Table of Contents
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, MD 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, 2005
Date of reporting period: August 31, 2005
Table of Contents
Item 1. Reports to Stockholders.
iShares®
2005 ANNUAL REPORT TO SHAREHOLDERS | AUGUST 31, 2005
iSHARES MSCI SERIES
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
iSHARES MSCI UNITED KINGDOM INDEX FUND
Table of Contents
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62 | ||
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73 | ||
79 | ||
85 | ||
93 | ||
101 | ||
112 | ||
121 | ||
122 | ||
123 | ||
Board Review and Approval of Investment Advisory Contracts (Unaudited) | 126 | |
129 | ||
135 | ||
138 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI AUSTRIA INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
56.82% | 56.49 | % | 61.52 | % | 29.43 | % | 29.29 | % | 29.98 | % | 11.46 | % | 11.56 | % | 12.64 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
56.82% | 56.49 | % | 61.52 | % | 263.19 | % | 261.21 | % | 270.99 | % | 179.47 | % | 181.83 | % | 209.07 | % |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 1 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI AUSTRIA INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/05
Sector | % of Net Assets | ||
Financial | 35.84 | % | |
Energy | 19.19 | ||
Communications | 15.86 | ||
Basic Materials | 11.87 | ||
Industrial | 10.21 | ||
Utilities | 6.30 | ||
Short-Term and Other Net Assets | 0.73 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS
As of 8/31/05
Security | % of Net Assets | ||
OMV AG | 19.19 | % | |
Telekom Austria AG | 15.86 | ||
Erste Bank der Oesterreichischen Sparkassen AG | 14.41 | ||
Oesterreichische Elektrizitaetswirtschafts AG Class A | 4.89 | ||
Bank Austria Creditanstalt | 4.82 | ||
Immofinanz Immobilien Anlage AG | 4.79 | ||
Meinl European Land Ltd. | 4.76 | ||
CA Immobilien Anlagen AG | 4.46 | ||
Voest-Alpine AG | 4.39 | ||
Boehler-Uddeholm AG | 4.13 | ||
TOTAL | 81.70 | % | |
The iShares MSCI Austria Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Austrian market, as measured by the MSCI Austria Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 56.82%, while the Index returned 61.52%.
Austria is sensitive to the economic health of the constituent markets of the European Monetary Union (“EMU”), because it relies on the EMU for the vast majority of its exports. Improving economic conditions in many EMU countries during the reporting period led to healthy demand for Austrian exports, contributing positively to market returns. In particular, improving economic conditions in Germany, Austria’s leading export market, translated into rising demand for Austrian goods. Rising oil prices during the reporting period also boosted returns for Austria’s energy sector.
All of the Fund’s ten largest holdings as of August 31, 2005 posted gains for the reporting period. The largest Fund holding, energy company OMV AG, was also the strongest performer with a triple-digit return. Utilities company Oesterreichische Elektrizitaetswirtschafts AG and steelmaker Boehler-Uddeholm AG delivered strong double-digit returns for the reporting period, as did bank Bank Austria Creditanstalt and steel maker Voest-Alpine AG. The most modest gain among the Fund’s ten largest holdings came from real estate company Meinl European Land Ltd.
2 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI BELGIUM INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
30.22% | 29.79 | % | 31.24 | % | 10.32 | % | 10.33 | % | 7.98 | % | 8.61 | % | 8.66 | % | 8.82 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
30.22% | 29.79 | % | 31.24 | % | 63.43 | % | 63.52 | % | 46.80 | % | 118.70 | % | 119.60 | % | 122.89 | % |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 3 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI BELGIUM INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/05
Sector | % of Net Assets | ||
Financial | 51.75 | % | |
Consumer Non-Cyclical | 16.93 | ||
Basic Materials | 7.94 | ||
Communications | 6.93 | ||
Industrial | 5.40 | ||
Diversified | 4.85 | ||
Utilities | 4.82 | ||
Consumer Cyclical | 0.57 | ||
Short-Term and Other Net Assets | 0.81 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS
As of 8/31/05
Security | % of Net Assets | ||
Fortis | 23.86 | % | |
KBC Groupe | 12.55 | ||
Dexia Group | 12.11 | ||
Belgacom SA | 4.87 | ||
InBev | 4.85 | ||
Groupe Bruxelles Lambert SA | 4.85 | ||
Solvay SA | 4.82 | ||
Electrabel SA | 4.82 | ||
UCB SA | 4.81 | ||
Delhaize Group | 3.37 | ||
TOTAL | 80.91 | % | |
The iShares MSCI Belgium Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Belgian market, as measured by the MSCI Belgium Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 30.22%, while the Index returned 31.24%.
The Belgian market delivered strong gains during the reporting period. Because more than 50% of its stock market is represented by financial companies, Belgium’s market performance is tied closely to the performance of the financial sector. During the reporting period, this relationship contributed positively to overall market performance as financial stocks generally performed well. Although economic activity remained generally sluggish, low interest rates provided an attractive environment for many financial stocks during the reporting period.
Within the Fund, the ten largest holdings as of August 31, 2005 accounted for approximately 81% of the net assets of the Fund. All of the ten largest Fund holdings posted gains for the reporting period. Financial company Groupe Bruxelles Lambert SA delivered the strongest returns among the ten largest holdings, followed closely by utilities company Electrabel SA. Diversified banks KBC Groupe and Dexia Group both performed well, as did chemical company Solvay SA. Among the ten largest Fund holdings, the weakest performer was retail food chain Delhaize Group, which posted a slight gain for the reporting period.
4 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMU INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
28.54% | 28.47 | % | 28.75 | % | 0.79 | % | 0.92 | % | 1.10 | % | (0.41 | )% | (0.25 | )% | (0.09 | )% | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
28.54% | 28.47 | % | 28.75 | % | 3.99 | % | 4.69 | % | 5.64 | % | (2.07 | )% | (1.26 | )% | (0.46 | )% |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (7/31/00), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMU INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/05
Sector | % of Net Assets | ||
Financial | 29.61 | % | |
Communications | 14.89 | ||
Consumer Non-Cyclical | 12.66 | ||
Industrial | 9.80 | ||
Energy | 8.96 | ||
Utilities | 8.38 | ||
Consumer Cyclical | 6.68 | ||
Basic Materials | 5.09 | ||
Technology | 2.85 | ||
Diversified | 0.91 | ||
Short-Term and Other Net Assets | 0.17 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS
As of 8/31/05
Security | % of Net Assets | ||
Total SA (France) | 4.88 | % | |
Sanofi-Aventis (France) | 2.91 | ||
ENI SpA (Italy) | 2.51 | ||
Banco Santander Central Hispano SA (Spain) | 2.35 | ||
Telefonica SA (Spain) | 2.35 | ||
Nokia OYJ (Finland) | 2.10 | ||
Siemens AG (Germany) | 1.96 | ||
E.ON AG (Germany) | 1.92 | ||
BNP Paribas SA (France) | 1.87 | ||
Banco Bilbao Vizcaya Argentaria SA (Spain) | 1.83 | ||
TOTAL | 24.68 | % | |
The iShares MSCI EMU Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the European Monetary Union (“EMU”) markets, as measured by the MSCI EMU Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 28.54%, while the Index returned 28.75%.
As the reporting period began, the economies of the EMU faced challenges on several fronts. The euro strengthened against the U.S. dollar, making goods in euro-based countries more costly to their trading partners. The price of oil escalated during the reporting period, reaching $70 per barrel and dampening economic growth. Unemployment levels rose, particularly in Germany, where the jobless rate topped 12%.
As the reporting period progressed, however, economic conditions appeared to improve. The euro declined against the U.S. dollar, providing a boost to European export markets. Unemployment rates appeared to be on the decline in Germany and other major EMU markets, and consumer confidence levels improved. Although oil prices remained on the rise, hemming in economic growth, the elevated prices did help oil and energy-related companies.
Among the Fund’s ten largest holdings as of August 31, 2005, performance was positive for the reporting period. Not surprisingly, the two best performing companies were both oil companies. ENI SpA (Italy) and top Fund holding Total SA (France) both benefited from rising oil prices during the reporting period. Utility company E.ON AG (Germany) also performed well. Spanish banks Banco Santander Central Hispano SA and Banco Bilbao Vizcaya Argentaria SA both contributed positively to Fund performance. The most modest return among the Fund’s ten largest holdings came from industrial conglomerate Siemens AG (Germany).
6 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI FRANCE INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
26.13% | 25.94 | % | 26.49 | % | 0.06 | % | 0.10 | % | 0.37 | % | 10.02 | % | 10.06 | % | 10.25 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
26.13% | 25.94 | % | 26.49 | % | 0.28 | % | 0.50 | % | 1.88 | % | 147.07 | % | 148.07 | % | 152.13 | % |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI FRANCE INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/05
Sector | % of Net Assets | ||
Consumer Non-Cyclical | 21.45 | % | |
Financial | 18.15 | ||
Energy | 16.92 | ||
Communications | 12.64 | ||
Industrial | 10.80 | ||
Consumer Cyclical | 7.46 | ||
Utilities | 3.95 | ||
Basic Materials | 3.29 | ||
Technology | 2.99 | ||
Diversified | 2.16 | ||
Short-Term and Other Net Assets | 0.19 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS
As of 8/31/05
Security | % of Net Assets | ||
Total SA | 16.38 | % | |
Sanofi-Aventis | 9.85 | ||
BNP Paribas SA | 6.31 | ||
France Telecom | 5.25 | ||
AXA | 4.16 | ||
Societe Generale Class A | 4.08 | ||
Vivendi Universal SA | 3.67 | ||
Carrefour SA | 2.86 | ||
Groupe Danone | 2.72 | ||
Suez SA | 2.60 | ||
TOTAL | 57.88 | % | |
The iShares MSCI France Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the French market, as measured by the MSCI France Index (the “Index���). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 26.13%, while the Index returned 26.49%.
For most of the reporting period, France struggled with sluggish economic growth and high unemployment levels, which reached 10.2% in April 2005. Rising oil prices, a strong euro, and poor business and consumer confidence levels all contributed to a relatively weak market environment. In the last three months of the reporting period, however, conditions appeared to improve on several fronts. The euro declined against the U.S. dollar, helping export levels. Economic momentum improved, and, in July, corporate earnings announcements from some French companies came in above expectations.
Among the Fund’s ten largest holdings as of August 31, 2005, performance was largely positive for the reporting period. Utilities company Suez SA was the top performer among the Fund’s ten largest holdings. Integrated oil and gas company Total SA was also a strong performer, benefiting from rising oil prices during the reporting period. Packaged food company Group Danone performed well, as did insurance company AXA. Telecommunications company France Telecom, entertainment company Vivendi Universal SA, and the bank Societe Generale all contributed positively to Fund performance for the reporting period. Among the ten largest Fund holdings, the sole negative performance for the reporting period came from Carrefour SA, a retail chain.
8 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI GERMANY INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
28.89% | 29.56 | % | 29.31 | % | (0.45 | )% | (0.33 | )% | (0.27 | )% | 6.32 | % | 6.43 | % | 6.75 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
28.89% | 29.56 | % | 29.31 | % | (2.25 | )% | (1.62 | )% | (1.36 | )% | 78.74 | % | 80.46 | % | 85.75 | % |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GERMANY INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/05
Sector | % of Net Assets | ||
Financial | 24.85 | % | |
Consumer Cyclical | 15.48 | ||
Industrial | 14.69 | ||
Utilities | 13.77 | ||
Basic Materials | 9.58 | ||
Communications | 8.40 | ||
Consumer Non-Cyclical | 7.13 | ||
Technology | 6.04 | ||
Short-Term and Other Net Assets | 0.06 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS
As of 8/31/05
Security | % of Net Assets | ||
Siemens AG | 9.33 | % | |
E.ON AG | 9.08 | ||
Deutsche Telekom AG | 7.91 | ||
Allianz AG | 7.14 | ||
DaimlerChrysler AG | 7.02 | ||
Deutsche Bank AG | 6.49 | ||
SAP AG | 4.86 | ||
BASF AG | 4.86 | ||
RWE AG | 4.29 | ||
Bayer AG | 3.63 | ||
TOTAL | 64.61 | % | |
The iShares MSCI Germany Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the German market, as measured by the MSCI Germany Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 28.89%, while the Index returned 29.31%.
For most of the reporting period, the German economy struggled with high unemployment rates, which reached 12.6% in February, the highest level since the 1930s. The rising price of oil during the reporting period had a dampening effect on the economy, increasing energy costs and weakening demand for automobiles, an important component of Germany’s economy. As the reporting period progressed, however, positive economic signs did emerge. Unemployment rates declined modestly during the final months of the reporting period, dipping to 11.4% by the end of August. In July, Germany’s market outpaced all of its developed European peers, apparently in anticipation of September’s general election, which many believed would bring about a regime change and improved economic conditions. Germany’s closely watched business climate index exceeded expectations in July, rising to 95.0 from 93.3 in June, encouraging already optimistic outlooks for business cycle-sensitive companies.
All of the Fund’s ten largest holdings as of August 31, 2005 posted gains for the reporting period. The strongest performer was chemical company Bayer AG. Utilities companies RWE AG and E.ON AG also performed well for the reporting period, as did insurance carrier Allianz AG. Deutsche Bank AG and DaimlerChrysler AG both contributed positively to Fund performance. Telecommunications company Deutsche Telekom AG delivered the weakest return among the Fund’s ten largest holdings, although it finished the reporting period with a gain.
10 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI ITALY INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
30.74% | 30.50 | % | 30.53 | % | 5.04 | % | 5.05 | % | 4.65 | % | 11.85 | % | 11.90 | % | 11.69 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
30.74% | 30.50 | % | 30.53 | % | 27.87 | % | 27.91 | % | 25.53 | % | 189.02 | % | 190.18 | % | 185.24 | % |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI ITALY INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/05
Sector | % of Net Assets | ||
Financial | 39.32 | % | |
Energy | 20.46 | ||
Communications | 17.76 | ||
Utilities | 13.68 | ||
Consumer Cyclical | 3.36 | ||
Consumer Non-Cyclical | 3.25 | ||
Industrial | 1.96 | ||
Short-Term and Other Net Assets | 0.21 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS
As of 8/31/05
Security | % of Net Assets | ||
ENI SpA | 20.46 | % | |
Enel SpA | 9.97 | ||
Telecom Italia SpA | 9.13 | ||
UniCredito Italiano SpA | 4.83 | ||
Assicurazioni Generali SpA | 4.78 | ||
Riunione Adriatica di Sicurta SpA | 4.57 | ||
Sanpaolo IMI SpA | 4.47 | ||
Telecom Italia SpA RNC | 4.30 | ||
Banca Intesa SpA | 4.04 | ||
Mediaset SpA | 2.80 | ||
TOTAL | 69.35 | % | |
The iShares MSCI Italy Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Italian market, as measured by the MSCI Italy Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 30.74%, while the Index returned 30.53%.
For much of the reporting period, Italy struggled with sluggish economic conditions and high unemployment rates. As its export market faced competition from some European neighbors as well as China, Italy’s economy slipped into recession during the first quarter of 2005. Rising oil prices had a dampening effect on economic growth as the price of oil reached $70 per barrel during the reporting period, but because one oil company represents more than 20% of the Index, higher oil prices also contributed positively to Fund returns. . During the last several months of the reporting period a weakening euro boosted Italy’s export market, and unemployment levels improved modestly.
The ten largest Fund holdings represented about 69% of the net assets of the Fund as of August 31, 2005. All of the Fund’s ten largest holdings had positive performance for the reporting period. The strongest returns came from the largest holding, oil company ENI SpA. Banks Banca Intesa SpA, Sanpaolo IMI SpA, and UniCredito Italiano SpA also performed well, as did the insurance company Assicurazioni Generali SpA. Among the ten largest holdings, the most modest gain for the reporting period came from Telecom Italia SpA, Italy’s telephone company.
12 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI NETHERLANDS INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
23.40% | 24.00 | % | 23.66 | % | (2.68 | )% | (2.71 | )% | (1.75 | )% | 5.16 | % | 5.22 | % | 6.42 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
23.40% | 24.00 | % | 23.66 | % | (12.70 | )% | (12.82 | )% | (8.44 | )% | 61.07 | % | 61.96 | % | 80.42 | % |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 13 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI NETHERLANDS INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/05
Sector | % of Net Assets | ||
Financial | 37.37 | % | |
Consumer Non-Cyclical | 24.05 | ||
Communications | 13.47 | ||
Industrial | 13.42 | ||
Basic Materials | 6.21 | ||
Technology | 4.03 | ||
Consumer Cyclical | 0.99 | ||
Short-Term and Other Net Assets | 0.46 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS
As of 8/31/05
Security | % of Net Assets | ||
ING Groep NV | 15.63 | % | |
ABN AMRO Holding NV | 11.89 | ||
Unilever NV CVA | 10.96 | ||
Koninklijke Philips Electronics NV | 9.69 | ||
Koninklijke KPN NV | 5.05 | ||
AEGON NV | 4.89 | ||
Koninklijke Ahold NV | 4.53 | ||
Akzo Nobel NV | 3.94 | ||
Reed Elsevier NV | 3.80 | ||
TPG NV | 3.73 | ||
TOTAL | 74.11 | % | |
The iShares MSCI Netherlands Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Dutch market, as measured by the MSCI Netherlands Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 23.40%, while the Index returned 23.66%.
Because The Netherlands relies heavily on its export trade for its livelihood, it is sensitive to the economic health of its trading partners. Many of its European trading partners struggled for much of the reporting period, hampering the Dutch export trade within Europe. High oil prices also had a negative effect on the economy. However, improving economic climates within Europe in the final months of the reporting period meant increased demand for Dutch products, and a declining euro helped make Dutch goods more affordable to trading partners outside Europe. Improving economic conditions in the U.S. during the reporting period, combined with the declining euro relative to the U.S. dollar, had a positive impact on the Netherlands’ export trade to the U.S., providing a boost to Dutch economic growth.
The ten largest Fund holdings accounted for approximately 74% of the net assets of the Fund as of August 31, 2005. Among the ten largest holdings, the best performer was retail food chain Koninklijke Ahold NV. Insurance giant AEGON NV also performed well for the reporting period. Telecommunications company Koninklijke KPN NV contributed positively to Fund performance, as did chemicals company Akzo Nobel NV. Publishing company Reed Elsevier NV posted the most modest gain among the ten largest holdings for the reporting period.
14 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SPAIN INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
31.85% | 31.70 | % | 31.47 | % | 9.04 | % | 9.05 | % | 7.72 | % | 13.90 | % | 13.96 | % | 14.18 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
31.85% | 31.70 | % | 31.47 | % | 54.11 | % | 54.23 | % | 45.07 | % | 243.28 | % | 244.95 | % | 251.65 | % |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 15 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SPAIN INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/05
Sector | % of Net Assets | ||
Financial | 38.44 | % | |
Communications | 21.22 | ||
Utilities | 14.87 | ||
Consumer Non-Cyclical | 8.53 | ||
Industrial | 6.21 | ||
Energy | 5.45 | ||
Consumer Cyclical | 2.93 | ||
Basic Materials | 1.43 | ||
Technology | 0.85 | ||
Short-Term and Other Net Assets | 0.07 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS
As of 8/31/05
Security | % of Net Assets | ||
Telefonica SA | 19.34 | % | |
Banco Santander Central Hispano SA | 17.30 | ||
Banco Bilbao Vizcaya Argentaria SA | 12.16 | ||
Repsol YPF SA | 4.99 | ||
Iberdrola SA | 4.86 | ||
Endesa SA | 4.85 | ||
Banco Popular Espanol SA | 4.33 | ||
Altadis SA | 3.63 | ||
Actividades de Construcciones y Servicios SA | 2.71 | ||
Abertis Infraestructuras SA | 2.31 | ||
TOTAL | 76.48 | % | |
The iShares MSCI Spain Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Spanish market, as measured by the MSCI Spain Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 31.85%, while the Index returned 31.47%.
For much of the reporting period, Spain struggled along with many of its European neighbors with sluggish economic conditions and high unemployment levels, which topped 10% during the reporting period. In the first several months of the reporting period, a strong euro dampened export demand from non euro-based countries, while high oil prices also weighed on economic growth. However, during the last several months of the reporting period, economic conditions improved somewhat. A weakening euro and improving economic climate in the U.S. helped export growth abroad, and improving conditions in neighboring European markets meant increased demand for Spanish exports within Europe. In addition, unemployment levels declined in the final three months of the reporting period, helping to boost domestic demand.
The ten largest Fund holdings represented approximately 76% of the net assets of the Fund as of August 31, 2005. Construction company Actividades de Construcciones y Servicios SA delivered the strongest gains among the Fund’s ten largest holdings, followed by Abertis Infraestructuras SA. Oil company Repsol YPF SA also posted strong gains, due largely to escalating oil prices during the reporting period. Tobacco company Altadis SA performed well. Both electric utility companies among the Fund’s ten largest holdings, Ibedrola SA and Endesa SA — contributed positively to Fund performance for the reporting period. Among the Fund’s ten largest holdings, the weakest performer was Banco Popular Espanol SA, although it posted a double-digit gain.
16 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SWEDEN INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
29.21% | 29.64 | % | 29.32 | % | (1.64 | )% | (1.51 | )% | (2.45 | )% | 10.20 | % | 10.29 | % | 11.44 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
29.21% | 29.64 | % | 29.32 | % | (7.91 | )% | (7.32 | )% | (11.68 | )% | 151.03 | % | 153.00 | % | 179.11 | % |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 17 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SWEDEN INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/05
Sector | % of Net Assets | ||
Communications | 29.67 | % | |
Financial | 22.21 | ||
Consumer Cyclical | 17.72 | ||
Industrial | 15.36 | ||
Consumer Non-Cyclical | 8.56 | ||
Basic Materials | 4.93 | ||
Energy | 0.90 | ||
Technology | 0.62 | ||
Short-Term and Other Net Assets | 0.03 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS
As of 8/31/05
Security | % of Net Assets | ||
Telefonaktiebolaget LM Ericsson Class B | 22.48 | % | |
Nordea AB | 9.04 | ||
Hennes & Mauritz AB Class B | 7.19 | ||
Svenska Handelsbanken AB Class A | 4.78 | ||
Volvo AB Class B | 4.12 | ||
TeliaSonera AB | 4.10 | ||
Sandvik AB | 3.96 | ||
Skandinaviska Enskilda Banken AB Class A | 3.84 | ||
Svenska Cellulosa AB Class B | 3.04 | ||
Electrolux AB Series B | 2.82 | ||
TOTAL | 65.37 | % | |
The iShares MSCI Sweden Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Swedish market, as measured by the MSCI Sweden Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 29.21%, while the Index returned 29.32%.
Compared with many of its European neighbors, Sweden’s market conditions were relatively healthy during the reporting period. Inflation remained low, its technology industry continued to grow, and the unemployment rate, although above the government’s target, was low by European standards. Sweden did see its economic growth slow during much of the reporting period, dipping to an annual rate of 1.4% in the first quarter of 2005. In response to the slower economic growth rate, Sweden’s central bank, the Riksbank lowered short-term interest rates by 0.50% to 1.50% in June. The move appeared to have a positive impact, with first quarter 2005 gross domestic product (“GDP”) growth of 1.8% and second quarter 2005 GDP of 2.3%.
The ten largest Fund holdings represented about 65% of the net assets of the Fund as of August 31, 2005. The Class B shares of retail clothing company Hennes & Mauritz AB delivered the strongest gains for the reporting period, followed by machinery company Sandvik AB and the Class A shares of bank Skandinaviska Enskilda Banken AB. The largest Fund holding, the Class B shares of wireless telephone company Telefonaktiebolaget LM Ericsson also posted strong returns for the reporting period. The sole negative performer for the reporting period among the Fund’s ten largest holdings was the Class B shares of Svenska Cellulosa AB.
18 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SWITZERLAND INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
21.54% | 22.09 | % | 22.98 | % | 2.95 | % | 2.84 | % | 4.24 | % | 6.00 | % | 6.04 | % | 7.44 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
21.54% | 22.09 | % | 22.98 | % | 15.62 | % | 15.03 | % | 23.09 | % | 73.63 | % | 74.23 | % | 97.39 | % |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 19 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SWITZERLAND INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/05
Sector | % of Net Assets | ||
Consumer Non-Cyclical | 47.78 | % | |
Financial | 26.30 | ||
Industrial | 8.03 | ||
Basic Materials | 7.80 | ||
Consumer Cyclical | 6.33 | ||
Communications | 2.62 | ||
Technology | 0.85 | ||
Short-Term and Other Net Assets | 0.29 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS
As of 8/31/05
Security | % of Net Assets | ||
Novartis AG | 14.78 | % | |
Nestle SA Registered | 12.76 | ||
Roche Holding AG Genusschein | 11.30 | ||
UBS AG Registered | 9.83 | ||
Credit Suisse Group | 4.94 | ||
Zurich Financial Services AG | 4.44 | ||
Swiss Reinsurance Co. | 3.90 | ||
Holcim Ltd. Registered | 3.55 | ||
Compagnie Financiere Richemont AG Class A | 3.43 | ||
Syngenta AG | 2.85 | ||
TOTAL | 71.78 | % | |
The iShares MSCI Switzerland Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Swiss market, as measured by the MSCI Switzerland Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 21.54%, while the Index returned 22.98%.
Like many of its European neighbors, Switzerland struggled with sluggish economic conditions during the reporting period. Because it relies on countries in the euro zone for approximately 60% of its exports, Switzerland was negatively affected by a contraction in manufacturing in Europe. In the final months of the reporting period, however, Switzerland’s economy appeared to turn a corner and began to grow. As a result of a declining Swiss franc (which fell approximately 11% vs. the U.S. dollar in the first half of 2005), Switzerland’s exports became more affordable to its trading partners. In August, manufacturing levels rose to their highest levels for 2005. Its healthcare sector received a boost as one major pharmaceutical company reported increased earnings during the first half of 2005.
The ten largest Fund holdings accounted for almost 72% of the net assets of the Fund as of August 31, 2005. The best performer among the ten largest holdings was the Class A shares of the apparel company Compagnie Financiere Richemont AG. Pharmaceutical giant Roche Holding AG Genusschein also posted strong gains for the reporting period. Financial companies generally performed well also, with Credit Suisse Group and insurance company Zurich Financial Services AG both performing well. The Fund’s largest holding, healthcare company Novartis AG, posted the most modest gain of the ten largest holdings for the reporting period.
20 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI UNITED KINGDOM INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
21.53% | 20.73 | % | 22.38 | % | 2.59 | % | 2.58 | % | 3.42 | % | 8.17 | % | 8.22 | % | 8.86 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
21.53% | 20.73 | % | 22.38 | % | 13.61 | % | 13.58 | % | 18.30 | % | 110.50 | % | 111.35 | % | 123.68 | % |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 21 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/05
Sector | % of Net Assets | ||
Financial | 23.93 | % | |
Consumer Non-Cyclical | 20.94 | ||
Energy | 20.38 | ||
Communications | 12.21 | ||
Consumer Cyclical | 6.74 | ||
Basic Materials | 5.42 | ||
Industrial | 4.75 | ||
Utilities | 4.11 | ||
Technology | 0.59 | ||
Diversified | 0.16 | ||
Short-Term and Other Net Assets | 0.77 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS
As of 8/31/05
Security | % of Net Assets | ||
BP PLC | 9.80 | % | |
HSBC Holdings PLC | 7.34 | ||
Vodafone Group PLC | 7.07 | ||
GlaxoSmithKline PLC | 5.73 | ||
Royal Dutch Shell PLC Class A | 5.49 | ||
Royal Dutch Shell PLC Class B | 3.80 | ||
Royal Bank of Scotland Group PLC | 3.78 | ||
AstraZeneca PLC | 3.02 | ||
Barclays PLC | 2.62 | ||
HBOS PLC | 2.49 | ||
TOTAL | 51.14 | % | |
The iShares MSCI United Kingdom Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the British market, as measured by the MSCI United Kingdom Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 21.53%, while the Index returned 22.38%.
The United Kingdom, which in recent years has enjoyed healthy economic growth, saw its economy lag during much of the reporting period. Its economy’s annual growth rate through the second quarter of 2005 was 1.7%, the lowest level in twelve years. In response, the United Kingdom’s central bank, the Bank of England cut its benchmark interest rate a quarter-point to 4.50% – the first cut in two years. Rising oil prices placed an additional strain on economic growth, topping $70 per barrel during the reporting period. However, high oil prices did benefit oil and energy-related companies. During the final months of the reporting period, the UK’s economy appeared to turn a corner toward recovery. Stronger retail sales (the largest increase since December 2003) and an apparent rebound in consumer confidence levels (which had declined to a six-month low in June) offered evidence that the economy might be recovering from its recent slowdown.
Among the Fund’s ten largest holdings as of August 31, 2005, performance was mostly positive for the reporting period. The largest Fund holding, oil company BP PLC, performed well, due largely to rising oil prices during the reporting period. Financial company HBOS PLC also performed well. Wireless telecommunications company Vodafone Group PLC and pharmaceutical giant GlaxoSmithKline PLC also contributed positively to Fund performance. The only negative performance for the reporting period among the Fund’s ten largest holdings came from pharmaceutical company AstraZeneca PLC.
22 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
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, 2005 to August 31, 2005.
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, 2005) | Ending Account Value (August 31, 2005) | Annualized Expense Ratio | Expenses Paid During Perioda (March 1 to August 31, 2005) | ||||||||
Austria | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,100.00 | 0.57 | % | $ | 3.02 | ||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 | ||||||||
Belgium | ||||||||||||
Actual | 1,000.00 | 992.70 | 0.57 | 2.86 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 | ||||||||
EMU | ||||||||||||
Actual | 1,000.00 | 1,013.00 | 0.59 | 2.99 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.23 | 0.59 | 3.01 | ||||||||
France | ||||||||||||
Actual | 1,000.00 | 1,031.20 | 0.57 | 2.92 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 |
SHAREHOLDER EXPENSES | 23 |
Table of Contents
Shareholder Expenses (Continued)
iSHARES®, INC.
iShares MSCI Index Fund | Beginning Account Value (March 1, 2005) | Ending Account Value (August 31, 2005) | Annualized Expense Ratio | Expenses Paid During Perioda (March 1 to August 31, 2005) | ||||||||
Germany | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,029.10 | 0.57 | % | $ | 2.92 | ||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 | ||||||||
Italy | ||||||||||||
Actual | 1,000.00 | 998.50 | 0.57 | 2.87 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 | ||||||||
Netherlands | ||||||||||||
Actual | 1,000.00 | 980.00 | 0.57 | 2.84 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 | ||||||||
Spain | ||||||||||||
Actual | 1,000.00 | 998.30 | 0.57 | 2.87 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 | ||||||||
Sweden | ||||||||||||
Actual | 1,000.00 | 1,020.30 | 0.57 | 2.90 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 | ||||||||
Switzerland | ||||||||||||
Actual | 1,000.00 | 1,010.30 | 0.57 | 2.89 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 | ||||||||
United Kingdom | ||||||||||||
Actual | 1,000.00 | 1,007.50 | 0.57 | 2.88 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 |
a | 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 (365 days). |
24 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI AUSTRIA INDEX FUND
August 31, 2005
Security | Shares | Value | ||||
COMMON STOCKS – 99.27% | ||||||
BANKS – 19.23% | ||||||
Bank Austria Creditanstalt | 84,212 | $ | 9,497,197 | |||
Erste Bank der Oesterreichischen Sparkassen AG | 513,412 | 28,382,318 | ||||
37,879,515 | ||||||
BUILDING MATERIALS – 1.84% | ||||||
Wienerberger Baustoffindustrie AG | 88,200 | 3,618,652 | ||||
3,618,652 | ||||||
CHEMICALS – 1.65% | ||||||
Lenzing AG | 14,250 | 3,242,017 | ||||
3,242,017 | ||||||
ELECTRIC – 6.30% | ||||||
EVN AG | 35,834 | 2,785,252 | ||||
Oesterreichische Elektrizitaetswirtschafts AG Class A | 28,416 | 9,628,014 | ||||
12,413,266 | ||||||
ENGINEERING & CONSTRUCTION – 2.51% | ||||||
Flughafen Wien AG1 | 74,370 | 4,944,541 | ||||
4,944,541 | ||||||
ENVIRONMENTAL CONTROL – 0.83% | ||||||
BWT AG1 | 38,384 | 1,641,844 | ||||
1,641,844 | ||||||
FOREST PRODUCTS & PAPER – 1.69% | ||||||
Mayr-Melnhof Karton AG | 23,828 | 3,327,568 | ||||
3,327,568 | ||||||
INSURANCE – 2.59% | ||||||
Generali Holding Vienna AG | 58,238 | 2,092,853 | ||||
Wiener Staedtische Allgemeine Versicherung AG | 55,566 | 3,010,282 | ||||
5,103,135 | ||||||
IRON & STEEL – 8.53% | ||||||
Boehler-Uddeholm AG | 52,836 | 8,141,389 | ||||
Voest-Alpine AG1 | 105,968 | 8,652,260 | ||||
16,793,649 | ||||||
MACHINERY – 2.84% | ||||||
Andritz AG | 58,682 | 5,593,179 | ||||
5,593,179 | ||||||
Security | Shares or Principal | Value | ||||
MACHINERY – CONSTRUCTION & MINING – 0.44% | ||||||
Palfinger AG | 10,272 | $ | 866,120 | |||
866,120 | ||||||
MANUFACTURING – 1.75% | ||||||
RHI AG1,2 | 108,632 | 3,446,907 | ||||
3,446,907 | ||||||
OIL & GAS – 19.19% | ||||||
OMV AG | 696,192 | 37,801,748 | ||||
37,801,748 | ||||||
REAL ESTATE – 14.02% | ||||||
CA Immobilien Anlagen AG2 | 344,914 | 8,793,510 | ||||
Immofinanz Immobilien Anlage AG 2 | 977,540 | 9,437,486 | ||||
Meinl European Land Ltd.2 | 524,734 | 9,383,303 | ||||
27,614,299 | ||||||
TELECOMMUNICATIONS – 15.86% | ||||||
Telekom Austria AG1 | 1,485,846 | 31,229,714 | ||||
31,229,714 | ||||||
TOTAL COMMON STOCKS | 195,516,154 | |||||
SHORT-TERM INVESTMENTS – 13.76% | ||||||
CERTIFICATES OF DEPOSIT3 – 1.56% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% - 3.83%, 09/14/05 - 01/25/06 | $ | 175,640 | 175,640 | |||
Bank of Nova Scotia | ||||||
3.45% - 3.56%, 09/26/05 - 01/03/06 | 76,110 | 76,104 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 117,093 | 117,093 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 117,093 | 117,089 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 58,547 | 58,535 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 199,058 | 199,058 | ||||
Fortis Bank NY | ||||||
3.83% - 3.84%, 01/25/06 | 175,640 | 175,641 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 70,256 | 70,256 |
SCHEDULESOF INVESTMENTS | 25 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRIA INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | $ | 58,547 | $ | 58,566 | ||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 58,547 | 58,539 | ||||
Societe Generale | ||||||
3.51% - 3.60%, 03/30/06 - 06/13/06 | 181,494 | 181,462 | ||||
Toronto-Dominion Bank | ||||||
2.66% - 3.94%, 09/14/05 - 07/10/06 | 415,680 | 415,690 | ||||
UBS AG | ||||||
2.67% - 3.40%, 11/09/05 - 12/15/05 | 93,674 | 93,674 | ||||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 292,733 | 292,733 | ||||
Washington Mutual Bank | ||||||
3.50% - 3.55%, 09/15/05 - 09/19/05 | 526,919 | 526,920 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 - 09/20/05 | 462,518 | 462,517 | ||||
3,079,517 | ||||||
COMMERCIAL PAPER3 – 3.15% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 234,186 | 234,003 | ||||
Amstel Funding Corp. | ||||||
3.49% - 3.91%, 09/15/05 - 02/15/06 | 247,066 | 245,749 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 117,093 | 117,093 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 132,789 | 132,712 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% - 3.49%, 09/09/05 - 09/21/05 | 193,204 | 192,965 | ||||
Bryant Park Funding LLC | ||||||
3.51% - 3.92%, 09/06/05 - 02/22/06 | 59,599 | 59,019 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 45,019 | 44,739 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 81,965 | 81,812 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 35,128 | 35,080 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 11,709 | 11,530 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 87,820 | 87,782 | ||||
Fairway Finance LLC | ||||||
3.15% - 3.56%, 09/15/05 - 10/20/05 | 150,997 | 150,870 | ||||
Ford Credit Floorplan Motown | ||||||
3.47% - 3.72%, 09/09/05 - 11/08/05 | 532,736 | 530,305 | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 187,852 | 187,761 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% - 3.53%, 09/20/05 - 09/21/05 | 380,552 | 379,817 | ||||
Giro Funding Corp. | ||||||
3.53% - 3.56%, 09/16/05 - 09/22/05 | 87,820 | 87,672 | ||||
Grampian Funding LLC | ||||||
3.13% - 3.84%, 09/09/05 - 01/31/06 | 181,494 | 179,551 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% - 3.53%, 09/02/05 - 02/10/06 | 134,657 | 134,657 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 35,128 | 34,541 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 66,377 | 66,247 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 - 02/21/064 | 122,937 | 122,937 | ||||
Lockhart Funding LLC | ||||||
3.47% - 3.55%, 09/16/05 - 09/19/05 | 161,405 | 161,164 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% - 3.51%, 09/01/05 - 09/21/05 | 286,878 | 286,502 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 409,826 | 409,826 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 66,045 | 65,930 |
26 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRIA INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Park Granada LLC | ||||||
3.48% - 3.51%, 09/15/05 - 09/20/05 | $ | 158,548 | $ | 158,305 | ||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 117,093 | 114,944 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 234,186 | 234,049 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 29,273 | 28,722 | ||||
Solitaire Funding Ltd. | ||||||
3.49% - 3.52%, 09/02/05 - 09/06/05 | 344,254 | 344,163 | ||||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 72,340 | 72,340 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 245,895 | 245,436 | ||||
Three Pillars Funding Corp. | ||||||
3.49% - 3.52%, 09/01/05 - 09/07/05 | 250,891 | 250,805 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 19,572 | 19,572 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 432,039 | 432,039 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 53,863 | 53,821 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 40,983 | 40,982 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 169,785 | 169,485 | ||||
6,204,927 | ||||||
MEDIUM-TERM NOTES3 – 0.05% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/064 | 36,299 | 36,296 | ||||
K2 USA LLC | ||||||
3.94%, 07/07/064 | 70,256 | 70,253 | ||||
106,549 | ||||||
Security | Shares or Principal | Value | ||||
MONEY MARKET FUNDS – 0.27% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares 3.63%3,5,6 | 468,372 | $ | 468,372 | |||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 3.56%5,6 | 2,373 | 2,373 | ||||
BlackRock Temp Cash Money Market Fund 3.41%3,6 | 12,407 | 12,407 | ||||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares 3.50%3,6 | 41,048 | 41,048 | ||||
524,200 | ||||||
REPURCHASE AGREEMENTS3 – 2.66% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $2,810,515 and an effective yield of 3.60%.7 | $ | 2,810,234 | 2,810,234 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $2,166,438 and an effective yield of 3.60%.7 | 2,166,222 | 2,166,222 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $255,288 and an effective yield of 3.60%.7 | 255,263 | 255,263 | ||||
5,231,719 | ||||||
TIME DEPOSITS3 – 0.55% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | 234,186 | 234,186 | ||||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 644,012 | 644,012 |
SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRIA INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | $ | 154,583 | $ | 154,583 | ||
Natexis Banques Populaires | ||||||
3.51%, 09/20/058 | 58,547 | 58,547 | ||||
1,091,328 | ||||||
VARIABLE & FLOATING RATE NOTES3 – 5.52% | ||||||
Allstate Life Global Funding II | ||||||
3.58% - 3.66%, 07/08/06 - 07/27/064 | 217,793 | 217,794 | ||||
American Express Bank | ||||||
3.55% - 3.63%, 10/17/05 - 07/19/06 | 316,151 | 316,153 | ||||
American Express Centurion Bank | ||||||
3.55% - 3.63%, 06/29/06 - 07/19/06 | 193,204 | 193,203 | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 234,186 | 234,204 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/064 | 117,093 | 117,239 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/064 | 76,110 | 76,110 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 585,465 | 585,465 | ||||
Beta Finance Inc. | ||||||
3.51% - 3.72%, 09/23/05 - 06/09/064 | 601,858 | 601,850 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/064 | 117,093 | 117,093 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% - 3.61%, 09/13/05 - 12/14/05 | 398,116 | 398,100 | ||||
CC USA Inc. | ||||||
3.52% - 3.59%, 03/23/06 - 07/14/064 | 314,980 | 314,966 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/054 | 29,273 | 29,273 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 292,733 | 292,733 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 117,093 | 117,093 | ||||
Dorada Finance Inc. | ||||||
3.59% - 3.62%, 03/27/06 - 06/26/064 | 186,178 | 186,188 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/064 | 117,093 | 117,093 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/064 | 234,186 | 234,186 | ||||
Five Finance Inc. | ||||||
3.60% - 3.63%, 02/27/06 - 06/26/064 | 81,965 | 81,967 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 52,692 | 52,739 | ||||
Hartford Life Global Funding Trust | ||||||
3.56%, 08/15/06 | 117,093 | 117,093 | ||||
HBOS Treasury Services PLC | ||||||
3.51% - 3.57%, 01/10/06 - 04/24/064 | 351,279 | 351,279 | ||||
HSBC Bank USA N.A. | ||||||
3.70%, 05/04/06 | 40,983 | 41,005 | ||||
K2 USA LLC | ||||||
3.47% - 3.58%, 09/12/05 - 06/02/064 | 456,663 | 456,667 | ||||
Links Finance LLC | ||||||
3.52% - 3.71%, 11/16/05 - 03/15/064 | 456,663 | 456,713 | ||||
Lothian Mortgages PLC | ||||||
3.63%, 01/24/06 | 117,093 | 117,093 | ||||
Marshall & Ilsley Bank | ||||||
3.71%, 02/20/06 | 117,093 | 117,159 | ||||
Metropolitan Life Global Funding I | ||||||
3.55% - 4.01%, 08/28/06 - 09/06/064 | 234,186 | 234,289 | ||||
National City Bank (Ohio) | ||||||
3.50%, 01/06/06 | 58,547 | 58,540 | ||||
Nationwide Building Society | ||||||
3.51% - 3.62%, 01/13/06 - 07/07/064 | 433,244 | 433,287 | ||||
Nordea Bank AB | ||||||
3.55%, 08/11/064 | 204,913 | 204,913 | ||||
Northern Rock PLC | ||||||
3.54% - 3.61%, 10/25/05 - 08/03/064 | 374,698 | 374,704 |
28 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRIA INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
Permanent Financing PLC | |||||||
3.53% - 3.54%, 09/12/05 - 06/12/064 | $ | 450,808 | $ | 450,808 | |||
Principal Life Income Funding Trusts | |||||||
3.74%, 05/10/06 | 87,820 | 87,823 | |||||
Royal Bank of Scotland | |||||||
3.47% - 3.61%, 04/05/06 - 08/30/06 | 390,798 | 390,709 | |||||
Sedna Finance Inc. | |||||||
3.54%, 01/10/06 - 01/17/064 | 64,401 | 64,395 | |||||
Sigma Finance Inc. | |||||||
3.50% - 3.72%, 09/15/05 - 08/15/064 | 668,601 | 668,604 | |||||
Skandinaviska Enskilda Bank NY | |||||||
3.58%, 07/18/064 | 117,093 | 117,093 | |||||
Strips III LLC | |||||||
3.69%, 07/24/064,8 | 34,396 | 34,396 | |||||
SunTrust Bank | |||||||
3.63%, 04/28/06 | 175,640 | 175,640 | |||||
Tango Finance Corp. | |||||||
3.54% - 3.60%, 09/15/05 - 06/21/064 | 284,536 | 284,518 | |||||
Toyota Motor Credit Corp. | |||||||
3.57%, 04/10/06 | 52,692 | 52,691 | |||||
Unicredito Italiano SpA | |||||||
3.34%, 06/14/06 | 152,221 | 152,179 | |||||
Wachovia Asset Securitization Inc. | |||||||
3.63%, 09/25/054 | 281,883 | 281,884 | |||||
Wells Fargo & Co. | |||||||
3.56%, 09/15/064 | 58,547 | 58,552 | |||||
WhistleJacket Capital LLC | |||||||
3.52% - 3.62%, 09/15/05 - 07/28/064 | 468,372 | 468,351 | |||||
White Pine Finance LLC | |||||||
3.47% - 3.61%, 11/01/05 - 06/20/064 | 247,066 | 247,060 | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/054 | 83,604 | 83,604 | |||||
10,864,498 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 27,102,738 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 113.03% | 222,618,892 | ||||||
Other Assets, Less Liabilities – (13.03)% | (25,666,718 | ) | |||||
NET ASSETS – 100.00% | $ | 196,952,174 | |||||
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 (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
4 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
6 | The rate quoted is the annualized seven-day yield of the fund at period end. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
8 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments
iSHARES® MSCI BELGIUM INDEX FUND
August 31, 2005
Security | Shares | Value | ||||
COMMON STOCKS – 99.19% | ||||||
BANKS – 48.52% | ||||||
Dexia Group1 | 261,826 | $ | 5,686,638 | |||
Fortis1 | 394,072 | 11,205,095 | ||||
KBC Groupe1 | 71,300 | 5,892,654 | ||||
22,784,387 | ||||||
BEVERAGES – 4.85% | ||||||
InBev | 58,590 | 2,279,881 | ||||
2,279,881 | ||||||
CHEMICALS – 4.82% | ||||||
Solvay SA | 20,894 | 2,265,145 | ||||
2,265,145 | ||||||
ELECTRIC – 4.82% | ||||||
Electrabel SA1 | 4,464 | 2,262,999 | ||||
2,262,999 | ||||||
ELECTRICAL COMPONENTS & EQUIPMENT – 1.26% | ||||||
Bekaert NV | 7,134 | 589,596 | ||||
589,596 | ||||||
ELECTRONICS – 0.67% | ||||||
Barco NV1 | 4,216 | 313,436 | ||||
313,436 | ||||||
FOOD – 6.09% | ||||||
Colruyt NV | 9,610 | 1,276,437 | ||||
Delhaize Group | 27,466 | 1,582,887 | ||||
2,859,324 | ||||||
HOLDING COMPANIES – DIVERSIFIED – 4.85% | ||||||
Groupe Bruxelles Lambert SA1 | 23,870 | 2,276,598 | ||||
2,276,598 | ||||||
MANUFACTURING – 2.22% | ||||||
AGFA-Gevaert NV1 | 39,804 | 1,040,250 | ||||
1,040,250 | ||||||
MINING – 3.12% | ||||||
Umicore | 15,438 | 1,466,701 | ||||
1,466,701 | ||||||
PHARMACEUTICALS – 5.99% | ||||||
Omega Pharma SA1 | 9,611 | 552,589 | ||||
UCB SA | 39,804 | 2,259,179 | ||||
2,811,768 | ||||||
Security | Shares or Principal | Value | ||||
REAL ESTATE INVESTMENT TRUSTS – 3.23% | ||||||
Cofinimmo | 9,486 | $ | 1,516,626 | |||
1,516,626 | ||||||
RETAIL – 0.57% | ||||||
SA D’Ieteren NV1 | 1,178 | 269,905 | ||||
269,905 | ||||||
TELECOMMUNICATIONS – 6.93% | ||||||
Belgacom SA | 65,224 | 2,287,753 | ||||
Mobistar SA1 | 12,338 | 968,094 | ||||
3,255,847 | ||||||
TRANSPORTATION – 1.25% | ||||||
Compagnie Maritime Belge SA | 8,681 | 278,652 | ||||
Euronav SA | 9,486 | 309,392 | ||||
588,044 | ||||||
TOTAL COMMON STOCKS | 46,580,507 | |||||
SHORT-TERM INVESTMENTS – 39.36% | ||||||
CERTIFICATES OF DEPOSIT2 – 4.47% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% - 3.83%, 09/14/05 - 01/25/06 | $ | 119,754 | 119,754 | |||
Bank of Nova Scotia | ||||||
3.45% - 3.56%, 09/26/05 - 01/03/06 | 51,894 | 51,889 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 79,836 | 79,836 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 79,836 | 79,833 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 39,918 | 39,910 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 135,722 | 135,722 | ||||
Fortis Bank NY | ||||||
3.83% - 3.84%, 01/25/06 | 119,754 | 119,755 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 47,902 | 47,902 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 39,918 | 39,931 |
30 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BELGIUM INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | $ | 39,918 | $ | 39,913 | ||
Societe Generale | ||||||
3.51% - 3.60%, 03/30/06 - 06/13/06 | 123,746 | 123,725 | ||||
Toronto-Dominion Bank | ||||||
2.66% - 3.94%, 09/14/05 - 07/10/06 | 283,419 | 283,424 | ||||
UBS AG | ||||||
2.67% - 3.40%, 11/09/05 - 12/15/05 | 63,869 | 63,869 | ||||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 199,591 | 199,591 | ||||
Washington Mutual Bank | ||||||
3.50% - 3.55%, 09/15/05 - 09/19/05 | 359,263 | 359,263 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 - 09/20/05 | 315,353 | 315,352 | ||||
2,099,669 | ||||||
COMMERCIAL PAPER2 – 9.01% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 159,673 | 159,548 | ||||
Amstel Funding Corp. | ||||||
3.49% - 3.91%, 09/15/05 - 02/15/06 | 168,454 | 167,556 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 79,836 | 79,836 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 90,538 | 90,485 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% - 3.49%, 09/09/05 - 09/21/05 | 131,730 | 131,567 | ||||
Bryant Park Funding LLC | ||||||
3.51% - 3.92%, 09/06/05 - 02/22/06 | 40,636 | 40,240 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 30,695 | 30,504 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 55,885 | 55,781 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 23,951 | 23,918 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 7,984 | 7,861 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 59,877 | 59,851 | ||||
Fairway Finance LLC | ||||||
3.15% - 3.56%, 09/15/05 - 10/20/05 | 102,953 | 102,865 | ||||
Ford Credit Floorplan Motown | ||||||
3.47% - 3.72%, 09/09/05 - 11/08/05 | 363,229 | 361,572 | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 128,081 | 128,019 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% - 3.53%, 09/20/05 - 09/21/05 | 259,468 | 258,966 | ||||
Giro Funding Corp. | ||||||
3.53% - 3.56%, 09/16/05 - 09/22/05 | 59,877 | 59,777 | ||||
Grampian Funding LLC | ||||||
3.13% - 3.84%, 09/09/05 - 01/31/06 | 123,746 | 122,421 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% - 3.53%, 09/02/05 - 02/10/06 | 91,812 | 91,812 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 23,951 | 23,551 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 45,257 | 45,169 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 - 02/21/063 | 83,821 | 83,821 | ||||
Lockhart Funding LLC | ||||||
3.47% - 3.55%, 09/16/05 - 09/19/05 | 110,049 | 109,884 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% - 3.51%, 09/01/05 - 09/21/05 | 195,599 | 195,343 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 279,427 | 279,427 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 45,031 | 44,952 |
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BELGIUM INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Park Granada LLC | ||||||
3.48% - 3.51%, 09/15/05 - 09/20/05 | $ | 108,101 | $ | 107,935 | ||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 79,836 | 78,371 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 159,673 | 159,579 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 19,959 | 19,583 | ||||
Solitaire Funding Ltd. | ||||||
3.49% - 3.52%, 09/02/05 - 09/06/05 | 234,719 | 234,657 | ||||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 49,323 | 49,323 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 167,656 | 167,343 | ||||
Three Pillars Funding Corp. | ||||||
3.49% - 3.52%, 09/01/05 - 09/07/05 | 171,062 | 171,003 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 13,345 | 13,345 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 294,573 | 294,573 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 36,725 | 36,696 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 27,943 | 27,943 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 115,763 | 115,558 | ||||
4,230,635 | ||||||
MEDIUM-TERM NOTES2 – 0.16% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/063 | 24,749 | 24,747 | ||||
K2 USA LLC | ||||||
3.94%, 07/07/063 | 47,902 | 47,900 | ||||
72,647 | ||||||
Security | Shares or Principal | Value | ||||
MONEY MARKET FUNDS – 0.76% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares 3.63%2,4,5 | 319,345 | $ | 319,345 | |||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 3.56%4,5 | 2,642 | 2,642 | ||||
BlackRock Temp Cash Money Market Fund 3.41%2,5 | 8,459 | 8,459 | ||||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares 3.50%2,5 | 27,987 | 27,987 | ||||
358,433 | ||||||
REPURCHASE AGREEMENTS2 – 7.60% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $1,916,262 and an effective yield of 3.60%.6 | $ | 1,916,070 | 1,916,070 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $1,477,118 and an effective yield of 3.60%.6 | 1,476,971 | 1,476,971 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $174,060 and an effective yield of 3.60%.6 | 174,043 | 174,043 | ||||
3,567,084 | ||||||
TIME DEPOSITS2 – 1.59% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | 159,673 | 159,672 | ||||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 439,099 | 439,099 |
32 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BELGIUM INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | $ | 105,398 | $ | 105,398 | ||
Natexis Banques Populaires | ||||||
3.51%, 09/20/057 | 39,918 | 39,918 | ||||
744,087 | ||||||
VARIABLE & FLOATING RATE NOTES 2 – 15.77% | ||||||
Allstate Life Global Funding II | ||||||
3.58% - 3.66%, 07/08/06 - 07/27/063 | 148,495 | 148,496 | ||||
American Express Bank | ||||||
3.55% - 3.63%, 10/17/05 - 07/19/06 | 215,558 | 215,558 | ||||
American Express Centurion Bank | ||||||
3.55% - 3.63%, 06/29/06 - 07/19/06 | 131,730 | 131,729 | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 159,673 | 159,684 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/063 | 79,836 | 79,936 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/063 | 51,894 | 51,894 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 399,181 | 399,181 | ||||
Beta Finance Inc. | ||||||
3.51% - 3.72%, 09/23/05 - 06/09/063 | 410,358 | 410,352 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/063 | 79,836 | 79,836 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% - 3.61%, 09/13/05 - 12/14/05 | 271,443 | 271,432 | ||||
CC USA Inc. | ||||||
3.52% - 3.59%, 03/23/06 - 07/14/063 | 214,760 | 214,751 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/053 | 19,959 | 19,959 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 199,591 | 199,591 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 79,836 | 79,836 | ||||
Dorada Finance Inc. | ||||||
3.59% - 3.62%, 03/27/06 - 06/26/063 | 126,940 | 126,946 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/063 | 79,836 | 79,836 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/063 | 159,673 | 159,672 | ||||
Five Finance Inc. | ||||||
3.60% - 3.63%, 02/27/06 - 06/26/063 | 55,885 | 55,887 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 35,926 | 35,959 | ||||
Hartford Life Global Funding Trust | ||||||
3.56%, 08/15/06 | 79,836 | 79,836 | ||||
HBOS Treasury Services PLC | ||||||
3.51% - 3.57%, 01/10/06 - 04/24/063 | 239,509 | 239,508 | ||||
HSBC Bank USA N.A. | ||||||
3.70%, 05/04/06 | 27,943 | 27,958 | ||||
K2 USA LLC | ||||||
3.47% - 3.58%, 09/12/05 - 06/02/063 | 311,361 | 311,364 | ||||
Links Finance LLC | ||||||
3.52% - 3.71%, 11/16/05 - 03/15/063 | 311,361 | 311,394 | ||||
Lothian Mortgages PLC | ||||||
3.63%, 01/24/06 | 79,836 | 79,836 | ||||
Marshall & Ilsley Bank | ||||||
3.71%, 02/20/06 | 79,836 | 79,881 | ||||
Metropolitan Life Global Funding I | ||||||
3.55% - 4.01%, 08/28/06 - 09/06/063 | 159,673 | 159,742 | ||||
National City Bank (Ohio) | ||||||
3.50%, 01/06/06 | 39,918 | 39,914 | ||||
Nationwide Building Society | ||||||
3.51% - 3.62%, 01/13/06 - 07/07/063 | 295,394 | 295,423 | ||||
Nordea Bank AB | ||||||
3.55%, 08/11/063 | 139,713 | 139,713 | ||||
Northern Rock PLC | ||||||
3.54% - 3.61%, 10/25/05 - 08/03/063 | 255,476 | 255,480 |
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BELGIUM INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
Permanent Financing PLC | |||||||
3.53% - 3.54%, 09/12/05 - 06/12/063 | $ | 307,370 | $ | 307,369 | |||
Principal Life Income Funding Trusts | |||||||
3.74%, 05/10/06 | 59,877 | 59,879 | |||||
Royal Bank of Scotland | |||||||
3.47% - 3.61%, 04/05/06 - 08/30/06 | 266,453 | 266,392 | |||||
Sedna Finance Inc. | |||||||
3.54%, 01/10/06 - 01/17/063 | 43,910 | 43,907 | |||||
Sigma Finance Inc. | |||||||
3.50% - 3.72%, 09/15/05 - 08/15/063 | 455,865 | 455,880 | |||||
Skandinaviska Enskilda Bank NY | |||||||
3.58%, 07/18/063 | 79,836 | 79,836 | |||||
Strips III LLC | |||||||
3.69%, 07/24/063,7 | 23,452 | 23,452 | |||||
SunTrust Bank | |||||||
3.63%, 04/28/06 | 119,754 | 119,754 | |||||
Tango Finance Corp. | |||||||
3.54% - 3.60%, 09/15/05 - 06/21/063 | 194,002 | 193,990 | |||||
Toyota Motor Credit Corp. | |||||||
3.57%, 04/10/06 | 35,926 | 35,926 | |||||
Unicredito Italiano SpA | |||||||
3.34%, 06/14/06 | 103,787 | 103,758 | |||||
Wachovia Asset Securitization Inc. | |||||||
3.63%, 09/25/053 | 192,193 | 192,193 | |||||
Wells Fargo & Co. | |||||||
3.56%, 09/15/063 | 39,918 | 39,922 | |||||
WhistleJacket Capital LLC | |||||||
3.52% - 3.62%, 09/15/05 - 07/28/063 | 319,345 | 319,331 | |||||
White Pine Finance LLC | |||||||
3.47% - 3.61%, 11/01/05 - 06/20/063 | 168,454 | 168,450 | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/053 | 57,003 | 57,003 | |||||
7,407,626 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 18,480,181 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 138.55% | 65,060,688 | ||||||
Other Assets, Less Liabilities – (38.55)% | (18,101,129 | ) | |||||
NET ASSETS – 100.00% | $ | 46,959,559 | |||||
1 | All or a portion of this security represents a security on loan. See Note 5. |
2 | All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
3 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
5 | The rate quoted is the annualized seven-day yield of the fund at period end. |
6 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
7 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
34 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 98.49% | |||||
AUSTRIA – 1.50% | |||||
Andritz AG | 1,470 | $ | 140,111 | ||
Bank Austria Creditanstalt | 6,468 | 729,443 | |||
Boehler-Uddeholm AG | 2,190 | 337,453 | |||
Erste Bank der Oesterreichischen Sparkassen AG | 24,255 | 1,340,859 | |||
Flughafen Wien AG | 294 | 19,547 | |||
Immofinanz Immobilien Anlage AG1 | 85,848 | 828,804 | |||
Mayr-Melnhof Karton AG | 1,764 | 246,342 | |||
Meinl European Land Ltd.1 | 10,290 | 184,006 | |||
Oesterreichische Elektrizitaetswirtschafts AG Class A | 1,323 | 448,264 | |||
OMV AG | 30,576 | 1,660,212 | |||
RHI AG1,2 | 3,993 | 126,698 | |||
Telekom Austria AG | 60,564 | 1,272,942 | |||
Voest-Alpine AG2 | 4,284 | 349,788 | |||
Wienerberger Baustoffindustrie AG | 12,936 | 530,736 | |||
8,215,205 | |||||
BELGIUM – 4.12% | |||||
AGFA-Gevaert NV2 | 16,170 | 422,592 | |||
Barco NV2 | 2,499 | 185,787 | |||
Bekaert NV2 | 3,942 | 325,790 | |||
Belgacom SA | 27,930 | 979,654 | |||
Cofinimmo | 1,617 | 258,527 | |||
Colruyt NV | 2,940 | 390,502 | |||
Compagnie Maritime Belge SA | 3,180 | 102,075 | |||
Delhaize Group2 | 12,789 | 737,040 | |||
Dexia Group2 | 98,842 | 2,146,764 | |||
Electrabel SA2 | 4,704 | 2,384,665 | |||
Euronav SA | 2,482 | 80,952 | |||
Fortis2 | 209,769 | 5,964,599 | |||
Groupe Bruxelles Lambert SA2 | 12,789 | 1,219,749 | |||
InBev | 34,398 | 1,338,511 | |||
KBC Groupe2 | 32,634 | 2,697,067 | |||
Mobistar SA | 5,010 | 393,107 | |||
Omega Pharma SA2 | 3,822 | 219,748 | |||
SA D’Ieteren NV | 588 | 134,723 | |||
Solvay SA | 11,466 | 1,243,044 | |||
UCB SA | 16,023 | 909,427 | |||
Umicore | 4,410 | 418,976 | |||
22,553,299 | |||||
FINLAND – 4.35% | |||||
Amer Group Ltd.2 | 11,025 | 201,353 | |||
Cargotec Corp.1 | 7,693 | 211,269 | |||
Elisa OYJ Class A2 | 23,798 | 431,410 | |||
Fortum OYJ | 78,110 | 1,516,844 | |||
KCI Konecranes OYJ2 | 3,087 | 143,509 | |||
Kesko OYJ Class B | 10,731 | 305,523 | |||
Kone OYJ1 | 7,203 | 471,721 | |||
Metso OYJ2 | 20,586 | 507,620 | |||
Neste Oil OYJ1,2 | 24,528 | 822,017 | |||
Nokia OYJ | 736,716 | 11,488,716 | |||
Nokian Renkaat OYJ | 20,286 | 430,615 | |||
Orion-Yhtyma OYJ Class B | 15,184 | 319,700 | |||
Outokumpu OYJ2 | 24,990 | 368,193 | |||
Pohjola Group PLC Class D2 | 10,143 | 144,578 | |||
Rautaruukki OYJ | 18,729 | 375,222 | |||
Sampo OYJ Class A | 69,825 | 1,099,191 | |||
Stora Enso OYJ Class R | 111,544 | 1,529,584 | |||
TietoEnator OYJ2 | 15,141 | 505,006 | |||
UPM-Kymmene OYJ2 | 96,285 | 1,918,341 | |||
Uponor OYJ2 | 15,582 | 333,445 | |||
Wartsila OYJ Class B | 10,789 | 317,789 | |||
YIT-Yhtyma OYJ | 9,996 | 378,519 | |||
23,820,165 | |||||
FRANCE – 29.44% | |||||
Accor SA2 | 37,632 | 1,978,543 | |||
Air France - KLM2 | 16,644 | 271,018 | |||
Alcatel SA Class A1,2 | 220,206 | 2,551,128 | |||
Alstom1 | 19,150 | 791,335 | |||
Arcelor2 | 92,022 | 2,014,484 | |||
Atos Origin SA1 | 11,826 | 895,923 | |||
Autoroutes du Sud de la France2 | 10,437 | 617,409 | |||
AXA2 | 252,252 | 6,682,400 | |||
BNP Paribas SA2 | 141,120 | 10,231,152 | |||
Bouygues SA2 | 33,516 | 1,490,090 | |||
Business Objects SA1,2 | 12,054 | 398,189 | |||
Cap Gemini SA1 | 22,491 | 737,707 | |||
Carrefour SA2 | 99,666 | 4,617,371 | |||
CNP Assurances2 | 5,880 | 403,880 | |||
Compagnie de Saint-Gobain2 | 55,125 | 3,339,605 |
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2005
Security | Shares | Value | |||
Compagnie Generale des Etablissements Michelin Class B2 | 26,313 | $ | 1,594,752 | ||
Credit Agricole SA2 | 105,412 | 2,800,244 | |||
Dassault Systemes SA2 | 10,290 | 501,524 | |||
Essilor International SA | 17,199 | 1,337,876 | |||
Etablissements Economiques du Casino Guichard-Perrachon SA2 | 7,203 | 504,055 | |||
European Aeronautic Defense and Space Co.2 | 43,953 | 1,478,961 | |||
France Telecom2 | 283,678 | 8,516,195 | |||
Gecina SA | 1,314 | 156,916 | |||
Groupe Danone | 41,902 | 4,385,473 | |||
Hermes International2 | 1,022 | 215,559 | |||
Imerys SA2 | 6,468 | 475,292 | |||
Klepierre2 | 3,848 | 380,253 | |||
Lafarge SA2 | 31,017 | 2,862,877 | |||
Lagardere S.C.A.2 | 20,580 | 1,467,998 | |||
L’Air Liquide SA2 | 19,404 | 3,362,439 | |||
L’Oreal SA2 | 51,976 | 4,158,171 | |||
LVMH Moet Hennessy Louis Vuitton SA2 | 42,483 | 3,422,226 | |||
Neopost SA | 5,145 | 475,201 | |||
PagesJaunes SA | 20,433 | 528,725 | |||
Pernod Ricard SA2 | 12,848 | 2,223,217 | |||
PPR2 | 12,054 | 1,288,259 | |||
PSA Peugeot Citroen SA2 | 28,371 | 1,755,071 | |||
Publicis Groupe2 | 22,785 | 753,795 | |||
Renault SA2 | 32,928 | 2,905,624 | |||
Safran SA2 | 30,948 | 639,051 | |||
Sanofi-Aventis2 | 186,984 | 15,913,389 | |||
Schneider Electric SA2 | 40,572 | 3,180,964 | |||
SCOR | 148,911 | 294,852 | |||
Societe BIC SA2 | 4,263 | 250,818 | |||
Societe des Autoroutes du Nord et de l’Est de la France1,2 | 4,704 | 288,971 | |||
Societe Des Autoroutes Paris-Rhin-Rhone | 6,174 | 423,695 | |||
Societe Generale Class A2 | 61,320 | 6,602,531 | |||
Societe Television Francaise 12 | 20,306 | 543,919 | |||
Sodexho Alliance SA2 | 19,110 | 662,299 | |||
STMicroelectronics NV | 113,484 | 1,859,050 | |||
Suez SA2 | 143,472 | 4,171,255 | |||
Technip-Coflexip SA2 | 14,259 | 814,567 | |||
Thales SA2 | 15,476 | 698,707 | |||
Thomson2 | 45,570 | 1,018,324 | |||
Total SA2 | 101,908 | 26,708,153 | |||
Unibail Holding2 | 7,644 | 1,091,453 | |||
Valeo SA2 | 13,369 | 547,185 | |||
Veolia Environnement2 | 52,773 | 2,145,040 | |||
Vinci SA2 | 26,572 | 2,352,929 | |||
Vivendi Universal SA | 189,189 | 5,926,209 | |||
Zodiac SA2 | 7,203 | 401,827 | |||
161,106,125 | |||||
GERMANY – 20.41% | |||||
Adidas-Salomon AG2 | 7,350 | 1,307,097 | |||
Allianz AG2 | 64,824 | 8,363,026 | |||
ALTANA AG | 12,495 | 708,264 | |||
BASF AG | 95,550 | 6,673,516 | |||
Bayer AG | 116,718 | 4,106,841 | |||
Bayerische Hypo-und Vereinsbank AG1 | 100,107 | 2,834,144 | |||
Beiersdorf AG2 | 2,824 | 329,944 | |||
Celesio AG | 6,321 | 551,946 | |||
Commerzbank AG | 85,410 | 2,214,275 | |||
Continental AG2 | 23,667 | 1,867,205 | |||
DaimlerChrysler AG2 | 161,914 | 8,303,718 | |||
Deutsche Bank AG2 | 87,892 | 7,590,359 | |||
Deutsche Boerse AG2 | 17,934 | 1,635,241 | |||
Deutsche Lufthansa AG2 | 35,332 | 470,597 | |||
Deutsche Post AG | 106,434 | 2,675,552 | |||
Deutsche Telekom AG2 | 482,307 | 9,134,745 | |||
Douglas Holding AG | 5,145 | 200,141 | |||
E.ON AG2 | 110,250 | 10,487,961 | |||
EPCOS AG1,2 | 9,702 | 119,320 | |||
Fresenius Medical Care AG2 | 6,615 | 597,956 | |||
Heidelberger Druckmaschinen AG | 9,996 | 355,653 | |||
Hochtief AG2 | 10,290 | 419,645 | |||
Hypo Real Estate Holding AG | 23,226 | 1,141,152 | |||
Infineon Technologies AG1 | 115,362 | 1,074,016 | |||
IVG Immobilien AG | 11,907 | 252,020 | |||
KarstadtQuelle AG1,2 | 13,818 | 183,536 | |||
Linde AG2 | 14,994 | 1,107,160 |
36 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2005
Security | Shares | Value | |||
MAN AG2 | 25,872 | $ | 1,301,066 | ||
Merck KGaA2 | 8,760 | 751,451 | |||
METRO AG2 | 25,872 | 1,305,520 | |||
MLP AG2 | 11,922 | 229,171 | |||
Muenchener Rueckversicherungs- Gesellschaft AG2 | 32,634 | 3,644,251 | |||
Premiere AG1,2 | 7,644 | 235,024 | |||
Puma AG | 2,793 | 753,976 | |||
RWE AG2 | 74,088 | 4,936,726 | |||
SAP AG2 | 39,102 | 6,617,128 | |||
Schering AG | 29,400 | 1,856,692 | |||
Siemens AG2 | 141,708 | 10,725,166 | |||
Suedzucker AG2 | 11,907 | 248,945 | |||
ThyssenKrupp AG | 66,738 | 1,273,026 | |||
TUI AG2 | 32,558 | 765,593 | |||
Volkswagen AG2 | 40,150 | 2,110,930 | |||
Wincor Nixdorf AG | 2,499 | 230,966 | |||
111,690,661 | |||||
GREECE – 1.29% | |||||
Hellenic Telecommunications Organization SA ADR1 | 258,867 | 2,702,571 | |||
National Bank of Greece SA ADR | 583,047 | 4,361,192 | |||
7,063,763 | |||||
IRELAND – 2.68% | |||||
Allied Irish Banks PLC | 154,350 | 3,321,979 | |||
Bank of Ireland | 174,489 | 2,746,820 | |||
C&C Group PLC | 50,224 | 284,133 | |||
CRH PLC | 97,314 | 2,635,389 | |||
DCC PLC | 14,994 | 333,586 | |||
DEPFA Bank PLC | 62,780 | 1,057,777 | |||
Eircom Group PLC | 99,519 | 230,100 | |||
Elan Corp. PLC1 | 43,659 | 390,892 | |||
Fyffes PLC | 57,477 | 179,548 | |||
Grafton Group PLC1 | 38,220 | 401,892 | |||
Greencore Group PLC | 35,427 | 154,673 | |||
IAWS Group PLC | 22,197 | 320,217 | |||
Independent News & Media PLC | 107,751 | 323,343 | |||
Irish Life & Permanent PLC | 49,833 | 920,532 | |||
Kerry Group PLC Class A | 24,990 | 608,532 | |||
Kingspan Group PLC | 21,903 | 273,684 | |||
Paddy Power PLC | 16,644 | 311,138 | |||
Ryanair Holdings PLC1 | 21,760 | 174,218 | |||
14,668,453 | |||||
ITALY – 11.44% | |||||
Alleanza Assicurazioni SpA2 | 75,411 | 848,146 | |||
Arnoldo Mondadori Editore SpA2 | 19,110 | 194,013 | |||
Assicurazioni Generali SpA2 | 168,021 | 5,250,738 | |||
Autogrill SpA2 | 30,282 | 422,328 | |||
Autostrade SpA2 | 52,038 | 1,373,417 | |||
Banca Antonveneta SpA | 16,206 | 499,071 | |||
Banca Fideuram SpA2 | 58,212 | 291,738 | |||
Banca Intesa SpA | 582,855 | 2,799,199 | |||
Banca Monte dei Paschi di Siena SpA2 | 206,976 | 806,922 | |||
Banca Nazionale del Lavoro SpA1,2 | 197,538 | 638,938 | |||
Banca Popolare di Milano Scrl2 | 72,471 | 733,527 | |||
Banca Popolare di Verona e Novara Scrl2 | 68,943 | 1,235,384 | |||
Banche Popolari Unite Scrl2 | 59,241 | 1,204,335 | |||
Benetton Group SpA2 | 6,332 | 62,144 | |||
Bulgari SpA2 | 20,586 | 236,594 | |||
Capitalia SpA2 | 255,633 | 1,430,476 | |||
Edison SpA1,2 | 149,006 | 339,022 | |||
Enel SpA2 | 761,313 | 6,736,684 | |||
ENI SpA2 | 465,255 | 13,732,653 | |||
Fiat SpA1,2 | 91,096 | 801,046 | |||
Fineco SpA | 28,371 | 264,307 | |||
Finmeccanica SpA | 56,403 | 1,054,382 | |||
Gruppo Editoriale L’Espresso SpA2 | 30,135 | 171,410 | |||
Italcementi SpA2 | 15,729 | 254,184 | |||
Lottomatica SpA | 9,928 | 374,235 | |||
Luxottica Group SpA2 | 24,255 | 557,821 | |||
Mediaset SpA2 | 145,530 | 1,793,380 | |||
Mediobanca SpA2 | 82,173 | 1,595,745 | |||
Mediolanum SpA2 | 50,646 | 325,449 | |||
Pirelli SpA2 | 498,330 | 491,829 | |||
Riunione Adriatica di Sicurta SpA2 | 52,773 | 1,090,368 | |||
Sanpaolo IMI SpA2 | 198,303 | 2,833,920 | |||
