less than – 2.0% and Greater than – 2.5% | 84 | 6.09 | |||
Less than – 2.5% and Greater than – 3.0% | 62 | 4.49 | |||
Less than – 3.0% and Greater than – 3.5% | 47 | 3.41 | |||
Less than – 3.5% and Greater than – 4.0% | 27 | 1.96 | |||
Less than – 4.0% and Greater than – 4.5% | 27 | 1.96 | |||
Less than – 4.5% and Greater than – 5.0% | 14 | 1.01 | |||
Less than – 5.0% and Greater than – 5.5% | 4 | 0.29 | |||
Less than – 5.5% and Greater than – 6.0% | 8 | 0.58 | |||
Less than – 6.0% | 29 | 2.10 | |||
1,380 | 100.00 | % | |||
iShares MSCI Mexico Index Fund
Period Covered: January 1, 1999 through June 30, 2004
Number of Days | Percentage of Total Days | ||||
Greater than 2.5% | 5 | 0.36 | % | ||
Greater than 2.0% and Less than 2.5% | 13 | 0.94 | |||
Greater than 1.5% and Less than 2.0% | 48 | 3.48 | |||
Greater than 1.0% and Less than 1.5% | 118 | 8.55 | |||
Greater than 0.5% and Less than 1.0% | 206 | 14.93 | |||
Between 0.5% and – 0.5% | 602 | 43.63 | |||
Less than – 0.5% and Greater than – 1.0% | 203 | 14.71 | |||
Less than – 1.0% and Greater than – 1.5% | 111 | 8.04 | |||
Less than – 1.5% and Greater than – 2.0% | 41 | 2.97 | |||
Less than – 2.0% and Greater than – 2.5% | 16 | 1.16 | |||
Less than – 2.5% and Greater than – 3.0% | 12 | 0.87 | |||
Less than – 3.0% | 5 | 0.36 | |||
1,380 | 100.00 | % | |||
SUPPLEMENTAL INFORMATION | 111 |
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Pacific ex-Japan Index Fund
Period Covered: January 1, 2002 through June 30, 2004
Number of Days | Percentage of Total Days | ||||
Greater than 3.0% | 4 | 0.64 | % | ||
Greater than 2.5% and Less than 3.0% | 6 | 0.96 | |||
Greater than 2.0% and Less than 2.5% | 10 | 1.59 | |||
Greater than 1.5% and Less than 2.0% | 55 | 8.77 | |||
Greater than 1.0% and Less than 1.5% | 163 | 26.00 | |||
Greater than 0.5% and Less than 1.0% | 155 | 24.72 | |||
Between 0.5% and – 0.5% | 208 | 33.17 | |||
Less than – 0.5% and Greater than – 1.0% | 19 | 3.03 | |||
Less than – 1.0% and Greater than – 1.5% | 5 | 0.80 | |||
Less than – 1.5% | 2 | 0.32 | |||
627 | 100.00 | % | |||
iShares MSCI Singapore Index Fund
Period Covered: January 1, 1999 through June 30, 2004
Number of Days | Percentage of Total Days | ||||
Greater than 3.0% | 10 | 0.72 | % | ||
Greater than 2.5% and Less than 3.0% | 14 | 1.01 | |||
Greater than 2.0% and Less than 2.5% | 32 | 2.32 | |||
Greater than 1.5% and Less than 2.0% | 64 | 4.64 | |||
Greater than 1.0% and Less than 1.5% | 137 | 9.93 | |||
Greater than 0.5% and Less than 1.0% | 133 | 9.64 | |||
Between 0.5% and – 0.5% | 366 | 26.52 | |||
Less than – 0.5% and Greater than – 1.0% | 180 | 13.04 | |||
Less than – 1.0% and Greater than – 1.5% | 155 | 11.23 | |||
Less than – 1.5% and Greater than – 2.0% | 93 | 6.74 | |||
Less than – 2.0% and Greater than – 2.5% | 76 | 5.51 | |||
Less than – 2.5% and Greater than – 3.0% | 43 | 3.12 | |||
Less than – 3.0% and Greater than – 3.5% | 30 | 2.17 | |||
Less than – 3.5% and Greater than – 4.0% | 23 | 1.67 | |||
Less than – 4.0% and Greater than – 4.5% | 10 | 0.72 | |||
Less than – 4.5% and Greater than – 5.0% | 7 | 0.51 | |||
Less than – 5.0% | 7 | 0.51 | |||
1,380 | 100.00 | % | |||
112 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI South Africa Index Fund
Period Covered: April 1, 2003 through June 30, 2004
Number of Days | Percentage of Total Days | ||||
Greater than 1.5% | 2 | 0.64 | % | ||
Greater than 1.0% and Less than 1.5% | 19 | 6.05 | |||
Greater than 0.5% and Less than 1.0% | 52 | 16.56 | |||
Between 0.5% and – 0.5% | 212 | 67.51 | |||
Less than – 0.5% and Greater than – 1.0% | 20 | 6.37 | |||
Less than – 1.0% and Greater than – 1.5% | 7 | 2.23 | |||
Less than – 1.5% | 2 | 0.64 | |||
314 | 100.00 | % | |||
iShares MSCI South Korea Index Fund
Period Covered: July 1, 2000 through June 30, 2004
Number of Days | Percentage of Total Days | ||||
Greater than 4.5% | 10 | 1.00 | % | ||
Greater than 4.0% and Less than 4.5% | 3 | 0.30 | |||
Greater than 3.5% and Less than 4.0% | 8 | 0.80 | |||
Greater than 3.0% and Less than 3.5% | 8 | 0.80 | |||
Greater than 2.5% and Less than 3.0% | 19 | 1.90 | |||
Greater than 2.0% and Less than 2.5% | 43 | 4.29 | |||
Greater than 1.5% and Less than 2.0% | 81 | 8.08 | |||
Greater than 1.0% and Less than 1.5% | 116 | 11.58 | |||
Greater than 0.5% and Less than 1.0% | 160 | 15.97 | |||
Between 0.5% and – 0.5% | 300 | 29.93 | |||
Less than – 0.5% and Greater than – 1.0% | 88 | 8.78 | |||
Less than – 1.0% and Greater than – 1.5% | 62 | 6.19 | |||
Less than – 1.5% and Greater than – 2.0% | 43 | 4.29 | |||
Less than – 2.0% and Greater than – 2.5% | 27 | 2.69 | |||
Less than – 2.5% and Greater than – 3.0% | 12 | 1.20 | |||
Less than – 3.0% and Greater than – 3.5% | 12 | 1.20 | |||
Less than – 3.5% | 10 | 1.00 | |||
1,002 | 100.00 | % | |||
SUPPLEMENTAL INFORMATION | 113 |
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Taiwan Index Fund
Period Covered: July 1, 2000 through June 30, 2004
Number of Days | Percentage of Total Days | ||||
Greater than 6.0% | 8 | 0.80 | % | ||
Greater than 5.0% and Less than 6.0% | 5 | 0.50 | |||
Greater than 4.5% and Less than 5.0% | 9 | 0.90 | |||
Greater than 4.0% and Less than 4.5% | 4 | 0.40 | |||
Greater than 3.5% and Less than 4.0% | 17 | 1.70 | |||
Greater than 3.0% and Less than 3.5% | 25 | 2.50 | |||
Greater than 2.5% and Less than 3.0% | 42 | 4.19 | |||
Greater than 2.0% and Less than 2.5% | 54 | 5.39 | |||
Greater than 1.5% and Less than 2.0% | 113 | 11.28 | |||
Greater than 1.0% and Less than 1.5% | 127 | 12.67 | |||
Greater than 0.5% and Less than 1.0% | 142 | 14.17 | |||
Between 0.5% and – 0.5% | 226 | 22.53 | |||
Less than – 0.5% and Greater than – 1.0% | 70 | 6.99 | |||
Less than – 1.0% and Greater than – 1.5% | 60 | 5.99 | |||
Less than – 1.5% and Greater than – 2.0% | 40 | 3.99 | |||
Less than – 2.0% and Greater than – 2.5% | 15 | 1.50 | |||
Less than – 2.5% and Greater than – 3.0% | 21 | 2.10 | |||
Less than – 3.0% and Greater than – 3.5% | 12 | 1.20 | |||
Less than – 3.5% and Greater than – 4.5% | 5 | 0.50 | |||
Less than – 4.5% | 7 | 0.70 | |||
1,002 | 100.00 | % | |||
114 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
DIRECTOR INFORMATION (Unaudited)
iSHARES®, INC.
The Board of Directors has responsibility for the overall management and operations of the Company, including general supervision of the duties performed by BGFA and other service providers. Each Director serves until his or her successor is duly elected or appointed and qualified.
iShares, Inc., iShares Trust, Barclays Global Investors Funds and Master Investment Portfolio are considered to be members of the same fund complex, as defined in Form N-1A under the 1940 Act. Each Director of iShares, Inc. also serves as a Trustee for iShares Trust and oversees 97 portfolios within the fund complex. In addition, Lee T. Kranefuss and Richard K. Lyons each serves as a Trustee for Barclays Global Investors Funds and Master Investment Portfolio and oversees 124 portfolios within the fund complex.
Unless otherwise noted in the tables below, the address for each Director is 45 Fremont Street, San Francisco, California 94105. Additional information about the Funds’ Directors may be found in the Funds’ Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-474-2737.
Interested Directors
Name and Age | Position(s), Length of Service | Principal Occupation(s) During Past 5 Years | Other Directorships Held | |||
*Lee T. Kranefuss (43) | Director, Chairman, and President (since June 18, 2003) | Chief Executive Officer of the Intermediary Investors and Exchange Traded Products Business of BGI (since 2003); Chief Executive Officer of the Individual Investor Business of BGI (1997-2003). | Trustee (since June 18, 2003) of iShares Trust; Board of Trustees (since 2001) for Barclays Global Investors Funds and Master Investment Portfolio. | |||
*Nathan Most (90) | Director (since December 16, 1996) | Consultant to BGI (1998-2002), American Stock Exchange (1996-2000) and the Hong Kong Stock Exchange (since 1998); Consultant to the Amsterdam Stock Exchange (1997-1998); Consultant to the Pacific Stock Exchange (1997-1998). | Trustee (Since 2000) and President (2000-2002) of iShares Trust. | |||
*John E. Martinez (42) | Director (since December 5, 2003) | Co-CEO of Global Index and Markets Group of BGI (2001-2003); Chairman of Barclays Global Investors Services (2000-2003); CEO of Capital Markets Group of BGI (1996-2001). | Trustee (since December 5, 2003) of iShares Trust; Director (since November 2003) of Barclays Global Investors UK Holdings. |
* | Lee T. Kranefuss, Nathan Most and John E. Martinez are deemed to be “interested persons” (as defined in the 1940 Act) of the Company due to their affiliations with BGFA, the Funds’ investment adviser and BGI, the parent company of BGFA. John E. Martinez is also deemed to be an “interested person” because of his affiliation with Barclays Global Investors Services, an affiliate of BGFA and BGI. |
DIRECTOR INFORMATION | 115 |
Director Information (Unaudited) (Continued)
iSHARES®, INC.
Independent Directors
Name and Age | Position(s), | Principal Occupation(s) During Past 5 Years | Other Directorships Held | |||
John B. Carroll (69) | Director (since December 16, 1996) | Retired Vice President of Investment Management (1984-2000) of Verizon Corporation; Advisory Board member of Ibbotson Associates (1992-1998); former Vice Chairman and Executive Committee Member (1994-1998) of the Committee on Investment of Employee Benefit Assets of the Financial Executive Institute. | Trustee (since 2002) of iShares Trust; Trustee and member of the Executive Committee (since 1991) of The Common Fund Institutional Funds, a non-profit organization; Member of the Board of Managers of JP Morgan Private Equity Funds. | |||
Richard K. Lyons (43) | Director (since February 28, 2002) | Professor, University of California, Berkeley: Haas School of Business (since 1993); Consultant for IMF World Bank, Federal Reserve Bank, and Citibank N.A. (since 2000). | Trustee (since 2000) of iShares Trust; Director (since 2003) of the BGI Cayman Prime Money Market Fund, Ltd.; Trustee (since 2001) of Barclays Global Investors Funds and Master Investment Portfolio; Board of Trustees: Matthews Asian Funds since 1995 (oversees 6 portfolios). | |||
George C. Parker (65) | Director (since February 28, 2002) | Dean Witter Distinguished Professor of Finance (since 1994); Associate Dean for Academic Affairs, Director of MBA Program, and Professor, Stanford University: Graduate School of Business (1993-2001). | Trustee (since 2000) of iShares Trust; Director (since 1985) of Bailard, Biehl and Kaiser, Inc.; Director (since 1978) of California Casualty Group of Insurance Companies; Director (since 1996) of Continental Airlines, Inc.; Director (since 1995) of Community First Financial Group; Director (1994-2002) of Dresdner/RCM Mutual Funds; Director (since 1999) of Tyon Ranch Company. | |||
W. Allen Reed (57) | Director (since December 16, 1996) | President and Chief Executive Officer (since 1994) of General Motors Investment Management Corporation. | Trustee (since 2002) of iShares Trust; Director (since 1994) of General Motors Investment Management Corporation; Director (1995-1998) of Taubman Centers, Inc. (a real estate investment trust); Director (since 1992) of FLIR Systems (an imaging technology company); Director (since 1994) of General Motors Acceptance Corporation; Director (since 1994) of GMAC Insurance Holdings, Inc.; Director (since 1995) of Global Emerging Markets Fund; Director (since 2000) of Temple Inland Industries; Chairman (since 1995) of the Investment Advisory Committee of Howard Hughes Medical Institute. |
116 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Director Information (Unaudited) (Continued)
iSHARES®, INC.