Seat Pagine Gialle SpA1,2 | 775,278 | 328,949 | |||
Snam Rete Gas SpA | 144,354 | 795,351 | |||
Telecom Italia Media SpA1,2 | 167,170 | 91,592 | |||
Telecom Italia SpA2 | 1,849,552 | 5,800,412 |
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2005
Security | Shares | Value | |||
Terna SpA Rights1 | 202,419 | $ | 536,476 | ||
Tiscali SpA1,2 | 51,303 | 154,425 | |||
UniCredito Italiano SpA2 | 789,537 | 4,483,648 | |||
62,634,258 | |||||
NETHERLANDS – 10.23% | |||||
ABN AMRO Holding NV2 | 308,700 | 7,380,487 | |||
AEGON NV2 | 245,931 | 3,438,950 | |||
Akzo Nobel NV | 47,922 | 1,956,704 | |||
ASML Holding NV1 | 85,701 | 1,431,324 | |||
Buhrmann NV | 19,257 | 233,753 | |||
Corio NV | 5,439 | 314,792 | |||
DSM NV2 | 12,556 | 969,757 | |||
Euronext NV2 | 15,288 | 615,200 | |||
Getronics NV | 21,441 | 248,662 | |||
Hagemeyer NV1,2 | 90,699 | 246,517 | |||
Heineken NV | 46,305 | 1,491,473 | |||
IHC Caland NV | 4,526 | 361,253 | |||
ING Groep NV | 331,632 | 9,600,968 | |||
Koninklijke Ahold NV1 | 274,596 | 2,431,526 | |||
Koninklijke KPN NV | 370,146 | 3,487,016 | |||
Koninklijke Numico NV CVA1,2 | 26,607 | 1,099,807 | |||
Koninklijke Philips Electronics NV | 231,378 | 6,072,515 | |||
Oce NV2 | 13,671 | 205,290 | |||
QIAGEN NV1,2 | 27,048 | 339,636 | |||
Randstad Holdings NV | 7,008 | 265,459 | |||
Reed Elsevier NV2 | 114,807 | 1,598,332 | |||
Rodamco Europe NV | 6,615 | 561,347 | |||
TPG NV | 69,090 | 1,767,383 | |||
Unilever NV CVA | 100,989 | 6,942,854 | |||
Vedior NV | 28,518 | 411,755 | |||
VNU NV2 | 40,719 | 1,246,949 | |||
Wereldhave NV | 3,087 | 324,035 | |||
Wolters Kluwer NV CVA | 49,245 | 920,572 | |||
55,964,316 | |||||
PORTUGAL – 0.99% | |||||
Banco BPI SA Registered | 70,851 | 304,105 | |||
Banco Comercial Portugues SA Class R2 | 358,722 | 961,760 | |||
Banco Espirito Santo SA2 | 28,077 | 453,731 | |||
Brisa-Auto Estradas de Portugal SA2 | 77,175 | 654,904 | |||
CIMPOR-Cimentos de Portugal SGPS SA2 | 55,334 | 313,042 | |||
Energias de Portugal SA | 347,918 | 975,582 | |||
Jeronimo Martins SGPS SA | 7,644 | 110,838 | |||
Portugal Telecom SGPS SA2 | 126,273 | 1,195,786 | |||
PT Multimedia Servicos de Telecomunicacoes e Multimedia SGPS SA2 | 18,396 | 178,732 | |||
Sonae SGPS SA | 156,408 | 244,295 | |||
5,392,775 | |||||
SPAIN – 12.04% | |||||
Abertis Infraestructuras SA2 | 42,048 | 1,100,447 | |||
Acciona SA2 | 4,557 | 508,041 | |||
Acerinox SA | 40,572 | 592,283 | |||
Actividades de Construcciones y Servicios SA2 | 42,483 | 1,271,709 | |||
Altadis SA | 52,560 | 2,270,835 | |||
Antena 3 de Television SA2 | 12,642 | 248,764 | |||
Banco Bilbao Vizcaya Argentaria SA | 605,052 | 10,008,457 | |||
Banco Popular Espanol SA2 | 158,613 | 1,935,096 | |||
Banco Santander Central Hispano SA2 | 1,058,208 | 12,884,227 | |||
Cintra Concesiones de Infraestructuras de Transporte SA1 | 40,278 | 525,081 | |||
Corporacion Mapfre SA2 | 20,729 | 340,594 | |||
Ebro Puleva SA | 13,377 | 232,463 | |||
Endesa SA2 | 170,373 | 3,834,458 | |||
Fomento de Construcciones y Contratas SA | 7,644 | 438,085 | |||
Gamesa Corporacion Tecnologica SA2 | 26,718 | 399,238 | |||
Gas Natural SDG SA2 | 33,369 | 988,216 | |||
Grupo Ferrovial SA2 | 11,172 | 861,491 | |||
Iberdrola SA2 | 145,383 | 3,729,753 | |||
Iberia Lineas Aereas de Espana SA2 | 79,233 | 214,378 | |||
Indra Sistemas SA2 | 19,992 | 403,475 | |||
Industria de Diseno Textil SA2 | 40,278 | 1,094,743 | |||
Inmobiliaria Colonial | 5,548 | 316,256 | |||
Metrovacesa SA2 | 10,300 | 694,810 | |||
NH Hoteles SA2 | 22,922 | 345,335 | |||
Promotora de Informaciones SA | 14,553 | 267,933 | |||
Repsol YPF SA2 | 167,727 | 4,946,572 | |||
Sacyr Vallehermoso SA2 | 18,342 | 468,753 |
38 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
Sociedad General de Aguas de Barcelona SA Class B2 | 11,557 | $ | 262,947 | |||
Sogecable SA1,2 | 7,154 | 249,257 | ||||
Telefonica Publicidad e Informacion SA2 | 32,487 | 281,677 | ||||
Telefonica SA2 | 782,040 | 12,868,776 | ||||
Union Fenosa SA2 | 38,955 | 1,130,648 | ||||
Zeltia SA2 | 30,076 | 206,768 | ||||
65,921,566 | ||||||
TOTAL COMMON STOCKS | 539,030,586 | |||||
PREFERRED STOCKS – 1.34% | ||||||
GERMANY – 0.73% | ||||||
Fresenius Medical Care AG2 | 4,851 | 375,799 | ||||
Henkel KGaA2 | 10,437 | 985,030 | ||||
Porsche AG 2 | 1,470 | 1,142,688 | ||||
ProSiebenSat.1 Media AG | 15,876 | 279,600 | ||||
RWE AG2 | 7,154 | 413,522 | ||||
Volkswagen AG2 | 19,551 | 774,002 | ||||
3,970,641 | ||||||
ITALY – 0.61% | ||||||
Banca Intesa SpA RNC2 | 172,431 | 765,552 | ||||
Telecom Italia SpA RNC2 | 988,134 | 2,588,497 | ||||
3,354,049 | ||||||
TOTAL PREFERRED STOCKS | 7,324,690 | |||||
SHORT-TERM INVESTMENTS – 35.31% | ||||||
CERTIFICATES OF DEPOSIT3 – 4.01% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% - 3.83%, 09/14/05 - 01/25/06 | $ | 1,252,384 | 1,252,384 | |||
Bank of Nova Scotia | ||||||
3.45% - 3.56%, 09/26/05 - 01/03/06 | 542,700 | 542,658 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 834,923 | 834,923 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 834,923 | 834,891 | ||||
Security | Principal | Value | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | $ | 417,461 | $ | 417,378 | ||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 1,419,369 | 1,419,369 | ||||
Fortis Bank NY | ||||||
3.83% - 3.84%, 01/25/06 | 1,252,384 | 1,252,393 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 500,954 | 500,954 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 417,461 | 417,598 | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 417,461 | 417,410 | ||||
Societe Generale | ||||||
3.51% - 3.60%, 03/30/06 - 06/13/06 | 1,294,130 | 1,293,901 | ||||
Toronto-Dominion Bank | ||||||
2.66% - 3.94%, 09/14/05 - 07/10/06 | 2,963,976 | 2,964,034 | ||||
UBS AG | ||||||
2.67% - 3.40%, 11/09/05 - 12/15/05 | 667,938 | 667,937 | ||||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 2,087,307 | 2,087,307 | ||||
Washington Mutual Bank | ||||||
3.50% - 3.55%, 09/15/05 - 09/19/05 | 3,757,152 | 3,757,152 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 - 09/20/05 | 3,297,945 | 3,297,943 | ||||
21,958,232 | ||||||
COMMERCIAL PAPER3 – 8.08% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 1,669,845 | 1,668,539 | ||||
Amstel Funding Corp. | ||||||
3.49% - 3.91%, 09/15/05 - 02/15/06 | 1,761,687 | 1,752,290 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 834,923 | 834,923 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 946,844 | 946,290 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% - 3.49%, 09/09/05 - 09/21/05 | 1,377,623 | 1,375,926 |
SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Bryant Park Funding LLC | ||||||
3.51% - 3.92%, 09/06/05 - 02/22/06 | $ | 424,967 | $ | 420,828 | ||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 321,003 | 319,007 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 584,446 | 583,354 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 250,477 | 250,132 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 83,492 | 82,210 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 626,192 | 625,921 | ||||
Fairway Finance LLC | ||||||
3.15% - 3.56%, 09/15/05 - 10/20/05 | 1,076,675 | 1,075,763 | ||||
Ford Credit Floorplan Motown | ||||||
3.47% - 3.72%, 09/09/05 - 11/08/05 | 3,798,631 | 3,781,300 | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 1,339,467 | 1,338,817 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% - 3.53%, 09/20/05 - 09/21/05 | 2,713,499 | 2,708,252 | ||||
Giro Funding Corp. | ||||||
3.53% - 3.56%, 09/16/05 - 09/22/05 | 626,192 | 625,144 | ||||
Grampian Funding LLC | ||||||
3.13% - 3.84%, 09/09/05 - 01/31/06 | 1,294,130 | 1,280,274 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% - 3.53%, 09/02/05 - 02/10/06 | 960,161 | 960,161 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 250,477 | 246,292 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 473,293 | 472,370 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 - 02/21/064 | 876,592 | 876,591 | ||||
Lockhart Funding LLC | ||||||
3.47% - 3.55%, 09/16/05 - 09/19/05 | 1,150,883 | 1,149,164 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% - 3.51%, 09/01/05 - 09/21/05 | 2,045,561 | 2,042,887 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 2,922,230 | 2,922,230 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 470,930 | 470,106 | ||||
Park Granada LLC | ||||||
3.48% - 3.51%, 09/15/05 - 09/20/05 | 1,130,510 | 1,128,781 | ||||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 834,923 | 819,598 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 1,669,845 | 1,668,866 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 208,731 | 204,799 | ||||
Solitaire Funding Ltd. | ||||||
3.49% - 3.52%, 09/02/05 - 09/06/05 | 2,454,673 | 2,454,026 | ||||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 515,815 | 515,815 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 1,753,338 | 1,750,062 | ||||
Three Pillars Funding Corp. | ||||||
3.49% - 3.52%, 09/01/05 - 09/07/05 | 1,788,956 | 1,788,345 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 139,557 | 139,557 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 3,080,623 | 3,080,623 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 384,064 | 383,764 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 292,223 | 292,222 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 1,210,638 | 1,208,501 | ||||
44,243,730 |
40 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
MEDIUM-TERM NOTES3 – 0.14% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/064 | $ | 258,826 | $ | 258,804 | ||
K2 USA LLC | ||||||
3.94%, 07/07/064 | 500,954 | 500,932 | ||||
759,736 | ||||||
MONEY MARKET FUNDS – 0.68% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares 3.63%3,5,6 | 3,339,691 | 3,339,691 | ||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 3.56%5,6 | 12,300 | 12,300 | ||||
BlackRock Temp Cash Money Market Fund 3.41%3,6 | 88,466 | 88,466 | ||||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares 3.50%3,6 | 292,687 | 292,687 | ||||
3,733,144 | ||||||
REPURCHASE AGREEMENTS3 – 6.82% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $20,040,150 and an effective yield of 3.60%.7 | $ | 20,038,145 | 20,038,145 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $15,447,615 and an effective yield of 3.60%.7 | 15,446,070 | 15,446,070 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $1,820,314 and an effective yield of 3.60%.7 | 1,820,132 | 1,820,132 | ||||
37,304,347 | ||||||
Security | Principal | Value | ||||
TIME DEPOSITS3 – 1.42% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | $ | 1,669,845 | $ | 1,669,845 | ||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 4,592,075 | 4,592,075 | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 1,102,242 | 1,102,242 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/058 | 417,461 | 417,461 | ||||
7,781,623 | ||||||
VARIABLE & FLOATING RATE NOTES3 – 14.16% | ||||||
Allstate Life Global Funding II | ||||||
3.58% - 3.66%, 07/08/06 - 07/27/064 | 1,552,956 | 1,552,965 | ||||
American Express Bank | ||||||
3.55% - 3.63%, 10/17/05 - 07/19/06 | 2,254,291 | 2,254,298 | ||||
American Express Centurion Bank | ||||||
3.55% - 3.63%, 06/29/06 - 07/19/06 | 1,377,623 | 1,377,622 | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 1,669,845 | 1,669,971 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/064 | 834,923 | 835,963 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/064 | 542,700 | 542,700 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 4,174,614 | 4,174,614 | ||||
Beta Finance Inc. | ||||||
3.51% - 3.72%, 09/23/05 - 06/09/064 | 4,291,503 | 4,291,445 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/064 | 834,923 | 834,923 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% - 3.61%, 09/13/05 - 12/14/05 | 2,838,737 | 2,838,619 | ||||
CC USA Inc. | ||||||
3.52% - 3.59%, 03/23/06 - 07/14/064 | 2,245,942 | 2,245,848 |
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/054 | $ | 208,731 | $ | 208,731 | ||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 2,087,307 | 2,087,307 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 834,923 | 834,923 | ||||
Dorada Finance Inc. | ||||||
3.59% - 3.62%, 03/27/06 - 06/26/064 | 1,327,527 | 1,327,596 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/064 | 834,923 | 834,923 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/064 | 1,669,845 | 1,669,845 | ||||
Five Finance Inc. | ||||||
3.60% - 3.63%, 02/27/06 - 06/26/064 | 584,446 | 584,459 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 375,715 | 376,054 | ||||
Hartford Life Global Funding Trust | ||||||
3.56%, 08/15/06 | 834,923 | 834,923 | ||||
HBOS Treasury Services PLC | ||||||
3.51% - 3.57%, 01/10/06 - 04/24/064 | 2,504,768 | 2,504,769 | ||||
HSBC Bank USA N.A. | ||||||
3.70%, 05/04/06 | 292,223 | 292,382 | ||||
K2 USA LLC | ||||||
3.47% - 3.58%, 09/12/05 - 06/02/064 | 3,256,199 | 3,256,226 | ||||
Links Finance LLC | ||||||
3.52% - 3.71%, 11/16/05 - 03/15/064 | 3,256,199 | 3,256,549 | ||||
Lothian Mortgages PLC | ||||||
3.63%, 01/24/06 | 834,923 | 834,923 | ||||
Marshall & Ilsley Bank | ||||||
3.71%, 02/20/06 | 834,923 | 835,396 | ||||
Metropolitan Life Global Funding I | ||||||
3.55% - 4.01%, 08/28/06 - 09/06/064 | 1,669,845 | 1,670,579 | ||||
National City Bank (Ohio) | ||||||
3.50%, 01/06/06 | 417,461 | 417,418 | ||||
Nationwide Building Society | ||||||
3.51% - 3.62%, 01/13/06 - 07/07/064 | 3,089,214 | 3,089,514 | ||||
Nordea Bank AB | ||||||
3.55%, 08/11/064 | 1,461,115 | 1,461,115 | ||||
Northern Rock PLC | ||||||
3.54% - 3.61%, 10/25/05 - 08/03/064 | 2,671,753 | 2,671,799 | ||||
Permanent Financing PLC | ||||||
3.53% - 3.54%, 09/12/05 - 06/12/064 | 3,214,453 | 3,214,452 | ||||
Principal Life Income Funding Trusts | ||||||
3.74%, 05/10/06 | 626,192 | 626,215 | ||||
Royal Bank of Scotland | ||||||
3.47% - 3.61%, 04/05/06 - 08/30/06 | 2,786,555 | 2,785,919 | ||||
Sedna Finance Inc. | ||||||
3.54%, 01/10/06 - 01/17/064 | 459,208 | 459,170 | ||||
Sigma Finance Inc. | ||||||
3.50% - 3.72%, 09/15/05 - 08/15/064 | 4,767,409 | 4,767,438 | ||||
Skandinaviska Enskilda Bank NY | ||||||
3.58%, 07/18/064 | 834,923 | 834,923 | ||||
Strips III LLC | ||||||
3.69%, 07/24/064,8 | 245,258 | 245,258 | ||||
SunTrust Bank | ||||||
3.63%, 04/28/06 | 1,252,384 | 1,252,384 | ||||
Tango Finance Corp. | ||||||
3.54% - 3.60%, 09/15/05 - 06/21/064 | 2,028,862 | 2,028,738 | ||||
Toyota Motor Credit Corp. | ||||||
3.57%, 04/10/06 | 375,715 | 375,712 | ||||
Unicredito Italiano SpA | ||||||
3.34%, 06/14/06 | 1,085,400 | 1,085,098 | ||||
Wachovia Asset Securitization Inc. | ||||||
3.63%, 09/25/054 | 2,009,947 | 2,009,947 | ||||
Wells Fargo & Co. | ||||||
3.56%, 09/15/064 | 417,461 | 417,503 | ||||
WhistleJacket Capital LLC | ||||||
3.52% - 3.62%, 09/15/05 - 07/28/064 | 3,339,691 | 3,339,546 |
42 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
White Pine Finance LLC | |||||||
3.47% - 3.61%, 11/01/05 - 06/20/064 | $ | 1,761,687 | $ | 1,761,643 | |||
Winston Funding Ltd. | |||||||
3.71%, 10/23/054 | 596,135 | 596,135 | |||||
77,468,480 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 193,249,292 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 135.14% | 739,604,568 | ||||||
Other Assets, Less Liabilities – (35.14)% | (192,320,391 | ) | |||||
NET ASSETS – 100.00% | $ | 547,284,177 | |||||
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 | All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
4 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
6 | The rate quoted is the annualized seven-day yield of the fund at period end. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
8 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
Schedule of Investments
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 99.81% | |||||
ADVERTISING – 0.85% | |||||
PagesJaunes SA | 11,120 | $ | 287,742 | ||
Publicis Groupe | 12,128 | 401,230 | |||
688,972 | |||||
AEROSPACE & DEFENSE – 1.90% | |||||
European Aeronautic Defense and Space Co. | 21,744 | 731,657 | |||
Safran SA1 | 14,800 | 305,608 | |||
Thales SA1 | 6,992 | 315,673 | |||
Zodiac SA1 | 3,440 | 191,904 | |||
1,544,842 | |||||
AIRLINES – 0.22% | |||||
Air France - KLM1 | 11,024 | 179,506 | |||
179,506 | |||||
APPAREL – 0.21% | |||||
Hermes International1 | 816 | 172,110 | |||
172,110 | |||||
AUTO MANUFACTURERS – 2.86% | |||||
PSA Peugeot Citroen SA1 | 14,144 | 874,968 | |||
Renault SA1 | 16,464 | 1,452,812 | |||
2,327,780 | |||||
AUTO PARTS & EQUIPMENT – 1.27% | |||||
Compagnie Generale des Etablissements Michelin Class B1 | 12,832 | 777,709 | |||
Valeo SA1 | 6,221 | 254,622 | |||
1,032,331 | |||||
BANKS – 12.10% | |||||
BNP Paribas SA1 | 70,832 | 5,135,296 | |||
Credit Agricole SA1 | 52,384 | 1,391,568 | |||
Societe Generale Class A1 | 30,800 | 3,316,340 | |||
9,843,204 | |||||
BEVERAGES – 1.33% | |||||
Pernod Ricard SA1 | 6,240 | 1,079,769 | |||
1,079,769 | |||||
BUILDING MATERIALS – 4.00% | |||||
Compagnie de Saint-Gobain1 | 27,152 | 1,644,934 | |||
Imerys SA1 | 2,864 | 210,457 | |||
Lafarge SA1 | 15,184 | 1,401,487 | |||
3,256,878 | |||||
CHEMICALS – 2.06% | |||||
L’Air Liquide SA1 | 9,680 | 1,677,407 | |||
1,677,407 | |||||
COMMERCIAL SERVICES – 0.78% | |||||
Autoroutes du Sud de la France1 | 5,088 | 300,985 | |||
Societe des Autoroutes du Nord et de l’Est de la France2 | 2,032 | 124,828 | |||
Societe Des Autoroutes Paris-Rhin-Rhone1 | 3,008 | 206,426 | |||
632,239 | |||||
COMPUTERS – 0.99% | |||||
Atos Origin SA2 | 5,856 | 443,643 | |||
Cap Gemini SA1,2 | 11,024 | 361,588 | |||
805,231 | |||||
COSMETICS & PERSONAL CARE – 2.59% | |||||
L’Oreal SA1 | 26,352 | 2,108,206 | |||
2,108,206 | |||||
DIVERSIFIED FINANCIAL SERVICES – 0.37% | |||||
Euronext NV1 | 7,536 | 303,254 | |||
303,254 | |||||
ENGINEERING & CONSTRUCTION – 2.46% | |||||
Bouygues SA | 17,840 | 793,150 | |||
Vinci SA1 | 13,616 | 1,205,686 | |||
1,998,836 | |||||
FOOD – 5.86% | |||||
Carrefour SA1 | 50,144 | 2,323,094 | |||
Etablissements Economiques du Casino Guichard-Perrachon SA1 | 3,312 | 231,769 | |||
Groupe Danone1 | 21,136 | 2,212,099 | |||
4,766,962 | |||||
FOOD SERVICE – 0.36% | |||||
Sodexho Alliance SA1 | 8,416 | 291,675 | |||
291,675 | |||||
HAND & MACHINE TOOLS – 1.94% | |||||
Schneider Electric SA1 | 20,096 | 1,575,585 | |||
1,575,585 | |||||
HEALTH CARE – PRODUCTS – 0.84% | |||||
Essilor International SA1 | 8,768 | 682,045 | |||
682,045 |
44 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2005
Security | Shares | Value | ||||
HOLDING COMPANIES – DIVERSIFIED – 2.16% | ||||||
LVMH Moet Hennessy Louis | ||||||
Vuitton SA1 | 21,760 | $ | 1,752,881 | |||
1,752,881 | ||||||
HOME FURNISHINGS – 0.63% | ||||||
Thomson1 | 23,024 | 514,503 | ||||
514,503 | ||||||
HOUSEHOLD PRODUCTS & WARES – 0.20% | ||||||
Societe BIC SA1 | 2,736 | 160,975 | ||||
160,975 | ||||||
INSURANCE – 4.59% | ||||||
AXA1 | 127,616 | 3,380,672 | ||||
CNP Assurances1 | 3,040 | 208,809 | ||||
SCOR | 73,008 | 144,560 | ||||
3,734,041 | ||||||
IRON & STEEL – 1.23% | ||||||
Arcelor1 | 45,792 | 1,002,448 | ||||
1,002,448 | ||||||
LODGING – 1.14% | ||||||
Accor SA1 | 17,568 | 923,657 | ||||
923,657 | ||||||
MACHINERY – 0.50% | ||||||
Alstom2 | 9,872 | 407,940 | ||||
407,940 | ||||||
MEDIA – 4.96% | ||||||
Lagardere S.C.A.1 | 10,720 | 764,672 | ||||
Societe Television Francaise 11 | 10,576 | 283,290 | ||||
Vivendi Universal SA | 95,360 | 2,987,083 | ||||
4,035,045 | ||||||
OFFICE & BUSINESS EQUIPMENT – 0.32% | ||||||
Neopost SA | 2,832 | 261,568 | ||||
261,568 | ||||||
OIL & GAS – 16.38% | ||||||
Total SA1 | 50,816 | 13,317,910 | ||||
13,317,910 | ||||||
OIL & GAS SERVICES – 0.54% | ||||||
Technip-Coflexip SA1 | 7,680 | 438,732 | ||||
438,732 | ||||||
Security | Shares or Principal | Value | ||||
PHARMACEUTICALS – 9.85% | ||||||
Sanofi-Aventis1 | 94,112 | $ | 8,009,460 | |||
8,009,460 | ||||||
REAL ESTATE – 1.09% | ||||||
Gecina SA | 806 | 96,251 | ||||
Klepierre1 | 2,064 | 203,961 | ||||
Unibail Holding1 | 4,080 | 582,565 | ||||
882,777 | ||||||
RETAIL – 0.77% | ||||||
PPR1 | 5,888 | 629,274 | ||||
629,274 | ||||||
SEMICONDUCTORS – 1.14% | ||||||
STMicroelectronics NV1 | 56,656 | 928,116 | ||||
928,116 | ||||||
SOFTWARE – 0.54% | ||||||
Business Objects SA1,2 | 6,016 | 198,731 | ||||
Dassault Systemes SA1 | 4,992 | 243,305 | ||||
442,036 | ||||||
TELECOMMUNICATIONS – 6.83% | ||||||
Alcatel SA Class A1,2 | 110,304 | 1,277,892 | ||||
France Telecom1 | 142,320 | 4,272,537 | ||||
5,550,429 | ||||||
WATER – 3.95% | ||||||
Suez SA | 72,592 | 2,110,515 | ||||
Veolia Environnement1 | 27,104 | 1,101,684 | ||||
3,212,199 | ||||||
TOTAL COMMON STOCKS | 81,170,823 | |||||
SHORT-TERM INVESTMENTS – 37.80% | ||||||
CERTIFICATES OF DEPOSIT3 – 4.27% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% - 3.83%, 09/14/05 - 01/25/06 | $ | 198,241 | 198,240 | |||
Bank of Nova Scotia | ||||||
3.45% - 3.56%, 09/26/05 - 01/03/06 | 85,904 | 85,898 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 132,161 | 132,160 |
SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | $ | 132,161 | $ | 132,156 | ||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 66,080 | 66,067 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 224,673 | 224,673 | ||||
Fortis Bank NY | ||||||
3.83% - 3.84%, 01/25/06 | 198,241 | 198,242 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 79,296 | 79,296 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 66,080 | 66,102 | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 66,080 | 66,072 | ||||
Societe Generale | ||||||
3.51% - 3.60%, 03/30/06 - 06/13/06 | 204,849 | 204,813 | ||||
Toronto-Dominion Bank | ||||||
2.66% - 3.94%, 09/14/05 - 07/10/06 | 469,170 | 469,180 | ||||
UBS AG | ||||||
2.67% - 3.40%, 11/09/05 - 12/15/05 | 105,728 | 105,728 | ||||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 330,401 | 330,401 | ||||
Washington Mutual Bank | ||||||
3.50% - 3.55%, 09/15/05 - 09/19/05 | 594,722 | 594,721 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 - 09/20/05 | 522,034 | 522,033 | ||||
3,475,782 | ||||||
COMMERCIAL PAPER3 – 8.61% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 264,321 | 264,114 | ||||
Amstel Funding Corp. | ||||||
3.49% - 3.91%, 09/15/05 - 02/15/06 | 278,859 | 277,372 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 132,161 | 132,160 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 149,877 | 149,789 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% - 3.49%, | ||||||
09/09/05 - 09/21/05 | 218,065 | 217,796 | ||||
Bryant Park Funding LLC | ||||||
3.51% - 3.92%, 09/06/05 - 02/22/06 | 67,268 | 66,613 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 50,812 | 50,496 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 92,512 | 92,340 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 39,648 | 39,594 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 13,216 | 13,013 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 99,120 | 99,077 | ||||
Fairway Finance LLC | ||||||
3.15% - 3.56%, 09/15/05 - 10/20/05 | 170,428 | 170,283 | ||||
Ford Credit Floorplan Motown | ||||||
3.47% - 3.72%, 09/09/05 - 11/08/05 | 601,288 | 598,545 | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 212,025 | 211,922 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% - 3.53%, 09/20/05 - 09/21/05 | 429,522 | 428,691 | ||||
Giro Funding Corp. | ||||||
3.53% - 3.56%, 09/16/05 - 09/22/05 | 99,120 | 98,955 | ||||
Grampian Funding LLC | ||||||
3.13% - 3.84%, 09/09/05 - 01/31/06 | 204,849 | 202,656 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% - 3.53%, 09/02/05 - 02/10/06 | 151,985 | 151,984 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 39,648 | 38,986 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 74,918 | 74,772 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 - 02/21/064 | 138,756 | 138,756 |
46 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Lockhart Funding LLC | ||||||
3.47% - 3.55%, 09/16/05 - 09/19/05 | $ | 182,174 | $ | 181,902 | ||
Mortgage Interest Networking Trust | ||||||
3.47% - 3.51%, 09/01/05 - 09/21/05 | 323,793 | 323,370 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 462,562 | 462,562 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 74,544 | 74,413 | ||||
Park Granada LLC | ||||||
3.48% - 3.51%, 09/15/05 - 09/20/05 | 178,949 | 178,675 | ||||
Santander Central Hispano | ||||||
Finance Inc. | ||||||
3.91%, 02/17/06 | 132,161 | 129,735 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 264,321 | 264,166 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 33,040 | 32,418 | ||||
Solitaire Funding Ltd. | ||||||
3.49% - 3.52%, 09/02/05 - 09/06/05 | 388,552 | 388,450 | ||||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 81,649 | 81,649 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 277,537 | 277,019 | ||||
Three Pillars Funding Corp. | ||||||
3.49% - 3.52%, 09/01/05 - 09/07/05 | 283,175 | 283,078 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 22,091 | 22,091 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 487,634 | 487,634 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 60,794 | 60,746 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 46,256 | 46,256 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 191,633 | 191,294 | ||||
7,003,372 | ||||||
Security | Shares or Principal | Value | ||||
MEDIUM-TERM NOTES3 – 0.15% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/064 | $ | 40,970 | $ | 40,966 | ||
K2 USA LLC | ||||||
3.94%, 07/07/064 | 79,296 | 79,293 | ||||
120,259 | ||||||
MONEY MARKET FUNDS – 0.91% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares 3.63%3,5,6 | 528,642 | 528,642 | ||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 3.56%5,6 | 150,406 | 150,406 | ||||
BlackRock Temp Cash Money Market Fund 3.41%3,6 | 14,003 | 14,003 | ||||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares 3.50%3,6 | 46,330 | 46,330 | ||||
739,381 | ||||||
REPURCHASE AGREEMENTS3 – 7.26% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $3,172,169 and an effective yield of 3.60%.7 | $ | 3,171,852 | 3,171,852 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $2,445,214 and an effective yield of 3.60%.7 | 2,444,969 | 2,444,969 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $288,139 and an effective yield of 3.60%.7 | 288,110 | 288,110 | ||||
5,904,931 |
SCHEDULESOF INVESTMENTS | 47 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
TIME DEPOSITS3 – 1.52% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | $ | 264,321 | $ | 264,321 | ||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 726,883 | 726,883 | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 174,475 | 174,475 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/058 | 66,080 | 66,080 | ||||
1,231,759 | ||||||
VARIABLE & FLOATING RATE NOTES3 – 15.08% | ||||||
Allstate Life Global Funding II | ||||||
3.58% - 3.66%, 07/08/06 - 07/27/064 | 245,819 | 245,820 | ||||
American Express Bank | ||||||
3.55% - 3.63%, 10/17/05 - 07/19/06 | 356,833 | 356,834 | ||||
American Express Centurion Bank | ||||||
3.55% - 3.63%, 06/29/06 - 07/19/06 | 218,065 | 218,065 | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 264,321 | 264,341 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/064 | 132,161 | 132,325 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/064 | 85,904 | 85,904 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 660,803 | 660,803 | ||||
Beta Finance Inc. | ||||||
3.51% - 3.72%, 09/23/05 - 06/09/064 | 679,305 | 679,295 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/064 | 132,161 | 132,160 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% - 3.61%, 09/13/05 - 12/14/05 | 449,346 | 449,327 | ||||
CC USA Inc. | ||||||
3.52% - 3.59%, 03/23/06 - 07/14/064 | 355,512 | 355,496 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/054 | 33,040 | 33,040 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 330,401 | 330,401 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 132,161 | 132,160 | ||||
Dorada Finance Inc. | ||||||
3.59% - 3.62%, 03/27/06 - 06/26/064 | 210,135 | 210,146 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/064 | 132,161 | 132,160 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/064 | 264,321 | 264,321 | ||||
Five Finance Inc. | ||||||
3.60% - 3.63%, 02/27/06 - 06/26/064 | 92,512 | 92,514 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 59,472 | 59,526 | ||||
Hartford Life Global Funding Trust | ||||||
3.56%, 08/15/06 | 132,161 | 132,160 | ||||
HBOS Treasury Services PLC | ||||||
3.51% - 3.57%, 01/10/06 - 04/24/064 | 396,482 | 396,480 | ||||
HSBC Bank USA N.A. | ||||||
3.70%, 05/04/06 | 46,256 | 46,281 | ||||
K2 USA LLC | ||||||
3.47% - 3.58%, 09/12/05 - 06/02/064 | 515,426 | 515,431 | ||||
Links Finance LLC | ||||||
3.52% - 3.71%, 11/16/05 - 03/15/064 | 515,426 | 515,481 | ||||
Lothian Mortgages PLC | ||||||
3.63%, 01/24/06 | 132,161 | 132,160 | ||||
Marshall & Ilsley Bank | ||||||
3.71%, 02/20/06 | 132,161 | 132,235 | ||||
Metropolitan Life Global Funding I | ||||||
3.55% - 4.01%, 08/28/06 - 09/06/064 | 264,321 | 264,437 | ||||
National City Bank (Ohio) | ||||||
3.50%, 01/06/06 | 66,080 | 66,073 | ||||
Nationwide Building Society | ||||||
3.51% - 3.62%, 01/13/06 - 07/07/064 | 488,994 | 489,041 |
48 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
Nordea Bank AB | |||||||
3.55%, 08/11/064 | $ | 231,281 | $ | 231,281 | |||
Northern Rock PLC | |||||||
3.54% - 3.61%, 10/25/05 - 08/03/064 | 422,914 | 422,921 | |||||
Permanent Financing PLC | |||||||
3.53% - 3.54%, 09/12/05 - 06/12/064 | 508,818 | 508,818 | |||||
Principal Life Income Funding Trusts | |||||||
3.74%, 05/10/06 | 99,120 | 99,124 | |||||
Royal Bank of Scotland | |||||||
3.47% - 3.61%, 04/05/06 - 08/30/06 | 441,086 | 440,985 | |||||
Sedna Finance Inc. | |||||||
3.54%, 01/10/06 - 01/17/064 | 72,688 | 72,683 | |||||
Sigma Finance Inc. | |||||||
3.50% - 3.72%, 09/15/05 - 08/15/064 | 754,636 | 754,649 | |||||
Skandinaviska Enskilda Bank NY | |||||||
3.58%, 07/18/064 | 132,161 | 132,160 | |||||
Strips III LLC | |||||||
3.69%, 07/24/064,8 | 38,822 | 38,822 | |||||
SunTrust Bank | |||||||
3.63%, 04/28/06 | 198,241 | 198,241 | |||||
Tango Finance Corp. | |||||||
3.54% - 3.60%, 09/15/05 - 06/21/064 | 321,150 | 321,131 | |||||
Toyota Motor Credit Corp. | |||||||
3.57%, 04/10/06 | 59,472 | 59,472 | |||||
Unicredito Italiano SpA | |||||||
3.34%, 06/14/06 | 171,809 | 171,761 | |||||
Wachovia Asset Securitization Inc. | |||||||
3.63%, 09/25/054 | 318,156 | 318,156 | |||||
Wells Fargo & Co. | |||||||
3.56%, 09/15/064 | 66,080 | 66,087 | |||||
WhistleJacket Capital LLC | |||||||
3.52% - 3.62%, 09/15/05 - 07/28/064 | 528,642 | 528,618 | |||||
White Pine Finance LLC | |||||||
3.47% - 3.61%, 11/01/05 - 06/20/064 | 278,859 | 278,851 | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/054 | 94,363 | 94,363 | |||||
12,262,540 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 30,738,024 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 137.61% | 111,908,847 | ||||||
Other Assets, Less Liabilities – (37.61)% | (30,583,055 | ) | |||||
NET ASSETS – 100.00% | $ | 81,325,792 | |||||
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 (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
4 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
6 | The rate quoted is the annualized seven-day yield of the fund at period end. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
8 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
SCHEDULESOF INVESTMENTS | 49 |
Table of Contents
Schedule of Investments
iSHARES® MSCI GERMANY INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 96.46% | |||||
AIRLINES – 0.49% | |||||
Deutsche Lufthansa AG1 | 114,730 | $ | 1,528,120 | ||
1,528,120 | |||||
APPAREL – 1.95% | |||||
Adidas-Salomon AG1 | 21,835 | 3,883,056 | |||
Puma AG | 8,360 | 2,256,799 | |||
6,139,855 | |||||
AUTO MANUFACTURERS – 8.84% | |||||
DaimlerChrysler AG1 | 430,760 | 22,091,417 | |||
Volkswagen AG1 | 109,075 | 5,734,737 | |||
27,826,154 | |||||
AUTO PARTS & EQUIPMENT – 1.64% | |||||
Continental AG1 | 65,340 | 5,154,991 | |||
5,154,991 | |||||
BANKS – 12.68% | |||||
Bayerische Hypo-und | |||||
Vereinsbank AG2 | 273,295 | 7,737,295 | |||
Commerzbank AG | 222,475 | 5,767,717 | |||
DEPFA Bank PLC1 | 171,052 | 2,882,046 | |||
Deutsche Bank AG1 | 236,610 | 20,433,656 | |||
Hypo Real Estate Holding AG | 62,700 | 3,080,608 | |||
39,901,322 | |||||
BIOTECHNOLOGY – 0.27% | |||||
QIAGEN NV1,2 | 67,595 | 848,775 | |||
848,775 | |||||
CHEMICALS – 8.48% | |||||
BASF AG1 | 218,955 | 15,292,514 | |||
Bayer AG1 | 324,445 | 11,415,925 | |||
26,708,439 | |||||
COMPUTERS – 0.25% | |||||
Wincor Nixdorf AG | 8,635 | 798,075 | |||
798,075 | |||||
COSMETICS & PERSONAL CARE – 0.37% | |||||
Beiersdorf AG1 | 10,010 | 1,169,526 | |||
1,169,526 | |||||
DIVERSIFIED FINANCIAL SERVICES – 1.63% | |||||
Deutsche Boerse AG1 | 49,775 | 4,538,538 | |||
MLP AG1 | 31,515 | 605,799 | |||
5,144,337 | |||||
ELECTRIC – 13.37% | |||||
E.ON AG1 | 300,355 | 28,572,440 | |||
RWE AG1 | 202,785 | 13,512,228 | |||
42,084,668 | |||||
ELECTRONICS – 0.12% | |||||
EPCOS AG1,2 | 29,700 | 365,266 | |||
365,266 | |||||
ENGINEERING & CONSTRUCTION – 1.46% | |||||
Hochtief AG1 | 29,865 | 1,217,949 | |||
Linde AG1 | 45,870 | 3,387,050 | |||
4,604,999 | |||||
FOOD – 1.35% | |||||
METRO AG1 | 73,755 | 3,721,732 | |||
Suedzucker AG1 | 24,827 | 519,069 | |||
4,240,801 | |||||
HEALTH CARE – PRODUCTS – 0.50% | |||||
Fresenius Medical Care AG1 | 17,545 | 1,585,962 | |||
1,585,962 | |||||
INSURANCE – 10.29% | |||||
Allianz AG1 | 174,295 | 22,486,018 | |||
Muenchener | |||||
Rueckversicherungs-Gesellschaft AG1 | 88,715 | 9,906,838 | |||
32,392,856 | |||||
IRON & STEEL – 1.10% | |||||
ThyssenKrupp AG1 | 181,775 | 3,467,353 | |||
3,467,353 | |||||
LEISURE TIME – 0.60% | |||||
TUI AG1 | 79,750 | 1,875,300 | |||
1,875,300 | |||||
MACHINERY – DIVERSIFIED – 1.43% | |||||
Heidelberger Druckmaschinen AG1 | 27,335 | 972,567 | |||
MAN AG1 | 70,125 | 3,526,486 | |||
4,499,053 | |||||
MANUFACTURING – 9.33% | |||||
Siemens AG1 | 388,190 | 29,380,147 | |||
29,380,147 | |||||
MEDIA – 0.25% | |||||
Premiere AG1,2 | 25,080 | 771,116 | |||
771,116 |
50 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GERMANY INDEX FUND
August 31, 2005
Security | Shares | Value | ||||
PHARMACEUTICALS – 3.41% | ||||||
ALTANA AG1 | 34,650 | $ | 1,964,093 | |||
Celesio AG 1 | 19,415 | 1,695,305 | ||||
Merck KGaA1 | 22,660 | 1,943,821 | ||||
Schering AG1 | 81,015 | 5,116,324 | ||||
10,719,543 | ||||||
REAL ESTATE – 0.25% | ||||||
IVG Immobilien AG1 | 37,510 | 793,926 | ||||
793,926 | ||||||
RETAIL – 0.35% | ||||||
Douglas Holding AG1 | 16,005 | 622,597 | ||||
KarstadtQuelle AG1,2 | 36,355 | 482,881 | ||||
1,105,478 | ||||||
SEMICONDUCTORS – 0.93% | ||||||
Infineon Technologies AG2 | 315,535 | 2,937,620 | ||||
2,937,620 | ||||||
SOFTWARE – 4.86% | ||||||
SAP AG1 | 90,420 | 15,301,538 | ||||
15,301,538 | ||||||
TELECOMMUNICATIONS – 7.91% | ||||||
Deutsche Telekom AG1 | 1,314,940 | 24,904,556 | ||||
24,904,556 | ||||||
TRANSPORTATION – 2.35% | ||||||
Deutsche Post AG | 294,855 | 7,412,104 | ||||
7,412,104 | ||||||
TOTAL COMMON STOCKS | 303,661,880 | |||||
PREFERRED STOCKS – 3.48% | ||||||
AUTO MANUFACTURERS – 1.61% | ||||||
Porsche AG 1 | 3,850 | 2,992,755 | ||||
Volkswagen AG1 | 52,324 | 2,071,448 | ||||
5,064,203 | ||||||
ELECTRIC – 0.40% | ||||||
RWE AG | 21,945 | 1,268,486 | ||||
1,268,486 | ||||||
HEALTH CARE – PRODUCTS – 0.33% | ||||||
Fresenius Medical Care AG1 | 13,420 | 1,039,624 | ||||
1,039,624 | ||||||
Security | Shares or Principal | Value | ||||
HOUSEHOLD PRODUCTS & WARES – 0.90% | ||||||
Henkel KGaA1 | 29,977 | $ | 2,829,190 | |||
2,829,190 | ||||||
MEDIA – 0.24% | ||||||
ProSiebenSat.1 Media AG1 | 42,460 | 747,783 | ||||
747,783 | ||||||
TOTAL PREFERRED STOCKS | 10,949,286 | |||||
SHORT-TERM INVESTMENTS – 17.68% | ||||||
CERTIFICATES OF DEPOSIT3 – 2.01% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% - 3.83%, 09/14/05 - 01/25/06 | $ | 360,488 | 360,489 | |||
Bank of Nova Scotia | ||||||
3.45% - 3.56%, 09/26/05 - 01/03/06 | 156,212 | 156,200 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 240,326 | 240,326 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 240,326 | 240,316 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 120,163 | 120,139 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 408,553 | 408,553 | ||||
Fortis Bank NY | ||||||
3.83% - 3.84%, 01/25/06 | 360,488 | 360,491 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 144,195 | 144,195 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 120,163 | 120,202 | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 120,163 | 120,148 | ||||
Societe Generale | ||||||
3.51% - 3.60%, 03/30/06 - 06/13/06 | 372,505 | 372,439 | ||||
Toronto-Dominion Bank | ||||||
2.66% - 3.94%, 09/14/05 - 07/10/06 | 853,156 | 853,173 |
SCHEDULESOF INVESTMENTS | 51 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GERMANY INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
UBS AG | ||||||
2.67% - 3.40%, 11/09/05 - 12/15/05 | $ | 192,260 | $ | 192,260 | ||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 600,814 | 600,814 | ||||
Washington Mutual Bank | ||||||
3.50% - 3.55%, 09/15/05 - 09/19/05 | 1,081,465 | 1,081,466 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 - 09/20/05 | 949,286 | 949,285 | ||||
6,320,496 | ||||||
COMMERCIAL PAPER3 – 4.05% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 480,651 | 480,275 | ||||
Amstel Funding Corp. | ||||||
3.49% - 3.91%, 09/15/05 - 02/15/06 | 507,087 | 504,382 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 240,326 | 240,326 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 272,541 | 272,382 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% - 3.49%, 09/09/05 - 09/21/05 | 396,537 | 396,049 | ||||
Bryant Park Funding LLC | ||||||
3.51% - 3.92%, 09/06/05 - 02/22/06 | 122,323 | 121,132 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 92,398 | 91,824 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 168,228 | 167,914 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 72,098 | 71,998 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 24,033 | 23,664 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 180,244 | 180,166 | ||||
Fairway Finance LLC | ||||||
3.15% - 3.56%, 09/15/05 - 10/20/05 | 309,912 | 309,650 | ||||
Ford Credit Floorplan Motown | ||||||
3.47% - 3.72%, 09/09/05 - 11/08/05 | 1,093,404 | 1,088,415 | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 385,554 | 385,367 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% - 3.53%, 09/20/05 - 09/21/05 | 781,058 | 779,548 | ||||
Giro Funding Corp. | ||||||
3.53% - 3.56%, 09/16/05 - 09/22/05 | 180,244 | 179,943 | ||||
Grampian Funding LLC | ||||||
3.13% - 3.84%, 09/09/05 - 01/31/06 | 372,505 | 368,516 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% - 3.53%, 09/02/05 - 02/10/06 | 276,374 | 276,375 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 72,098 | 70,893 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 136,233 | 135,968 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 - 02/21/064 | 252,320 | 252,319 | ||||
Lockhart Funding LLC | ||||||
3.47% - 3.55%, 09/16/05 - 09/19/05 | 331,272 | 330,777 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% - 3.51%, 09/01/05 - 09/21/05 | 588,797 | 588,027 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 841,139 | 841,139 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 135,553 | 135,316 | ||||
Park Granada LLC | ||||||
3.48% - 3.51%, 09/15/05 - 09/20/05 | 325,408 | 324,910 | ||||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 240,326 | 235,914 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 480,651 | 480,369 |
52 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GERMANY INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | $ | 60,081 | $ | 58,950 | ||
Solitaire Funding Ltd. | ||||||
3.49% - 3.52%, 09/02/05 - 09/06/05 | 706,557 | 706,371 | ||||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 148,473 | �� | 148,473 | |||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 504,684 | 503,741 | ||||
Three Pillars Funding Corp. | ||||||
3.49% - 3.52%, 09/01/05 - 09/07/05 | 514,936 | 514,760 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 40,170 | 40,170 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 886,731 | 886,731 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 110,550 | 110,463 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 84,114 | 84,114 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 348,472 | 347,857 | ||||
12,735,188 | ||||||
MEDIUM-TERM NOTES3 – 0.07% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/064 | 74,501 | 74,495 | ||||
K2 USA LLC | ||||||
3.94%, 07/07/064 | 144,195 | 144,189 | ||||
218,684 | ||||||
MONEY MARKET FUNDS – 0.35% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares 3.63%3,5,6 | 961,302 | 961,302 | ||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 3.56%5,6 | 33,661 | 33,661 | ||||
BlackRock Temp Cash Money Market Fund 3.41%3,6 | 25,464 | 25,464 | ||||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares 3.50%3,6 | 84,248 | 84,248 | ||||
1,104,675 | ||||||
REPURCHASE AGREEMENTS3 – 3.41% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $5,768,389 and an effective yield of 3.60%.7 | $ | 5,767,812 | 5,767,812 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $4,446,467 and an effective yield of 3.60%.7 | 4,446,022 | 4,446,022 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $523,962 and an effective yield of 3.60%.7 | 523,910 | 523,910 | ||||
10,737,744 | ||||||
TIME DEPOSITS3 – 0.71% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | 480,651 | 480,651 | ||||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 1,321,790 | 1,321,790 | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 317,271 | 317,271 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/058 | 120,163 | 120,163 | ||||
2,239,875 | ||||||
VARIABLE & FLOATING RATE NOTES3 – 7.08% | ||||||
Allstate Life Global Funding II | ||||||
3.58% - 3.66%, 07/08/06 - 07/27/064 | 447,005 | 447,008 | ||||
American Express Bank | ||||||
3.55% - 3.63%, 10/17/05 - 07/19/06 | 648,879 | 648,880 |
SCHEDULESOF INVESTMENTS | 53 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GERMANY INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
American Express Centurion Bank | ||||||
3.55% - 3.63%, 06/29/06 - 07/19/06 | $ | 396,537 | $ | 396,537 | ||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 480,651 | 480,687 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/064 | 240,326 | 240,625 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/064 | 156,212 | 156,212 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 1,201,628 | 1,201,628 | ||||
Beta Finance Inc. | ||||||
3.51% - 3.72%, 09/23/05 - 06/09/064 | 1,235,273 | 1,235,256 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/064 | 240,326 | 240,326 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% - 3.61%, 09/13/05 - 12/14/05 | 817,107 | 817,072 | ||||
CC USA Inc. | ||||||
3.52% - 3.59%, 03/23/06 - 07/14/064 | 646,476 | 646,449 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/054 | 60,081 | 60,081 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 600,814 | 600,814 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 240,326 | 240,326 | ||||
Dorada Finance Inc. | ||||||
3.59% - 3.62%, 03/27/06 - 06/26/064 | 382,118 | 382,137 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/064 | 240,326 | 240,326 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/064 | 480,651 | 480,651 | ||||
Five Finance Inc. | ||||||
3.60% - 3.63%, 02/27/06 - 06/26/064 | 168,228 | 168,231 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 108,146 | 108,244 | ||||
Hartford Life Global Funding Trust | ||||||
3.56%, 08/15/06 | 240,326 | 240,326 | ||||
HBOS Treasury Services PLC | ||||||
3.51% - 3.57%, 01/10/06 - 04/24/064 | 720,977 | 720,978 | ||||
HSBC Bank USA N.A. | ||||||
3.70%, 05/04/06 | 84,114 | 84,160 | ||||
K2 USA LLC | ||||||
3.47% - 3.58%, 09/12/05 - 06/02/064 | 937,269 | 937,278 | ||||
Links Finance LLC | ||||||
3.52% - 3.71%, 11/16/05 - 03/15/064 | 937,269 | 937,371 | ||||
Lothian Mortgages PLC | ||||||
3.63%, 01/24/06 | 240,326 | 240,326 | ||||
Marshall & Ilsley Bank | ||||||
3.71%, 02/20/06 | 240,326 | 240,462 | ||||
Metropolitan Life Global Funding I | ||||||
3.55% - 4.01%, 08/28/06 - 09/06/064 | 480,651 | 480,862 | ||||
National City Bank (Ohio) | ||||||
3.50%, 01/06/06 | 120,163 | 120,150 | ||||
Nationwide Building Society | ||||||
3.51% - 3.62%, 01/13/06 - 07/07/064 | 889,204 | 889,291 | ||||
Nordea Bank AB | ||||||
3.55%, 08/11/064 | 420,570 | 420,570 | ||||
Northern Rock PLC | ||||||
3.54% - 3.61%, 10/25/05 - 08/03/064 | 769,042 | 769,055 | ||||
Permanent Financing PLC | ||||||
3.53% - 3.54%, 09/12/05 - 06/12/064 | 925,253 | 925,253 | ||||
Principal Life Income Funding Trusts | ||||||
3.74%, 05/10/06 | 180,244 | 180,251 | ||||
Royal Bank of Scotland | ||||||
3.47% - 3.61%, 04/05/06 - 08/30/06 | 802,086 | 801,904 | ||||
Sedna Finance Inc. | ||||||
3.54%, 01/10/06 - 01/17/064 | 132,179 | 132,169 | ||||
Sigma Finance Inc. | ||||||
3.50% - 3.72%, 09/15/05 - 08/15/064 | 1,372,259 | 1,372,255 |
54 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GERMANY INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
Skandinaviska Enskilda Bank NY | |||||||
3.58%, 07/18/064 | $ | 240,326 | $ | 240,326 | |||
Strips III LLC | |||||||
3.69%, 07/24/064,8 | 70,596 | 70,596 | |||||
SunTrust Bank | |||||||
3.63%, 04/28/06 | 360,488 | 360,488 | |||||
Tango Finance Corp. | |||||||
3.54% - 3.60%, 09/15/05 - 06/21/064 | 583,991 | 583,955 | |||||
Toyota Motor Credit Corp. | |||||||
3.57%, 04/10/06 | 108,146 | 108,146 | |||||
Unicredito Italiano SpA | |||||||
3.34%, 06/14/06 | 312,423 | 312,336 | |||||
Wachovia Asset Securitization Inc. | |||||||
3.63%, 09/25/054 | 578,546 | 578,546 | |||||
Wells Fargo & Co. | |||||||
3.56%, 09/15/064 | 120,163 | 120,175 | |||||
WhistleJacket Capital LLC | |||||||
3.52% - 3.62%, 09/15/05 - 07/28/064 | 961,302 | 961,261 | |||||
White Pine Finance LLC | |||||||
3.47% - 3.61%, 11/01/05 - 06/20/064 | 507,087 | 507,074 | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/054 | 171,592 | 171,592 | |||||
22,298,646 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 55,655,308 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 117.62% | 370,266,474 | ||||||
Other Assets, Less Liabilities – (17.62)% | (55,473,043 | ) | |||||
NET ASSETS – 100.00% | $ | 314,793,431 | |||||
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 (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
4 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
6 | The rate quoted is the annualized seven-day yield of the fund at period end. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
8 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
SCHEDULESOF INVESTMENTS | 55 |
Table of Contents
Schedule of Investments
iSHARES® MSCI ITALY INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 94.68% | |||||
AEROSPACE & DEFENSE – 1.55% | |||||
Finmeccanica SpA1 | 35,395 | $ | 661,664 | ||
661,664 | |||||
APPAREL – 0.21% | |||||
Benetton Group SpA1 | 9,251 | 90,791 | |||
90,791 | |||||
AUTO MANUFACTURERS – 1.15% | |||||
Fiat SpA1,2 | 55,451 | 487,604 | |||
487,604 | |||||
AUTO PARTS & EQUIPMENT – 0.79% | |||||
Pirelli SpA1 | 340,945 | 336,497 | |||
336,497 | |||||
BANKS – 25.58% | |||||
Banca Antonveneta SpA1 | 25,641 | 789,626 | |||
Banca Intesa SpA1 | 357,423 | 1,716,547 | |||
Banca Monte dei Paschi di Siena SpA1 | 143,550 | 559,648 | |||
Banca Nazionale del Lavoro SpA1,2 | 163,812 | 529,851 | |||
Banca Popolare di Milano Scrl1 | 49,181 | 497,794 | |||
Banca Popolare di Verona e Novara Scrl1 | 46,519 | 833,570 | |||
Banche Popolari Unite Scrl1 | 47,300 | 961,582 | |||
Capitalia SpA1 | 166,694 | 932,789 | |||
Fineco SpA | 10,681 | 99,505 | |||
Sanpaolo IMI SpA1 | 133,005 | 1,900,755 | |||
UniCredito Italiano SpA1 | 361,834 | 2,054,795 | |||
10,876,462 | |||||
BUILDING MATERIALS – 0.41% | |||||
Italcementi SpA1 | 10,747 | 173,674 | |||
173,674 | |||||
COMMERCIAL SERVICES – 2.29% | |||||
Autostrade SpA | 36,982 | 976,050 | |||
976,050 | |||||
DIVERSIFIED FINANCIAL SERVICES – 3.09% | |||||
Banca Fideuram SpA1 | 38,533 | 193,113 | |||
Mediobanca SpA1 | 57,717 | 1,120,826 | |||
1,313,939 | |||||
ELECTRIC – 11.46% | |||||
Edison SpA1,2 | 98,978 | 225,197 | |||
Enel SpA1 | 479,303 | 4,241,242 | |||
Terna SpA Rights2 | 153,571 | 407,013 | |||
4,873,452 | |||||
ENTERTAINMENT – 0.31% | |||||
Lottomatica SpA | 3,476 | 131,028 | |||
131,028 | |||||
GAS – 2.22% | |||||
Snam Rete Gas SpA1 | 171,160 | 943,045 | |||
943,045 | |||||
HEALTH CARE – PRODUCTS – 0.96% | |||||
Luxottica Group SpA1 | 17,798 | 409,322 | |||
409,322 | |||||
INSURANCE – 9.84% | |||||
Assicurazioni Generali SpA1 | 65,065 | 2,033,313 | |||
Mediolanum SpA1 | 32,659 | 209,866 | |||
Riunione Adriatica di Sicurta SpA1 | 94,039 | 1,942,985 | |||
4,186,164 | |||||
MEDIA – 4.13% | |||||
Arnoldo Mondadori Editore SpA1 | 15,246 | 154,784 | |||
Gruppo Editoriale L’Espresso SpA1 | 20,526 | 116,753 | |||
Mediaset SpA1 | 96,668 | 1,191,249 | |||
Seat Pagine Gialle SpA1,2 | 473,257 | 200,802 | |||
Telecom Italia Media SpA1,2 | 170,265 | 93,288 | |||
1,756,876 | |||||
OIL & GAS – 20.46% | |||||
ENI SpA1 | 294,767 | 8,700,461 | |||
8,700,461 | |||||
RETAIL – 0.90% | |||||
Autogrill SpA1 | 13,574 | 189,310 | |||
Bulgari SpA1 | 16,797 | 193,047 | |||
382,357 | |||||
TELECOMMUNICATIONS – 9.33% | |||||
Telecom Italia SpA1 | 1,238,116 | 3,882,877 | |||
Tiscali SpA1,2 | 27,951 | 84,134 | |||
3,967,011 | |||||
TOTAL COMMON STOCKS | 40,266,397 |
56 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ITALY INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
PREFERRED STOCKS – 5.11% | ||||||
BANKS – 0.81% | ||||||
Banca Intesa SpA RNC1 | 77,022 | $ | 341,959 | |||
341,959 | ||||||
TELECOMMUNICATIONS – 4.30% | ||||||
Telecom Italia SpA RNC1 | 698,523 | 1,829,837 | ||||
1,829,837 | ||||||
TOTAL PREFERRED STOCKS | 2,171,796 | |||||
SHORT-TERM INVESTMENTS – 44.43% | ||||||
CERTIFICATES OF DEPOSIT3 – 5.05% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% - 3.83%, 09/14/05 - 01/25/06 | $ | 122,422 | 122,422 | |||
Bank of Nova Scotia | ||||||
3.45% - 3.56%, 09/26/05 - 01/03/06 | 53,050 | 53,046 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 81,615 | 81,615 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 81,615 | 81,612 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 40,807 | 40,799 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 138,745 | 138,745 | ||||
Fortis Bank NY | ||||||
3.83% - 3.84%, 01/25/06 | 122,422 | 122,423 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 48,969 | 48,969 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 40,807 | 40,821 | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 40,807 | 40,802 | ||||
Societe Generale | ||||||
3.51% - 3.60%, 03/30/06 - 06/13/06 | 126,503 | 126,480 | ||||
Toronto-Dominion Bank | ||||||
2.66% - 3.94%, 09/14/05 - 07/10/06 | 289,733 | 289,739 | ||||
Security | Principal | Value | ||||
UBS AG | ||||||
2.67% - 3.40%, 11/09/05 - 12/15/05 | $ | 65,292 | $ | 65,291 | ||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 204,037 | 204,037 | ||||
Washington Mutual Bank | ||||||
3.50% - 3.55%, 09/15/05 - 09/19/05 | 367,267 | 367,266 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 - 09/20/05 | 322,379 | 322,378 | ||||
2,146,445 | ||||||
COMMERCIAL PAPER3 – 10.17% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 163,230 | 163,102 | ||||
Amstel Funding Corp. | ||||||
3.49% - 3.91%, 09/15/05 - 02/15/06 | 172,207 | 171,289 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 81,615 | 81,615 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 92,555 | 92,501 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% - 3.49%, 09/09/05 - 09/21/05 | 134,665 | 134,499 | ||||
Bryant Park Funding LLC | ||||||
3.51% - 3.92%, 09/06/05 - 02/22/06 | 41,541 | 41,136 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 31,378 | 31,183 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 57,130 | 57,024 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 24,484 | 24,451 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 8,161 | 8,036 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 61,211 | 61,185 | ||||
Fairway Finance LLC | ||||||
3.15% - 3.56%, 09/15/05 - 10/20/05 | 105,246 | 105,158 |
SCHEDULESOF INVESTMENTS | 57 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ITALY INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Ford Credit Floorplan Motown | ||||||
3.47% - 3.72%, 09/09/05 - 11/08/05 | $ | 371,321 | $ | 369,626 | ||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 130,935 | 130,871 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% - 3.53%, 09/20/05 - 09/21/05 | 265,248 | 264,735 | ||||
Giro Funding Corp. | ||||||
3.53% - 3.56%, 09/16/05 - 09/22/05 | 61,211 | 61,108 | ||||
Grampian Funding LLC | ||||||
3.13% - 3.84%, 09/09/05 - 01/31/06 | 126,503 | 125,149 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% - 3.53%, 09/02/05 - 02/10/06 | 93,857 | 93,857 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 24,484 | 24,075 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 46,265 | 46,175 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 - 02/21/064 | 85,688 | 85,688 | ||||
Lockhart Funding LLC | ||||||
3.47% - 3.55%, 09/16/05 - 09/19/05 | 112,500 | 112,333 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% - 3.51%, 09/01/05 - 09/21/05 | 199,956 | 199,695 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 285,652 | 285,652 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 46,034 | 45,953 | ||||
Park Granada LLC | ||||||
3.48% - 3.51%, 09/15/05 - 09/20/05 | 110,509 | 110,340 | ||||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 81,615 | 80,117 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 163,230 | 163,134 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 20,404 | 20,019 | ||||
Security | Shares or Principal | Value | ||||
Solitaire Funding Ltd. | ||||||
3.49% - 3.52%, 09/02/05 - 09/06/05 | $ | 239,948 | $ | 239,885 | ||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 50,422 | 50,422 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 171,391 | 171,071 | ||||
Three Pillars Funding Corp. | ||||||
3.49% - 3.52%, 09/01/05 - 09/07/05 | 174,873 | 174,813 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 13,642 | 13,642 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 301,135 | 301,135 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 37,543 | 37,513 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 28,565 | 28,565 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 118,342 | 118,133 | ||||
4,324,885 | ||||||
MEDIUM-TERM NOTES3 – 0.17% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/064 | 25,301 | 25,298 | ||||
K2 USA LLC | ||||||
3.94%, 07/07/064 | 48,969 | 48,967 | ||||
74,265 | ||||||
MONEY MARKET FUNDS – 0.86% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares 3.63%3,5,6 | 326,459 | 326,459 | ||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 3.56%5,6 | 3,927 | 3,927 | ||||
BlackRock Temp Cash Money Market Fund 3.41%3,6 | 8,648 | 8,648 |
58 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ITALY INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares 3.50%3,6 | 28,611 | $ | 28,611 | |||
367,645 | ||||||
REPURCHASE AGREEMENTS3 – 8.58% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $1,958,953 and an effective yield of 3.60%.7 | $ | 1,958,757 | 1,958,757 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $1,510,026 and an effective yield of 3.60%.7 | 1,509,875 | 1,509,875 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $177,938 and an effective yield of 3.60%.7 | 177,920 | 177,920 | ||||
3,646,552 | ||||||
TIME DEPOSITS3 – 1.79% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | 163,230 | 163,230 | ||||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 448,882 | 448,882 | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 107,746 | 107,746 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/058 | 40,807 | 40,807 | ||||
760,665 | ||||||
VARIABLE & FLOATING RATE NOTES3 – 17.81% | ||||||
Allstate Life Global Funding II | ||||||
3.58% - 3.66%, 07/08/06 - 07/27/064 | 151,804 | 151,805 | ||||
American Express Bank | ||||||
3.55% - 3.63%, 10/17/05 - 07/19/06 | 220,360 | 220,361 | ||||
Security | Principal | Value | ||||
American Express Centurion Bank | ||||||
3.55% - 3.63%, 06/29/06 - 07/19/06 | $ | 134,665 | $ | 134,665 | ||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 163,230 | 163,242 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/064 | 81,615 | 81,717 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/064 | 53,050 | 53,050 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 408,074 | 408,074 | ||||
Beta Finance Inc. | ||||||
3.51% - 3.72%, 09/23/05 - 06/09/064 | 419,500 | 419,495 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/064 | 81,615 | 81,615 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% - 3.61%, 09/13/05 - 12/14/05 | 277,491 | 277,479 | ||||
CC USA Inc. | ||||||
3.52% - 3.59%, 03/23/06 - 07/14/064 | 219,544 | 219,535 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/054 | 20,404 | 20,404 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 204,037 | 204,037 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 81,615 | 81,615 | ||||
Dorada Finance Inc. | ||||||
3.59% - 3.62%, 03/27/06 - 06/26/064 | 129,768 | 129,774 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/064 | 81,615 | 81,615 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/064 | 163,230 | 163,230 | ||||
Five Finance Inc. | ||||||
3.60% - 3.63%, 02/27/06 - 06/26/064 | 57,130 | 57,132 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 36,727 | 36,760 |
SCHEDULESOF INVESTMENTS | 59 |
Table of Contents
.Schedule of Investments (Continued)
iSHARES® MSCI ITALY INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
Hartford Life Global Funding Trust | |||||||
3.56%, 08/15/06 | $ | 81,615 | $ | 81,615 | |||
HBOS Treasury Services PLC | |||||||
3.51% - 3.57%, 01/10/06 - 04/24/064 | 244,845 | 244,845 | |||||
HSBC Bank USA N.A. | |||||||
3.70%, 05/04/06 | 28,565 | 28,581 | |||||
K2 USA LLC | |||||||
3.47% - 3.58%, 09/12/05 - 06/02/064 | 318,298 | 318,300 | |||||
Links Finance LLC | |||||||
3.52% - 3.71%, 11/16/05 - 03/15/064 | 318,298 | 318,333 | |||||
Lothian Mortgages PLC | |||||||
3.63%, 01/24/06 | 81,615 | 81,615 | |||||
Marshall & Ilsley Bank | |||||||
3.71%, 02/20/06 | 81,615 | 81,661 | |||||
Metropolitan Life Global Funding I | |||||||
3.55% - 4.01%, 08/28/06 - 09/06/064 | 163,230 | 163,301 | |||||
National City Bank (Ohio) | |||||||
3.50%, 01/06/06 | 40,807 | 40,803 | |||||
Nationwide Building Society | |||||||
3.51% - 3.62%, 01/13/06 - 07/07/064 | 301,975 | 302,004 | |||||
Nordea Bank AB | |||||||
3.55%, 08/11/064 | 142,826 | 142,826 | |||||
Northern Rock PLC | |||||||
3.54% - 3.61%, 10/25/05 - 08/03/064 | 261,168 | 261,172 | |||||
Permanent Financing PLC | |||||||
3.53% - 3.54%, 09/12/05 - 06/12/064 | 314,217 | 314,217 | |||||
Principal Life Income Funding Trusts | |||||||
3.74%, 05/10/06 | 61,211 | 61,213 | |||||
Royal Bank of Scotland | |||||||
3.47% - 3.61%, 04/05/06 - 08/30/06 | 272,390 | 272,328 | |||||
Sedna Finance Inc. | |||||||
3.54%, 01/10/06 - 01/17/064 | 44,888 | 44,884 | |||||
Sigma Finance Inc. | |||||||
3.50% - 3.72%, 09/15/05 - 08/15/064 | 466,021 | 466,024 | |||||
Skandinaviska Enskilda Bank NY | |||||||
3.58%, 07/18/064 | 81,615 | 81,615 | |||||
Strips III LLC | |||||||
3.69%, 07/24/064,8 | 23,974 | 23,974 | |||||
SunTrust Bank | |||||||
3.63%, 04/28/06 | 122,422 | 122,422 | |||||
Tango Finance Corp. | |||||||
3.54% - 3.60%, 09/15/05 - 06/21/064 | 198,324 | 198,312 | |||||
Toyota Motor Credit Corp. | |||||||
3.57%, 04/10/06 | 36,727 | 36,726 | |||||
Unicredito Italiano SpA | |||||||
3.34%, 06/14/06 | 106,099 | 106,070 | |||||
Wachovia Asset Securitization Inc. | |||||||
3.63%, 09/25/054 | 196,475 | 196,475 | |||||
Wells Fargo & Co. | |||||||
3.56%, 09/15/064 | 40,807 | 40,811 | |||||
WhistleJacket Capital LLC | |||||||
3.52% - 3.62%, 09/15/05 - 07/28/064 | 326,459 | 326,447 | |||||
White Pine Finance LLC | |||||||
3.47% - 3.61%, 11/01/05 - 06/20/064 | 172,207 | 172,203 | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/054 | 58,273 | 58,273 | |||||
7,572,655 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 18,893,112 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 144.22% | 61,331,305 | ||||||
Other Assets, Less Liabilities – (44.22)% | (18,805,263 | ) | |||||
NET ASSETS – 100.00% | $ | 42,526,042 | |||||
60 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ITALY INDEX FUND
August 31, 2005
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 (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
4 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
6 | The rate quoted is the annualized seven-day yield of the fund at period end. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
8 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
SCHEDULESOF INVESTMENTS | 61 |
Table of Contents
Schedule of Investments
iSHARES® MSCI NETHERLANDS INDEX FUND
August 31, 2005
Security | Shares | Value | ||||
COMMON STOCKS – 99.54% | ||||||
BANKS – 11.89% | ||||||
ABN AMRO Holding NV | 318,250 | $ | 7,608,811 | |||
7,608,811 | ||||||
BEVERAGES – 3.37% | ||||||
Heineken NV1 | 66,850 | 2,153,223 | ||||
2,153,223 | ||||||
CHEMICALS – 6.21% | ||||||
Akzo Nobel NV | 61,707 | 2,519,560 | ||||
DSM NV1 | 18,827 | 1,454,095 | ||||
3,973,655 | ||||||
COMMERCIAL SERVICES – 3.17% | ||||||
IHC Caland NV | 13,600 | 1,085,515 | ||||
Randstad Holdings NV | 10,653 | 403,529 | ||||
Vedior NV | 37,185 | 536,893 | ||||
2,025,937 | ||||||
COMPUTERS – 0.48% | ||||||
Getronics NV | 26,599 | 308,482 | ||||
308,482 | ||||||
DISTRIBUTION & WHOLESALE – 0.99% | ||||||
Buhrmann NV | 25,996 | 315,556 | ||||
Hagemeyer NV1,2 | 116,647 | 317,043 | ||||
632,599 | ||||||
ELECTRONICS – 9.69% | ||||||
Koninklijke Philips Electronics NV | 236,175 | 6,198,413 | ||||
6,198,413 | ||||||
FOOD – 17.51% | ||||||
Koninklijke Ahold NV2 | 327,630 | 2,901,138 | ||||
Koninklijke Numico NV CVA1,2 | 31,222 | 1,290,569 | ||||
Unilever NV CVA | 101,974 | 7,010,571 | ||||
11,202,278 | ||||||
INSURANCE – 20.51% | ||||||
AEGON NV1 | 223,590 | 3,126,547 | ||||
ING Groep NV1 | 345,312 | 9,997,013 | ||||
13,123,560 | ||||||
MEDIA – 8.43% | ||||||
Reed Elsevier NV1 | 174,468 | 2,428,926 | ||||
VNU NV1 | 58,089 | 1,778,875 | ||||
Wolters Kluwer NV CVA | 63,382 | 1,184,845 | ||||
5,392,646 | ||||||
Security |
Shares or Principal | Value | ||||
OFFICE & BUSINESS EQUIPMENT – 0.89% | ||||||
Oce NV1 | 37,944 | $ | 569,785 | |||
569,785 | ||||||
REAL ESTATE INVESTMENT TRUSTS – 4.97% | ||||||
Corio NV | 17,688 | 1,023,724 | ||||
Rodamco Europe NV | 14,807 | 1,256,517 | ||||
Wereldhave NV | 8,576 | 900,203 | ||||
3,180,444 | ||||||
SEMICONDUCTORS – 2.66% | ||||||
ASML Holding NV2 | 101,840 | 1,700,867 | ||||
1,700,867 | ||||||
TELECOMMUNICATIONS – 5.04% | ||||||
Koninklijke KPN NV | 342,638 | 3,227,873 | ||||
3,227,873 | ||||||
TRANSPORTATION – 3.73% | ||||||
TPG NV | 93,197 | 2,384,061 | ||||
2,384,061 | ||||||
TOTAL COMMON STOCKS | 63,682,634 | |||||
SHORT-TERM INVESTMENTS – 15.87% | ||||||
CERTIFICATES OF DEPOSIT3 – 1.80% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% - 3.83%, 09/14/05 - 01/25/06 | $ | 65,784 | 65,784 | |||
Bank of Nova Scotia | ||||||
3.45% - 3.56%, 09/26/05 - 01/03/06 | 28,506 | 28,505 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 43,856 | 43,856 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 43,856 | 43,854 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 21,928 | 21,924 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 74,555 | 74,555 | ||||
Fortis Bank NY | ||||||
3.83% - 3.84%, 01/25/06 | 65,784 | 65,784 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 26,314 | 26,314 |
62 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI NETHERLANDS INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | $ | 21,928 | $ | 21,935 | ||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 21,928 | 21,925 | ||||
Societe Generale | ||||||
3.51% - 3.60%, 03/30/06 - 06/13/06 | 67,977 | 67,964 | ||||
Toronto-Dominion Bank | ||||||
2.66% - 3.94%, 09/14/05 - 07/10/06 | 155,688 | 155,692 | ||||
UBS AG | ||||||
2.67% - 3.40%, 11/09/05 - 12/15/05 | 35,085 | 35,085 | ||||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 109,640 | 109,640 | ||||
Washington Mutual Bank | ||||||
3.50% - 3.55%, 09/15/05 - 09/19/05 | 197,352 | 197,352 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 - 09/20/05 | 173,231 | 173,231 | ||||
1,153,400 | ||||||
COMMERCIAL PAPER3 – 3.63% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 87,712 | 87,643 | ||||
Amstel Funding Corp. | ||||||
3.49% - 3.91%, 09/15/05 - 02/15/06 | 92,536 | 92,042 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 43,856 | 43,856 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 49,735 | 49,706 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% - 3.49%, 09/09/05 - 09/21/05 | 72,362 | 72,273 | ||||
Bryant Park Funding LLC | ||||||
3.51% - 3.92%, 09/06/05 - 02/22/06 | 22,322 | 22,105 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 16,861 | 16,756 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 30,699 | 30,642 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 13,157 | 13,139 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 4,386 | 4,318 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 32,892 | 32,878 | ||||
Fairway Finance LLC | ||||||
3.15% - 3.56%, 09/15/05 - 10/20/05 | 56,554 | 56,506 | ||||
Ford Credit Floorplan Motown | ||||||
3.47% - 3.72%, 09/09/05 - 11/08/05 | 199,530 | 198,620 | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 70,358 | 70,324 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% - 3.53%, 09/20/05 - 09/21/05 | 142,532 | 142,256 | ||||
Giro Funding Corp. | ||||||
3.53% - 3.56%, 09/16/05 - 09/22/05 | 32,892 | 32,837 | ||||
Grampian Funding LLC | ||||||
3.13% - 3.84%, 09/09/05 - 01/31/06 | 67,977 | 67,249 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% - 3.53%, 09/02/05 - 02/10/06 | 50,434 | 50,434 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 13,157 | 12,937 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 24,861 | 24,812 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 - 02/21/064 | 46,045 | 46,045 | ||||
Lockhart Funding LLC | ||||||
3.47% - 3.55%, 09/16/05 - 09/19/05 | 60,452 | 60,362 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% - 3.51%, 09/01/05 - 09/21/05 | 107,447 | 107,306 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 153,496 | 153,496 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 24,736 | 24,693 |
SCHEDULESOF INVESTMENTS | 63 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI NETHERLANDS INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
Park Granada LLC | ||||||
3.48% - 3.51%, 09/15/05 - 09/20/05 | $ | 59,382 | $ | 59,291 | ||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 43,856 | 43,051 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 87,712 | 87,660 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 10,964 | 10,757 | ||||
Solitaire Funding Ltd. | ||||||
3.49% - 3.52%, 09/02/05 - 09/06/05 | 128,936 | 128,902 | ||||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 27,094 | 27,094 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 92,097 | 91,925 | ||||
Three Pillars Funding Corp. | ||||||
3.49% - 3.52%, 09/01/05 - 09/07/05 | 93,968 | 93,936 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 7,331 | 7,331 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 161,816 | 161,816 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 20,174 | 20,158 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 15,350 | 15,350 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 63,591 | 63,479 | ||||
2,323,985 | ||||||
MEDIUM-TERM NOTES3 – 0.06% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/064 | 13,595 | 13,594 | ||||
K2 USA LLC | ||||||
3.94%, 07/07/064 | 26,314 | 26,312 | ||||
39,906 | ||||||
MONEY MARKET FUNDS – 0.31% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares 3.63%3,5,6 | 175,424 | 175,424 | ||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 3.56%5,6 | 1,620 | 1,620 | ||||
BlackRock Temp Cash Money Market Fund 3.41%3,6 | 4,647 | 4,647 | ||||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares 3.50%3,6 | 15,374 | 15,374 | ||||
197,065 | ||||||
REPURCHASE AGREEMENTS3 – 3.07% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $1,052,647 and an effective yield of 3.60%.7 | $ | 1,052,542 | 1,052,542 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $811,415 and an effective yield of 3.60%.7 | 811,334 | 811,334 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $95,615 and an effective yield of 3.60%.7 | 95,606 | 95,606 | ||||
1,959,482 | ||||||
TIME DEPOSITS3 – 0.64% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | 87,712 | 87,712 | ||||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 241,207 | 241,207 | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 57,897 | 57,897 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/058 | 21,928 | 21,928 | ||||
408,744 |
64 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI NETHERLANDS INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
VARIABLE & FLOATING RATE NOTES3 – 6.36% | ||||||
Allstate Life Global Funding II | ||||||
3.58% - 3.66%, 07/08/06 - 07/27/064 | $ | 81,572 | $ | 81,572 | ||
American Express Bank | ||||||
3.55% - 3.63%, 10/17/05 - 07/19/06 | 118,411 | 118,412 | ||||
American Express Centurion Bank | ||||||
3.55% - 3.63%, 06/29/06 - 07/19/06 | 72,362 | 72,362 | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 87,712 | 87,718 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/064 | 43,856 | 43,911 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/064 | 28,506 | 28,506 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 219,279 | 219,279 | ||||
Beta Finance Inc. | ||||||
3.51% - 3.72%, 09/23/05 - 06/09/064 | 225,419 | 225,416 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/064 | 43,856 | 43,856 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% - 3.61%, 09/13/05 - 12/14/05 | 149,110 | 149,104 | ||||
CC USA Inc. | ||||||
3.52% - 3.59%, 03/23/06 - 07/14/064 | 117,972 | 117,967 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/054 | 10,964 | 10,964 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 109,640 | 109,640 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 43,856 | 43,856 | ||||
Dorada Finance Inc. | ||||||
3.59% - 3.62%, 03/27/06 - 06/26/064 | 69,731 | 69,734 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/064 | 43,856 | 43,856 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/064 | 87,712 | 87,712 | ||||
Five Finance Inc. | ||||||
3.60% - 3.63%, 02/27/06 - 06/26/064 | 30,699 | 30,699 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 19,735 | 19,753 | ||||
Hartford Life Global Funding Trust | ||||||
3.56%, 08/15/06 | 43,856 | 43,856 | ||||
HBOS Treasury Services PLC | ||||||
3.51% - 3.57%, 01/10/06 - 04/24/064 | 131,568 | 131,568 | ||||
HSBC Bank USA N.A. | ||||||
3.70%, 05/04/06 | 15,350 | 15,358 | ||||
K2 USA LLC | ||||||
3.47% - 3.58%, 09/12/05 - 06/02/064 | 171,038 | 171,039 | ||||
Links Finance LLC | ||||||
3.52% - 3.71%, 11/16/05 - 03/15/064 | 171,038 | 171,056 | ||||
Lothian Mortgages PLC | ||||||
3.63%, 01/24/06 | 43,856 | 43,856 | ||||
Marshall & Ilsley Bank | ||||||
3.71%, 02/20/06 | 43,856 | 43,881 | ||||
Metropolitan Life Global Funding I | ||||||
3.55% - 4.01%, 08/28/06 - 09/06/064 | 87,712 | 87,750 | ||||
National City Bank (Ohio) | ||||||
3.50%, 01/06/06 | 21,928 | 21,926 | ||||
Nationwide Building Society | ||||||
3.51% - 3.62%, 01/13/06 - 07/07/064 | 162,267 | 162,282 | ||||
Nordea Bank AB | ||||||
3.55%, 08/11/064 | 76,748 | 76,748 | ||||
Northern Rock PLC | ||||||
3.54% - 3.61%, 10/25/05 - 08/03/064 | 140,339 | 140,342 | ||||
Permanent Financing PLC | ||||||
3.53% - 3.54%, 09/12/05 - 06/12/064 | 168,845 | 168,845 | ||||
Principal Life Income Funding Trusts | ||||||
3.74%, 05/10/06 | 32,892 | 32,893 | ||||
Royal Bank of Scotland | ||||||
3.47% - 3.61%, 04/05/06 - 08/30/06 | 146,369 | 146,335 |
SCHEDULESOF INVESTMENTS | 65 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI NETHERLANDS INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
Sedna Finance Inc. | |||||||
3.54%, 01/10/06 - 01/17/064 | $ | 24,121 | $ | 24,118 | |||
Sigma Finance Inc. | |||||||
3.50% - 3.72%, 09/15/05 - 08/15/064 | 250,417 | 250,419 | |||||
Skandinaviska Enskilda Bank NY | |||||||
3.58%, 07/18/064 | 43,856 | 43,856 | |||||
Strips III LLC | |||||||
3.69%, 07/24/064,8 | 12,883 | 12,883 | |||||
SunTrust Bank | |||||||
3.63%, 04/28/06 | 65,784 | 65,784 | |||||
Tango Finance Corp. | |||||||
3.54% - 3.60%, 09/15/05 - 06/21/064 | 106,570 | 106,564 | |||||
Toyota Motor Credit Corp. | |||||||
3.57%, 04/10/06 | 19,735 | 19,735 | |||||
Unicredito Italiano SpA | |||||||
3.34%, 06/14/06 | 57,013 | 56,997 | |||||
Wachovia Asset Securitization Inc. | |||||||
3.63%, 09/25/054 | 105,576 | 105,576 | |||||
Wells Fargo & Co. | |||||||
3.56%, 09/15/064 | 21,928 | 21,930 | |||||
WhistleJacket Capital LLC | |||||||
3.52% - 3.62%, 09/15/05 - 07/28/064 | 175,424 | 175,416 | |||||
White Pine Finance LLC | |||||||
3.47% - 3.61%, 11/01/05 - 06/20/064 | 92,536 | 92,533 | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/054 | 31,313 | 31,313 | |||||
4,069,176 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 10,151,758 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 115.41% | 73,834,392 | ||||||
Other Assets, Less Liabilities – (15.41)% | (9,860,382 | ) | |||||
NET ASSETS – 100.00% | $ | 63,974,010 | |||||
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 (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
4 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
6 | The rate quoted is the annualized seven-day yield of the fund at period end. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
8 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
66 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI SPAIN INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 99.93% | |||||
ADVERTISING – 0.52% | |||||
Telefonica Publicidad e Informacion SA1 | 39,825 | $ | 345,300 | ||
345,300 | |||||
AGRICULTURE – 3.63% | |||||
Altadis SA1 | 56,225 | 2,429,180 | |||
2,429,180 | |||||
AIRLINES – 0.36% | |||||
Iberia Lineas Aereas de Espana SA1 | 89,575 | 242,360 | |||
242,360 | |||||
BANKS – 34.78% | |||||
Banco Bilbao Vizcaya Argentaria SA | 491,950 | 8,137,582 | |||
Banco Popular Espanol SA1 | 237,525 | 2,897,832 | |||
Banco Santander Central Hispano SA | 951,025 | 11,579,219 | |||
Bankinter SA1 | 13,325 | 668,948 | |||
23,283,581 | |||||
BIOTECHNOLOGY – 0.36% | |||||
Zeltia SA1 | 35,175 | 241,823 | |||
241,823 | |||||
BUILDING MATERIALS – 0.13% | |||||
Uralita SA | 15,750 | 85,035 | |||
85,035 | |||||
COMMERCIAL SERVICES – 2.82% | |||||
Abertis Infraestructuras SA1 | 59,113 | 1,547,059 | |||
Cintra Concesiones de Infraestructuras de Transporte SA2 | 25,925 | 337,969 | |||
1,885,028 | |||||
COMPUTERS – 0.85% | |||||
Indra Sistemas SA1 | 28,275 | 570,642 | |||
570,642 | |||||
ELECTRIC – 11.80% | |||||
Endesa SA1 | 144,300 | 3,247,653 | |||
Iberdrola SA1 | 126,750 | 3,251,730 | |||
Union Fenosa SA1 | 48,250 | 1,400,430 | |||
7,899,813 | |||||
ENERGY – ALTERNATE SOURCES – 0.46% | |||||
Gamesa Corporacion Tecnologica SA1 | 20,700 | 309,313 | |||
309,313 | |||||
ENGINEERING & CONSTRUCTION – 6.08% | |||||
Acciona SA1 | 5,850 | 652,193 | |||
Actividades de Construcciones y Servicios SA1 | 60,700 | 1,817,027 | |||
Fomento de Construcciones y Contratas SA | 13,425 | 769,400 | |||
Grupo Ferrovial SA1 | 10,800 | 832,805 | |||
4,071,425 | |||||
FOOD – 0.96% | |||||
Ebro Puleva SA1 | 26,082 | 453,247 | |||
Viscofan SA | 19,375 | 191,103 | |||
644,350 | |||||
FOREST PRODUCTS & PAPER – 0.37% | |||||
Grupo Empresarial ENCE SA | 8,925 | 247,957 | |||
247,957 | |||||
GAS – 2.13% | |||||
Gas Natural SDG SA1 | 48,200 | 1,427,433 | |||
1,427,433 | |||||
INSURANCE – 1.12% | |||||
Corporacion Mapfre SA1 | 45,725 | 751,298 | |||
751,298 | |||||
IRON & STEEL – 1.06% | |||||
Acerinox SA | 48,700 | 710,938 | |||
710,938 | |||||
LODGING – 0.57% | |||||
NH Hoteles SA1 | 25,575 | 385,304 | |||
385,304 | |||||
MEDIA – 1.36% | |||||
Antena 3 de Television SA1 | 11,600 | 228,260 | |||
Promotora de Informaciones SA | 25,425 | 468,096 | |||
Sogecable SA1,2 | 6,172 | 215,043 | |||
911,399 | |||||
OIL & GAS – 4.99% | |||||
Repsol YPF SA1 | 113,275 | 3,340,684 | |||
3,340,684 | |||||
PHARMACEUTICALS – 0.76% | |||||
FAES FARMA SA1 | 26,275 | 507,658 | |||
507,658 |
SCHEDULESOF INVESTMENTS | 67 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SPAIN INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
REAL ESTATE – 2.54% | ||||||
Inmobiliaria Colonial | 5,500 | $ | 313,520 | |||
Metrovacesa SA1 | 9,410 | 634,773 | ||||
Sacyr Vallehermoso SA1 | 29,392 | 751,150 | ||||
1,699,443 | ||||||
RETAIL – 2.00% | ||||||
Industria de Diseno Textil SA1 | 49,325 | 1,340,638 | ||||
1,340,638 | ||||||
TELECOMMUNICATIONS – 19.34% | ||||||
Telefonica SA1 | 786,656 | 12,944,734 | ||||
12,944,734 | ||||||
WATER – 0.94% | ||||||
Sociedad General de Aguas de Barcelona SA Class B1 | 27,550 | 626,824 | ||||
626,824 | ||||||
TOTAL COMMON STOCKS | 66,902,160 | |||||
SHORT-TERM INVESTMENTS – 19.32% | ||||||
CERTIFICATES OF DEPOSIT3 – 2.19% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% - 3.83%, 09/14/05 - 01/25/06 | $ | 83,778 | 83,778 | |||
Bank of Nova Scotia | ||||||
3.45% - 3.56%, 09/26/05 - 01/03/06 | 36,304 | 36,302 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 55,852 | 55,852 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 55,852 | 55,850 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 27,926 | 27,921 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 94,949 | 94,949 | ||||
Fortis Bank NY | ||||||
3.83% - 3.84%, 01/25/06 | 83,778 | 83,779 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 33,511 | 33,511 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 27,926 | 27,935 | ||||
Security | Principal | Value | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | $ | 27,926 | $ | 27,923 | ||
Societe Generale | ||||||
3.51% - 3.60%, 03/30/06 - 06/13/06 | 86,571 | 86,555 | ||||
Toronto-Dominion Bank | ||||||
2.66% - 3.94%, 09/14/05 - 07/10/06 | 198,275 | 198,280 | ||||
UBS AG | ||||||
2.67% - 3.40%, 11/09/05 - 12/15/05 | 44,682 | 44,681 | ||||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 139,631 | 139,631 | ||||
Washington Mutual Bank | ||||||
3.50% - 3.55%, 09/15/05 - 09/19/05 | 251,335 | 251,335 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 - 09/20/05 | 220,616 | 220,616 | ||||
1,468,898 | ||||||
COMMERCIAL PAPER3 – 4.42% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 111,704 | 111,617 | ||||
Amstel Funding Corp. | ||||||
3.49% - 3.91%, 09/15/05 - 02/15/06 | 117,848 | 117,220 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 55,852 | 55,852 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 63,339 | 63,302 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% - 3.49%, 09/09/05 - 09/21/05 | 92,156 | 92,043 | ||||
Bryant Park Funding LLC | ||||||
3.51% - 3.92%, 09/06/05 - 02/22/06 | 28,428 | 28,152 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 21,474 | 21,340 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 39,097 | 39,024 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 16,756 | 16,733 |
68 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SPAIN INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | $ | 5,585 | $ | 5,499 | ||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 41,889 | 41,871 | ||||
Fairway Finance LLC | ||||||
3.15% - 3.56%, 09/15/05 - 10/20/05 | 72,024 | 71,963 | ||||
Ford Credit Floorplan Motown | ||||||
3.47% - 3.72%, 09/09/05 - 11/08/05 | 254,110 | 252,951 | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 89,604 | 89,560 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% - 3.53%, 09/20/05 - 09/21/05 | 181,520 | 181,169 | ||||
Giro Funding Corp. | ||||||
3.53% - 3.56%, 09/16/05 - 09/22/05 | 41,889 | 41,819 | ||||
Grampian Funding LLC | ||||||
3.13% - 3.84%, 09/09/05 - 01/31/06 | 86,571 | 85,644 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% - 3.53%, 09/02/05 - 02/10/06 | 64,230 | 64,230 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 16,756 | 16,476 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 31,661 | 31,599 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 - 02/21/064 | 58,640 | 58,639 | ||||
Lockhart Funding LLC | ||||||
3.47% - 3.55%, 09/16/05 - 09/19/05 | 76,988 | 76,874 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% - 3.51%, 09/01/05 - 09/21/05 | 136,838 | 136,660 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 195,483 | 195,483 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 31,503 | 31,448 | ||||
Park Granada LLC | ||||||
3.48% - 3.51%, 09/15/05 - 09/20/05 | 75,626 | 75,510 | ||||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 55,852 | 54,827 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 111,704 | 111,639 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 13,963 | 13,700 | ||||
Solitaire Funding Ltd. | ||||||
3.49% - 3.52%, 09/02/05 - 09/06/05 | 164,206 | 164,162 | ||||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 34,506 | 34,506 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 117,290 | 117,071 | ||||
Three Pillars Funding Corp. | ||||||
3.49% - 3.52%, 09/01/05 - 09/07/05 | 119,672 | 119,631 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 9,336 | 9,336 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 206,079 | 206,079 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 25,692 | 25,672 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 19,548 | 19,548 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 80,986 | 80,843 | ||||
2,959,692 | ||||||
MEDIUM-TERM NOTES3 – 0.08% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/064 | 17,314 | 17,313 | ||||
K2 USA LLC | ||||||
3.94%, 07/07/064 | 33,511 | 33,510 | ||||
50,823 |
SCHEDULESOF INVESTMENTS | 69 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SPAIN INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
MONEY MARKET FUNDS – 0.38% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares 3.63%3,5,6 | 223,409 | $ | 223,409 | |||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 3.56%5,6 | 5,726 | 5,726 | ||||
BlackRock Temp Cash Money Market Fund 3.41%3,6 | 5,918 | 5,918 | ||||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares 3.50%3,6 | 19,579 | 19,579 | ||||
254,632 | ||||||
REPURCHASE AGREEMENTS3 – 3.73% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $1,340,588 and an effective yield of 3.60%.7 | $ | 1,340,453 | 1,340,453 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $1,033,370 and an effective yield of 3.60%.7 | 1,033,266 | 1,033,266 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $121,770 and an effective yield of 3.60%.7 | 121,758 | 121,758 | ||||
2,495,477 | ||||||
TIME DEPOSITS3 – 0.78% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | 111,704 | 111,704 | ||||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 307,187 | 307,187 | ||||
Security | Principal | Value | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | $ | 73,735 | $ | 73,735 | ||
Natexis Banques Populaires | ||||||
3.51%, 09/20/058 | 27,926 | 27,926 | ||||
520,552 | ||||||
VARIABLE & FLOATING RATE NOTES3 – 7.74% | ||||||
Allstate Life Global Funding II | ||||||
3.58% - 3.66%, 07/08/06 - 07/27/064 | 103,885 | 103,890 | ||||
American Express Bank | ||||||
3.55% - 3.63%, 10/17/05 - 07/19/06 | 150,801 | 150,801 | ||||
American Express Centurion Bank | ||||||
3.55% - 3.63%, 6/29/06 - 07/19/06 | 92,156 | 92,156 | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 111,704 | 111,713 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/064 | 55,852 | 55,922 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/064 | 36,304 | 36,304 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 279,261 | 279,261 | ||||
Beta Finance Inc. | ||||||
3.51% - 3.72%, 09/23/05 - 06/09/064 | 287,081 | 287,078 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/064 | 55,852 | 55,852 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% - 3.61%, 09/13/05 - 12/14/05 | 189,898 | 189,889 | ||||
CC USA Inc. | ||||||
3.52% - 3.59%, 03/23/06 - 07/14/064 | 150,243 | 150,236 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/054 | 13,963 | 13,963 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 139,631 | 139,631 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 55,852 | 55,852 |
70 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SPAIN INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Dorada Finance Inc. | ||||||
3.59% - 3.62%, 03/27/06 - 06/26/064 | $ | 88,805 | $ | 88,810 | ||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/064 | 55,852 | 55,852 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/064 | 111,704 | 111,704 | ||||
Five Finance Inc. | ||||||
3.60% - 3.63%, 02/27/06 - 06/26/064 | 39,097 | 39,098 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 25,134 | 25,156 | ||||
Hartford Life Global Funding Trust | ||||||
3.56%, 08/15/06 | 55,852 | 55,852 | ||||
HBOS Treasury Services PLC | ||||||
3.51% - 3.57%, 01/10/06 - 04/24/064 | 167,557 | 167,556 | ||||
HSBC Bank USA N.A. | ||||||
3.70%, 05/04/06 | 19,548 | 19,559 | ||||
K2 USA LLC | ||||||
3.47% - 3.58%, 09/12/05 - 06/02/064 | 217,824 | 217,825 | ||||
Links Finance LLC | ||||||
3.52% - 3.71%, 11/16/05 - 03/15/064 | 217,824 | 217,847 | ||||
Lothian Mortgages PLC | ||||||
3.63%, 01/24/06 | 55,852 | 55,852 | ||||
Marshall & Ilsley Bank | ||||||
3.71%, 02/20/06 | 55,852 | 55,884 | ||||
Metropolitan Life Global Funding I | ||||||
3.55% - 4.01%, 08/28/06 - 09/06/064 | 111,704 | 111,753 | ||||
National City Bank (Ohio) | ||||||
3.50%, 01/06/06 | 27,926 | 27,923 | ||||
Nationwide Building Society | ||||||
3.51% - 3.62%, 01/13/06 - 07/07/064 | 206,653 | 206,673 | ||||
Nordea Bank AB | ||||||
3.55%, 08/11/064 | 97,741 | 97,741 | ||||
Northern Rock PLC | ||||||
3.54% - 3.61%, 10/25/05 - 08/03/064 | 178,727 | 178,730 | ||||
Permanent Financing PLC | ||||||
3.53% - 3.54%, 09/12/05 - 06/12/064 | 215,031 | 215,031 | ||||
Principal Life Income Funding Trusts | ||||||
3.74%, 05/10/06 | 41,889 | 41,891 | ||||
Royal Bank of Scotland | ||||||
3.47% - 3.61%, 04/05/06 - 08/30/06 | 186,407 | 186,364 | ||||
Sedna Finance Inc. | ||||||
3.54%, 01/10/06 - 01/17/064 | 30,719 | 30,716 | ||||
Sigma Finance Inc. | ||||||
3.50% - 3.72%, 09/15/05 - 08/15/064 | 318,916 | 318,918 | ||||
Skandinaviska Enskilda Bank NY | ||||||
3.58%, 07/18/064 | 55,852 | 55,852 | ||||
Strips III LLC | ||||||
3.69%, 07/24/064,8 | 16,407 | 16,407 | ||||
SunTrust Bank | ||||||
3.63%, 04/28/06 | 83,778 | 83,778 | ||||
Tango Finance Corp. | ||||||
3.54% - 3.60%, 09/15/05 - 06/21/064 | 135,721 | 135,713 | ||||
Toyota Motor Credit Corp. | ||||||
3.57%, 04/10/06 | 25,134 | 25,133 | ||||
Unicredito Italiano SpA | ||||||
3.34%, 06/14/06 | 72,608 | 72,588 | ||||
Wachovia Asset Securitization Inc. | ||||||
3.63%, 09/25/054 | 134,456 | 134,456 | ||||
Wells Fargo & Co. | ||||||
3.56%, 09/15/064 | 27,926 | 27,929 | ||||
WhistleJacket Capital LLC | ||||||
3.52% - 3.62%, 09/15/05 - 07/28/064 | 223,409 | 223,399 | ||||
White Pine Finance LLC | ||||||
3.47% - 3.61%, 11/01/05 - 06/20/064 | 117,848 | 117,845 |
SCHEDULESOF INVESTMENTS | 71 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SPAIN INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/054 | $ | 39,879 | $ | 39,878 | |||
5,182,261 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 12,932,335 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 119.25% | 79,834,495 | ||||||
Other Assets, Less Liabilities – (19.25)% | (12,889,437 | ) | |||||
NET ASSETS – 100.00% | $ | 66,945,058 | |||||
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 (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
4 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
6 | The rate quoted is the annualized seven-day yield of the fund at period end. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
8 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
72 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI SWEDEN INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 99.97% | |||||
AGRICULTURE – 1.83% | |||||
Swedish Match AB | 89,110 | $ | 1,126,497 | ||
1,126,497 | |||||
AIRLINES – 0.32% | |||||
SAS AB1,2 | 20,748 | 200,132 | |||
200,132 | |||||
AUTO MANUFACTURERS – 7.39% | |||||
Scania AB Class B | 26,068 | 938,852 | |||
Volvo AB Class A2 | 26,030 | 1,072,879 | |||
Volvo AB Class B2 | 59,356 | 2,532,456 | |||
4,544,187 | |||||
BANKS – 17.66% | |||||
Nordea AB2 | 576,460 | 5,560,439 | |||
Skandinaviska Enskilda Banken AB Class A2 | 130,492 | 2,362,756 | |||
Svenska Handelsbanken AB Class A2 | 135,394 | 2,941,817 | |||
10,865,012 | |||||
COMMERCIAL SERVICES – 2.11% | |||||
Securitas AB Class B2 | 80,598 | 1,300,147 | |||
1,300,147 | |||||
COMPUTERS – 0.38% | |||||
WM-Data AB Class B2 | 85,120 | 236,508 | |||
236,508 | |||||
COSMETICS & PERSONAL CARE – 0.33% | |||||
Oriflame Cosmetics SA SDR | 8,398 | 201,823 | |||
201,823 | |||||
DIVERSIFIED FINANCIAL SERVICES – 0.68% | |||||
D Carnegie AB | 12,426 | 144,404 | |||
OM AB1,2 | 21,470 | 275,657 | |||
420,061 | |||||
ENGINEERING & CONSTRUCTION – 2.11% | |||||
Skanska AB Class B2 | 100,624 | 1,295,241 | |||
1,295,241 | |||||
FOOD – 0.33% | |||||
Axfood AB | 8,018 | 200,610 | |||
200,610 | |||||
FOREST PRODUCTS & PAPER – 4.03% | |||||
Billerud AB2 | 14,820 | 183,446 | |||
Holmen AB Class B2 | 14,250 | 425,026 | |||
Svenska Cellulosa AB Class B2 | 52,744 | 1,868,347 | |||
2,476,819 | |||||
HAND & MACHINE TOOLS – 3.96% | |||||
Sandvik AB2 | 55,290 | 2,435,426 | |||
2,435,426 | |||||
HEALTH CARE – PRODUCTS – 3.35% | |||||
Elekta AB Class B1,2 | 7,866 | 353,216 | |||
Gambro AB Class A2 | 48,374 | 684,783 | |||
Gambro AB Class B2 | 26,296 | 372,246 | |||
Getinge AB Class B2 | 47,044 | 650,468 | |||
2,060,713 | |||||
HEALTH CARE – SERVICES – 0.61% | |||||
Capio AB1 | 20,634 | 374,968 | |||
374,968 | |||||
HOME FURNISHINGS – 2.82% | |||||
Electrolux AB Series B2 | 77,444 | 1,733,680 | |||
1,733,680 | |||||
INSURANCE – 2.46% | |||||
Skandia Forsakrings AB2 | 278,388 | 1,514,024 | |||
1,514,024 | |||||
IRON & STEEL – 0.90% | |||||
Svenskt Stal AB Class A2 | 13,908 | 380,943 | |||
Svenskt Stal AB Class B | 6,764 | 174,134 | |||
555,077 | |||||
MACHINERY – 3.97% | |||||
Atlas Copco AB Class A2 | 91,390 | 1,570,513 | |||
Atlas Copco AB Class B2 | 57,000 | 870,693 | |||
2,441,206 | |||||
MANUFACTURING – 1.26% | |||||
Alfa Laval AB2 | 24,852 | 425,439 | |||
Trelleborg AB Class B2 | 20,862 | 350,266 | |||
775,705 | |||||
MEDIA – 1.58% | |||||
Eniro ABS2 | 43,206 | 483,610 | |||
Modern Times Group AB Class B1 | 13,756 | 490,901 | |||
974,511 | |||||
METAL FABRICATE & HARDWARE – 4.06% | |||||
Assa Abloy AB Class B2 | 80,674 | 1,078,281 |
SCHEDULESOF INVESTMENTS | 73 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SWEDEN INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
Hoganas AB Class B2 | 7,144 | $ | 179,683 | |||
SKF AB2 | 102,106 | 1,240,366 | ||||
2,498,330 | ||||||
OIL & GAS – 0.90% | ||||||
Lundin Petroleum AB1 | 44,878 | 551,080 | ||||
551,080 | ||||||
REAL ESTATE – 1.41% | ||||||
Castellum AB | 10,868 | 381,399 | ||||
Fabege AB2 | 21,166 | 372,094 | ||||
Wihlborgs Fastigheter AB1,2 | 4,683 | 114,393 | ||||
867,886 | ||||||
RETAIL – 7.19% | ||||||
Hennes & Mauritz AB Class B2 | 127,642 | 4,420,604 | ||||
4,420,604 | ||||||
SOFTWARE – 0.24% | ||||||
Telelogic AB1 | 62,814 | 145,580 | ||||
145,580 | ||||||
TELECOMMUNICATIONS – 28.09% | ||||||
Tele2 AB Class B2 | 85,044 | 923,911 | ||||
Telefonaktiebolaget LM Ericsson Class B2 | 4,008,544 | 13,829,937 | ||||
TeliaSonera AB2 | 508,060 | 2,522,253 | ||||
17,276,101 | ||||||
TOTAL COMMON STOCKS | 61,491,928 | |||||
SHORT-TERM INVESTMENTS – 32.49% | ||||||
CERTIFICATES OF DEPOSIT3 – 3.69% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% - 3.83%, 09/14/05 - 01/25/06 | $ | 129,480 | 129,480 | |||
Bank of Nova Scotia | ||||||
3.45% - 3.56%, 09/26/05 - 01/03/06 | 56,108 | 56,103 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 86,320 | 86,320 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 86,320 | 86,317 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 43,160 | 43,152 | ||||
Security | Principal | Value | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | $ | 146,744 | $ | 146,744 | ||
Fortis Bank NY | ||||||
3.83% - 3.84%, 01/25/06 | 129,480 | 129,481 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 51,792 | 51,792 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 43,160 | 43,174 | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 43,160 | 43,155 | ||||
Societe Generale | ||||||
3.51% - 3.60%, 03/30/06 - 06/13/06 | 133,796 | 133,773 | ||||
Toronto-Dominion Bank | ||||||
2.66% - 3.94%, 09/14/05 - 07/10/06 | 306,437 | 306,443 | ||||
UBS AG | ||||||
2.67% - 3.40%, 11/09/05 - 12/15/05 | 69,056 | 69,056 | ||||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 215,801 | 215,801 | ||||
Washington Mutual Bank | ||||||
3.50% - 3.55%, 09/15/05 - 09/19/05 | 388,441 | 388,441 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 - 09/20/05 | 340,965 | 340,964 | ||||
2,270,196 | ||||||
COMMERCIAL PAPER3 – 7.43% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 172,640 | 172,505 | ||||
Amstel Funding Corp. | ||||||
3.49% - 3.91%, 09/15/05 - 02/15/06 | 182,136 | 181,164 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 86,320 | 86,320 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 97,891 | 97,834 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% - 3.49%, 09/09/05 - 09/21/05 | 142,428 | 142,253 |
74 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SWEDEN INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Bryant Park Funding LLC | ||||||
3.51% - 3.92%, 09/06/05 - 02/22/06 | $ | 43,936 | $ | 43,508 | ||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 33,188 | 32,981 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 60,424 | 60,311 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 25,896 | 25,860 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 8,632 | 8,499 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 64,740 | 64,712 | ||||
Fairway Finance LLC | ||||||
3.15% - 3.56%, 09/15/05 - 10/20/05 | 111,314 | 111,220 | ||||
Ford Credit Floorplan Motown | ||||||
3.47% - 3.72%, 09/09/05 - 11/08/05 | 392,729 | 390,938 | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 138,484 | 138,416 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% - 3.53%, 09/20/05 - 09/21/05 | 280,541 | 279,998 | ||||
Giro Funding Corp. | ||||||
3.53% - 3.56%, 09/16/05 - 09/22/05 | 64,740 | 64,632 | ||||
Grampian Funding LLC | ||||||
3.13% - 3.84%, 09/09/05 - 01/31/06 | 133,796 | 132,364 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% - 3.53%, 09/02/05 - 02/10/06 | 99,268 | 99,268 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 25,896 | 25,463 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 48,932 | 48,837 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 - 02/21/064 | 90,628 | 90,628 | ||||
Lockhart Funding LLC | ||||||
3.47% - 3.55%, 09/16/05 - 09/19/05 | 118,986 | 118,809 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% - 3.51%, 09/01/05 - 09/21/05 | 211,485 | 211,208 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 302,121 | 302,121 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 48,688 | 48,603 | ||||
Park Granada LLC | ||||||
3.48% - 3.51%, 09/15/05 - 09/20/05 | 116,880 | 116,701 | ||||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 86,320 | 84,736 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 172,640 | 172,539 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 21,580 | 21,174 | ||||
Solitaire Funding Ltd. | ||||||
3.49% - 3.52%, 09/02/05 - 09/06/05 | 253,782 | 253,715 | ||||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 53,329 | 53,329 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 181,273 | 180,934 | ||||
Three Pillars Funding Corp. | ||||||
3.49% - 3.52%, 09/01/05 - 09/07/05 | 184,955 | 184,891 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 14,428 | 14,428 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 318,497 | 318,497 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 39,707 | 39,676 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 30,212 | 30,212 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 125,164 | 124,943 | ||||
4,574,227 |
SCHEDULESOF INVESTMENTS | 75 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SWEDEN INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
MEDIUM-TERM NOTES3 – 0.13% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/064 | $ | 26,759 | $ | 26,757 | ||
K2 USA LLC | ||||||
3.94%, 07/07/064 | 51,792 | 51,790 | ||||
78,547 | ||||||
MONEY MARKET FUNDS – 0.64% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares 3.63%3,5,6 | 345,281 | 345,281 | ||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 3.56%5,6 | 7,174 | 7,174 | ||||
BlackRock Temp Cash Money Market Fund 3.41%3,6 | 9,146 | 9,146 | ||||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares 3.50%3,6 | 30,260 | 30,260 | ||||
391,861 | ||||||
REPURCHASE AGREEMENTS3 – 6.27% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $2,071,893 and an effective yield of 3.60%.7 | $ | 2,071,685 | 2,071,685 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $1,597,084 and an effective yield of 3.60%.7 | 1,596,924 | 1,596,924 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $188,197 and an effective yield of 3.60%.7 | 188,178 | 188,178 | ||||
3,856,787 | ||||||
Security | Principal | Value | ||||
TIME DEPOSITS3 – 1.31% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | $ | 172,640 | $ | 172,640 | ||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 474,761 | 474,761 | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 113,958 | 113,958 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/058 | 43,160 | 43,160 | ||||
804,519 | ||||||
VARIABLE & FLOATING RATE NOTES3 – 13.02% | ||||||
Allstate Life Global Funding II | ||||||
3.58% - 3.66%, 07/08/06 - 07/27/064 | 160,556 | 160,571 | ||||
American Express Bank | ||||||
3.55% - 3.63%, 10/17/05 - 07/19/06 | 233,065 | 233,065 | ||||
American Express Centurion Bank | ||||||
3.55% - 3.63%, 06/29/06 - 07/19/06 | 142,428 | 142,428 | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 172,640 | 172,653 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/064 | 86,320 | 86,428 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/064 | 56,108 | 56,108 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 431,601 | 431,601 | ||||
Beta Finance Inc. | ||||||
3.51% - 3.72%, 09/23/05 - 06/09/064 | 443,686 | 443,680 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/064 | 86,320 | 86,320 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% - 3.61%, 09/13/05 - 12/14/05 | 293,489 | 293,477 | ||||
CC USA Inc. | ||||||
3.52% - 3.59%, 03/23/06 - 07/14/064 | 232,201 | 232,191 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/054 | 21,580 | 21,580 |
76 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SWEDEN INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | $ | 215,801 | $ | 215,801 | ||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 86,320 | 86,320 | ||||
Dorada Finance Inc. | ||||||
3.59% - 3.62%, 03/27/06 - 06/26/064 | 137,249 | 137,256 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/064 | 86,320 | 86,320 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/064 | 172,640 | 172,640 | ||||
Five Finance Inc. | ||||||
3.60% - 3.63%, 02/27/06 - 06/26/064 | 60,424 | 60,426 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 38,844 | 38,879 | ||||
Hartford Life Global Funding Trust | ||||||
3.56%, 08/15/06 | 86,320 | 86,320 | ||||
HBOS Treasury Services PLC | ||||||
3.51% - 3.57%, 01/10/06 - 04/24/064 | 258,961 | 258,960 | ||||
HSBC Bank USA N.A. | ||||||
3.70%, 05/04/06 | 30,212 | 30,229 | ||||
K2 USA LLC | ||||||
3.47% - 3.58%, 09/12/05 - 06/02/064 | 336,649 | 336,652 | ||||
Links Finance LLC | ||||||
3.52% - 3.71%, 11/16/05 - 03/15/064 | 336,649 | 336,685 | ||||
Lothian Mortgages PLC | ||||||
3.63%, 01/24/06 | 86,320 | 86,320 | ||||
Marshall & Ilsley Bank | ||||||
3.71%, 02/20/06 | 86,320 | 86,369 | ||||
Metropolitan Life Global Funding I | ||||||
3.55% - 4.01%, 08/28/06 - 09/06/064 | 172,640 | 172,716 | ||||
National City Bank (Ohio) | ||||||
3.50%, 01/06/06 | 43,160 | 43,156 | ||||
Nationwide Building Society | ||||||
3.51% - 3.62%, 01/13/06 - 07/07/064 | 319,385 | 319,416 | ||||
Nordea Bank AB | ||||||
3.55%, 08/11/064 | 151,060 | 151,060 | ||||
Northern Rock PLC | ||||||
3.54% - 3.61%, 10/25/05 - 08/03/064 | 276,225 | 276,229 | ||||
Permanent Financing PLC | ||||||
3.53% - 3.54%, 09/12/05 - 06/12/064 | 332,333 | 332,332 | ||||
Principal Life Income Funding Trusts | ||||||
3.74%, 05/10/06 | 64,740 | 64,743 | ||||
Royal Bank of Scotland | ||||||
3.47% - 3.61%, 04/05/06 - 08/30/06 | 288,094 | 288,028 | ||||
Sedna Finance Inc. | ||||||
3.54%, 01/10/06 - 01/17/064 | 47,476 | 47,472 | ||||
Sigma Finance Inc. | ||||||
3.50% - 3.72%, 09/15/05 - 08/15/064 | 492,889 | 492,892 | ||||
Skandinaviska Enskilda Bank NY | ||||||
3.58%, 07/18/064 | 86,320 | 86,320 | ||||
Strips III LLC | ||||||
3.69%, 07/24/064,8 | 25,357 | 25,357 | ||||
SunTrust Bank | ||||||
3.63%, 04/28/06 | 129,480 | 129,480 | ||||
Tango Finance Corp. | ||||||
3.54% - 3.60%, 09/15/05 - 06/21/064 | 209,758 | 209,744 | ||||
Toyota Motor Credit Corp. | ||||||
3.57%, 04/10/06 | 38,844 | 38,844 | ||||
Unicredito Italiano SpA | ||||||
3.34%, 06/14/06 | 112,216 | 112,185 | ||||
Wachovia Asset Securitization Inc. | ||||||
3.63%, 09/25/054 | 207,803 | 207,802 | ||||
Wells Fargo & Co. | ||||||
3.56%, 09/15/064 | 43,160 | 43,164 | ||||
WhistleJacket Capital LLC | ||||||
3.52% - 3.62%, 09/15/05 - 07/28/064 | 345,281 | 345,267 | ||||
White Pine Finance LLC | ||||||
3.47% - 3.61%, 11/01/05 - 06/20/064 | 182,136 | 182,131 |
SCHEDULESOF INVESTMENTS | 77 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SWEDEN INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/054 | $ | 61,633 | $ | 61,633 | |||
8,009,250 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 19,985,387 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 132.46% | 81,477,315 | ||||||
Other Assets, Less Liabilities – (32.46)% | (19,964,809 | ) | |||||
NET ASSETS – 100.00% | $ | 61,512,506 | |||||
SDR - Swedish Depositary Receipts
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 (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
4 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
6 | The rate quoted is the annualized seven-day yield of the fund at period end. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
8 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
78 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI SWITZERLAND INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 99.71% | |||||
BANKS – 17.13% | |||||
Banque Cantonale Vaudoise | 1,512 | $ | 408,202 | ||
Credit Suisse Group | 90,720 | 3,918,020 | |||
Julius Baer Holding AG | 13,414 | 872,984 | |||
UBS AG Registered | 95,669 | 7,799,785 | |||
Vontobel Holding AG Registered | 21,900 | 590,810 | |||
13,589,801 | |||||
BUILDING MATERIALS – 3.83% | |||||
Geberit AG Registered | 296 | 216,981 | |||
Holcim Ltd. Registered | 43,689 | 2,818,981 | |||
3,035,962 | |||||
CHEMICALS – 7.80% | |||||
Ciba Specialty Chemicals AG Registered | 19,948 | 1,210,243 | |||
Clariant AG Registered1 | 21,672 | 309,120 | |||
Givaudan SA Registered2 | 3,279 | 2,090,983 | |||
Lonza Group AG Registered | 5,618 | 319,415 | |||
Syngenta AG1 | 21,297 | 2,257,555 | |||
6,187,316 | |||||
COMMERCIAL SERVICES – 1.90% | |||||
Adecco SA Registered | 15,389 | 730,655 | |||
Societe Generale de Surveillance Holding SA | 1,008 | 780,961 | |||
1,511,616 | |||||
COMPUTERS – 0.49% | |||||
Logitech International SA1 | 10,516 | 388,568 | |||
388,568 | |||||
ENGINEERING & CONSTRUCTION – 2.04% | |||||
ABB Ltd.1 | 225,720 | 1,621,446 | |||
1,621,446 | |||||
FOOD – 12.76% | |||||
Nestle SA Registered | 36,180 | 10,119,878 | |||
10,119,878 | |||||
HAND & MACHINE TOOLS – 1.34% | |||||
Schindler Holding AG Participation Certificates | 1,872 | 746,747 | |||
Schindler Holding AG Registered | 792 | 316,561 | |||
1,063,308 | |||||
HEALTH CARE – PRODUCTS – 5.28% | |||||
Nobel Biocare Holding AG | 5,306 | 1,155,265 | |||
Phonak Holding AG Registered | 9,072 | 346,026 | |||
Straumann Holding AG Registered | 1,927 | 439,086 | |||
Synthes Inc. | 18,720 | 2,246,192 | |||
4,186,569 | |||||
INSURANCE – 8.34% | |||||
Swiss Reinsurance Co. | 48,160 | 3,092,159 | |||
Zurich Financial Services AG1 | 20,006 | 3,524,439 | |||
6,616,598 | |||||
LEISURE TIME – 0.02% | |||||
Kuoni Reisen Holding AG Registered1 | 37 | 14,282 | |||
14,282 | |||||
MACHINERY – 0.43% | |||||
Rieter Holding AG | 521 | 155,250 | |||
SIG Holding AG | 731 | 183,556 | |||
338,806 | |||||
MANUFACTURING – 0.39% | |||||
Sulzer AG Registered | 648 | 306,634 | |||
306,634 | |||||
PHARMACEUTICALS – 27.84% | |||||
Novartis AG | 242,666 | 11,724,020 | |||
Roche Holding AG Genusschein | 65,145 | 8,965,882 | |||
Serono SA | 2,116 | 1,397,271 | |||
22,087,173 | |||||
REAL ESTATE – 0.83% | |||||
PSP Swiss Property AG1 | 14,616 | 655,626 | |||
655,626 | |||||
RETAIL – 6.31% | |||||
Compagnie Financiere Richemont AG Class A | 72,000 | 2,720,489 | |||
Swatch Group (The) AG Class B2 | 7,821 | 1,081,373 | |||
Swatch Group (The) AG Registered | 24,749 | 703,069 | |||
Valora Holding AG Registered1 | 2,715 | 503,757 | |||
5,008,688 | |||||
SEMICONDUCTORS – 0.36% | |||||
Micronas Semiconductor Holding AG1 | 1,995 | 83,941 | |||
Unaxis Holding AG Class R1,2 | 1,404 | 199,703 | |||
283,644 |
SCHEDULESOF INVESTMENTS | 79 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SWITZERLAND INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
TELECOMMUNICATIONS – 2.62% | ||||||
Kudelski SA Bearer1,2 | 2,988 | $ | 120,617 | |||
Swisscom AG Registered | 5,844 | 1,959,687 | ||||
2,080,304 | ||||||
TOTAL COMMON STOCKS | 79,096,219 | |||||
SHORT-TERM INVESTMENTS – 1.59% | ||||||
CERTIFICATES OF DEPOSIT3 – 0.17% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% - 3.83%, 09/14/05 - 01/25/06 | $ | 7,911 | 7,911 | |||
Bank of Nova Scotia | ||||||
3.45% - 3.56%, 09/26/05 - 01/03/06 | 3,428 | 3,427 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 5,274 | 5,274 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 5,274 | 5,274 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 2,637 | 2,636 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 8,966 | 8,966 | ||||
Fortis Bank NY | ||||||
3.83% - 3.84%, 01/25/06 | 7,911 | 7,911 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 3,164 | 3,164 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 2,637 | 2,638 | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 2,637 | 2,637 | ||||
Societe Generale | ||||||
3.51% - 3.60%, 03/30/06 - 06/13/06 | 8,175 | 8,173 | ||||
Toronto-Dominion Bank | ||||||
2.66% - 3.94%, 09/14/05 - 07/10/06 | 18,723 | 18,723 | ||||
UBS AG | ||||||
2.67% - 3.40%, 11/09/05 - 12/15/05 | 4,219 | 4,220 | ||||
Security | Principal | Value | ||||
US Bank N.A. | ||||||
3.54%, 09/19/05 | $ | 13,185 | $ | 13,185 | ||
Washington Mutual Bank | ||||||
3.50% - 3.55%, 09/15/05 - 09/19/05 | 23,733 | 23,733 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 - 09/20/05 | 20,832 | 20,832 | ||||
138,704 | ||||||
COMMERCIAL PAPER3 – 0.35% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 10,548 | 10,540 | ||||
Amstel Funding Corp. | ||||||
3.49% - 3.91%, 09/15/05 - 02/15/06 | 11,128 | 11,069 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 5,274 | 5,274 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 5,981 | 5,977 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% - 3.49%, 09/09/05 - 09/21/05 | 8,702 | 8,691 | ||||
Bryant Park Funding LLC | ||||||
3.51% - 3.92%, 09/06/05 - 02/22/06 | 2,684 | 2,658 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 2,028 | 2,015 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 3,692 | 3,685 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 1,582 | 1,580 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 527 | 519 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 3,955 | 3,954 | ||||
Fairway Finance LLC | ||||||
3.15% - 3.56%, 09/15/05 - 10/20/05 | 6,801 | 6,796 | ||||
Ford Credit Floorplan Motown | ||||||
3.47% - 3.72%, 09/09/05 - 11/08/05 | 23,995 | 23,886 |
80 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SWITZERLAND INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | $ | 8,461 | $ | 8,457 | ||
Georgetown Funding Co. LLC | ||||||
3.49% - 3.53%, 09/20/05 - 09/21/05 | 17,140 | 17,107 | ||||
Giro Funding Corp. | ||||||
3.53% - 3.56%, 09/16/05 - 09/22/05 | 3,955 | 3,949 | ||||
Grampian Funding LLC | ||||||
3.13% - 3.84%, 09/09/05 - 01/31/06 | 8,175 | 8,087 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% - 3.53%, 09/02/05 - 02/10/06 | 6,065 | 6,065 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 1,582 | 1,556 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 2,990 | 2,984 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 - 02/21/064 | 5,537 | 5,537 | ||||
Lockhart Funding LLC | ||||||
3.47% - 3.55%, 09/16/05 - 09/19/05 | 7,270 | 7,259 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% - 3.51%, 09/01/05 - 09/21/05 | 12,921 | 12,905 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 18,459 | 18,459 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 2,975 | 2,970 | ||||
Park Granada LLC | ||||||
3.48% - 3.51%, 09/15/05 - 09/20/05 | 7,141 | 7,130 | ||||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 5,274 | 5,177 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 10,548 | 10,542 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 1,318 | 1,294 | ||||
Security | Shares or Principal | Value | ||||
Solitaire Funding Ltd. | ||||||
3.49% - 3.52%, 09/02/05 - 09/06/05 | $ | 15,506 | $ | 15,501 | ||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 3,258 | 3,258 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 11,075 | 11,055 | ||||
Three Pillars Funding Corp. | ||||||
3.49% - 3.52%, 09/01/05 - 09/07/05 | 11,300 | 11,296 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 882 | 882 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 19,460 | 19,460 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 2,426 | 2,424 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 1,846 | 1,846 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 7,647 | 7,634 | ||||
279,478 | ||||||
MEDIUM-TERM NOTES3 – 0.01% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/064 | 1,635 | 1,635 | ||||
K2 USA LLC | ||||||
3.94%, 07/07/064 | 3,164 | 3,164 | ||||
4,799 | ||||||
MONEY MARKET FUNDS – 0.08% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares 3.63%3,5,6 | 21,096 | 21,096 | ||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 3.56%5,6 | 41,664 | 41,664 | ||||
BlackRock Temp Cash Money Market Fund 3.41%3,6 | 559 | 559 |
SCHEDULESOF INVESTMENTS | 81 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SWITZERLAND INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
Short Term Investments Co.- Prime Money Market Portfolio, Institutional Shares 3.50%3,6 | 1,849 | $ | 1,849 | |||
65,168 | ||||||
REPURCHASE AGREEMENTS3 – 0.30% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $126,589 and an effective yield of 3.60%.7 | $ | 126,576 | 126,576 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $97,579 and an effective yield of 3.60%.7 | 97,569 | 97,569 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $11,498 and an effective yield of 3.60%.7 | 11,497 | 11,497 | ||||
235,642 | ||||||
TIME DEPOSITS3 – 0.06% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | 10,548 | 10,548 | ||||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 29,007 | 29,007 | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 6,963 | 6,963 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/058 | 2,637 | 2,637 | ||||
49,155 | ||||||
VARIABLE & FLOATING RATE NOTES3 – 0.62% | ||||||
Allstate Life Global Funding II | ||||||
3.58% - 3.66%, 07/08/06 - 07/27/064 | 9,810 | 9,810 | ||||
American Express Bank | ||||||
3.55% - 3.63%, 10/17/05 - 07/19/06 | 14,240 | 14,239 | ||||
Security | Principal | Value | ||||
American Express Centurion Bank | ||||||
3.55% - 3.63%, 06/29/06 - 07/19/06 | $ | 8,702 | $ | 8,702 | ||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 10,548 | 10,549 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/064 | 5,274 | 5,281 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/064 | 3,428 | 3,428 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 26,370 | 26,370 | ||||
Beta Finance Inc. | ||||||
3.51% - 3.72%, 09/23/05 - 06/09/064 | 27,108 | 27,107 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/064 | 5,274 | 5,274 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% - 3.61%, 09/13/05 - 12/14/05 | 17,932 | 17,931 | ||||
CC USA Inc. | ||||||
3.52% - 3.59%, 03/23/06 - 07/14/064 | 14,187 | 14,185 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/054 | 1,318 | 1,318 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 13,185 | 13,185 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 5,274 | 5,274 | ||||
Dorada Finance Inc. | ||||||
3.59% - 3.62%, 03/27/06 - 06/26/064 | 8,386 | 8,386 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/064 | 5,274 | 5,274 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/064 | 10,548 | 10,548 | ||||
Five Finance Inc. | ||||||
3.60% - 3.63%, 02/27/06 - 06/26/064 | 3,692 | 3,692 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 2,373 | 2,375 |
82 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SWITZERLAND INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
Hartford Life Global Funding Trust | |||||||
3.56%, 08/15/06 | $ | 5,274 | $ | 5,274 | |||
HBOS Treasury Services PLC | |||||||
3.51% - 3.57%, 01/10/06 - 04/24/064 | 15,822 | 15,822 | |||||
HSBC Bank USA N.A. | |||||||
3.70%, 05/04/06 | 1,846 | 1,847 | |||||
K2 USA LLC | |||||||
3.47% - 3.58%, 09/12/05 - 06/02/064 | 20,569 | 20,569 | |||||
Links Finance LLC | |||||||
3.52% - 3.71%, 11/16/05 - 03/15/064 | 20,569 | 20,571 | |||||
Lothian Mortgages PLC | |||||||
3.63%, 01/24/06 | 5,274 | 5,274 | |||||
Marshall & Ilsley Bank | |||||||
3.71%, 02/20/06 | 5,274 | 5,277 | |||||
Metropolitan Life Global Funding I | |||||||
3.55% - 4.01%, 08/28/06 - 09/06/064 | 10,548 | 10,553 | |||||
National City Bank (Ohio) | |||||||
3.50%, 01/06/06 | 2,637 | 2,637 | |||||
Nationwide Building Society | |||||||
3.51% - 3.62%, 01/13/06 - 07/07/064 | 19,514 | 19,515 | |||||
Nordea Bank AB | |||||||
3.55%, 08/11/064 | 9,229 | 9,229 | |||||
Northern Rock PLC | |||||||
3.54% - 3.61%, 10/25/05 - 08/03/064 | 16,877 | 16,877 | |||||
Permanent Financing PLC | |||||||
3.53% - 3.54%, 09/12/05 - 06/12/064 | 20,305 | 20,304 | |||||
Principal Life Income Funding Trusts | |||||||
3.74%, 05/10/06 | 3,955 | 3,956 | |||||
Royal Bank of Scotland | |||||||
3.47% - 3.61%, 04/05/06 - 08/30/06 | 17,602 | 17,598 | |||||
Sedna Finance Inc. | |||||||
3.54%, 01/10/06 - 01/17/064 | 2,901 | 2,901 | |||||
Sigma Finance Inc. | |||||||
3.50% - 3.72%, 09/15/05 - 08/15/064 | 30,114 | 30,117 | |||||
Skandinaviska Enskilda Bank NY | |||||||
3.58%, 07/18/064 | 5,274 | 5,274 | |||||
Strips III LLC | |||||||
3.69%, 07/24/064,8 | 1,549 | 1,549 | |||||
SunTrust Bank | |||||||
3.63%, 04/28/06 | 7,911 | 7,911 | |||||
Tango Finance Corp. | |||||||
3.54% - 3.60%, 09/15/05 - 06/21/064 | 12,816 | 12,815 | |||||
Toyota Motor Credit Corp. | |||||||
3.57%, 04/10/06 | 2,373 | 2,373 | |||||
Unicredito Italiano SpA | |||||||
3.34%, 06/14/06 | 6,856 | 6,854 | |||||
Wachovia Asset Securitization Inc. | |||||||
3.63%, 09/25/054 | 12,696 | 12,696 | |||||
Wells Fargo & Co. | |||||||
3.56%, 09/15/064 | 2,637 | 2,637 | |||||
WhistleJacket Capital LLC | |||||||
3.52% - 3.62%, 09/15/05 - 07/28/064 | 21,096 | 21,095 | |||||
White Pine Finance LLC | |||||||
3.47% - 3.61%, 11/01/05 - 06/20/064 | 11,128 | 11,129 | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/054 | 3,766 | 3,766 | |||||
489,348 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 1,262,294 | ||||||
TOTAL INVESTMENTS | 80,358,513 | ||||||
Other Assets, Less Liabilities – (1.30)% | (1,034,345 | ) | |||||
NET ASSETS – 100.00% | $ | 79,324,168 | |||||
SCHEDULESOF INVESTMENTS | 83 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SWITZERLAND INDEX FUND
August 31, 2005
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 (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
4 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
6 | The rate quoted is the annualized seven-day yield of the fund at period end. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
8 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
84 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 99.23% | |||||
ADVERTISING – 0.60% | |||||
Aegis Group PLC | 218,116 | $ | 455,059 | ||
WPP Group PLC | 226,920 | 2,338,568 | |||
2,793,627 | |||||
AEROSPACE & DEFENSE – 1.38% | |||||
BAE Systems PLC | 608,840 | 3,583,483 | |||
Cobham PLC | 219,480 | 546,723 | |||
Meggitt PLC | 87,048 | 483,380 | |||
Rolls-Royce Group PLC1 | 297,972 | 1,808,722 | |||
6,422,308 | |||||
AGRICULTURE – 2.53% | |||||
British American Tobacco PLC | 302,808 | 6,077,907 | |||
Gallaher Group PLC | 122,140 | 1,856,253 | |||
Imperial Tobacco Group PLC | 138,136 | 3,826,045 | |||
11,760,205 | |||||
AIRLINES – 0.12% | |||||
British Airways PLC1 | 108,252 | 539,796 | |||
539,796 | |||||
AUTO PARTS & EQUIPMENT– 0.15% | |||||
GKN PLC | 135,904 | 702,737 | |||
TI Automotive Ltd. Class A1,2 | 52,283 | — | |||
702,737 | |||||
BANKS – 18.09% | |||||
Barclays PLC3 | 1,223,880 | 12,172,688 | |||
HBOS PLC | 738,668 | 11,551,580 | |||
HSBC Holdings PLC | 2,123,996 | 34,113,609 | |||
Lloyds TSB Group PLC | 1,060,696 | 8,699,180 | |||
Royal Bank of Scotland Group PLC | 602,640 | 17,569,665 | |||
84,106,722 | |||||
BEVERAGES – 2.61% | |||||
Diageo PLC | 563,828 | 8,031,457 | |||
SABMiller PLC | 167,276 | 2,943,859 | |||
Scottish & Newcastle PLC | 141,360 | 1,167,611 | |||
12,142,927 | |||||
BUILDING MATERIALS – 0.80% | |||||
BPB PLC | 92,752 | 1,220,282 | |||
Hanson PLC | 136,028 | 1,415,319 | |||
Pilkington PLC | 189,100 | 448,940 | |||
Travis Perkins PLC | 22,692 | 639,535 | |||
3,724,076 | |||||
CHEMICALS – 0.80% | |||||
BOC Group PLC | 93,124 | 1,753,601 | |||
Imperial Chemical Industries PLC | 221,216 | 1,150,833 | |||
Johnson Matthey PLC | 40,796 | 831,323 | |||
3,735,757 | |||||
COMMERCIAL SERVICES – 1.45% | |||||
Aggreko PLC | 46,996 | 176,868 | |||
Brambles Industries PLC | 133,920 | 796,650 | |||
Bunzl PLC | 68,865 | 675,641 | |||
Capita Group PLC | 122,636 | 803,415 | |||
Davis Service Group PLC | 33,893 | 269,893 | |||
De La Rue PLC | 31,920 | 207,823 | |||
Group 4 Securicor PLC1 | 219,852 | 609,927 | |||
Hays PLC | 318,928 | 751,426 | |||
Intertek Group PLC | 31,372 | 425,720 | |||
Rank Group PLC | 120,032 | 613,109 | |||
Rentokil Initial PLC | 335,916 | 978,742 | |||
Serco Group PLC | 91,760 | 443,119 | |||
6,752,333 | |||||
COMPUTERS – 0.10% | |||||
LogicaCMG PLC | 143,096 | 458,110 | |||
458,110 | |||||
DISTRIBUTION & WHOLESALE – 0.61% | |||||
Inchcape PLC | 14,632 | 544,749 | |||
Wolseley PLC | 112,468 | 2,281,711 | |||
2,826,460 | |||||
DIVERSIFIED FINANCIAL SERVICES – 1.11% | |||||
AMVESCAP PLC | 141,236 | 932,253 | |||
Cattles PLC | 62,744 | 328,388 | |||
Close Brothers Group PLC | 23,808 | 340,846 | |||
ICAP PLC | 95,356 | 544,092 | |||
London Stock Exchange PLC | 49,957 | 509,450 | |||
Man Group PLC | 54,560 | 1,614,220 | |||
Provident Financial PLC | 46,996 | 541,803 | |||
Schroders PLC | 23,560 | 369,288 | |||
5,180,340 | |||||
ELECTRIC – 2.59% | |||||
International Power PLC1 | 273,668 | 1,145,609 |
SCHEDULESOF INVESTMENTS | 85 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2005
Security | Shares | Value | |||
National Grid PLC | 511,996 | $ | 4,825,256 | ||
Scottish & Southern Energy PLC | 163,060 | 2,891,658 | |||
Scottish Power PLC | 353,896 | 3,192,046 | |||
12,054,569 | |||||
ELECTRONICS – 0.13% | |||||
Electrocomponents PLC | 79,484 | 374,902 | |||
Premier Farnell PLC | 77,376 | 244,930 | |||
619,832 | |||||
ENGINEERING & CONSTRUCTION – 0.67% | |||||
AMEC PLC | 60,636 | 392,605 | |||
BAA PLC | 204,848 | 2,252,946 | |||
Balfour Beatty PLC | 81,716 | 486,839 | |||
3,132,390 | |||||
ENTERTAINMENT – 0.68% | |||||
EMI Group PLC | 145,948 | 680,518 | |||
Hilton Group PLC | 305,288 | 1,726,843 | |||
William Hill PLC | 72,912 | 769,768 | |||
3,177,129 | |||||
FOOD – 4.26% | |||||
Cadbury Schweppes PLC | 392,832 | 3,864,708 | |||
J Sainsbury PLC | 253,084 | 1,289,309 | |||
Tate & Lyle PLC | 89,900 | 744,581 | |||
Tesco PLC | 1,475,600 | 8,658,481 | |||
Unilever PLC | 522,040 | 5,234,451 | |||
19,791,530 | |||||
FOOD SERVICE – 0.39% | |||||
Compass Group PLC | 401,884 | 1,801,600 | |||
1,801,600 | |||||
GAS – 0.69% | |||||
Centrica PLC | 709,404 | 3,186,557 | |||
3,186,557 | |||||
HEALTH CARE – PRODUCTS – 0.40% | |||||
Smith & Nephew PLC | 174,964 | 1,674,106 | |||
SSL International PLC | 35,340 | 181,784 | |||
1,855,890 | |||||
HOLDING COMPANIES – DIVERSIFIED – 0.16% | |||||
Tomkins PLC | 143,096 | 723,197 | |||
723,197 | |||||
HOME BUILDERS – 0.75% | |||||
Barratt Developments PLC | 44,268 | 562,901 | |||
Bellway PLC | 22,692 | 355,070 | |||
Berkeley Group Holdings (The) PLC1 | 21,452 | 334,703 | |||
Bovis Homes Group PLC | 24,552 | 272,234 | |||
Persimmon PLC4 | 50,716 | 755,718 | |||
Taylor Woodrow PLC | 111,476 | 641,083 | |||
Wimpey (George) PLC | 74,772 | 551,709 | |||
3,473,418 | |||||
HOME FURNISHINGS – 0.06% | |||||
MFI Furniture Group PLC | 124,000 | 257,588 | |||
257,588 | |||||
HOUSEHOLD PRODUCTS & WARES – 0.79% | |||||
Reckitt Benckiser PLC | 118,172 | 3,647,156 | |||
3,647,156 | |||||
INSURANCE – 2.99% | |||||
Aviva PLC | 446,896 | 4,923,059 | |||
Britannic Group PLC | 38,812 | 437,679 | |||
Friends Provident PLC | 361,088 | 1,128,393 | |||
Legal & General Group PLC | 1,214,952 | 2,430,982 | |||
Prudential PLC | 448,756 | 4,085,995 | |||
Royal & Sun Alliance Insurance Group PLC | 539,772 | 900,423 | |||
13,906,531 | |||||
IRON & STEEL – 0.15% | |||||
Corus Group PLC1 | 820,260 | 700,757 | |||
700,757 | |||||
LEISURE TIME – 0.42% | |||||
Carnival PLC | 31,744 | 1,640,287 | |||
First Choice Holidays PLC | 88,908 | 323,809 | |||
1,964,096 | |||||
LODGING – 0.24% | |||||
InterContinental Hotels Group PLC | 84,568 | 1,136,185 | |||
1,136,185 | |||||
MANUFACTURING – 0.75% | |||||
BBA Group PLC | 89,528 | 493,528 | |||
Cookson Group PLC1 | 38,480 | 223,369 | |||
FKI PLC | 120,652 | 230,019 | |||
IMI PLC | 68,200 | 540,935 | |||
Invensys PLC1 | 1,120,113 | 297,150 |
86 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2005
Security | Shares | Value | |||
Smiths Group PLC | 104,904 | $ | 1,712,226 | ||
3,497,227 | |||||
MEDIA – 2.89% | |||||
British Sky Broadcasting Group PLC | 230,020 | 2,358,104 | |||
Daily Mail & General Trust PLC Class A | 58,776 | 697,696 | |||
EMAP PLC | 47,492 | 692,730 | |||
ITV PLC | 763,344 | 1,599,443 | |||
Pearson PLC | 149,668 | 1,798,158 | |||
Reed Elsevier PLC | 242,792 | 2,270,703 | |||
Reuters Group PLC | 267,716 | 1,753,866 | |||
Trinity Mirror PLC | 57,660 | 642,967 | |||
United Business Media PLC | 54,738 | 548,853 | |||
Yell Group | 130,696 | 1,061,898 | |||
13,424,418 | |||||
MINING – 4.47% | |||||
Anglo American PLC | 267,716 | 6,750,639 | |||
BHP Billiton PLC | 465,496 | 6,898,675 | |||
Rio Tinto PLC | 202,740 | 7,143,259 | |||
20,792,573 | |||||
OIL & GAS – 20.38% | |||||
BG Group PLC | 667,244 | 5,994,358 | |||
BP PLC | 4,008,548 | 45,564,510 | |||
Royal Dutch Shell PLC Class A | 783,680 | 25,511,727 | |||
Royal Dutch Shell PLC Class B | 522,536 | 17,677,772 | |||
94,748,367 | |||||
PACKAGING & CONTAINERS – 0.20% | |||||
Rexam PLC | 102,176 | 924,816 | |||
924,816 | |||||
PHARMACEUTICALS – 8.90% | |||||
Alliance Unichem PLC | 46,376 | 688,129 | |||
AstraZeneca PLC | 308,388 | 14,032,676 | |||
GlaxoSmithKline PLC | 1,106,576 | 26,649,210 | |||
41,370,015 | |||||
REAL ESTATE – 1.45% | |||||
British Land Co. PLC | 96,596 | 1,535,797 | |||
Brixton PLC | 52,948 | 355,445 | |||
Great Portland Estates PLC | 28,768 | 189,630 | |||
Hammerson PLC | 51,336 | 830,050 | |||
Land Securities Group PLC | 87,296 | 2,227,918 | |||
Liberty International PLC | 46,996 | 817,776 | |||
Slough Estates PLC | 81,716 | 804,662 | |||
6,761,278 | |||||
RETAIL – 3.32% | |||||
Boots Group PLC | 136,648 | 1,516,390 | |||
Dixons Group PLC | 353,648 | 962,031 | |||
Enterprise Inns PLC | 64,852 | 963,443 | |||
GUS PLC | 190,464 | 3,117,287 | |||
HMV Group PLC | 75,020 | 339,342 | |||
Kesa Electricals PLC | 97,216 | 458,101 | |||
Kingfisher PLC | 437,968 | 1,979,115 | |||
Marks & Spencer Group PLC | 308,884 | 1,981,901 | |||
Mitchells & Butlers PLC | 95,108 | 624,784 | |||
Next PLC | 48,484 | 1,314,990 | |||
Punch Taverns PLC | 48,856 | 676,599 | |||
Signet Group PLC | 342,736 | 671,906 | |||
Whitbread PLC | 47,368 | 847,252 | |||
15,453,141 | |||||
SEMICONDUCTORS – 0.12% | |||||
ARM Holdings PLC | 259,284 | 536,286 | |||
536,286 | |||||
SOFTWARE – 0.37% | |||||
iSOFT Group PLC | 43,028 | 353,276 | |||
Misys PLC | 90,520 | 367,939 | |||
Sage Group PLC | 237,956 | 977,925 | |||
1,699,140 | |||||
TELECOMMUNICATIONS – 8.72% | |||||
BT Group PLC | 1,607,536 | 6,230,609 | |||
Cable & Wireless PLC | 458,056 | 1,246,053 | |||
Marconi Corp. PLC1 | 39,680 | 201,253 | |||
Vodafone Group PLC | 12,036,060 | 32,850,014 | |||
40,527,929 | |||||
TRANSPORTATION – 0.82% | |||||
Arriva PLC | 37,200 | 378,354 | |||
Associated British Ports Holdings PLC | 56,916 | 473,188 | |||
Exel PLC | 55,304 | 999,643 | |||
FirstGroup PLC | 72,664 | 409,059 | |||
National Express Group PLC | 26,660 | 395,582 |
SCHEDULESOF INVESTMENTS | 87 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
Peninsular & Oriental Steam Navigation Co. (The) | 144,088 | $ | 821,504 | |||
Stagecoach Group PLC | 160,323 | 311,417 | ||||
3,788,747 | ||||||
VENTURE CAPITAL – 0.29% | ||||||
3i Group PLC | 107,632 | 1,357,974 | ||||
1,357,974 | ||||||
WATER – 0.83% | ||||||
Kelda Group PLC | 69,688 | 849,161 | ||||
Severn Trent PLC | 64,356 | 1,126,223 | ||||
United Utilities PLC | 161,820 | 1,861,209 | ||||
3,836,593 | ||||||
TOTAL COMMON STOCKS | 461,292,327 | |||||
SHORT-TERM INVESTMENTS – 0.18% | ||||||
CERTIFICATES OF DEPOSIT5 – 0.02% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% - 3.83%, 09/14/05 - 01/25/06 | $ | 5,177 | 5,177 | |||
Bank of Nova Scotia | ||||||
3.45% - 3.56%, 09/26/05 - 01/03/06 | 2,243 | 2,243 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 3,451 | 3,451 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 3,451 | 3,451 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 1,726 | 1,725 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 5,867 | 5,867 | ||||
Fortis Bank NY | ||||||
3.83% - 3.84%, 01/25/06 | 5,177 | 5,177 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 2,071 | 2,071 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 1,726 | 1,726 | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 1,726 | 1,725 | ||||
Security | Principal | Value | ||||
Societe Generale | ||||||
3.51% - 3.60%, 03/30/06 - 06/13/06 | $ | 5,349 | $ | 5,349 | ||
Toronto-Dominion Bank | ||||||
2.66% - 3.94%, 09/14/05 - 07/10/06 | 12,252 | 12,252 | ||||
UBS AG | ||||||
2.67% - 3.40%, 11/09/05 - 12/15/05 | 2,761 | 2,761 | ||||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 8,628 | 8,628 | ||||
Washington Mutual Bank | ||||||
3.50% - 3.55%, 09/15/05 - 09/19/05 | 15,531 | 15,531 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 - 09/20/05 | 13,633 | 13,633 | ||||
90,767 | ||||||
COMMERCIAL PAPER5 – 0.04% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 6,903 | 6,897 | ||||
Amstel Funding Corp. | ||||||
3.49% - 3.91%, 09/15/05 - 02/15/06 | 7,282 | 7,243 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 3,451 | 3,451 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 3,914 | 3,912 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% - 3.49%, 09/09/05 - 09/21/05 | 5,695 | 5,688 | ||||
Bryant Park Funding LLC | ||||||
3.51% - 3.92%, 09/06/05 - 02/22/06 | 1,757 | 1,740 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 1,327 | 1,319 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 2,416 | 2,411 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 1,035 | 1,034 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 345 | 340 |
88 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | $ | 2,588 | $ | 2,587 | ||
Fairway Finance LLC | ||||||
3.15% - 3.56%, 09/15/05 - 10/20/05 | 4,451 | 4,446 | ||||
Ford Credit Floorplan Motown | ||||||
3.47% - 3.72%, 09/09/05 - 11/08/05 | 15,702 | 15,631 | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 5,537 | 5,534 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% - 3.53%, 09/20/05 - 09/21/05 | 11,217 | 11,195 | ||||
Giro Funding Corp. | ||||||
3.53% - 3.56%, 09/16/05 - 09/22/05 | 2,588 | 2,584 | ||||
Grampian Funding LLC | ||||||
3.13% - 3.84%, 09/09/05 - 01/31/06 | 5,350 | 5,292 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% - 3.53%, 09/02/05 - 02/10/06 | 3,969 | 3,969 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 1,035 | 1,018 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 1,956 | 1,953 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 - 02/21/066 | 3,624 | 3,623 | ||||
Lockhart Funding LLC | ||||||
3.47% - 3.55%, 09/16/05 - 09/19/05 | 4,757 | 4,750 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% - 3.51%, 09/01/05 - 09/21/05 | 8,456 | 8,445 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 12,080 | 12,080 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 1,947 | 1,943 | ||||
Park Granada LLC | ||||||
3.48% - 3.51%, 09/15/05 - 09/20/05 | 4,673 | 4,666 | ||||
Security | Shares or Principal | Value | ||||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | $ | 3,451 | $ | 3,388 | ||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 6,903 | 6,899 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 863 | 847 | ||||
Solitaire Funding Ltd. | ||||||
3.49% - 3.52%, 09/02/05 - 09/06/05 | 10,147 | 10,144 | ||||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 2,132 | 2,132 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 7,248 | 7,234 | ||||
Three Pillars Funding Corp. | ||||||
3.49% - 3.52%, 09/01/05 - 09/07/05 | 7,395 | 7,392 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 577 | 577 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 12,734 | 12,734 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 1,588 | 1,586 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 1,208 | 1,208 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 5,004 | 4,996 | ||||
182,888 | ||||||
MEDIUM-TERM NOTES5 – 0.00% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/066 | 1,070 | 1,070 | ||||
K2 USA LLC | ||||||
3.94%, 07/07/066 | 2,071 | 2,071 | ||||
3,141 | ||||||
MONEY MARKET FUNDS – 0.01% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares 3.63%3,5,7 | 13,805 | 13,805 |
SCHEDULESOF INVESTMENTS | 89 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 3.56%3,7 | 28,399 | $ | 28,399 | |||
BlackRock Temp Cash Money Market Fund 3.41%5,7 | 366 | 366 | ||||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares 3.50%5,7 | 1,210 | 1,210 | ||||
43,780 | ||||||
REPURCHASE AGREEMENTS5 – 0.03% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $82,839 and an effective yield of 3.60%.8 | $ | 82,831 | 82,831 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $63,855 and an effective yield of 3.60%.8 | 63,849 | 63,849 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $7,525 and an effective yield of 3.60%.8 | 7,524 | 7,524 | ||||
154,204 | ||||||
TIME DEPOSITS5 – 0.01% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | 6,903 | 6,903 | ||||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 18,982 | 18,982 | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 4,556 | 4,556 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/059 | 1,726 | 1,726 | ||||
32,167 | ||||||
Security | Principal | Value | ||||
VARIABLE & FLOATING RATE NOTES5 – 0.07% | ||||||
Allstate Life Global Funding II | ||||||
3.58% - 3.66%, 07/08/06 - 07/27/066 | $ | 6,419 | $ | 6,420 | ||
American Express Bank | ||||||
3.55% - 3.63%, 10/17/05 - 07/19/06 | 9,318 | 9,318 | ||||
American Express Centurion Bank | ||||||
3.55% - 3.63%, 06/29/06 - 07/19/06 | 5,695 | 5,695 | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 6,903 | 6,903 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/066 | 3,451 | 3,456 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/066 | 2,243 | 2,243 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 17,256 | 17,256 | ||||
Beta Finance Inc. | ||||||
3.51% - 3.72%, 09/23/05 - 06/09/066 | 17,740 | 17,739 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/066 | 3,451 | 3,451 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% - 3.61%, 09/13/05 - 12/14/05 | 11,734 | 11,734 | ||||
CC USA Inc. | ||||||
3.52% - 3.59%, 03/23/06 - 07/14/066 | 9,284 | 9,284 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/056 | 863 | 863 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 8,628 | 8,628 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 3,451 | 3,451 | ||||
Dorada Finance Inc. | ||||||
3.59% - 3.62%, 03/27/06 - 06/26/066 | 5,488 | 5,488 |
90 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/066 | $ | 3,451 | $ | 3,451 | ||
Fifth Third Bancorp | ||||||
3.58%, 04/21/066 | 6,903 | 6,903 | ||||
Five Finance Inc. | ||||||
3.60% - 3.63%, 02/27/06 - 06/26/066 | 2,416 | 2,416 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 1,553 | 1,554 | ||||
Hartford Life Global Funding Trust | ||||||
3.56%, 08/15/06 | 3,451 | 3,451 | ||||
HBOS Treasury Services PLC | ||||||
3.51% - 3.57%, 01/10/06 - 04/24/066 | 10,354 | 10,353 | ||||
HSBC Bank USA N.A. | ||||||
3.70%, 05/04/06 | 1,208 | 1,209 | ||||
K2 USA LLC | ||||||
3.47% - 3.58%, 09/12/05 - 06/02/066 | 13,460 | 13,460 | ||||
Links Finance LLC | ||||||
3.52% - 3.71%, 11/16/05 - 03/15/066 | 13,460 | 13,462 | ||||
Lothian Mortgages PLC | ||||||
3.63%, 01/24/06 | 3,451 | 3,451 | ||||
Marshall & Ilsley Bank | ||||||
3.71%, 02/20/06 | 3,451 | 3,453 | ||||
Metropolitan Life Global Funding I | ||||||
3.55% - 4.01%, 08/28/06 - 09/06/066 | 6,903 | 6,906 | ||||
National City Bank (Ohio) | ||||||
3.50%, 01/06/06 | 1,726 | 1,725 | ||||
Nationwide Building Society | ||||||
3.51% - 3.62%, 01/13/06 - 07/07/066 | 12,770 | 12,771 | ||||
Nordea Bank AB | ||||||
3.55%, 08/11/066 | 6,040 | 6,040 | ||||
Northern Rock PLC | ||||||
3.54% - 3.61%, 10/25/05 - 08/03/066 | 11,044 | 11,045 | ||||
Permanent Financing PLC | ||||||
3.53% - 3.54%, 09/12/05 - 06/12/066 | 13,287 | 13,287 | ||||
Principal Life Income Funding Trusts | ||||||
3.74%, 05/10/06 | 2,588 | 2,589 | ||||
Royal Bank of Scotland | ||||||
3.47% - 3.61%, 04/05/06 - 08/30/06 | 11,519 | 11,516 | ||||
Sedna Finance Inc. | ||||||
3.54%, 01/10/06 - 01/17/066 | 1,898 | 1,898 | ||||
Sigma Finance Inc. | ||||||
3.50% - 3.72%, 09/15/05 - 08/15/066 | 19,707 | 19,709 | ||||
Skandinaviska Enskilda Bank NY | ||||||
3.58%, 07/18/066 | 3,451 | 3,451 | ||||
Strips III LLC | ||||||
3.69%, 07/24/066,9 | 1,014 | 1,014 | ||||
SunTrust Bank | ||||||
3.63%, 04/28/06 | 5,177 | 5,177 | ||||
Tango Finance Corp. | ||||||
3.54% - 3.60%, 09/15/05 - 06/21/066 | 8,387 | 8,386 | ||||
Toyota Motor Credit Corp. | ||||||
3.57%, 04/10/06 | 1,553 | 1,553 | ||||
Unicredito Italiano SpA | ||||||
3.34%, 06/14/06 | 4,487 | 4,485 | ||||
Wachovia Asset Securitization Inc. | ||||||
3.63%, 09/25/056 | 8,308 | 8,309 | ||||
Wells Fargo & Co. | ||||||
3.56%, 09/15/066 | 1,726 | 1,726 | ||||
WhistleJacket Capital LLC | ||||||
3.52% - 3.62%, 09/15/05 - 07/28/066 | 13,805 | 13,804 | ||||
White Pine Finance LLC | ||||||
3.47% - 3.61%, 11/01/05 - 06/20/066 | 7,282 | 7,282 | ||||
Winston Funding Ltd. | ||||||
3.71%, 10/23/056 | 2,464 | 2,464 | ||||
320,229 | ||||||
SCHEDULESOF INVESTMENTS | 91 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2005
Value | |||
TOTAL SHORT-TERM INVESTMENTS | $ | 827,176 | |
TOTAL INVESTMENTS IN SECURITIES – 99.41% | 462,119,503 | ||
Other Assets, Less Liabilities – 0.59% | 2,730,826 | ||
NET ASSETS – 100.00% | $ | 464,850,329 | |
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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
4 | All or a portion of this security represents a security on loan. See Note 5. |
5 | All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
6 | This security or a portion of these securities is 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 | The rate quoted is the annualized seven-day yield of the fund at period end. |
8 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
9 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
92 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 2005
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 | $ | 179,336,127 | $ | 63,796,587 | $ | 658,638,283 | $ | 103,485,386 | $ | 360,783,137 | $ | 52,634,083 | ||||||||||||
Affiliated issuersa | $ | 470,745 | $ | 321,987 | $ | 3,351,991 | $ | 679,048 | $ | 994,963 | $ | 330,386 | ||||||||||||
Foreign currencies, at cost | $ | 92,921 | $ | 6,385 | $ | 983,521 | $ | 75,356 | $ | 192,929 | $ | 49,100 | ||||||||||||
Investments in securities, at value (including securities on loanb) (Note 1): | ||||||||||||||||||||||||
Unaffiliated issuers | $ | 222,148,147 | $ | 64,738,701 | $ | 736,252,577 | $ | 111,229,799 | $ | 369,271,511 | $ | 61,000,919 | ||||||||||||
Affiliated issuersa | 470,745 | 321,987 | 3,351,991 | 679,048 | 994,963 | 330,386 | ||||||||||||||||||
Foreign currencies, at value | 94,953 | 6,533 | 992,741 | 76,012 | 195,783 | 50,140 | ||||||||||||||||||
Receivables: | ||||||||||||||||||||||||
Investment securities sold | 11,360,914 | 635,252 | 3,486,714 | 503,547 | 3,529,696 | 2,100,990 | ||||||||||||||||||
Dividends and interest | 287,282 | 361,055 | 693,121 | 114,546 | 92,947 | 69,025 | ||||||||||||||||||
Total Assets | 234,362,041 | 66,063,528 | 744,777,144 | 112,602,952 | 374,084,900 | 63,551,460 | ||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Payables: | ||||||||||||||||||||||||
Investment securities purchased | 10,159,871 | 603,205 | 3,989,133 | 652,182 | 3,518,307 | 2,115,597 | ||||||||||||||||||
Collateral for securities on loan (Note 5) | 27,100,365 | 18,477,539 | 193,236,992 | 30,587,618 | 55,621,647 | 18,889,185 | ||||||||||||||||||
Capital shares redeemed | 51,736 | — | — | — | — | — | ||||||||||||||||||
Investment advisory fees (Note 2) | 97,895 | 23,225 | 266,842 | 37,360 | 151,515 | 20,636 | ||||||||||||||||||
Total Liabilities | 37,409,867 | 19,103,969 | 197,492,967 | 31,277,160 | 59,291,469 | 21,025,418 | ||||||||||||||||||
NET ASSETS | $ | 196,952,174 | $ | 46,959,559 | $ | 547,284,177 | $ | 81,325,792 | $ | 314,793,431 | $ | 42,526,042 | ||||||||||||
Net assets consist of: | ||||||||||||||||||||||||
Paid-in capital | $ | 157,473,250 | $ | 46,981,952 | $ | 480,455,249 | $ | 79,767,840 | $ | 342,004,155 | $ | 39,068,310 | ||||||||||||
Undistributed net investment income | 1,903,837 | 1,784,303 | 10,321,106 | 1,092,730 | 2,547,987 | 1,061,531 | ||||||||||||||||||
Accumulated net realized loss | (5,298,777 | ) | (2,746,729 | ) | (21,115,935 | ) | (7,280,253 | ) | (38,246,530 | ) | (5,986,954 | ) | ||||||||||||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies | 42,873,864 | 940,033 | 77,623,757 | 7,745,475 | 8,487,819 | 8,383,155 | ||||||||||||||||||
NET ASSETS | $ | 196,952,174 | $ | 46,959,559 | $ | 547,284,177 | $ | 81,325,792 | $ | 314,793,431 | $ | 42,526,042 | ||||||||||||
Shares outstanding | 7,400,000 | 2,480,000 | 7,300,000 | 3,200,000 | 16,500,000 | 1,650,000 | ||||||||||||||||||
Net asset value per share | $ | 26.62 | $ | 18.94 | $ | 74.97 | $ | 25.41 | $ | 19.08 | $ | 25.77 | ||||||||||||
a | The Funds’ investment adviser is an affiliate of the issuers. See Note 2. |
b | Securities on loan with market values of $25,800,814, $17,588,248, $183,688,759, $29,118,363, $52,953,681 and $17,914,520, respectively. See Note 5. |
See notes to the financial statements.