Officer
Name and Age | Position | Principal Occupation(s) During Past 5 Years | Directorships Held by Officers | |||
Michael A. Latham (39) | Secretary, Treasurer and Principal Financial Officer (since February 28, 2002) | Chief Operating Officer of the Intermediary Investors and Exchange Traded Products Business of BGI (since 2003); Director of Mutual Fund Delivery in the U.S. Individual Investor Business of BGI (2000-2003); Head of Operations, BGI Europe (1997-2000). | None. |
DIRECTOR INFORMATION | 117 |
The following is a list of iShares Funds being offered, 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 that 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 tisk, including possible loss of principal.
iShares S&P Domestic Index Funds
iShares S&P 1500 (ISI)
iShares S&P 500 (IVV)
iShares S&P 500/BARRA Growth (IVW)
iShares S&P 500/BARRA Value (IVE)
iShares S&P MidCap 400 (IJH)
iShares S&P MidCap 400/BARRA Growth (IJK)
iShares S&P MidCap 400/BARRA Value (IJJ)
iShares S&P SmallCap 600 (IJR)
iShares S&P SmallCap 600/BARRA Growth (IJT)
iShares S&P SmallCap 600/BARRA Value (IJS)
iShares S&P 100 (OEF)
iShares Sector and Specialty Index Funds
iShares Cohen & Steers Realty Majors (ICF)
iShares Dow Jones U.S. Basic Materials Sector (IYM)
iShares Dow Jones U.S. Consumer Cyclical Sector (IYC)
iShares Dow Jones U.S. Consumer Non-Cyclical Sector (IYK)
iShares Dow Jones U.S. Energy Sector (IYE)
iShares Dow Jones U.S. Financial Sector (IYF)
iShares Dow Jones U.S. Financial Services (IYG)
iShares Dow Jones U.S. Healthcare Sector (IYH)
iShares Dow Jones U.S. Industrial Sector (IYJ)
iShares Dow Jones U.S. Real Estate (IYR)
iShares Dow Jones Select Dividend (DVY)
iShares Dow Jones U.S. Technology Sector (IYW)
iShares Dow Jones U.S. Telecommunications Sector (IYZ)
iShares Dow Jones U.S. Total Market (IYY)
iShares Dow Jones Transportation Average (IYT)
iShares Dow Jones U.S. Utilities Sector (IDU)
iShares Goldman Sachs Natural Resources (IGE)
iShares Goldman Sachs Networking (IGN)
iShares Goldman Sachs Semiconductor (IGW)
iShares Goldman Sachs Software (IGV)
iShares Goldman Sachs Technology (IGM)
iShares Nasdaq Biotechnology (IBB)
iShares S&P Global Energy Sector (IXC)
iShares S&P Global Financials Sector (IXG)
iShares S&P Global Healthcare Sector (IXJ)
iShares S&P Global Technology Sector (IXN)
iShares S&P Global Telecommunications Sector (IXP)
iShares Russell Index Funds
iShares Russell 3000 (IWV)
iShares Russell 3000 Growth (IWZ)
iShares Russell 3000 Value (IWW)
iShares Russell 1000 (IWB)
iShares Russell 1000 Growth (IWF)
iShares Russell 1000 Value (IWD)
iShares Russell Midcap (IWR)
iShares Russell Midcap Growth (IWP)
iShares Russell Midcap Value (IWS)
iShares Russell 2000 (IWM)
iShares Russell 2000 Growth (IWO)
iShares Russell 2000 Value (IWN)
iShares International Index Funds
iShares FTSE/Xinhua China 25 (FXI)
iShares MSCI Australia (EWA)
iShares MSCI Austria (EWO)
iShares MSCI Belgium (EWK)
iShares MSCI Brazil (EWZ)
iShares MSCI Canada (EWC)
iShares MSCI EAFE (EFA)
iShares MSCI Emerging Markets (EEM)
iShares MSCI EMU (EZU)
iShares MSCI France (EWQ)
iShares MSCI Germany (EWG)
iShares MSCI Hong Kong (EWH)
iShares MSCI Italy (EWI)
iShares MSCI Japan (EWJ)
iShares MSCI Malaysia (EWM)
iShares MSCI Mexico (EWW)
iShares MSCI Netherlands (EWN)
iShares MSCI Pacific ex-Japan (EPP)
iShares MSCI Singapore (EWS)
iShares MSCI South Africa (EZA)
iShares MSCI South Korea (EWY)
iShares MSCI Spain (EWP)
iShares MSCI Sweden (EWD)
iShares MSCI Switzerland (EWL)
iShares MSCI Taiwan (EWT)
iShares MSCI United Kingdom (EWU)
iShares S&P Europe 350 (IEV)
iShares S&P Global 100 (IOO)
iShares S&P Latin America 40 (ILF)
iShares S&P/TOPIX 150 (ITF)
iShares Bond Funds
iShares Lehman Aggregate (AGG)
iShares Lehman TIPS (TIP)
iShares Lehman 1-3 Year Treasury (SHY)
iShares Lehman 7-10 Year Treasury (IEF)
iShares Lehman 20+ Year Treasury (TLT)
iShares GS $ InvesTop™ Corporate (LQD)
iShares NYSE Index Funds
iShares NYSE 100 (NY)
iShares NYSE Composite (NYC)
iShares Morningstar Index Funds
iShares Morningstar Large Core (JKD)
iShares Morningstar Large Growth (JKE)
iShares Morningstar Large Value (JKF)
iShares Morningstar Mid Core (JKG)
iShares Morningstar Mid Growth (JKH)
iShares Morningstar Mid Value (JKI)
iShares Morningstar Small Core (JKJ)
iShares Morningstar Small Growth (JKK)
iShares Morningstar Small Value (JKL)
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., FTSE/ Xinhua Index Limited, Morgan Stanley Capital International, Morningstar, Inc., The Nasdaq Stock Market, Inc., New York Stock Exchange, 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 the companies listed above. “GS $ InvesTop™” and “Goldman Sachs®” are trademarks of Goldman, Sachs & Co.
An investment in the Fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
This advertising section does not constitute part of the 2004 Annual Report.
1353-iS-0904
118 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
The iShares Funds are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an adviser 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.
©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.
Investing involves risk, including possible loss of principal.
A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, 2004 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.
Beginning January 31, 2005, the Funds will be filing their complete schedules of portfolio holdings with the Securities and Exchange Commission for the first and third quarter of each fiscal year on Form N-Q, which when filed, will be available on the Commission’s website at www.sec.gov. When filed, the Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily and monthly basis on the Funds’ website at www.iShares.com.
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.
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iShares®
2004ANNUALREPORTTOSHAREHOLDERS | AUGUST 31, 2004 |
iSHARESMSCIJAPANINDEXFUND | Electronic delivery of this document may be available to you. See inside for details. |
Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on your iShares holdings. In addition, it’s a way we can all care for our environment. To that end, we are pleased to offer shareholder reports and prospectuses online.
To sign up for electronic delivery, please follow these simple steps:
1. | Go to www.icsdelivery.com. |
2. | From the main page, select the first letter of your brokerage firm’s name. |
3. | Select your brokerage institution from the list that follows. If your brokerage firm is not listed, electronic delivery may not be available. Please contact your brokerage firm or financial adviser. |
4. | Fill out the appropriate information and provide the e-mail address where you would like your information sent. |
Your information and email address will be kept confidential and only used to deliver documents to you. If at any time you are not satisfied, you can cancel electronic delivery at www.icsdelivery.com and once again receive physical delivery of your materials. If you have any questions, please contact your brokerage firm or financial adviser.
Once you have enrolled, you will no longer receive prospectuses and shareholder reports in the mail. Instead, you will receive e-mail notifications announcing that the shareholder report or prospectus has been posted on the iShares website at www.iShares.com.
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The Japanese market delivered gains during the 12-month reporting period ended August 31, 2004. Following a decade of economic sluggishness, Japan surprised analysts around the world during the reporting period, producing a robust 7.00% gross domestic product (“GDP”) annual growth for the fourth quarter of 2003. The impressive GDP figure – Japan’s highest level in 13 years – outpaced GDP growth during the same period in both the U.S. and Europe. The increase in GDP hinged largely on export trade, which included increased demand to the U.S. and Japan’s Asian neighbors, particularly China. By early 2004 the effects of export growth appeared to be rippling through the economy, as manufacturing levels increased, unemployment dropped, and consumer spending was revived. As the months progressed, however, Japan’s recovery appeared more fragile. In particular GDP growth for the second quarter of 2004 was half of the level predicted by some analysts. Hiring and retail sales growth faltered, bringing into question the resilience of domestic demand.
As market conditions change, we encourage you to talk with your financial adviser about what blend of investments or asset allocation can best help you meet your financial goals. One trait many successful investors share is the ability to stay focused on their personal financial goals while ignoring market swings. Regardless of market conditions, a sound, disciplined investment plan is essential.
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.
Lee T. Kranefuss |
President and Chairman of the Board of Directors iShares, Inc. |
SHAREHOLDER LETTER | 1 |
Managers’ Discussion & Analysis
iSHARES® MSCI JAPAN INDEX FUND
Performance as of 8/31/04
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
19.32% | 19.73 | % | 20.45 | % | (4.89 | )% | (4.93 | )% | (4.52 | )% | (4.13 | )% | (4.05 | )% | (3.39 | )% | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/04 | Five Years Ended 8/31/04 | Inception to 8/31/04 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
19.32% | 19.73 | % | 20.45 | % | (22.17 | )% | (22.33 | )% | (20.63 | )% | (30.06 | )% | (29.58 | )% | (25.34 | )% |
Total returns for the periods 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 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.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
iSHARES INDEX | MSCI JAPAN INDEX | |||||
3/12/1996 | $ | 10,000 | $ | 10,000 | ||
3/31/1996 | $ | 10,548 | $ | 10,567 | ||
4/30/1996 | $ | 11,116 | $ | 11,168 | ||
5/31/1996 | $ | 10,548 | $ | 10,593 | ||
6/30/1996 | $ | 10,629 | $ | 10,649 | ||
7/31/1996 | $ | 10,149 | $ | 10,172 | ||
8/31/1996 | $ | 9,689 | $ | 9,718 | ||
9/30/1996 | $ | 10,027 | $ | 10,054 | ||
10/31/1996 | $ | 9,344 | $ | 9,380 | ||
11/30/1996 | $ | 9,527 | $ | 9,559 | ||
12/31/1996 | $ | 8,857 | $ | 8,898 | ||
1/31/1997 | $ | 7,890 | $ | 7,929 | ||
2/28/1997 | $ | 8,060 | $ | 8,115 | ||
3/31/1997 | $ | 7,830 | $ | 7,847 | ||
4/30/1997 | $ | 8,100 | $ | 8,132 | ||
5/31/1997 | $ | 8,959 | $ | 9,030 | ||
6/30/1997 | $ | 9,635 | $ | 9,705 | ||
7/31/1997 | $ | 9,337 | $ | 9,409 | ||
8/31/1997 | $ | 8,529 | $ | 8,593 | ||
9/30/1997 | $ | 8,434 | $ | 8,463 | ||
10/31/1997 | $ | 7,630 | $ | 7,675 | ||
11/30/1997 | $ | 7,170 | $ | 7,204 | ||
12/31/1997 | $ | 6,764 | $ | 6,792 | ||
1/31/1998 | $ | 7,339 | $ | 7,398 | ||
2/28/1998 | $ | 7,366 | $ | 7,436 | ||
3/31/1998 | $ | 6,893 | $ | 6,930 | ||
4/30/1998 | $ | 6,839 | $ | 6,902 | ||
5/31/1998 | $ | 6,453 | $ | 6,523 | ||
6/30/1998 | $ | 6,541 | $ | 6,614 | ||
7/31/1998 | $ | 6,433 | $ | 6,527 | ||
8/31/1998 | $ | 5,682 | $ | 5,783 | ||
9/30/1998 | $ | 5,547 | $ | 5,625 | ||
10/31/1998 | $ | 6,461 | $ | 6,569 | ||
11/30/1998 | $ | 6,752 | $ | 6,869 | ||
12/31/1998 | $ | 7,003 | $ | 7,135 | ||
1/31/1999 | $ | 7,030 | $ | 7,186 | ||
2/28/1999 | $ | 6,868 | $ | 7,029 | ||
3/31/1999 | $ | 7,823 | $ | 8,00194 | ||
4/30/1999 | $ | 8,121 | $ | 8,338 | ||
5/31/1999 | $ | 7,687 | $ | 7,868 | ||
6/30/1999 | $ | 8,330 | $ | 8,613 | ||
7/31/1999 | $ | 9,130 | $ | 9,473 | ||
8/31/1999 | $ | 8,986 | $ | 9,406 | ||
9/30/1999 | $ | 9,564 | $ | 9,977 | ||
10/31/1999 | $ | 9,965 | $ | 10,405 | ||
11/30/1999 | $ | 10,386 | $ | 10,851 | ||
12/31/1999 | $ | 11,057 | $ | 11,524 | ||
1/31/2000 | $ | 10,557 | $ | 11,025 | ||
2/29/2000 | $ | 10,297 | $ | 10,739 | ||
3/31/2000 | $ | 11,133 | $ | 11,625 | ||
4/30/2000 | $ | 10,297 | $ | 10,751 | ||
5/31/2000 | $ | 9,777 | $ | 10,204 | ||
6/30/2000 | $ | 10,414 | $ | 10,905 | ||
7/31/2000 | $ | 9,195 | $ | 9,649 | ||
8/31/2000 | $ | 9,772 | $ | 10,274 | ||
9/30/2000 | $ | 9,313 | $ | 9,764 | ||
10/31/2000 | $ | 8,782 | $ | 9,197 | ||
11/30/2000 | $ | 8,393 | $ | 8,815 | ||
12/31/2000 | $ | 7,898 | $ | 8,279 | ||
1/31/2001 | $ | 7,778 | $ | 8,181 | ||
2/28/2001 | $ | 7,417 | $ | 7,813 | ||
3/31/2001 | $ | 7,205 | $ | 7,581 | ||
4/30/2001 | $ | 7,714 | $ | 8,096 | ||
5/31/2001 | $ | 7,693 | $ | 8,076 | ||
6/30/2001 | $ | 7,241 | $ | 7,593 | ||
7/31/2001 | $ | 6,597 | $ | 6,931 | ||
8/31/2001 | $ | 6,413 | $ | 6,735 | ||
9/30/2001 | $ | 5,883 | $ | 6,192 | ||
10/31/2001 | $ | 5,933 | $ | 6,240 | ||
11/30/2001 | $ | 5,940 | $ | 6,260 | ||
12/31/2001 | $ | 5,537 | $ | 5,837 | ||
1/31/2002 | $ | 5,091 | $ | 5,367 | ||
2/28/2002 | $ | 5,282 | $ | 5,580 | ||
3/31/2002 | $ | 5,720 | $ | 6,038 | ||
4/30/2002 | $ | 5,911 | $ | 6,246 | ||
5/31/2002 | $ | 6,293 | $ | 6,659 | ||
6/30/2002 | $ | 5,975 | $ | 6,312 | ||
7/31/2002 | $ | 5,558 | $ | 5,873 | ||
8/31/2002 | $ | 5,494 | $ | 5,811 | ||
9/30/2002 | $ | 5,247 | $ | 5,551 | ||
10/31/2002 | $ | 4,893 | $ | 5,165 | ||
11/30/2002 | $ | 5,084 | $ | 5,374 | ||
12/31/2002 | $ | 4,957 | $ | 5,235 | ||
1/31/2003 | $ | 4,759 | $ | 5,023 | ||
2/28/2003 | $ | 4,787 | $ | 5,053 | ||
3/31/2003 | $ | 4,582 | $ | 4,824 | ||
4/30/2003 | $ | 4,540 | $ | 4,786 | ||
5/31/2003 | $ | 4,752 | $ | 5,019 | ||
6/30/2003 | $ | 5,105 | $ | 5,388 | ||
7/31/2003 | $ | 5,303 | $ | 5,607 | ||
8/31/2003 | $ | 5,862 | $ | 6,198 | ||
9/30/2003 | $ | 6,201 | $ | 6,566 | ||
10/31/2003 | $ | 6,484 | $ | 6,866 | ||
11/30/2003 | $ | 6,286 | $ | 6,654 | ||
12/31/2003 | $ | 6,719 | $ | 7,116 | ||
1/31/2004 | $ | 6,832 | $ | 7,245 | ||
2/29/2004 | $ | 6,803 | $ | 7,223 | ||
3/31/2004 | $ | 7,702 | $ | 8,193 | ||
4/30/2004 | $ | 7,284 | $ | 7,749 | ||
5/31/2004 | $ | 7,030 | $ | 7,485 | ||
6/30/2004 | $ | 7,398 | $ | 7,880 | ||
7/31/2004 | $ | 6,952 | $ | 7,412 | ||
8/31/2004 | $ | 6,994 | $ | 7,466 |
Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.
2 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 equity securities in the aggregate in the Japanese equity market, as measured by the MSCI Japan Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the 12-month period ended August 31, 2004 (the “reporting period”), the Fund returned 19.32%, while the Index returned 20.45%.
After more than a decade of anemic economic activity, the Japanese economy appeared to be headed toward recovery during the reporting period. 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, and was followed by an annual rate of 6.6% for the first quarter of 2004.
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. Domestic spending, which has been the laggard for the Japanese economy, finally rebounded when in March, household spending grew at its fastest pace in 22 years.
However, by July the picture was less optimistic and some investors worried that the recovery might be stalling. Second quarter annual GDP was reported at a disappointing 1.7%, the lowest level in five quarters. Compounding the concern, retail sales fell, and the trade surplus was lower than expected.
Among the Fund’s ten largest holdings as of August 31, 2004, performance during the reporting period was mixed. Banks generally performed well during the reporting period. Japan’s second largest bank, Mitsubishi Tokyo Financial Group Inc. (2.27% of the net assets of the Fund as of August 31, 2004), posted gains during the reporting period. Mizuho Financial Group Inc. (1.70% of the net assets of the Fund as of August 31, 2004), Japan’s largest bank, logged triple-digit gains during the reporting period.
Automobile companies generally experienced strong performance during the reporting period. Toyota Motor Corp. (6.37% of the net assets of the Fund as of August 31, 2004) and Honda Motor Co. Ltd. (2.17% of the net assets of the Fund as of August 31, 2004), both posted gains during the reporting period, benefiting from healthy export levels.
NTT DoCoMo Inc. (2.03% of the net assets of the Fund as of August 31, 2004), on the other hand, suffered losses, as did Canon Inc. (2.24% of the net assets of the Fund as of August 31, 2004). Sony Corp. (1.80% of the net assets of the Fund as of August 31, 2004) and Matsushita Electric Industrial Co. Ltd. (1.58% of the net assets of the Fund as of August 31, 2004) both experienced moderate declines.
MANAGERS’ DISCUSSION & ANALYSIS | 3 |
iSHARES® MSCI JAPAN INDEX FUND
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares; and (2) ongoing costs, including management fees and other fund expenses. The following Example is intended to help you understand your ongoing costs (in dollars and cents) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2004 to August 31, 2004.
Actual Expenses
The first line in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value (March 1, 2004) | Ending Account Value (August 31, 2004) | Annualized Expense Ratio | Expenses Paid During Period* (March 1 to August 31, 2004) | |||||||||
Actual | $ | 1,000.00 | $ | 1,028.10 | 0.66 | % | $ | 3.36 | ||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.83 | 0.66 | 3.35 |
* | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days), and divided by the number of days in the year (366 days). |
4 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2004
Security | Shares | Value | |||
COMMON STOCKS – 99.92% | |||||
ADVERTISING – 0.25% | |||||
Asatsu-DK Inc.1 | 98,800 | $ | 2,628,785 | ||
Dentsu Inc.1 | 4,940 | 11,883,548 | |||
14,512,333 | |||||
AGRICULTURE – 0.41% | |||||
Japan Tobacco Inc. | 2,964 | 24,037,177 | |||
24,037,177 | |||||
AIRLINES – 0.21% | |||||
All Nippon Airways Co. Ltd.1 | 1,976,000 | 6,409,914 | |||
Japan Airlines System Corp.1,2 | 1,976,000 | 5,707,704 | |||
12,117,618 | |||||
APPAREL – 0.37% | |||||
Gunze Ltd. | 988,000 | 4,654,390 | |||
Onward Kashiyama Co. Ltd.1 | 988,000 | 13,819,126 | |||
World Co. Ltd.1 | 98,800 | 3,006,898 | |||
21,480,414 | |||||
AUTO MANUFACTURERS – 10.17% | |||||
Hino Motors Ltd.1 | 988,000 | 6,562,959 | |||
Honda Motor Co. Ltd. | 2,568,800 | 127,334,020 | |||
Nissan Motors Co. Ltd.1 | 8,200,400 | 89,068,995 | |||
Toyota Motor Corp. | 9,484,800 | 373,359,479 | |||
596,325,453 | |||||
AUTO PARTS & EQUIPMENT – 1.72% | |||||
Aisin Seiki Co. Ltd. | 165,200 | 3,966,486 | |||
Bridgestone Corp. | 1,976,000 | 37,361,155 | |||
Denso Corp. | 1,877,200 | 46,098,264 | |||
NOK Corp.1 | 296,400 | 9,317,782 | |||
Toyoda Gosei Co. Ltd.1 | 197,600 | 4,195,253 | |||
100,938,940 | |||||
BANKS – 9.24% | |||||
Bank of Fukuoka Ltd.1 | 1,976,000 | 10,245,059 | |||
Bank of Yokohama Ltd. (The) | 3,952,000 | 23,406,989 | |||
Chiba Bank Ltd. (The) | 1,976,000 | 11,415,408 | |||
Gunma Bank Ltd.1 | 988,000 | 5,032,503 | |||
Hokuhoku Financial Group Inc. | 1,976,000 | 4,915,468 | |||
Joyo Bank Ltd. | 2,964,000 | 12,018,589 | |||
Mitsubishi Tokyo Financial Group Inc. | 14,820 | 133,014,716 | |||
Mitsui Trust Holdings Inc.1 | 1,976,000 | 14,152,226 | |||
Mizuho Financial Group Inc. | 24,700 | 99,479,703 | |||
Resona Holdings Inc.1,2 | 13,832,000 | 22,434,699 | |||
77 Bank Ltd. (The) | 988,000 | 5,923,769 | |||
Shinsei Bank Ltd.1 | 1,976,000 | 11,847,537 | |||
Shizuoka Bank Ltd. (The)1 | 2,964,000 | 22,362,677 | |||
Sumitomo Mitsui Financial Group Inc.1 | 12,844 | 77,360,098 | |||
Sumitomo Trust & Banking Co. Ltd. (The) | 3,952,000 | 23,875,129 | |||
UFJ Holdings Inc.1,2 | 12,844 | 64,135,150 | |||
541,619,720 | |||||
BEVERAGES – 0.94% | |||||
Asahi Breweries Ltd.1 | 988,000 | 9,326,785 | |||
Coca-Cola West Japan Co. Ltd.1 | 197,600 | 4,762,422 | |||
Ito En Ltd.1 | 98,800 | 4,249,269 | |||
Kirin Brewery Co. Ltd. | 2,964,000 | 26,683,967 | |||
Sapporo Breweries Ltd.1 | 988,000 | 3,466,035 | |||
Takara Holdings Inc.1 | 988,000 | 6,391,909 | |||
54,880,387 | |||||
BUILDING MATERIALS – 1.60% | |||||
Asahi Glass Co. Ltd.1 | 2,964,000 | 28,547,523 | |||
Daikin Industries Ltd.1 | 988,000 | 25,657,661 | |||
Matsushita Electric Works Ltd.1 | 988,000 | 7,985,384 | |||
Nippon Sheet Glass Co. Ltd.1 | 988,000 | 3,556,062 | |||
Sumitomo Osaka Cement Co. Ltd.1 | 988,000 | 2,295,686 | |||
Taiheiyo Cement Corp.1 | 2,964,000 | 7,022,097 | |||
Tostem Inax Holding Corp. | 988,000 | 18,725,591 | |||
93,790,004 | |||||
CHEMICALS – 3.71% | |||||
Asahi Kasei Corp | 4,940,000 | 22,101,599 | |||
Daicel Chemical Industries Ltd.1 | 988,000 | 4,573,365 | |||
Dainippon Ink & Chemical Inc. | 1,976,000 | 4,609,376 | |||
Denki Kagaku Kogyo Kabushiki Kaisha | 1,976,000 | 6,193,849 | |||
Ishihara Sangyo Kaisha Ltd.1 | 988,000 | 2,043,610 | |||
JSR Corp.1 | 691,600 | 11,532,443 | |||
Kaneka Corp. | 988,000 | 9,389,804 | |||
Mitsubishi Chemical Corp.1 | 5,928,000 | 15,880,742 | |||
Mitsubishi Gas Chemical Co. Inc.1 | 988,000 | 4,177,247 | |||
Mitsui Chemicals Inc.1 | 1,976,000 | 10,028,994 | |||
Nippon Kayaku Co. Ltd. | 988,000 | 5,338,594 | |||
Nippon Sanso Corp.1 | 988,000 | 5,086,519 |
SCHEDULEOF INVESTMENTS | 5 |
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2004
Security | Shares | Value | |||
Nippon Shokubai Co. Ltd. | 988,000 | $ | 7,445,223 | ||
Nissan Chemical Industries Ltd.1 | 988,000 | 7,868,350 | |||
Nitto Denko Corp.1 | 494,000 | 21,606,451 | |||
Shin-Etsu Chemical Co. Ltd. | 1,086,800 | 37,829,295 | |||
Showa Denko K.K.1 | 2,964,000 | 6,833,040 | |||
Sumitomo Bakelite Co. Ltd.1 | 988,000 | 6,067,812 | |||
Sumitomo Chemical Co. Ltd.1 | 3,952,000 | 17,681,279 | |||
Tosoh Corp.1 | 1,976,000 | 7,022,097 | |||
Ube Industries Ltd.1,2 | 2,964,000 | 4,024,202 | |||
217,333,891 | |||||
COMMERCIAL SERVICES – 1.17% | |||||
Bellsystem24 Inc.1 | 9,880 | 2,412,720 | |||
Benesse Corp.1 | 197,600 | 5,941,774 | |||
Dai Nippon Printing Co. Ltd.1 | 1,976,000 | 28,970,650 | |||
Kamigumi Co. Ltd. | 988,000 | 7,436,221 | |||
TIS Inc.1 | 98,800 | 3,592,072 | |||
Toppan Printing Co. Ltd.1 | 1,976,000 | 20,454,107 | |||
68,807,544 | |||||
COMPUTERS – 1.47% | |||||
CSK Corp.1 | 197,600 | 8,498,538 | |||
Fujitsu Ltd.1 | 5,928,000 | 36,622,935 | |||
Itochu Techno-Science Corp.1 | 98,800 | 4,312,287 | |||
Meitec Corp.1 | 98,800 | 3,556,062 | |||
NET One Systems Co. Ltd.1 | 1,976 | 7,112,124 | |||
TDK Corp. | 395,200 | 26,107,795 | |||
86,209,741 | |||||
COSMETICS & PERSONAL CARE – 1.27% | |||||
Aderans Co. Ltd.1 | 98,800 | 1,890,564 | |||
Kanebo Ltd.1,2 | 1,976,000 | 1,818,543 | |||
Kao Corp.1 | 1,976,000 | 48,434,461 | |||
Shiseido Co. Ltd.1 | 988,000 | 12,684,787 | |||
Uni-Charm Corp.1 | 197,600 | 9,812,930 | |||
74,641,285 | |||||
DISTRIBUTION & WHOLESALE – 2.04% | |||||
Itochu Corp.1,2 | 4,940,000 | 20,391,088 | |||
Marubeni Corp.1 | 4,940,000 | 11,748,508 | |||
Mitsubishi Corp.1 | 3,952,000 | 40,800,182 | |||
Mitsui & Co. Ltd.1 | 3,952,000 | 32,049,569 | |||
Sumitomo Corp. | 1,976,000 | 14,368,290 | |||
119,357,637 | |||||
DIVERSIFIED FINANCIAL SERVICES – 4.22% | |||||
ACOM Co. Ltd. | 227,240 | 14,929,158 | |||
Aeon Credit Service Co. Ltd.1 | 98,890 | 6,424,764 | |||
AIFUL Corp. | 148,200 | 14,786,915 | |||
Credit Saison Co. Ltd.1 | 494,000 | 16,294,865 | |||
Daiwa Securities Group Inc. | 3,952,000 | 25,567,634 | |||
Nikko Cordial Corp. | 4,940,000 | 22,101,599 | |||
Nomura Holdings Inc. | 5,928,000 | 81,456,321 | |||