FINANCIAL STATEMENTS | 93 |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2005
iShares MSCI | ||||||||||||||||||||
Netherlands Index Fund | Spain Index Fund | Sweden Index Fund | Switzerland Index Fund | United Index Fund | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Investments, at cost: | ||||||||||||||||||||
Unaffiliated issuers | $ | 72,378,560 | $ | 65,519,577 | $ | 68,889,975 | $ | 69,365,595 | $ | 409,817,923 | ||||||||||
Affiliated issuersa | $ | 177,044 | $ | 229,135 | $ | 352,455 | $ | 62,760 | $ | 11,177,268 | ||||||||||
Foreign currencies, at cost | $ | 114,188 | $ | 82,569 | $ | 41,581 | $ | 61,243 | $ | 860,032 | ||||||||||
Investments in securities, at value (including securities on loanb) (Note 1): | ||||||||||||||||||||
Unaffiliated issuers | $ | 73,657,348 | $ | 79,605,360 | $ | 81,124,860 | $ | 80,295,753 | $ | 449,904,611 | ||||||||||
Affiliated issuersa | 177,044 | 229,135 | 352,455 | 62,760 | 12,214,892 | |||||||||||||||
Foreign currencies, at value | 114,859 | 82,813 | 40,765 | 62,780 | 862,131 | |||||||||||||||
Receivables: | ||||||||||||||||||||
Investment securities sold | — | 272,786 | 163,663 | — | 962,872 | |||||||||||||||
Dividends and interest | 206,088 | 8,213 | 3,816 | 158,667 | 3,193,482 | |||||||||||||||
Total Assets | 74,155,339 | 80,198,307 | 81,685,559 | 80,579,960 | 467,137,988 | |||||||||||||||
LIABILITIES | ||||||||||||||||||||
Payables: | ||||||||||||||||||||
Investment securities purchased | — | 293,923 | 164,692 | — | 1,257,639 | |||||||||||||||
Collateral for securities on loan (Note 5) | 10,150,138 | 12,926,609 | 19,978,213 | 1,220,630 | 798,777 | |||||||||||||||
Investment advisory fees (Note 2) | 31,191 | 32,717 | 30,148 | 35,162 | 231,243 | |||||||||||||||
Total Liabilities | 10,181,329 | 13,253,249 | 20,173,053 | 1,255,792 | 2,287,659 | |||||||||||||||
NET ASSETS | $ | 63,974,010 | $ | 66,945,058 | $ | 61,512,506 | $ | 79,324,168 | $ | 464,850,329 | ||||||||||
Net assets consist of: | ||||||||||||||||||||
Paid-in capital | $ | 69,971,517 | $ | 55,853,019 | $ | 55,272,237 | $ | 74,634,396 | $ | 447,365,743 | ||||||||||
Undistributed net investment income | 1,453,405 | 1,109,161 | 1,228,454 | 771,673 | 13,056,804 | |||||||||||||||
Accumulated net realized loss | (8,731,080 | ) | (4,102,964 | ) | (7,222,280 | ) | (7,013,371 | ) | (36,703,887 | ) | ||||||||||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies | 1,280,168 | 14,085,842 | 12,234,095 | 10,931,470 | 41,131,669 | |||||||||||||||
NET ASSETS | $ | 63,974,010 | $ | 66,945,058 | $ | 61,512,506 | $ | 79,324,168 | $ | 464,850,329 | ||||||||||
Shares outstanding | 3,350,000 | 1,875,000 | 2,850,000 | 4,500,000 | 24,800,000 | |||||||||||||||
Net asset value per share | $ | 19.10 | $ | 35.70 | $ | 21.58 | $ | 17.63 | $ | 18.74 | ||||||||||
a | The Funds’ investment adviser is an affiliate of the issuers. See Note 2. |
b | Securities on loan with market values of $9,653,681, $12,291,309, $18,987,996, $1,162,382 and $755,718, respectively. See Note 5. |
See notes to the financial statements.
94 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations
iSHARES®, INC.
Year Ended August 31, 2005
iShares MSCI | ||||||||||||||||||||||||
Austria Index Fund | Belgium Index Fund | EMU Index Fund | France Index Fund | Germany Index Fund | Italy Index Fund | |||||||||||||||||||
NET INVESTMENT INCOME | ||||||||||||||||||||||||
Dividendsa | $ | 2,815,125 | $ | 2,264,979 | $ | 13,910,631 | $ | 1,529,281 | $ | 3,383,768 | $ | 1,328,186 | ||||||||||||
Interest from affiliated issuersb | 2,556 | 993 | 4,176 | 801 | 1,770 | 397 | ||||||||||||||||||
Securities lending incomec | 37,314 | 51,426 | 594,149 | 73,467 | 174,555 | 50,871 | ||||||||||||||||||
Total investment income | 2,854,995 | 2,317,398 | 14,508,956 | 1,603,549 | 3,560,093 | 1,379,454 | ||||||||||||||||||
EXPENSES | ||||||||||||||||||||||||
Investment advisory fees (Note 2) | 891,196 | 298,236 | 2,700,971 | 360,949 | 966,395 | 211,190 | ||||||||||||||||||
Foreign taxes (Note 1) | — | — | 48,825 | — | — | — | ||||||||||||||||||
Total expenses | 891,196 | 298,236 | 2,749,796 | 360,949 | 966,395 | 211,190 | ||||||||||||||||||
Net investment income | 1,963,799 | 2,019,162 | 11,759,160 | 1,242,600 | 2,593,698 | 1,168,264 | ||||||||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||||||||||
Investments | (1,835,744 | ) | (21,584 | ) | (4,414,579 | ) | (765,287 | ) | (4,751,457 | ) | (734,558 | ) | ||||||||||||
In-kind redemptions | 24,342,828 | 7,017,381 | 16,417,287 | 5,873,067 | — | — | ||||||||||||||||||
Foreign currency transactions | (52,533 | ) | (52,351 | ) | (226,223 | ) | (35,873 | ) | (45,711 | ) | (30,240 | ) | ||||||||||||
Net realized gain (loss) | 22,454,551 | 6,943,446 | 11,776,485 | 5,071,907 | (4,797,168 | ) | (764,798 | ) | ||||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||||||
Investments | 30,867,737 | 1,061 | 76,330,376 | 9,119,174 | 40,529,403 | 7,986,384 | ||||||||||||||||||
Translation of assets and liabilities in foreign currencies | 62,516 | (5,283 | ) | 28,867 | 17,022 | 5,347 | 2,299 | |||||||||||||||||
Net change in unrealized appreciation (depreciation) | 30,930,253 | (4,222 | ) | 76,359,243 | 9,136,196 | 40,534,750 | 7,988,683 | |||||||||||||||||
Net realized and unrealized gain | 53,384,804 | 6,939,224 | 88,135,728 | 14,208,103 | 35,737,582 | 7,223,885 | ||||||||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 55,348,603 | $ | 8,958,386 | $ | 99,894,888 | $ | 15,450,703 | $ | 38,331,280 | $ | 8,392,149 | ||||||||||||
a | Net of foreign withholding tax of $440,591, $244,984, $745,655, $83,554, $192,687 and $83,362, respectively. |
b | The Funds’ investment adviser is an affiliate of the issuers. See Note 2. |
c | Includes income earned from issuers of which the Funds’ investment adviser is an affiliate. See Note 2. |
See notes to the financial statements.
FINANCIAL STATEMENTS | 95 |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year Ended August 31, 2005
iShares MSCI | |||||||||||||||||||
Netherlands Index Fund | Spain Index Fund | Sweden Index Fund | Switzerland Index Fund | United Kingdom Index Fund | |||||||||||||||
NET INVESTMENT INCOME | |||||||||||||||||||
Dividendsa | $ | 1,703,103 | $ | 1,675,707 | $ | 1,498,021 | $ | 1,090,187 | $ | 19,431,203 | |||||||||
Dividends from affiliated issuersb | — | — | — | — | 735,841 | ||||||||||||||
Interest from affiliated issuersb | 561 | 674 | 366 | 1,061 | 3,132 | ||||||||||||||
Securities lending incomec | 34,278 | 60,713 | 68,520 | 13,439 | 28,858 | ||||||||||||||
Total investment income | 1,737,942 | 1,737,094 | 1,566,907 | 1,104,687 | 20,199,034 | ||||||||||||||
EXPENSES | |||||||||||||||||||
Investment advisory fees (Note 2) | 269,795 | 343,145 | 315,269 | 330,809 | 2,930,931 | ||||||||||||||
Foreign taxes (Note 1) | — | — | 2,514 | — | — | ||||||||||||||
Total expenses | 269,795 | 343,145 | 317,783 | 330,809 | 2,930,931 | ||||||||||||||
Net investment income | 1,468,147 | 1,393,949 | 1,249,124 | 773,878 | 17,268,103 | ||||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | |||||||||||||||||||
Net realized gain (loss) from: | |||||||||||||||||||
Investments | (550,628 | ) | 533,891 | (160,581 | ) | 264,654 | (10,764,439 | ) | |||||||||||
Investments in affiliated issuersb | — | — | — | — | 1,809 | ||||||||||||||
In-kind redemptions | 1,651,292 | 6,546,984 | 1,479,493 | 1,037,446 | 48,446,691 | ||||||||||||||
Foreign currency transactions | (12,085 | ) | 9,467 | (20,670 | ) | (2,203 | ) | (201,524 | ) | ||||||||||
Net realized gain | 1,088,579 | 7,090,342 | 1,298,242 | 1,299,897 | 37,482,537 | ||||||||||||||
Net change in unrealized appreciation (depreciation) on: | |||||||||||||||||||
Investments | 4,966,794 | 5,675,806 | 7,896,684 | 7,739,638 | 44,225,265 | ||||||||||||||
Translation of assets and liabilities in foreign currencies | 1,342 | 435 | (637 | ) | (8,175 | ) | 49,489 | ||||||||||||
Net change in unrealized appreciation (depreciation) | 4,968,136 | 5,676,241 | 7,896,047 | 7,731,463 | 44,274,754 | ||||||||||||||
Net realized and unrealized gain | 6,056,715 | 12,766,583 | 9,194,289 | 9,031,360 | 81,757,291 | ||||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 7,524,862 | $ | 14,160,532 | $ | 10,443,413 | $ | 9,805,238 | $ | 99,025,394 | |||||||||
a | Net of foreign withholding tax of $102,137, $75,980, $112,122, $140,278 and $34,516, respectively. |
b | The Funds’ investment adviser is an affiliate of the issuers. See Note 2. |
c | Includes income earned from issuers of which the Funds’ investment adviser is an affiliate. See Note 2. |
See notes to the financial statements.
96 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
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 August 31, 2005 | For the year ended August 31, 2004 | For the year ended August 31, 2005 | For the year ended August 31, 2004 | For the year ended August 31, 2005 | For the year ended August 31, 2004 | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income | $ | 1,963,799 | $ | 498,538 | $ | 2,019,162 | $ | 525,871 | $ | 11,759,160 | $ | 6,589,669 | ||||||||||||
Net realized gain | 22,454,551 | 3,919,431 | 6,943,446 | 2,236,862 | 11,776,485 | 8,857,335 | ||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 30,930,253 | 8,637,559 | (4,222 | ) | 2,626,962 | 76,359,243 | 19,792,119 | |||||||||||||||||
Net increase in net assets resulting from operations | 55,348,603 | 13,055,528 | 8,958,386 | 5,389,695 | 99,894,888 | 35,239,123 | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||||||||||
From net investment income | (642,119 | ) | (272,938 | ) | (821,720 | ) | (884,836 | ) | (7,926,598 | ) | (3,047,220 | ) | ||||||||||||
Total distributions to shareholders | (642,119 | ) | (272,938 | ) | (821,720 | ) | (884,836 | ) | (7,926,598 | ) | (3,047,220 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Proceeds from shares sold | 143,898,493 | 32,913,587 | 45,733,499 | 19,364,816 | 174,100,562 | 175,480,082 | ||||||||||||||||||
Cost of shares redeemed | (59,573,023 | ) | (10,064,261 | ) | (31,723,211 | ) | (20,928,283 | ) | (45,390,429 | ) | (46,454,697 | ) | ||||||||||||
Net increase (decrease) in net assets from capital share transactions | 84,325,470 | 22,849,326 | 14,010,288 | (1,563,467 | ) | 128,710,133 | 129,025,385 | |||||||||||||||||
INCREASE IN NET ASSETS | 139,031,954 | 35,631,916 | 22,146,954 | 2,941,392 | 220,678,423 | 161,217,288 | ||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 57,920,220 | 22,288,304 | 24,812,605 | 21,871,213 | 326,605,754 | 165,388,466 | ||||||||||||||||||
End of year | $ | 196,952,174 | $ | 57,920,220 | $ | 46,959,559 | $ | 24,812,605 | $ | 547,284,177 | $ | 326,605,754 | ||||||||||||
Undistributed net investment income included in net assets at end of year | $ | 1,903,837 | $ | 480,630 | $ | 1,784,303 | $ | 533,300 | $ | 10,321,106 | $ | 6,691,251 | ||||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 6,600,000 | 2,100,000 | 2,560,000 | 1,360,000 | 2,450,000 | 2,950,000 | ||||||||||||||||||
Shares redeemed | (2,600,000 | ) | (800,000 | ) | (1,760,000 | ) | (1,640,000 | ) | (650,000 | ) | (750,000 | ) | ||||||||||||
Net increase (decrease) in shares outstanding | 4,000,000 | 1,300,000 | 800,000 | (280,000 | ) | 1,800,000 | 2,200,000 | |||||||||||||||||
See notes to the financial statements.
FINANCIAL STATEMENTS | 97 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI France Index Fund | iShares MSCI Germany Index Fund | iShares MSCI Italy Index Fund | ||||||||||||||||||||||
For the 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 | $ | 1,242,600 | $ | 698,891 | $ | 2,593,698 | $ | 1,574,590 | $ | 1,168,264 | $ | 777,612 | ||||||||||||
Net realized gain (loss) | 5,071,907 | 1,787,933 | (4,797,168 | ) | 9,845,575 | (764,798 | ) | 449,897 | ||||||||||||||||
Net change in unrealized appreciation (depreciation) | 9,136,196 | 8,599,182 | 40,534,750 | 9,717,674 | 7,988,683 | 4,880,596 | ||||||||||||||||||
Net increase in net assets resulting from operations | 15,450,703 | 11,086,006 | 38,331,280 | 21,137,839 | 8,392,149 | 6,108,105 | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||||||||||
From net investment income | (838,342 | ) | (794,879 | ) | (1,573,473 | ) | (1,804,102 | ) | (869,122 | ) | (824,876 | ) | ||||||||||||
Total distributions to shareholders | (838,342 | ) | (794,879 | ) | (1,573,473 | ) | (1,804,102 | ) | (869,122 | ) | (824,876 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Proceeds from shares sold | 23,987,143 | 4,101,648 | 179,271,889 | 37,742,897 | 7,723,603 | — | ||||||||||||||||||
Cost of shares redeemed | (18,474,473 | ) | (7,267,190 | ) | — | (60,113,109 | ) | — | (8,001,044 | ) | ||||||||||||||
Net increase (decrease) in net assets from capital share transactions | 5,512,670 | (3,165,542 | ) | 179,271,889 | (22,370,212 | ) | 7,723,603 | (8,001,044 | ) | |||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | 20,125,031 | 7,125,585 | 216,029,696 | (3,036,475 | ) | 15,246,630 | (2,717,815 | ) | ||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 61,200,761 | 54,075,176 | 98,763,735 | 101,800,210 | 27,279,412 | 29,997,227 | ||||||||||||||||||
End of year | $ | 81,325,792 | $ | 61,200,761 | $ | 314,793,431 | $ | 98,763,735 | $ | 42,526,042 | $ | 27,279,412 | ||||||||||||
Undistributed net investment income included in net assets at end of year | $ | 1,092,730 | $ | 724,345 | $ | 2,547,987 | $ | 1,573,473 | $ | 1,061,531 | $ | 792,629 | ||||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 1,000,000 | 200,000 | 9,900,000 | 2,400,000 | 300,000 | — | ||||||||||||||||||
Shares redeemed | (800,000 | ) | (400,000 | ) | — | (3,900,000 | ) | — | (450,000 | ) | ||||||||||||||
Net increase (decrease) in shares outstanding | 200,000 | (200,000 | ) | 9,900,000 | (1,500,000 | ) | 300,000 | (450,000 | ) | |||||||||||||||
See notes to the financial statements.
98 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Netherlands Index Fund | iShares MSCI Spain Index Fund | iShares MSCI Sweden Index Fund | ||||||||||||||||||||||
For the 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 | $ | 1,468,147 | $ | 547,447 | $ | 1,393,949 | $ | 782,782 | $ | 1,249,124 | $ | 420,927 | ||||||||||||
Net realized gain (loss) | 1,088,579 | (220,571 | ) | 7,090,342 | 3,958,943 | 1,298,242 | 15,743 | |||||||||||||||||
Net change in unrealized appreciation (depreciation) | 4,968,136 | 1,720,975 | 5,676,241 | 5,008,839 | 7,896,047 | 5,562,688 | ||||||||||||||||||
Net increase in net assets resulting from operations | 7,524,862 | 2,047,851 | 14,160,532 | 9,750,564 | 10,443,413 | 5,999,358 | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||||||||||
From net investment income | (561,271 | ) | (480,580 | ) | (1,053,358 | ) | (464,559 | ) | (420,504 | ) | (332,115 | ) | ||||||||||||
Total distributions to shareholders | (561,271 | ) | (480,580 | ) | (1,053,358 | ) | (464,559 | ) | (420,504 | ) | (332,115 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Proceeds from shares sold | 29,691,702 | 8,098,478 | 23,479,415 | 2,263,744 | 26,763,849 | 5,099,033 | ||||||||||||||||||
Cost of shares redeemed | (946,288 | ) | — | (15,097,858 | ) | (16,465,374 | ) | (3,032,449 | ) | — | ||||||||||||||
Net increase (decrease) in net assets from capital share transactions | 28,745,414 | 8,098,478 | 8,381,557 | (14,201,630 | ) | 23,731,400 | 5,099,033 | |||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | 35,709,005 | 9,665,749 | 21,488,731 | (4,915,625 | ) | 33,754,309 | 10,766,276 | |||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 28,265,005 | 18,599,256 | 45,456,327 | 50,371,952 | 27,758,197 | 16,991,921 | ||||||||||||||||||
End of year | $ | 63,974,010 | $ | 28,265,005 | $ | 66,945,058 | $ | 45,456,327 | $ | 61,512,506 | $ | 27,758,197 | ||||||||||||
Undistributed net investment income included in net assets at end of year | $ | 1,453,405 | $ | 558,614 | $ | 1,109,161 | $ | 759,103 | $ | 1,228,454 | $ | 420,504 | ||||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 1,600,000 | 500,000 | 675,000 | 75,000 | 1,350,000 | 300,000 | ||||||||||||||||||
Shares redeemed | (50,000 | ) | — | (450,000 | ) | (675,000 | ) | (150,000 | ) | — | ||||||||||||||
Net increase (decrease) in shares outstanding | 1,550,000 | 500,000 | 225,000 | (600,000 | ) | 1,200,000 | 300,000 | |||||||||||||||||
See notes to the financial statements.
FINANCIAL STATEMENTS | 99 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Switzerland Index Fund | iShares MSCI United Kingdom Index Fund | |||||||||||||||
For the year ended | For the year ended | For the year ended | For the year ended | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 773,878 | $ | 267,243 | $ | 17,268,103 | $ | 7,712,465 | ||||||||
Net realized gain (loss) | 1,299,897 | (117,551 | ) | 37,482,537 | (2,229,963 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) | 7,731,463 | 6,459,446 | 44,274,754 | 28,384,261 | ||||||||||||
Net increase in net assets resulting from operations | 9,805,238 | 6,609,138 | 99,025,394 | 33,866,763 | ||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (269,799 | ) | (146,432 | ) | (10,962,863 | ) | (5,320,972 | ) | ||||||||
Total distributions to shareholders | (269,799 | ) | (146,432 | ) | (10,962,863 | ) | (5,320,972 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 31,861,760 | 3,722,134 | 96,935,420 | 281,527,046 | ||||||||||||
Cost of shares redeemed | (3,993,200 | ) | (1,907,959 | ) | (173,017,720 | ) | (8,011,981 | ) | ||||||||
Net increase (decrease) in net assets from capital share transactions | 27,868,560 | 1,814,175 | (76,082,300 | ) | 273,515,065 | |||||||||||
INCREASE IN NET ASSETS | 37,403,999 | 8,276,881 | 11,980,231 | 302,060,856 | ||||||||||||
NET ASSETS: | ||||||||||||||||
Beginning of year | 41,920,169 | 33,643,288 | 452,870,098 | 150,809,242 | ||||||||||||
End of year | $ | 79,324,168 | $ | 41,920,169 | $ | 464,850,329 | $ | 452,870,098 | ||||||||
Undistributed net investment income included in net assets at end of year | $ | 771,673 | $ | 269,799 | $ | 13,056,804 | $ | 6,931,580 | ||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||
Shares sold | 1,875,000 | 250,000 | 5,600,000 | 17,800,000 | ||||||||||||
Shares redeemed | (250,000 | ) | (125,000 | ) | (9,600,000 | ) | (600,000 | ) | ||||||||
Net increase (decrease) in shares outstanding | 1,625,000 | 125,000 | (4,000,000 | ) | 17,200,000 | |||||||||||
See notes to the financial statements.
100 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES®, INC .
(For a share outstanding throughout each period)
iShares MSCI Austria Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 17.04 | $ | 10.61 | $ | 8.19 | $ | 8.18 | $ | 7.67 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.29 | 0.21 | 0.09 | 0.13 | 0.13 | |||||||||||||||
Net realized and unrealized gain (loss) | 9.38 | 6.39 | 2.43 | (0.12 | ) | 0.52 | ||||||||||||||
Total from investment operations | 9.67 | 6.60 | 2.52 | 0.01 | 0.65 | |||||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.09 | ) | (0.17 | ) | (0.10 | ) | — | (0.14 | ) | |||||||||||
Return of capital | — | — | — | — | (0.00 | )c | ||||||||||||||
Total distributions | (0.09 | ) | (0.17 | ) | (0.10 | ) | — | (0.14 | ) | |||||||||||
Net asset value, end of year | $ | 26.62 | $ | 17.04 | $ | 10.61 | $ | 8.19 | $ | 8.18 | ||||||||||
Total return | 56.82 | % | 62.70 | % | 31.15 | % | 0.12 | % | 8.41 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 196,952 | $ | 57,920 | $ | 22,288 | $ | 14,740 | $ | 11,447 | ||||||||||
Ratio of expenses to average net assets | 0.57 | % | 0.77 | % | 0.84 | % | 0.84 | % | 0.84 | %d | ||||||||||
Ratio of net investment income to average net assets | 1.26 | % | 1.37 | % | 0.98 | % | 1.57 | % | 1.69 | %e | ||||||||||
Portfolio turnover rateb | 21 | % | 11 | % | 26 | % | 32 | % | 66 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude 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 waived fees and reimbursed expenses for the year ended August 31, 2001 was 0.97%. |
e | Ratio of net investment income to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2001 was 1.55%. |
See notes to the financial statements.
FINANCIAL HIGHLIGHTS | 101 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Belgium Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 14.77 | $ | 11.16 | $ | 10.43 | $ | 11.81 | $ | 13.23 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.71 | 0.37 | 0.41 | 0.25 | 0.19 | |||||||||||||||
Net realized and unrealized gain (loss) | 3.75 | 4.25 | 0.43 | (1.56 | ) | (1.34 | ) | |||||||||||||
Total from investment operations | 4.46 | 4.62 | 0.84 | (1.31 | ) | (1.15 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.29 | ) | (1.01 | ) | (0.11 | ) | (0.07 | ) | (0.27 | ) | ||||||||||
Total distributions | (0.29 | ) | (1.01 | ) | (0.11 | ) | (0.07 | ) | (0.27 | ) | ||||||||||
Net asset value, end of year | $ | 18.94 | $ | 14.77 | $ | 11.16 | $ | 10.43 | $ | 11.81 | ||||||||||
Total return | 30.22 | % | 42.88 | % | 8.25 | % | (11.10 | )% | (8.72 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 46,960 | $ | 24,813 | $ | 21,871 | $ | 10,427 | $ | 9,918 | ||||||||||
Ratio of expenses to average net assets | 0.57 | % | 0.78 | % | 0.84 | % | 0.84 | % | 0.84 | %c | ||||||||||
Ratio of net investment income to average net assets | 3.89 | % | 2.79 | % | 4.10 | % | 2.26 | % | 1.60 | %d | ||||||||||
Portfolio turnover rateb | 10 | % | 21 | % | 8 | % | 18 | % | 36 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
c | Ratio of expenses to average net assets prior to waived fees and reimbursed expenses for the year ended August 31, 2001 was 0.87%. |
d | 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%. |
See notes to the financial statements.
102 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI EMU Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 59.38 | $ | 50.12 | $ | 46.02 | $ | 56.74 | $ | 76.02 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 1.76 | 1.36 | 0.93 | 0.75 | 0.72 | |||||||||||||||
Net realized and unrealized gain (loss) | 15.13 | 8.69 | 3.62 | (11.47 | ) | (19.32 | ) | |||||||||||||
Total from investment operations | 16.89 | 10.05 | 4.55 | (10.72 | ) | (18.60 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.30 | ) | (0.79 | ) | (0.45 | ) | — | (0.42 | ) | |||||||||||
Return of capital | — | — | — | — | (0.26 | ) | ||||||||||||||
Total distributions | (1.30 | ) | (0.79 | ) | (0.45 | ) | — | (0.68 | ) | |||||||||||
Net asset value, end of year | $ | 74.97 | $ | 59.38 | $ | 50.12 | $ | 46.02 | $ | 56.74 | ||||||||||
Total return | 28.54 | % | 20.07 | % | 10.05 | % | (18.89 | )% | (24.51 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 547,284 | $ | 326,606 | $ | 165,388 | $ | 131,168 | $ | 90,779 | ||||||||||
Ratio of expenses to average net assets | 0.58 | % | 0.79 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of expenses to average net assets exclusive of foreign taxes | 0.57 | % | 0.79 | % | n/a | n/a | n/a | |||||||||||||
Ratio of net investment income to average net assets | 2.50 | % | 2.29 | % | 2.08 | % | 1.44 | % | 1.13 | % | ||||||||||
Portfolio turnover rateb | 8 | % | 11 | % | 7 | % | 3 | % | 24 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to the financial statements.
FINANCIAL HIGHLIGHTS | 103 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI France Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 20.40 | $ | 16.90 | $ | 15.52 | $ | 19.53 | $ | 26.41 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.47 | 0.24 | 0.23 | 0.18 | 0.06 | |||||||||||||||
Net realized and unrealized gain (loss) | 4.84 | 3.54 | 1.33 | (4.19 | ) | (6.89 | ) | |||||||||||||
Total from investment operations | 5.31 | 3.78 | 1.56 | (4.01 | ) | (6.83 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.30 | ) | (0.28 | ) | (0.18 | ) | — | (0.04 | ) | |||||||||||
Net realized gain | — | — | — | — | (0.00 | )c | ||||||||||||||
Return of capital | — | — | — | — | (0.01 | ) | ||||||||||||||
Total distributions | (0.30 | ) | (0.28 | ) | (0.18 | ) | — | (0.05 | ) | |||||||||||
Net asset value, end of year | $ | 25.41 | $ | 20.40 | $ | 16.90 | $ | 15.52 | $ | 19.53 | ||||||||||
Total return | 26.13 | % | 22.44 | % | 10.22 | % | (20.53 | )% | (25.86 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 81,326 | $ | 61,201 | $ | 54,075 | $ | 49,674 | $ | 58,602 | ||||||||||
Ratio of expenses to average net assets | 0.57 | % | 0.79 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of net investment income to average net assets | 1.98 | % | 1.23 | % | 1.56 | % | 1.00 | % | 0.28 | % | ||||||||||
Portfolio turnover rateb | 7 | % | 9 | % | 9 | % | 3 | % | 14 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude 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 the financial statements.
104 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC .
(For a share outstanding throughout each period)
iShares MSCI Germany Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 14.96 | $ | 12.57 | $ | 12.07 | $ | 15.19 | $ | 20.46 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.28 | 0.19 | 0.21 | 0.11 | 0.18 | |||||||||||||||
Net realized and unrealized gain (loss) | 4.03 | 2.40 | 0.41 | (3.23 | ) | (5.26 | ) | |||||||||||||
Total from investment operations | 4.31 | 2.59 | 0.62 | (3.12 | ) | (5.08 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.19 | ) | (0.20 | ) | (0.12 | ) | — | (0.19 | ) | |||||||||||
Return of capital | — | — | — | — | (0.00 | )c | ||||||||||||||
Total distributions | (0.19 | ) | (0.20 | ) | (0.12 | ) | — | (0.19 | ) | |||||||||||
Net asset value, end of year | $ | 19.08 | $ | 14.96 | $ | 12.57 | $ | 12.07 | $ | 15.19 | ||||||||||
Total return | 28.89 | % | 20.55 | % | 5.39 | % | (20.54 | )% | (24.87 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 314,793 | $ | 98,764 | $ | 101,800 | $ | 94,160 | $ | 118,525 | ||||||||||
Ratio of expenses to average net assets | 0.57 | % | 0.80 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of net investment income to average net assets | 1.54 | % | 1.27 | % | 1.98 | % | 0.77 | % | 0.99 | % | ||||||||||
Portfolio turnover rateb | 9 | % | 9 | % | 11 | % | 9 | % | 20 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude 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 the financial statements.
FINANCIAL HIGHLIGHTS | 105 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Italy Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 20.21 | $ | 16.67 | $ | 15.15 | $ | 17.79 | $ | 22.23 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.78 | 0.56 | 0.43 | 0.37 | 0.24 | |||||||||||||||
Net realized and unrealized gain (loss) | 5.42 | 3.59 | 1.47 | (3.01 | ) | (4.37 | ) | |||||||||||||
Total from investment operations | 6.20 | 4.15 | 1.90 | (2.64 | ) | (4.13 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.64 | ) | (0.61 | ) | (0.38 | ) | — | (0.24 | ) | |||||||||||
Net realized gain | — | — | — | — | (0.07 | ) | ||||||||||||||
Return of capital | — | — | — | — | (0.00 | )c | ||||||||||||||
Total distributions | (0.64 | ) | (0.61 | ) | (0.38 | ) | — | (0.31 | ) | |||||||||||
Net asset value, end of year | $ | 25.77 | $ | 20.21 | $ | 16.67 | $ | 15.15 | $ | 17.79 | ||||||||||
Total return | 30.74 | % | 25.09 | % | 12.79 | % | (14.84 | )% | (18.61 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 42,526 | $ | 27,279 | $ | 29,997 | $ | 29,538 | $ | 34,682 | ||||||||||
Ratio of expenses to average net assets | 0.57 | % | 0.83 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of expenses to average net assets exclusive of foreign taxes | n/a | 0.79 | % | n/a | n/a | n/a | ||||||||||||||
Ratio of net investment income to average net assets | 3.18 | % | 2.85 | % | 2.84 | % | 2.34 | % | 1.16 | % | ||||||||||
Portfolio turnover rateb | 18 | % | 9 | % | 22 | % | 10 | % | 20 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude 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 the financial statements.
106 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Netherlands Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 15.70 | $ | 14.31 | $ | 14.69 | $ | 18.59 | $ | 23.53 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.57 | 0.39 | 0.30 | 0.25 | 0.28 | |||||||||||||||
Net realized and unrealized gain (loss) | 3.09 | 1.37 | (0.43 | ) | (4.11 | ) | (4.94 | ) | ||||||||||||
Total from investment operations | 3.66 | 1.76 | (0.13 | ) | (3.86 | ) | (4.66 | ) | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.26 | ) | (0.37 | ) | (0.25 | ) | (0.04 | ) | (0.28 | ) | ||||||||||
Total distributions | (0.26 | ) | (0.37 | ) | (0.25 | ) | (0.04 | ) | (0.28 | ) | ||||||||||
Net asset value, end of year | $ | 19.10 | $ | 15.70 | $ | 14.31 | $ | 14.69 | $ | 18.59 | ||||||||||
Total return | 23.40 | % | 12.28 | % | (0.78 | )% | (20.79 | )% | (19.83 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 63,974 | $ | 28,265 | $ | 18,599 | $ | 19,103 | $ | 24,184 | ||||||||||
Ratio of expenses to average net assets | 0.57 | % | 0.78 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of net investment income to average net assets | 3.13 | % | 2.45 | % | 2.37 | % | 1.48 | % | 1.34 | % | ||||||||||
Portfolio turnover rateb | 6 | % | 9 | % | 18 | % | 15 | % | 35 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to the financial statements.
FINANCIAL HIGHLIGHTS | 107 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Spain Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 27.55 | $ | 22.39 | $ | 17.95 | $ | 21.33 | $ | 24.19 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.79 | 0.44 | 0.24 | 0.17 | 0.19 | |||||||||||||||
Net realized and unrealized gain (loss) | 7.97 | 4.99 | 4.36 | (3.55 | ) | (2.89 | ) | |||||||||||||
Total from investment operations | 8.76 | 5.43 | 4.60 | (3.38 | ) | (2.70 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.61 | ) | (0.27 | ) | (0.16 | ) | — | (0.16 | ) | |||||||||||
Return of capital | — | — | — | — | (0.00 | )c | ||||||||||||||
Total distributions | (0.61 | ) | (0.27 | ) | (0.16 | ) | — | (0.16 | ) | |||||||||||
Net asset value, end of year | $ | 35.70 | $ | 27.55 | $ | 22.39 | $ | 17.95 | $ | 21.33 | ||||||||||
Total return | 31.85 | % | 24.28 | % | 25.81 | % | (15.85 | )% | (11.17 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 66,945 | $ | 45,456 | $ | 50,372 | $ | 18,850 | $ | 27,198 | ||||||||||
Ratio of expenses to average net assets | 0.57 | % | 0.80 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of net investment income to average net assets | 2.33 | % | 1.64 | % | 1.22 | % | 0.85 | % | 0.82 | % | ||||||||||
Portfolio turnover rateb | 8 | % | 6 | % | 17 | % | 14 | % | 26 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude 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 the financial statements.
108 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC .
(For a share outstanding throughout each period)
iShares MSCI Sweden Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 16.82 | $ | 12.59 | $ | 9.88 | $ | 12.88 | $ | 24.38 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.46 | 0.28 | 0.25 | 0.12 | 0.07 | |||||||||||||||
Net realized and unrealized gain (loss) | 4.45 | 4.20 | 2.58 | (3.12 | ) | (11.52 | ) | |||||||||||||
Total from investment operations | 4.91 | 4.48 | 2.83 | (3.00 | ) | (11.45 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.15 | ) | (0.25 | ) | (0.12 | ) | — | (0.05 | ) | |||||||||||
Return of capital | — | — | — | — | (0.00 | )c | ||||||||||||||
Total distributions | (0.15 | ) | (0.25 | ) | (0.12 | ) | — | (0.05 | ) | |||||||||||
Net asset value, end of year | $ | 21.58 | $ | 16.82 | $ | 12.59 | $ | 9.88 | $ | 12.88 | ||||||||||
Total return | 29.21 | % | 35.81 | % | 29.04 | % | (23.29 | )% | (46.99 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 61,513 | $ | 27,758 | $ | 16,992 | $ | 8,154 | $ | 10,630 | ||||||||||
Ratio of expenses to average net assets | 0.58 | % | 0.92 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of expenses to average net assets exclusive of foreign taxes | 0.57 | % | 0.79 | % | n/a | n/a | n/a | |||||||||||||
Ratio of net investment income to average net assets | 2.28 | % | 1.74 | % | 2.44 | % | 0.98 | % | 0.40 | % | ||||||||||
Portfolio turnover rateb | 6 | % | 9 | % | 12 | % | 31 | % | 43 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude 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 the financial statements.
FINANCIAL HIGHLIGHTS | 109 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Switzerland Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 14.58 | $ | 12.23 | $ | 11.59 | $ | 12.95 | $ | 15.54 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.22 | 0.09 | 0.05 | 0.03 | 0.04 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.92 | 2.31 | 0.62 | (1.38 | ) | (2.54 | ) | |||||||||||||
Total from investment operations | 3.14 | 2.40 | 0.67 | (1.35 | ) | (2.50 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.09 | ) | (0.05 | ) | (0.03 | ) | (0.01 | ) | (0.05 | ) | ||||||||||
Net realized gain | — | — | — | — | (0.04 | ) | ||||||||||||||
Total distributions | (0.09 | ) | (0.05 | ) | (0.03 | ) | (0.01 | ) | (0.09 | ) | ||||||||||
Net asset value, end of year | $ | 17.63 | $ | 14.58 | $ | 12.23 | $ | 11.59 | $ | 12.95 | ||||||||||
Total return | 21.54 | % | 19.56 | % | 5.89 | % | (10.47 | )% | (16.08 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 79,324 | $ | 41,920 | $ | 33,643 | $ | 31,883 | $ | 32,384 | ||||||||||
Ratio of expenses to average net assets | 0.57 | % | 0.79 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of net investment income to average net assets | 1.34 | % | 0.64 | % | 0.43 | % | 0.20 | % | 0.29 | % | ||||||||||
Portfolio turnover rateb | 5 | % | 4 | % | 10 | % | 12 | % | 34 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to the financial statements.
110 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC .
(For a share outstanding throughout each period)
iShares MSCI United Kingdom Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 15.72 | $ | 13.00 | $ | 12.77 | $ | 15.11 | $ | 18.35 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.60 | 0.48 | 0.39 | 0.48 | 0.26 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.76 | 2.72 | 0.12 | (2.60 | ) | (3.23 | ) | |||||||||||||
Total from investment operations | 3.36 | 3.20 | 0.51 | (2.12 | ) | (2.97 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.34 | ) | (0.48 | ) | (0.28 | ) | (0.22 | ) | (0.25 | ) | ||||||||||
Net realized gain | — | — | — | — | (0.02 | ) | ||||||||||||||
Total distributions | (0.34 | ) | (0.48 | ) | (0.28 | ) | (0.22 | ) | (0.27 | ) | ||||||||||
Net asset value, end of year | $ | 18.74 | $ | 15.72 | $ | 13.00 | $ | 12.77 | $ | 15.11 | ||||||||||
Total return | 21.53 | % | 24.77 | % | 4.20 | % | (14.19 | )% | (16.20 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 464,850 | $ | 452,870 | $ | 150,809 | $ | 120,067 | $ | 117,883 | ||||||||||
Ratio of expenses to average net assets | 0.57 | % | 0.77 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of net investment income to average net assets | 3.39 | % | 3.11 | % | 3.23 | % | 3.39 | % | 1.57 | % | ||||||||||
Portfolio turnover rateb | 11 | % | 6 | % | 6 | % | 14 | % | 30 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to the financial statements.
FINANCIAL HIGHLIGHTS | 111 |
Table of Contents
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, 2005, 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 uses 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 securities of 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; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets and the risk of war.
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 the financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
112 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes to the Financial Statements (Continued)
iSHARES®, INC .
SECURITY VALUATION
The securities and other assets of each Fund are generally valued using market valuations. A market valuation generally means a valuation (i) obtained from an exchange, a pricing service, or a major market maker (or dealer), (ii) based on a price quotation or other equivalent indication of value supplied by an exchange, a pricing service, or a major market maker (or dealer) or (iii) based on amortized cost. In the case of shares of other funds that are not traded on an exchange, a market valuation means such fund’s published net asset value per share. The investment adviser may use various pricing services or discontinue the use of any pricing service. A price obtained from a pricing service based on such pricing service’s valuation matrix may be considered a market valuation. In the event that current market valuations are not readily available or such valuations do not reflect current market values, the affected investments will be valued using fair value pricing pursuant to the pricing policy and procedures approved by the Board of Directors of the Company (the “Board”).
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source, 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. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Any use of a different rate from the rates used by MSCI may adversely affect a Fund’s ability to track its underlying index. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective date of such transactions.
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 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, 2005, the iShares MSCI EMU Index Fund and 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 Funds. The foreign taxes paid by the Funds 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 capital 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 | 113 |
Table of Contents
Notes to the Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2005, 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 | Capital and Other Losses | Net Distributable Earnings (Accumulated Losses) | ||||||||||
Austria | $ | 2,357,719 | $ | 41,942,462 | $ | (4,821,257 | ) | $ | 39,478,924 | |||||
Belgium | 2,145,588 | 406,558 | (2,574,539 | ) | (22,393 | ) | ||||||||
EMU | 11,061,377 | 66,025,825 | (10,258,274 | ) | 66,828,928 | |||||||||
France | 1,093,386 | 7,230,333 | (6,765,767 | ) | 1,557,952 | |||||||||
Germany | 2,745,191 | 433,894 | (30,389,809 | ) | (27,210,724 | ) | ||||||||
Italy | 1,062,571 | 8,141,272 | (5,746,111 | ) | 3,457,732 | |||||||||
Netherlands | 1,617,341 | 181,147 | (7,795,995 | ) | (5,997,507 | ) | ||||||||
Spain | 1,109,404 | 13,939,500 | (3,956,865 | ) | 11,092,039 | |||||||||
Sweden | 1,227,638 | 11,304,499 | (6,291,868 | ) | 6,240,269 | |||||||||
Switzerland | 773,209 | 10,295,706 | (6,379,143 | ) | 4,689,772 | |||||||||
United Kingdom | 13,081,964 | 33,685,294 | (29,282,672 | ) | 17,484,586 |
For the years ended August 31, 2005 and August 31, 2004, 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, 2005.
From November 1, 2004 to August 31, 2005, certain Funds incurred net realized capital losses. As permitted by tax regulations, these Funds have elected to defer these losses and treat them as arising in the year ending August 31, 2006, as follows:
iShares MSCI Index Fund | Deferred Net Realized | ||
Austria | $ | 1,416,383 | |
Belgium | 23,978 | ||
EMU | 548,433 | ||
France | 320,104 | ||
Germany | 358,629 | ||
Italy | 491,584 | ||
Netherlands | 403,525 | ||
Sweden | 125,932 | ||
United Kingdom | 7,096,922 |
114 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to the Financial Statements (Continued)
iSHARES®, INC.
The Funds had tax basis net capital loss carryforwards as of August 31, 2005, the tax year-end of the Funds, as follows:
iShares MSCI Index Fund | Expiring in 2008 | Expiring in 2009 | Expiring in 2010 | Expiring in 2011 | Expiring in 2012 | Expiring in 2013 | Total | ||||||||||||||
Austria | $ | 548,653 | $ | 336,553 | $ | 1,291,324 | $ | 370,948 | $ | 855,364 | $ | — | $ | 3,402,842 | |||||||
Belgium | 94,675 | 450,543 | 1,677,678 | 117,767 | 175,781 | 33,969 | 2,550,413 | ||||||||||||||
EMU | — | 443 | 1,923,552 | 1,144,756 | 4,757,907 | 1,873,963 | 9,700,621 | ||||||||||||||
France | — | — | 3,807,513 | 236,944 | 2,400,550 | — | 6,445,007 | ||||||||||||||
Germany | — | 86,860 | 13,573,336 | 5,469,732 | 8,656,712 | 2,241,687 | 30,028,327 | ||||||||||||||
Italy | — | — | 3,355,772 | 848,408 | 541,980 | 527,327 | 5,273,487 | ||||||||||||||
Netherlands | — | 60,885 | 3,222,792 | 1,497,810 | 2,481,175 | 129,137 | 7,391,799 | ||||||||||||||
Spain | — | — | 1,695,618 | 678,910 | 1,582,094 | — | 3,956,622 | ||||||||||||||
Sweden | — | 89,443 | 3,350,244 | 1,577,551 | 1,149,514 | — | 6,166,752 | ||||||||||||||
Switzerland | — | — | 2,855,879 | 1,018,305 | 2,149,171 | 354,252 | 6,377,607 | ||||||||||||||
United Kingdom | — | — | 9,945,254 | 6,448,554 | 4,272,059 | 1,517,783 | 22,183,650 |
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.
The Funds may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Funds may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such mark-to-market gains.
For the year ended August 31, 2005, the Funds reclassified certain amounts to paid-in-capital from accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss), respectively, as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, realized foreign currency gains and losses and gains and losses on in-kind redemptions. These reclassifications have no effect on net assets or net asset value per share.
As of August 31, 2005, 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 | |||||||||
Austria | $ | 180,738,274 | $ | 42,359,403 | $ | (478,785 | ) | $ | 41,880,618 | ||||
Belgium | 64,652,049 | 1,555,744 | (1,147,105 | ) | 408,639 | ||||||||
EMU | 673,588,206 | 73,844,099 | (7,827,737 | ) | 66,016,362 | ||||||||
France | 104,679,576 | 15,496,949 | (8,267,678 | ) | 7,229,271 | ||||||||
Germany | 369,832,025 | 21,640,259 | (21,205,810 | ) | 434,449 | ||||||||
Italy | 53,206,352 | 9,151,103 | (1,026,150 | ) | 8,124,953 | ||||||||
Netherlands | 73,654,625 | 1,552,472 | (1,372,705 | ) | 179,767 | ||||||||
Spain | 65,895,054 | 13,979,855 | (40,414 | ) | 13,939,441 | ||||||||
Sweden | 70,172,026 | 11,555,235 | (249,946 | ) | 11,305,289 | ||||||||
Switzerland | 70,064,119 | 11,867,950 | (1,573,556 | ) | 10,294,394 | ||||||||
United Kingdom | 428,441,566 | 43,222,092 | (9,544,155 | ) | 33,677,937 |
NOTESTOTHE FINANCIAL STATEMENTS | 115 |
Table of Contents
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 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. As of August 31, 2005, a portion of the cash collateral for securities on loan for the Funds 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, 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 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 execution of portfolio transactions, distribution fees and extraordinary expenses.
For its investment advisory services to each Fund, 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.
Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Funds are permitted to lend portfolio securities to Barclays Capital, Inc. (“BarCap”). Pursuant to the same exemptive order, BGI serves as securities lending agent for the Company. BarCap and BGI are affiliates 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, 2005, BGI earned securities lending agent fees as follows:
iShares MSCI Index Fund | Securities Lending Agent Fees | ||
Austria | $ | 37,314 | |
Belgium | 51,426 | ||
EMU | 594,149 | ||
France | 73,467 | ||
Germany | 174,555 | ||
Italy | 50,871 | ||
Netherlands | 34,278 | ||
Spain | 60,713 | ||
Sweden | 68,520 | ||
Switzerland | 13,439 | ||
United Kingdom | 28,858 |
116 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to the Financial Statements (Continued)
iSHARES ®, INC.
SEI Investments Distribution Co. (the “Distributor”) serves as each Fund’s underwriter and distributor of the shares of each Fund, pursuant to a Distribution Agreement with the Company. The Distributor does not currently receive a fee from the Funds for its distribution services. 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 of 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 did not execute any portfolio transactions with or on behalf of such Fund during the year ended August 31, 2005.
Pursuant to Rule 17a-7 under the 1940 Act, certain Funds executed cross trades for the year ended August 31, 2005. 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 by Rule 17a-7. The Board is scheduled at its next regularly scheduled meeting to review all such transactions executed during the last two months of the fiscal year.
Pursuant to an exemptive order issued by the SEC, each Fund may invest in the Institutional Shares of the Government Money Market Fund (“GMMF”), Institutional Money Market Fund (“IMMF”) and Prime Money Market Fund (“PMMF”) of Barclays Global Investors Funds. The GMMF, IMMF and PMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Government Money Market Master Portfolio, 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 GMMF, IMMF and PMMF are open-end money market funds available to institutional and accredited investors, including other investment companies managed by BGFA. The GMMF, IMMF and PMMF seek a high level of income consistent with liquidity and the preservation of capital. While the GMMF, 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 GMMF, 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 from affiliated issuers or securities lending income, respectively, in the accompanying Statements of Operations.
The following table provides information about the investment by each Fund in shares of issuers of which BGFA is an affiliate, for the year ended August 31, 2005, including income earned from these affiliated issuers and net realized gains from sales of these affiliated issuers.
iShares MSCI Index Fund and Name of Affiliated Issuer | Number of (in 000s) | Gross Additions (in 000s) | Gross Reductions (in 000s) | Number of Shares Held End of Year (in 000s) | Value at End of Year | Dividend And Interest Income | Net Realized Gain | ||||||||||
Austria | |||||||||||||||||
IMMF | 29 | 19,758 | 19,785 | 2 | $ | 2,373 | $ | 2,556 | $ | — | |||||||
Belgium | |||||||||||||||||
IMMF | 12 | 7,266 | 7,275 | 3 | 2,642 | 993 | — | ||||||||||
EMU | |||||||||||||||||
IMMF | 193 | 33,491 | 33,672 | 12 | 12,300 | 4,176 | — | ||||||||||
France | |||||||||||||||||
IMMF | 52 | 5,492 | 5,394 | 150 | 150,406 | 801 | — |
NOTESTOTHE FINANCIAL STATEMENTS | 117 |
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Notes to the Financial Statements (Continued)
iSHARES®, INC.
iShares MSCI Index Fund and Name of Affiliated Issuer | 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 | ||||||||||
Germany | |||||||||||||||||
IMMF | 69 | 12,876 | 12,911 | 34 | $ | 33,661 | $ | 1,770 | $ | — | |||||||
Italy | |||||||||||||||||
IMMF | 15 | 3,059 | 3,070 | 4 | 3,927 | 397 | — | ||||||||||
Netherlands | |||||||||||||||||
IMMF | 15 | 3,796 | 3,809 | 2 | 1,620 | 561 | — | ||||||||||
Spain | |||||||||||||||||
IMMF | 24 | 4,621 | 4,639 | 6 | 5,726 | 674 | — | ||||||||||
Sweden | |||||||||||||||||
IMMF | 15 | 2,784 | 2,792 | 7 | 7,174 | 366 | — | ||||||||||
Switzerland | |||||||||||||||||
IMMF | 22 | 8,491 | 8,471 | 42 | 41,664 | 1,061 | — | ||||||||||
United Kingdom | |||||||||||||||||
Barclays PLC | 1,510 | 338 | 624 | 1,224 | 12,173 | 735,841 | 1,809 | ||||||||||
IMMF | 283 | 23,584 | 23,839 | 28 | 28,399 | 3,132 | — |
During the year ended August 31, 2005, the Funds invested cash collateral from securities on loan in the GMMF, 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 Fund’s holdings of the GMMF, IMMF and PMMF in connection with the investment of collateral for securities on loan.
As of August 31, 2005, 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, 2005, were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||
Austria | $ | 31,580,662 | $ | 34,430,495 | ||
Belgium | 8,332,614 | 4,977,137 | ||||
EMU | 47,000,669 | 38,403,677 | ||||
France | 7,087,036 | 4,299,801 | ||||
Germany | 17,639,521 | 15,534,609 | ||||
Italy | 6,763,653 | 6,475,886 | ||||
Netherlands | 4,708,755 | 2,715,830 | ||||
Spain | 5,398,990 | 5,030,616 | ||||
Sweden | 4,078,768 | 3,261,991 | ||||
Switzerland | 3,529,477 | 2,820,278 | ||||
United Kingdom | 59,717,879 | 54,614,037 |
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Notes to the Financial Statements (Continued)
iSHARES®, INC.
In-kind transactions (see Note 4) for the year ended August 31, 2005, were as follows:
iShares MSCI Index Fund | In-kind Purchases | In-kind Sales | ||||
Austria | $ | 142,486,434 | $ | 55,346,450 | ||
Belgium | 45,601,301 | 34,157,545 | ||||
EMU | 188,532,097 | 62,742,303 | ||||
France | 22,717,286 | 18,394,404 | ||||
Germany | 178,114,817 | — | ||||
Italy | 7,705,709 | — | ||||
Netherlands | 40,979,230 | 13,339,574 | ||||
Spain | 23,444,179 | 15,068,052 | ||||
Sweden | 26,757,602 | 3,028,466 | ||||
Switzerland | 30,850,070 | 3,310,623 | ||||
United Kingdom | 96,396,302 | 171,642,362 |
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 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 contribution 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.
NOTESTOTHE FINANCIAL STATEMENTS | 119 |
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Notes to the Financial Statements (Continued)
iSHARES®, INC.
5. LOANS OF PORTFOLIO SECURITIES
Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by each Fund is required to have a value of at least 102% of the market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other 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, 2005, the Funds had loaned securities which were collateralized by cash. Pursuant to an exemptive order issued by the SEC, the cash collateral received was invested in a joint account with other funds managed by BGFA. The joint account 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 as of August 31, 2005 and the value of the related collateral 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.
120 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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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 Series (the “Funds”) at August 31, 2005, 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 five 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, 2005 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 18, 2005
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 121 |
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iSHARES®, INC.
For the year ended August 31, 2005, 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 | $ | 3,255,716 | $ | 433,818 | ||
Belgium | 2,509,962 | 244,697 | ||||
EMU | 14,656,286 | 719,648 | ||||
France | 1,612,835 | 81,176 | ||||
Germany | 3,576,454 | 192,687 | ||||
Italy | 1,411,550 | 77,493 | ||||
Netherlands | 1,805,240 | 94,731 | ||||
Spain | 1,751,687 | 73,273 | ||||
Sweden | 1,610,143 | 105,535 | ||||
Switzerland | 1,230,465 | 133,685 | ||||
United Kingdom | 20,201,560 | 34,516 |
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, 2005:
iShares MSCI Index Fund | Qualified Dividend Income | ||
Austria | $ | 2,798,966 | |
Belgium | 1,342,630 | ||
EMU | 4,179,807 | ||
France | 683,511 | ||
Germany | 1,298,086 | ||
Italy | 347,151 | ||
Netherlands | 695,397 | ||
Spain | 631,316 | ||
Sweden | 722,110 | ||
Switzerland | 906,896 | ||
United Kingdom | 17,081,687 |
In January 2006, shareholders will receive Form 1099-DIV which will include their share of qualified dividends distributed during the calendar year 2005. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
122 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Shareholder Meeting Results (Unaudited)
iSHARES®, INC.
A special meeting of shareholders of iShares, Inc. was scheduled on July 14, 2005 and subsequently adjourned until August 11, 2005. The proposals acted upon by shareholders at the special meeting and the results of the shareholder vote were as follows:
Proposal 1*
To elect the eight nominees specified below as Directors of the Company, each of whom will serve until his/her successor is duly elected or appointed and qualified.
Director | Votes For | Votes Withheld | ||
Lee T. Kranefuss | 514,380,779 | 13,203,425 | ||
John E. Martinez | 514,431,297 | 13,152,907 | ||
Richard K. Lyons | 514,795,814 | 12,788,388 | ||
George G.C. Parker | 509,155,829 | 18,428,374 | ||
W. Allen Reed | 514,418,913 | 13,165,293 | ||
Cecilia H. Herbert | 514,381,937 | 13,202,268 | ||
Charles A. Hurty | 514,442,567 | 13,141,638 | ||
John E. Kerrigan | 514,830,983 | 12,753,220 |
Messrs. Kranefuss, Martinez, Lyons, Reed and Parker previously served as Directors of the Company and were re-elected. Ms. Herbert and Messrs. Hurty and Kerrigan were newly elected.
Proposal 2A
To approve a change to the Company’s fundamental investment policy to simplify and conform each Fund’s investment restriction regarding issuing senior securities. The shareholders of the iShares MSCI Germany Index Fund, iShares MSCI Netherlands Index Fund and iShares MSCI Switzerland Index Fund did not approve this proposal.
iShares MSCI Index Fund | Votes For | Votes Against | Votes Abstaining | Broker Non-Votes** | ||||
Austria | 2,884,959 | 65,749 | 222,523 | 962,796 | ||||
Belgium | 1,482,566 | 43,740 | 74,902 | 405,883 | ||||
EMU | 2,734,892 | 98,272 | 103,919 | 1,075,723 | ||||
France | 828,162 | 178,236 | 7,055 | 200,710 | ||||
Germany | 2,368,605 | 181,068 | 79,215 | 2,566,569 | ||||
Italy | 622,042 | 14,930 | 5,521 | 185,045 | ||||
Netherlands | 838,057 | 76,143 | 17,348 | 636,422 | ||||
Spain | 683,738 | 55,673 | 28,147 | 175,573 | ||||
Sweden | 1,258,559 | 22,666 | 25,604 | 356,425 | ||||
Switzerland | 629,965 | 34,188 | 18,663 | 1,237,452 | ||||
United Kingdom | 9,639,753 | 2,284,284 | 94,975 | 1,614,899 |
SHAREHOLDER MEETING RESULTS | 123 |
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Shareholder Meeting Results (Unaudited) (Continued)
iSHARES®, INC.
Proposal 2B
To approve a change to the Company’s fundamental investment policy to simplify and conform each Fund’s investment restriction regarding the making of loans. The shareholders of the iShares MSCI Germany Index Fund, iShares MSCI Netherlands Index Fund and iShares MSCI Switzerland Index Fund did not approve this proposal.
iShares MSCI Index Fund | Votes For | Votes Against | Votes Abstaining | Broker Non-Votes** | ||||
Austria | 2,854,656 | 86,018 | 232,557 | 962,796 | ||||
Belgium | 1,477,907 | 49,352 | 73,948 | 405,884 | ||||
EMU | 2,730,274 | 103,167 | 103,642 | 1,075,723 | ||||
France | 827,194 | 179,954 | 6,305 | 200,710 | ||||
Germany | 2,367,398 | 187,739 | 73,750 | 2,566,570 | ||||
Italy | 621,869 | 15,103 | 5,521 | 185,045 | ||||
Netherlands | 837,912 | 76,288 | 17,348 | 636,422 | ||||
Spain | 683,239 | 56,041 | 28,277 | 175,574 | ||||
Sweden | 1,258,589 | 22,966 | 25,274 | 356,425 | ||||
Switzerland | 622,865 | 40,699 | 19,252 | 1,237,452 | ||||
United Kingdom | 9,628,318 | 2,294,895 | 95,799 | 1,614,899 |
Proposal 2C
This proposal did not apply to the Funds in this shareholder report.
Proposal 2D
This proposal did not apply to the Funds in this shareholder report.
Proposal 3
To approve a change in the classification of the investment objectives of certain Funds from fundamental to non-fundamental. The shareholders of the iShares MSCI Belgium Index Fund, iShares MSCI Italy Index Fund and iShares MSCI Sweden Index Fund approved this proposal. The proposal did not pass in the other Funds in this shareholder report.
iShares MSCI Index Fund | Votes For | Votes Against | Votes Abstaining | Broker Non-Votes** | ||||
Austria | 2,724,589 | 214,575 | 234,066 | 962,797 | ||||
Belgium | 1,453,881 | 70,905 | 76,422 | 405,883 | ||||
EMU | 2,472,672 | 361,541 | 102,870 | 1,075,723 | ||||
France | 720,634 | 286,514 | 6,305 | 200,710 | ||||
Germany | 2,243,543 | 304,700 | 80,645 | 2,566,569 | ||||
Italy | 601,385 | 35,557 | 5,551 | 185,045 | ||||
Netherlands | 826,664 | 87,536 | 17,348 | 636,422 | ||||
Spain | 625,676 | 112,595 | 29,287 | 175,573 | ||||
Sweden | 1,183,848 | 95,027 | 27,954 | 356,425 | ||||
Switzerland | 572,355 | 92,009 | 18,452 | 1,237,452 | ||||
United Kingdom | 8,486,421 | 3,434,447 | 98,144 | 1,614,899 |
124 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Shareholder | Meeting Results (Unaudited) (Continued) |
iSHARES®, INC.
Proposal 4
This | proposal did not apply to the Funds in this shareholder report. |
* | Denotes Company-wide proposal and voting results. |
** | Broker non-votes are proxies received by the Fund from brokers or nominees, who did not receive instructions from the beneficial owner or other persons entitled to vote, and who have no discretionary power to vote on a particular matter. Broker non-votes have the effect of a vote against the proposal. |
SHAREHOLDER MEETING RESULTS | 125 |
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Board Review and Approval of Investment Advisory Contracts* (Unaudited)
iSHARES®, INC.
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors, including a majority of Directors who are not interested persons of the Company (as that term is defined in the 1940 Act), who are commonly referred to as the “Independent Directors,” is required annually to consider each Fund’s Investment Advisory Contract with BGFA (each, an “Advisory Contract”). Pursuant to Section 15(c), the Board of Directors (the “Board”) is required to request and evaluate, and BGFA is required to provide, such information as may be reasonably necessary to evaluate the terms of the Advisory Contracts. At a meeting held on June 14, 2005, the Board approved the selection of BGFA and the continuance of the Advisory Contracts, based on its review of qualitative and quantitative information provided by BGFA. With respect to the iShares MSCI Singapore Index Fund (the “Singapore Fund”), the Board approved the continuance of the current Advisory Contract for the Singapore Fund, pending shareholder approval of the new advisory contract for the Singapore Fund which was previously considered and approved by the Board on April 22, 2005. In selecting BGFA and approving the Advisory Contracts for the Funds, the Board, including the Independent Directors, advised by their independent counsel, considered the following factors, none of which was controlling, and made the following conclusions:
NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY BGFA
The Board reviewed the scope of services to be provided by BGFA under the Advisory Contracts and noted that there would be no differences between the scope of services required to be provided by BGFA for the past year and the scope of services required to be provided by BGFA for the upcoming year. In reviewing the scope of services provided to the Funds by BGFA, the Board reviewed and discussed BGFA’s investment philosophy and experience, noting that BGFA and its affiliates have committed significant resources over time, including increasing the number of their employees, to the support of the Funds. The Board also considered BGFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BGFA provides information regarding portfolio management and compliance to the Board on a periodic basis in connection with regularly scheduled meetings of the Board. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds. In addition to the above considerations, the Board reviewed and considered BGFA’s investment processes and strategies, and matters related to BGFA’s portfolio transaction policies and procedures. The Board further noted that BGFA does not serve as investment adviser for any other series of registered investment companies with substantially similar investment objectives and strategies as the Funds; therefore, no comparative performance information was available. However, the Board also noted that the Funds had met their investment objectives consistently since their relevant inception dates. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Funds under the Advisory Contracts were appropriate and continued to support the Board’s original selection of BGFA as investment adviser to the Funds.