ORIX Corp.1 | 296,400 | 30,330,056 | |||
Promise Co. Ltd. | 296,400 | 18,770,605 | |||
Takefuji Corp.1 | 237,120 | 16,636,967 | |||
247,298,884 | |||||
ELECTRIC – 4.06% | |||||
Chubu Electric Power Co. Inc.1 | 2,272,400 | 49,798,369 | |||
Kansai Electric Power Co. Inc. (The)1 | 2,470,000 | 45,238,508 | |||
Kyushu Electric Power Co. Inc. | 1,482,000 | 28,223,427 | |||
Tohoku Electric Power Co. Inc.1 | 1,679,600 | 28,619,545 | |||
Tokyo Electric Power Co. Inc. (The) | 3,754,400 | 86,380,792 | |||
238,260,641 | |||||
ELECTRICAL COMPONENTS & EQUIPMENT – 4.14% | |||||
Casio Computer Co. Ltd.1 | 988,000 | 12,864,841 | |||
Fujikura Ltd.1 | 988,000 | 4,465,333 | |||
Furukawa Electric Co. Ltd.1,2 | 1,976,000 | 7,976,381 | |||
Hitachi Cable Ltd. | 988,000 | 4,006,196 | |||
Hitachi Ltd.1 | 9,880,000 | 61,938,494 | |||
Mitsubishi Electric Corp. | 5,928,000 | 28,574,532 | |||
SANYO Electric Co. Ltd.1 | 4,940,000 | 16,835,026 | |||
Sharp Corp.1 | 2,964,000 | 41,322,338 | |||
Stanley Electric Co. Ltd.1 | 691,600 | 10,353,992 | |||
Sumitomo Electric Industries Ltd.1 | 1,976,000 | 18,095,403 | |||
Toshiba Corp.1 | 9,880,000 | 36,460,887 | |||
242,893,423 | |||||
ELECTRONICS – 5.09% | |||||
Advantest Corp.1 | 296,400 | 18,797,613 | |||
Alps Electric Co. Ltd.1 | 988,000 | 12,180,637 | |||
Dainippon Screen Manufacturing Co. Ltd.1 | 988,000 | 5,536,653 | |||
Fanuc Ltd. | 494,000 | 26,287,849 | |||
Hirose Electric Co. Ltd.1 | 98,800 | 9,533,846 | |||
Keyence Corp. | 98,820 | 20,188,112 |
6 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2004
Security | Shares | Value | |||
Kyocera Corp.1 | 592,800 | $ | 43,320,935 | ||
Mabuchi Motor Co. Ltd.1 | 98,800 | 6,923,067 | |||
Minebea Co. Ltd.1 | 988,000 | 4,186,250 | |||
Murata Manufacturing Co. Ltd.1 | 790,400 | 39,107,677 | |||
NEC Corp. | 5,928,000 | 37,865,306 | |||
NGK Insulators Ltd.1 | 988,000 | 8,039,400 | |||
Omron Corp. | 889,200 | 19,040,685 | |||
Secom Co. Ltd. | 988,000 | 36,460,887 | |||
Yokogawa Electric Corp.1 | 988,000 | 10,830,234 | |||
298,299,151 | |||||
ENGINEERING & CONSTRUCTION – 0.86% | |||||
Kajima Corp.1 | 2,964,000 | 10,209,048 | |||
Nishimatsu Construction Co. Ltd.1 | 988,000 | 3,132,935 | |||
Obayashi Corp. | 1,976,000 | 9,668,887 | |||
Okumura Corp.1 | 988,000 | 4,708,406 | |||
Shimizu Corp.1 | 1,976,000 | 8,696,597 | |||
Taisei Corp.1 | 2,964,000 | 10,128,024 | |||
Toda Corp. | 988,000 | 3,898,164 | |||
50,442,061 | |||||
ENTERTAINMENT – 0.38% | |||||
Oriental Land Co. Ltd.1 | 197,600 | 12,225,650 | |||
Toho Co. Ltd.1 | 691,600 | 9,893,954 | |||
22,119,604 | |||||
FOOD – 1.38% | |||||
Ajinomoto Co. Inc. | 1,976,000 | 22,218,634 | |||
Ariake Japan Co., Ltd1 | 105,530 | 2,875,162 | |||
Katokichi Co. Ltd. | 197,600 | 3,637,086 | |||
Kikkoman Corp.1 | 988,000 | 8,651,583 | |||
Meiji Dairies Corp.1 | 988,000 | 5,338,594 | |||
Meiji Seika Kaisha Ltd.1 | 988,000 | 4,078,218 | |||
Nichirei Corp.1 | 988,000 | 3,376,008 | |||
Nippon Meat Packers Inc.1 | 988,000 | 11,667,484 | |||
Nisshin Seifun Group Inc. | 988,000 | 9,821,933 | |||
Nissin Food Products Co. Ltd.1 | 296,400 | 7,508,242 | |||
Snow Brand Milk Products Co. Ltd.1,2 | 494,000 | 1,480,942 | |||
80,653,886 | |||||
FOREST PRODUCTS & PAPER – 0.54% | |||||
Nippon Unipac Holding1 | 2,964 | 14,125,218 | |||
OJI Paper Co. Ltd.1 | 2,964,000 | 17,825,322 | |||
31,950,540 | |||||
GAS – 0.88% | |||||
Osaka Gas Co. Ltd. | 6,916,000 | 19,094,701 | |||
Tokyo Gas Co. Ltd.1 | 8,892,000 | 32,571,725 | |||
51,666,426 | |||||
HAND & MACHINE TOOLS – 0.68% | |||||
Fuji Electric Holdings Co. Ltd. | 1,976,000 | 5,005,495 | |||
Nidec Corp.1 | 98,800 | 9,452,822 | |||
SMC Corp. | 197,600 | 18,923,650 | |||
THK Co. Ltd.1 | 395,200 | 6,716,005 | |||
40,097,972 | |||||
HEALTH CARE – PRODUCTS – 0.91% | |||||
Hoya Corp.1 | 395,200 | 37,991,344 | |||
Terumo Corp. | 691,600 | 15,565,648 | |||
53,556,992 | |||||
HOME BUILDERS – 0.94% | |||||
Daiwa House Industry Co. Ltd. | 1,976,000 | 20,508,123 | |||
Sekisui Chemical Co. Ltd.1 | 1,976,000 | 14,818,425 | |||
Sekisui House Ltd. | 1,976,000 | 19,805,914 | |||
55,132,462 | |||||
HOME FURNISHINGS – 3.79% | |||||
Matsushita Electric Industrial Co. Ltd.1 | 6,916,015 | 92,700,880 | |||
Pioneer Corp. | 691,600 | 15,124,516 | |||
Sony Corp.1 | 3,062,800 | 105,493,498 | |||
Yamaha Corp.1 | 592,800 | 8,826,235 | |||
222,145,129 | |||||
HOUSEWARES – 0.17% | |||||
Toto Ltd.1 | 988,000 | 9,731,906 | |||
9,731,906 | |||||
INSURANCE – 2.63% | |||||
Millea Holdings Inc. | 4,940 | 67,970,294 | |||
Mitsui Sumitomo Insurance Co. Ltd. | 3,952,000 | 34,858,408 | |||
Sompo Japan Insurance Inc.1 | 2,964,000 | 27,656,258 | |||
T&D Holdings Inc.1,2 | 526,500 | 23,891,476 | |||
154,376,436 | |||||
INTERNET – 1.54% | |||||
Rakuten Inc.1 | 988 | 6,797,029 | |||
Softbank Corp.1 | 790,400 | 33,706,064 | |||
Trend Micro Inc.1 | 494,000 | 21,471,411 | |||
Yahoo! Japan Corp.1,2 | 2,964 | 28,358,467 | |||
90,332,971 |
SCHEDULEOF INVESTMENTS | 7 |
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2004
Security | Shares | Value | |||
IRON & STEEL – 2.10% | |||||
JFE Holdings Inc.1 | 1,679,650 | $ | 45,608,975 | ||
Kobe Steel Ltd.1 | 7,904,000 | 11,379,398 | |||
Nippon Steel Corp. | 19,760,000 | 45,193,494 | |||
Nisshin Steel Co. Ltd.1 | 2,964,000 | 6,292,879 | |||
Sumitomo Metal Industries Ltd. | 12,844,000 | 14,863,438 | |||
123,338,184 | |||||
LEISURE TIME – 0.37% | |||||
Namco Ltd.1 | 197,600 | 4,951,479 | |||
Sammy Corp.1 | 197,600 | 9,812,930 | |||
Shimano Inc. | 296,400 | 6,752,016 | |||
21,516,425 | |||||
MACHINERY – CONSTRUCTION & MINING – 0.31% | |||||
Komatsu Ltd.1 | 2,964,000 | 18,122,411 | |||
18,122,411 | |||||
MACHINERY – DIVERSIFIED – 0.87% | |||||
Amada Co. Ltd. | 988,000 | 5,581,666 | |||
Ebara Corp.1 | 988,000 | 4,276,277 | |||
Kubota Corp. | 2,964,000 | 14,854,435 | |||
Sumitomo Heavy Industries Ltd.1,2 | 1,976,000 | 6,049,807 | |||
Toyota Industries Corp.1 | 889,200 | 20,256,048 | |||
51,018,233 | |||||
MANUFACTURING – 2.01% | |||||
Fuji Photo Film Co. Ltd. | 988,000 | 30,969,247 | |||
Ishikawajima-Harima Heavy Industries Co. Ltd.2 | 3,952,000 | 5,869,753 | |||
Kawasaki Heavy Industries Ltd.1 | 4,940,000 | 7,472,231 | |||
Konica Minolta Holdings Inc. | 1,482,000 | 19,135,213 | |||
Mitsubishi Heavy Industries Ltd. | 9,880,000 | 26,737,984 | |||
Nikon Corp.1 | 988,000 | 9,128,726 | |||
Olympus Corp.1 | 988,000 | 18,725,591 | |||
118,038,745 | |||||
MEDIA – 0.04% | |||||
Fuji Television Network Inc. | 1,154 | 2,523,669 | |||
2,523,669 | |||||
METAL FABRICATE & HARDWARE – 0.24% | |||||
NSK Ltd.1 | 1,976,000 | 8,696,597 | |||
NTN Corp.1 | 988,000 | 5,365,602 | |||
14,062,199 | |||||
MINING – 0.57% | |||||
Dowa Mining Co. Ltd.1 | 988,000 | 6,355,897 | |||
Mitsubishi Materials Corp.1 | 2,964,000 | 6,265,871 | |||
Mitsui Mining & Smelting Co. Ltd.1 | 1,976,000 | 7,994,387 | |||
Sumitomo Metal Mining Co. Ltd.1 | 1,976,000 | 12,909,855 | |||
33,526,010 | |||||
OFFICE & BUSINESS EQUIPMENT – 3.11% | |||||
Canon Inc. | 2,766,400 | 131,583,289 | |||
Ricoh Co. Ltd. | 1,976,000 | 38,711,559 | |||
Seiko Epson Corp.1 | 296,400 | 12,126,621 | |||
182,421,469 | |||||
OIL & GAS – 0.91% | |||||
Nippon Mining Holdings Inc. | 1,976,000 | 9,056,704 | |||
Nippon Oil Corp. | 4,940,500 | 30,747,291 | |||
Teikoku Oil Co. Ltd.1 | 988,000 | 5,257,570 | |||
TonenGeneral Sekiyu K.K.1 | 988,000 | 8,219,454 | |||
53,281,019 | |||||
PACKAGING & CONTAINERS – 0.28% | |||||
Toyo Seikan Kaisha Ltd.1 | 988,000 | 16,645,970 | |||
16,645,970 | |||||
PHARMACEUTICALS – 5.26% | |||||
Chugai Pharmaceutical Co. Ltd.1 | 988,000 | 14,494,328 | |||
Daiichi Pharmaceutical Co. Ltd.1 | 889,200 | 15,345,982 | |||
Eisai Co. Ltd.1 | 889,200 | 25,279,548 | |||
Fujisawa Pharmaceutical Co. Ltd. | 988,000 | 23,452,002 | |||
Kyowa Hakko Kogyo Co. Ltd.1 | 988,000 | 6,797,029 | |||
Sankyo Co. Ltd.1 | 988,000 | 20,616,156 | |||
Shionogi & Co. Ltd.1 | 988,000 | 15,934,758 | |||
Taisho Pharmaceutical Co. Ltd. | 988,000 | 18,815,618 | |||
Takeda Pharmaceutical Co. Ltd. | 2,964,000 | 133,419,837 | |||
Yamanouchi Pharmaceutical Co. Ltd.1 | 988,000 | 34,120,188 | |||
308,275,446 | |||||
REAL ESTATE – 1.44% | |||||
Daito Trust Construction Co. Ltd.1 | 296,400 | 11,208,347 | |||
Leopalace21 Corp.1 | 395,200 | 7,706,301 | |||
Mitsubishi Estate Co. Ltd.1 | 2,964,000 | 33,246,927 | |||
Mitsui Fudosan Co. Ltd. | 1,976,000 | 21,786,505 | |||
Sumitomo Realty & Development Co. Ltd.1 | 988,000 | 10,776,218 | |||
84,724,298 | |||||
RETAIL – 3.88% | |||||
Aeon Co. Ltd.1 | 890,100 | 14,793,771 | |||
Aeon Co. Ltd. When Issued1,2 | 848,700 | 13,881,421 |
8 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2004
Security | Shares | Value | |||
Aoyama Trading Co. Ltd. | 197,600 | $ | 4,762,422 | ||
Autobacs Seven Co. Ltd.1 | 98,800 | 2,916,871 | |||
Citizen Watch Co. Ltd.1 | 988,000 | 9,902,957 | |||
Daimaru Inc. (The)1 | 988,000 | 7,913,363 | |||
FamilyMart Co. Ltd1 | 197,600 | 5,563,661 | |||
Fast Retailing Co. Ltd.1 | 197,600 | 14,224,247 | |||
Isetan Co. Ltd.1 | 889,200 | 9,901,156 | |||
Ito-Yokado Co. Ltd.1 | 988,000 | 36,370,860 | |||
Lawson Inc.1 | 197,600 | 7,004,091 | |||
Marui Co. Ltd.1 | 988,000 | 13,008,884 | |||
Mitsukoshi Ltd.1 | 988,000 | 4,717,409 | |||
Saizeriya Co. Ltd.1 | 197,690 | 3,089,328 | |||
Seven-Eleven Japan Co. Ltd.1 | 988,000 | 30,068,978 | |||
Shimachu Co. Ltd.1 | 197,600 | 4,762,422 | |||
Shimamura Co. Ltd.1 | 98,800 | 7,220,156 | |||
Takashimaya Co. Ltd.1 | 988,000 | 8,975,680 | |||
UNY Co. Ltd.1 | 988,000 | 11,163,333 | |||
USS Co. Ltd.1 | 88,920 | 6,473,833 | |||
Yamada Denki Co. Ltd.1 | 296,400 | 10,668,186 | |||
227,383,029 | |||||
SEMICONDUCTORS – 1.30% | |||||
NEC Electronics Corp.1 | 98,800 | 4,996,492 | |||
Rohm Co. Ltd.1 | 395,200 | 40,872,204 | |||
Tokyo Electron Ltd.1 | 592,852 | 30,359,727 | |||
76,228,423 | |||||
SHIPBUILDING – 0.08% | |||||
Mitsui Engineering & Shipbuilding Co. Ltd.1 | 2,964,000 | 4,510,347 | |||
4,510,347 | |||||
SOFTWARE – 0.28% | |||||
Capcom Co. Ltd.1 | 296,400 | 3,003,297 | |||
Hitachi Software Engineering Co. Ltd.1 | 98,800 | 1,967,088 | |||
Konami Corp.1 | 296,400 | 6,603,472 | |||
Oracle Corp.1 | 98,800 | 5,104,524 | |||
16,678,381 | |||||
TELECOMMUNICATIONS – 3.69% | |||||
Nippon Telegraph & Telephone Corp. | 17,784 | 76,810,934 | |||
NTT Data Corp.1 | 4,940 | 13,819,126 | |||
NTT DoCoMo Inc. | 64,220 | 118,790,469 | |||
Oki Electric Industry Co. Ltd.1,2 | 1,976,000 | 6,806,032 | |||
216,226,561 | |||||
TEXTILES – 0.93% | |||||
Kuraray Co. Ltd.1 | 988,000 | 7,382,204 | |||
Mitsubishi Rayon Co. Ltd. | 1,976,000 | 6,535,952 | |||
Nisshinbo Industries Inc. | 988,000 | 6,977,084 | |||
Teijin Ltd.1 | 2,964,000 | 10,290,072 | |||
Toray Industries Inc. | 3,952,000 | 18,653,570 | |||
Toyobo Co. Ltd. | 1,976,000 | 4,843,446 | |||
54,682,328 | |||||
TOYS, GAMES & HOBBIES – 0.86% | |||||
Bandai Co. Ltd.1 | 335,999 | 7,776,550 | |||
Nintendo Co. Ltd.1 | 395,200 | 42,492,688 | |||
50,269,238 | |||||
TRANSPORTATION – 4.51% | |||||
Central Japan Railway Co.1 | 2,964 | 24,631,354 | |||
East Japan Railway Co. | 10,868 | 60,804,155 | |||
Kawasaki Kisen Kaisha Ltd.1 | 1,976,000 | 12,621,768 | |||
Keihin Electric Express Railway Co. Ltd.1 | 1,976,000 | 11,469,425 | |||
Keio Electric Railway Co. Ltd. | 1,976,000 | 10,497,134 | |||
Kintetsu Corp.1 | 4,940,000 | 16,970,067 | |||
Mitsui O.S.K. Lines Ltd.1 | 2,964,000 | 17,555,242 | |||
Nippon Express Co. Ltd. | 2,964,000 | 15,205,540 | |||
Nippon Yusen Kabushiki Kaisha | 3,952,000 | 20,418,097 | |||
Seino Transportation Co. Ltd.1 | 988,000 | 9,299,777 | |||
Tobu Railway Co. Ltd.1 | 2,964,000 | 11,127,322 | |||
Tokyu Corp. | 2,964,000 | 14,179,234 | |||
West Japan Railway Co. | 5,928 | 24,469,306 | |||
Yamato Transport Co. Ltd.1 | 988,000 | 15,016,484 | |||
264,264,905 | |||||
VENTURE CAPITAL – 0.10% | |||||
JAFCO Co. Ltd.1 | 98,800 | 5,977,785 | |||
5,977,785 | |||||
TOTAL COMMON STOCKS | 5,858,725,703 |
SCHEDULEOF INVESTMENTS | 9 |
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2004
Security | Principal | Value | ||||
SHORT-TERM INVESTMENTS – 24.01% | ||||||
FLOATING RATE NOTES – 6.21% | ||||||
Beta Finance Inc. | ||||||
1.45%, 05/04/053,4 | $ | 6,151,906 | $ | 6,151,068 | ||
1.52%, 10/12/043,4 | 5,126,588 | 5,126,531 | ||||
1.56%, 09/15/043,4 | 10,253,176 | 10,253,137 | ||||
1.64%, 03/15/053,4 | 5,126,588 | 5,128,801 | ||||
Canadian Imperial Bank of Commerce | ||||||
1.24%, 10/07/043 | 7,689,882 | 7,689,768 | ||||
1.38%, 11/22/043 | 2,563,294 | 2,563,338 | ||||
1.40%, 10/29/043 | 10,253,176 | 10,253,135 | ||||
CC USA Inc. | ||||||
1.45%, 05/04/053,4 | 10,253,176 | 10,251,800 | ||||
1.61%, 07/29/053,4 | 10,253,176 | 10,250,379 | ||||
Den Danske Bank NY | ||||||
1.51%, 08/12/053 | 10,253,176 | 10,250,268 | ||||
1.56%, 08/26/053 | 10,253,176 | 10,250,150 | ||||
Depfa Bank PLC | ||||||
1.27%, 06/15/053 | 10,253,176 | 10,253,176 | ||||
Dorada Finance Inc. | ||||||
1.61%, 07/29/053,4 | 8,510,136 | 8,507,815 | ||||
Five Finance Inc. | ||||||
1.42%, 04/29/053,4 | 8,202,541 | 8,202,001 | ||||
Gemini Securitization Corp. | ||||||
1.53%, 09/09/043 | 5,126,588 | 5,124,845 | ||||
HBOS Treasury Services PLC | ||||||
1.24%, 04/01/053 | 6,562,033 | 6,561,651 | ||||
1.58%, 04/22/053 | 10,253,176 | 10,253,176 | ||||
K2 USA LLC | ||||||
1.45%, 06/10/053,4 | 10,253,176 | 10,252,206 | ||||
1.57%, 09/27/043,4 | 11,073,430 | 11,073,312 | ||||
1.61%, 07/25/053,4 | 5,126,588 | 5,125,667 | ||||
Links Finance LLC | ||||||
1.55%, 04/15/053,4 | 10,253,176 | 10,251,906 | ||||
1.68%, 04/25/053 | 10,253,176 | 10,257,497 | ||||
Nationwide Building Society | ||||||
1.59%, 07/28/053 | 10,253,176 | 10,253,176 | ||||
1.63%, 12/09/043,4 | 8,510,136 | 8,471,989 | ||||
Nordea Bank PLC | ||||||
2.11%, 06/07/053 | 10,253,176 | 10,251,620 | ||||
Security | Shares or Principal | Value | ||||
Northern Rock PLC | ||||||
1.56%, 01/13/053,4 | $ | 9,740,517 | $ | 9,740,517 | ||
Permanent Financing PLC | ||||||
1.52%, 03/10/053 | 10,253,176 | 10,253,176 | ||||
1.53%, 12/10/043 | 5,126,588 | 5,126,588 | ||||
1.55%, 06/10/053 | 4,613,929 | 4,613,929 | ||||
Sigma Finance Inc. | ||||||
1.52%, 10/07/043 | 10,253,176 | 10,252,974 | ||||
1.57%, 11/15/043 | 10,253,176 | 10,253,015 | ||||
1.59%, 09/15/053 | 7,689,882 | 7,690,569 | ||||
Tango Finance Corp. | ||||||
1.52%, 04/07/053,4 | 3,762,916 | 3,762,691 | ||||
1.56%, 01/18/053,4 | 4,511,397 | 4,511,224 | ||||
1.59%, 07/25/053,4 | 10,253,176 | 10,252,255 | ||||
1.66%, 05/17/053,4 | 8,510,136 | 8,509,836 | ||||
1.70%, 02/25/053,4 | 5,741,778 | 5,741,223 | ||||
WhistleJacket Capital LLC | ||||||
1.26%, 10/20/043 | 2,539,712 | 2,535,356 | ||||
1.48%, 06/15/053,4 | 5,126,588 | 5,125,665 | ||||
1.56%, 09/15/043,4 | 5,126,588 | 5,126,549 | ||||
1.56%, 07/15/053,4 | 7,689,882 | 7,688,524 | ||||
White Pine Finance LLC | ||||||
1.46%, 07/05/053 | 5,126,588 | 5,125,644 | ||||
1.55%, 04/15/053,4 | 7,689,882 | 7,688,930 | ||||
1.55%, 07/11/053 | 2,563,294 | 2,563,046 | ||||
1.56%, 11/15/043,4 | 6,151,906 | 6,151,906 | ||||
1.57%, 06/15/053,4 | 4,203,802 | 4,203,803 | ||||
1.58%, 03/29/053 | 4,408,866 | 4,408,296 | ||||
1.58%, 08/26/053,4 | 5,126,588 | 5,125,579 | ||||
1.68%, 05/20/053 | 4,613,929 | 4,613,599 | ||||
364,073,306 | ||||||
MONEY MARKET FUNDS – 4.80% | ||||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares3,5 | 156,793,933 | 156,793,933 | ||||
Barclays Global Investors Funds Prime Money Market Fund, Institutional Shares3,5 | 112,784,935 | 112,784,935 | ||||
BlackRock Temp Cash Money Market Fund3 | 5,175,964 | 5,175,964 |
10 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2004
Security | Shares or Principal | Value | ||||
Short-Term Investment Co. - | ||||||
Prime Money Market Portfolio, | ||||||
Institutional Shares3 | 6,892,169 | $ | 6,892,169 | |||
281,647,001 | ||||||
COMMERCIAL PAPER – 4.45% | ||||||
Alpine Securitization Corp. | ||||||
1.50%, 09/08/043 | $ | 5,126,588 | 5,125,093 | |||
1.51%, 09/02/043 | 4,613,929 | 4,613,736 | ||||
1.54%, 09/14/043 | 5,126,588 | 5,123,737 | ||||
Amsterdam Funding Corp. | ||||||
1.49%, 09/08/043 | 2,050,635 | 2,050,041 | ||||
1.53%, 09/16/043 | 5,044,357 | 5,041,142 | ||||
1.54%, 09/15/043 | 5,126,588 | 5,123,518 | ||||
1.54%, 09/22/043 | 2,563,294 | 2,560,991 | ||||
Barton Capital Corp. | ||||||
1.53%, 09/08/043 | 5,126,588 | 5,125,063 | ||||
1.53%, 09/09/043 | 11,974,787 | 11,970,715 | ||||
1.53%, 09/13/043 | 7,381,877 | 7,378,112 | ||||
1.53%, 09/14/043 | 2,563,294 | 2,561,878 | ||||
1.54%, 09/17/043 | 3,075,953 | 3,073,847 | ||||
Blue Ridge Asset Funding Corp. | ||||||
1.51%, 09/08/043 | 5,126,588 | 5,125,083 | ||||
1.53%, 09/15/043 | 2,050,635 | 2,049,415 | ||||
Cantabric Finance LLC | ||||||
1.55%, 09/17/043 | 2,050,635 | 2,049,223 | ||||
Corporate Asset Funding | ||||||
1.42%, 09/03/043 | 3,075,953 | 3,075,710 | ||||
CRC Funding LLC | ||||||
1.42%, 09/03/043 | 5,126,588 | 5,126,184 | ||||
Delaware Funding Corp. | ||||||
1.50%, 09/09/043 | 5,126,588 | 5,124,879 | ||||
1.53%, 09/10/043 | 8,202,541 | 8,199,403 | ||||
1.53%, 09/20/043 | 3,486,080 | 3,483,265 | ||||
Edison Asset Securitization | ||||||
1.07%, 09/21/043 | 5,126,588 | 5,123,540 | ||||
1.45%, 11/09/043 | 10,253,176 | 10,224,681 | ||||
1.52%, 09/08/043 | 10,253,176 | 10,250,146 | ||||
1.59%, 12/02/043 | 10,253,176 | 10,211,514 | ||||
Security | Principal | Value | ||||
Falcon Asset Securitization Corp. | ||||||
1.48%, 09/03/043 | $ | 3,075,953 | $ | 3,075,700 | ||
1.53%, 09/07/043 | 5,126,588 | 5,125,281 | ||||
1.53%, 09/17/043 | 3,075,953 | 3,073,861 | ||||
1.53%, 09/21/043 | 2,563,294 | 2,561,115 | ||||
1.53%, 09/22/043 | 5,126,588 | 5,122,012 | ||||
1.54%, 09/14/043 | 7,689,882 | 7,685,612 | ||||
Ford Credit Auto Receivables | ||||||
1.85%, 01/14/053 | 5,126,588 | 5,091,023 | ||||
GIRO Funding US Corp. | ||||||
1.54%, 09/09/043 | 5,126,588 | 5,124,839 | ||||
1.55%, 10/15/043 | 6,723,520 | 6,710,783 | ||||
Grampian Funding LLC | ||||||
1.26%, 10/22/043 | 10,253,176 | 10,234,947 | ||||
1.44%, 10/27/043 | 10,253,176 | 10,230,209 | ||||
1.59%, 11/30/043 | 5,126,588 | 5,106,210 | ||||
Jupiter Securitization Corp. | ||||||
1.47%, 09/02/043 | 2,563,294 | 2,563,189 | ||||
1.53%, 09/20/043 | 2,563,294 | 2,561,225 | ||||
1.53%, 09/23/043 | 3,588,612 | 3,585,257 | ||||
1.54%, 09/15/043 | 6,151,906 | 6,148,221 | ||||
Preferred Receivables Funding Corp. | ||||||
1.47%, 09/01/043 | 7,145,438 | 7,145,438 | ||||
1.51%, 09/08/043 | 4,101,270 | 4,100,066 | ||||
1.52%, 09/09/043 | 2,563,294 | 2,562,428 | ||||