FUNDS’ EXPENSES AND PERFORMANCE OF THE FUNDS
The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund in comparison with the same information for other funds registered under the 1940 Act objectively determined solely by Lipper, as comprising each Fund’s applicable peer group (the “Lipper Peer Group”). In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Fund for the one-, three- and five-year, and “latest quarter” periods ended March 31, 2005, as applicable, and a comparison of each Fund’s performance to that of the funds in its Lipper Peer Group for the same periods. Because there are relatively few exchange-traded funds other than the Funds and because few, if any, exchange-traded funds or index funds track indices similar to those tracked by the Funds, the Lipper Peer Groups included open-end, closed-end, and exchange-traded funds, and funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the applicable Lipper Peer Groups and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Peer Groups, the statistical information may or may not provide meaningful direct comparisons to the Funds. The Board noted that most of the Funds generally performed in line with the funds in their respective Lipper Peer Groups over relevant periods, however, certain
126 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Board Review and Approval of Investment Advisory Contracts (Unaudited) (Continued)
iSHARES®, INC.
of the Funds may have underperformed or outperformed funds in their respective Lipper Peer Groups over relevant periods, but any such Funds also performed in line with their relevant benchmarks over such periods. The Board also noted that the investment advisory fees and overall expenses for the Funds were generally lower than or in line with the investment advisory fee rates and overall expenses of the Funds in their respective Lipper Peer Groups. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Funds, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the Lipper Peer Groups, were satisfactory for the purposes of approving the continuance of the Advisory Contracts.
COSTS OF SERVICES PROVIDED TO FUNDS AND PROFITS REALIZED BY BGFA AND AFFILIATES
The Board reviewed information about the profitability of the Funds to BGFA based on the fees payable under the Advisory Contracts for the last calendar year. The Board analyzed the Funds’ expenses, including the investment advisory fees paid to BGFA. The Board also reviewed information regarding direct revenue received by BGFA and ancillary revenue received by BGFA and/or its affiliates in connection with the services provided to the Funds by BGFA (as discussed below). The Board also discussed BGFA’s profit margin as reflected in the Funds’ profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits to be realized by BGFA and its affiliates under the Advisory Contracts and from other relationships between the Funds and BGFA and/or its affiliates, if any, were within the range the Board considered reasonable and appropriate.
ECONOMIES OF SCALE
In connection with its review of the Funds’ profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds’ asset levels. The Board noted that the Advisory Contracts for most of the Funds provide for breakpoints in the investment advisory fee rates as a result of increases in the asset levels of such Funds on an aggregated basis with certain other Funds. The Board further noted that the Advisory Contract for the iShares MSCI Singapore Index Fund provides for breakpoints in its investment advisory fee rate based on increases in the asset levels of that particular Fund. The Board also noted that the Advisory Contracts for the iShares MSCI Pacific Ex-Japan Index Fund and the iShares MSCI Emerging Markets Index Fund do not provide for any breakpoints in the investment advisory fee rates as a result of increases in the asset levels of such Funds. However, the Board further noted that possible future economies of scale had been taken into consideration by fixing the investment advisory fees at rates at the lower end of the marketplace, effectively giving Fund shareholders, from inception, the benefits of the lower average fee shareholders would have received from a fee structure with declining breakpoints where the initial fee was higher. In addition, the Board noted that as of July 1, 2004, Fund shareholders were no longer paying distribution fees pursuant to the Funds’ distribution plan under Rule 12b-1 of the 1940 Act because such plan had been terminated as of that date, benefiting the Funds’ shareholders by lowering the Funds’ overall expenses. The Board also reviewed BGFA’s historic profitability as investment adviser to the Funds and noted that BGFA had not yet fully recovered losses it had experienced during earlier years when the Funds had not yet achieved reasonable economic scale. In light of this history, the Board determined that reductions in fee rates or additions of further breakpoints were not warranted at this juncture. Based on this review, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees at present reflects the sharing of economies of scale with the Funds’ shareholders.
FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA AND ITS AFFILIATES
The Board received and considered information regarding the Funds’ annual investment advisory fee rates under the Advisory Contracts in comparison to the investment advisory/management fee rates for other funds/accounts for which BGFA or BGI, an affiliate of BGFA, provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and separate accounts. The Board noted that comparative investment advisory/management fee information was not available, as BGFA and its affiliates do not manage any mutual funds, collective funds, separate accounts or other exchange-traded funds with substantially similar investment objectives and strategies as the
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACTS | 127 |
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Board Review and Approval of Investment Advisory Contracts (Unaudited) (Continued)
iSHARES®, INC.
Funds. However, the Board noted that BGFA provided the Board with general information regarding how the level of services provided to the other funds registered under the 1940 Act, collective funds and separate accounts differed from the level of services provided to the Funds. Based on this review, the Board determined that the investment advisory fee rates under the Advisory Contracts do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Advisory Contracts are fair and reasonable.
OTHER BENEFITS TO BGFA AND/OR ITS AFFILIATES
The Board reviewed any ancillary revenue received by BGFA and/or its affiliates in connection with the services provided to the Funds by BGFA, such as the payment of securities lending revenue to BGI, the Company’s securities lending agent, and the payment of advisory fees and/or administration fees to BGFA and BGI in connection with the Funds’ investments in other funds for which BGFA provides investment advisory services and/or BGI provides administration services. The Board noted that BGFA and its affiliates do not use soft dollars or consider the value of research or other services that may be provided to BGFA or its affiliates in connection with portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through an affiliate of the Funds or BGFA are reported to the Board pursuant to Rule 17e-1 under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders.
Based on the above analysis, the Board determined that the Advisory Contracts, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Funds and their shareholders to continue the Advisory Contracts.
* | Denotes the Board’s approval of Investment Advisory Contracts for all series of the Company, including the Funds. |
128 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
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, 2000 through June 30, 2005, 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, 2005. 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, 2000 through June 30, 2005
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 3.0% | 5 | 0.36 | % | ||
Greater than 2.5% and Less than 3.0% | 3 | 0.22 | |||
Greater than 2.0% and Less than 2.5% | 3 | 0.22 | |||
Greater than 1.5% and Less than 2.0% | 31 | 2.24 | |||
Greater than 1.0% and Less than 1.5% | 82 | 5.94 | |||
Greater than 0.5% and Less than 1.0% | 222 | 16.08 | |||
Between 0.5% and –0.5% | 761 | 55.10 | |||
Less than –0.5% and Greater than –1.0% | 180 | 13.03 | |||
Less than –1.0% and Greater than –1.5% | 65 | 4.71 | |||
Less than –1.5% and Greater than –2.0% | 17 | 1.23 | |||
Less than –2.0% and Greater than –2.5% | 7 | 0.51 | |||
Less than –2.5% | 5 | 0.36 | |||
1,381 | 100.00 | % | |||
SUPPLEMENTAL INFORMATION | 129 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC .
iShares MSCI Belgium Index Fund
Period Covered: January 1, 2000 through June 30, 2005
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 2.5% | 13 | 0.94 | % | ||
Greater than 2.0% and Less than 2.5% | 17 | 1.23 | |||
Greater than 1.5% and Less than 2.0% | 35 | 2.53 | |||
Greater than 1.0% and Less than 1.5% | 98 | 7.10 | |||
Greater than 0.5% and Less than 1.0% | 224 | 16.22 | |||
Between 0.5% and –0.5% | 700 | 50.69 | |||
Less than –0.5% and Greater than –1.0% | 197 | 14.27 | |||
Less than –1.0% and Greater than –1.5% | 64 | 4.63 | |||
Less than –1.5% and Greater than –2.0% | 19 | 1.38 | |||
Less than –2.0% and Greater than –2.5% | 10 | 0.72 | |||
Less than –2.5% | 4 | 0.29 | |||
1,381 | 100.00 | % | |||
iShares MSCI EMU Index Fund
Period Covered: October 1, 2000 through June 30, 2005
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 2.5% | 7 | 0.59 | % | ||
Greater than 2.0% and Less than 2.5% | 7 | 0.59 | |||
Greater than 1.5% and Less than 2.0% | 25 | 2.10 | |||
Greater than 1.0% and Less than 1.5% | 86 | 7.21 | |||
Greater than 0.5% and Less than 1.0% | 309 | 25.92 | |||
Between 0.5% and –0.5% | 639 | 53.60 | |||
Less than –0.5% and Greater than –1.0% | 87 | 7.30 | |||
Less than –1.0% and Greater than –1.5% | 23 | 1.93 | |||
Less than –1.5% | 9 | 0.76 | |||
1,192 | 100.00 | % | |||
130 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI France Index Fund
Period Covered: January 1, 2000 through June 30, 2005
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 2.0% | 4 | 0.29 | % | ||
Greater than 1.5% and Less than 2.0% | 8 | 0.58 | |||
Greater than 1.0% and Less than 1.5% | 35 | 2.53 | |||
Greater than 0.5% and Less than 1.0% | 135 | 9.78 | |||
Between 0.5% and –0.5% | 1024 | 74.14 | |||
Less than –0.5% and Greater than –1.0% | 136 | 9.85 | |||
Less than –1.0% and Greater than –1.5% | 28 | 2.03 | |||
Less than –1.5% and Greater than –2.0% | 4 | 0.29 | |||
Less than –2.0% | 7 | 0.51 | |||
1,381 | 100.00 | % | |||
iShares MSCI Germany Index Fund
Period Covered: January 1, 2000 through June 30, 2005
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 2.0% | 6 | 0.43 | % | ||
Greater than 1.5% and Less than 2.0% | 18 | 1.30 | |||
Greater than 1.0% and Less than 1.5% | 51 | 3.69 | |||
Greater than 0.5% and Less than 1.0% | 187 | 13.54 | |||
Between 0.5% and –0.5% | 882 | 63.88 | |||
Less than –0.5% and Greater than –1.0% | 157 | 11.37 | |||
Less than –1.0% and Greater than –1.5% | 55 | 3.98 | |||
Less than –1.5% and Greater than –2.0% | 13 | 0.94 | |||
Less than –2.0% and Greater than –2.5% | 5 | 0.36 | |||
Less than –2.5% | 7 | 0.51 | |||
1,381 | 100.00 | % | |||
SUPPLEMENTAL INFORMATION | 131 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Italy Index Fund
Period Covered: January 1, 2000 through June 30, 2005
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 2.0% | 6 | 0.43 | % | ||
Greater than 1.5% and Less than 2.0% | 14 | 1.01 | |||
Greater than 1.0% and Less than 1.5% | 28 | 2.03 | |||
Greater than 0.5% and Less than 1.0% | 136 | 9.85 | |||
Between 0.5% and –0.5% | 1019 | 73.79 | |||
Less than –0.5% and Greater than –1.0% | 127 | 9.20 | |||
Less than –1.0% and Greater than –1.5% | 29 | 2.10 | |||
Less than –1.5% and Greater than –2.0% | 12 | 0.87 | |||
Less than –2.0% | 10 | 0.72 | |||
1,381 | 100.00 | % | |||
iShares MSCI Netherlands Index Fund
Period Covered: January 1, 2000 through June 30, 2005
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% | 6 | 0.43 | |||
Greater than 1.5% and Less than 2.0% | 17 | 1.23 | |||
Greater than 1.0% and Less than 1.5% | 51 | 3.69 | |||
Greater than 0.5% and Less than 1.0% | 243 | 17.60 | |||
Between 0.5% and –0.5% | 845 | 61.19 | |||
Less than –0.5% and Greater than –1.0% | 134 | 9.70 | |||
Less than –1.0% and Greater than –1.5% | 53 | 3.84 | |||
Less than –1.5% and Greater than –2.0% | 14 | 1.01 | |||
Less than –2.0% | 7 | 0.51 | |||
1,381 | 100.00 | % | |||
132 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Spain Index Fund
Period Covered: January 1, 2000 through June 30, 2005
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 3.0% | 4 | 0.29 | % | ||
Greater than 2.0% and Less than 3.0% | 7 | 0.51 | |||
Greater than 1.5% and Less than 2.0% | 9 | 0.65 | |||
Greater than 1.0% and Less than 1.5% | 44 | 3.19 | |||
Greater than 0.5% and Less than 1.0% | 173 | 12.53 | |||
Between 0.5% and –0.5% | 935 | 67.69 | |||
Less than –0.5% and Greater than –1.0% | 144 | 10.43 | |||
Less than –1.0% and Greater than –1.5% | 47 | 3.40 | |||
Less than –1.5% and Greater than –2.0% | 11 | 0.80 | |||
Less than –2.0% | 7 | 0.51 | |||
1,381 | 100.00 | % | |||
iShares MSCI Sweden Index Fund
Period Covered: January 1, 2000 through June 30, 2005
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 2.5% | 14 | 1.01 | % | ||
Greater than 2.0% and Less than 2.5% | 22 | 1.59 | |||
Greater than 1.5% and Less than 2.0% | 31 | 2.24 | |||
Greater than 1.0% and Less than 1.5% | 87 | 6.30 | |||
Greater than 0.5% and Less than 1.0% | 249 | 18.03 | |||
Between 0.5% and –0.5% | 730 | 52.87 | |||
Less than –0.5% and Greater than –1.0% | 137 | 9.92 | |||
Less than –1.0% and Greater than –1.5% | 65 | 4.71 | |||
Less than –1.5% and Greater than –2.0% | 18 | 1.30 | |||
Less than –2.0% and Greater than –2.5% | 15 | 1.09 | |||
Less than –2.5% | 13 | 0.94 | |||
1,381 | 100.00 | % | |||
SUPPLEMENTAL INFORMATION | 133 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Switzerland Index Fund
Period Covered: January 1, 2000 through June 30, 2005
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% | 7 | 0.51 | |||
Greater than 2.0% and Less than 2.5% | 9 | 0.65 | |||
Greater than 1.5% and Less than 2.0% | 39 | 2.82 | |||
Greater than 1.0% and Less than 1.5% | 111 | 8.04 | |||
Greater than 0.5% and Less than 1.0% | 267 | 19.33 | |||
Between 0.5% and –0.5% | 770 | 55.77 | |||
Less than –0.5% and Greater than –1.0% | 114 | 8.25 | |||
Less than –1.0% and Greater than –1.5% | 34 | 2.46 | |||
Less than –1.5% and Greater than –2.0% | 20 | 1.45 | |||
Less than –2.0% | 8 | 0.58 | |||
1,381 | 100.00 | % | |||
iShares MSCI United Kingdom Index Fund
Period Covered: January 1, 2000 through June 30, 2005
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 3.5% | 7 | 0.51 | % | ||
Greater than 2.5% and Less than 3.5% | 8 | 0.58 | |||
Greater than 2.0% and Less than 2.5% | 18 | 1.30 | |||
Greater than 1.5% and Less than 2.0% | 78 | 5.65 | |||
Greater than 1.0% and Less than 1.5% | 212 | 15.35 | |||
Greater than 0.5% and Less than 1.0% | 344 | 24.91 | |||
Between 0.5% and –0.5% | 619 | 44.82 | |||
Less than –0.5% and Greater than –1.0% | 66 | 4.78 | |||
Less than –1.0% and Greater than –1.5% | 15 | 1.09 | |||
Less than –1.5% and Greater than –2.5% | 10 | 0.72 | |||
Less than –2.5% | 4 | 0.29 | |||
1,381 | 100.00 | % | |||
134 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
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 101 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 126 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 and Officers
Name, Year of Birth | Position(s), Length of Service | Principal Occupation(s) During Past 5 Years | Other Directorships Held | |||
*Lee T. Kranefuss, 1961 | Director, Chairman and President (since June 18, 2003). | Chief Executive Officer of Intermediary Investor and Exchange Traded Products Business of BGI (since 2003); Chief Executive Officer of the Individual Investor Business of BGI (1997-2003). | Trustee (since 2003) of iShares Trust; Trustee (since 2001) of Barclays Global Investors Funds and Master Investment Portfolio; Director (since 2003) of BGI Cayman Prime Money Market Fund, Ltd.; Director (since 2003) of iShares PLC and EETF PLC (Dublin). | |||
*John E. Martinez, 1961 | 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 2003) of iShares Trust; Director (since 2005) of Real Estate Equity Exchange; Director (since 2003) of Larkin Street Youth Services; Director (2000-2002) of Barclays Global Investors UK Holdings. |
* | Lee T. Kranefuss and John E. Martinez are considered to be “interested persons” (as defined in the 1940 Act) of the Company due to their affiliations with BGFA, the Funds’ investment adviser, and BGFA affiliates. |
DIRECTOR INFORMATION | 135 |
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Director Information (Unaudited) (Continued)
iSHARES®, INC.
Independent Directors
Name, Year of Birth | Position(s), Length of Service | Principal Occupation(s) During Past 5 Years | Other Directorships Held | |||
Richard K. Lyons, 1961 | Director (since February 28, 2002) | Acting Dean (2004-2005) and Sylvan Coleman Professor of Finance (since 1993) University of California, Berkeley: Haas School of Business; Consultant for IMF World Bank, Federal Reserve Bank and Citibank N.A. (since 2000). | Trustee (since 2000) of iShares Trust; Trustee (since 2001) of Barclays Global Investors Funds and Master Investment Portfolio; Director (since 2003) of BGI Cayman Prime Money Market Fund, Ltd.; Trustee and Chairman (since 1995) of Matthews Asian Funds (oversees 6 portfolios). | |||
George G. C. Parker, 1939 | Director (since February 28, 2002) | Dean Witter Distinguished Professor of Finance (since 1994); Senior Associate Dean for Academic Affairs, Director of MBA Program, Stanford University: Graduate School of Business (1993-2001). | Trustee (since 2000) of iShares Trust; Director (since 1998) of Affinity Group Holdings; 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 1996) of Community First Financial Group; Director (since 1999) of Tejon Ranch Company; Director (since 2003) of First Republic Bank; Director (since 2000) of Converium Re-Insurance; Director (since 2004) of Threshold Pharmaceuticals. | |||
W. Allen Reed, 1947 | Director (since December 16, 1996) | President and Chief Executive Officer of General Motors Investment Management Corporation (since 1994); Chief Executive Officer of General Motors Trust Bank (since 2003); Chief Executive Officer of General Motors Trust Company (since 1999). | Trustee (since 2002) of iShares Trust; Director (since 1994) of General Motors Investment Management Corporation; Director and Chairman (since 2003) of General Motors Trust Bank; Director and Chairman (since 1999) of General Motors Trust Company; Director (since 2002) of GMAM ARS Fund I; 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; Member (since 2004) of Board of Executives of New York Stock Exchange; Member (since 1995) of New York State Retirement System Advisory Board; Member (since 2004) of the Auburn University Foundation Fund Investment Committee. |
136 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director Information (Unaudited) (Continued)
iSHARES®, INC.
Independent Directors (Continued)
Name, Year of Birth | Position(s), Length of Service | Principal Occupation(s) During Past 5 Years | Other Directorships Held | |||
Cecilia H. Herbert, 1949 | Director (since August 11, 2005). | Member of Finance Council, Archdiocese of San Francisco (since 1991); Chair of Investment Committee, Archdiocese of San Francisco (since 1994). | Trustee (since 2005) of iShares Trust; Trustee (since 2004) of Pacific Select Funds (31 portfolios); Trustee (1992-2003) of the Montgomery Funds (20 portfolios); Trustee (since 2005) of the Thatcher School; Director (since 1998) of Catholic Charities CYO; Trustee (1998-2000) of the Groton School; Director (since 2005) of Women’s Forum West (professional association). | |||
Charles A. Hurty, 1944 | Director (since August 11, 2005). | Partner, KPMG LLP (1968-2001). | Trustee (since 2005) of iShares Trust; Director (since 2002) of GMAM Absolute Return Strategy Fund (1 portfolio); Director (since 2002) of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (2 portfolios); Director (since 2005) of CSFB Alternative Investments Fund (15 portfolios). | |||
John E. Kerrigan, 1956 | Director (since August 11, 2005). | Chief Investment Officer, Santa Clara University (since 2002); Managing Director, Merrill Lynch (1994-2002). | Trustee (since 2005) of iShares Trust; Member (since 2004) of Advisory Council for Commonfund Distressed Debt Partners II. |
Officer
Name, Year of Birth | Position(s), Length of Service | Principal Occupation(s) During Past 5 Years | Other Directorships Held | |||
Michael A. Latham, 1965 | Secretary, Treasurer and Principal Financial Officer (since February 28, 2002). | Chief Operating Officer of the Intermediary Investor 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 | 137 |
Table of Contents
The following is a list of iShares Funds being offered, along with their respective exchange trading symbols. Please call 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 100 (OEF)
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 Domestic Sector Index Funds
iShares Cohen & Steers Realty Majors (ICF)
iShares Dow Jones U.S. Basic Materials Sector (IYM)
iShares Dow Jones U.S. Consumer Services Sector (IYC)
iShares Dow Jones U.S. Consumer Goods 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 U.S. Technology Sector (IYW)
iShares Dow Jones U.S. Telecommunications Sector (IYZ)
iShares Dow Jones Transportation Average (IYT)
iShares Dow Jones U.S. Utilities Sector (IDU)
iShares Dow Jones U.S. Total Market (IYY)
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 Global Index Funds
iShares S&P Global 100 (IOO)
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 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 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 Russell Microcap™ (IWC)
iShares International Country 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 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 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/TOPIX 150 (ITF)
iShares Specialty Index Funds
iShares KLD Select SocialSM (KLD)
iShares Dow Jones Select Dividend (DVY)
iShares International Index Funds
iShares MSCI EAFE (EFA)
iShares MSCI EAFE Growth (EFG)
iShares MSCI EAFE Value (EFV)
iShares MSCI Emerging Markets (EEM)
iShares MSCI EMU (EZU)
iShares MSCI Pacific ex-Japan (EPP)
iShares S&P Europe 350 (IEV)
iShares S&P Latin America 40 (ILF)
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 NYSE Index Funds
iShares NYSE Composite (NYC)
iShares NYSE 100 (NY)
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, KLD Research & Analytics, Inc., 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 a deposit of a bank and it 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 2005 Annual Report.
2117-is-0805
138 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
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.
©2005 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, 2005 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 web-site at www.sec.gov.
The Funds file 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. The Funds’ Forms N-Q are available on the Commission’s website at www.sec.gov. 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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2005 annual report to shareholders | august 31 , 2005 iSHARES MSCI SERIES
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
iShares msci taiwan index fund
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Board Review and Approval of Investment Advisory Contracts (Unaudited) | 125 | |
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Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI AUSTRALIA INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | |||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | |||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||
39.58 | % | 41.19 | % | 38.98 | % | 15.82 | % | 15.89 | % | 15.29 | % | 9.58 | % | 9.68 | % | 9.78 | % | ||||||||
Cumulative Total Returns | |||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | |||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||
39.58 | % | 41.19 | % | 38.98 | % | 108.40 | % | 109.01 | % | 103.69 | % | 137.88 | % | 139.90 | % | 142.09 | % |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 1 |
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PORTFOLIO ALLOCATION As of 8/31/ 05 | |||
Sector | % of Net Assets | ||
Financial | 49.11 | % | |
Basic Materials | 16.62 | ||
Consumer Non-Cyclical | 9.34 | ||
Industrial | 9.17 | ||
Consumer Cyclical | 4.62 | ||
Energy | 4.49 | ||
Communications | 3.43 | ||
Utilities | 1.37 | ||
Diversified | 0.68 | ||
Technology | 0.38 | ||
Short-Term and Other Net Assets | 0.79 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS As of 8/31/05 | |||
Security | % of Net Assets | ||
BHP Billiton Ltd. | 10.88 | % | |
National Australia Bank Ltd. | 7.24 | ||
Commonwealth Bank of Australia | 7.10 | ||
Australia & New Zealand Banking Group Ltd. | 5.99 | ||
Westpac Banking Corp. Ltd. | 5.27 | ||
Westfield Group | 3.76 | ||
Woolworths Ltd. | 2.56 | ||
Woodside Petroleum Ltd. | 2.28 | ||
Wesfarmers Ltd. | 2.20 | ||
Rio Tinto Ltd. | 2.12 | ||
TOTAL | 49.40 | % | |
The iShares MSCI Australia Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Australian market, as measured by the MSCI Australia Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 39.58%, while the Index returned 38.98%.
The Australian market delivered solid gains for the reporting period. Australia’s economy continued to appear healthy during the reporting period: with annualized gross domestic product growth for the second quarter of 2005 of 2.60%, the economy is now in its 14th year of uninterrupted expansion, the longest expansion in Australia since 1945. Inflation remained low, and export trade continued to grow for most of the reporting period, due in part to strong demand from China. Previous concerns surrounding a housing bubble appeared to lessen during the reporting period, as the housing market began to cool moderately.
As economic expansion continued during the reporting period, concerns were raised about supply constraints, and their impact on further expansion. With capacity utilization in the manufacturing industry at its highest level in 15 years, congested ports and railways creating a bottleneck for export trade, and a shortage of skilled labor, Australia’s export growth showed signs of slowing toward the end of the reporting period, although the ratio of exports to imports remained at their highest levels since the 1970s.
All of the Fund’s ten largest holdings as of August 31, 2005 posted double-digit gains for the reporting period. Oil exploration and production company Woodside Petroleum Ltd. had the strongest returns among the Fund’s ten largest holdings, due largely to escalating oil prices during the reporting period. Two metals and mining companies performed well: BHP Billiton Ltd., the largest Fund holding at almost 11% of the Fund’s net assets, delivered strong returns, as did Rio Tinto Ltd. Conglomerate Wesfarmers Ltd. also contributed positively to Fund performance for the reporting period. The most modest gain among the Fund’s ten largest holdings came from real estate investment trust Westfield Group.
2 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Management’s Discussion of Fund Performance
iSHARES® MSCI BRAZIL INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | |||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | |||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||
69.72 | % | 68.54 | % | 74.70 | % | 10.24 | % | 9.74 | % | 12.98 | % | 9.29 | % | 9.22 | % | 11.91 | % | ||||||||
Cumulative Total Returns | |||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | |||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||
69.72 | % | 68.54 | % | 74.70 | % | 62.78 | % | 59.14 | % | 84.10 | % | 57.95 | % | 57.44 | % | 78.52 | % |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (7/14/00), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 3 |
Table of Contents
PORTFOLIO ALLOCATION As of 8/31/05 | |||
Sector | % of Net Assets | ||
Basic Materials | 29.19 | % | |
Energy | 24.30 | ||
Financial | 16.07 | ||
Consumer Non-Cyclical | 9.18 | ||
Communications | 8.79 | ||
Utilities | 6.63 | ||
Industrial | 3.58 | ||
Consumer Cyclical | 1.47 | ||
Diversified | 0.17 | ||
Short-Term and Other Net Assets | 0.62 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS As of 8/31/05 | |||
Security | % of Net Assets | ||
Petroleo Brasileiro SA Preferred | 13.32 | % | |
Petroleo Brasileiro SA | 10.98 | ||
Companhia Vale do Rio Doce Class A Preferred | 8.59 | ||
Companhia Vale do Rio Doce ADR | 8.00 | ||
Banco Itau Holding Financeira SA Preferred | 7.43 | ||
Banco Bradesco SA Preferred | 4.82 | ||
Companhia de Bebidas das Americas Preferred | 4.57 | ||
Unibanco Uniao de Bancos Brasileiros SA | 3.82 | ||
Tele Norte Leste Participacoes SA Preferred | 2.90 | ||
Companhia Energetica de Minas Gerais Preferred | 2.73 | ||
TOTAL | 67.16 | % | |
The iShares MSCI Brazil Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Brazilian market, as measured by the MSCI Brazil Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 69.72%, while the Index returned 74.70%.
The Brazilian market posted strong gains for the reporting period, fueled largely by rising oil prices, a strengthening currency, and rising interest rates. Oil prices escalated during the reporting period, reaching $70 per barrel. The increase benefited the Brazilian market whose largest company, oil company Petroleo Brasileiro SA, represented more than 28% of the Index as of August 31, 2005. The Brazilian currency, the real, climbed during the reporting period, reaching a three-year-high by May and becoming the best performing currency against the U.S. dollar among the 60 currencies tracked by Bloomberg. The Brazilian central bank increased its benchmark lending rate during the course of the reporting period, reaching 19.75% by May, in an effort to curtail inflation. The result was an inflow of foreign investment from investors seeking to capitalize on its high interest rates, benefiting the banking industry.
Among the Fund’s ten largest holdings as of August 31, 2005, performance was largely positive for the reporting period. The preferred shares of diversified bank Banco Bradesco SA posted the strongest gains among the Fund’s ten largest holdings. The preferred shares of diversified bank Banco Itau Holding Financeira SA also delivered strong returns for the reporting period. Oil company Petroleo Brasileiro SA, whose preferred and common shares were the two largest Fund holdings, performed well, as did bank Unibanco Uniao de Bancos Brasileiros SA. The sole negative performer among the ten largest Fund holdings was the preferred shares of the telecommunications company Tele Norte Leste Participacoes SA.
4 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Management’s Discussion of Fund Performance
iSHARES® MSCI CANADA INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
43.35% | 43.23 | % | 43.69 | % | 4.93 | % | 5.04 | % | 3.78 | % | 12.80 | % | 12.87 | % | 13.43 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
43.35% | 43.23 | % | 43.69 | % | 27.22 | % | 27.87 | % | 20.39 | % | 212.94 | % | 214.94 | % | 230.15 | % |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 5 |
Table of Contents
PORTFOLIO ALLOCATION As of 8/31/05 | |||
Sector | % of Net Assets | ||
Financial | 32.10 | % | |
Energy | 27.73 | ||
Basic Materials | 15.36 | ||
Communications | 6.91 | ||
Industrial | 5.55 | ||
Consumer Cyclical | 4.12 | ||
Consumer Non-Cyclical | 3.00 | ||
Technology | 2.95 | ||
Diversified | 1.62 | ||
Utilities | 0.43 | ||
Short-Term and Other Net Assets | 0.23 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS As of 8/31/05 | |||
Security | % of Net Assets | ||
Royal Bank of Canada | 6.01 | % | |
EnCana Corp. | 5.98 | ||
Manulife Financial Corp. | 5.62 | ||
Bank of Nova Scotia | 4.73 | ||
Suncor Energy Inc. | 3.70 | ||
Canadian Natural Resources Ltd. | 3.59 | ||
Bank of Montreal | 3.36 | ||
Sun Life Financial Inc. | 3.00 | ||
Petro-Canada | 2.81 | ||
Canadian Imperial Bank of Commerce | 2.78 | ||
TOTAL | 41.58 | % | |
The iShares MSCI Canada Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Canadian market, as measured by the MSCI Canada Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 43.35%, while the Index returned 43.69%.
The Canadian market posted strong gains for the reporting period. Canada’s market strength was driven largely by two factors – rising oil prices and improving economic conditions in the U.S. Oil companies represent a relatively large part of the Canadian economy, accounting for more than 20% of the Index. During the course of the reporting period, oil prices escalated, reaching $70 per barrel by the end of the reporting period and boosting returns for oil companies. Canada’s exports to the U.S. also are important to its economy, representing approximately 85% of all of its exports. As the U.S. economy improved during the reporting period and the U.S. dollar strengthened, its demand for Canadian exports grew, also providing a boost to the Canadian economy and market.
All of the Fund’s ten largest holdings as of August 31, 2005 had positive returns for the reporting period. Two oil and gas exploration companies, Canadian Natural Resources Ltd. and EnCana Corp., were the strongest performers for the reporting period, each posting triple-digit gains. Integrated oil and gas company Suncor Energy Inc. also logged strong gains, as did integrated oil and gas company Petro-Canada. The largest Fund holding, Royal Bank of Canada, also contributed positively to Fund performance. The most modest returns among the Fund’s ten largest holdings came from Bank of Montreal.
6 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||
Year Ended 8/31/05 | Inception to 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
46.17% | 47.06 | % | 41.83 | % | 42.68 | % | 42.85 | % | 40.27 | % | 134.91 | % | 135.58 | % | 125.27 | % |
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.
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (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 tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 7 |
Table of Contents
PORTFOLIO ALLOCATION | |||
As of 8/31/05 | |||
Sector | % of Net Assets | ||
Financial | 18.73 | % | |
Communications | 16.06 | ||
Energy | 13.70 | ||
Basic Materials | 12.30 | ||
Industrial | 11.17 | ||
Technology | 10.28 | ||
Consumer Non-Cyclical | 5.25 | ||
Utilities | 4.60 | ||
Consumer Cyclical | 4.52 | ||
Diversified | 2.31 | ||
Exchange-Traded Funds | 0.58 | ||
Short-Term and Other Net Assets | 0.50 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS | |||
As of 8/31/05 | |||
Security | % of Net Assets | ||
Samsung Electronics Co. Ltd. GDR (South Korea) | 5.99 | % | |
Taiwan Semiconductor Manufacturing Co. Ltd. ADR (Taiwan) | 3.44 | ||
Kookmin Bank ADR (South Korea) | 2.96 | ||
POSCO ADR (South Korea) | 2.87 | ||
United Microelectronics Corp. ADR (Taiwan) | 2.25 | ||
LUKOIL ADR (Russia) | 2.18 | ||
Korea Electric Power Corp. ADR (South Korea) | 2.04 | ||
AU Optronics Corp. ADR (Taiwan) | 1.97 | ||
China Mobile Ltd. (Hong Kong) | 1.76 | ||
Chunghwa Telecom Co. Ltd. ADR (Taiwan) | 1.74 | ||
TOTAL | 27.20 | % | |
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 twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 46.17%, while the Index returned 41.83%.
Emerging markets, as represented by the Index, posted healthy gains for the reporting period. Rising oil prices, improving economic conditions in the U.S. and export demand from China were key drivers to performance in most emerging markets during the reporting period.
The South African market delivered strong gains for the reporting period, benefiting from economic growth. Annualized gross domestic product growth for the second quarter of 2005 was 5.0%, up from 3.5% in the first quarter of 2005. Slowing consumer inflation and low interest rates helped boost both consumer and business spending during the reporting period. Declining unemployment rates also contributed to a rise in consumer spending. While the escalating price of oil generally had a dampening effect on global economic growth, it appeared to help South African oil producers and suppliers. The South African currency, the rand, declined during the reporting period, helping companies in the precious metals and mining sectors since they pay their costs in rand but sell their metal in U.S. dollars.
The South Korean market posted strong gains for the reporting period. South Korea’s economic livelihood relies heavily on its export trade. Early in the reporting period, the won, South Korea’s currency, appreciated, making South Korean goods more expensive to its trading partners. As the reporting period progressed, however, the won began to depreciate, providing a boost to exports. Improved economic conditions in the U.S. and demand from some of its Asian neighbors also contributed to increased export trade. In July, export levels rose 12.35% over June, the largest increase in four months, reflecting higher export levels for cars, computer chips and ships.
The Taiwanese market delivered moderate gains for the reporting period, although its index returns lagged other Asian markets. Taiwan’s two leading trading partners are China and the U.S., and its export growth to both partners was somewhat volatile during the reporting period. However, U.S. economic conditions improved as the reporting period progressed, ultimately boosting demand for Taiwanese exports. China’s investments in steelmaking facilities declined 14% in the first quarter of 2005, contributing to a decline in Taiwan’s steel industry. Electronics exports to China, on the other hand, remained healthy.
Among the Fund’s ten largest holdings as of August 31, 2005, performance was mostly positive for the reporting period. The best performer among the ten largest Fund holdings was integrated oil and gas company LUKOIL (Russia). Korea Electric Power Corp. (South Korea), also posted strong gains for the reporting period. Wireless telephone company China Mobile Ltd. (Hong Kong) and Kookmin Bank (South Korea) also performed well. The sole negative performer among the Fund’s ten largest holdings was semiconductor company United Microelectronics Corp. (Taiwan), which posted a modest decline for the reporting period.
8 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI HONG KONG INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
21.96% | 22.17 | % | 22.59 | % | 1.41 | % | 1.15 | % | 2.39 | % | 2.85 | % | 2.90 | % | 4.81 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
21.96% | 22.17 | % | 22.59 | % | 7.25 | % | 5.88 | % | 12.53 | % | 30.49 | % | 31.17 | % | 56.05 | % |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 9 |
Table of Contents
PORTFOLIO ALLOCATION | |||
As of 8/31/05 | |||
Sector | % of Net Assets | ||
Financial | 41.56 | % | |
Diversified | 20.66 | ||
Utilities | 14.56 | ||
Consumer Cyclical | 10.20 | ||
Industrial | 7.24 | ||
Communications | 4.06 | ||
Technology | 0.81 | ||
Basic Materials | 0.72 | ||
Short-Term and Other Net Assets | 0.19 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS As of 8/31/05 | |||
Security | % of Net Assets | ||
Hutchison Whampoa Ltd. | 13.15 | % | |
Cheung Kong Holdings Ltd. | 10.01 | ||
Sun Hung Kai Properties Ltd. | 8.30 | ||
CLP Holdings Ltd. | 6.27 | ||
Hang Seng Bank Ltd. | 6.23 | ||
Swire Pacific Ltd. Class A | 4.87 | ||
BOC Hong Kong Holdings Ltd. | 4.44 | ||
Hong Kong & China Gas Co. Ltd. | 4.32 | ||
Esprit Holdings Ltd. | 4.15 | ||
Hongkong Electric Holdings Ltd. | 3.96 | ||
TOTAL | 65.70 | % | |
The iShares MSCI Hong Kong Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Hong Kong market, as measured by the MSCI Hong Kong Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 21.96%, while the Index returned 22.59%.
The Hong Kong market delivered solid gains for the reporting period. Hong Kong’s economy continued to expand during the reporting period, and was on track for gross domestic product (“GDP”) growth of 4.6% in 2005, a more moderate rate than the 8.1% GDP growth rate in 2004. Contributing to Hong Kong’s economic growth was a strong real estate market, which benefited both Index and Fund performance for the reporting period. Healthy tourism levels also contributed to market returns, as did export trade. With mainland China serving as both its main export partner and its leading source of tourists, Hong Kong’s economy is sensitive to China’s economic well being. During the reporting period, this relationship benefited Hong Kong, as China provided demand in the forms of both exports and tourism.
The Fund’s ten largest holdings accounted for approximately 66% of the net assets of the Fund as of August 31, 2005. The strongest performer for the reporting period was retail clothing company Esprit Holdings Ltd. Real estate development companies also delivered gains for the reporting period: both Swire Pacific Ltd. and Cheung Kong Holdings Ltd. performed well. The largest Fund holding at more than 13% of the Fund’s net assets, Hutchison Whampoa Ltd., also contributed positively to Fund returns. The most modest gains came from electric utility CLP Holdings Ltd., which posted a slight gain for the reporting period.
10 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI MALAYSIA INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
12.39% | 15.10 | % | 13.02 | % | 5.39 | % | 5.48 | % | 6.57 | % | (4.31 | )% | (4.34 | )% | (3.17 | )% | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
12.39% | 15.10 | % | 13.02 | % | 30.02 | % | 30.57 | % | 37.49 | % | (34.12 | )% | (34.29 | )% | (26.32 | )% |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 stock exchange on which it is listed, the market return will use the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 11 |
Table of Contents
PORTFOLIO ALLOCATION As of 8/31/05 | |||
Sector | % of Net Assets | ||
Financial | 29.92 | % | |
Consumer Cyclical | 14.86 | ||
Industrial | 13.46 | ||
Consumer Non-Cyclical | 13.22 | ||
Communications | 12.04 | ||
Utilities | 8.96 | ||
Diversified | 4.48 | ||
Energy | 1.78 | ||
Technology | 0.66 | ||
Basic Materials | 0.49 | ||
Short-Term and Other Net Assets | 0.13 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS As of 8/31/05 | |||
Security | % of Net Assets | ||
Malayan Banking Bhd | 10.43 | % | |
Commerce Asset Holdings Bhd | 5.76 | ||
Tenaga Nasional Bhd | 4.81 | ||
Telekom Malaysia Bhd | 4.81 | ||
Malaysia International Shipping Corp. Bhd | 4.55 | ||
Maxis Communications Bhd | 4.49 | ||
Genting Bhd | 4.04 | ||
Sime Darby Bhd | 3.96 | ||
Public Bank Bhd | 3.86 | ||
IOI Corp. Bhd | 3.78 | ||
TOTAL | 50.49 | % | |
The iShares MSCI Malaysia Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Malaysian market, as measured by the MSCI Malaysia Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 12.39%, while the Index returned 13.02%.
The Malaysian market posted moderate gains for the reporting period. Malaysia’s economy remained healthy during the reporting period. For the second quarter of 2005, gross domestic product growth was 4.1%, slowing from 7.1% in the fourth quarter of 2004. Because exporting plays an important role in Malaysia’s economy, the country was negatively affected by higher oil prices during the reporting period. High oil prices had a dampening effect on global economic growth, weighing on export demand.
Malaysia competes with China for much of its export trade with Europe and other Asian countries. Shortly after China had announced changes to its foreign currency policy, the central bank of Malaysia, Bank Negara, announced a change in its currency peg to allow the ringgit to fluctuate against an undisclosed but “trade-weighted” currency basket. Malaysia had imposed capital controls to halt a slide in the ringgit during a financial crisis in 1998. These currency controls had resulted in the ringgit, like the renminbi (China’s currency), widely being viewed as undervalued.
Tourism, another important industry for Malaysia, also rebounded during the reporting period as economic conditions in Asia, particularly China, translated into increased tourism for Malaysia.
Among the Fund’s ten largest holdings as of August 31, 2005, performance was mostly positive for the reporting period. The strongest performer was Malaysia International Shipping Corp. Bhd Agriculture company IOI Corp. Bhd also performed well for the reporting period. Casinos and gaming company Genting Bhd posted healthy gains as well. The sole negative performance among the Fund’s ten largest holdings came from telecommunications company Telekom Malaysia Bhd, which posted a slight decline for the reporting period.
12 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI MEXICO INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
51.77% | 52.20 | % | 54.08 | % | 13.48 | % | 13.66 | % | 14.61 | % | 14.22 | % | 14.30 | % | 16.14 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
51.77% | 52.20 | % | 54.08 | % | 88.21 | % | 89.72 | % | 97.74 | % | 252.37 | % | 254.70 | % | 313.11 | % |
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.
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 13 |
Table of Contents
PORTFOLIO ALLOCATION As of 8/31/05 | |||
Sector | % of Net Assets | ||
Communications | 46.41 | % | |
Industrial | 15.25 | ||
Consumer Cyclical | 10.91 | ||
Consumer Non-Cyclical | 10.37 | ||
Basic Materials | 5.86 | ||
Diversified | 5.79 | ||
Financial | 5.33 | ||
Short-Term and Other Net Assets | 0.08 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS As of 8/31/05 | |||
Security | % of Net Assets | ||
America Movil SA de CV Series L | 23.52 | % | |
Cemex SA de CV Series CPO | 13.72 | ||
Telefonos de Mexico SA de CV Series L | 12.79 | ||
Fomento Economico Mexicano SA de CV Class UBD | 4.93 | ||
Wal-Mart de Mexico SA de CV Series V | 4.84 | ||
Grupo Televisa SA Series CPO | 4.72 | ||
Grupo Financiero Banorte SA de CV Series O | 4.06 | ||
Grupo Carso SA de CV Series A1 | 3.29 | ||
Kimberly-Clark de Mexico SA de CV Class A | 2.97 | ||
Grupo Modelo SA de CV Series C | 2.75 | ||
TOTAL | 77.59 | % | |
The iShares MSCI Mexico Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Mexican market, as measured by the MSCI Mexico Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 51.77%, while the Index returned 54.08%.
The Mexican market delivered strong gains for the reporting period. Because Mexico relies on the U.S. for roughly 80% of its exports, its economic well-being is closely linked to that of the U.S. During the reporting period, the relationship benefited the Mexican economy, as economic conditions in the U.S. improved, boosting demand for Mexican exports. Oil accounts for approximately 15% of Mexico’s export earnings, which also benefited the Mexican economy during the reporting period. Oil prices escalated during the reporting period, reaching $70 per barrel, boosting returns for oil companies.
All of the Fund’s ten largest holdings as of August 31, 2005 posted double-digit gains for the reporting period. The diversified bank Grupo Financiero Banorte SA de CV logged the strongest gains. Top Fund holding America Movil SA de CV, the wireless telephone carrier, also performed well for the reporting period. The construction materials company Cemex SA de CV and the soft drink maker Fomento Economico Mexicano SA de CV contributed positively to Fund performance. The most modest gains, albeit double-digit gains, among the Fund’s ten largest holdings came from the telephone company Telefonos de Mexico SA de CV.
14 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||
Year Ended 8/31/05 | Inception to 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
33.27% | 34.82 | % | 33.13 | % | 21.35 | % | 21.71 | % | 21.30 | % | 110.71 | % | 113.16 | % | 110.29 | % |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (10/26/01), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 15 |
Table of Contents
PORTFOLIO ALLOCATION As of 8/31/05 | |||
Sector | % of Net Assets | ||
Financial | 46.21 | % | |
Basic Materials | 11.49 | ||
Industrial | 8.74 | ||
Consumer Non-Cyclical | 6.71 | ||
Communications | 6.26 | ||
Consumer Cyclical | 6.07 | ||
Diversified | 5.55 | ||
Utilities | 4.29 | ||
Energy | 2.95 | ||
Technology | 0.93 | ||
Short-Term and Other Net Assets | 0.80 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS As of 8/31/05 | |||
Security | % of Net Assets | ||
BHP Billiton Ltd. (Australia) | 7.09 | % | |
National Australia Bank Ltd. (Australia) | 4.73 | ||
Commonwealth Bank of Australia (Australia) | 4.62 | ||
Australia & New Zealand Banking Group Ltd. (Australia) | 3.91 | ||
Westpac Banking Corp. Ltd. (Australia) | 3.44 | ||
Hutchison Whampoa Ltd. (Hong Kong) | 2.73 | ||
Westfield Group (Australia) | 2.43 | ||
Cheung Kong Holdings Ltd. (Hong Kong) | 2.11 | ||
Sun Hung Kai Properties Ltd. (Hong Kong) | 1.76 | ||
Woolworths Ltd. (Australia) | 1.68 | ||
TOTAL | 34.50 | % | |
The iShares MSCI Pacific ex-Japan Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Australia, Hong Kong, New Zealand and Singapore markets, as measured by the MSCI Pacific Free ex-Japan Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 33.27%, while the Index returned 33.13%.
The markets comprising the Index – Australia, Hong Kong, New Zealand and Singapore, all posted gains for the reporting period.
The Australian market delivered solid gains for the reporting period. Australia’s economy continued to appear healthy during the reporting period: with annualized gross domestic product growth for the second quarter of 2005 of 2.60%, the economy is now in its 14th year of uninterrupted expansion, the longest expansion in Australia since 1945. Inflation remained low, and export trade continued to grow for most of the reporting period, due in part to strong demand from China.
Contributing to Hong Kong’s economic growth was a strong real estate market, which benefited Fund performance for the reporting period. Healthy tourism levels also contributed to market returns, as did export trade. With mainland China serving as both its main export partner and its leading source of tourists, Hong Kong’s economy is sensitive to China’s economic well being. During the reporting period, this relationship benefited Hong Kong, as China provided demand in the forms of both exports and tourism.
Because Singapore depends so heavily on exports, it is sensitive to the economic health of both the United States and its Asian neighbors. During the reporting period, improved conditions in the U.S. benefited Singapore’s economic growth, as did continued demand of exports to China. In July 2005, annualized gross domestic product growth was reported at 14% for the second quarter of 2005.
All of the Fund’s ten largest holdings as of August 31, 2005 posted gains for the reporting period. The strongest performance came from the largest holding, mining company BHP Billiton Ltd. (Australia). Retail chain Woolworths Ltd. (Australia) also performed well for the reporting period. Real estate development company Cheung Kong Holdings Ltd. (Hong Kong) and industrial conglomerate Hutchison Whampoa Ltd. (Hong Kong) also contributed positively to Fund performance, as did Commonwealth Bank of Australia (Australia). The most modest returns for the reporting period among the Fund’s ten largest holdings came from real estate development company Sun Hung Kai Properties Ltd. (Hong Kong).
16 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SINGAPORE INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
24.06% | 24.21 | % | 22.19 | % | 2.69 | % | 2.60 | % | 2.34 | % | (2.84 | )% | (2.77 | )% | (2.44 | )% | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
24.06% | 24.21 | % | 22.19 | % | 14.18 | % | 13.68 | % | 12.29 | % | (23.86 | )% | (23.40 | )% | (20.87 | )% |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 17 |
Table of Contents
PORTFOLIO ALLOCATION As of 8/31/05 | |||
Sector | % of Net Assets | ||
Financial | 48.97 | % | |
Communications | 17.27 | ||
Industrial | 14.28 | ||
Diversified | 5.69 | ||
Consumer Cyclical | 5.49 | ||
Consumer Non-Cyclical | 4.55 | ||
Technology | 2.37 | ||
Energy | 0.42 | ||
Short-Term and Other Net Assets | 0.96 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS As of 8/31/05 | |||
Security | % of Net Assets | ||
Singapore Telecommunications Ltd. | 12.41 | % | |
United Overseas Bank Ltd. | 11.93 | ||
DBS Group Holdings Ltd. | 11.91 | ||
Oversea-Chinese Banking Corp. | 10.50 | ||
Singapore Press Holdings Ltd. | 4.49 | ||
Keppel Corp. Ltd. | 4.43 | ||
Singapore Airlines Ltd. | 3.91 | ||
City Developments Ltd. | 3.25 | ||
Singapore Technologies Engineering Ltd. | 2.78 | ||
Fraser & Neave Ltd. | 2.55 | ||
TOTAL | 68.16 | % | |
The iShares MSCI Singapore Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Singaporean market, as measured by the MSCI Singapore Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 24.06%, while the Index returned 22.19%.
Singapore’s market posted solid gains for the reporting period. The Singaporean economy appeared to improve during the course of the reporting period. Because it depends so heavily on exports, Singapore is sensitive to the economic health of both the United States and its Asian neighbors. During the reporting period, improved conditions in the U.S. benefited Singapore’s economic growth, as did continued demand for exports to China. In July 2005, annualized gross domestic product growth was reported at 14% for the second quarter 2005.
The Fund’s ten largest holdings accounted for about 68% of the Fund’s net assets as of August 31, 2005. Industrial conglomerate Keppel Corp. Ltd. was the strongest performer by far among the ten largest Fund holdings. City Developments Ltd., which operates hotels and resorts, also performed well for the reporting period. Aerospace firm Singapore Technologies Engineering Ltd. contributed positively to Fund performance, as did Singapore Telecommunications Ltd. Banking company DBS Group Holdings Ltd., had the smallest gain among the ten largest holdings.
18 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SOUTH AFRICA INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||
Year Ended 8/31/05 | Inception to 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
40.62% | 42.19 | % | 42.25 | % | 36.58 | % | 37.61 | % | 38.15 | % | 123.19 | % | 127.54 | % | 130.21 | % |
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.
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (2/7/03), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 19 |
Table of Contents
PORTFOLIO ALLOCATION As of 8/31/05 | |||
Sector | % of Net Assets | ||
Financial | 30.39 | % | |
Basic Materials | 15.75 | ||
Communications | 13.15 | ||
Energy | 13.01 | ||
Consumer Cyclical | 9.58 | ||
Diversified | 7.99 | ||
Industrial | 5.05 | ||
Consumer Non-Cyclical | 4.92 | ||
Short-Term and Other Net Assets | 0.16 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS As of 8/31/05 | |||
Security | % of Net Assets | ||
Sasol Ltd. | 13.01 | % | |
Standard Bank Group Ltd. | 9.00 | ||
Old Mutual PLC | 6.77 | ||
MTN Group Ltd. | 6.51 | ||
Impala Platinum Holdings Ltd. | 4.74 | ||
FirstRand Ltd. | 4.49 | ||
Sanlam Ltd. | 3.74 | ||
Telkom South Africa Ltd. | 3.35 | ||
AngloGold Ashanti Ltd. | 3.31 | ||
Naspers Ltd. | 3.28 | ||
TOTAL | 58.20 | % | |
The iShares MSCI South Africa Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the South African market, as measured by the MSCI South Africa Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 40.62%, while the Index returned 42.25%.
The South African market delivered strong gains for the reporting period, benefiting from economic growth. Annualized gross domestic product growth for the second quarter of 2005 was 5.0%, up from 3.5% in the first quarter of 2005. Slowing consumer inflation and low interest rates helped boost both consumer and business spending during the reporting period. Declining unemployment rates also contributed to a rise in consumer spending. While the escalating price of oil generally had a dampening effect on global economic growth, it helped South African oil producers and suppliers. The South African currency, the rand, declined during the reporting period, helping companies in the precious metals and mining sectors since they pay their costs in rand but sell their metal in U.S. dollars.
Among the Fund’s ten largest holdings as of August 31, 2005, returns were mostly positive for the reporting period. Broadcasting and cable television company Naspers Ltd. was the strongest performer for the reporting period. Top Fund holding Sasol Ltd., an oil and gas exploration and production company, also delivered strong gains. Telkom South Africa Ltd. and Standard Bank Group Ltd. both contributed positively to Fund performance for the reporting period, as did wireless telecommunications company MTN Group Ltd. The only negative performer among the Fund’s ten largest holdings was AngloGold Ashanti Ltd.
20 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SOUTH KOREA INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
44.29% | 42.65 | % | 45.83 | % | 14.33 | % | 13.07 | % | 15.45 | % | 11.02 | % | 10.80 | % | 11.62 | % | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
44.29% | 42.65 | % | 45.83 | % | 95.38% | 84.83 | % | 105.12 | % | 74.26% | 72.48 | % | 79.43 | % |
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.
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 stock exchange on which it is listed, the market return is calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (5/12/00), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 21 |
Table of Contents
PORTFOLIO ALLOCATION | |||
Sector | % of Net Assets | ||
Industrial | 40.08 | % | |
Financial | 17.01 | ||
Consumer Cyclical | 14.66 | ||
Basic Materials | 8.96 | ||
Communications | 6.77 | ||
Consumer Non-Cyclical | 5.22 | ||
Energy | 3.68 | ||
Utilities | 3.51 | ||
Short-Term and Other Net Assets | 0.11 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS | |||
Security | % of Net Assets | ||
Samsung Electronics Co. Ltd. | 23.31 | % | |
Kookmin Bank | 7.00 | ||
POSCO | 6.39 | ||
Hyundai Motor Co. Ltd. | 4.93 | ||
Korea Electric Power Corp. | 3.51 | ||
Shinhan Financial Group Ltd. | 3.03 | ||
LG Electronics Inc. | 2.89 | ||
SK Telecom Co. Ltd. | 2.61 | ||
Shinsegae Department Store Co. Ltd. | 2.24 | ||
SK Corp. | 2.24 | ||
TOTAL | 58.15 | % | |
The iShares MSCI South Korea Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the South Korean market, as measured by the MSCI 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 twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 44.29%, while the Index returned 45.83%.
The South Korean market posted robust gains for the reporting period. South Korea’s economic livelihood relies heavily on its export trade, which overcame challenges on several fronts in the first few months of the reporting period before ultimately contributing to the healthy market returns. Early in the reporting period, the won, South Korea’s currency, appreciated, making South Korean goods more expensive to its trading partners. Escalating oil prices also threatened export growth, as it had a dampening effect on global economic growth. As the reporting period progressed, however, conditions improved considerably for South Korea’s export trade. The won began to depreciate, making South Korean goods less expensive to its export partners. Improved economic conditions in the U.S. and demand from some of its Asian neighbors also contributed to increased export trade. In July, export levels rose 12.35% over June, the largest increase in four months, reflecting higher export levels for cars, computer chips and ships.
Among the Fund’s ten largest holdings as of August 31, 2005, performance was positive for the reporting period. The strongest performer among the Fund’s ten largest holdings was electric utility company Korea Electric Power Corp. Financial company Shinhan Financial Group Ltd. also delivered strong gains for the reporting period. Automobile manufacturer Hyundai Motor Co. Ltd. contributed positively to Fund performance, as did Kookmin Bank. Among the ten largest Fund holdings, SK Telecom Co. Ltd. posted the smallest return for the reporting period.
22 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI TAIWAN INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | |||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | |||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||
9.28 | % | 10.15 | % | 10.10 | % | (6.59 | )% | (7.07 | )% | (5.66 | )% | (8.64 | )% | (8.74 | )% | (7.78 | )% | ||||||||
Cumulative Total Returns | |||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | |||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||
9.28 | % | 10.15 | % | 10.10 | % | (28.87 | )% | (30.68 | )% | (25.28 | )% | (37.48 | )% | (37.84 | )% | (34.36 | )% |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 stock exchange on which it is listed, the market return is calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (6/23/00), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 23 |
Table of Contents
PORTFOLIO ALLOCATION | |||
Sector | % of Net Assets | ||
Technology | 34.80 | % | |
Industrial | 22.45 | ||
Financial | 21.04 | ||
Basic Materials | 11.42 | ||
Communications | 4.89 | ||
Consumer Cyclical | 3.87 | ||
Consumer Non-Cyclical | 0.75 | ||
Short-Term and Other Net Assets | 0.78 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS | |||
Security | % of Net Assets | ||
Taiwan Semiconductor Manufacturing Co. Ltd. | 14.54 | % | |
Hon Hai Precision Industry Co. Ltd. | 6.24 | ||
United Microelectronics Corp. | 4.56 | ||
Cathay Financial Holding Co. Ltd. | 4.21 | ||
AU Optronics Corp. | 3.31 | ||
Chunghwa Telecom Co. Ltd. | 3.22 | ||
China Steel Corp. | 3.13 | ||
MediaTek Inc. | 2.92 | ||
Formosa Plastic Co. | 2.83 | ||
Nan Ya Plastic Corp. | 2.74 | ||
TOTAL | 47.70 | % | |
The iShares MSCI Taiwan Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Taiwanese market, as measured by the MSCI Taiwan Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 9.28%, while the Index returned 10.10%.
The Taiwanese market delivered moderate gains for the reporting period, although its index lagged other Asian markets. Taiwan’s two leading trading partners are China and the U.S., and export growth to both partners was somewhat volatile during the reporting period. For much of the reporting period, rising oil prices weighed on economic growth, having a negative effect on export demand. However, U.S. economic conditions improved as the reporting period progressed, ultimately boosting demand for Taiwanese exports. China’s investments in steelmaking facilities declined 14% in the first quarter of 2005, contributing to a decline in Taiwan’s steel industry, although electronics exports to China remained healthy.
Among the Fund’s ten largest holdings as of August 31, 2005, performance was mixed for the reporting period. Electronics manufacturer Hon Hai Precision Industry Co. Ltd. logged the strongest gains among the Fund’s ten largest holdings. Semiconductor companies MediaTek Inc. and Taiwan Semiconductor Manufacturing Co. Ltd. also performed well for the reporting period, as did electronic equipment manufacturer AU Optronics Corp. On the negative side, Nan Ya Plastic Corp. posted a decline for the reporting period, as did China Steel Corp. and United Microelectronics Corp.
24 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
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, 2005 to August 31, 2005.
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, 2005) | Ending Account Value (August 31, 2005) | Annualized Expense Ratio | Expenses Paid During Period a (March 1 to August 31, 2005) | ||||||||
Australia | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,028.70 | 0.57 | % | $ | 2.91 | ||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 | ||||||||
Brazil | ||||||||||||
Actual | 1,000.00 | 1,119.60 | 0.74 | 3.95 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.48 | 0.74 | 3.77 | ||||||||
Canada | ||||||||||||
Actual | 1,000.00 | 1,157.40 | 0.57 | 3.10 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 | ||||||||
Emerging Markets | ||||||||||||
Actual | 1,000.00 | 1,061.80 | 0.78 | 4.05 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.27 | 0.78 | 3.97 |
SHAREHOLDER EXPENSES | 25 |
Table of Contents
Shareholder Expenses (Continued)
iSHARES®, INC.
iShares MSCI Index Fund | Beginning Account Value (March 1, 2005) | Ending Account Value (August 31, 2005) | Annualized Expense Ratio | Expenses Paid During Period a (March 1 to August 31, 2005) | ||||||||
Hong Kong | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,089.60 | 0.57 | % | $ | 3.00 | ||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 | ||||||||
Malaysia | ||||||||||||
Actual | 1,000.00 | 1,011.30 | 0.57 | 2.89 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 | ||||||||
Mexico | ||||||||||||
Actual | 1,000.00 | 1,086.00 | 0.57 | 3.00 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 | ||||||||
Pacific ex-Japan | ||||||||||||
Actual | 1,000.00 | 1,042.70 | 0.50 | 2.57 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.68 | 0.50 | 2.55 | ||||||||
Singapore | ||||||||||||
Actual | 1,000.00 | 1,064.40 | 0.57 | 2.97 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 | ||||||||
South Africa | ||||||||||||
Actual | 1,000.00 | 1,027.50 | 0.74 | 3.78 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.48 | 0.74 | 3.77 | ||||||||
South Korea | ||||||||||||
Actual | 1,000.00 | 1,016.70 | 0.74 | 3.76 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.48 | 0.74 | 3.77 | ||||||||
Taiwan | ||||||||||||
Actual | 1,000.00 | 939.90 | 1.21 | 5.92 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,019.11 | 1.21 | 6.16 |
a | 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 (365 days). |
26 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 99.21% | |||||
AIRLINES – 0.44% | |||||
Qantas Airways Ltd. | 679,528 | $ | 1,638,472 | ||
1,638,472 | |||||
APPAREL – 0.26% | |||||
Billabong International Ltd. | 97,566 | 949,063 | |||
949,063 | |||||
BANKS – 27.20% | |||||
Australia & New Zealand Banking Group Ltd. | 1,329,766 | 22,134,599 | |||
Commonwealth Bank of Australia1 | 933,745 | 26,231,708 | |||
National Australia Bank Ltd.1 | 1,137,159 | 26,744,281 | |||
Suncorp-Metway Ltd. | 398,243 | 5,893,063 | |||
Westpac Banking Corp. Ltd. | 1,313,505 | 19,476,259 | |||
100,479,910 | |||||
BEVERAGES – 2.72% | |||||
Coca-Cola Amatil Ltd. | 380,265 | 2,467,896 | |||
Foster’s Group Ltd. | 1,459,248 | 6,302,656 | |||
Lion Nathan Ltd. | 213,918 | 1,291,903 | |||
10,062,455 | |||||
BIOTECHNOLOGY – 0.56% | |||||
Sonic Healthcare Ltd. | 180,588 | 2,075,425 | |||
2,075,425 | |||||
BUILDING MATERIALS – 3.58% | |||||
Boral Ltd. | 422,180 | 2,302,295 | |||
CSR Ltd. | 662,055 | 1,332,771 | |||
James Hardie Industries NV | 335,623 | 2,173,130 | |||
Rinker Group Ltd. | 686,295 | 7,407,886 | |||
13,216,082 | |||||
COMMERCIAL SERVICES – 1.28% | |||||
Brambles Industries Ltd.1 | 707,101 | 4,716,514 | |||
4,716,514 | |||||
COMPUTERS – 0.38% | |||||
Computershare Ltd. | 281,083 | 1,410,385 | |||
1,410,385 | |||||
DIVERSIFIED FINANCIAL SERVICES – 3.72% | |||||
Australian Stock Exchange Ltd.1 | 74,841 | 1,492,557 | |||
Babcock & Brown Ltd.1 | 109,181 | 1,521,310 | |||
Challenger Financial Services Group Ltd.2 | 293,607 | 789,544 | |||
Macquarie Bank Ltd. | 163,620 | 7,757,648 | |||
Perpetual Trustees Australia Ltd. | 28,684 | 1,317,106 | |||
SFE Corp. Ltd. | 97,667 | 849,539 | |||
13,727,704 | |||||
ENGINEERING & CONSTRUCTION – 0.86% | |||||
Downer EDI Ltd. | 202,101 | 918,439 | |||
Leighton Holdings Ltd.1 | 99,384 | 1,111,573 | |||
Multiplex Group | 457,025 | 1,153,469 | |||
3,183,481 | |||||
ENTERTAINMENT – 2.09% | |||||
Aristocrat Leisure Ltd.1 | 225,331 | 2,120,795 | |||
TABCORP Holdings Ltd. | 381,881 | 4,733,024 | |||
UNiTAB Ltd. | 87,365 | 867,552 | |||
7,721,371 | |||||
FOOD – 2.56% | |||||
Woolworths Ltd.1 | 774,367 | 9,452,069 | |||
9,452,069 | |||||
FOREST PRODUCTS & PAPER – 0.22% | |||||
PaperlinX Ltd.1 | 325,422 | 794,432 | |||
794,432 | |||||
GAS – 1.37% | |||||
Alinta Ltd.1 | 183,618 | 1,517,171 | |||
Australian Gas Light Co. Ltd. | 333,098 | 3,550,431 | |||
5,067,602 | |||||
HEALTH CARE – PRODUCTS – 0.34% | |||||
Cochlear Ltd.1 | 39,592 | 1,249,060 | |||
1,249,060 | |||||
HEALTH CARE – SERVICES – 0.23% | |||||
DCA Group Ltd.1 | 292,294 | 860,662 | |||
860,662 | |||||
HOLDING COMPANIES – DIVERSIFIED – 0.68% | |||||
Patrick Corp. Ltd. 1 | 477,023 | 2,522,543 | |||
2,522,543 | |||||
HOUSEHOLD PRODUCTS & WARES – 0.21% | |||||
Pacific Brands Ltd.1 | 367,741 | 762,391 | |||
762,391 |
SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2005
Security | Shares | Value | |||
INSURANCE – 5.91% | |||||
AMP Ltd. | 1,356,228 | $ | 7,508,045 | ||
AXA Asia Pacific Holdings Ltd. | 634,179 | 2,348,472 | |||
Insurance Australia Group Ltd. | 1,162,308 | 4,723,296 | |||
QBE Insurance Group Ltd. | 562,772 | 7,228,618 | |||
21,808,431 | |||||
INVESTMENT COMPANIES – 1.85% | |||||
Macquarie Airports | 453,995 | 1,087,849 | |||
Macquarie Communications Infrastructure Group | 242,400 | 1,145,275 | |||
Macquarie Infrastructure Group | 1,578,731 | 4,613,010 | |||
6,846,134 | |||||
IRON & STEEL – 1.25% | |||||
BHP Steel Ltd.1 | 521,059 | 3,647,787 | |||
OneSteel Ltd.1 | 409,656 | 984,682 | |||
4,632,469 | |||||
MANUFACTURING – 3.35% | |||||
Ansell Ltd. | 105,848 | 848,347 | |||
Futuris Corp. Ltd. | 387,133 | 581,590 | |||
Orica Ltd. | 198,667 | 2,838,330 | |||
Wesfarmers Ltd.1 | 274,417 | 8,121,456 | |||
12,389,723 | |||||
MEDIA – 1.13% | |||||
APN News & Media Ltd.1 | 213,918 | 817,884 | |||
John Fairfax Holdings Ltd. | 673,569 | 2,200,888 | |||
Publishing & Broadcasting Ltd. | 94,839 | 1,148,362 | |||
4,167,134 | |||||
MINING – 15.15% | |||||
Alumina Ltd. | 848,400 | 3,791,790 | |||
BHP Billiton Ltd.1 | 2,613,880 | 40,171,491 | |||
Iluka Resources Ltd. | 169,579 | 1,082,724 | |||
Newcrest Mining Ltd. | 241,087 | 3,076,762 | |||
Rio Tinto Ltd.1 | 207,151 | 7,828,310 | |||
55,951,077 | |||||
OIL & GAS – 4.49% | |||||
Caltex Australia Ltd. | 98,172 | 1,275,735 | |||
Origin Energy Ltd. | 576,508 | 3,139,569 | |||
Santos Ltd. | 430,462 | 3,744,295 | |||
Woodside Petroleum Ltd. | 340,269 | 8,419,235 | |||
16,578,834 | |||||
PACKAGING & CONTAINERS – 0.86% | |||||
Amcor Ltd. | 639,532 | 3,170,537 | |||
3,170,537 | |||||
PHARMACEUTICALS – 1.44% | |||||
CSL Ltd. | 138,269 | 3,559,308 | |||
Mayne Group Ltd. | 464,297 | 1,743,783 | |||
5,303,091 | |||||
REAL ESTATE – 10.43% | |||||
Centro Properties Group | 567,822 | 2,537,791 | |||
Commonwealth Property Office Fund | 974,549 | 929,681 | |||
DB RREEF Trust | 1,896,174 | 1,944,185 | |||
Gandel Retail Trust | 1,104,637 | 1,468,654 | |||
GPT Group | 1,323,908 | 3,888,313 | |||
ING Industrial Fund | 508,939 | 856,329 | |||
Investa Property Group1 | 1,090,901 | 1,688,026 | |||
Lend Lease Corp Ltd.1 | 261,287 | 2,586,782 | |||
Macquarie Goodman Group | 867,893 | 2,783,689 | |||
Mirvac Group | 623,877 | 1,790,148 | |||
Stockland Trust Group | 944,047 | 4,183,813 | |||
Westfield Group | 1,060,702 | 13,879,321 | |||
38,536,732 | |||||
RETAIL – 1.83% | |||||
Coles Myer Ltd. | 805,677 | 5,985,273 | |||
Harvey Norman Holdings Ltd.1 | 385,719 | 767,792 | |||
6,753,065 | |||||
TELECOMMUNICATIONS – 2.30% | |||||
Telstra Corp. Ltd.1 | 1,542,371 | 5,422,023 | |||
Transurban Group1 | 571,862 | 3,071,312 | |||
8,493,335 | |||||
TRANSPORTATION – 0.52% | |||||
Toll Holdings Ltd.1 | 180,487 | 1,908,865 | |||
1,908,865 | |||||
TOTAL COMMON STOCKS | 366,429,048 |
28 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
SHORT-TERM INVESTMENTS – 21.35% | ||||||
CERTIFICATES OF DEPOSIT3 – 2.42% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% – 3.83%, 09/14/05 – 01/25/06 | $ | 510,329 | $ | 510,330 | ||
Bank of Nova Scotia | ||||||
3.45% – 3.56%, 09/26/05 – 01/03/06 | 221,143 | 221,126 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 340,220 | 340,220 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 340,220 | 340,207 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 170,110 | 170,076 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 578,373 | 578,373 | ||||
Fortis Bank NY | ||||||
3.83% – 3.84%, 01/25/06 | 510,329 | 510,333 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 204,132 | 204,132 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 170,110 | 170,165 | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 170,110 | 170,089 | ||||
Societe Generale | ||||||
3.51% – 3.60%, 03/30/06 – 06/13/06 | 527,340 | 527,247 | ||||
Toronto–Dominion Bank | ||||||
2.66% – 3.94%, 09/14/05 – 07/10/06 | 1,207,780 | 1,207,804 | ||||
UBS AG | ||||||
2.67% – 3.40%, 11/09/05 – 12/15/05 | 272,176 | 272,175 | ||||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 850,549 | 850,549 | ||||
Washington Mutual Bank | ||||||
3.50% – 3.55%, 09/15/05 – 09/19/05 | 1,530,988 | 1,530,989 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 – 09/20/05 | 1,343,867 | 1,343,867 | ||||
8,947,682 | ||||||
COMMERCIAL PAPER3 – 4.88% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 680,439 | 679,907 | ||||
Amstel Funding Corp. | ||||||
3.49% – 3.91%, 09/15/05 – 02/15/06 | 717,863 | 714,020 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 340,220 | 340,220 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 385,826 | 385,600 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% – 3.49%, 09/09/05 – 09/21/05 | 561,362 | 560,671 | ||||
Bryant Park Funding LLC | ||||||
3.51% – 3.92%, 09/06/05 – 02/22/06 | 173,168 | 171,481 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 130,804 | 129,991 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 238,154 | 237,709 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 102,066 | 101,925 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 34,022 | 33,500 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 255,165 | 255,054 | ||||
Fairway Finance LLC | ||||||
3.15% – 3.56%, 09/15/05 – 10/20/05 | 438,730 | 438,359 | ||||
Ford Credit Floorplan Motown | ||||||
3.47% – 3.72%, 09/09/05 – 11/08/05 | 1,547,890 | 1,540,827 | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 545,814 | 545,550 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% – 3.53%, 09/20/05 – 09/21/05 | 1,105,714 | 1,103,576 | ||||
Giro Funding Corp. | ||||||
3.53% – 3.56%, 09/16/05 – 09/22/05 | 255,165 | 254,738 |
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Grampian Funding LLC | ||||||
3.13% – 3.84%, 09/09/05 – 01/31/06 | $ | 527,340 | $ | 521,694 | ||
Greenwich Capital Holdings Inc. | ||||||
3.48% – 3.53%, 09/02/05 – 02/10/06 | 391,253 | 391,253 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 102,066 | 100,361 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 192,860 | 192,484 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 – 02/21/064 | 357,199 | 357,199 | ||||
Lockhart Funding LLC | ||||||
3.47% – 3.55%, 09/16/05 – 09/19/05 | 468,969 | 468,269 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% – 3.51%, 09/01/05 – 09/21/05 | 833,538 | 832,449 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 1,190,769 | 1,190,769 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 191,897 | 191,562 | ||||
Park Granada LLC | ||||||
3.48% – 3.51%, 09/15/05 – 09/20/05 | 460,668 | 459,963 | ||||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 340,220 | 333,975 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 680,439 | 680,040 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 85,055 | 83,453 | ||||
Solitaire Funding Ltd. | ||||||
3.49% – 3.52%, 09/02/05 – 09/06/05 | 1,000,246 | 999,982 | ||||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 210,188 | 210,188 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 714,461 | 713,126 | ||||
Security | Shares or Principal | Value | ||||
Three Pillars Funding Corp. | ||||||
3.49% – 3.52%, 09/01/05 – 09/07/05 | $ | 728,975 | $ | 728,726 | ||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 56,868 | 56,868 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 1,255,312 | 1,255,312 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 156,501 | 156,379 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 119,078 | 119,078 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 493,318 | 492,448 | ||||
18,028,706 | ||||||
MEDIUM-TERM NOTES3 – 0.08% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/064 | 105,468 | 105,459 | ||||
K2 USA LLC | ||||||
3.94%, 07/07/064 | 204,132 | 204,123 | ||||
309,582 | ||||||
MONEY MARKET FUNDS – 0.44% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares | ||||||
3.63%3,5,6 | 1,360,878 | 1,360,878 | ||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares | ||||||
3.56%5,6 | 108,353 | 108,353 | ||||
BlackRock Temp Cash Money Market Fund | ||||||
3.41%3,6 | 36,049 | 36,049 | ||||
Short Term Investments Co. – Prime Money Market Portfolio, Institutional Shares | ||||||
3.50%3,6 | 119,266 | 119,266 | ||||
1,624,546 |
30 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
REPURCHASE AGREEMENTS3 – 4.12% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $8,166,087 and an effective yield of 3.60%.7 | $ | 8,165,270 | $ | 8,165,270 | ||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $6,294,692 and an effective yield of 3.60%.7 | 6,294,062 | 6,294,062 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $741,753 and an effective yield of 3.60%.7 | 741,679 | 741,679 | ||||
15,201,011 | ||||||
TIME DEPOSITS3 – 0.86% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | 680,439 | 680,439 | ||||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 1,871,208 | 1,871,208 | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 449,149 | 449,149 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/058 | 170,110 | 170,110 | ||||
3,170,906 | ||||||
VARIABLE & FLOATING RATE NOTES3 – 8.55% | ||||||
Allstate Life Global Funding II | ||||||
3.58% – 3.66%, 07/08/06 – 07/27/064 | 632,808 | 632,811 | ||||
American Express Bank | ||||||
3.55% – 3.63%, 10/17/05 – 07/19/06 | 918,593 | 918,596 | ||||
American Express Centurion Bank | ||||||
3.55% – 3.63%, 06/29/06 – 07/19/06 | 561,362 | 561,362 | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 680,439 | 680,490 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/064 | 340,220 | 340,644 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/064 | �� | 221,143 | 221,143 | |||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 1,701,098 | 1,701,098 | ||||
Beta Finance Inc. | ||||||
3.51% – 3.72%, 09/23/05 – 06/09/064 | 1,748,729 | 1,748,706 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/064 | 340,220 | 340,220 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% – 3.61%, 09/13/05 – 12/14/05 | 1,156,747 | 1,156,698 | ||||
CC USA Inc. | ||||||
3.52% – 3.59%, 03/23/06 – 07/14/064 | 915,191 | 915,153 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/054 | 85,055 | 85,055 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 850,549 | 850,549 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 340,220 | 340,220 | ||||
Dorada Finance Inc. | ||||||
3.59% – 3.62%, 03/27/06 – 06/26/064 | 540,949 | 540,977 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/064 | 340,220 | 340,220 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/064 | 680,439 | 680,439 | ||||
Five Finance Inc. | ||||||
3.60% – 3.63%, 02/27/06 – 06/26/064 | 238,154 | 238,159 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 153,099 | 153,237 | ||||
Hartford Life Global Funding Trust | ||||||
3.56%, 08/15/06 | 340,220 | 340,220 |
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
HBOS Treasury Services PLC | |||||||
3.51% – 3.57%, 01/10/06 – 04/24/064 | $ | 1,020,659 | $ | 1,020,660 | |||
HSBC Bank USA N.A. | |||||||
3.70%, 05/04/06 | 119,077 | 119,142 | |||||
K2 USA LLC | |||||||
3.47% – 3.58%, 09/12/05 – 06/02/064 | 1,326,856 | 1,326,868 | |||||
Links Finance LLC | |||||||
3.52% – 3.71%, 11/16/05 – 03/15/064 | 1,326,856 | 1,327,000 | |||||
Lothian Mortgages PLC | |||||||
3.63%, 01/24/06 | 340,220 | 340,220 | |||||
Marshall & Ilsley Bank | |||||||
3.71%, 02/20/06 | 340,220 | 340,412 | |||||
Metropolitan Life Global Funding I | |||||||
3.55% – 4.01%, 08/28/06 – 09/06/064 | 680,439 | 680,738 | |||||
National City Bank (Ohio) | |||||||
3.50%, 01/06/06 | 170,110 | 170,092 | |||||
Nationwide Building Society | |||||||
3.51% – 3.62%, 01/13/06 – 07/07/064 | 1,258,812 | 1,258,935 | |||||
Nordea Bank AB | |||||||
3.55%, 08/11/064 | 595,384 | 595,384 | |||||
Northern Rock PLC | |||||||
3.54% – 3.61%, 10/25/05 – 08/03/064 | 1,088,703 | 1,088,722 | |||||
Permanent Financing PLC | |||||||
3.53% – 3.54%, 09/12/05 – 06/12/064 | 1,309,845 | 1,309,845 | |||||
Principal Life Income Funding Trusts | |||||||
3.74%, 05/10/06 | 255,165 | 255,174 | |||||
Royal Bank of Scotland | |||||||
3.47% – 3.61%, 04/05/06 – 08/30/06 | 1,135,483 | 1,135,224 | |||||
Sedna Finance Inc. | |||||||
3.54%, 01/10/06 – 01/17/064 | 187,121 | 187,106 | |||||
Sigma Finance Inc. | |||||||
3.50% – 3.72%, 09/15/05 – 08/15/064 | 1,942,654 | 1,942,664 | |||||
Skandinaviska Enskilda Bank NY | |||||||
3.58%, 07/18/064 | 340,220 | 340,220 | |||||
Strips III LLC | |||||||
3.69%, 07/24/064,8 | 99,939 | 99,939 | |||||
SunTrust Bank | |||||||
3.63%, 04/28/06 | 510,329 | 510,329 | |||||
Tango Finance Corp. | |||||||
3.54% – 3.60%, 09/15/05 – 06/21/064 | 826,734 | 826,683 | |||||
Toyota Motor Credit Corp. | |||||||
3.57%, 04/10/06 | 153,099 | 153,097 | |||||
Unicredito Italiano SpA | |||||||
3.34%, 06/14/06 | 442,285 | 442,163 | |||||
Wachovia Asset Securitization Inc. | |||||||
3.63%, 09/25/054 | 819,026 | 819,026 | |||||
Wells Fargo & Co. | |||||||
3.56%, 09/15/064 | 170,110 | 170,127 | |||||
WhistleJacket Capital LLC | |||||||
3.52% – 3.62%, 09/15/05 – 07/28/064 | 1,360,878 | 1,360,819 | |||||
White Pine Finance LLC | |||||||
3.47% – 3.61%, 11/01/05 – 06/20/064 | 717,863 | 717,845 | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/054 | 242,917 | 242,917 | |||||
31,567,348 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 78,849,781 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 120.56% | 445,278,829 | ||||||
Other Assets, Less Liabilities – (20.56)% | (75,923,561 | ) | |||||
NET ASSETS – 100.00% | $ | 369,355,268 | |||||
32 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2005
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 (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
4 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
6 | The rate quoted is the annualized seven-day yield of the fund at period end. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
8 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
iSHARES® MSCI BRAZIL INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 33.12% | |||||
AGRICULTURE – 0.80% | |||||
Souza Cruz SA | 392,000 | $ | 4,392,530 | ||
4,392,530 | |||||
BANKS – 3.82% | |||||
Unibanco Uniao de Bancos Brasileiros SA | 2,352,010 | 21,114,181 | |||
21,114,181 | |||||
CHEMICALS – 1.34% | |||||
Braskem SA Class A | 745,036 | 7,409,250 | |||
7,409,250 | |||||
COMMERCIAL SERVICES – 0.85% | |||||
Cia de Concessoes Rodoviarias | 196,000 | 4,675,382 | |||
4,675,382 | |||||
COSMETICS & PERSONAL CARE – 0.72% | |||||
Natura Cosmeticos SA | 117,600 | 3,993,209 | |||
3,993,209 | |||||
ELECTRIC – 1.18% | |||||
Centrais Eletricas Brasileiras SA | 470,400,000 | 6,508,930 | |||
6,508,930 | |||||
HEALTH CARE - SERVICES – 0.43% | |||||
Diagnosticos da America SA1 | 196,000 | 2,354,329 | |||
2,354,329 | |||||
HOLDING COMPANIES - DIVERSIFIED – 0.04% | |||||
Contax Participacoes SA1 | 340,138 | 248,318 | |||
248,318 | |||||
IRON & STEEL – 2.23% | |||||
Companhia Siderurgica Nacional SA | 627,284 | 12,335,343 | |||
12,335,343 | |||||
MINING – 8.00% | |||||
Companhia Vale do Rio Doce ADR2 | 1,284,584 | 44,176,844 | |||
44,176,844 | |||||
OIL & GAS – 10.98% | |||||
Petroleo Brasileiro SA | 960,900 | 60,647,636 | |||
60,647,636 | |||||
TELECOMMUNICATIONS – 1.93% | |||||
Brasil Telecom Participacoes SA | 313,600,000 | 4,218,158 | |||
Tele Norte Leste Participacoes SA | 316,138 | 6,420,714 | |||
10,638,872 | |||||
WATER – 0.80% | |||||
Companhia de Saneamento Basico do Estado de Sao Paulo | 70,560,000 | 4,432,162 | |||
4,432,162 | |||||
TOTAL COMMON STOCKS | 182,926,986 | ||||
PREFERRED STOCKS – 66.26% | |||||
AEROSPACE & DEFENSE – 2.37% | |||||
Embraer-Empresa Brasileira de Aeronautica SA | 1,450,443 | 13,113,088 | |||
13,113,088 | |||||
AIRLINES – 0.60% | |||||
Gol Linhas Aereas Inteligentes SA | 196,000 | 3,323,514 | |||
3,323,514 | |||||
BANKS – 12.25% | |||||
Banco Bradesco SA | 627,284 | 26,624,958 | |||
Banco Itau Holding Financeira SA | 196,037 | 41,021,325 | |||
67,646,283 | |||||
BEVERAGES – 4.57% | |||||
Companhia de Bebidas das Americas | 78,400,000 | 25,257,046 | |||
25,257,046 | |||||
BUILDING MATERIALS – 0.55% | |||||
Duratex SA | 319,110 | 3,006,894 | |||
3,006,894 | |||||
ELECTRIC – 4.42% | |||||
Centrais Eletricas Brasileiras SA Class B | 313,600,000 | 4,179,557 | |||
Companhia Energetica de Minas Gerais | 431,200,000 | 15,071,867 | |||
Companhia Paranaense de Energia Class B | 588,000,000 | 3,376,755 | |||
Eletropaulo Metropolitana Eletricidade de Sao Paulo SA1 | 47,040,000 | 1,796,944 | |||
24,425,123 |
34 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BRAZIL INDEX FUND
August 31, 2005
Security | Shares | Value | ||||
FOOD – 1.81% | ||||||
Companhia Brasileira de Distribuicao Grupo Pao de Acucar | 162,172,000 | $ | 3,882,216 | |||
Sadia SA | 2,744,000 | 6,126,248 | ||||
10,008,464 | ||||||
FOREST PRODUCTS & PAPER – 2.91% | ||||||
Aracruz Celulose SA Class B | 2,038,400 | 7,440,679 | ||||
Klabin SA | 2,352,000 | 4,532,292 | ||||
Votorantim Celulose e Papel SA | 352,800 | 4,080,560 | ||||
16,053,531 | ||||||
GAS – 0.23% | ||||||
Cia de Gas de Sao Paulo Class A | 11,760,000 | 1,247,928 | ||||
1,247,928 | ||||||
HOLDING COMPANIES – DIVERSIFIED – 0.13% | ||||||
Contax Participacoes SA1 | 1,058,439 | 709,819 | ||||
709,819 | ||||||
IRON & STEEL – 4.38% | ||||||
Companhia Siderurgica de Tubarao | 78,400,000 | 4,459,083 | ||||
Gerdau SA | 823,216 | 9,975,729 | ||||
Usinas Siderurgicas de Minas Gerais SA Class A | 470,400 | 9,755,409 | ||||
24,190,221 | ||||||
MACHINERY – 0.66% | ||||||
Weg SA | 1,136,800 | 3,623,671 | ||||
3,623,671 | ||||||
MINING – 10.33% | ||||||
Caemi Mineracao e Metalurgica SA | 8,232,000 | 9,643,599 | ||||
Companhia Vale do Rio Doce Class A | 1,578,000 | 47,420,374 | ||||
57,063,973 | ||||||
OIL & GAS – 13.32% | ||||||
Petroleo Brasileiro SA | 1,332,800 | 73,541,596 | ||||
73,541,596 | ||||||
RETAIL – 0.65% | ||||||
Lojas Americanas SA | 196,000,000 | 3,602,208 | ||||
3,602,208 | ||||||
Security | Shares or Principal | Value | ||||
TELECOMMUNICATIONS – 6.86% | ||||||
Brasil Telecom Participacoes SA | 940,800,000 | $ | 6,868,320 | |||
Celular CRT Participacoes SA Class A | 41,460 | 888,680 | ||||
Embratel Participacoes SA1 | 1,764,000,000 | 3,556,453 | ||||
Tele Centro Oeste Celular Participacoes SA | 272,412 | 2,636,245 | ||||
Tele Norte Leste Participacoes SA | 1,058,439 | 15,988,898 | ||||
Telemig Celular Participacoes SA | 862,400,000 | 1,361,686 | ||||
Telesp Celular Participacoes SA1 | 857,697 | 3,556,749 | ||||
TIM Participacoes SA | 1,920,800,000 | 3,008,376 | ||||
37,865,407 | ||||||
TEXTILES – 0.22% | ||||||
Companhia de Tecidos Norte de Minas | 17,132,400 | 1,236,209 | ||||
1,236,209 | ||||||
TOTAL PREFERRED STOCKS | 365,914,975 | |||||
SHORT- TERM INVESTMENTS – 2.21% | ||||||
CERTIFICATES OF DEPOSIT3 – 0.23% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% – 3.83%, 09/14/05 – 01/25/06 | $ | 71,908 | 71,907 | |||
Bank of Nova Scotia | ||||||
3.45% – 3.56%, 09/26/05 – 01/03/06 | 31,160 | 31,157 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 47,938 | 47,938 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 47,938 | 47,937 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 23,969 | 23,964 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 81,495 | 81,495 | ||||
Fortis Bank NY | ||||||
3.83% - 3.84%, 01/25/06 | 71,908 | 71,908 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 28,763 | 28,763 |
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BRAZIL INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | $ | 23,969 | $ | 23,977 | ||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 23,969 | 23,966 | ||||
Societe Generale | ||||||
3.51% – 3.60%, 03/30/06 – 06/13/06 | 74,304 | 74,292 | ||||
Toronto-Dominion Bank | ||||||
2.66% – 3.94%, 09/14/05 – 07/10/06 | 170,181 | 170,185 | ||||
UBS AG | ||||||
2.67% – 3.40%, 11/09/05 – 12/15/05 | 38,351 | 38,351 | ||||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 119,846 | 119,846 | ||||
Washington Mutual Bank | ||||||
3.50% – 3.55%, 09/15/05 – 09/19/05 | 215,723 | 215,722 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 – 09/20/05 | 189,357 | 189,357 | ||||
1,260,765 | ||||||
COMMERCIAL PAPER3 – 0.46% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 95,877 | 95,800 | ||||
Amstel Funding Corp. | ||||||
3.49% – 3.91%, 09/15/05 – 02/15/06 | 101,150 | 100,610 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 47,938 | 47,938 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 54,365 | 54,333 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% – 3.49%, 09/09/05 – 09/21/05 | 79,098 | 79,001 | ||||
Bryant Park Funding LLC | ||||||
3.51% – 3.92%, 09/06/05 – 02/22/06 | 24,400 | 24,163 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 18,431 | 18,316 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 33,557 | 33,494 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 14,382 | 14,362 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 4,794 | 4,720 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 35,954 | 35,938 | ||||
Fairway Finance LLC | ||||||
3.15% – 3.56%, 09/15/05 – 10/20/05 | 61,819 | 61,766 | ||||
Ford Credit Floorplan Motown | ||||||
3.47% – 3.72%, 09/09/05 – 11/08/05 | 218,104 | 217,110 | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 76,908 | 76,870 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% – 3.53%, 09/20/05 – 09/21/05 | 155,800 | 155,499 | ||||
Giro Funding Corp. | ||||||
3.53% – 3.56%, 09/16/05 – 09/22/05 | 35,954 | 35,894 | ||||
Grampian Funding LLC | ||||||
3.13% – 3.84%, 09/09/05 – 01/31/06 | 74,304 | 73,509 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% – 3.53%, 09/02/05 – 02/10/06 | 55,129 | 55,129 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 14,382 | 14,141 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 27,175 | 27,122 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 – 02/21/064 | 50,331 | 50,330 | ||||
Lockhart Funding LLC | ||||||
3.47% – 3.55%, 09/16/05 – 09/19/05 | 66,080 | 65,981 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% – 3.51%, 09/01/05 – 09/21/05 | 117,449 | 117,296 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 167,784 | 167,784 |
36 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BRAZIL INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | $ | 27,039 | $ | 26,992 | ||
Park Granada LLC | ||||||
3.48% – 3.51%, 09/15/05 – 09/20/05 | 64,910 | 64,810 | ||||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 47,938 | 47,058 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 95,877 | 95,820 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 11,985 | 11,759 | ||||
Solitaire Funding Ltd. | ||||||
3.49% – 3.52%, 09/02/05 – 09/06/05 | 140,939 | 140,902 | ||||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 29,616 | 29,616 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 100,671 | 100,482 | ||||
Three Pillars Funding Corp. | ||||||
3.49% – 3.52%, 09/01/05 – 09/07/05 | 102,716 | 102,681 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 8,013 | 8,013 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 176,879 | 176,879 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 22,052 | 22,034 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 16,778 | 16,778 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 69,511 | 69,388 | ||||
2,540,318 | ||||||
MEDIUM-TERM NOTES3 – 0.01% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/064 | 14,861 | 14,860 | ||||
K2 USA LLC | ||||||
3.94%, 07/07/064 | 28,763 | 28,762 | ||||
43,622 | ||||||
Security | Shares or Principal | Value | ||||
MONEY MARKET FUNDS – 0.24% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares | ||||||
3.63%3, 5 ,6 | 191,754 | $ | 191,754 | |||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares | ||||||
3.56%5, 6 | 1,112,414 | 1,112,414 | ||||
BlackRock Temp Cash Mo ney Market Fund | ||||||
3.41%3, 6 | 5,079 | 5,079 | ||||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares | ||||||
3.50%3, 6 | 16,805 | 16,805 | ||||
1,326,052 | ||||||
REPURCHASE AGREEMENTS3 – 0.39% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $1,150,636 and an effective yield of 3.60%.7 | $ | 1,150,522 | 1,150,522 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $886,949 and an effective yield of 3.60%.7 | 886,860 | 886,860 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $104,516 and an effective yield of 3.60%.7 | 104,506 | 104,506 | ||||
2,141,888 | ||||||
TIME DEPOSITS3 – 0.08% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | 95,877 | 95,877 |
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BRAZIL INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | $ | 263,661 | $ | 263,661 | ||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 63,287 | 63,287 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/058 | 23,969 | 23,969 | ||||
446,794 | ||||||
VARIABLE & FLOATING RATE NOTES3 – 0.80% | ||||||
Allstate Life Global Funding II | ||||||
3.58% – 3.66%, 07/08/06 – 07/27/064 | 89,165 | 89,166 | ||||
American Express Bank | ||||||
3.55% – 3.63%, 10/17/05 – 07/19/06 | 129,434 | 129,435 | ||||
American Express Centurion Bank | ||||||
3.55% – 3.63%, 06/29/06 – 07/19/06 | 79,098 | 79,098 | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 95,877 | 95,884 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/064 | 47,938 | 47,998 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/064 | 31,160 | 31,160 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 239,692 | 239,692 | ||||
Beta Finance Inc. | ||||||
3.51% – 3.72%, 09/23/05 – 06/09/064 | 246,403 | 246,400 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/064 | 47,938 | 47,938 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% – 3.61%, 09/13/05 – 12/14/05 | 162,990 | 162,984 | ||||
CC USA Inc. | ||||||
3.52% – 3.59%, 03/23/06 – 07/14/064 | 128,954 | 128,949 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/054 | 11,985 | 11,985 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 119,846 | 119,846 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 47,938 | 47,938 | ||||
Dorada Finance Inc. | ||||||
3.59% – 3.62%, 03/27/06 – 06/26/064 | 76,222 | 76,226 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/064 | 47,938 | 47,938 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/064 | 95,877 | 95,877 | ||||
Five Finance Inc. | ||||||
3.60% – 3.63%, 02/27/06 – 06/26/064 | 33,557 | 33,558 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 21,572 | 21,592 | ||||
Hartford Life Global Funding Trust | ||||||
3.56%, 08/15/06 | 47,938 | 47,938 | ||||
HBOS Treasury Services PLC | ||||||
3.51% – 3.57%, 01/10/06 – 04/24/064 | 143,815 | 143,814 | ||||
HSBC Bank USA N.A. | ||||||
3.70%, 05/04/06 | 16,778 | 16,788 | ||||
K2 USA LLC | ||||||
3.47% – 3.58%, 09/12/05 – 06/02/064 | 186,960 | 186,961 | ||||
Links Finance LLC | ||||||
3.52% – 3.71%, 11/16/05 – 03/15/064 | 186,960 | 186,979 | ||||
Lothian Mortgages PLC | ||||||
3.63%, 01/24/06 | 47,938 | 47,938 | ||||
Marshall & Ilsley Bank | ||||||
3.71%, 02/20/06 | 47,938 | 47,966 | ||||
Metropolitan Life Global Funding I | ||||||
3.55% – 4.01%, 08/28/06 – 09/06/064 | 95,877 | 95,919 | ||||
National City Bank (Ohio) | ||||||
3.50%, 01/06/06 | 23,969 | 23,967 |
38 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BRAZIL INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
Nationwide Building Society | |||||||
3.51% – 3.62%, 01/13/06 – 07/07/064 | $ | 177,372 | $ | 177,389 | |||
Nordea Bank AB | |||||||
3.55%, 08/11/064 | 83,892 | 83,892 | |||||
Northern Rock PLC | |||||||
3.54% – 3.61%, 10/25/05 – 08/03/064 | 153,403 | 153,406 | |||||
Permanent Financing PLC | |||||||
3.53% – 3.54%, 09/12/05 – 06/12/064 | 184,563 | 184,563 | |||||
Principal Life Income Funding Trusts | |||||||
3.74%, 05/10/06 | �� | 35,954 | 35,955 | ||||
Royal Bank of Scotland | |||||||
3.47% – 3.61%, 04/05/06 – 08/30/06 | 159,994 | 159,958 | |||||
Sedna Finance Inc. | |||||||
3.54%, 01/10/06 – 01/17/064 | 26,366 | 26,364 | |||||
Sigma Finance Inc. | |||||||
3.50% – 3.72%, 09/15/05 – 08/15/064 | 273,728 | 273,730 | |||||
Skandinaviska Enskilda Bank NY | |||||||
3.58%, 07/18/064 | 47,938 | 47,938 | |||||
Strips III LLC | |||||||
3.69%, 07/24/064,8 | 14,082 | 14,082 | |||||
SunTrust Bank | |||||||
3.63%, 04/28/06 | 71,908 | 71,908 | |||||
Tango Finance Corp. | |||||||
3.54% – 3.60%, 09/15/05 – 06/21/064 | 116,490 | 116,484 | |||||
Toyota Motor Credit Corp. | |||||||
3.57%, 04/10/06 | 21,572 | 21,572 | |||||
Unicredito Italiano SpA | |||||||
3.34%, 06/14/06 | 62,320 | 62,303 | |||||
Wachovia Asset Securitization Inc. | |||||||
3.63%, 09/25/054 | 115,404 | 115,405 | |||||
Wells Fargo & Co. | |||||||
3.56%, 09/15/064 | 23,969 | 23,972 | |||||
WhistleJacket Capital LLC | |||||||
3.52% – 3.62%, 09/15/05 – 07/28/064 | 191,753 | 191,746 | |||||
White Pine Finance LLC | |||||||
3.47% – 3.61%, 11/01/05 – 06/20/064 | 101,150 | 101,146 | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/054 | 34,228 | 34,228 | |||||
4,447,975 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 12,207,414 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 101.59% | 561,049,375 | ||||||
Other Assets, Less Liabilities – (1.59)% | (8,763,937 | ) | |||||
NET ASSETS – 100.00% | $ | 552,285,438 | |||||
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 | All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
4 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
6 | The rate quoted is the annualized seven-day yield of the fund at period end. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
8 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
SCHEDULEOF INVESTMENTS | 39 |
Table of Contents
iSHARES® MSCI CANADA INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 99.77% | |||||
AEROSPACE & DEFENSE – 0.23% | |||||
CAE Inc. | 138,897 | $ | 970,327 | ||
970,327 | |||||
APPAREL – 0.26% | |||||
Gildan Activewear Inc.1 | 32,367 | 1,088,344 | |||
1,088,344 | |||||
AUTO PARTS & EQUIPMENT – 1.04% | |||||
Magna International Inc. Class A | 59,790 | 4,378,192 | |||
4,378,192 | |||||
BANKS – 18.03% | |||||
Bank of Montreal | 290,007 | 14,125,667 | |||
Bank of Nova Scotia | 577,640 | 19,885,090 | |||
Canadian Imperial Bank of Commerce | 198,308 | 11,683,831 | |||
National Bank of Canada | 99,622 | 4,811,304 | |||
Royal Bank of Canada | 371,565 | 25,253,660 | |||
75,759,552 | |||||
BEVERAGES – 0.19% | |||||
Cott Corp.1 | 32,008 | 813,064 | |||
813,064 | |||||
CHEMICALS – 2.71% | |||||
Agrium Inc. | 81,144 | 1,748,410 | |||
Methanex Corp. | 64,584 | 975,745 | |||
NOVA Chemicals Corp. | 50,182 | 1,602,056 | |||
Potash Corp. of Saskatchewan Inc. | 64,377 | 7,060,284 | |||
11,386,495 | |||||
COMMERCIAL SERVICES – 0.21% | |||||
Quebecor World Inc. | 45,212 | 873,721 | |||
873,721 | |||||
COMPUTERS – 2.01% | |||||
CGI Group Inc.1 | 166,851 | 1,189,486 | |||
Research In Motion Ltd.1 | 92,910 | 7,254,659 | |||
8,444,145 | |||||
DIVERSIFIED FINANCIAL SERVICES – 1.16% | |||||
C.I. Fund Management Inc. | 81,668 | 1,396,075 | |||
IGM Financial Inc. | 70,794 | 2,481,752 | |||
TSX Group Inc. | 31,048 | 986,240 | |||
4,864,067 | |||||
ELECTRIC – 0.43% | |||||
TransAlta Corp. | 99,411 | 1,821,545 | |||
1,821,545 | |||||
ELECTRONICS – 0.31% | |||||
Celestica Inc.1 | 108,675 | 1,300,697 | |||
1,300,697 | |||||
ENGINEERING & CONSTRUCTION – 0.41% | |||||
SNC-Lavalin Group Inc. | 30,222 | 1,731,005 | |||
1,731,005 | |||||
ENTERTAINMENT – 0.16% | |||||
Intrawest Corp. | 26,496 | 689,329 | |||
689,329 | |||||
FOOD – 1.66% | |||||
George Weston Ltd. | 26,452 | 2,358,883 | |||
Loblaw Companies Ltd. | 67,810 | 3,959,816 | |||
Saputo Inc. | 21,321 | 647,472 | |||
6,966,171 | |||||
FOREST PRODUCTS & PAPER – 0.51% | |||||
Abitibi-Consolidated Inc. | 229,770 | 986,303 | |||
Canfor Corp.1 | 51,750 | 574,952 | |||
Domtar Inc. | 86,767 | 585,701 | |||
2,146,956 | |||||
HAND & MACHINE TOOLS – 0.36% | |||||
Finning International Inc. | 45,954 | 1,492,992 | |||
1,492,992 | |||||
HEALTH CARE - SERVICES – 0.33% | |||||
MDS Inc. | 87,334 | 1,403,989 | |||
1,403,989 | |||||
HOLDING COMPANIES - DIVERSIFIED – 1.62% | |||||
Brascan Corp. Class A | 137,655 | 5,445,489 | |||
Onex Corp. | 80,666 | 1,370,799 | |||
6,816,288 | |||||
INSURANCE – 12.10% | |||||
Fairfax Financial Holdings Ltd. | 8,901 | 1,481,577 | |||
Great-West Lifeco Inc. | 158,346 | 3,819,709 | |||
Manulife Financial Corp. | 464,508 | 23,622,232 | |||
Power Corp. of Canada | 192,096 | 5,154,466 | |||
Power Financial Corp. | 148,551 | 4,167,330 | |||
Sun Life Financial Inc. | 341,964 | 12,606,702 | |||
50,852,016 |
40 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI CANADA INDEX FUND
August 31, 2005
Security | Shares | Value | |||
IRON & STEEL – 0.92% | |||||
Algoma Steel Inc. | 21,321 | $ | 385,827 | ||
Dofasco Inc. | 47,938 | 1,702,705 | |||
IPSCO Inc. | 27,901 | 1,784,762 | |||
3,873,294 | |||||
LODGING – 0.52% | |||||
Fairmont Hotels & Resorts Inc. | 39,951 | 1,247,859 | |||
Four Seasons Hotels Inc. | 15,738 | 928,040 | |||
2,175,899 | |||||
MANUFACTURING – 0.51% | |||||
Bombardier Inc. Class B | 815,292 | 2,161,577 | |||
2,161,577 | |||||
MEDIA – 2.80% | |||||
Rogers Communications Inc. Class B | 112,421 | 4,166,229 | |||
Shaw Communications Inc. Class B | 113,700 | 2,396,303 | |||
Thomson Corp. | 140,064 | 5,190,656 | |||
11,753,188 | |||||
MINING – 11.22% | |||||
Aber Diamond Corp. | 25,668 | 869,787 | |||
Agnico-Eagle Mines Ltd. | 49,266 | 638,580 | |||
Alcan Inc. | 214,452 | 7,053,938 | |||
Barrick Gold Corp. | 294,768 | 7,718,401 | |||
Cameco Corp. | 100,395 | 5,056,508 | |||
Glamis Gold Ltd.1 | 78,149 | 1,481,943 | |||
Goldcorp Inc. | 189,392 | 3,411,320 | |||
Inco Ltd. | 109,503 | 4,612,011 | |||
Ivanhoe Mines Ltd.1 | 127,008 | 924,686 | |||
Kinross Gold Corp.1 | 197,064 | 1,235,693 | |||
Meridian Gold Inc.1 | 55,062 | 1,027,923 | |||
Noranda Inc. | 173,347 | 4,032,751 | |||
Novelis Inc. | 43,966 | 1,013,945 | |||
Placer Dome Inc. | 256,059 | 3,719,871 | |||
Teck Cominco Ltd. Class B | 112,346 | 4,372,426 | |||
47,169,783 | |||||
OIL & GAS – 24.56% | |||||
Canadian Natural Resources Ltd. | 306,772 | 15,097,179 | |||
EnCana Corp. | 513,360 | 25,151,659 | |||
Husky Energy Inc. | 76,176 | 3,923,888 | |||
Imperial Oil Ltd. | 71,644 | 7,260,279 | |||
Nexen Inc. | 151,731 | 6,573,180 | |||
Petro-Canada | 292,588 | 11,820,742 | |||
Precision Drilling Corp. Class A1 | 70,392 | 3,298,310 | |||
Shell Canada Ltd. | 124,200 | 4,024,661 | |||
Suncor Energy Inc. | 262,476 | 15,541,778 | |||
Talisman Energy Inc. | 215,487 | 10,510,455 | |||
103,202,131 | |||||
PHARMACEUTICALS – 0.61% | |||||
Angiotech Pharmaceuticals Inc.1 | 50,094 | 675,032 | |||
Biovail Corp.1 | 78,660 | 1,407,551 | |||
QLT Corp.1 | 55,683 | 496,793 | |||
2,579,376 | |||||
PIPELINES – 3.17% | |||||
Enbridge Inc. | 190,026 | 5,601,137 | |||
TransCanada Corp. | 278,622 | 7,738,849 | |||
13,339,986 | |||||
REAL ESTATE – 0.81% | |||||
Brookfield Properties Corp. | 85,775 | 2,476,292 | |||
MI Developments Inc. Class A | 28,425 | 936,893 | |||
3,413,185 | |||||
RETAIL – 2.14% | |||||
Canadian Tire Corp. Class A | 49,343 | 2,475,249 | |||
Hudson’s Bay Co. | 41,413 | 476,837 | |||
Jean Coutu Group Inc. Class A | 73,538 | 1,299,805 | |||
RONA Inc.1 | 58,742 | 1,191,551 | |||
Shoppers Drug Mart Corp. | 101,591 | 3,564,792 | |||
9,008,234 | |||||
SEMICONDUCTORS – 0.42% | |||||
ATI Technologies Inc.1 | 146,142 | 1,772,499 | |||
1,772,499 | |||||
SOFTWARE – 0.52% | |||||
Cognos Inc.1 | 51,957 | 1,866,009 | |||
Open Text Corp.1 | 27,945 | 324,822 | |||
2,190,831 | |||||
TELECOMMUNICATIONS – 4.11% | |||||
Aliant Inc. | 12,277 | 279,826 | |||
BCE Inc. | 184,023 | 4,812,385 | |||
Nortel Networks Corp.1 | 2,461,437 | 7,478,990 | |||
TELUS Corp. | 35,397 | 1,340,683 | |||
TELUS Corp. NVS | 90,873 | 3,346,262 | |||
17,258,146 |
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI CANADA INDEX FUND
August 31, 2005
Security | Shares | Value | |||
TRANSPORTATION – 3.73% | |||||
Canadian National Railway Co. | 163,999 | $ | 10,812,256 | ||
Canadian Pacific Railway Ltd. | 95,896 | 3,617,590 | |||
CP Ships Ltd. | 54,333 | 1,229,707 | |||
15,659,553 | |||||
TOTAL COMMON STOCKS | 419,356,577 | ||||
SHORT-TERM INVESTMENTS – 0.01% | |||||
MONEY MARKET FUNDS – 0.01% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares | |||||
3.56%2, 3 | 39,013 | 39,013 | |||
39,013 | |||||
TOTAL SHORT-TERM INVESTMENTS | 39,013 | ||||
TOTAL INVESTMENTS IN SECURITIES – 99.78% | 419,395,590 | ||||
Other Assets, Less Liabilities – 0.22% | 905,185 | ||||
NET ASSETS – 100.00% | $ | 420,300,775 | |||
NVS – Non-Voting Shares
1 | Non-income earning security. |
2 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
3 | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to the financial statements.
42 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 97.35% | |||||
ARGENTINA – 1.14% | |||||
Petrobras Energia Participaciones SA ADR1, 2 | 1,220,951 | $ | 18,070,075 | ||
Tenaris SA ADR2 | 537,303 | 61,510,447 | |||
79,580,522 | |||||
BRAZIL – 8.51% | |||||
Aracruz Celulose SA ADR2 | 397,764 | 14,586,006 | |||
Banco Bradesco SA ADR2 | 2,098,896 | 89,370,992 | |||
Banco Itau Holding Financiera SA ADR2 | 848,328 | 88,887,808 | |||
Brasil Telecom Participacoes SA ADR | 478,764 | 17,450,948 | |||
Companhia Brasileira de Distribuicao Grupo Pao de Acucar ADR2 | 582,952 | 14,002,507 | |||
Companhia Vale do Rio Doce ADR2 | 2,803,320 | 96,406,175 | |||
Companhia Vale do Rio Doce Sponsored ADR | 3,534,100 | 106,023,000 | |||
Contax Participacoes SA ADR1, 9 | 1,977,328 | 1,287,241 | |||
Empresa Brasileira de Aeronautica SA ADR2 | 818,234 | 29,341,871 | |||
Petroleo Brasileiro SA ADR2 | 1,639,056 | 102,539,343 | |||
Tele Norte Leste Participacoes SA ADR2 | 1,977,328 | 29,739,013 | |||
Votorantim Celulose e Papel ADR | 552,278 | 6,406,425 | |||
596,041,329 | |||||
CHILE – 2.66% | |||||
Banco Santander Chile SA ADR | 1,186,692 | 45,011,228 | |||
Compania de Telecomunicaciones de Chile SA ADR | 2,064,808 | 23,848,532 | |||
Enersis SA Chile ADR | 3,617,960 | 38,712,172 | |||
LAN Airlines SA Sponsored ADR | 47,321 | 1,490,611 | |||
Sociedad Quimica y Minera de Chile SA ADR2 | 646,940 | 76,985,860 | |||
186,048,403 | |||||
CHINA – 4.82% | |||||
Aluminum Corp. of China Ltd. Class H2 | 7,188,000 | 3,953,694 | |||
Angang New Steel Co. Ltd. Class H2 | 10,782,000 | 5,410,318 | |||
AviChina Industry & Technology Co.1, 2 | 7,188,000 | 434,675 | |||
Bank of Communications Co. Ltd. Class H1, 2 | 28,259,000 | 12,453,063 | |||
Beijing Capital International Airport Co. Ltd. Class H | 9,588,000 | 3,947,633 | |||
China Eastern Airlines Corp. Ltd. Class H2 | 34,742,000 | 5,453,477 | |||
China Life Insurance Co. Ltd. Class H1, 2 | 36,539,000 | 28,207,639 | |||
China Petroleum and Chemical Corp. Class H | 98,236,000 | 42,974,261 | |||
China Shipping Development Co. Ltd. Class H2 | 10,800,000 | 8,476,419 | |||
China Southern Airlines Co. Ltd.1, 2 | 20,372,000 | 5,701,009 | |||
China Telecom Corp. Ltd. Class H | 67,088,000 | 24,816,556 | |||
Cofco International Ltd. | 3,600,000 | 1,540,114 | |||
Cosco Pacific Ltd.2 | 3,600,000 | 7,110,002 | |||
Datang International Power Generation Co. Ltd. Class H2 | 4,800,000 | 3,582,020 | |||
Guangshen Railway Co. Ltd. Class H2 | 38,406,363 | 12,106,765 | |||
Huadian Power International Corp. Ltd. | 20,400,000 | 5,643,226 | |||
Huaneng Power International Inc. Class H2 | 14,400,000 | 10,190,231 | |||
Jiangsu Expressway Co. Ltd. Class H2 | 3,600,000 | 1,875,929 | |||
Jiangxi Copper Co. Ltd.2 | 11,998,000 | 5,827,531 | |||
Maanshan Iron & Steel Co. Ltd. Class H2 | 13,178,000 | 4,366,019 | |||
PetroChina Co. Ltd. Class H2 | 111,414,000 | 90,310,687 | |||
Ping An Insurance (Group) Co. of China Ltd. Class H | 6,888,500 | 11,787,865 | |||
Qingling Motors Co. Ltd.2 | 7,188,474 | 1,211,621 | |||
Semiconductor Manufacturing International Corp.1, 2 | 17,970,000 | 3,583,757 | |||
Shanghai Forte Land Co. Class H2 | 3,594,000 | 1,063,567 | |||
Sinopec Shanghai Petrochemical Co. Ltd. Class H | 14,400,000 | 5,095,116 |
SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2005
Security | Shares | Value | |||
Sinotrans Ltd.2 | 14,376,000 | $ | 5,040,381 | ||
Travelsky Technology Ltd. Class H2 | 1,200,000 | 1,042,182 | |||
Tsingtao Brewery Co. Ltd. Class H2 | 2,400,000 | 2,655,636 | |||
Weichai Power Co. Ltd. Class H | 599,000 | 1,475,891 | |||
Yanzhou Coal Mining Co. Ltd. Class H2 | 14,376,800 | 10,636,259 | |||
Zhejiang Expressway Co. Ltd. Class H2 | 14,400,000 | 9,727,038 | |||
337,700,581 | |||||
CZECH REPUBLIC – 2.74% | |||||
CEZ AS | 3,243,386 | 85,775,744 | |||
Komercni Banka AS | 171,519 | 23,757,889 | |||
Philip Morris CR AS | 66,489 | 55,013,932 | |||
Unipetrol AS1 | 3,295,000 | 26,891,896 | |||
191,439,461 | |||||
HONG KONG – 4.25% | |||||
Air China Ltd.1,2 | 17,970,000 | 5,433,439 | |||
Beijing Enterprises Holdings Ltd. | 2,400,000 | 3,365,864 | |||
Brilliance China Automotive Holdings Ltd.2 | 25,158,000 | 4,272,764 | |||
Chaoda Modern Agriculture | 1,198,000 | 462,420 | |||
China Everbright Pacific Ltd.2 | 13,406,000 | 5,347,117 | |||
China Mengniu Dairy Co. Ltd. | 2,396,000 | 1,865,095 | |||
China Merchants Holdings International Co. Ltd.2 | 4,792,000 | 10,142,419 | |||
China Mobile Ltd.2 | 28,452,500 | 123,003,802 | |||
China Overseas Land & Investment Ltd.2 | 19,168,000 | 4,710,522 | |||
China Resources Enterprises Ltd.2 | 8,400,000 | 13,347,658 | |||
China Resources Land Ltd.2 | 19,200,000 | 4,792,496 | |||
China Resources Power Holdings Co. | 3,594,000 | 2,057,770 | |||
China Travel International Investment Hong Kong Ltd.2 | 42,216,951 | 13,036,377 | |||
Citic Pacific Ltd. | 6,600,000 | 18,384,874 | |||
CNOOC Ltd.2 | 80,266,000 | 57,316,997 | |||
Denway Motors Ltd. | 22,762,000 | 8,346,687 | |||
Guangdong Investment Ltd. | 8,390,110 | 2,617,811 | |||
Lenovo Group Ltd.2 | 25,158,000 | 10,358,215 | |||
Shanghai Industrial Holdings Ltd. | 2,400,000 | 4,554,724 | |||
Shenzhen Investment Ltd. | 6,000,000 | 826,026 | |||
TCL International Holdings Ltd.2 | 7,188,000 | 1,313,274 | |||
TPV Technology Ltd.2 | 2,396,000 | 1,587,643 | |||
297,143,994 | |||||
HUNGARY – 2.94% | |||||
BorsodChem Rt | 542,095 | 6,875,820 | |||
Gedeon Richter Rt | 295,484 | 46,863,093 | |||
MATAV Rt | 2,397,872 | 12,069,091 | |||
Mol Magyar Olaj-es Gazipari Rt | 456,718 | 49,952,409 | |||
OTP Bank Rt | 2,286,489 | 90,341,512 | |||
206,101,925 | |||||
INDIA – 5.46% | |||||
HDFC Bank Ltd. ADR | 1,518,465 | 72,719,289 | |||
ICICI Bank Ltd. ADR2 | 2,232,166 | 52,188,041 | |||
Infosys Technologies Ltd. ADR2 | 1,205,982 | 85,371,466 | |||
Mahanagar Telephone Nigam Ltd. ADR2 | 3,589,383 | 25,125,681 | |||
Satyam Computer Services Ltd. ADR | 1,757,494 | 48,102,611 | |||
Videsh Sanchar Nigam Ltd. ADR2 | 3,769,647 | 64,800,232 | |||
Wipro Ltd. ADR2 | 1,705,533 | 33,803,664 | |||
382,110,984 | |||||
INDONESIA – 2.16% | |||||
PT Aneka Tambang Tbk | 41,630,955 | 9,094,141 | |||
PT Astra International Inc. Tbk | 16,502,730 | 16,262,399 | |||
PT Bank Central Asia Tbk | 30,000,000 | 9,975,728 | |||
PT Bank Danamon Indonesia Tbk | 9,295,487 | 4,061,135 | |||
PT Bank Mandiri Tbk | 31,500,000 | 4,189,806 | |||
PT Bank Pan Indonesia Tbk | 121,959,418 | 4,913,898 | |||
PT Bank Rakyat Indonesia Tbk | 27,585,061 | 6,896,265 | |||
PT Bumi Resources Tbk | 87,154,500 | 6,600,050 | |||
PT Gudang Garam Tbk | 6,000,987 | 6,408,821 | |||
PT Indosat Tbk | 12,878,500 | 6,626,801 | |||
PT Kalbe Farma Tbk | 182,197,156 | 15,035,687 | |||
PT Matahari Putra Prima Tbk | 52,508,694 | 4,078,345 | |||
PT Perusahaan Gas Negara Tbk | 16,786,500 | 5,826,382 | |||
PT Ramayana Lestari Sentosa Tbk | 60,009,870 | 4,777,485 | |||
PT Semen Gresik (Persero) Tbk | 315,500 | 480,908 | |||
PT Telekomunikasi Indonesia Tbk | 81,763,686 | 40,881,843 | |||
PT Tempo Scan Pacific Tbk | 650,376 | 378,860 | |||
PT United Tractors Tbk | 11,744,271 | 4,418,355 | |||
150,906,909 |
44 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2005
Security | Shares | Value | |||
ISRAEL – 4.42% | |||||
Alvarion Ltd.1, 2 | 658,900 | $ | 5,679,718 | ||
AudioCodes Ltd.1, 2 | 513,952 | 5,062,427 | |||
Bank Hapoalim Ltd. | 6,957,552 | 25,653,072 | |||
Bank Leumi Le-Israel | 9,109,148 | 26,917,158 | |||
Check Point Software Technologies Ltd.1 | 969,781 | 21,878,259 | |||
Clal Industries and Investments Ltd. | 326,455 | 1,508,903 | |||
Clal Insurance Co. Ltd. | 59,301 | 1,145,285 | |||
ECI Telecom Ltd.1 | 294,109 | 2,252,875 | |||
Elbit Systems Ltd. | 458,834 | 11,018,694 | |||
Elite Industries Ltd. | 134,775 | 1,094,011 | |||
Given Imaging Ltd.1, 2 | 119,201 | 2,838,176 | |||
Israel Chemicals Ltd. | 4,899,221 | 18,128,657 | |||
Israel Corp. Ltd. (The) | 6,589 | 2,178,050 | |||
Israel Discount Bank Class A1 | 10,442,416 | 14,659,335 | |||
Koor Industries Ltd.1 | 194,133 | 11,036,438 | |||
Lipman Electronic Engineering Ltd.1 | 100,033 | 3,194,054 | |||
Makhteshim-Agan Industries Ltd. | 2,106,208 | 11,806,562 | |||
M-Systems Flash Disk Pioneers Ltd.1 | 507,353 | 13,399,193 | |||
NICE Systems Ltd.1 | 60,000 | 2,568,168 | |||
Orbotech Ltd.1, 2 | 460,631 | 11,372,979 | |||
Supersol Ltd. | 1,177,178 | 2,933,372 | |||
Syneron Medical Ltd.1, 2 | 59,900 | 2,211,508 | |||
Teva Pharmaceutical Industries Ltd. | 2,925,736 | 94,325,509 | |||
United Mizrahi Bank Ltd.1 | 3,277,900 | 16,769,895 | |||
309,632,298 | |||||
MEXICO – 7.31% | |||||
Alfa SA de CV Class A | 2,575,700 | 15,568,072 | |||
America Movil SA de CV Series L | 110,695,200 | 120,912,904 | |||
Cemex SA de CV Series CPO | 14,016,600 | 66,479,028 | |||
Consorcio Ara SA de CV | 4,200,000 | 14,007,769 | |||
Controladora Comercial Mexicana SA de CV | 6,708,800 | 9,282,616 | |||
Corporacion GEO SA de CV Series B1 | 3,054,900 | 8,448,160 | |||
Fomento Economico Mexicano SA de CV Class UBD | 3,660,000 | 24,958,546 | |||
Grupo Carso SA de CV Series A1 | 540,741 | 1,095,285 | |||
Grupo Financiero Banorte SA de CV Series O | 1,801,114 | 14,742,748 | |||
Grupo Mexico SA de CV Series B | 8,100,000 | 14,211,709 | |||
Grupo Modelo SA de CV Series C | 7,874,198 | 25,329,690 | |||
Grupo Televisa SA Series CPO | 12,399,300 | 38,773,616 | |||
Industrias Penoles SA de CV Series CP | 540,988 | 2,100,006 | |||
Kimberly-Clark de Mexico SA de CV Class A | 4,432,600 | 14,504,753 | |||
Telefonos de Mexico SA de CV Series L | 89,192,094 | 85,133,409 | |||
TV Azteca SA de CV Series CPO1 | 7,487,500 | 4,321,309 | |||
Wal-Mart de Mexico SA de CV Series V | 11,980,000 | 51,811,395 | |||
511,681,015 | |||||
PERU – 0.29% | |||||
Companhia de Minas Buenaventura SA ADR | 807,528 | 20,034,770 | |||
20,034,770 | |||||
PHILIPPINE ISLANDS – 1.41% | |||||
Ayala Corp. | 1,814,970 | 9,509,211 | |||
Ayala Land Inc. Class B | 17,371,000 | 2,498,980 | |||
Bank of the Philippine Islands | 11,860,200 | 11,269,349 | |||
Equitable PCI Bank | 7,128,100 | 6,519,797 | |||
Filinvest Land Inc.1 | 149,151,000 | 3,549,637 | |||
Globe Telecom Inc. | 347,420 | 4,442,632 | |||
Jollibee Foods Corp. | 25,936,700 | 15,201,334 | |||
Manila Electric Co. Class B1 | 6,648,900 | 2,686,484 | |||
Megaworld Corp.1 | 102,429,000 | 2,474,086 | |||
Metropolitan Bank & Trust Co. | 40 | 20 | |||
Petron Corp. | 120,399,000 | 6,949,592 | |||
Philippine Long Distance Telephone Co. | 748,750 | 21,143,993 | |||
SM Investments Corp. | 1,144,090 | 4,185,819 | |||
SM Prime Holdings Inc. | 67,088,000 | 8,459,725 | |||
98,890,659 | |||||
RUSSIA – 4.93% | |||||
JSC MMC Norilsk Nickel ADR2 | 403,726 | 29,189,390 | |||
LUKOIL ADR2 | 3,129,176 | 152,390,871 | |||
Mobile Telesystems OJSC ADR2 | 539,100 | 19,946,700 | |||
Rostelecom ADR2 | 435,578 | 5,880,303 | |||
Surgutneftegaz ADR2 | 2,206,721 | 105,039,920 | |||
Tatneft ADR2 | 162,388 | 8,070,684 | |||
Vimpel-Communications Sponsored ADR1 | 599,000 | 24,696,770 | |||
345,214,638 |
SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2005
Security | Shares | Value | |||
SOUTH AFRICA – 12.40% | |||||
African Bank Investments Ltd.2 | 5,830,761 | $ | 18,415,596 | ||
Alexander Forbes Ltd.1 | 5,794,267 | 12,359,018 | |||
Anglo Platinum Ltd. | 325,976 | 15,701,096 | |||
AngloGold Ashanti Ltd.2 | 660,140 | 23,194,606 | |||
Anglovaal Industries Ltd. | 2,415,568 | 5,470,851 | |||
Barloworld Ltd. | 1,265,292 | 19,932,117 | |||
Bidvest Group Ltd. | 1,494,699 | 20,265,061 | |||
Consol Ltd.1 | 2,415,568 | 4,571,533 | |||
Edgars Consolidated Stores Ltd. | 2,533,770 | 12,499,052 | |||
FirstRand Ltd. | 15,830,983 | 37,327,957 | |||
Foschini Ltd. | 5,014,259 | 36,636,200 | |||
Gold Fields Ltd. | 1,973,751 | 22,565,377 | |||
Impala Platinum Holdings Ltd. | 283,376 | 29,452,835 | |||
Imperial Holdings Ltd.1 | 1,440,477 | 26,915,093 | |||
Investec Ltd. | 525,352 | 16,584,315 | |||
JD Group Ltd. | 1,703,644 | 19,556,599 | |||
Liberty Group Ltd.2 | 944,284 | 9,448,113 | |||
Mittal Steel South Africa Ltd. | 2,151,208 | 16,067,986 | |||
MTN Group Ltd.2 | 6,251,212 | 44,995,073 | |||
Nampak Ltd. | 4,616,568 | 11,028,659 | |||
Naspers Ltd. | 2,346,384 | 37,854,296 | |||
Nedbank Group Ltd. | 1,888,049 | 25,741,596 | |||
Network Healthcare Holdings Ltd.1 | 10,364,042 | 9,839,281 | |||
New Africa Capital Ltd. | 5,306,708 | 9,590,337 | |||
Old Mutual PLC | 21,062,820 | 53,192,900 | |||
Pick’n Pay Stores Ltd. | 2,745,830 | 11,206,687 | |||
Reunert Ltd. | 950,613 | 6,193,495 | |||
Sanlam Ltd. | 16,328,864 | 33,613,183 | |||
Sappi Ltd. | 1,164,492 | 12,310,767 | |||
Sasol Ltd. | 3,350,806 | 111,755,909 | |||
Shoprite Holdings Ltd. | 6,981,346 | 17,381,888 | |||
SPAR Group Ltd. (The)1 | 963,316 | 4,266,361 | |||
Standard Bank Group Ltd. | 5,337,319 | 57,542,763 | |||
Steinhoff International Holdings Ltd. | 1,006,919 | 2,577,278 | |||
Telkom South Africa Ltd. | 725,540 | 14,350,079 | |||
Tiger Brands Ltd. | 963,316 | 19,374,212 | |||
Tongaat-Hulett Group Ltd. | 871,734 | 8,776,300 | |||
Truworths International Ltd.2 | 5,353,266 | 15,778,117 | |||
Woolworths Holdings Ltd. | 7,781,773 | 13,942,585 | |||
868,275,171 | |||||
SOUTH KOREA – 16.25% | |||||
Kookmin Bank ADR1,2 | 4,083,982 | 206,976,208 | |||
Korea Electric Power Corp. ADR2 | 8,884,967 | 142,603,720 | |||
KT Corp. ADR | 3,751,566 | 76,344,368 | |||
LG.Philips LCD Co. Ltd. ADR1 | 886,520 | 20,168,330 | |||
POSCO ADR2 | 3,851,570 | 201,244,533 | |||
Samsung Electronics Co. Ltd. GDR | 1,598,731 | 419,267,205 | |||
SK Telecom Co. Ltd. ADR2 | 3,351,539 | 71,253,719 | |||
1,137,858,083 | |||||
TAIWAN – 11.14% | |||||
AU Optronics Corp. ADR2 | 9,323,189 | 137,889,965 | |||
Chunghwa Telecom Co. Ltd. ADR2 | 6,324,242 | 121,741,659 | |||
Siliconware Precision Industries Co. ADR2 | 26,306,239 | 121,534,824 | |||
Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 29,273,037 | 240,917,094 | |||
United Microelectronics Corp. ADR2 | 46,290,617 | 157,851,004 | |||
779,934,546 | |||||
THAILAND – 2.93% | |||||
Advanced Info Service PCL | 4,620,000 | 11,296,938 | |||
Bangkok Bank PCL | 5,637,800 | 15,150,606 | |||
Bangkok Expressway PCL | 11,160,000 | 7,092,362 | |||
Banpu PCL | 1,800,000 | 6,798,208 | |||
Charoen Pokphand Foods PCL | 28,000 | 3,491 | |||
Electricity Generating PCL | 2,457,900 | 4,611,724 | |||
Kasikornbank PCL | 8,580,000 | 13,086,552 | |||
Kiatnakin Finance PCL | 4,495,600 | 3,129,125 | |||
Krung Thai Bank PCL | 10,256,400 | 2,396,181 | |||
National Finance PCL | 10,794,500 | 3,266,705 | |||
National Petrochemical PCL | 2,400,000 | 7,030,626 | |||
PTT Exploration & Production PCL | 1,920,000 | 22,498,002 | |||
PTT PCL | 8,146,400 | 48,123,026 | |||
Ratchaburi Electricity Generating Holding PCL | 19,778,800 | 18,675,057 | |||
Shin Corp. PCL | 7,080,000 | 6,513,497 | |||
Siam Cement PCL | 1,800,000 | 10,458,782 | |||
Siam City Cement PCL | 360,000 | 2,457,814 | |||
Siam Makro PCL | 8,100,000 | 11,668,079 | |||
Thai Union Frozen Products PCL | 7,200,000 | 5,229,391 | |||
Tisco Bank PCL | 4,615,100 | 3,100,570 | |||
United Broadcasting Corp. PCL1 | 5,096,800 | 2,566,601 | |||
205,153,337 |
46 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2005
Security | Shares | Value | ||||
TURKEY – 1.59% | ||||||
Adana Cimento TAS Class A | 1,725,923 | $ | 7,649,342 | |||
Akbank TAS | 3,824,924 | 22,650,388 | ||||
Akcansa Cimento AS | 313,300 | 1,423,560 | ||||
Arcelik AS | 566,187 | 3,352,839 | ||||
Dogan Yayin Holding AS1 | 1,624,191 | 4,379,569 | ||||
Eregli Demir ve Celik Fabrikalari TAS | 1,047,576 | 5,696,317 | ||||
Hurriyet Gazetecilik ve Matbaacilik AS | 1,295,371 | 3,415,727 | ||||
Tofas Turk Otomobil Fabrik | 4,199,652 | 6,663,135 | ||||
Trakya Cam Sanayii AS | 708,130 | 2,716,476 | ||||
Tupras-Turkiye Petrol Rafinerileri AS | 516,440 | 7,924,517 | ||||
Turk Hava Yollari Anonim Ortakligi1 | 2,005,503 | 11,278,620 | ||||
Turk Sise ve Cam Fabrikalari AS | 1,946,151 | 6,755,355 | ||||
Turkiye Garanti Bankasi AS1 | 4,456,780 | 12,615,094 | ||||
Vestel Elektronik Sanayi ve Ticaret AS1 | 1,070,666 | 3,939,732 | ||||
Yapi ve Kredi Bankasi AS1 | 2,523,284 | 10,901,339 | ||||
111,362,010 | ||||||
TOTAL COMMON STOCKS | 6,815,110,635 | |||||
PREFERRED STOCKS – 1.57% | ||||||
BRAZIL – 1.57% | ||||||
Petroleo Brasileiro SA ADR2 | 1,992,590 | 109,572,524 | ||||
109,572,524 | ||||||
TOTAL PREFERRED STOCKS | 109,572,524 | |||||
EXCHANGE-TRADED FUNDS – 0.58% | ||||||
iShares MSCI Malaysia Index Fund2,3 | 1,179,722 | 8,564,782 | ||||
iShares MSCI South Korea Index Fund2,3 | 401,643 | 14,097,669 | ||||
iShares MSCI Taiwan Index Fund3 | 1,516,180 | 17,815,115 | ||||
TOTAL EXCHANGE-TRADED FUNDS | 40,477,566 | |||||
Security | Principal | Value | ||||
SHORT-TERM INVESTMENTS – 12.98% | ||||||
CERTIFICATES OF DEPOSIT4 – 1.47% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% – 3.83%, 09/14/05 – 01/25/06 | $ | 5,865,282 | $ | 5,865,282 | ||
Bank of Nova Scotia | ||||||
3.45% – 3.56%, 09/26/05 – 01/03/06 | 2,541,622 | 2,541,428 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 3,910,188 | 3,910,188 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 3,910,188 | 3,910,041 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 1,955,094 | 1,954,705 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 6,647,319 | 6,647,319 | ||||
Fortis Bank NY | ||||||
3.83% – 3.84%, 01/25/06 | 5,865,282 | 5,865,321 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 2,346,113 | 2,346,113 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 1,955,094 | 1,955,733 | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 1,955,094 | 1,954,855 | ||||
Societe Generale | ||||||
3.51% – 3.60%, 03/30/06 – 06/13/06 | 6,060,791 | 6,059,718 | ||||
Toronto-Dominion Bank | ||||||
2.66% – 3.94%, 09/14/05 – 07/10/06 | 13,881,167 | 13,881,444 | ||||
UBS AG | ||||||
2.67% – 3.40%, 11/09/05 – 12/15/05 | 3,128,150 | 3,128,143 | ||||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 9,775,470 | 9,775,470 | ||||
Washington Mutual Bank | ||||||
3.50% – 3.55%, 09/15/05 – 09/19/05 | 17,595,846 | 17,595,846 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 – 09/20/05 | 15,445,242 | 15,445,236 | ||||
102,836,842 |
SCHEDULESOF INVESTMENTS | 47 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
COMMERCIAL PAPER4 – 2.96% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | $ | 7,820,376 | $ | 7,814,258 | ||
Amstel Funding Corp. | ||||||
3.49% – 3.91%, 09/15/05 – 02/15/06 | 8,250,496 | 8,206,490 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 3,910,188 | 3,910,188 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 4,434,349 | 4,431,754 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% – 3.49%, 09/09/05 – 09/21/05 | 6,451,810 | 6,443,863 | ||||
Bryant Park Funding LLC | ||||||
3.51% – 3.92%, 09/06/05 – 02/22/06 | 1,990,247 | 1,970,858 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 1,503,350 | 1,494,004 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 2,737,132 | 2,732,018 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 1,173,056 | 1,171,441 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 391,019 | 385,015 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 2,932,641 | 2,931,370 | ||||
Fairway Finance LLC | ||||||
3.15% – 3.56%, 09/15/05 – 10/20/05 | 5,042,383 | 5,038,112 | ||||
Ford Credit Floorplan Motown | ||||||
3.47% – 3.72%, 09/09/05 – 11/08/05 | 17,790,104 | 17,708,937 | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 6,273,114 | 6,270,074 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% – 3.53%, 09/20/05 – 09/21/05 | 12,708,111 | 12,683,538 | ||||
Giro Funding Corp. | ||||||
3.53% – 3.56%, 09/16/05 – 09/22/05 | 2,932,641 | 2,927,735 | ||||
Grampian Funding LLC | ||||||
3.13% – 3.84%, 09/09/05 – 01/31/06 | 6,060,791 | 5,995,899 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% – 3.53%, 09/02/05 – 02/10/06 | 4,496,716 | 4,496,716 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 1,173,056 | 1,153,460 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 2,216,568 | 2,212,246 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 – 02/21/065 | 4,105,335 | 4,105,336 | ||||
Lockhart Funding LLC | ||||||
3.47% – 3.55%, 09/16/05 – 09/19/05 | 5,389,920 | 5,381,872 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% – 3.51%, 09/01/05 – 09/21/05 | 9,579,960 | 9,567,439 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 13,685,658 | 13,685,658 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 2,205,502 | 2,201,643 | ||||
Park Granada LLC | ||||||
3.48% – 3.51%, 09/15/05 – 09/20/05 | 5,294,512 | 5,286,410 | ||||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 3,910,188 | 3,838,415 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 7,820,376 | 7,815,788 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 977,547 | 959,132 | ||||
Solitaire Funding Ltd. | ||||||
3.49% – 3.52%, 09/02/05 – 09/06/05 | 11,495,952 | 11,492,922 | ||||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 2,415,714 | 2,415,714 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 8,211,395 | 8,196,053 |
48 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
Three Pillars Funding Corp. | ||||||
3.49% – 3.52%, 09/01/05 – 09/07/05 | $ | 8,378,203 | $ | 8,375,344 | ||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 653,588 | 653,588 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 14,427,459 | 14,427,459 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 1,798,686 | 1,797,279 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 1,368,566 | 1,368,563 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 5,669,772 | 5,659,765 | ||||
207,206,356 | ||||||
MEDIUM–TERM NOTES4 – 0.05% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/065 | 1,212,158 | 1,212,056 | ||||
K2 USA LLC | ||||||
3.94%, 07/07/065 | 2,346,113 | 2,346,013 | ||||
3,558,069 | ||||||
MONEY MARKET FUNDS – 0.31% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares | ||||||
3.63%3, 4, 6 | 15,640,751 | 15,640,751 | ||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares | ||||||
3.56%3, 6 | 4,035,314 | 4,035,314 | ||||
BlackRock Temp Cash Money Market Fund | ||||||
3.41%4, 6 | 414,313 | 414,313 | ||||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares | ||||||
3.50%4, 6 | 1,370,740 | 1,370,740 | ||||
21,461,118 | ||||||
Security | Principal | Value | ||||
REPURCHASE AGREEMENTS4– 2.49% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $93,853,894 and an effective yield of 3.60%.7 | $ | 93,844,510 | $ | 93,844,510 | ||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $72,345,710 and an effective yield of 3.60%.7 | 72,338,476 | 72,338,476 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $8,525,062 and an effective yield of 3.60%.7 | 8,524,210 | 8,524,210 | ||||
174,707,196 | ||||||
TIME DEPOSITS4 – 0.52% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | 7,820,376 | 7,820,376 | ||||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 21,506,033 | 21,506,033 | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 5,162,124 | 5,162,124 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/058 | 1,955,094 | 1,955,094 | ||||
36,443,627 | ||||||
VARIABLE & FLOATING RATE NOTES4 – 5.18% | ||||||
Allstate Life Global Funding II | ||||||
3.58% – 3.66%, 07/08/06 – 07/27/065 | 7,272,949 | 7,272,989 | ||||
American Express Bank | ||||||
3.55% – 3.63%, 10/17/05 – 07/19/06 | 10,557,507 | 10,557,540 | ||||
American Express Centurion Bank | ||||||
3.55% – 3.63%, 06/29/06 – 07/19/06 | 6,451,810 | 6,451,810 |
SCHEDULESOF INVESTMENTS | 49 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | $ | 7,820,376 | $ | 7,820,963 | ||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/065 | 3,910,188 | 3,915,062 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/065 | 2,541,622 | 2,541,622 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 19,550,940 | 19,550,940 | ||||
Beta Finance Inc. | ||||||
3.51% – 3.72%, 09/23/05 – 06/09/065 | 20,098,366 | 20,098,094 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/065 | 3,910,188 | 3,910,188 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% – 3.61%, 09/13/05 – 12/14/05 | 13,294,639 | 13,294,083 | ||||
CC USA Inc. | ||||||
3.52% – 3.59%, 03/23/06 – 07/14/065 | 10,518,405 | 10,517,965 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/055 | 977,547 | 977,547 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 9,775,470 | 9,775,470 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 3,910,188 | 3,910,188 | ||||
Dorada Finance Inc. | ||||||
3.59% – 3.62%, 03/27/06 – 06/26/065 | 6,217,199 | 6,217,522 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/065 | 3,910,188 | 3,910,188 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/065 | 7,820,376 | 7,820,376 | ||||
Five Finance Inc. | ||||||
3.60% – 3.63%, 02/27/06 – 06/26/065 | 2,737,132 | 2,737,193 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 1,759,585 | 1,761,172 | ||||
Hartford Life Global Funding Trust | ||||||
3.56%, 08/15/06 | 3,910,188 | 3,910,188 | ||||
HBOS Treasury Services PLC | ||||||
3.51% – 3.57%, 01/10/06 – 04/24/065 | 11,730,564 | 11,730,564 | ||||
HSBC Bank USA N.A. | ||||||
3.70%, 05/04/06 | 1,368,566 | 1,369,312 | ||||
K2 USA LLC | ||||||
3.47% – 3.58%, 09/12/05 – 06/02/065 | 15,249,733 | 15,249,859 | ||||
Links Finance LLC | ||||||
3.52% – 3.71%, 11/16/05 – 03/15/065 | 15,249,733 | 15,251,375 | ||||
Lothian Mortgages PLC | ||||||
3.63%, 01/24/06 | 3,910,188 | 3,910,188 | ||||
Marshall & Ilsley Bank | ||||||
3.71%, 02/20/06 | 3,910,188 | 3,912,403 | ||||
Metropolitan Life Global Funding I | ||||||
3.55% – 4.01%, 08/28/06 – 09/06/065 | 7,820,376 | 7,823,813 | ||||
National City Bank (Ohio) | ||||||
3.50%, 01/06/06 | 1,955,094 | 1,954,889 | ||||
Nationwide Building Society | ||||||
3.51% – 3.62%, 01/13/06 – 07/07/065 | 14,467,695 | 14,469,100 | ||||
Nordea Bank AB | ||||||
3.55%, 08/11/065 | 6,842,829 | 6,842,829 | ||||
Northern Rock PLC | ||||||
3.54% – 3.61%, 10/25/05 – 08/03/065 | 12,512,601 | 12,512,822 | ||||
Permanent Financing PLC | ||||||
3.53% – 3.54%, 09/12/05 – 06/12/065 | 15,054,223 | 15,054,224 | ||||
Principal Life Income Funding Trusts | ||||||
3.74%, 05/10/06 | 2,932,641 | 2,932,750 | ||||
Royal Bank of Scotland | ||||||
3.47% – 3.61%, 04/05/06 – 08/30/06 | 13,050,252 | 13,047,273 | ||||
Sedna Finance Inc. | ||||||
3.54%, 01/10/06 – 01/17/065 | 2,150,603 | 2,150,429 | ||||
Sigma Finance Inc. | ||||||
3.50% – 3.72%, 09/15/05 – 08/15/065 | 22,327,173 | 22,327,282 | ||||
Skandinaviska Enskilda Bank NY | ||||||
3.58%, 07/18/065 | 3,910,188 | 3,910,188 | ||||
Strips III LLC | ||||||
3.69%, 07/24/065, 8 | 1,148,617 | 1,148,617 |
50 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
SunTrust Bank | |||||||
3.63%, 04/28/06 | $ | 5,865,282 | $ | 5,865,282 | |||
Tango Finance Corp. | |||||||
3.54% – 3.60%, 09/15/05 – 06/21/065 | 9,501,757 | 9,501,175 | |||||
Toyota Motor Credit Corp. | |||||||
3.57%, 04/10/06 | 1,759,585 | 1,759,569 | |||||
Unicredito Italiano SpA | |||||||
3.34%, 06/14/06 | 5,083,244 | 5,081,832 | |||||
Wachovia Asset Securitization Inc. | |||||||
3.63%, 09/25/055 | 9,413,171 | 9,413,171 | |||||
Wells Fargo & Co. | |||||||
3.56%, 09/15/065 | 1,955,094 | 1,955,288 | |||||
WhistleJacket Capital LLC | |||||||
3.52% – 3.62%, 09/15/05 – 07/28/065 | 15,640,752 | 15,640,074 | |||||
White Pine Finance LLC | |||||||
3.47% – 3.61%, 11/01/05 – 06/20/065 | 8,250,496 | 8,250,286 | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/055 | 2,791,874 | 2,791,874 | |||||
362,807,568 | |||||||
TOTAL SHORT- TERM INVESTMENTS | 909,020,776 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 112.47% | 7,874,181,501 | ||||||
Other Assets, Less Liabilities – (12.47)% | (873,323,451 | ) | |||||
NET ASSETS – 100.00% | $ | 7,000,858,050 | |||||
ADR – American Depositary Receipts
GDR – Global Depositary Receipts
1 | Non-income earning security. |
2 | All or a portion of this security represents a security on loan. See Note 5. |
3 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
4 | All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
5 | This security or a portion of these securities is 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 | The rate quoted is the annualized seven-day yield of the fund at period end. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
8 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
9 | Security valued at fair value in accordance with procedures approved by the Board of Directors. See Note 1. |
See notes to the financial statements.