1.53%, 09/21/043 | 5,126,588 | 5,122,230 | ||||
Receivables Capital Corp. | ||||||
1.54%, 09/14/043 | 3,075,953 | 3,074,242 | ||||
Scaldis Capital LLC | ||||||
1.48%, 09/01/043 | 5,639,247 | 5,639,247 | ||||
Sydney Capital Corp. | ||||||
1.25%, 10/22/043 | 3,412,257 | 3,406,214 | ||||
1.55%, 09/16/043 | 3,075,953 | 3,073,967 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
1.54%, 09/15/043 | 4,101,270 | 4,098,814 | ||||
1.54%, 09/23/043 | 2,563,294 | 2,560,882 | ||||
Windmill Funding Corp. | ||||||
1.52%, 09/09/043 | 2,563,294 | 2,562,428 | ||||
1.52%, 09/10/043 | 3,588,612 | 3,587,248 | ||||
260,723,604 |
SCHEDULEOF INVESTMENTS | 11 |
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2004
Security | Principal | Value | |||||
TIME DEPOSITS – 3.91% | |||||||
Abbey National Treasury Services PLC | |||||||
1.25%, 01/06/053 | $ | 10,253,176 | $ | 10,253,176 | |||
1.33%, 02/10/053 | 5,126,588 | 5,126,245 | |||||
1.39%, 02/02/053 | 5,126,588 | 5,126,264 | |||||
1.39%, 04/08/053 | 7,177,223 | 7,176,577 | |||||
1.40%, 10/25/043 | 10,253,176 | 10,252,948 | |||||
Bank of New York | |||||||
1.39%, 11/01/043 | 10,253,176 | 10,253,005 | |||||
1.60%, 12/03/043 | 2,563,294 | 2,562,963 | |||||
Bank of Nova Scotia | |||||||
1.13%, 10/06/043 | 10,253,176 | 10,253,176 | |||||
1.24%, 10/07/043 | 7,689,882 | 7,689,806 | |||||
1.42%, 10/29/043 | 7,689,882 | 7,689,974 | |||||
National City Bank (Cleveland, Ohio) | |||||||
1.25%, 01/06/053 | 10,253,176 | 10,253,352 | |||||
1.49%, 08/09/053 | 10,253,176 | 10,250,294 | |||||
1.54%, 06/23/053 | 10,253,176 | 10,250,690 | |||||
1.56%, 06/10/053 | 5,126,588 | 5,127,829 | |||||
Norddeutsche Landesbank | |||||||
1.59%, 07/27/053 | 10,253,176 | 10,249,923 | |||||
Prudential Funding LLC | |||||||
1.60%, 12/01/043 | 5,126,588 | 5,105,854 | |||||
SouthTrust Bank | |||||||
1.55%, 09/01/043 | 20,506,352 | 20,506,352 | |||||
Toronto-Dominion Bank | |||||||
1.22%, 03/23/053 | 17,943,058 | 17,941,309 | |||||
1.34%, 02/10/053 | 4,101,270 | 4,100,997 | |||||
1.41%, 11/01/043 | 7,689,882 | 7,689,754 | |||||
1.53%, 09/13/043 | 5,126,588 | 5,126,588 | |||||
1.77%, 05/10/053 | 5,126,588 | 5,126,237 | |||||
1.90%, 05/11/053 | 5,126,588 | 5,126,236 | |||||
UBS Finance (Delaware) | |||||||
1.10%, 09/08/043 | 10,253,176 | 10,250,983 | |||||
1.11%, 12/17/043 | 15,379,764 | 15,329,023 | |||||
1.14%, 09/29/043 | 10,253,176 | 10,244,125 | |||||
229,063,680 | |||||||
REPURCHASE AGREEMENTS – 3.46% | |||||||
Banc of America Securities LLC | |||||||
1.59%, 09/01/043,6 | 30,759,528 | 30,759,528 | |||||
Bank of America, N.A | |||||||
1.59%, 09/01/043,6 | $ | 58,955,761 | 58,955,761 | ||||
Goldman Sachs & Co. | |||||||
1.59%, 09/01/043,6 | 51,265,879 | 51,265,879 | |||||
Merrill Lynch Government Securities Inc. | |||||||
1.57%, 09/01/043,6 | 10,253,176 | 10,253,176 | |||||
1.59%, 09/01/043,6 | 51,265,879 | 51,265,879 | |||||
202,500,223 | |||||||
U.S. GOVERNMENT AGENCY NOTES – 0.63% | |||||||
Federal Home Loan Mortgage Corp. | |||||||
1.63%, 04/15/053 | 7,177,223 | 7,191,431 | |||||
1.80%, 01/18/053 | 4,767,727 | 4,734,591 | |||||
1.80%, 01/19/053 | 5,126,588 | 5,090,702 | |||||
2.06%, 05/31/053 | 5,111,516 | 5,031,958 | |||||
Federal National Mortgage Association | |||||||
2.33%, 07/22/053 | 15,379,764 | 15,057,942 | |||||
37,106,624 | |||||||
MEDIUM-TERM NOTES – 0.55% | |||||||
CC USA Inc. | |||||||
1.29%, 04/15/053,4 | 10,253,176 | 10,252,541 | |||||
1.51%, 02/15/053,4 | 6,664,564 | 6,669,304 | |||||
Dorada Finance Inc. | |||||||
1.48%, 01/18/053,4 | 7,689,882 | 7,689,737 | |||||
K2 USA LLC | |||||||
1.46%, 01/12/053,4 | 5,126,588 | 5,126,402 | |||||
WhistleJacket Capital LLC | |||||||
1.32%, 02/04/053,4 | 2,563,294 | 2,563,075 | |||||
32,301,059 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 1,407,415,497 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 123.93% | 7,266,141,200 | ||||||
Other Assets, Less Liabilities – (23.93%) | (1,402,809,556 | ) | |||||
NET ASSETS – 100.00% | $ | 5,863,331,644 | |||||
1 | All or a portion of this security represents a security on loan. See Note 5. |
2 | Non-income earning security. |
3 | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
4 | Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
5 | Issuer is an affiliate of the Fund’s investment adviser. See Note 2. |
6 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 2.58% to 9.60% and maturity dates ranging from 2/1/07 to 8/1/42. |
12 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2004
SECTOR DIVERSIFICATION
Sector | % of Net Assets | Value | ||||
Consumer Cyclical | 25.81 | % | $ | 1,513,200,183 | ||
Industrial | 20.67 | 1,212,185,421 | ||||
Financial | 17.63 | 1,033,997,123 | ||||
Consumer Non-Cyclical | 11.34 | 664,852,717 | ||||
Basic Materials | 6.93 | 406,148,625 | ||||
Technology | 6.17 | 361,538,014 | ||||
Communications | 5.52 | 323,595,534 | ||||
Utilities | 4.94 | 289,927,067 | ||||
Energy | 0.91 | 53,281,019 | ||||
Short-Term and Other Net Assets | 0.08 | 4,605,941 | ||||
TOTAL | 100.00 | % | $ | 5,863,331,644 | ||
See notes to financial statements.
SCHEDULEOF INVESTMENTS | 13 |
Statement of Assets and Liabilities
iSHARES®, INC.
August 31, 2004
iShares MSCI Japan Index Fund | ||||
ASSETS | ||||
Investments, at cost: | ||||
Unaffiliated issuers | $ | 6,731,956,144 | ||
Affiliates of the investment adviser | $ | 269,578,868 | ||
Foreign currency, at cost | $ | 1,237,601 | ||
Investments in securities, at value (including securities on loana) (Note 1): | ||||
Unaffiliated issuers | $ | 6,996,562,332 | ||
Affiliates of the investment adviser | 269,578,868 | |||
Foreign currency, at value | 1,236,861 | |||
Receivables: | ||||
Dividends and interest | 2,026,946 | |||
Capital shares sold | 760,361 | |||
Reimbursement of distribution fees | 2,936,074 | |||
Total Assets | 7,273,101,442 | |||
LIABILITIES | ||||
Payables: | ||||
Collateral for securities on loan (Note 5) | 1,404,260,565 | |||
Investment advisory fees (Note 2) | 5,509,233 | |||
Total Liabilities | 1,409,769,798 | |||
NET ASSETS | $ | 5,863,331,644 | ||
Net assets consist of: | ||||
Paid-in capital | $ | 5,707,845,846 | ||
Undistributed net investment income | 9,816,919 | |||
Accumulated net realized loss | (118,920,006 | ) | ||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies | 264,588,885 | |||
NET ASSETS | $ | 5,863,331,644 | ||
Shares outstanding | 592,800,000 | |||
Net asset value per share | $ | 9.89 | ||
a | Securities on loan with market value of $1,334,878,170. See Note 5. |
See notes to financial statements.
14 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Statement of Operations
iSHARES®, INC.
Year ended August 31, 2004
iShares MSCI Japan Index Fund | ||||
NET INVESTMENT INCOME | ||||
Dividendsa | $ | 34,225,228 | ||
Interestb | 24,325 | |||
Securities lending incomeb | 1,415,820 | |||
Total investment income | 35,665,373 | |||
EXPENSES (NOTE 2) | ||||
Investment advisory fees | 22,799,645 | |||
Distribution fees | 7,356,613 | |||
Total expenses | 30,156,258 | |||
Less reimbursement of distribution fees | (5,182,221 | ) | ||
Net expenses | 24,974,037 | |||
Net investment income | 10,691,336 | |||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments | (37,481,806 | ) | ||
In-kind redemptions | 73,242,782 | |||
Foreign currency transactions | (206,736 | ) | ||
Net realized gain | 35,554,240 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 309,290,346 | |||
Translation of assets and liabilities in foreign currencies | (39,229 | ) | ||
Net change in unrealized appreciation (depreciation) | 309,251,117 | |||
Net realized and unrealized gain | 344,805,357 | |||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 355,496,693 | ||
a | Net of foreign withholding tax of $2,219,290. |
b | Includes income earned from affiliates of the Fund’s investment adviser. See Note 2. |
See notes to financial statements.
FINANCIAL STATEMENTS | 15 |
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Japan Index Fund | ||||||||
For the year Ended August 31, 2004 | For the year Ended August 31, 2003 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 10,691,336 | $ | 212,198 | ||||
Net realized gain | 35,554,240 | 8,673,926 | ||||||
Net change in unrealized appreciation (depreciation) | 309,251,117 | 171,100,487 | ||||||
Net increase in net assets resulting from operations | 355,496,693 | 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 | 4,011,503,336 | 1,146,153,031 | ||||||
Cost of shares redeemed | (230,049,073 | ) | (265,660,262 | ) | ||||
Net increase in net assets from capital share transactions | 3,781,454,263 | 880,492,769 | ||||||
INCREASE IN NET ASSETS | 4,136,476,743 | 1,060,479,380 | ||||||
NET ASSETS: | ||||||||
Beginning of year | 1,726,854,901 | 666,375,521 | ||||||
End of year | $ | 5,863,331,644 | $ | 1,726,854,901 | ||||
Undistributed net investment income (accumulated net investment loss) included in net assets at end of year | $ | 9,816,919 | $ | (240,476 | ) | |||
SHARES ISSUED AND REDEEMED: | ||||||||
Shares sold | 408,600,000 | 158,400,000 | ||||||
Shares redeemed | (24,000,000 | ) | (36,000,000 | ) | ||||
Net increase in shares outstanding | 384,600,000 | 122,400,000 | ||||||
See notes to financial statements.