SCHEDULESOF INVESTMENTS | 51 |
Table of Contents
Schedule of Investments
iSHARES® MSCI HONG KONG INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 99.81% | |||||
AIRLINES – 1.14% | |||||
Cathay Pacific Airways Ltd. | 3,924,000 | $ | 7,270,266 | ||
7,270,266 | |||||
APPAREL – 0.93% | |||||
Yue Yuen Industrial Holdings Ltd.1 | 1,962,000 | 5,932,335 | |||
5,932,335 | |||||
BANKS – 13.88% | |||||
Bank of East Asia Ltd. | 5,362,900 | 15,663,340 | |||
BOC Hong Kong Holdings Ltd. | 14,061,000 | 28,313,227 | |||
Hang Seng Bank Ltd.1 | 2,943,000 | 39,759,269 | |||
Wing Hang Bank Ltd. | 654,000 | 4,808,978 | |||
88,544,814 | |||||
CHEMICALS – 0.72% | |||||
Kingboard Chemical Holdings Co. Ltd. | 1,962,000 | 4,607,026 | |||
4,607,026 | |||||
DISTRIBUTION & WHOLESALE – 6.23% | |||||
Esprit Holdings Ltd. | 3,597,000 | 26,495,661 | |||
Li & Fung Ltd. | 6,540,000 | 13,253,090 | |||
39,748,751 | |||||
DIVERSIFIED FINANCIAL SERVICES – 1.89% | |||||
Hong Kong Exchanges & Clearing Ltd. | 3,924,000 | 12,066,623 | |||
12,066,623 | |||||
ELECTRIC – 10.24% | |||||
CLP Holdings Ltd. | 6,867,200 | 40,025,496 | |||
Hongkong Electric Holdings Ltd. | 5,232,000 | 25,277,639 | |||
65,303,135 | |||||
ELECTRICAL COMPONENTS & EQUIPMENT – 0.80% | |||||
Johnson Electric Holdings Ltd. | 5,559,000 | 5,114,010 | |||
5,114,010 | |||||
ENGINEERING & CONSTRUCTION – 2.66% | |||||
Cheung Kong Infrastructure Holdings Ltd. | 1,962,000 | 6,172,153 | |||
New World Development Co. Ltd. | 8,502,800 | 10,830,686 | |||
17,002,839 | |||||
GAS – 4.32% | |||||
Hong Kong & China Gas Co. Ltd. | 13,734,663 | 27,567,757 | |||
27,567,757 | |||||
HAND & MACHINE TOOLS – 1.42% | |||||
Techtronic Industries Co. Ltd. | 3,597,000 | 9,071,004 | |||
9,071,004 | |||||
HOLDING COMPANIES - DIVERSIFIED – 20.66% | |||||
Hutchison Whampoa Ltd.1 | 8,502,800 | 83,910,470 | |||
Swire Pacific Ltd. Class A | 3,270,000 | 31,071,132 | |||
Wharf Holdings Ltd. (The) | 4,578,000 | 16,816,698 | |||
131,798,300 | |||||
LODGING – 1.07% | |||||
Shangri-La Asia Ltd.1 | 3,924,000 | 6,815,875 | |||
6,815,875 | |||||
MEDIA – 1.30% | |||||
SCMP Group Ltd. | 2,616,000 | 1,060,247 | |||
Television Broadcasts Ltd. | 1,308,000 | 7,245,022 | |||
8,305,269 | |||||
REAL ESTATE – 25.79% | |||||
Cheung Kong Holdings Ltd. | 5,886,000 | 63,842,026 | |||
Hang Lung Properties Ltd. | 7,194,000 | 11,199,912 | |||
Henderson Land | |||||
Development Co. Ltd. | 2,616,000 | 13,025,894 | |||
Hopewell Holdings Ltd. | 2,616,000 | 6,714,899 | |||
Hysan Development Co. Ltd. | 2,616,000 | 6,529,776 | |||
Kerry Properties Ltd.1 | 1,635,000 | 4,438,733 | |||
Sino Land Co. Ltd.1 | 5,232,000 | 5,822,945 | |||
Sun Hung Kai Properties Ltd. | 5,232,000 | 52,945,041 | |||
164,519,226 | |||||
RETAIL – 0.55% | |||||
Giordano International Ltd. 1 | 5,232,000 | 3,500,499 | |||
3,500,499 | |||||
SEMICONDUCTORS – 0.81% | |||||
ASM Pacific Technology Ltd.1 | 654,000 | 3,201,778 | |||
Solomon Systech International Ltd. | 6,540,000 | 1,956,408 | |||
5,158,186 | |||||
TELECOMMUNICATIONS – 2.76% | |||||
Hutchinson Telecommunications International Ltd.1, 2 | 5,886,000 | 7,043,070 | |||
PCCW Ltd.1 | 14,388,576 | 9,441,627 | |||
SmarTone Telecommunications Holdings Ltd. | 983,000 | 1,144,619 | |||
17,629,316 |
52 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI HONG KONG INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
TEXTILES – 0.28% | ||||||
Texwinca Holdings Ltd. | 2,616,000 | $ | 1,783,908 | |||
1,783,908 | ||||||
TRANSPORTATION – 2.36% | ||||||
MTR Corp. Ltd. | 4,578,083 | 9,277,331 | ||||
Orient Overseas International Ltd. | 1,445,200 | 5,755,028 | ||||
15,032,359 | ||||||
TOTAL COMMON STOCKS | 636,771,498 | |||||
SHORT-TERM INVESTMENTS – 16.34% | ||||||
CERTIFICATES OF DEPOSIT3– 1.86% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% – 3.83%, 09/14/05 – 01/25/06 | $ | 675,696 | 675,696 | |||
Bank of Nova Scotia | ||||||
3.45% – 3.56%, 09/26/05 – 01/03/06 | 292,802 | 292,780 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 450,464 | 450,464 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 450,464 | 450,447 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 225,232 | 225,187 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 765,789 | 765,789 | ||||
Fortis Bank NY | ||||||
3.83% – 3.84%, 01/25/06 | 675,696 | 675,700 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 270,278 | 270,278 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 225,232 | 225,306 | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 225,232 | 225,204 | ||||
Societe Generale | ||||||
3.51% – 3.60%, 03/30/06 – 06/13/06 | 698,219 | 698,095 | ||||
Toronto-Dominion Bank | ||||||
2.66% – 3.94%, 09/14/05 – 07/10/06 | 1,599,147 | 1,599,179 | ||||
Security | Principal | Value | ||||
UBS AG | ||||||
2.67% – 3.40%, 11/09/05 – 12/15/05 | $ | 360,371 | $ | 360,370 | ||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 1,126,160 | 1,126,160 | ||||
Washington Mutual Bank | ||||||
3.50% – 3.55%, 09/15/05 – 09/19/05 | 2,027,088 | 2,027,088 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 – 09/20/05 | 1,779,333 | 1,779,332 | ||||
11,847,075 | ||||||
COMMERCIAL PAPER3 – 3.74% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 900,928 | 900,223 | ||||
Amstel Funding Corp. | ||||||
3.49% – 3.91%, 09/15/05 – 02/15/06 | 950,479 | 945,408 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 450,464 | 450,464 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 510,849 | 510,550 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% – 3.49%, 09/09/05 – 09/21/05 | 743,266 | 742,351 | ||||
Bryant Park Funding LLC | ||||||
3.51% – 3.92%, 09/06/05 – 02/22/06 | 229,282 | 227,048 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 173,190 | 172,113 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 315,325 | 314,736 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 135,139 | 134,953 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 45,046 | 44,355 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 337,848 | 337,702 | ||||
Fairway Finance LLC | ||||||
3.15% – 3.56%, 09/15/05 – 10/20/05 | 580,896 | 580,403 |
SCHEDULESOF INVESTMENTS | 53 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI HONG KONG INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Ford Credit Floorplan Motown | ||||||
3.47% – 3.72%, 09/09/05 – 11/08/05 | $ | 2,049,467 | $ | 2,040,117 | ||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 722,679 | 722,329 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% – 3.53%, 09/20/05 – 09/21/05 | 1,464,008 | 1,461,177 | ||||
Giro Funding Corp. | ||||||
3.53% – 3.56%, 09/16/05 – 09/22/05 | 337,848 | 337,283 | ||||
Grampian Funding LLC | ||||||
3.13% – 3.84%, 09/09/05 – 01/31/06 | 698,219 | 690,743 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% – 3.53%, 09/02/05 – 02/10/06 | 518,034 | 518,034 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 135,139 | 132,882 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 255,355 | 254,857 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 – 02/21/064 | 472,945 | 472,945 | ||||
Lockhart Funding LLC | ||||||
3.47% – 3.55%, 09/16/05 – 09/19/05 | 620,933 | 620,006 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% – 3.51%, 09/01/05 – 09/21/05 | 1,103,637 | 1,102,194 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 1,576,624 | 1,576,624 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 254,080 | 253,635 | ||||
Park Granada LLC | ||||||
3.48% – 3.51%, 09/15/05 – 09/20/05 | 609,942 | 609,008 | ||||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 450,464 | 442,196 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 900,928 | 900,399 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 112,616 | 110,495 | ||||
Security | Shares or Principal | Value | ||||
Solitaire Funding Ltd. | ||||||
3.49% – 3.52%, 09/02/05 – 09/06/05 | $ | 1,324,364 | $ | 1,324,015 | ||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 278,297 | 278,297 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 945,974 | 944,207 | ||||
Three Pillars Funding Corp. | ||||||
3.49% – 3.52%, 09/01/05 – 09/07/05 | 965,191 | 964,861 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 75,295 | 75,295 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 1,662,082 | 1,662,082 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 207,213 | 207,051 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 157,662 | 157,662 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 653,173 | 652,020 | ||||
23,870,720 | ||||||
MEDIUM-TERM NOTES3 – 0.06% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/064 | 139,644 | 139,632 | ||||
K2 USA LLC | ||||||
3.94%, 07/07/064 | 270,278 | 270,267 | ||||
409,899 | ||||||
MONEY MARKET FUNDS – 0.32% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares | ||||||
3.63%3, 5, 6 | 1,801,856 | 1,801,856 | ||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares | ||||||
3.56%5, 6 | 22,977 | 22,977 | ||||
BlackRock Temp Cash Money Market Fund 3.41%3, 6 | 47,730 | 47,730 | ||||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares | ||||||
3.50%3, 6 | 157,913 | 157,913 | ||||
2,030,476 |
54 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI HONG KONG INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
REPURCHASE AGREEMENTS3 – 3.15% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $10,812,217 and an effective yield of 3.60%.7 | $ | 10,811,136 | $ | 10,811,136 | ||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $8,334,417 and an effective yield of 3.60%.7 | 8,333,584 | 8,333,584 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $982,110 and an effective yield of 3.60%.7 | 982,012 | 982,012 | ||||
20,126,732 | ||||||
TIME DEPOSITS3 – 0.66% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | 900,928 | 900,928 | ||||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 2,477,552 | 2,477,552 | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 594,690 | 594,690 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/058 | 225,232 | 225,232 | ||||
4,198,402 | ||||||
VARIABLE & FLOATING RATE NOTES3 – 6.55% | ||||||
Allstate Life Global Funding II | ||||||
3.58% – 3.66%, 07/08/06 – 07/27/064 | 837,863 | 837,868 | ||||
American Express Bank | ||||||
3.55% – 3.63%, 10/17/05 – 07/19/06 | 1,216,253 | 1,216,257 | ||||
American Express Centurion Bank | ||||||
3.55% – 3.63%, 06/29/06 – 07/19/06 | 743,266 | 743,266 | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 900,928 | 900,996 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/064 | 450,464 | 451,025 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/064 | 292,802 | 292,802 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 2,252,320 | 2,252,320 | ||||
Beta Finance Inc. | ||||||
3.51% – 3.72%, 09/23/05 – 06/09/064 | 2,315,385 | 2,315,354 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/064 | 450,464 | 450,464 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% – 3.61%, 09/13/05 – 12/14/05 | 1,531,578 | 1,531,514 | ||||
CC USA Inc. | ||||||
3.52% – 3.59%, 03/23/06 – 07/14/064 | 1,211,748 | 1,211,699 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/054 | 112,616 | 112,616 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 1,126,160 | 1,126,160 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 450,464 | 450,464 | ||||
Dorada Finance Inc. | ||||||
3.59% – 3.62%, 03/27/06 – 06/26/064 | 716,238 | 716,275 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/064 | 450,464 | 450,464 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/064 | 900,928 | 900,928 | ||||
Five Finance Inc. | ||||||
3.60% – 3.63%, 02/27/06 – 06/26/064 | 315,325 | 315,331 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 202,709 | 202,892 | ||||
Hartford Life Global Funding Trust | ||||||
3.56%, 08/15/06 | 450,464 | 450,464 |
SCHEDULESOF INVESTMENTS | 55 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI HONG KONG INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
HBOS Treasury Services PLC | |||||||
3.51% – 3.57%, 01/10/06 – 04/24/064 | $ | 1,351,392 | $ | 1,351,392 | |||
HSBC Bank USA N.A. | |||||||
3.70%, 05/04/06 | 157,662 | 157,748 | |||||
K2 USA LLC | |||||||
3.47% – 3.58%, 09/12/05 – 06/02/064 | 1,756,810 | 1,756,824 | |||||
Links Finance LLC | |||||||
3.52% – 3.71%, 11/16/05 – 03/15/064 | 1,756,810 | 1,757,000 | |||||
Lothian Mortgages PLC | |||||||
3.63%, 01/24/06 | 450,464 | 450,464 | |||||
Marshall & Ilsley Bank | |||||||
3.71%, 02/20/06 | 450,464 | 450,719 | |||||
Metropolitan Life Global Funding I | |||||||
3.55% – 4.01%, 08/28/06 – 09/06/064 | 900,928 | 901,324 | |||||
National City Bank (Ohio) | |||||||
3.50%, 01/06/06 | 225,232 | 225,208 | |||||
Nationwide Building Society | |||||||
3.51% – 3.62%, 01/13/06 – 07/07/064 | 1,666,717 | 1,666,878 | |||||
Nordea Bank AB | |||||||
3.55%, 08/11/064 | 788,312 | 788,312 | |||||
Northern Rock PLC | |||||||
3.54% – 3.61%, 10/25/05 – 08/03/064 | 1,441,485 | 1,441,510 | |||||
Permanent Financing PLC | |||||||
3.53% – 3.54%, 09/12/05 – 06/12/064 | 1,734,286 | 1,734,286 | |||||
Principal Life Income | |||||||
Funding Trusts | |||||||
3.74%, 05/10/06 | 337,848 | 337,861 | |||||
Royal Bank of Scotland | |||||||
3.47% – 3.61%, 04/05/06 – 08/30/06 | 1,503,424 | 1,503,080 | |||||
Sedna Finance Inc. | |||||||
3.54%, 01/10/06 – 01/17/064 | 247,755 | 247,735 | |||||
Sigma Finance Inc. | |||||||
3.50% – 3.72%, 09/15/05 – 08/15/064 | 2,572,149 | 2,572,164 | |||||
Skandinaviska Enskilda Bank NY | |||||||
3.58%, 07/18/064 | 450,464 | 450,464 | |||||
Strips III LLC | |||||||
3.69%, 07/24/064,8 | 132,324 | 132,324 | |||||
SunTrust Bank | |||||||
3.63%, 04/28/06 | 675,696 | 675,696 | |||||
Tango Finance Corp. | |||||||
3.54% – 3.60%, 09/15/05 – 06/21/064 | 1,094,627 | 1,094,560 | |||||
Toyota Motor Credit Corp. | |||||||
3.57%, 04/10/06 | 202,709 | 202,707 | |||||
Unicredito Italiano SpA | |||||||
3.34%, 06/14/06 | 585,603 | 585,440 | |||||
Wachovia Asset Securitization Inc. | |||||||
3.63%, 09/25/054 | 1,084,422 | 1,084,422 | |||||
Wells Fargo & Co. | |||||||
3.56%, 09/15/064 | 225,232 | 225,254 | |||||
WhistleJacket Capital LLC | |||||||
3.52% – 3.62%, 09/15/05 – 07/28/064 | 1,801,856 | 1,801,778 | |||||
White Pine Finance LLC | |||||||
3.47% – 3.61%, 11/01/05 – 06/20/064 | 950,479 | 950,454 | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/054 | 321,631 | 321,631 | |||||
41,796,394 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 104,279,698 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 116.15% | 741,051,196 | ||||||
Other Assets, Less Liabilities – (16.15)% | (103,066,358 | ) | |||||
NET ASSETS – 100.00% | $ | 637,984,838 | |||||
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 (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
56 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI HONG KONG INDEX FUND
August 31, 2005
4 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
6 | The rate quoted is the annualized seven-day yield of the fund at period end. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
8 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
SCHEDULESOF INVESTMENTS | 57 |
Table of Contents
iSHARES® MSCI MALAYSIA INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 99.87% | |||||
AGRICULTURE – 8.59% | |||||
British American Tobacco (Malaysia) Bhd | 1,006,600 | $ | 10,207,436 | ||
Golden Hope Plantations Bhd | 3,379,300 | 3,171,453 | |||
Highlands & Lowlands Bhd | 1,222,300 | 1,412,839 | |||
IOI Corp. Bhd | 4,889,200 | 14,646,861 | |||
Kuala Lumpur Kepong Bhd | 2,013,200 | 3,842,800 | |||
33,281,389 | |||||
AIRLINES – 1.01% | |||||
Airasia Bhd1 | 5,608,200 | 2,304,535 | |||
Malaysian Airline System Bhd | 2,013,200 | 1,622,515 | |||
3,927,050 | |||||
AUTO MANUFACTURERS – 2.23% | |||||
DRB-Hicom Bhd | 3,163,600 | 1,341,930 | |||
Oriental Holdings Bhd | 1,222,300 | 1,354,511 | |||
Proton Holdings Bhd | 2,013,200 | 4,723,441 | |||
Tan Chong Motor Holdings Bhd | 2,660,300 | 1,206,021 | |||
8,625,903 | |||||
AUTO PARTS & EQUIPMENT – 0.66% | |||||
UMW Holdings Bhd | 1,797,500 | 2,549,477 | |||
2,549,477 | |||||
BANKS – 24.70% | |||||
AMMB Holdings Bhd | 10,209,800 | 6,929,239 | |||
CIMB Bhd | 1,495,777 | 2,438,767 | |||
Commerce Asset Holdings Bhd | 15,170,900 | 22,321,976 | |||
Hong Leong Bank Bhd | 3,810,700 | 5,505,916 | |||
Malayan Banking Bhd | 13,373,400 | 40,418,017 | |||
Public Bank Bhd | 8,124,700 | 14,969,954 | |||
RHB Capital Bhd | 5,104,900 | 3,139,811 | |||
95,723,680 | |||||
BEVERAGES – 0.42% | |||||
Guinness Anchor Bhd | 1,078,500 | 1,629,759 | |||
1,629,759 | |||||
BUILDING MATERIALS – 1.70% | |||||
Malayan Cement Bhd | 9,275,100 | 1,512,245 | |||
OYL Industries Bhd | 5,536,530 | 4,638,238 | |||
WTK Holdings Bhd | 503,300 | 453,664 | |||
6,604,147 | |||||
CHEMICALS – 0.49% | |||||
Malaysian Oxygen Bhd | 575,200 | 1,906,151 | |||
1,906,151 | |||||
COMMERCIAL SERVICES – 2.19% | |||||
PLUS Expressways Bhd | 9,994,100 | 8,478,558 | |||
8,478,558 | |||||
DIVERSIFIED FINANCIAL SERVICES – 1.60% | |||||
Bursa Malaysia Bhd | 2,372,700 | 2,679,667 | |||
Hong Leong Credit Bhd | 1,653,700 | 1,876,415 | |||
OSK Holdings Bhd | 2,300,833 | 634,376 | |||
TA Enterprise Bhd | 5,320,600 | 1,008,544 | |||
6,199,002 | |||||
ELECTRIC – 7.12% | |||||
Malakoff Bhd | 4,314,000 | 8,920,785 | |||
Tenaga Nasional Bhd | 6,399,100 | 18,661,214 | |||
27,581,999 | |||||
ELECTRONICS – 0.16% | |||||
Hong Leong Industries Bhd | 719,000 | 632,842 | |||
Hume Industries Bhd | 667 | 866 | |||
633,708 | |||||
ENGINEERING & CONSTRUCTION – 5.93% | |||||
Gamuda Bhd | 4,457,800 | 5,058,161 | |||
IJM Corp. Bhd | 2,660,300 | 3,385,323 | |||
Malaysia Airports Holdings Bhd | 2,228,900 | 1,193,631 | |||
Malaysian Resources Corp. Bhd1 | 4,601,600 | 609,968 | |||
MMC Corp. Bhd | 2,228,900 | 1,299,995 | |||
Road Builder (Malaysia) Holdings Bhd | 3,091,700 | 1,639,290 | |||
Transmile Group Bhd | 934,700 | 2,651,456 | |||
YTL Corp. Bhd | 4,889,288 | 7,129,131 | |||
22,966,955 | |||||
ENTERTAINMENT – 6.78% | |||||
Berjaya Sports Toto Bhd | 4,817,300 | 5,823,671 | |||
Magnum Corp. Bhd | 6,902,400 | 3,733,005 | |||
Resorts World Bhd | 3,954,500 | 10,798,343 | |||
Tanjong PLC | 1,653,700 | 5,918,598 | |||
26,273,617 | |||||
ENVIRONMENTAL CONTROL – 0.19% | |||||
Puncak Niaga Holding Bhd | 1,078,500 | 743,399 | |||
743,399 |
58 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI MALAYSIA INDEX FUND
August 31, 2005
Security | Shares | Value | |||
FOOD – 2.02% | |||||
Nestle (Malaysia) Bhd | 575,200 | $ | 3,781,803 | ||
PPB Group Bhd | 3,738,866 | 4,063,985 | |||
7,845,788 | |||||
GAS – 1.84% | |||||
Petronas Gas Bhd | 3,163,600 | 7,129,003 | |||
7,129,003 | |||||
HOLDING COMPANIES – DIVERSIFIED – 4.48% | |||||
Mulpha International Bhd1 | 5,967,700 | 909,710 | |||
Multi-Purpose Holdings Bhd1 | 4,601,600 | 1,134,541 | |||
Sime Darby Bhd | 9,562,700 | 15,337,841 | |||
17,382,092 | |||||
INSURANCE – 0.63% | |||||
Kurnia Asia Bhd1 | 4,817,300 | 1,494,231 | |||
MAA Holdings Bhd | 790,900 | 964,512 | |||
2,458,743 | |||||
LODGING – 4.04% | |||||
Genting Bhd | 3,091,700 | 15,655,215 | |||
15,655,215 | |||||
MEDIA – 2.75% | |||||
Astro All Asia Networks PLC | 3,882,600 | 5,661,267 | |||
Media Prima Bhd1 | 3,235,500 | 1,355,273 | |||
New Straits Times Press Bhd | 934,700 | 758,267 | |||
Star Publications (Malaysia) Bhd | 1,509,900 | 2,882,100 | |||
10,656,907 | |||||
METAL FABRICATE & HARDWARE – 0.05% | |||||
KrisAssets Holdings Bhd1,2 | 282,362 | 192,878 | |||
192,878 | |||||
OIL & GAS – 1.37% | |||||
Petronas Dagangan Bhd | 2,013,200 | 1,996,121 | |||
Shell Refining Co. | 1,222,300 | 3,305,265 | |||
5,301,386 | |||||
OIL & GAS SERVICES – 0.41% | |||||
Scomi Group Bhd | 4,385,900 | 1,569,715 | |||
1,569,715 | |||||
REAL ESTATE – 2.99% | |||||
Bandar Raya Developments Bhd | 1,725,600 | 695,364 | |||
IGB Corp. Bhd | 5,823,900 | 1,945,417 | |||
IOI Properties Bhd | 647,150 | 1,363,956 | |||
Island & Peninsular Bhd | 1,182,610 | 489,096 | |||
KLCC Property Holdings Bhd | 3,738,800 | 2,091,428 | |||
MK Land Holdings Bhd | 2,876,000 | 747,211 | |||
SP Setia Bhd | 3,738,800 | 4,242,329 | |||
11,574,801 | |||||
RETAIL – 0.14% | |||||
Edaran Otomobil Nasional Bhd | 575,200 | 530,672 | |||
530,672 | |||||
SEMICONDUCTORS – 0.66% | |||||
Malaysian Pacific Industries Bhd | 647,100 | 1,801,312 | |||
Unisem (Malaysia) Bhd | 1,941,300 | 756,551 | |||
2,557,863 | |||||
TELECOMMUNICATIONS – 9.29% | |||||
Maxis Communications Bhd | 6,902,400 | 17,384,093 | |||
Telekom Malaysia Bhd | 6,758,600 | 18,634,528 | |||
36,018,621 | |||||
TRANSPORTATION – 5.43% | |||||
Malaysia International Shipping Corp. Bhd | 3,738,800 | 17,643,330 | |||
Malaysian Bulk Carriers Bhd | 1,941,300 | 1,173,426 | |||
POS Malaysia & Services Holdings Bhd | 2,444,600 | 2,242,396 | |||
21,059,152 | |||||
TOTAL COMMON STOCKS | 387,057,630 | ||||
SHORT-TERM INVESTMENTS – 0.10% | |||||
MONEY MARKET FUNDS – 0.10% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 3.56%3,4 | 401,056 | 401,056 | |||
401,056 | |||||
TOTAL SHORT-TERM INVESTMENTS | 401,056 | ||||
TOTAL INVESTMENTS IN SECURITIES – 99.97% | 387,458,686 | ||||
Other Assets, Less Liabilities – 0.03% | 116,294 | ||||
NET ASSETS – 100.00% | $ | 387,574,980 | |||
1 | Non-income earning security. |
SCHEDULESOF INVESTMENTS | 59 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI MALAYSIA INDEX FUND
August 31, 2005
2 | Security valued at fair value in accordance with procedures approved by the Board of Directors. See Note 1. |
3 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
4 | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to the financial statements.
60 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI MEXICO INDEX FUND
August 31, 2005
Security | Shares | Value | ||||
COMMON STOCKS – 99.92% | ||||||
BEVERAGES – 8.80% | ||||||
Coca-Cola Femsa SA de CV ADR1 | 105,600 | $ | 2,851,200 | |||
Fomento Economico Mexicano SA de CV Class UBD | 1,848,000 | 12,602,020 | ||||
Grupo Modelo SA de CV Series C | 2,183,450 | 7,023,713 | ||||
22,476,933 | ||||||
BUILDING MATERIALS – 13.72% | ||||||
Cemex SA de CV Series CPO | 7,392,000 | 35,059,356 | ||||
35,059,356 | ||||||
DIVERSIFIED FINANCIAL SERVICES – 4.06% | ||||||
Grupo Financiero Banorte SA de CV Series O | 1,267,200 | 10,372,475 | ||||
10,372,475 | ||||||
ENGINEERING & CONSTRUCTION – 1.53% | ||||||
Grupo Aeroportuario del Sureste SA de CV ADR | 105,600 | 3,917,760 | ||||
3,917,760 | ||||||
FOOD – 1.57% | ||||||
Grupo Bimbo SA Series A | 1,311,200 | 4,014,125 | ||||
4,014,125 | ||||||
FOREST PRODUCTS & PAPER – 2.97% | ||||||
Kimberly-Clark de Mexico SA de CV Class A | 2,323,200 | 7,602,184 | ||||
7,602,184 | ||||||
HOLDING COMPANIES - DIVERSIFIED – 5.79% | ||||||
Alfa SA de CV Class A | 1,056,000 | 6,382,686 | ||||
Grupo Carso SA de CV Series A1 | 4,153,600 | 8,413,230 | ||||
14,795,916 | ||||||
HOME BUILDERS – 2.71% | ||||||
Corporacion GEO SA de CV Series B2 | 1,381,600 | 3,820,740 | ||||
Urbi Desarrollos Urbanos SA de CV2 | 510,400 | 3,100,071 | ||||
6,920,811 | ||||||
HOUSEWARES – 0.55% | ||||||
Vitro SA de CV Series A | 1,226,369 | 1,405,356 | ||||
1,405,356 | ||||||
MEDIA – 5.93% | ||||||
Grupo Televisa SA Series CPO | 3,854,400 | 12,053,021 | ||||
TV Azteca SA de CV Series CPO2 | 5,376,800 | 3,103,148 | ||||
15,156,169 | ||||||
Security | Shares or Principal | Value | ||||
MINING – 2.89% | ||||||
Grupo Mexico SA de CV Series B | 3,432,000 | $ | 6,021,554 | |||
Industrias Penoles SA de CV Series CP | 352,000 | 1,366,393 | ||||
7,387,947 | ||||||
REAL ESTATE – 1.27% | ||||||
Consorcio Ara SA de CV | 976,846 | 3,257,960 | ||||
3,257,960 | ||||||
RETAIL – 7.65% | ||||||
Controladora Comercial Mexicana SA de CV | 1,812,800 | 2,508,277 | ||||
Grupo Sanborns SA Series B12 | 884,443 | 1,554,238 | ||||
Organizacion Soriana SA de CV Series B2 | 797,456 | 3,107,364 | ||||
Wal-Mart de Mexico SA de CV Series V | 2,860,000 | 12,368,997 | ||||
19,538,876 | ||||||
TELECOMMUNICATIONS – 40.48% | ||||||
America Movil SA de CV Series L | 55,017,600 | 60,095,991 | ||||
America Telecom SA de CV Series A12 | 1,797,088 | 6,183,100 | ||||
Carso Global Telecom SA de CV Class A12 | 2,687,779 | 4,487,089 | ||||
Telefonos de Mexico SA de CV Series L | 34,242,214 | 32,684,023 | ||||
103,450,203 | ||||||
TOTAL COMMON STOCKS | 255,356,071 | |||||
SHORT-TERM INVESTMENTS – 1.06% | ||||||
CERTIFICATES OF DEPOSIT3 – 0.12% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% – 3.83%, 09/14/05 – 01/25/06 | $ | 17,437 | 17,436 | |||
Bank of Nova Scotia | ||||||
3.45% – 3.56%, 09/26/05 – 01/03/06 | 7,556 | 7,555 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 11,624 | 11,624 |
SCHEDULESOF INVESTMENTS | 61 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI MEXICO INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | $ | 11,624 | $ | 11,624 | ||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 5,812 | 5,811 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 19,762 | 19,762 | ||||
Fortis Bank NY | ||||||
3.83% – 3.84%, 01/25/06 | 17,437 | 17,436 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 6,975 | 6,975 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 5,812 | 5,814 | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 5,812 | 5,812 | ||||
Societe Generale | ||||||
3.51% – 3.60%, 03/30/06 – 06/13/06 | 18,018 | 18,015 | ||||
Toronto-Dominion Bank | ||||||
2.66% – 3.94%, 09/14/05 – 07/10/06 | 41,267 | 41,268 | ||||
UBS AG | ||||||
2.67% – 3.40%, 11/09/05 – 12/15/05 | 9,300 | 9,300 | ||||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 29,061 | 29,061 | ||||
Washington Mutual Bank | ||||||
3.50% – 3.55%, 09/15/05 – 09/19/05 | 52,310 | 52,309 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 – 09/20/05 | 45,917 | 45,917 | ||||
305,719 | ||||||
COMMERCIAL PAPER3 – 0.24% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 23,249 | 23,232 | ||||
Amstel Funding Corp. | ||||||
3.49% – 3.91%, 09/15/05 – 02/15/06 | 24,528 | 24,397 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 11,624 | 11,624 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 13,183 | 13,175 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% – 3.49%, 09/09/05 – 09/21/05 | 19,180 | 19,156 | ||||
Bryant Park Funding LLC | ||||||
3.51% – 3.92%, 09/06/05 – 02/22/06 | 5,917 | 5,859 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 4,469 | 4,441 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 8,137 | 8,122 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 3,487 | 3,483 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 1,162 | 1,145 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 8,718 | 8,715 | ||||
Fairway Finance LLC | ||||||
3.15% – 3.56%, 09/15/05 – 10/20/05 | 14,990 | 14,978 | ||||
Ford Credit Floorplan Motown | ||||||
3.47% – 3.72%, 09/09/05 – 11/08/05 | 52,888 | 52,645 | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 18,649 | 18,640 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% – 3.53%, 09/20/05 – 09/21/05 | 37,779 | 37,706 | ||||
Giro Funding Corp. | ||||||
3.53% – 3.56%, 09/16/05 – 09/22/05 | 8,718 | 8,704 | ||||
Grampian Funding LLC | ||||||
3.13% – 3.84%, 09/09/05 – 01/31/06 | 18,018 | 17,825 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% – 3.53%, 09/02/05 – 02/10/06 | 13,368 | 13,368 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 3,487 | 3,429 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 6,590 | 6,577 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 – 02/21/064 | 12,205 | 12,205 |
62 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI MEXICO INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Lockhart Funding LLC | ||||||
3.47% – 3.55%, 09/16/05 – 09/19/05 | $ | 16,024 | $ | 16,000 | ||
Mortgage Interest Networking Trust | ||||||
3.47% – 3.51%, 09/01/05 – 09/21/05 | 28,480 | 28,443 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 40,686 | 40,686 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 6,557 | 6,545 | ||||
Park Granada LLC | ||||||
3.48% – 3.51%, 09/15/05 – 09/20/05 | 15,740 | 15,716 | ||||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 11,624 | 11,411 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 23,249 | 23,235 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 2,906 | 2,851 | ||||
Solitaire Funding Ltd. | ||||||
3.49% – 3.52%, 09/02/05 – 09/06/05 | 34,176 | 34,166 | ||||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 7,182 | 7,182 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 24,411 | 24,366 | ||||
Three Pillars Funding Corp. | ||||||
3.49% – 3.52%, 09/01/05 – 09/07/05 | 24,907 | 24,899 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 1,943 | 1,943 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 42,891 | 42,891 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 5,347 | 5,343 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 4,069 | 4,069 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 16,855 | 16,826 | ||||
615,998 | ||||||
Security | Shares or Principal | Value | ||||
MEDIUM-TERM NOTES3 – 0.01% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/064 | $ | 3,604 | $ | 3,603 | ||
K2 USA LLC | ||||||
3.94%, 07/07/064 | 6,975 | 6,974 | ||||
10,577 | ||||||
MONEY MARKET FUNDS – 0.03% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares | ||||||
3.63%3, 5, 6 | 46,498 | 46,498 | ||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares | ||||||
3.56%5, 6 | 17,275 | 17,275 | ||||
BlackRock Temp Cash Money Market Fund | ||||||
3.41%3, 6 | 1,232 | 1,232 | ||||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares | ||||||
3.50%3, 6 | 4,075 | 4,075 | ||||
69,080 | ||||||
REPURCHASE AGREEMENTS3 – 0.20% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $279,015 and an effective yield of 3.60%.7 | $ | 278,988 | 278,988 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $215,074 and an effective yield of 3.60%.7 | 215,053 | 215,053 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $25,344 and an effective yield of 3.60%.7 | 25,341 | 25,341 | ||||
519,382 |
SCHEDULESOF INVESTMENTS | 63 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI MEXICO INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
TIME DEPOSITS3 – 0.04% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | $ | 23,249 | $ | 23,249 | ||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 63,935 | 63,935 | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 15,346 | 15,346 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/058 | 5,812 | 5,812 | ||||
108,342 | ||||||
VARIABLE & FLOATING RATE NOTES3 – 0.42% | ||||||
Allstate Life Global Funding II | ||||||
3.58% – 3.66%, 07/08/06 – 07/27/064 | 21,621 | 21,621 | ||||
American Express Bank | ||||||
3.55% – 3.63%, 10/17/05 – 07/19/06 | 31,386 | 31,386 | ||||
American Express Centurion Bank | ||||||
3.55% – 3.63%, 06/29/06 – 07/19/06 | 19,180 | 19,181 | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 23,249 | 23,251 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/064 | 11,624 | 11,639 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/064 | 7,556 | 7,556 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 58,122 | 58,122 | ||||
Beta Finance Inc. | ||||||
3.51% – 3.72%, 09/23/05 – 06/09/064 | 59,750 | 59,749 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/064 | 11,624 | 11,624 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% – 3.61%, 09/13/05 – 12/14/05 | 39,523 | 39,521 | ||||
CC USA Inc. | ||||||
3.52% – 3.59%, 03/23/06 – 07/14/064 | 31,270 | 31,269 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/054 | 2,906 | 2,906 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 29,061 | 29,061 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 11,624 | 11,624 | ||||
Dorada Finance Inc. | ||||||
3.59% – 3.62%, 03/27/06 – 06/26/064 | 18,483 | 18,484 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/064 | 11,624 | 11,624 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/064 | 23,249 | 23,249 | ||||
Five Finance Inc. | ||||||
3.60% – 3.63%, 02/27/06 – 06/26/064 | 8,137 | 8,138 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 5,231 | 5,236 | ||||
Hartford Life Global Funding Trust | ||||||
3.56%, 08/15/06 | 11,624 | 11,624 | ||||
HBOS Treasury Services PLC | ||||||
3.51% – 3.57%, 01/10/06 – 04/24/064 | 34,873 | 34,872 | ||||
HSBC Bank USA N.A. | ||||||
3.70%, 05/04/06 | 4,069 | 4,071 | ||||
K2 USA LLC | ||||||
3.47% – 3.58%, 09/12/05 – 06/02/064 | 45,335 | 45,336 | ||||
Links Finance LLC | ||||||
3.52% – 3.71%, 11/16/05 – 03/15/064 | 45,335 | 45,340 | ||||
Lothian Mortgages PLC | ||||||
3.63%, 01/24/06 | 11,624 | 11,624 | ||||
Marshall & Ilsley Bank | ||||||
3.71%, 02/20/06 | 11,624 | 11,631 | ||||
Metropolitan Life Global Funding I | ||||||
3.55% – 4.01%, 08/28/06 – 09/06/064 | 23,249 | 23,259 | ||||
National City Bank (Ohio) | ||||||
3.50%, 01/06/06 | 5,812 | 5,812 |
64 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI MEXICO INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
Nationwide Building Society | |||||||
3.51% – 3.62%, 01/13/06 – 07/07/064 | $ | 43,011 | $ | 43,014 | |||
Nordea Bank AB | |||||||
3.55%, 08/11/064 | 20,343 | 20,343 | |||||
Northern Rock PLC | |||||||
3.54% – 3.61%, 10/25/05 – 08/03/064 | 37,198 | 37,199 | |||||
Permanent Financing PLC | |||||||
3.53% – 3.54%, 09/12/05 – 06/12/064 | 44,754 | 44,754 | |||||
Principal Life Income Funding Trusts | |||||||
3.74%, 05/10/06 | 8,718 | 8,719 | |||||
Royal Bank of Scotland | |||||||
3.47% – 3.61%, 04/05/06 – 08/30/06 | 38,797 | 38,788 | |||||
Sedna Finance Inc. | |||||||
3.54%, 01/10/06 – 01/17/064 | 6,393 | 6,393 | |||||
Sigma Finance Inc. | |||||||
3.50% – 3.72%, 09/15/05 – 08/15/064 | 66,376 | 66,376 | |||||
Skandinaviska Enskilda Bank NY | |||||||
3.58%, 07/18/064 | 11,624 | 11,624 | |||||
Strips III LLC | |||||||
3.69%, 07/24/064,8 | 3,415 | 3,415 | |||||
SunTrust Bank | |||||||
3.63%, 04/28/06 | 17,437 | 17,437 | |||||
Tango Finance Corp. | |||||||
3.54% – 3.60%, 09/15/05 – 06/21/064 | 28,247 | 28,246 | |||||
Toyota Motor Credit Corp. | |||||||
3.57%, 04/10/06 | 5,231 | 5,231 | |||||
Unicredito Italiano SpA | |||||||
3.34%, 06/14/06 | 15,112 | 15,108 | |||||
Wachovia Asset Securitization Inc. | |||||||
3.63%, 09/25/054 | 27,984 | 27,984 | |||||
Wells Fargo & Co. | |||||||
3.56%, 09/15/064 | 5,812 | 5,813 | |||||
WhistleJacket Capital LLC | |||||||
3.52% – 3.62%, 09/15/05 – 07/28/064 | 46,498 | 46,496 | |||||
White Pine Finance LLC | |||||||
3.47% – 3.61%, 11/01/05 – 06/20/064 | 24,528 | 24,527 | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/054 | 8,300 | 8,300 | |||||
1,078,577 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 2,707,675 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 100.98% | 258,063,746 | ||||||
Other Assets, Less Liabilities – (0.98)% | (2,506,297 | ) | |||||
NET ASSETS – 100.00% | $ | 255,557,449 | |||||
ADR – American 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 (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
4 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
6 | The rate quoted is the annualized seven-day yield of the fund at period end. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
8 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
SCHEDULESOF INVESTMENTS | 65 |
Table of Contents
Schedule of Investments
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 99.20% | |||||
AUSTRALIA – 64.67% | |||||
Alinta Ltd.1 | 457,704 | $ | 3,781,848 | ||
Alumina Ltd.1 | 2,456,844 | 10,980,477 | |||
Amcor Ltd. | 333,216 | 1,651,948 | |||
AMP Ltd. | 3,685,968 | 20,405,429 | |||
Ansell Ltd.1 | 308,256 | 2,470,601 | |||
APN News & Media Ltd.1 | 627,432 | 2,398,894 | |||
Aristocrat Leisure Ltd.1 | 619,008 | 5,826,047 | |||
Australia & New Zealand Banking Group Ltd. | 3,579,108 | 59,575,985 | |||
Australian Gas Light Co. Ltd. | 899,340 | 9,585,902 | |||
Australian Stock Exchange Ltd.1 | 202,644 | 4,041,336 | |||
AXA Asia Pacific Holdings Ltd.1 | 1,722,240 | 6,377,747 | |||
Babcock & Brown Ltd.1 | 296,712 | 4,134,335 | |||
BHP Billiton Ltd.1 | 7,019,688 | 107,882,279 | |||
BHP Steel Ltd.1 | 1,445,028 | 10,116,234 | |||
Billabong International Ltd. | 250,692 | 2,438,579 | |||
Boral Ltd.1 | 1,282,944 | 6,996,341 | |||
Brambles Industries Ltd.1 | 1,935,648 | 12,911,183 | |||
Caltex Australia Ltd. | 257,712 | 3,348,940 | |||
Centro Properties Group | 1,521,156 | 6,798,567 | |||
Challenger Financial Services Group Ltd.2 | 802,776 | 2,158,759 | |||
Coca-Cola Amatil Ltd. | 1,045,044 | 6,782,269 | |||
Cochlear Ltd. | 104,988 | 3,312,193 | |||
Coles Myer Ltd.1 | 2,269,332 | 16,858,580 | |||
Commonwealth Bank of Australia | 2,505,672 | 70,391,868 | |||
Commonwealth Property Office Fund | 3,463,044 | 3,303,607 | |||
Computershare Ltd.1 | 805,116 | 4,039,816 | |||
CSL Ltd. | 388,440 | 9,999,188 | |||
CSR Ltd. | 1,921,764 | 3,868,668 | |||
DB RREEF Trust | 5,158,296 | 5,288,903 | |||
DCA Group Ltd.1 | 845,208 | 2,488,722 | |||
Downer EDI Ltd. | 561,132 | 2,550,040 | |||
Foster’s Group Ltd. | 3,884,556 | 16,777,834 | |||
Futuris Corp. Ltd. | 1,100,736 | 1,653,636 | |||
Gandel Retail Trust | 3,305,016 | 4,394,136 | |||
GPT Group | 3,711,240 | 10,899,899 | |||
Harvey Norman Holdings Ltd.1 | 804,905 | 1,602,202 | |||
Iluka Resources Ltd. | 473,148 | 3,020,944 | |||
ING Industrial Fund1 | 1,629,264 | 2,741,360 | |||
Insurance Australia Group Ltd. | 3,177,564 | 12,912,735 | |||
Investa Property Group1 | 3,450,252 | 5,338,813 | |||
James Hardie Industries NV | 916,968 | 5,937,288 | |||
John Fairfax Holdings Ltd. | 1,914,432 | 6,255,411 | |||
Leighton Holdings Ltd.1 | 262,236 | 2,933,011 | |||
Lend Lease Corp Ltd. | 709,020 | 7,019,409 | |||
Lion Nathan Ltd.1 | 609,804 | 3,682,756 | |||
Macquarie Airports | 100,152 | 239,981 | |||
Macquarie Bank Ltd. | 435,084 | 20,628,458 | |||
Macquarie Communications Infrastructure Group1 | 629,304 | 2,973,294 | |||
Macquarie Goodman Group | 2,231,112 | 7,156,092 | |||
Macquarie Infrastructure Group | 4,213,404 | 12,311,455 | |||
Mayne Group Ltd. | 1,272,336 | 4,778,576 | |||
Mirvac Group | 1,868,568 | 5,361,656 | |||
Multiplex Group | 1,443,624 | 3,643,511 | |||
National Australia Bank Ltd. | 3,061,968 | 72,012,914 | |||
Newcrest Mining Ltd. | 652,704 | 8,329,834 | |||
OneSteel Ltd.1 | 1,311,804 | 3,153,157 | |||
Orica Ltd.1 | 560,664 | 8,010,135 | |||
Origin Energy Ltd.1 | 1,585,272 | 8,633,134 | |||
Pacific Brands Ltd.1 | 1,218,828 | 2,526,843 | |||
PaperlinX Ltd.1 | 1,388,712 | 3,390,176 | |||
Patrick Corp. Ltd.1 | 1,409,772 | 7,455,010 | |||
Perpetual Trustees Australia Ltd. | 75,816 | 3,481,304 | |||
Publishing & Broadcasting Ltd. | 260,988 | 3,160,183 | |||
Qantas Airways Ltd. | 58,656 | 141,431 | |||
QBE Insurance Group Ltd.1 | 1,521,000 | 19,536,735 | |||
Rinker Group Ltd.1 | 1,818,960 | 19,633,901 | |||
Rio Tinto Ltd.1 | 575,796 | 21,759,536 | |||
Santos Ltd. | 1,137,552 | 9,894,788 | |||
SFE Corp. Ltd.1 | 251,784 | 2,190,097 | |||
Sonic Healthcare Ltd. | 482,820 | 5,548,855 | |||
Stockland Trust Group | 2,638,896 | 11,695,020 | |||
Suncorp-Metway Ltd. | 1,047,228 | 15,496,519 | |||
TABCORP Holdings Ltd. | 1,079,988 | 13,385,344 | |||
Telstra Corp. Ltd.1 | 4,254,120 | 14,954,857 | |||
Toll Holdings Ltd.1 | 496,392 | 5,249,937 | |||
Transurban Group1 | 1,531,140 | 8,223,328 |
66 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2005
Security | Shares | Value | |||
UNiTAB Ltd. | 221,988 | $ | 2,204,386 | ||
Wesfarmers Ltd.1 | 739,284 | 21,879,339 | |||
Westfield Group1 | 2,825,160 | 36,967,312 | |||
Westpac Banking Corp. Ltd. | 3,529,188 | 52,329,744 | |||
Woodside Petroleum Ltd.1 | 909,324 | 22,499,296 | |||
Woolworths Ltd.1 | 2,090,244 | 25,513,910 | |||
984,284,767 | |||||
HONG KONG – 21.55% | |||||
ASM Pacific Technology Ltd.1 | 468,000 | 2,291,181 | |||
Bank of East Asia Ltd. | 2,839,200 | 8,292,408 | |||
BOC Hong Kong Holdings Ltd.1 | 7,254,000 | 14,606,653 | |||
Cathay Pacific Airways Ltd.1 | 2,496,000 | 4,624,512 | |||
Cheung Kong Holdings Ltd. | 2,964,000 | 32,148,787 | |||
Cheung Kong Infrastructure Holdings Ltd. | 936,000 | 2,944,514 | |||
CLP Holdings Ltd. | 3,510,000 | 20,458,046 | |||
Esprit Holdings Ltd.1 | 1,872,000 | 13,789,235 | |||
Giordano International Ltd.1 | 2,808,000 | 1,878,708 | |||
Hang Lung Properties Ltd. | 3,588,736 | 5,587,090 | |||
Hang Seng Bank Ltd. | 1,482,000 | 20,021,487 | |||
Henderson Land Development Co. Ltd. | 1,404,000 | 6,990,961 | |||
Hong Kong & China Gas Co. Ltd. | 7,020,836 | 14,091,988 | |||
Hong Kong Exchanges & Clearing Ltd.1 | 2,184,000 | 6,715,979 | |||
Hongkong Electric Holdings Ltd. | 2,730,000 | 13,189,594 | |||
Hopewell Holdings Ltd. | 1,248,000 | 3,203,438 | |||
Hutchinson Telecommunications International Ltd.2 | 2,808,000 | 3,359,997 | |||
Hutchison Whampoa Ltd. | 4,212,000 | 41,566,414 | |||
Hysan Development Co. Ltd. | 1,248,000 | 3,115,122 | |||
Johnson Electric Holdings Ltd. | 546,000 | 502,293 | |||
Kerry Properties Ltd.1 | 936,000 | 2,541,073 | |||
Kingboard Chemical Holdings Co. Ltd. | 1,248,000 | 2,930,463 | |||
Li & Fung Ltd. | 3,432,000 | 6,954,832 | |||
MTR Corp. Ltd. | 2,652,000 | 5,374,189 | |||
New World Development Co. Ltd. | 4,368,941 | 5,565,064 | |||
Noble Group Ltd.1 | 1,872,000 | 1,599,858 | |||
Orient Overseas International Ltd.1 | 468,200 | 1,864,451 | |||
PCCW Ltd.1 | 7,332,845 | 4,811,733 | |||
SCMP Group Ltd.1 | 1,872,000 | 758,709 | |||
Shangri-La Asia Ltd.1 | 2,184,000 | 3,793,545 | |||
Sino Land Co. Ltd.1 | 2,808,000 | 3,125,158 | |||
SmarTone Telecommunications Holdings Ltd. | 624,000 | 726,594 | |||
Solomon Systech International Ltd. | 8,112,000 | 2,426,664 | |||
Sun Hung Kai Properties Ltd. | 2,652,000 | 26,836,821 | |||
Swire Pacific Ltd. Class A | 1,794,000 | 17,046,364 | |||
Techtronic Industries Co. Ltd.1 | 1,872,000 | 4,720,856 | |||
Television Broadcasts Ltd. | 624,000 | 3,456,341 | |||
Texwinca Holdings Ltd. | 624,000 | 425,519 | |||
Wharf Holdings Ltd. (The) | 2,340,000 | 8,595,691 | |||
Wing Hang Bank Ltd. | 312,000 | 2,294,191 | |||
Yue Yuen Industrial Holdings Ltd.1 | 936,000 | 2,830,105 | |||
328,056,628 | |||||
NEW ZEALAND – 2.73% | |||||
Auckland International Airport Ltd. | 2,030,496 | 2,924,304 | |||
Carter Holt Harvey Ltd.1 | 1,874,028 | 3,295,846 | |||
Contact Energy Ltd.1 | 561,132 | 2,878,991 | |||
Fisher & Paykel Appliances Holdings Ltd.1 | 391,618 | 930,066 | |||
Fisher & Paykel Healthcare Corp. Ltd.1 | 950,196 | 2,315,863 | |||
Fletcher Building Ltd.1 | 914,472 | 4,634,881 | |||
Kiwi Income Property Trust | 1,424,436 | 1,144,084 | |||
NGC Holdings Ltd. | 321,204 | 962,999 | |||
Sky City Entertainment Group Ltd.1 | 807,144 | 2,699,325 | |||
Sky Network Television Ltd. New2 | 381,576 | 1,574,651 | |||
Telecom Corp. of New Zealand Ltd.1 | 3,780,972 | 15,917,106 | |||
Tower Ltd.1, 2 | 612,144 | 898,559 | |||
Vector Ltd.2 | 123,412 | 279,423 | |||
Warehouse Group Ltd. (The) | 77,296 | 202,305 | |||
Waste Management NZ Ltd. | 202,956 | 892,345 | |||
41,550,748 | |||||
SINGAPORE – 10.25% | |||||
Allgreen Properties Ltd. | 936,000 | 699,938 | |||
Ascendas Real Estate Investment Trust1 | 1,716,000 | 2,281,278 | |||
Capitaland Ltd.1 | 2,028,000 | 3,514,502 | |||
CapitaMall Trust Management Ltd. | 1,248,000 | 1,785,026 | |||
Chartered Semiconductor Manufacturing Ltd.1, 2 | 2,496,000 | 1,629,485 |
SCHEDULESOF INVESTMENTS | 67 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
City Developments Ltd. | 936,000 | $ | 4,721,802 | |||
ComfortDelGro Corp. Ltd. | 3,432,000 | 2,933,072 | ||||
COSCO Corp. Singapore Ltd.1 | 780,000 | 1,087,866 | ||||
Creative Technology Ltd.1 | 195,000 | 1,608,653 | ||||
Datacraft Asia Ltd.2 | 624,000 | 592,800 | ||||
DBS Group Holdings Ltd. | 2,184,000 | 20,220,422 | ||||
Fraser & Neave Ltd. | 312,830 | 3,100,544 | ||||
Haw Par Corp. Ltd. | 312,397 | 936,292 | ||||
Jardine Cycle & Carriage Ltd. | 156,000 | 1,036,945 | ||||
Keppel Corp. Ltd.1 | 1,092,000 | 7,517,849 | ||||
Keppel Land Ltd.1 | 780,000 | 1,592,451 | ||||
Neptune Orient Lines Ltd. | 1,092,000 | 2,099,813 | ||||
Olam International Ltd.2 | 1,248,000 | 799,929 | ||||
Oversea-Chinese Banking Corp. | 4,849,600 | 17,988,664 | ||||
Overseas Union Enterprise Ltd. | 156,000 | 874,922 | ||||
Parkway Holdings Ltd. | 1,404,000 | 1,666,518 | ||||
SembCorp Industries Ltd. | 1,803,240 | 3,007,273 | ||||
SembCorp Marine Ltd. | 1,092,000 | 1,814,653 | ||||
Singapore Airlines Ltd.1 | 1,404,000 | 9,832,458 | ||||
Singapore Exchange Ltd. | 1,404,000 | 1,941,494 | ||||
Singapore Land Ltd.1 | 312,000 | 990,653 | ||||
Singapore Petroleum Co. Ltd. | 156,000 | 504,585 | ||||
Singapore Post Ltd. | 3,120,000 | 1,888,721 | ||||
Singapore Press Holdings Ltd. | 3,120,517 | 8,371,012 | ||||
Singapore Technologies Engineering Ltd. | 2,496,000 | 3,851,509 | ||||
Singapore Telecommunications Ltd.1 | 13,416,871 | 20,543,949 | ||||
SMRT Corp. Ltd. | 1,248,000 | 799,929 | ||||
STATS ChipPAC Ltd.1,2 | 3,276,000 | 2,022,042 | ||||
United Overseas Bank Ltd. | 2,340,000 | 19,720,467 | ||||
United Overseas Land Ltd.1 | 1,008,000 | 1,393,893 | ||||
Wing Tai Holdings Ltd. | 936,333 | 683,515 | ||||
156,054,924 | ||||||
TOTAL COMMON STOCKS | 1,509,947,067 | |||||
SHORT-TERM INVESTMENTS – 21.16% | ||||||
CERTIFICATES OF DEPOSIT3 – 2.40% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% – 3.83%, 09/14/05 – 01/25/06 | $ | 2,082,106 | 2,082,106 | |||
Security | Principal | Value | ||||
Bank of Nova Scotia | ||||||
3.45% – 3.56%, 09/26/05 – 01/03/06 | $ | 902,246 | $ | 902,177 | ||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 1,388,071 | 1,388,071 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 1,388,071 | 1,388,018 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 694,035 | 693,897 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 2,359,720 | 2,359,720 | ||||
Fortis Bank NY | ||||||
3.83% – 3.84%, 01/25/06 | 2,082,106 | 2,082,120 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 832,842 | 832,842 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 694,035 | 694,262 | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 694,035 | 693,950 | ||||
Societe Generale | ||||||
3.51% – 3.60%, 03/30/06 – 06/13/06 | 2,151,509 | 2,151,128 | ||||
Toronto-Dominion Bank | ||||||
2.66% – 3.94%, 09/14/05 – 07/10/06 | 4,927,650 | 4,927,749 | ||||
UBS AG | ||||||
2.67% – 3.40%, 11/09/05 – 12/15/05 | 1,110,456 | 1,110,454 | ||||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 3,470,176 | 3,470,176 | ||||
Washington Mutual Bank | ||||||
3.50% – 3.55%, 09/15/05 – 09/19/05 | 6,246,317 | 6,246,317 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 – 09/20/05 | 5,482,879 | 5,482,876 | ||||
36,505,863 | ||||||
COMMERCIAL PAPER3 – 4.83% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 2,776,141 | 2,773,969 | ||||
Amstel Funding Corp. | ||||||
3.49% – 3.91%, 09/15/05 – 02/15/06 | 2,928,829 | 2,913,207 |
68 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | $ | 1,388,071 | $ | 1,388,071 | ||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 1,574,141 | 1,573,220 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% – 3.49%, 09/09/05 – 09/21/05 | 2,290,316 | 2,287,495 | ||||
Bryant Park Funding LLC | ||||||
3.51% – 3.92%, 09/06/05 – 02/22/06 | 706,514 | 699,631 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 533,671 | 530,354 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 971,649 | 969,834 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 416,421 | 415,848 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 138,807 | 136,676 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 1,041,053 | 1,040,602 | ||||
Fairway Finance LLC | ||||||
3.15% – 3.56%, 09/15/05 – 10/20/05 | 1,789,986 | 1,788,470 | ||||
Ford Credit Floorplan Motown | ||||||
3.47% – 3.72%, 09/09/05 – 11/08/05 | 6,315,277 | 6,286,463 | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 2,226,882 | 2,225,802 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% – 3.53%, 09/20/05 – 09/21/05 | 4,511,229 | 4,502,506 | ||||
Giro Funding Corp. | ||||||
3.53% – 3.56%, 09/16/05 – 09/22/05 | 1,041,053 | 1,039,311 | ||||
Grampian Funding LLC | ||||||
3.13% – 3.84%, 09/09/05 – 01/31/06 | 2,151,509 | 2,128,473 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% – 3.53%, 09/02/05 – 02/10/06 | 1,596,281 | 1,596,281 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 416,421 | 409,465 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 786,856 | 785,321 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 – 02/21/064 | 1,457,345 | 1,457,345 | ||||
Lockhart Funding LLC | ||||||
3.47% – 3.55%, 09/16/05 – 09/19/05 | 1,913,358 | 1,910,501 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% – 3.51%, 09/01/05 – 09/21/05 | 3,400,773 | 3,396,328 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 4,858,247 | 4,858,247 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 782,927 | 781,557 | ||||
Park Granada LLC | ||||||
3.48% – 3.51%, 09/15/05 – 09/20/05 | 1,879,489 | 1,876,614 | ||||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 1,388,071 | 1,362,592 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 2,776,141 | 2,774,512 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 347,018 | 340,481 | ||||
Solitaire Funding Ltd. | ||||||
3.49% – 3.52%, 09/02/05 – 09/06/05 | 4,080,927 | 4,079,852 | ||||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 857,550 | 857,550 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 2,914,948 | 2,909,502 | ||||
Three Pillars Funding Corp. | ||||||
3.49% – 3.52%, 09/01/05 – 09/07/05 | 2,974,163 | 2,973,148 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 232,016 | 232,016 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 5,121,578 | 5,121,578 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 638,512 | 638,013 |
SCHEDULESOF INVESTMENTS | 69 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | $ | 485,825 | $ | 485,824 | ||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 2,012,702 | 2,009,150 | ||||
73,555,809 | ||||||
MEDIUM-TERM NOTES3 – 0.08% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/064 | 430,302 | 430,265 | ||||
K2 USA LLC | ||||||
3.94%, 07/07/064 | 832,842 | 832,807 | ||||
1,263,072 | ||||||
MONEY MARKET FUNDS – 0.46% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares | ||||||
3.63%3, 5, 6 | 5,552,282 | 5,552,282 | ||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares | ||||||
3.56%5, 6 | 815,709 | 815,709 | ||||
BlackRock Temp Cash Money Market Fund | ||||||
3.41%3, 6 | 147,076 | 147,076 | ||||
Short Term Investments Co. – Prime Money Market Portfolio, Institutional Shares | ||||||
3.50%3, 6 | 486,597 | 486,597 | ||||
7,001,664 | ||||||
REPURCHASE AGREEMENTS3 – 4.08% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $33,317,024 and an effective yield of 3.60%.7 | $ | 33,313,693 | 33,313,693 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $25,681,873 and an effective yield of 3.60%.7 | 25,679,304 | 25,679,304 |
Security | Principal | Value | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $3,026,296 and an effective yield of 3.60%.7 | $ | 3,025,994 | $ | 3,025,994 | ||
62,018,991 | ||||||
TIME DEPOSITS3 – 0.85% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | 2,776,141 | 2,776,141 | ||||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 7,634,388 | 7,634,388 | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 1,832,493 | 1,832,493 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/058 | 694,035 | 694,035 | ||||
12,937,057 | ||||||
VARIABLE & FLOATING RATE NOTES3 – 8.46% | ||||||
Allstate Life Global Funding II | ||||||
3.58% – 3.66%, 07/08/06 – 07/27/064 | 2,581,811 | 2,581,826 | ||||
American Express Bank | ||||||
3.55% – 3.63%, 10/17/05 – 07/19/06 | 3,747,790 | 3,747,803 | ||||
American Express Centurion Bank | ||||||
3.55% – 3.63%, 06/29/06 – 07/19/06 | 2,290,316 | 2,290,316 | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 2,776,141 | 2,776,350 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/064 | 1,388,071 | 1,389,801 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/064 | 902,246 | 902,246 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 6,940,353 | 6,940,353 | ||||
Beta Finance Inc. | ||||||
3.51% – 3.72%, 09/23/05 – 06/09/064 | 7,134,682 | 7,134,586 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/064 | 1,388,071 | 1,388,071 |
70 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% – 3.61%, 09/13/05 – 12/14/05 | $ | 4,719,440 | $ | 4,719,242 | ||
CC USA Inc. | ||||||
3.52% – 3.59%, 03/23/06 – 07/14/064 | 3,733,910 | 3,733,752 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/054 | 347,018 | 347,018 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 3,470,176 | 3,470,176 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 1,388,071 | 1,388,071 | ||||
Dorada Finance Inc. | ||||||
3.59% – 3.62%, 03/27/06 – 06/26/064 | 2,207,032 | 2,207,146 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/064 | 1,388,071 | 1,388,071 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/064 | 2,776,141 | 2,776,141 | ||||
Five Finance Inc. | ||||||
3.60% – 3.63%, 02/27/06 – 06/26/064 | 971,649 | 971,671 | ||||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 624,632 | 625,195 | ||||
Hartford Life Global Funding Trust | ||||||
3.56%, 08/15/06 | 1,388,071 | 1,388,071 | ||||
HBOS Treasury Services PLC | ||||||
3.51% – 3.57%, 01/10/06 – 04/24/064 | 4,164,212 | 4,164,213 | ||||
HSBC Bank USA N.A. | ||||||
3.70%, 05/04/06 | 485,825 | 486,090 | ||||
K2 USA LLC | ||||||
3.47% – 3.58%, 09/12/05 – 06/02/064 | 5,413,475 | 5,413,521 | ||||
Links Finance LLC | ||||||
3.52% – 3.71%, 11/16/05 – 03/15/064 | 5,413,475 | 5,414,057 | ||||
Lothian Mortgages PLC | ||||||
3.63%, 01/24/06 | 1,388,071 | 1,388,071 | ||||
Marshall & Ilsley Bank | ||||||
3.71%, 02/20/06 | 1,388,071 | 1,388,857 | ||||
Metropolitan Life Global Funding I | ||||||
3.55% – 4.01%, 08/28/06 – 09/06/064 | $ | 2,776,141 | $ | 2,777,361 | ||
National City Bank (Ohio) | ||||||
3.50%, 01/06/06 | 694,035 | 693,962 | ||||
Nationwide Building Society | ||||||
3.51% – 3.62%, 01/13/06 – 07/07/064 | 5,135,861 | 5,136,359 | ||||
Nordea Bank AB | ||||||
3.55%, 08/11/064 | 2,429,123 | 2,429,123 | ||||
Northern Rock PLC | ||||||
3.54% – 3.61%, 10/25/05 – 08/03/064 | 4,441,826 | 4,441,904 | ||||
Permanent Financing PLC | ||||||
3.53% – 3.54%, 09/12/05 – 06/12/064 | 5,344,072 | 5,344,071 | ||||
Principal Life Income Funding Trusts | ||||||
3.74%, 05/10/06 | 1,041,053 | 1,041,092 | ||||
Royal Bank of Scotland | ||||||
3.47% – 3.61%, 04/05/06 – 08/30/06 | 4,632,685 | 4,631,627 | ||||
Sedna Finance Inc. | ||||||
3.54%, 01/10/06 – 01/17/064 | 763,439 | 763,377 | ||||
Sigma Finance Inc. | ||||||
3.50% – 3.72%, 09/15/05 – 08/15/064 | 7,925,883 | 7,925,921 | ||||
Skandinaviska Enskilda Bank NY | ||||||
3.58%, 07/18/064 | 1,388,071 | 1,388,071 | ||||
Strips III LLC | ||||||
3.69%, 07/24/064,8 | 407,745 | 407,745 | ||||
SunTrust Bank | ||||||
3.63%, 04/28/06 | 2,082,106 | 2,082,106 | ||||
Tango Finance Corp. | ||||||
3.54% – 3.60%, 09/15/05 – 06/21/064 | 3,373,011 | 3,372,805 | ||||
Toyota Motor Credit Corp. | ||||||
3.57%, 04/10/06 | 624,632 | 624,626 | ||||
Unicredito Italiano SpA | ||||||
3.34%, 06/14/06 | 1,804,492 | 1,803,990 | ||||
Wachovia Asset Securitization Inc. | ||||||
3.63%, 09/25/054 | 3,341,565 | 3,341,565 |
SCHEDULESOF INVESTMENTS | 71 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
Wells Fargo & Co. | |||||||
3.56%, 09/15/064 | $ | 694,035 | $ | 694,104 | |||
WhistleJacket Capital LLC | |||||||
3.52% – 3.62%, 09/15/05 – 07/28/064 | 5,552,282 | 5,552,043 | |||||
White Pine Finance LLC | |||||||
3.47% – 3.61%, 11/01/05 – 06/20/064 | 2,928,829 | 2,928,755 | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/054 | 991,082 | 991,082 | |||||
128,792,404 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 322,074,860 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 120.36% | 1,832,021,927 | ||||||
Other Assets, Less Liabilities – (20.36)% | (309,914,450 | ) | |||||
NET ASSETS – 100.00% | $ | 1,522,107,477 | |||||
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 (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
4 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
6 | The rate quoted is the annualized seven-day yield of the fund at period end. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
8 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
72 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI SINGAPORE INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 99.04% | |||||
AIRLINES – 3.91% | |||||
Singapore Airlines Ltd. | 1,907,000 | $ | 13,355,055 | ||
13,355,055 | |||||
BANKS – 34.35% | |||||
DBS Group Holdings Ltd. | 4,390,000 | 40,644,530 | |||
Oversea-Chinese Banking Corp. | 9,658,000 | 35,824,505 | |||
United Overseas Bank Ltd. | 4,829,000 | 40,696,638 | |||
117,165,673 | |||||
BEVERAGES – 2.55% | |||||
Fraser & Neave Ltd. | 878,000 | 8,702,098 | |||
8,702,098 | |||||
COMPUTERS – 0.58% | |||||
Creative Technology Ltd.1 | 241,450 | 1,991,843 | |||
1,991,843 | |||||
DISTRIBUTION & WHOLESALE – 0.86% | |||||
Jardine Cycle & Carriage Ltd.1 | 439,000 | 2,918,069 | |||
2,918,069 | |||||
DIVERSIFIED FINANCIAL SERVICES – 1.78% | |||||
Singapore Exchange Ltd. | 4,390,000 | 6,070,625 | |||
6,070,625 | |||||
ELECTRONICS – 2.34% | |||||
Venture Corp. Ltd. | 878,000 | 7,972,581 | |||
7,972,581 | |||||
ENGINEERING & CONSTRUCTION – 4.79% | |||||
SembCorp Industries Ltd. | 4,103,000 | 6,842,595 | |||
Singapore Technologies Engineering Ltd. | 6,146,000 | 9,483,723 | |||
16,326,318 | |||||
FOOD – 1.08% | |||||
Olam International Ltd.2 | 2,634,000 | 1,688,311 | |||
Want Want Holdings Ltd. | 1,756,000 | 2,001,840 | |||
3,690,151 | |||||
HEALTH CARE - SERVICES – 0.92% | |||||
Parkway Holdings Ltd. | 2,634,000 | 3,126,502 | |||
3,126,502 | |||||
HOLDING COMPANIES - DIVERSIFIED – 5.69% | |||||
Haw Par Corp. Ltd. | 439,000 | 1,315,736 | |||
Keppel Corp. Ltd.1 | 2,195,000 | 15,111,428 | |||
Noble Group Ltd.1 | 3,512,000 | 3,001,442 | |||
19,428,606 | |||||
LODGING – 0.72% | |||||
Overseas Union Enterprise Ltd. | 439,000 | 2,462,121 | |||
2,462,121 | |||||
MEDIA – 4.49% | |||||
Singapore Press Holdings Ltd.1 | 5,707,000 | 15,309,439 | |||
15,309,439 | |||||
OIL & GAS – 0.42% | |||||
Singapore Petroleum Co. Ltd.1 | 439,000 | 1,419,953 | |||
1,419,953 | |||||
REAL ESTATE – 9.43% | |||||
Allgreen Properties Ltd. | 2,634,000 | 1,969,697 | |||
Capitaland Ltd.1 | 4,837,000 | 8,382,468 | |||
City Developments Ltd. | 2,195,000 | 11,073,029 | |||
Keppel Land Ltd. | 1,756,000 | 3,585,056 | |||
Singapore Land Ltd.1 | 878,000 | 2,787,798 | |||
United Overseas Land Ltd.1 | 2,233,000 | 3,087,860 | |||
Wing Tai Holdings Ltd. | 1,756,000 | 1,281,866 | |||
32,167,774 | |||||
REAL ESTATE INVESTMENT TRUSTS – 3.41% | |||||
Ascendas Real Estate Investment Trust | 3,512,000 | 4,668,910 | |||
CapitaMall Trust Management Ltd.1 | 3,073,000 | 4,395,341 | |||
Suntec1 | 3,762,000 | 2,567,613 | |||
11,631,864 | |||||
SEMICONDUCTORS – 1.79% | |||||
Chartered Semiconductor Manufacturing Ltd.1, 2 | 4,390,000 | 2,865,960 | |||
STATS ChipPAC Ltd.1, 2 | 5,268,000 | 3,251,562 | |||
6,117,522 | |||||
SHIPBUILDING – 1.28% | |||||
SembCorp Marine Ltd. | 2,634,000 | 4,377,103 | |||
4,377,103 | |||||
TELECOMMUNICATIONS – 12.78% | |||||
Datacraft Asia Ltd.1, 2 | 1,317,000 | 1,251,150 | |||
Singapore Telecommunications Ltd. | 27,657,650 | 42,349,469 | |||
43,600,619 |
SCHEDULESOF INVESTMENTS | 73 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SINGAPORE INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
TRANSPORTATION – 5.87% | ||||||
ComfortDelGro Corp. Ltd. | 7,902,000 | $ | 6,753,245 | |||
COSCO Corp. Singapore Ltd.1 | 1,317,000 | 1,836,820 | ||||
Neptune Orient Lines Ltd. | 2,195,000 | 4,220,778 | ||||
SembCorp Logistics Ltd. | 1,317,660 | 1,259,048 | ||||
Singapore Post Ltd. | 6,146,000 | 3,720,538 | ||||
SMRT Corp. Ltd. | 3,512,000 | 2,251,082 | ||||
20,041,511 | ||||||
TOTAL COMMON STOCKS | 337,875,427 | |||||
SHORT-TERM INVESTMENTS – 12.98% | ||||||
CERTIFICATES OF DEPOSIT3 – 1.47% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% – 3.83%, 09/14/05 – 01/25/06 | $ | 286,624 | 286,623 | |||
Bank of Nova Scotia | ||||||
3.45% – 3.56%, 09/26/05 – 01/03/06 | 124,204 | 124,194 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 191,082 | 191,082 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 191,082 | 191,075 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 95,541 | 95,522 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 324,840 | 324,840 | ||||
Fortis Bank NY | ||||||
3.83% – 3.84%, 01/25/06 | 286,624 | 286,625 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 114,649 | 114,649 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 95,541 | 95,572 | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 95,541 | 95,530 | ||||
Societe Generale | ||||||
3.51% – 3.60%, 03/30/06 – 06/13/06 | 296,178 | 296,126 | ||||
Toronto-Dominion Bank | ||||||
2.66% – 3.94%, 09/14/05 – 07/10/06 | 678,343 | 678,356 | ||||
Security | Principal | Value | ||||
UBS AG | ||||||
2.67% – 3.40%, 11/09/05 – 12/15/05 | $ | 152,866 | $ | 152,866 | ||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 477,706 | 477,706 | ||||
Washington Mutual Bank | ||||||
3.50% – 3.55%, 09/15/05 – 09/19/05 | 859,871 | 859,870 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 – 09/20/05 | 754,776 | 754,776 | ||||
5,025,412 | ||||||
COMMERCIAL PAPER3 – 2.97% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 382,165 | 381,866 | ||||
Amstel Funding Corp. | ||||||
3.49% – 3.91%, 09/15/05 – 02/15/06 | 403,184 | 401,033 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 191,082 | 191,082 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 216,697 | 216,570 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% – 3.49%, 09/09/05 – 09/21/05 | 315,286 | 314,897 | ||||
Bryant Park Funding LLC | ||||||
3.51% – 3.92%, 09/06/05 – 02/22/06 | 97,259 | 96,312 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 73,465 | 73,009 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 133,758 | 133,508 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 57,325 | 57,246 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 19,108 | 18,815 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 143,312 | 143,250 | ||||
Fairway Finance LLC | ||||||
3.15% – 3.56%, 09/15/05 – 10/20/05 | 246,410 | 246,201 |
74 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SINGAPORE INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Ford Credit Floorplan Motown | ||||||
3.47% – 3.72%, 09/09/05 – 11/08/05 | $ | 869,364 | $ | 865,397 | ||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 306,554 | 306,405 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% – 3.53%, 09/20/05 – 09/21/05 | 621,018 | 619,817 | ||||
Giro Funding Corp. | ||||||
3.53% – 3.56%, 09/16/05 – 09/22/05 | 143,312 | 143,072 | ||||
Grampian Funding LLC | ||||||
3.13% – 3.84%, 09/09/05 – 01/31/06 | 296,178 | 293,006 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% – 3.53%, 09/02/05 – 02/10/06 | 219,745 | 219,745 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 57,325 | 56,367 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 108,319 | 108,108 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 – 02/21/064 | 200,619 | 200,618 | ||||
Lockhart Funding LLC | ||||||
3.47% – 3.55%, 09/16/05 – 09/19/05 | 263,394 | 263,001 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% – 3.51%, 09/01/05 – 09/21/05 | 468,152 | 467,540 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 668,789 | 668,789 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 107,778 | 107,590 | ||||
Park Granada LLC | ||||||
3.48% – 3.51%, 09/15/05 – 09/20/05 | 258,731 | 258,335 | ||||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 191,082 | 187,575 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 382,165 | 381,941 | ||||
Security | Shares or Principal | Value | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | $ | 47,771 | $ | 46,871 | ||
Solitaire Funding Ltd. | ||||||
3.49% – 3.52%, 09/02/05 – 09/06/05 | 561,782 | 561,634 | ||||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 118,051 | 118,051 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 401,273 | 400,523 | ||||
Three Pillars Funding Corp. | ||||||
3.49% – 3.52%, 09/01/05 – 09/07/05 | 409,425 | 409,285 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 31,939 | 31,939 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 705,039 | 705,039 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 87,898 | 87,829 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 66,879 | 66,879 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 277,070 | 276,581 | ||||
10,125,726 | ||||||
MEDIUM-TERM NOTES3 – 0.05% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/064 | 59,236 | 59,231 | ||||
K2 USA LLC | ||||||
3.94%, 07/07/064 | 114,649 | 114,645 | ||||
173,876 | ||||||
MONEY MARKET FUNDS – 0.27% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares | ||||||
3.63%3, 5, 6 | 764,330 | 764,330 | ||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares | ||||||
3.56%5, 6 | 51,875 | 51,875 |
SCHEDULESOF INVESTMENTS | 75 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SINGAPORE INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
BlackRock Temp Cash Money Market Fund | ||||||
3.41%3, 6 | 20,247 | $ | 20,247 | |||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares | ||||||
3.50%3, 6 | 66,985 | 66,985 | ||||
903,437 | ||||||
REPURCHASE AGREEMENTS3 – 2.50% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $4,586,438 and an effective yield of 3.60%.7 | $ | 4,585,980 | 4,585,980 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $3,535,379 and an effective yield of 3.60%.7 | 3,535,026 | 3,535,026 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $416,601 and an effective yield of 3.60%.7 | 416,560 | 416,560 | ||||
8,537,566 | ||||||
TIME DEPOSITS3 – 0.52% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | 382,165 | 382,165 | ||||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 1,050,954 | 1,050,954 | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 252,262 | 252,262 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/058 | 95,541 | 95,541 | ||||
1,780,922 | ||||||
VARIABLE & FLOATING RATE NOTES3 – 5.20% | ||||||
Allstate Life Global Funding II | ||||||
3.58% – 3.66%, 07/08/06 – 07/27/064 | 355,413 | 355,421 | ||||
Security | Principal | Value | ||||
American Express Bank | ||||||
3.55% – 3.63%, 10/17/05 – 07/19/06 | $ | 515,923 | $ | 515,925 | ||
American Express Centurion Bank | ||||||
3.55% – 3.63%, 06/29/06 – 07/19/06 | 315,286 | 315,286 | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 382,165 | 382,194 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/064 | 191,082 | 191,321 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/064 | 124,204 | 124,204 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 955,412 | 955,412 | ||||
Beta Finance Inc. | ||||||
3.51% – 3.72%, 09/23/05 – 06/09/064 | 982,164 | 982,151 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/064 | 191,082 | 191,082 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% – 3.61%, 09/13/05 – 12/14/05 | 649,680 | 649,653 | ||||
CC USA Inc. | ||||||
3.52% – 3.59%, 03/23/06 – 07/14/064 | 514,012 | 513,990 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/054 | 47,771 | 47,771 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 477,706 | 477,706 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 191,082 | 191,082 | ||||
Dorada Finance Inc. | ||||||
3.59% – 3.62%, 03/27/06 – 06/26/064 | 303,821 | 303,837 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/064 | 191,082 | 191,082 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/064 | 382,165 | 382,165 |
76 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SINGAPORE INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
Five Finance Inc. | |||||||
3.60% – 3.63%, 02/27/06 – 06/26/064 | $ | 133,758 | $ | 133,760 | |||
General Electric Capital Corp. | |||||||
3.66%, 07/07/06 | 85,987 | 86,065 | |||||
Hartford Life Global Funding Trust | |||||||
3.56%, 08/15/06 | 191,082 | 191,082 | |||||
HBOS Treasury Services PLC | |||||||
3.51% – 3.57%, 01/10/06 – 04/24/064 | 573,247 | 573,246 | |||||
HSBC Bank USA N.A. | |||||||
3.70%, 05/04/06 | 66,879 | 66,915 | |||||
K2 USA LLC | |||||||
3.47% – 3.58%, 09/12/05 – 06/02/064 | 745,222 | 745,227 | |||||
Links Finance LLC | |||||||
3.52% – 3.71%, 11/16/05 – 03/15/064 | 745,222 | 745,301 | |||||
Lothian Mortgages PLC | |||||||
3.63%, 01/24/06 | 191,082 | 191,082 | |||||
Marshall & Ilsley Bank | |||||||
3.71%, 02/20/06 | 191,082 | 191,191 | |||||
Metropolitan Life Global Funding I | |||||||
3.55% – 4.01%, 08/28/06 – 09/06/064 | 382,165 | 382,333 | |||||
National City Bank (Ohio) | |||||||
3.50%, 01/06/06 | 95,541 | 95,531 | |||||
Nationwide Building Society | |||||||
3.51% – 3.62%, 01/13/06 – 07/07/064 | 707,005 | 707,073 | |||||
Nordea Bank AB | |||||||
3.55%, 08/11/064 | 334,394 | 334,394 | |||||
Northern Rock PLC | |||||||
3.54% – 3.61%, 10/25/05 – 08/03/064 | 611,464 | 611,475 | |||||
Permanent Financing PLC | |||||||
3.53% – 3.54%, 09/12/05 – 06/12/064 | 735,667 | 735,668 | |||||
Principal Life Income Funding Trusts | |||||||
3.74%, 05/10/06 | 143,312 | 143,317 | |||||
Royal Bank of Scotland | |||||||
3.47% – 3.61%, 04/05/06 – 08/30/06 | 637,738 | 637,592 | |||||
Sedna Finance Inc. | |||||||
3.54%, 01/10/06 – 01/17/064 | 105,095 | 105,087 | |||||
Sigma Finance Inc. | |||||||
3.50% – 3.72%, 09/15/05 – 08/15/064 | 1,091,081 | 1,091,086 | |||||
Skandinaviska Enskilda Bank NY | |||||||
3.58%, 07/18/064 | 191,082 | 191,082 | |||||
Strips III LLC | |||||||
3.69%, 07/24/064, 8 | 56,130 | 56,130 | |||||
SunTrust Bank | |||||||
3.63%, 04/28/06 | 286,624 | 286,624 | |||||
Tango Finance Corp. | |||||||
3.54% – 3.60%, 09/15/05 – 06/21/064 | 464,330 | 464,303 | |||||
Toyota Motor Credit Corp. | |||||||
3.57%, 04/10/06 | 85,987 | 85,986 | |||||
Unicredito Italiano SpA | |||||||
3.34%, 06/14/06 | 248,407 | 248,338 | |||||
Wachovia Asset Securitization Inc. | |||||||
3.63%, 09/25/054 | 460,001 | 460,001 | |||||
Wells Fargo & Co. | |||||||
3.56%, 09/15/064 | 95,541 | 95,551 | |||||
WhistleJacket Capital LLC | |||||||
3.52% – 3.62%, 09/15/05 – 07/28/064 | 764,330 | 764,297 | |||||
White Pine Finance LLC | |||||||
3.47% – 3.61%, 11/01/05 – 06/20/064 | 403,184 | 403,174 | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/054 | 136,433 | 136,433 | |||||
17,729,626 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 44,276,565 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 112.02% | 382,151,992 | ||||||
Other Assets, Less Liabilities – (12.02)% | (41,015,156 | ) | |||||
NET ASSETS – 100.00% | $ | 341,136,836 | |||||
1 | All or a portion of this security represents a security on loan. See Note 5. |
SCHEDULESOF INVESTMENTS | 77 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SINGAPORE INDEX FUND
August 31, 2005
2 | Non-income earning security. |
3 | All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
4 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
6 | The rate quoted is the annualized seven-day yield of the fund at period end. |
7 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
8 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
78 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI SOUTH AFRICA INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 99.84% | |||||
BANKS – 15.36% | |||||
FirstRand Ltd. | 2,920,743 | $ | 6,886,835 | ||
Nedbank Group Ltd. | 210,086 | 2,864,305 | |||
Standard Bank Group Ltd. | 1,282,346 | 13,825,243 | |||
23,576,383 | |||||
BUILDING MATERIALS – 0.42% | |||||
Pretoria Portland Cement Co. Ltd. | 15,947 | 641,947 | |||
641,947 | |||||
DIVERSIFIED FINANCIAL SERVICES – 2.19% | |||||
African Bank Investments Ltd. | �� | 470,936 | 1,487,383 | ||
Alexander Forbes Ltd.1 | 373,737 | 797,171 | |||
Investec Ltd. | 34,299 | 1,082,751 | |||
3,367,305 | |||||
ELECTRONICS – 0.85% | |||||
Reunert Ltd. | 199,467 | 1,299,580 | |||
1,299,580 | |||||
ENGINEERING & CONSTRUCTION – 1.26% | |||||
Aveng Ltd. | 408,850 | 821,328 | |||
Murray & Roberts Holdings Ltd. | 452,288 | 1,121,880 | |||
1,943,208 | |||||
FOOD – 3.50% | |||||
Shoprite Holdings Ltd. | 425,389 | 1,059,117 | |||
SPAR Group Ltd. (The)1 | 177,341 | 785,413 | |||
Tiger Brands Ltd. | 175,528 | 3,530,219 | |||
5,374,749 | |||||
FOREST PRODUCTS & PAPER – 0.15% | |||||
Sappi Ltd. | 21,418 | 226,427 | |||
226,427 | |||||
HEALTH CARE - PRODUCTS – 0.65% | |||||
Aspen Pharmacare Holdings Ltd. | 213,255 | 991,776 | |||
991,776 | |||||
HEALTH CARE - SERVICES – 0.77% | |||||
Network Healthcare Holdings Ltd.1 | 1,251,821 | 1,188,438 | |||
1,188,438 | |||||
HOLDING COMPANIES - DIVERSIFIED – 7.99% | |||||
Anglovaal Industries Ltd. | 362,563 | 821,143 | |||
Barloworld Ltd. | 232,841 | 3,667,939 | |||
Bidvest Group Ltd. | 267,029 | 3,620,367 | |||
Imperial Holdings Ltd.1 | 191,956 | 3,586,669 | |||
Tongaat-Hulett Group Ltd. | 56,314 | 566,949 | |||
12,263,067 | |||||
HOME FURNISHINGS – 1.47% | |||||
Steinhoff International Holdings Ltd. | 884,115 | 2,262,952 | |||
2,262,952 | |||||
INSURANCE – 12.28% | |||||
Liberty Group Ltd. | 156,954 | 1,570,416 | |||
New Africa Capital Ltd. | 635,623 | 1,148,704 | |||
Old Mutual PLC | 4,114,918 | 10,391,981 | |||
Sanlam Ltd. | 2,786,803 | 5,736,671 | |||
18,847,772 | |||||
IRON & STEEL – 0.68% | |||||
Mittal Steel South Africa Ltd. | 140,009 | 1,045,767 | |||
1,045,767 | |||||
MEDIA – 3.28% | |||||
Naspers Ltd. | 312,502 | 5,041,606 | |||
5,041,606 | |||||
MINING – 14.92% | |||||
Anglo Platinum Ltd. | 75,776 | 3,649,858 | |||
AngloGold Ashanti Ltd. | 144,818 | 5,088,309 | |||
Gold Fields Ltd. | 408,924 | 4,675,121 | |||
Harmony Gold Mining Co. Ltd.1 | 182,447 | 1,338,692 | |||
Impala Platinum Holdings Ltd. | 69,967 | 7,272,057 | |||
Kumba Resources Ltd. | 70,115 | 881,006 | |||
22,905,043 | |||||
OIL & GAS – 13.01% | |||||
Sasol Ltd. | 598,808 | 19,971,413 | |||
19,971,413 | |||||
PACKAGING & CONTAINERS – 1.58% | |||||
Consol Ltd.1 | 333,555 | 631,262 | |||
Nampak Ltd. | 751,063 | 1,794,237 | |||
2,425,499 | |||||
REAL ESTATE – 0.56% | |||||
Allan Gray Property Trust | 1,135,012 | 857,457 | |||
857,457 | |||||
RETAIL – 8.11% | |||||
Edgars Consolidated Stores Ltd. | 503,570 | 2,484,104 | |||
Ellerine Holdings Ltd. | 114,737 | 1,085,716 |
SCHEDULESOF INVESTMENTS | 79 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH AFRICA INDEX FUND
August 31, 2005
Security | Shares | Value | |||
Foschini Ltd. | 212,380 | $ | 1,551,734 | ||
JD Group Ltd. | 173,530 | 1,991,999 | |||
Massmart Holdings Ltd. | 200,688 | 1,486,543 | |||
Pick’n Pay Stores Ltd. | 235,061 | 959,366 | |||
Truworths International Ltd. | 479,187 | 1,412,347 | |||
Woolworths Holdings Ltd. | 828,874 | 1,485,092 | |||
12,456,901 | |||||
TELECOMMUNICATIONS – 9.87% | |||||
MTN Group Ltd. | 1,389,387 | 10,000,552 | |||
Telkom South Africa Ltd. | 260,332 | 5,148,971 | |||
15,149,523 | |||||
TRANSPORTATION – 0.94% | |||||
Grindrod Ltd. | 70,189 | 599,934 | |||
Super Group Ltd. | 453,805 | 844,760 | |||
1,444,694 | |||||
TOTAL COMMON STOCKS | 153,281,507 | ||||
SHORT-TERM INVESTMENTS – 0.00% | |||||
MONEY MARKET FUNDS – 0.00% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares | |||||
3.56%2, 3 | 5,136 | 5,136 | |||
5,136 | |||||
TOTAL SHORT-TERM INVESTMENTS | |||||
5,136 | |||||
TOTAL INVESTMENTS IN SECURITIES – 99.84% | 153,286,643 | ||||
Other Assets, Less Liabilities – 0.16% | 243,516 | ||||
NET ASSETS – 100.00% | $ | 153,530,159 | |||
1 | Non-income earning security. |
2 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
3 | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to the financial statements.