16 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Japan Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | Year ended Aug. 31, 2000 | ||||||||||||||||
Net asset value, beginning of year | $ | 8.29 | $ | 7.77 | $ | 9.07 | $ | 13.82 | $ | 13.22 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income (loss)a | 0.03 | 0.00c | (0.01 | ) | (0.01 | ) | (0.05 | ) | ||||||||||||
Net realized and unrealized gain (loss) | 1.57 | 0.52 | (1.29 | ) | (4.74 | ) | 1.21 | |||||||||||||
Total from investment operations | 1.60 | 0.52 | (1.30 | ) | (4.75 | ) | 1.16 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.00 | )c | — | — | — | (0.00 | )c | |||||||||||||
Net realized gain | — | — | — | — | (0.53 | ) | ||||||||||||||
Return of capital | — | — | — | — | (0.03 | ) | ||||||||||||||
Total distributions | (0.00 | )c | — | — | — | (0.56 | ) | |||||||||||||
Net asset value, end of year | $ | 9.89 | $ | 8.29 | $ | 7.77 | $ | 9.07 | $ | 13.82 | ||||||||||
Total return | �� | 19.32 | % | 6.69 | % | (14.33 | )% | (34.37 | )% | 8.75 | % | |||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 5,863,332 | $ | 1,726,855 | $ | 666,376 | $ | 527,899 | $ | 787,790 | ||||||||||
Ratio of expenses to average net assets | 0.64 | %d | 0.84 | % | 0.84 | % | 0.84 | % | 0.88 | % | ||||||||||
Ratio of net investment income (loss) to average net assets | 0.28 | %e | 0.03 | % | (0.12 | )% | (0.11 | )% | (0.32 | )% | ||||||||||
Portfolio turnover rateb | 5 | % | 2 | % | 2 | % | 21 | % | 22 | % |
a | Based on average shares outstanding throughout the period. |
b | Excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
c | Rounds to less than $0.01. |
d | Ratio of expenses to average net assets prior to reimbursed distribution fees for the year ended August 31, 2004 was 0.78%. |
e | Ratio of net investment income to average net assets prior to reimbursed distribution fees for the year ended August 31, 2004 was 0.14%. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 17 |
Notes to the Financial Statements
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 pursuant to amended and restated Articles of Incorporation. As of August 31, 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 equity securities in the aggregate in the Japanese equity market, as measured by the MSCI Japan Index compiled by Morgan Stanley Capital International Inc. (“MSCI”). The investment adviser 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 affecting these companies.
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 Company’s organizational documents, the Fund’s officers and directors are indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
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 that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenue and expenses during the reporting period. 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. The reclassifications had no impact on prior year net assets, net income or distributions.
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 is generally the same as the one used by MSCI in calculating the benchmark index used by the Fund. Short-term investments and debt securities maturing in 60 days or less are valued at amortized cost. Securities in investment companies, other than investment companies whose shares are traded on an exchange, are valued at the investment company’s published net asset value per share. 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 (the “Board”).
18 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Notes to the Financial Statements (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 Fund’s accounting records are maintained in U.S. dollars. 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 currencies, investment securities and other 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 adviser 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, 2004, the tax year-end of the Fund, the components of distributable earnings (accumulated losses) on a tax basis consisted of undistributed ordinary income of $12,922,546, unrealized appreciation of $225,179,965 and capital and other losses of $82,616,713, for total distributable earnings of $155,485,798.
The differences between the components of distributable earnings (accumulated losses) on a tax basis and the amounts reflected in the Statement of Assets and Liabilities are primarily due to differing treatments of wash sales.
For the year ended August 31, 2004, the tax characterization of distributions paid for the 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 the Fund.
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 by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its 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 year ended August 31, 2004.
NOTESTOTHE FINANCIAL STATEMENTS | 19 |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
From November 1, 2003 to August 31, 2004, the Fund incurred net realized capital losses and net foreign currency losses of $7,869,800. As permitted by tax regulations, the Fund has elected to defer those losses and treat them as arising in the year ending August 31, 2005.
At August 31, 2004, the tax year-end of the Fund, the Fund had tax basis net capital loss carryforwards of $2,959,030, $62,572,173, $3,621,148 and $5,594,562 expiring in 2009, 2010, 2011 and 2012, 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, as “passive foreign investment companies”, the Fund may elect to mark-to-market annually the shares of the passive foreign investment companies, and would be required to distribute to shareholders any such mark-to-market gains.
At August 31, 2004, the cost of investments for federal income tax purposes was $7,040,943,933. Net unrealized appreciation aggregated $225,197,267, of which $430,909,893 represented gross unrealized appreciation on securities and $205,712,626 represented gross unrealized depreciation on securities.
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. At August 31, 2004, a portion of the Fund’s cash collateral for securities on loan was invested in repurchase agreements as disclosed in the Fund’s Schedule of Investments. For further information, see Note 5, below.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
Pursuant to an Investment Advisory Agreement with the Company, as amended on December 28, 2001, Barclays Global Fund Advisors (“BGFA”) manages the investment of the Fund’s assets. BGFA is a California corporation indirectly owned by Barclays Bank PLC. Under the Investment Advisory Agreement, BGFA is responsible for all of the expenses (“Covered Expenses”) of the Fund, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except interest, taxes, brokerage commissions and other expenses connected with the executions of portfolio transactions, distribution fees and extraordinary expenses.
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:
Investment 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 |
20 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
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 adviser. 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 year ended August 31, 2004, BGI earned securities lending agent fees of $1,436,206.
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. Prior to July 1, 2004, the Company had in effect a distribution plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Distributor was 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 expenses and services. At the Board meeting held on March 16, 2004, the Directors voted to terminate the Plan, effective July 1, 2004.
For the year ended August 31, 2004, the Distributor voluntarily reimbursed for distribution fees in the amount of $5,182,221.
Pursuant to Rule 17a-7 of the 1940 Act, the Fund executed cross trades for the year ended August 31, 2004. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment adviser. The Board reviewed all such transactions executed during the first ten months of the fiscal year and concluded that they 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 last two months of the fiscal year.
Pursuant to an exemptive order issued by the U.S. 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 adviser. The IMMF and PMMF are open-end money market funds available to institutional and accredited 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 investment advisory fee, the Master Portfolios in which they invest do charge an investment advisory fee. 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.
NOTESTOTHE FINANCIAL STATEMENTS | 21 |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
The following table provides information about the investments of the Fund in shares of issuers affiliated with BGFA for the year ended August 31, 2004, including income earned from affiliated issuers.
Name of Affiliated Issuer | Number of Shares Held Beginning of Year (in 000S) | Gross Additions (in 000S) | Gross Reductions (in 000S) | Number of Shares Held End of Year (in 000S) | Value At End of Year | Interest Income | ||||||||
IMMF | 580 | 115,632 | 113,057 | 3,155 | $ | 3,154,932 | $ | 24,325 |
The Fund invested cash collateral from securities on loan in the IMMF and PMMF. Due to the nature of the structure of the joint account used for the investment of the collateral for securities on loan, the information reported above for the Fund does not include the Fund’s holdings of the IMMF and PMMF in connection with the investment of collateral for securities on loan.
As of August 31, 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 year ended August 31, 2004, aggregated $222,888,889 and $204,256,982, respectively.
In-kind purchases and sales for the year ended August 31, 2004, aggregated $3,997,923,915 and $229,374,876, respectively.
4. CAPITAL SHARE TRANSACTIONS
The Company has authorized 10.9 billion shares of $.001 par value capital stock. At August 31, 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 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 the purchase of Creation Units of the Fund generally consists of 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.
22 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Notes to the Financial Statements (Continued)
iSHARES®, INC.
The risks to the Fund of securities lending are that the borrower may not provide additional collateral when required, or may not return the securities when due.
As of August 31, 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 August 31, 2004, and the value of the related collateral received are disclosed in the Statement of Assets and Liabilities. Securities lending income, which is disclosed in the Fund’s Statement of Operations, is presented net of rebates paid to, or fees paid by, borrowers.
NOTESTOTHE FINANCIAL STATEMENTS | 23 |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
iShares, Inc.
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statement of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the iShares MSCI Japan Index Fund, a portfolio of the iShares MSCI Index Fund Series (the “Fund”) at August 31, 2004, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the four years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2004 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
The financial statements of the Funds as of August 31, 2000 and for the year then ended were audited by other auditors, whose report dated October 13, 2000 expressed an unqualified opinion on those statements.
PricewaterhouseCoopers LLP
San Francisco, California
October 22, 2004
24 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
iSHARES®, INC.
For the year ended August 31, 2004, the iShares MSCI Japan Index Fund earned foreign source income of $36,444,518 and paid foreign taxes of $1,973,500 which it intends to pass through to its shareholders pursuant to Section 853 of the Internal Revenue Code (the “Code”).
Under Section 854(b)(2) of the Code, the Fund hereby designates $14,896,042 as qualified dividends for purposes of the maximum rate under Section 1(h)(11) of the Code for the year ended August 31, 2004.
In January 2005, shareholders will receive Form 1099-DIV which will include their share of qualified dividends distributed during the calendar year 2004. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their individual income tax returns.
TAX INFORMATION | 25 |
Supplemental Information (Unaudited)
iSHARES®, INC.
The table that follows presents information about the differences between the daily market price on secondary markets for shares of the iShares MSCI Japan Index Fund (the “Fund”) and the Fund’s net asset value. Net asset value, or “NAV”, is the price per share at which the Fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of the Fund is determined using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund is listed for trading, as of the time that the Fund’s NAV is calculated. The Fund’s Market Price may be at, above or below its NAV. The NAV of the Fund will fluctuate with changes in the market value of its portfolio holdings. The Market Price of the Fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.
Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of the Fund on a given day, generally at the time NAV is calculated. A premium is the amount that the Fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that the Fund is trading below the reported NAV, expressed as a percentage of the NAV.
The following information shows the frequency distributions of premiums and discounts for the Fund, for the period from January 1, 1999 through June 30, 2004, the date of the most recent calendar quarter-end.
Each line in the table shows the number of trading days in which the Fund traded within the premium/discount range indicated. The number of trading days in each Premium/discount range is also shown as a percentage of the total number of trading days in the period covered by the table. All data presented here represents past performance, which cannot be used to predict future results.
iShares MSCI Japan Index Fund
Period Covered: January 1, 1999 through June 30, 2004
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 3.0% | 7 | 0.51 | % | ||
Greater than 2.5% and Less than 3.0% | 12 | 0.87 | |||
Greater than 2.0% and Less than 2.5% | 32 | 2.32 | |||
Greater than 1.5% and Less than 2.0% | 63 | 4.57 | |||
Greater than 1.0% and Less than 1.5% | 171 | 12.39 | |||
Greater than 0.5% and Less than 1.0% | 262 | 18.99 | |||
Between 0.5% and - 0.5% | 538 | 38.97 | |||
Less than – 0.5% and Greater than – 1.0% | 159 | 11.52 | |||
Less than – 1.0% and Greater than – 1.5% | 80 | 5.80 | |||
Less than – 1.5% and Greater than – 2.0% | 39 | 2.83 | |||
Less than – 2.0% and Greater than – 2.5% | 7 | 0.51 | |||
Less than – 2.5% | 10 | 0.72 | |||
1,380 | 100.00 | % | |||
26 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Director Information (Unaudited)
iSHARES®, INC.
The Board of Directors has responsibility for the overall management and operations of the Company, including general supervision of the duties performed by BGFA and other service providers. Each Director serves until his or her successor is duly elected or appointed and qualified.
iShares, Inc., iShares Trust, Barclays Global Investors Funds and Master Investment Portfolio are considered to be members of the same fund complex, as defined in Form N-1A under the 1940 Act. Each Director of iShares, Inc. also serves as a Trustee for iShares Trust and oversees 97 portfolios within the fund complex. In addition, Lee T. Kranefuss and Richard K. Lyons each serves as a Trustee for Barclays Global Investors Funds and Master Investment Portfolio and oversees 124 portfolios within the fund complex.
Unless otherwise noted in the tables below, the address for each Director is 45 Fremont Street, San Francisco, California 94105. Additional information about the Funds’ Directors may be found in the Funds’ Statement of Additional Information, which is available without charge upon request by calling toll-free 1-800-474-2737.
Interested Directors
Name and Age | Position(s), Length of Service | Principal Occupation(s) During Past 5 Years | Other Directorships Held | |||
* Lee T. Kranefuss (43) | Director, Chairman, and President (since June 18, 2003) | Chief Executive Officer of the Intermediary Investors and Exchange Traded Products Business BGI (since 2003); Chief Executive Officer of the individual Investor Business of BGI (1997-2003). | Trustee (since June 18, 2003) of iShares Trust; Board of Trustees (since 2001) for Barclays Global Investors Funds and Master Investment Portfolio. | |||
* Nathan Most (90) | Director (since December 16, 1996) | Consultant to BGI (1998-2002), American Stock Exchange (1996-2000) and the Hong Kong Stock Exchange (since 1998); Consultant to the Amsterdam Stock Exchange (1997-1998); Consultant to the Pacific Stock Exchange (1997-1998). | Trustee (since 2000) and President (2000-2002) of iShares Trust. | |||
* John E. Martinez (42) | Director (since December 5, 2003) | Co-CEO of Global Index and Markets Group of BGI (2001-2003); Chairman of Barclays Global Investors Services (2000-2003); CEO of Capital Markets Group of BGI (1996-2001). | Trustee (since December 5, 2003) of iShares Trust; Director (since November 2003) of Barclays Global Investors UK Holdings. |
* | Lee T. Kranefuss, Nathan Most and John E. Martinez are deemed to be “interested persons” (as defined in the 1940 Act) of the Company due to their affiliations with BGFA, the Funds’ investment adviser and BGI, the parent company of BGFA. John E. Martinez is also deemed to be an “interested person” because of his affiliation with Barclays Global Investors Services, an affiliate of BGFA and BGI. |
DIRECTOR INFORMATION | 27 |
Director Information (Unaudited) (Continued)
iSHARES®, INC.
Independent Directors
Name and Age | Position(s), Length of Service | Principal Occupation(s) During Past 5 Years | Other Directorships Held | |||
John B. Carroll (69) | Director (since December 16, 1996) | Retired Vice President of Investment Management (1984-2000) of Verizon Corporation; Advisory Board member of Ibbotson Associates (1992-1998); former Vice Chairman and Executive Committee Member (1994-1998) of the Committee on Investment of Employee Benefit Assets of the Financial Executive Institute. | Trustee (since 2002) of iShares Trust; Trustee and member of the Executive Committee (since 1991) of The Common Fund Institutional Funds, a non-profit organization; Member of the Board of Managers of JP Morgan Private Equity Funds. | |||
Richard K. Lyons (43) | Director (since February 28, 2002) | Professor, University of California, Berkeley: Haas School of Business (since 1993); Consultant for IMF World Bank, Federal Reserve Bank, and Citibank N.A. (since 2000). | Trustee (since 2000) of iShares Trust; Director (since 2003) of the BGI Cayman Prime Money Market Fund, Ltd.; Trustee (since 2001) of Barclays Global Investors Funds and Master Investment Portfolio; Board of Trustees: Matthews Asian Funds since 1995 (oversees 6 portfolios). | |||
George C. Parker (65) | Director (since February 28, 2002) | Dean Witter Distinguished Professor of Finance (since 1994); Associate Dean for Academic Affairs, Director of MBA Program, and Professor, Stanford University: Graduate School of Business (1993-2001). | Trustee (since 2000) of iShares Trust; Director (since 1985) of Bailard, Biehl and Kaiser, Inc.; Director (since 1978) of California Casualty Group of Insurance Companies; Director (since 1996) of Continental Airlines, Inc.; Director (since 1995) of Community First Financial Group; Director (1994-2002) of Dresdner/RCM Mutual Funds; Director (since 1999) of Tyon Ranch Company. |
28 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Director Information (Unaudited) (Continued)
iSHARES®, INC.
Independent Directors (Continued)
Name and Age | Position(s), Length of Service | Principal Occupation(s) During Past 5 Years | Other Directorships Held | |||
W. Allen Reed (57) | Director (since December 16, 1996) | President and Chief Executive Officer (since 1994) of General Motors Investment Management Corporation. | Trustee (since 2002) of iShares Trust; Director (since 1994) of General Motors Investment Management Corporation; Director (1995-1998) of Taubman Centers, Inc. (a real estate investment trust); Director (since 1992) of FLIR Systems (an imaging technology company); Director (since 1994) of General Motors Acceptance Corporation; Director (since 1994) of GMAC Insurance Holdings, Inc.; Director (since 1995) of Global Emerging Markets Fund; Director (since 2000) of Temple Inland Industries; Chairman (since 1995) of the Investment Advisory Committee of Howard Hughes Medical Institute. | |||
Officer
| ||||||
Name and Age | Position | Principal Occupation(s) During Past 5 Years | Directorships Held by Officers | |||
Michael A. Latham (39) | Secretary, Treasurer and Principal Financial Officer (since February 28, 2002) | Chief Operating Officer of the Intermediary Investors and Exchange Traded Products Business of BGI (since 2003); Director of Mutual Fund Delivery in the U.S. Individual Investor Business of BGI (2000-2003); Head of Operations, BGI Europe (1997-2000). | None. |
DIRECTOR INFORMATION | 29 |
The following is a list of iShares Funds being offered, 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 that 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.
iShares S&P Domestic Index Funds |
iShares S&P 1500 (ISI) |
iShares S&P 500 (IVV) |
iShares S&P 500/BARRA Growth (IVW) |
iShares S&P 500/BARRA Value (IVE) |
iShares S&P MidCap 400 (IJH) |
iShares S&P MidCap 400/BARRA Growth (IJK) |
iShares S&P MidCap 400/BARRA Value (IJJ) |
iShares S&P SmallCap 600 (IJR) |
iShares S&P SmallCap 600/BARRA Growth (IJT) |
iShares S&P SmallCap 600/BARRA Value (IJS) |
iShares S&P 100 (OEF) |
iShares Sector and Specialty Index Funds |
iShares Cohen & Steers Realty Majors (ICF) |
iShares Dow Jones U.S. Basic Materials Sector (IYM) |
iShares Dow Jones U.S. Consumer Cyclical Sector (IYC) |
iShares Dow Jones U.S. Consumer Non-Cyclical Sector (IYK) |
iShares Dow Jones U.S. Energy Sector (IYE) |
iShares Dow Jones U.S. Financial Sector (IYF) |
iShares Dow Jones U.S. Financial Services (IYG) |
iShares Dow Jones U.S. Healthcare Sector (IYH) |
iShares Dow Jones U.S. Industrial Sector (IYJ) |
iShares Dow Jones U.S. Real Estate (IYR) |
iShares Dow Jones Select Dividend (DVY) |
iShares Dow Jones U.S. Technology Sector (IYW) |
iShares Dow Jones U.S. Telecommunications Sector (IYZ) |
iShares Dow Jones U.S. Total Market (IYY) |
iShares Dow Jones Transportation Average (IYT) |
iShares Dow Jones U.S. Utilities Sector (IDU) |
iShares Goldman Sachs Natural Resources (IGE) |
iShares Goldman Sachs Networking (IGN) |
iShares Goldman Sachs Semiconductor (IGW) |
iShares Goldman Sachs Software (IGV) |
iShares Goldman Sachs Technology (IGM) |
iShares Nasdaq Biotechnology (IBB) |
iShares S&P Global Energy Sector (IXC) |
iShares S&P Global Financials Sector (IXG) |
iShares S&P Global Healthcare Sector (IXJ) |
iShares S&P Global Technology Sector (IXN) |
iShares S&P Global Telecommunications Sector (IXP) |
iShares Russell Index Funds |
iShares Russell 3000 (IWV) |
iShares Russell 3000 Growth (IWZ) |
iShares Russell 3000 Value (IWW) |
iShares Russell 1000 (IWB) |
iShares Russell 1000 Growth (IWF) |
iShares Russell 1000 Value (IWD) |
iShares Russell Midcap (IWR) |
iShares Russell Midcap Growth (IWP) |
iShares Russell Midcap Value (IWS) |
iShares Russell 2000 (IWM) |
iShares Russell 2000 Growth (IWO) |
iShares Russell 2000 Value (IWN) |
iShares International Index Funds |
iShares FTSE/Xinhua China 25 (FXI) |
iShares MSCI Australia (EWA) |
iShares MSCI Austria (EWO) |
iShares MSCI Belgium (EWK) |
iShares MSCI Brazil (EWZ) |
iShares MSCI Canada (EWC) |
iShares MSCI EAFE (EFA) |
iShares MSCI Emerging Markets (EEM) |
iShares MSCI EMU (EZU) |
iShares MSCI France (EWQ) |
iShares MSCI Germany (EWG) |
iShares MSCI Hong Kong (EWH) |
iShares MSCI Italy (EWI) |
iShares MSCI Japan (EWJ) |
iShares MSCI Malaysia (EWM) |
iShares MSCI Mexico (EWW) |
iShares MSCI Netherlands (EWN) |
iShares MSCI Pacific ex-Japan (EPP) |
iShares MSCI Singapore (EWS) |
iShares MSCI South Africa (EZA) |
iShares MSCI South Korea (EWY) |
iShares MSCI Spain (EWP) |
iShares MSCI Sweden (EWD) |
iShares MSCI Switzerland (EWL) |
iShares MSCI Taiwan (EWT) |
iShares MSCI United Kingdom (EWU) |
iShares S&P Europe 350 (IEV) |
iShares S&P Global 100 (IOO) |
iShares S&P Latin America 40 (ILF) |
iShares S&P/TOPIX 150 (ITF) |
iShares Bond Funds |
iShares Lehman Aggregate (AGG) |
iShares Lehman TIPS (TIP) |
iShares Lehman 1-3 Year Treasury (SHY) |
iShares Lehman 7-10 Year Treasury (IEF) |
iShares Lehman 20+ Year Treasury (TLT) |
iShares GS $ InvesTop™ Corporate (LQD) |
iShares NYSE Index Funds |
iShares NYSE 100 (NY) |
iShares NYSE Composite (NYC) |
iShares Morningstar Index Funds |
iShares Morningstar Large Core (JKD) |
iShares Morningstar Large Growth (JKE) |
iShares Morningstar Large Value (JKF) |
iShares Morningstar Mid Core (JKG) |
iShares Morningstar Mid Growth (JKH) |
iShares Morningstar Mid Value (JKI) |
iShares Morningstar Small Core (JKJ) |
iShares Morningstar Small Growth (JKK) |
iShares Morningstar Small Value (JKL) |
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., FTSE/ Xinhua Index Limited, Morgan Stanley Capital International, Morningstar, Inc., The Nasdaq Stock Market, Inc., New York Stock Exchange, 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 the companies listed above. “GS $ InvesTop™” and “Goldman Sachs®” are trademarks of Goldman, Sachs & Co.
An investment in the Fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
This advertising section does not constitute part of the 2004 Annual Report.
1353-iS-0904
30 | 2004 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
The iShares Funds are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an adviser 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.
©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.
Investing involves risk, including possible loss of principal.
A description of the policies that the Fund uses to determine how to vote proxies relating to portfolio securities and information about how the Fund voted proxies relating to portfolio securities during the most recent twelve month period ended June 30, 2004 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Fund’s website at www.iShares.com; and on the Securities and Exchange Commission’s website at www.sec.gov.
Beginning January 31, 2005, the Fund will be filing its complete schedules of portfolio holdings with the Securities and Exchange Commission for the first and third quarter of each fiscal year on Form N-Q, which when filed, will be available on the Commission’s web-site at www.sec.gov. When filed, the Fund’s Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Fund also discloses its complete schedules of portfolio holdings on a daily and monthly basis on the Fund’s website at www.iShares.com.
This report is intended for the Fund’s shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
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Item 2. Code of Ethics.
As of August 31, 2004, iShares, Inc. (the “Registrant”) had adopted a code of ethics that applies to persons appointed by the Registrant’s Board of Directors as the Chief Executive Officer, President, Chief Financial Officer, Treasurer and/or Chief Accounting Officer, and any persons performing similar functions. For the fiscal year ended August 31, 2004, there were no amendments to any provision of this code of ethics, nor were there any waivers granted from any provision of this code of ethics. A copy of this code of ethics is filed with this Form N-CSR under Item 11(a)(1).
Item 3. Audit Committee Financial Expert.
The Registrant’s Board of Directors has determined that the Registrant has more than one audit committee financial expert, as that term is defined under Item 3(b) and 3(c), serving on its audit committee. The audit committee financial experts serving on the Registrant’s audit committee are John B. Carroll, Richard K. Lyons, George C. Parker and W. Allen Reed, all of whom are “independent”, as that term is defined under Item 3(a)(2). Richard K. Lyons holds a PhD in Economics and qualifies as an audit committee financial expert through his many years of university-level (graduate) teaching of accounting and finance-related subjects, his many years of research in the same subjects (including mutual funds), and his extensive experience serving as independent director and as a member of various mutual fund audit committees.
Item 4. Principal Accountant Fees and Services.
(a) | Audit Fees – The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the Registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were $295,680 and $324,000 for the fiscal years ended August 31, 2003 and August 31, 2004, respectively. |
(b) | Audit-Related Fees – There were no fees billed for the fiscal years ended August 31, 2003 and August 31, 2004 for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the Registrant’s financial statements and are not reported under (a) of this Item. |
(c) | Tax Fees – The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for the review of the Registrant’s tax returns and excise tax calculations, were $153,120 and $158,880 for the fiscal years ended August 31, 2003 and August 31, 2004, respectively |
(d) | All Other Fees – There were no other fees billed for the fiscal years ended August 31, 2003 and August 31, 2004 for products and services provided by the principal accountant, other than the services reported in (a) through (c) of this Item. |
(e) | (1) The Registrant’s audit committee charter, as most recently amended in June 2004, provides that the audit committee is responsible for the approval, prior to appointment, of the engagement of the principal accountant to annually audit and provide their opinion on the Registrant’s financial statements. The audit committee must also approve, prior to appointment, the engagement of the principal accountant to provide non-audit services to the Registrant or to any entity controlling, controlled by or under common control with the Registrant’s investment adviser (“Adviser Affiliate”) that provides services to the Registrant, if the engagement relates directly to the operations and financial reporting of the Registrant. |
(2) There were no services described in (b) through (d) above (including services required to be approved by the audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X) that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) | None of the hours expended on the principal accountant’s engagement to audit the Registrant’s financial statements for the fiscal year ended August 31, 2004 were attributable to work performed by persons other than the principal accountant’s full-time, permanent employees. |
(g) | The aggregate non-audit fees billed by the Registrant’s principal accountant for services rendered to the Registrant, and rendered to the Registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant for the fiscal years ended August 31, 2003 and August 31, 2004 were $1,419,770 and $992,543 respectively. |
(h) | The Registrant’s audit committee has considered whether the provision of non-audit services rendered to the Registrant’s investment adviser and any Adviser Affiliate that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, if any, are compatible with maintaining the principal accountant’s independence, and has determined that the provision of these services do not compromise the principal accountant’s independence. |
Item 5. Audit Committee of Listed Registrants.
The Registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act and has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Registrant’s audit committee members are John B. Carroll, Richard K. Lyons, George C. Parker and W. Allen Reed.
Item 6. Schedule of Investments.
The Registrant’s full schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form.
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.
There were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Directors.
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) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 11. Exhibits.
(a) (1) Code of Ethics for Senior Officers that is the subject of Item 2 is attached.
(a) (2) Section 302 Certifications are attached.
(b) Section 906 Certifications are attached.
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: | November 5, 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: | November 5, 2004 |
By: | /s/ Michael A. Latham | |||
Michael A. Latham, Principal Financial Officer | ||||
Date: | November 5, 2004 |