80 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI SOUTH KOREA INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 98.19% | |||||
ADVERTISING – 0.41% | |||||
Cheil Communications Inc. | 16,080 | $ | 2,874,464 | ||
2,874,464 | |||||
AEROSPACE & DEFENSE – 0.20% | |||||
Hanjin Heavy Industries & Construction Co. Ltd.1 | 84,420 | 1,415,789 | |||
1,415,789 | |||||
AGRICULTURE – 2.01% | |||||
KT&G Corp. | 317,580 | 14,009,536 | |||
14,009,536 | |||||
AIRLINES – 0.29% | |||||
Korean Air Co. Ltd. | 120,600 | 2,039,942 | |||
2,039,942 | |||||
AUTO MANUFACTURERS – 6.08% | |||||
Hyundai Motor Co. Ltd. | 506,520 | 34,417,073 | |||
Kia Motors Corp. | 546,720 | 8,039,227 | |||
42,456,300 | |||||
AUTO PARTS & EQUIPMENT – 2.38% | |||||
Hankook Tire Co. Ltd. | 337,680 | 4,008,023 | |||
Hyundai Mobis Co. | 176,886 | 12,597,071 | |||
16,605,094 | |||||
BANKS – 9.70% | |||||
Daegu Bank | 287,640 | 2,999,418 | |||
Hana Bank | 373,863 | 11,228,466 | |||
Kookmin Bank | 980,889 | 48,926,611 | |||
Korea Exchange Bank1, 2 | 337,680 | 3,521,219 | |||
Pusan Bank | 112,560 | 1,078,542 | |||
67,754,256 | |||||
BEVERAGES – 0.35% | |||||
Hite Brewery Co. Ltd. | 24,120 | 2,434,022 | |||
2,434,022 | |||||
CHEMICALS – 2.36% | |||||
Hanwha Chemical Corp.1 | 136,680 | 1,582,887 | |||
Honam Petrochemical Corp.1 | 44,220 | 2,294,935 | |||
KCC Corp. | 20,100 | 4,307,833 | |||
LG Chem Ltd. | 140,700 | 5,719,952 | |||
LG Petrochemical Co. Ltd. | 84,420 | 2,089,202 | |||
Samsung Fine Chemicals Co. Ltd. | 20,100 | 459,760 | |||
16,454,569 | |||||
COMMERCIAL SERVICES – 0.73% | |||||
S1 Corp. | 116,580 | 5,137,139 | |||
5,137,139 | |||||
COMPUTERS – 0.00% | |||||
Trigem Computer Inc.2, 3 | 7 | — | |||
— | |||||
COSMETICS & PERSONAL CARE – 0.62% | |||||
Amorepacific Corp.1 | 16,080 | 4,311,697 | |||
4,311,697 | |||||
DISTRIBUTION & WHOLESALE – 1.10% | |||||
Hyosung Corp. | 5 | 58 | |||
LG International Corp. | 108,540 | 1,350,882 | |||
Samsung Corp. | 438,180 | 6,358,979 | |||
7,709,919 | |||||
DIVERSIFIED FINANCIAL SERVICES – 5.60% | |||||
Daewoo Securities Co. Ltd.1, 2 | 253,260 | 2,604,404 | |||
Daishin Securities Co. Ltd. | 104,520 | 1,401,301 | |||
Hyundai Securities Co. Ltd.1, 2 | 381,900 | 3,461,141 | |||
Korea Investment Holdings Co. Ltd. | 92,465 | 2,003,927 | |||
Samsung Securities Co.1 | 168,840 | 5,143,900 | |||
Shinhan Financial Group Ltd. | 723,600 | 21,141,221 | |||
Woori Investment & Securities Co. | 325,620 | 3,332,872 | |||
39,088,766 | |||||
ELECTRIC – 3.51% | |||||
Korea Electric Power Corp. | 783,900 | 24,485,103 | |||
24,485,103 | |||||
ELECTRICAL COMPONENTS & EQUIPMENT – 26.41% | |||||
LG Electronics Inc.1 | 337,686 | 20,218,969 | |||
LS Cable Ltd. | 60,300 | 1,466,209 | |||
Samsung Electronics Co. Ltd. | 311,400 | 162,807,881 | |||
184,493,059 | |||||
ELECTRONICS – 5.47% | |||||
Daeduck Electronics Co. Ltd.1 | 438,181 | 3,962,790 | |||
LG.Philips LCD Co. Ltd.2 | 277,380 | 12,636,052 | |||
Samsung Electro-Mechanics Co. Ltd.1 | 369,840 | 8,815,024 | |||
Samsung SDI Co. Ltd. | 136,680 | 12,781,320 | |||
38,195,186 |
SCHEDULESOF INVESTMENTS | 81 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH KOREA INDEX FUND
August 31, 2005
Security | Shares | Value | |||
ENGINEERING & CONSTRUCTION – 2.08% | |||||
Daelim Industrial Co. Ltd. | 80,400 | $ | 4,752,138 | ||
Daewoo Engineering & Construction Co. Ltd.1 | 373,860 | 3,014,594 | |||
GS Engineering & Construction Corp. | 92,460 | 3,385,609 | |||
Hyundai Engineering & Construction Co. Inc.1, 2 | 112,560 | 3,375,177 | |||
14,527,518 | |||||
FOOD – 0.96% | |||||
Cheil Jedang Corp. | 56,280 | 3,575,308 | |||
Nong Shim Co. Ltd. | 12,062 | 3,164,753 | |||
6,740,061 | |||||
HOLDING COMPANIES – DIVERSIFIED – 0.00% | |||||
GS Holdings Corp. | 2 | 44 | |||
LG Corp. | 3 | 69 | |||
113 | |||||
HOME BUILDERS – 0.58% | |||||
Hyundai Development Co. | 152,760 | 4,066,749 | |||
4,066,749 | |||||
HOUSEHOLD PRODUCTS & WARES – 0.27% | |||||
LG Household & Health Care Ltd. | 36,180 | 1,867,243 | |||
1,867,243 | |||||
INSURANCE – 1.71% | |||||
Samsung Fire & Marine Insurance Co. Ltd. | 124,620 | 11,917,049 | |||
11,917,049 | |||||
INTERNET – 1.48% | |||||
Daum Communications Corp.2 | 40,204 | 1,002,685 | |||
NCsoft Corp.2 | 48,244 | 3,305,908 | |||
NHN Corp.1, 2 | 44,222 | 6,018,102 | |||
10,326,695 | |||||
IRON & STEEL – 6.56% | |||||
Dongkuk Steel Mill Co. Ltd. | 72,360 | 1,168,331 | |||
POSCO | 217,080 | 44,646,920 | |||
45,815,251 | |||||
LODGING – 0.78% | |||||
Kangwon Land Inc. | 349,742 | 5,462,093 | |||
5,462,093 | |||||
MACHINERY – DIVERSIFIED – 0.26% | |||||
Doosan Infracore Co. Ltd.1 | 209,040 | 1,802,104 | |||
1,802,104 | |||||
MANUFACTURING – 0.37% | |||||
Cheil Industries Inc. | 128,640 | 2,621,017 | |||
2,621,017 | |||||
MINING – 0.04% | |||||
Poongsan Corp. | 28,140 | 302,901 | |||
302,901 | |||||
OIL & GAS – 3.68% | |||||
SK Corp. | 317,580 | 15,657,716 | |||
S-Oil Corp.1 | 136,680 | 10,062,170 | |||
25,719,886 | |||||
PHARMACEUTICALS – 0.28% | |||||
Dong-A Pharmaceutical Co. Ltd. | 9 | 397 | |||
YuHan Corp. | 16,088 | 1,932,725 | |||
1,933,122 | |||||
RETAIL – 2.73% | |||||
Hyundai Department Store Co. Ltd.1 | 52,260 | 3,415,358 | |||
Shinsegae Department Store Co. Ltd. | 44,220 | 15,660,807 | |||
19,076,165 | |||||
SHIPBUILDING – 3.83% | |||||
Daewoo Shipbuilding & Marine | |||||
Engineering Co. Ltd.1 | 313,560 | 6,027,102 | |||
Hyundai Heavy Industries Co. Ltd.1 | 160,800 | 10,632,427 | |||
Hyundai Mipo Dockyard | 40,200 | 2,797,194 | |||
Samsung Heavy Industries Co. Ltd.1 | 578,880 | 7,315,975 | |||
26,772,698 | |||||
TELECOMMUNICATIONS – 4.88% | |||||
KT Corp. | 269,340 | 10,095,396 | |||
KT Corp. ADR | 241,200 | 4,821,588 | |||
SK Telecom Co. Ltd. | 100,380 | 18,233,369 | |||
SK Telecom Co. Ltd. ADR | 44,622 | 937,062 | |||
34,087,415 | |||||
TRANSPORTATION – 0.48% | |||||
Hanjin Shipping Co. Ltd. | 148,740 | 3,330,747 | |||
3,330,747 | |||||
TOTAL COMMON STOCKS | 685,833,668 |
82 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH KOREA INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
PREFERRED STOCKS – 1.70% | ||||||
AUTO MANUFACTURERS – 0.72% | ||||||
Hyundai Motor Co. Ltd. | 112,560 | $ | 5,030,312 | |||
5,030,312 | ||||||
ELECTRICAL COMPONENTS & EQUIPMENT – 0.98% | ||||||
LG Electronics Inc. | 148,740 | 5,367,791 | ||||
Samsung Electronics Co. Ltd. | 4,020 | 1,433,369 | ||||
6,801,160 | ||||||
TOTAL PREFERRED STOCKS | 11,831,472 | |||||
SHORT-TERM INVESTMENTS – 6.53% | ||||||
CERTIFICATES OF DEPOSIT4 – 0.72% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% – 3.83%, 09/14/05 – 01/25/06 | $ | 286,495 | 286,495 | |||
Bank of Nova Scotia | ||||||
3.45% – 3.56%, 09/26/05 – 01/03/06 | 124,148 | 124,139 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 190,997 | 190,997 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 190,997 | 190,990 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 95,498 | 95,479 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 324,695 | 324,695 | ||||
Fortis Bank NY | ||||||
3.83% – 3.84%, 01/25/06 | 286,495 | 286,497 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 114,598 | 114,598 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 95,498 | 95,530 | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 95,498 | 95,487 | ||||
Societe Generale | ||||||
3.51% – 3.60%, 03/30/06 – 06/13/06 | 296,045 | 295,993 | ||||
Security | Principal | Value | ||||
Toronto-Dominion Bank | ||||||
2.66% – 3.94%, 09/14/05 – 07/10/06 | $ | 678,039 | $ | 678,052 | ||
UBS AG | ||||||
2.67% – 3.40%, 11/09/05 – 12/15/05 | 152,797 | 152,797 | ||||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 477,492 | 477,492 | ||||
Washington Mutual Bank | ||||||
3.50% – 3.55%, 09/15/05 – 09/19/05 | 859,486 | 859,485 | ||||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 – 09/20/05 | 754,437 | 754,438 | ||||
5,023,164 | ||||||
COMMERCIAL PAPER4 – 1.45% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 381,994 | 381,695 | ||||
Amstel Funding Corp. | ||||||
3.49% – 3.91%, 09/15/05 – 02/15/06 | 403,003 | 400,853 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 190,997 | 190,997 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 216,600 | 216,473 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% – 3.49%, 09/09/05 – 09/21/05 | 315,145 | 314,757 | ||||
Bryant Park Funding LLC | ||||||
3.51% – 3.92%, 09/06/05 – 02/22/06 | 97,215 | 96,268 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 73,433 | 72,976 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 133,698 | 133,448 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 57,299 | 57,220 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 19,100 | 18,806 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 143,248 | 143,186 |
SCHEDULESOF INVESTMENTs | 83 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH KOREA INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Fairway Finance LLC | ||||||
3.15% – 3.56%, 09/15/05 – 10/20/05 | $ | 246,300 | $ | 246,091 | ||
Ford Credit Floorplan Motown | ||||||
3.47% – 3.72%, 09/09/05 – 11/08/05 | 868,974 | 865,009 | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 306,416 | 306,268 | ||||
Georgetown Funding Co. LLC | ||||||
3.49% – 3.53%, 09/20/05 – 09/21/05 | 620,740 | 619,540 | ||||
Giro Funding Corp. | ||||||
3.53% – 3.56%, 09/16/05 – 09/22/05 | 143,248 | 143,008 | ||||
Grampian Funding LLC | ||||||
3.13% – 3.84%, 09/09/05 – 01/31/06 | 296,045 | 292,875 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% – 3.53%, 09/02/05 – 02/10/06 | 219,646 | 219,646 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 57,299 | 56,342 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 108,270 | 108,059 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 – 02/21/065 | 200,529 | 200,529 | ||||
Lockhart Funding LLC | ||||||
3.47% – 3.55%, 09/16/05 – 09/19/05 | 263,276 | 262,883 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% – 3.51%, 09/01/05 – 09/21/05 | 467,942 | 467,330 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 668,489 | 668,489 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 107,730 | 107,541 | ||||
Park Granada LLC | ||||||
3.48% – 3.51%, 09/15/05 – 09/20/05 | 258,615 | 258,220 | ||||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 190,997 | 187,491 | ||||
Security | Shares or Principal | Value | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | $ | 381,994 | $ | 381,769 | ||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 47,749 | 46,850 | ||||
Solitaire Funding Ltd. | ||||||
3.49% – 3.52%, 09/02/05 – 09/06/05 | 561,531 | 561,382 | ||||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 117,998 | 117,998 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 401,093 | 400,344 | ||||
Three Pillars Funding Corp. | ||||||
3.49% – 3.52%, 09/01/05 – 09/07/05 | 409,241 | 409,101 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 31,925 | 31,925 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 704,723 | 704,723 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 87,859 | 87,790 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 66,849 | 66,849 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 276,945 | 276,457 | ||||
10,121,188 | ||||||
MEDIUM-TERM NOTES4 – 0.03% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/065 | 59,209 | 59,204 | ||||
K2 USA LLC | ||||||
3.94%, 07/07/065 | 114,598 | 114,593 | ||||
173,797 | ||||||
MONEY MARKET FUNDS – 0.32% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares | ||||||
3.63%4, 6, 7 | 763,987 | 763,987 | ||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares | ||||||
3.56%6,7 | 1,393,487 | 1,393,487 |
84 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH KOREA INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
BlackRock Temp Cash Money Market Fund | ||||||
3.41%4, 7 | 20,238 | $ | 20,238 | |||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares | ||||||
3.50%4, 7 | 66,955 | 66,955 | ||||
2,244,667 | ||||||
REPURCHASE AGREEMENTS4 – 1.22% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $4,584,382 and an effective yield of 3.60%.8 | $ | 4,583,923 | 4,583,923 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $3,533,794 and an effective yield of 3.60%.8 | 3,533,441 | 3,533,441 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $416,415 and an effective yield of 3.60%.8 | 416,373 | 416,373 | ||||
8,533,737 | ||||||
TIME DEPOSITS4 – 0.25% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | 381,994 | 381,994 | ||||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 1,050,482 | 1,050,482 | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 252,149 | 252,149 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/059 | 95,498 | 95,498 | ||||
1,780,123 | ||||||
VARIABLE & FLOATING RATE NOTES4 – 2.54% | ||||||
Allstate Life Global Funding II | ||||||
3.58% – 3.66%, 07/08/06 – 07/27/065 | 355,254 | 355,256 | ||||
Security | Principal | Value | ||||
American Express Bank | ||||||
3.55% – 3.63%, 10/17/05 – 07/19/06 | $ | 515,691 | $ | 515,693 | ||
American Express Centurion Bank | ||||||
3.55% – 3.63%, 06/29/06 – 07/19/06 | 315,145 | 315,145 | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 381,994 | 382,022 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/065 | 190,997 | 191,235 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/065 | 124,148 | 124,148 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 954,984 | 954,984 | ||||
Beta Finance Inc. | ||||||
3.51% – 3.72%, 09/23/05 – 06/09/065 | 981,724 | 981,711 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/065 | 190,997 | 190,997 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% – 3.61%, 09/13/05 – 12/14/05 | 649,389 | 649,362 | ||||
CC USA Inc. | ||||||
3.52% – 3.59%, 03/23/06 – 07/14/065 | 513,781 | 513,760 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/055 | 47,749 | 47,749 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 477,492 | 477,492 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 190,997 | 190,997 | ||||
Dorada Finance Inc. | ||||||
3.59% – 3.62%, 03/27/06 – 06/26/065 | 303,685 | 303,700 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/065 | 190,997 | 190,997 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/065 | 381,994 | 381,994 |
SCHEDULESOF INVESTMENTS | 85 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH KOREA INDEX FUND
August 31, 2005
Security | Principal | Value | |||||
Five Finance Inc. | |||||||
3.60% – 3.63%, 02/27/06 – 06/26/065 | $ | 133,698 | $ | 133,701 | |||
General Electric Capital Corp. | |||||||
3.66%, 07/07/06 | 85,949 | 86,026 | |||||
Hartford Life Global Funding Trust | |||||||
3.56%, 08/15/06 | 190,997 | 190,997 | |||||
HBOS Treasury Services PLC | |||||||
3.51% – 3.57%, 01/10/06 – 04/24/065 | 572,990 | 572,991 | |||||
HSBC Bank USA N.A. | |||||||
3.70%, 05/04/06 | 66,849 | 66,885 | |||||
K2 USA LLC | |||||||
3.47% – 3.58%, 09/12/05 – 06/02/065 | 744,887 | 744,894 | |||||
Links Finance LLC | |||||||
3.52% – 3.71%, 11/16/05 – 03/15/065 | 744,887 | 744,967 | |||||
Lothian Mortgages PLC | |||||||
3.63%, 01/24/06 | 190,997 | 190,997 | |||||
Marshall & Ilsley Bank | |||||||
3.71%, 02/20/06 | 190,997 | 191,105 | |||||
Metropolitan Life Global Funding I | |||||||
3.55% – 4.01%, 08/28/06 – 09/06/065 | 381,994 | 382,161 | |||||
National City Bank (Ohio) | |||||||
3.50%, 01/06/06 | 95,498 | 95,488 | |||||
Nationwide Building Society | |||||||
3.51% – 3.62%, 01/13/06 – 07/07/065 | 706,688 | 706,756 | |||||
Nordea Bank AB | |||||||
3.55%, 08/11/065 | 334,244 | 334,244 | |||||
Northern Rock PLC | |||||||
3.54% – 3.61%, 10/25/05 – 08/03/065 | 611,190 | 611,201 | |||||
Permanent Financing PLC | |||||||
3.53% – 3.54%, 09/12/05 – 06/12/065 | 735,338 | 735,338 | |||||
Principal Life Income Funding Trusts | |||||||
3.74%, 05/10/06 | 143,248 | 143,253 | |||||
Royal Bank of Scotland | |||||||
3.47% – 3.61%, 04/05/06 – 08/30/06 | 637,452 | 637,306 | |||||
Sedna Finance Inc. | |||||||
3.54%, 01/10/06 – 01/17/065 | 105,048 | 105,040 | |||||
Sigma Finance Inc. | |||||||
3.50% – 3.72%, 09/15/05 – 08/15/065 | 1,090,592 | 1,090,597 | |||||
Skandinaviska Enskilda Bank NY | |||||||
3.58%, 07/18/065 | 190,997 | 190,997 | |||||
Strips III LLC | |||||||
3.69%, 07/24/065, 9 | 56,105 | 56,105 | |||||
SunTrust Bank | |||||||
3.63%, 04/28/06 | 286,495 | 286,495 | |||||
Tango Finance Corp. | |||||||
3.54% – 3.60%, 09/15/05 – 06/21/065 | 464,122 | 464,093 | |||||
Toyota Motor Credit Corp. | |||||||
3.57%, 04/10/06 | 85,949 | 85,948 | |||||
Unicredito Italiano SpA | |||||||
3.34%, 06/14/06 | 248,296 | 248,227 | |||||
Wachovia Asset Securitization Inc. | |||||||
3.63%, 09/25/055 | 459,795 | 459,795 | |||||
Wells Fargo & Co. | |||||||
3.56%, 09/15/065 | 95,498 | 95,508 | |||||
WhistleJacket Capital LLC | |||||||
3.52% – 3.62%, 09/15/05 – 07/28/065 | 763,987 | 763,953 | |||||
White Pine Finance LLC | |||||||
3.47% – 3.61%, 11/01/05 – 06/20/065 | 403,003 | 402,993 | |||||
Winston Funding Ltd. | |||||||
3.71%, 10/23/055 | 136,372 | 136,372 | |||||
17,721,675 | |||||||
TOTAL SHORT-TERM INVESTMENTS | 45,598,351 | ||||||
TOTAL INVESTMENTS IN SECURITIES – 106.42% | 743,263,491 | ||||||
Other Assets, Less Liabilities – (6.42)% | (44,808,206 | ) | |||||
NET ASSETS – 100.00% | $698,455,285 | ||||||
86 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH KOREA INDEX FUND
August 31, 2005
ADR - American 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 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 (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
5 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
7 | The rate quoted is the annualized seven-day yield of the fund at period end. |
8 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
9 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
SCHEDULESOF INVESTMENTS | 87 |
Table of Contents
iSHARES® MSCI TAIWAN INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 99.22% | |||||
AIRLINES – 0.40% | |||||
China Airlines | 2,946,319 | $ | 1,416,932 | ||
EVA Airways Corp. | 3,941,557 | 1,588,658 | |||
3,005,590 | |||||
APPAREL – 0.48% | |||||
Pou Chen Corp. | 5,725,243 | 3,627,444 | |||
3,627,444 | |||||
AUTO MANUFACTURERS – 0.52% | |||||
China Motor Co. Ltd. | 1,314,423 | 1,206,058 | |||
Yulon Motor Co. Ltd. | 2,664,447 | 2,676,651 | |||
3,882,709 | |||||
AUTO PARTS & EQUIPMENT– 0.20% | |||||
Cheng Shin Rubber Industry Co. Ltd. | 1,491,102 | 1,504,761 | |||
1,504,761 | |||||
BANKS – 10.41% | |||||
Chang Hwa Commercial Bank Ltd. | 13,010,446 | 6,773,377 | |||
Chinatrust Financial Holding Co. Ltd. | 16,858,255 | 15,700,054 | |||
E.Sun Financial Holding Co. Ltd. | 8,040,253 | 5,695,691 | |||
First Financial Holding Co. Ltd. | 15,026,602 | 11,011,861 | |||
Hua Nan Financial Holdings Co. Ltd. | 11,136,965 | 7,481,320 | |||
International Bank of Taipei | 5,204,756 | 3,265,885 | |||
Mega Financial Holding Co. Ltd.1 | 29,923,136 | 19,826,933 | |||
Taishin Financial Holdings Co. Ltd. | 13,420,439 | 8,605,472 | |||
78,360,593 | |||||
BUILDING MATERIALS – 1.02% | |||||
Asia Cement Corp. | 4,217,649 | 2,324,536 | |||
Taiwan Cement Corp.1 | 5,204,513 | 3,226,004 | |||
Taiwan Glass Industrial Corp. | 2,602,341 | 2,105,711 | |||
7,656,251 | |||||
CHEMICALS – 8.10% | |||||
Eternal Chemical Co. Ltd. | 1,432,010 | 846,088 | |||
Formosa Chemicals & Fibre Co. | 8,591,401 | 13,300,276 | |||
Formosa Plastic Co. | 14,311,497 | 21,325,223 | |||
Nan Ya Plastic Corp. | 16,913,085 | 20,631,382 | |||
Oriental Union Chemical Corp. | 1,648,382 | 1,132,476 | |||
Taiwan Fertilizer Co. Ltd. | 2,602,000 | 3,082,675 | |||
Taiwan Styrene Monomer Corp. | 1,379,696 | 619,283 | |||
60,937,403 | |||||
COMMERCIAL SERVICES – 0.23% | |||||
Taiwan Secom Co. Ltd. | 1,301,486 | 1,760,483 | |||
1,760,483 | |||||
COMPUTERS – 9.46% | |||||
Acer Inc. | 6,898,533 | 13,059,818 | |||
Advantech Co. Ltd. | 1,366,730 | 3,221,727 | |||
Benq Corp. | 6,505,019 | 6,058,109 | |||
CMC Magnetics Corp.1 | 9,107,400 | 3,392,680 | |||
Compal Electronics Inc. | 10,825,214 | 10,775,633 | |||
Foxconn Technology Co. Ltd. | 1,301,100 | 4,926,302 | |||
High Tech Computer Corp. | 390,000 | 4,275,115 | |||
Inventec Co. Ltd. | 3,903,620 | 1,728,320 | |||
Lite-On Technology Corp. | 6,636,011 | 6,858,900 | |||
Mitac International | 2,706,407 | 3,181,578 | |||
Quanta Computer Inc. | 6,505,381 | 10,349,018 | |||
Ritek Corp.1 | 7,806,389 | 2,633,911 | |||
Systex Corp. | 2,678,887 | 720,641 | |||
71,181,752 | |||||
DIVERSIFIED FINANCIAL SERVICES – 3.73% | |||||
Fubon Financial Holding Co. Ltd. | 13,010,000 | 11,758,656 | |||
Fuhwa Financial Holdings Co. Ltd. | 6,834,803 | 2,546,095 | |||
Polaris Securities Co. Ltd. | 4,146,317 | 1,683,848 | |||
SinoPac Holdings Co. | 11,709,641 | 5,613,477 | |||
Waterland Financial Holdings | 5,204,000 | 1,851,194 | |||
Yuanta Core Pacific Securities Co. Ltd. | 7,959,644 | 4,581,352 | |||
28,034,622 | |||||
ELECTRICAL COMPONENTS & EQUIPMENT – 1.86% | |||||
Delta Electronics Inc. | 3,903,414 | 6,328,894 | |||
Pacific Electric Wire & Cable Co. Ltd.1, 2 | 986 | — | |||
Phoenixtec Power Co. Ltd. | 1,303,438 | 1,213,889 | |||
Tatung Co. Ltd.1 | 13,010,120 | 3,801,736 | |||
Walsin Lihwa Corp. | 9,107,069 | 2,672,334 | |||
14,016,853 | |||||
ELECTRONICS – 17.87% | |||||
Asustek Computer Inc. | 7,159,688 | 17,380,006 | |||
AU Optronics Corp. | 16,913,716 | 24,944,503 | |||
Chi Mei Optoelectronics Corp. | 10,398,428 | 13,002,004 | |||
Chunghwa Picture Tubes Ltd. | 19,515,105 | 6,018,399 |
88 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI TAIWAN INDEX FUND
August 31, 2005
Security | Shares | Value | |||
Compeq Manufacturing Co. Ltd.1 | 2,602,200 | $ | 1,056,771 | ||
Elitegroup Computer Systems Co. Ltd.1 | 1,338,215 | 780,455 | |||
Gigabyte Technology Co. Ltd. | 1,367,017 | 1,293,970 | |||
HannStar Display Corp.1 | 16,138,218 | 4,060,425 | |||
Hon Hai Precision Industry Co. Ltd.1 | 9,107,773 | 46,998,890 | |||
Micro-Star International Co. Ltd. | 1,417,396 | 813,650 | |||
Optimax Technology Corp. | 1,493,157 | 2,603,336 | |||
Quanta Display Inc. | 9,602,541 | 3,225,281 | |||
Synnex Technology International Corp. | 2,862,679 | 3,400,251 | |||
Wintek Corp. | 2,602,359 | 3,758,522 | |||
Ya Hsin Industrial Co. Ltd. | 2,862,270 | 2,735,544 | |||
Yageo Corp.1 | 7,806,100 | 2,443,131 | |||
134,515,138 | |||||
FOOD – 0.52% | |||||
Uni-President Enterprises Co. | 10,408,637 | 3,893,307 | |||
3,893,307 | |||||
FOREST PRODUCTS & PAPER – 0.19% | |||||
Yuen Foong Yu Paper Manufacturing Co. Ltd. | 4,119,322 | 1,446,480 | |||
1,446,480 | |||||
HAND & MACHINE TOOLS – 0.16% | |||||
Shihlin Electric & Engineering Corp. | 1,301,080 | 1,160,047 | |||
1,160,047 | |||||
HOME FURNISHINGS – 0.43% | |||||
Nien Made Enterprise Co. Ltd. | 1,301,733 | 1,510,408 | |||
Teco Electric and Machinery Co. Ltd.1 | 6,505,092 | 1,690,331 | |||
3,200,739 | |||||
INSURANCE – 5.04% | |||||
Cathay Financial Holding Co. Ltd. | 16,914,055 | 31,658,979 | |||
Shin Kong Financial Holding Co. Ltd. | 6,928,837 | 6,272,978 | |||
37,931,957 | |||||
INVESTMENT COMPANIES– 1.64% | |||||
China Development Financial Holding Co.1 | 33,826,338 | 12,342,740 | |||
12,342,740 | |||||
IRON & STEEL – 3.13% | |||||
China Steel Corp. | 27,321,742 | 23,567,610 | |||
23,567,610 | |||||
LEISURE TIME – 0.28% | |||||
Giant Manufacturing Co. Ltd. | 1,301,914 | 2,126,791 | |||
2,126,791 | |||||
MANUFACTURING – 0.21% | |||||
Premier Image Technology Corp. | 1,379,262 | 1,600,365 | |||
1,600,365 | |||||
METAL FABRICATE& HARDWARE – 0.16% | |||||
Yieh Phui Enterprise | 2,917,078 | 1,215,820 | |||
1,215,820 | |||||
MULTIPLE UTILITIES – 0.24% | |||||
Fu Sheng Industrial Co. Ltd. | 1,570,320 | 1,826,845 | |||
1,826,845 | |||||
OFFICE & BUSINESS EQUIPMENT– 0.22% | |||||
Kinpo Electronics Inc. | 3,903,119 | 1,674,468 | |||
1,674,468 | |||||
REAL ESTATE – 0.22% | |||||
Cathay Real Estate Development Co. Ltd.1 | 3,903,493 | 1,644,831 | |||
1,644,831 | |||||
RETAIL – 0.31% | |||||
President Chain Store Corp. | 1,301,640 | 2,348,914 | |||
2,348,914 | |||||
SEMICONDUCTORS – 25.12% | |||||
Advanced Semiconductor Engineering Inc.1 | 10,408,727 | 7,135,143 | |||
Macronix International Co. Ltd.1 | 16,913,200 | 1,998,598 | |||
MediaTek Inc. | 2,602,239 | 22,009,777 | |||
Realtek Semiconductor Corp. | 2,733,003 | 2,737,176 | |||
Siliconware Precision Industries Co. Ltd. | 7,028,151 | 6,277,051 | |||
Taiwan Semiconductor Manufacturing Co. Ltd. | 66,351,475 | 109,403,959 | |||
United Microelectronics Corp. | 57,397,640 | 34,350,954 | |||
Via Technologies Inc.1 | 2,736,861 | 1,596,154 | |||
Winbond Electronics Corp.1 | 11,709,280 | 3,561,051 | |||
189,069,863 |
SCHEDULESOF INVESTMENTS | 89 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI TAIWAN INDEX FUND
August 31, 2005
Security | Shares | Value | |||
TELECOMMUNICATIONS – 4.89% | |||||
Accton Technology Corp.1 | 2,602,259 | $ | 969,390 | ||
Chunghwa Telecom Co. Ltd. | 13,010,000 | 24,232,366 | |||
D-Link Corp. | 1,474,638 | 1,429,611 | |||
Taiwan Cellular Corp. | 7,806,920 | 7,246,729 | |||
Zyxel Communications Corp. | 1,484,071 | 2,922,827 | |||
36,800,923 | |||||
TEXTILES – 1.01% | |||||
Far Eastern Textile Ltd. | 8,431,351 | 5,444,979 | |||
Formosa Taffeta Co. Ltd. | 2,655,152 | 1,183,671 | |||
Nien Hsing Textile Co. Ltd. | 1,301,800 | 987,778 | |||
7,616,428 | |||||
TRANSPORTATION – 1.17% | |||||
Evergreen Marine Corp. Ltd. | 2,959,194 | 2,028,516 | |||
U-Ming Marine Transport Corp. | 1,562,800 | 1,813,325 | |||
Wan Hai Lines Ltd. | 2,880,177 | 2,312,936 | |||
Yang Ming Marine Transport Corp. | 3,903,667 | 2,669,989 | |||
8,824,766 | |||||
TOTAL COMMON STOCKS | 746,776,493 | ||||
SHORT-TERM INVESTMENTS – 0.01% | |||||
MONEY MARKET FUNDS – 0.01% | |||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares | |||||
3.56%3, 4 | 69,521 | 69,521 | |||
69,521 | |||||
TOTAL SHORT-TERM INVESTMENTS | 69,521 | ||||
TOTAL INVESTMENTS IN SECURITIES – 99.23% | 746,846,014 | ||||
Other Assets, Less Liabilities – 0.77% | 5,794,357 | ||||
NET ASSETS – 100.00% | $ | 752,640,371 | |||
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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
4 | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to the financial statements.
90 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 2005
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 | $ | 399,657,062 | $ | 343,069,780 | $ | 301,023,010 | $ | 6,708,913,552 | $ | 651,812,693 | $ | 321,999,685 | ||||||||||||
Affiliated issuersa | $ | 1,469,231 | $ | 1,304,168 | $ | 39,013 | $ | 54,852,180 | $ | 1,824,833 | $ | 401,056 | ||||||||||||
Foreign currencies, at cost | $ | 912,978 | $ | — | $ | 813,486 | $ | 10,569,408 | $ | 181,467 | $ | 1,000,507 | ||||||||||||
Investments in securities, at value (including securities on loanb) (Note 1): | ||||||||||||||||||||||||
Unaffiliated issuers | $ | 443,809,598 | $ | 559,745,207 | $ | 419,356,577 | $ | 7,814,027,870 | $ | 739,226,363 | $ | 387,057,630 | ||||||||||||
Affiliated issuersa | 1,469,231 | 1,304,168 | 39,013 | 60,153,631 | 1,824,833 | 401,056 | ||||||||||||||||||
Foreign currencies, at value | 901,720 | — | 832,166 | 10,546,310 | 181,505 | 997,644 | ||||||||||||||||||
Receivables: | ||||||||||||||||||||||||
Investment securities sold | 331,087 | 40,649,951 | 1,371,469 | — | 3,084,223 | 487,943 | ||||||||||||||||||
Dividends and interest | 2,676,931 | 3,476,197 | 436,864 | 24,788,353 | 1,075,252 | 361,244 | ||||||||||||||||||
Capital shares sold | — | — | 60,684 | 1,466,305 | — | — | ||||||||||||||||||
Total Assets | 449,188,567 | 605,175,523 | 422,096,773 | 7,910,982,469 | 745,392,176 | 389,305,517 | ||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Payables: | ||||||||||||||||||||||||
Investment securities purchased | 914,793 | 281,818 | 1,611,194 | — | 2,839,784 | 1,539,127 | ||||||||||||||||||
Collateral for securities on loan (Note 5) | 78,741,428 | 11,095,000 | — | 904,985,462 | 104,256,721 | — | ||||||||||||||||||
Capital shares redeemed | — | 41,148,885 | — | — | — | — | ||||||||||||||||||
Foreign taxes | — | — | — | 600,471 | — | — | ||||||||||||||||||
Investment advisory fees (Note 2) | 177,078 | 364,382 | 184,804 | 4,538,486 | 310,833 | 191,410 | ||||||||||||||||||
Total Liabilities | 79,833,299 | 52,890,085 | 1,795,998 | 910,124,419 | 107,407,338 | 1,730,537 | ||||||||||||||||||
NET ASSETS | $ | 369,355,268 | $ | 552,285,438 | $ | 420,300,775 | $ | 7,000,858,050 | $ | 637,984,838 | $ | 387,574,980 | ||||||||||||
Net assets consist of: | ||||||||||||||||||||||||
Paid-in capital | $ | 327,788,846 | $ | 378,079,398 | $ | 315,386,634 | $ | 5,848,297,589 | $ | 556,013,398 | $ | 358,301,472 | ||||||||||||
Undistributed net investment income | 8,105,304 | 12,063,040 | 1,859,540 | 79,495,049 | 10,655,366 | 5,217,709 | ||||||||||||||||||
Accumulated net realized loss | (10,646,560 | ) | (54,582,584 | ) | (15,300,159 | ) | (37,326,384 | ) | (16,097,496 | ) | (40,999,692 | ) | ||||||||||||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies | 44,107,678 | 216,725,584 | 118,354,760 | 1,110,391,796 | 87,413,570 | 65,055,491 | ||||||||||||||||||
NET ASSETS | $ | 369,355,268 | $ | 552,285,438 | $ | 420,300,775 | $ | 7,000,858,050 | $ | 637,984,838 | $ | 387,574,980 | ||||||||||||
Shares outstanding | 20,200,000 | 19,600,000 | 20,700,000 | 89,850,000 | c | 49,050,000 | 53,925,000 | |||||||||||||||||
Net asset value per share | $ | 18.28 | $ | 28.18 | $ | 20.30 | $ | 77.92 | c | $ | 13.01 | $ | 7.19 | |||||||||||
a | The Funds’ investment adviser is an affiliate of the issuers. See Note 2. |
b | Securities on loan with market values of $74,708,591, $10,765,320, $–, $882,820,182, $98,619,315 and $–, respectively. See Note 5. |
c | Shares outstanding and net asset value per share reflect a three-for-one stock split effective June 9, 2005. See Note 4. |
See notes to the financial statements.
FINANCIAL STATEMENTS | 91 |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
August 31, 2005
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 | $ | 223,242,963 | $ | 1,537,280,650 | $ | 337,489,800 | $ | 101,282,645 | $ | 523,230,827 | $ | 689,149,249 | ||||||||||||
Affiliated issuersa | $ | 63,773 | $ | 6,367,991 | $ | 816,205 | $ | 5,136 | $ | 2,157,474 | $ | 69,521 | ||||||||||||
Foreign currencies, at cost | $ | 164,175 | $ | 3,727,616 | $ | 2,554,064 | $ | 441,020 | $ | — | $ | 6,581,218 | ||||||||||||
Investments in securities, at value (including securities on loanb) (Note 1): | ||||||||||||||||||||||||
Unaffiliated issuers | $ | 257,999,973 | $ | 1,825,653,936 | $ | 381,335,787 | $ | 153,281,507 | $ | 741,106,017 | $ | 746,776,493 | ||||||||||||
Affiliated issuersa | 63,773 | 6,367,991 | 816,205 | 5,136 | 2,157,474 | 69,521 | ||||||||||||||||||
Foreign currencies, at value | 164,175 | 3,710,603 | 2,539,306 | 444,012 | — | 6,470,956 | ||||||||||||||||||
Receivables: | ||||||||||||||||||||||||
Investment securities sold | — | 17,132,280 | — | 1,280,091 | 5,513,745 | 3,202,171 | ||||||||||||||||||
Dividends and interest | 150,283 | 9,255,929 | 1,615,956 | 10,495 | 47,428 | 6,493,025 | ||||||||||||||||||
Total Assets | 258,378,204 | 1,862,120,739 | 386,307,254 | 155,021,241 | 748,824,664 | 763,012,166 | ||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Payables: | ||||||||||||||||||||||||
Investment securities purchased | — | 18,103,634 | 672,212 | 1,395,785 | 5,718,744 | 9,136,885 | ||||||||||||||||||
Collateral for securities on loan (Note 5) | 2,690,400 | 321,259,151 | 44,224,690 | — | 44,204,864 | — | ||||||||||||||||||
Foreign taxes | — | — | — | — | — | 736,059 | ||||||||||||||||||
Investment advisory fees (Note 2) | 130,355 | 650,477 | 113,912 | 95,297 | 445,771 | 498,851 | ||||||||||||||||||
Accrued expenses | — | — | 159,604 | — | — | — | ||||||||||||||||||
Total Liabilities | 2,820,755 | 340,013,262 | 45,170,418 | 1,491,082 | 50,369,379 | 10,371,795 | ||||||||||||||||||
NET ASSETS | $ | 255,557,449 | $ | 1,522,107,477 | $ | 341,136,836 | $ | 153,530,159 | $ | 698,455,285 | $ | 752,640,371 | ||||||||||||
Net assets consist of: | ||||||||||||||||||||||||
Paid-in capital | $ | 226,067,262 | $ | 1,215,439,654 | $ | 306,448,882 | $ | 101,505,362 | $ | 504,854,603 | $ | 761,836,274 | ||||||||||||
Undistributed net investment income | 2,951,033 | 28,176,254 | 9,519,613 | 2,645,723 | 7,841,332 | 15,854,994 | ||||||||||||||||||
Accumulated net realized loss | (8,219,201 | ) | (9,735,753 | ) | (18,643,227 | ) | (2,622,823 | ) | (32,115,840 | ) | (82,413,169 | ) | ||||||||||||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies | 34,758,355 | 288,227,322 | 43,811,568 | 52,001,897 | 217,875,190 | 57,362,272 | ||||||||||||||||||
NET ASSETS | $ | 255,557,449 | $ | 1,522,107,477 | $ | 341,136,836 | $ | 153,530,159 | $ | 698,455,285 | $ | 752,640,371 | ||||||||||||
Shares outstanding | 8,800,000 | 15,600,000 | 43,900,000 | 1,850,000 | 20,100,000 | 65,050,000 | ||||||||||||||||||
Net asset value per share | $ | 29.04 | $ | 97.57 | $ | 7.77 | $ | 82.99 | $ | 34.75 | $ | 11.57 | ||||||||||||
a | The Funds’ investment adviser is an affiliate of the issuers. See Note 2. |
b | Securities on loan with market values of $2,636,000, $304,569,077, $41,666,346, $–, $42,058,693 and $–, respectively. See Note 5. |
See notes to the financial statements.
92 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations
iSHARES®, INC.
Year Ended August 31, 2005
iShares MSCI | |||||||||||||||||||||||
Australia Index Fund | Brazil Index Fund | Canada Index Fund | Emerging Markets Index Fund | Hong Kong Index Fund | Malaysia Index Fund | ||||||||||||||||||
NET INVESTMENT INCOME | |||||||||||||||||||||||
Dividendsa | $ | 13,738,461 | $ | 18,313,043 | $ | 5,300,340 | $ | 129,986,882 | $ | 18,981,595 | $ | 10,348,455 | |||||||||||
Dividends from affiliated issuersb | — | — | — | 280,317 | — | — | |||||||||||||||||
Interest from affiliated issuersb | 3,048 | 35,374 | 2,360 | 184,172 | 4,452 | 11,255 | |||||||||||||||||
Securities lending incomec | 67,101 | 3,632 | – | 4,057,604 | 239,418 | – | |||||||||||||||||
Total investment income | 13,808,610 | 18,352,049 | 5,302,700 | 134,508,975 | 19,225,465 | 10,359,710 | |||||||||||||||||
EXPENSES | |||||||||||||||||||||||
Investment advisory fees (Note 2) | 1,684,365 | 2,897,738 | 1,934,001 | 31,817,245 | 3,327,704 | 1,738,119 | |||||||||||||||||
Foreign taxes (Note 1) | — | — | — | 1,184,593 | — | — | |||||||||||||||||
Total expenses | 1,684,365 | 2,897,738 | 1,934,001 | 33,001,838 | 3,327,704 | 1,738,119 | |||||||||||||||||
Less investment advisory fees waived | — | — | — | (243,817 | ) | — | — | ||||||||||||||||
Net expenses | 1,684,365 | 2,897,738 | 1,934,001 | 32,758,021 | 3,327,704 | 1,738,119 | |||||||||||||||||
Net investment income | 12,124,245 | 15,454,311 | 3,368,699 | 101,750,954 | 15,897,761 | 8,621,591 | |||||||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | |||||||||||||||||||||||
Net realized gain (loss) from: | |||||||||||||||||||||||
Investments | (199,484 | ) | 5,649,655 | (1,629,132 | ) | (12,338,990 | ) | (736,482 | ) | (5,784,171 | ) | ||||||||||||
Investments in affiliated issuersb | — | — | — | 239,464 | — | — | |||||||||||||||||
In-kind redemptions | 41,445,765 | — | 67,552,987 | 284,269,646 | 42,539,450 | — | |||||||||||||||||
Foreign currency transactions | 111,908 | 117,728 | 68,698 | (1,212,714 | ) | 19,225 | (2,341 | ) | |||||||||||||||
Net realized gain (loss) | 41,358,189 | 5,767,383 | 65,992,553 | 270,957,406 | 41,822,193 | (5,786,512 | ) | ||||||||||||||||
Net change in unrealized appreciation (depreciation) on: | |||||||||||||||||||||||
Investments | 25,449,285 | 178,459,016 | 56,833,544 | 1,082,273,860 | 51,243,067 | 24,394,919 | |||||||||||||||||
Translation of assets and liabilities in foreign currencies | (38,989 | ) | 40,739 | 18,912 | 51,380 | (47 | ) | (2,454 | ) | ||||||||||||||
Net change in unrealized appreciation (depreciation) | 25,410,296 | 178,499,755 | 56,852,456 | 1,082,325,240 | 51,243,020 | 24,392,465 | |||||||||||||||||
Net realized and unrealized gain | 66,768,485 | 184,267,138 | 122,845,009 | 1,353,282,646 | 93,065,213 | 18,605,953 | |||||||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 78,892,730 | $ | 199,721,449 | $ | 126,213,708 | $ | 1,455,033,600 | $ | 108,962,974 | $ | 27,227,544 | |||||||||||
a | Net of foreign withholding tax of $466,092, $2,173,162, $935,573, $12,828,063, $– and $–, respectively. |
b | The Funds’ investment adviser is an affiliate of the issuers. See Note 2. |
c | Includes income earned from issuers of which the Funds’ investment adviser is an affiliate. See Note 2. |
See notes to the financial statements.
FINANCIAL STATEMENTS | 93 |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year Ended August 31, 2005
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 | $ | 4,994,170 | $ | 50,466,415 | $ | 13,889,369 | $ | 4,354,376 | $ | 11,150,702 | $ | 22,938,413 | ||||||||||||
Interest from affiliated issuersb | 2,247 | 10,294 | 3,420 | 1,014 | 26,042 | 6,503 | ||||||||||||||||||
Securities lending incomec | 4,502 | 342,351 | 126,439 | — | 334,612 | — | ||||||||||||||||||
Total investment income | 5,000,919 | 50,819,060 | 14,019,228 | 4,355,390 | 11,511,356 | 22,944,916 | ||||||||||||||||||
EXPENSES (Note 2) |
| |||||||||||||||||||||||
Investment advisory fees | 1,265,701 | 5,536,961 | 1,132,585 | 959,383 | 3,815,173 | 5,030,229 | ||||||||||||||||||
Custodian fees and expenses | — | — | 151,215 | — | — | — | ||||||||||||||||||
Directors’ fees | — | — | 1,136 | — | — | — | ||||||||||||||||||
Professional fees | — | — | 24,387 | — | — | — | ||||||||||||||||||
Federal and state registration fees | — | — | 15,691 | — | — | — | ||||||||||||||||||
Insurance | — | — | 48,305 | — | — | — | ||||||||||||||||||
Printing | — | — | 22,550 | — | — | — | ||||||||||||||||||
AMEX listing fee | — | — | 253 | — | — | — | ||||||||||||||||||
Foreign taxes (Note 1) | — | — | — | — | 15 | 1,972,213 | ||||||||||||||||||
Total expenses | 1,265,701 | 5,536,961 | 1,396,122 | 959,383 | 3,815,188 | 7,002,442 | ||||||||||||||||||
Net investment income | 3,735,218 | 45,282,099 | 12,623,106 | 3,396,007 | 7,696,168 | 15,942,474 | ||||||||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
| |||||||||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||||||||||
Investments | (1,206,762 | ) | (2,107,551 | ) | 948,126 | (1,786,597 | ) | (9,419,038 | ) | (22,338,603 | ) | |||||||||||||
In-kind redemptions | 38,932,114 | — | 8,430,114 | 13,110,939 | — | — | ||||||||||||||||||
Foreign currency transactions | 28,638 | 372,735 | (17,604 | ) | (41,657 | ) | 188,130 | (87,480 | ) | |||||||||||||||
Net realized gain (loss) | 37,753,990 | (1,734,816 | ) | 9,360,636 | 11,282,685 | (9,230,908 | ) | (22,426,083 | ) | |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||||||
Investments | 42,545,724 | 222,483,428 | 23,711,211 | 25,742,186 | 167,580,084 | 48,531,114 | ||||||||||||||||||
Translation of assets and liabilities in foreign currencies | 2,201 | (135,276 | ) | (34,741 | ) | 12,878 | — | (254,962 | ) | |||||||||||||||
Net change in unrealized appreciation (depreciation) | 42,547,925 | 222,348,152 | 23,676,470 | 25,755,064 | 167,580,084 | 48,276,152 | ||||||||||||||||||
Net realized and unrealized gain | 80,301,915 | 220,613,336 | 33,037,106 | 37,037,749 | 158,349,176 | 25,850,069 | ||||||||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 84,037,133 | $ | 265,895,435 | $ | 45,660,212 | $ | 40,433,756 | $ | 166,045,344 | $ | 41,792,543 | ||||||||||||
a | Net of foreign withholding tax of $–, $1,287,900, $–, $–, $2,179,802 and $5,667,907, respectively. |
b | The Funds’ investment adviser is an affiliate of the issuers. See Note 2. |
c | Includes income earned from issuers of which the Funds’ investment adviser is an affiliate. See Note 2. |
See notes to the financial statements.
94 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Australia Index Fund | iShares MSCI Brazil Index Fund | iShares MSCI Canada Index Fund | ||||||||||||||||||||||
For the year ended August 31, 2005 | For the year ended August 31, 2004 | For the year ended August 31, 2005 | For the year ended August 31, 2004 | For the year ended August 31, 2005 | For the year ended August 31, 2004 | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income | $ | 12,124,245 | $ | 5,265,617 | $ | 15,454,311 | $ | 8,655,485 | $ | 3,368,699 | $ | 2,839,492 | ||||||||||||
Net realized gain | 41,358,189 | 9,686,425 | 5,767,383 | 45,107,732 | 65,992,553 | 93,207,203 | ||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 25,410,296 | 7,651,309 | 178,499,755 | 23,024,278 | 56,852,456 | (24,881,737 | ) | |||||||||||||||||
Net increase in net assets resulting from operations | 78,892,730 | 22,603,351 | 199,721,449 | 76,787,495 | 126,213,708 | 71,164,958 | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||||||||||
From net investment income | (9,320,851 | ) | (4,470,639 | ) | (8,052,116 | ) | (5,717,313 | ) | (3,453,495 | ) | (4,394,348 | ) | ||||||||||||
Total distributions to shareholders | (9,320,851 | ) | (4,470,639 | ) | (8,052,116 | ) | (5,717,313 | ) | (3,453,495 | ) | (4,394,348 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Proceeds from shares sold | 231,751,585 | 106,224,512 | 274,248,148 | 265,754,092 | 141,711,605 | 98,535,887 | ||||||||||||||||||
Cost of shares redeemed | (110,966,622 | ) | (32,899,563 | ) | (123,135,627 | ) | (230,355,301 | ) | (169,468,858 | ) | (343,415,496 | ) | ||||||||||||
Net increase (decrease) in net assets from capital share transactions | 120,784,963 | 73,324,949 | 151,112,521 | 35,398,791 | (27,757,253 | ) | (244,879,609 | ) | ||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | 190,356,842 | 91,457,661 | 342,781,854 | 106,468,973 | 95,002,960 | (178,108,999 | ) | |||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 178,998,426 | 87,540,765 | 209,503,584 | 103,034,611 | 325,297,815 | 503,406,814 | ||||||||||||||||||
End of year | $ | 369,355,268 | $ | 178,998,426 | $ | 552,285,438 | $ | 209,503,584 | $ | 420,300,775 | $ | 325,297,815 | ||||||||||||
Undistributed net investment income included in net assets at end of year | $ | 8,105,304 | $ | 3,368,610 | $ | 12,063,040 | $ | 4,543,117 | $ | 1,859,540 | $ | 1,875,638 | ||||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 13,800,000 | 8,000,000 | 12,300,000 | 18,600,000 | 7,900,000 | 7,200,000 | ||||||||||||||||||
Shares redeemed | (6,800,000 | ) | (2,600,000 | ) | (5,050,000 | ) | (14,700,000 | ) | (9,900,000 | ) | (25,600,000 | ) | ||||||||||||
Net increase (decrease) in shares outstanding | 7,000,000 | 5,400,000 | 7,250,000 | 3,900,000 | (2,000,000 | ) | (18,400,000 | ) | ||||||||||||||||
See notes to the financial statements.
FINANCIAL STATEMENTS | 95 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Index Fund | iShares MSCI Hong Kong Index Fund | iShares MSCI Malaysia Index Fund | ||||||||||||||||||||||
For the year ended August 31, 2005 | For the year ended August 31, 2004a | For the year ended August 31, 2005 | For the year ended | For the year ended August 31, 2005 | For the year ended August 31, 2004 | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income | $ | 101,750,954 | $ | 28,887,584 | $ | 15,897,761 | $ | 11,714,811 | $ | 8,621,591 | $ | 3,951,040 | ||||||||||||
Net realized gain (loss) | 270,957,406 | 34,568,649 | 41,822,193 | 23,540,083 | (5,786,512 | ) | (8,032,612 | ) | ||||||||||||||||
Net change in unrealized appreciation (depreciation) | 1,082,325,240 | (1,740,338 | ) | 51,243,020 | 25,672,069 | 24,392,465 | 10,040,748 | |||||||||||||||||
Net increase in net assets resulting from operations | 1,455,033,600 | 61,715,895 | 108,962,974 | 60,926,963 | 27,227,544 | 5,959,176 | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||||||||||
From net investment income | (45,604,575 | ) | (4,998,228 | ) | (14,195,028 | ) | (6,211,899 | ) | (6,156,574 | ) | (2,163,298 | ) | ||||||||||||
Total distributions to shareholders | (45,604,575 | ) | (4,998,228 | ) | (14,195,028 | ) | (6,211,899 | ) | (6,156,574 | ) | (2,163,298 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Proceeds from shares sold | 4,407,630,562 | 1,833,607,273 | 251,633,472 | 262,371,854 | 155,029,612 | 180,819,437 | ||||||||||||||||||
Cost of shares redeemed | (774,797,887 | ) | (229,574,799 | ) | (158,339,373 | ) | (117,791,065 | ) | (12,743,715 | ) | (60,126,782 | ) | ||||||||||||
Net increase in net assets from capital share transactions | 3,632,832,675 | 1,604,032,474 | 93,294,099 | 144,580,789 | 142,285,897 | 120,692,655 | ||||||||||||||||||
INCREASE IN NET ASSETS | 5,042,261,700 | 1,660,750,141 | 188,062,045 | 199,295,853 | 163,356,867 | 124,488,533 | ||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 1,958,596,350 | 297,846,209 | 449,922,793 | 250,626,940 | 224,218,113 | 99,729,580 | ||||||||||||||||||
End of year | $ | 7,000,858,050 | $ | 1,958,596,350 | $ | 637,984,838 | $ | 449,922,793 | $ | 387,574,980 | $ | 224,218,113 | ||||||||||||
Undistributed net investment income included in net assets at end of year | $ | 79,495,049 | $ | 24,561,384 | $ | 10,655,366 | $ | 8,931,316 | $ | 5,217,709 | $ | 2,754,991 | ||||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 64,200,000 | 34,050,000 | 21,225,000 | 25,650,000 | 21,525,000 | 26,925,000 | ||||||||||||||||||
Shares redeemed | (10,650,000 | ) | (4,350,000 | ) | (13,425,000 | ) | (12,150,000 | ) | (1,875,000 | ) | (9,300,000 | ) | ||||||||||||
Net increase in shares outstanding | 53,550,000 | 29,700,000 | 7,800,000 | 13,500,000 | 19,650,000 | 17,625,000 | ||||||||||||||||||
a | Share transactions were adjusted to reflect a three-for-one stock split effective June 9, 2005. See Note 4. |
See notes to the financial statements.
96 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC .
iShares MSCI Mexico Index Fund | iShares MSCI Pacific ex-Japan Index Fund | iShares Singapore | ||||||||||||||||||||||
For the year ended August 31, 2005 | For the year ended August 31, 2004 | For the year ended August 31, 2005 | For the year ended August 31, 2004 | For the year ended August 31, 2005 | For the year ended August 31, 2004 | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
| |||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income | $ | 3,735,218 | $ | 1,426,138 | $ | 45,282,099 | $ | 19,602,876 | $ | 12,623,106 | $ | 5,623,277 | ||||||||||||
Net realized gain (loss) | 37,753,990 | 10,436,818 | (1,734,816 | ) | 12,895,227 | 9,360,636 | 264,490 | |||||||||||||||||
Net change in unrealized appreciation (depreciation) | 42,547,925 | (644,904 | ) | 222,348,152 | 43,117,628 | 23,676,470 | 23,413,442 | |||||||||||||||||
Net increase in net assets resulting from operations | 84,037,133 | 11,218,052 | 265,895,435 | 75,615,731 | 45,660,212 | 29,301,209 | ||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
| |||||||||||||||||||||||
From net investment income | (2,048,280 | ) | (788,654 | ) | (31,933,222 | ) | (9,962,572 | ) | (7,420,067 | ) | (3,170,833 | ) | ||||||||||||
Total distributions to shareholders | (2,048,280 | ) | (788,654 | ) | (31,933,222 | ) | (9,962,572 | ) | (7,420,067 | ) | (3,170,833 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: |
| |||||||||||||||||||||||
Proceeds from shares sold | 229,047,163 | 228,974,858 | 636,895,214 | 424,290,639 | 156,094,475 | 49,430,368 | ||||||||||||||||||
Cost of shares redeemed | (185,101,346 | ) | (169,936,912 | ) | — | (61,991,273 | ) | (23,244,294 | ) | (13,716,664 | ) | |||||||||||||
Net increase in net assets from capital share transactions | 43,945,817 | 59,037,946 | 636,895,214 | 362,299,366 | 132,850,181 | 35,713,704 | ||||||||||||||||||
INCREASE IN NET ASSETS | 125,934,670 | 69,467,344 | 870,857,427 | 427,952,525 | 171,090,326 | 61,844,080 | ||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 129,622,779 | 60,155,435 | 651,250,050 | 223,297,525 | 170,046,510 | 108,202,430 | ||||||||||||||||||
End of year | $ | 255,557,449 | $ | 129,622,779 | $ | 1,522,107,477 | $ | 651,250,050 | $ | 341,136,836 | $ | 170,046,510 | ||||||||||||
Undistributed net investment income included in net assets at end of year | $ | 2,951,033 | $ | 1,235,457 | $ | 28,176,254 | $ | 14,410,596 | $ | 9,519,613 | $ | 4,042,788 | ||||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 9,500,000 | 12,300,000 | 7,000,000 | 5,900,000 | 21,000,000 | 8,200,000 | ||||||||||||||||||
Shares redeemed | (7,400,000 | ) | (9,600,000 | ) | — | (900,000 | ) | (3,200,000 | ) | (2,200,000 | ) | |||||||||||||
Net increase in shares outstanding | 2,100,000 | 2,700,000 | 7,000,000 | 5,000,000 | 17,800,000 | 6,000,000 | ||||||||||||||||||
See notes to the financial statements.
FINANCIAL STATEMENTS | 97 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC .
iShares MSCI South Africa Index Fund | iShares MSCI South Korea Index Fund | iShares MSCI Taiwan Index Fund | ||||||||||||||||||||||
For the year ended August 31, 2005 | For the year ended August 31, 2004 | For the year ended August 31, 2005 | For the year ended August 31, 2004 | For the year ended August 31, 2005 | For the year ended August 31, 2004 | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
| |||||||||||||||||||||||
OPERATIONS: | ||||||||||||||||||||||||
Net investment income | $ | 3,396,007 | $ | 1,953,405 | $ | 7,696,168 | $ | 2,173,679 | $ | 15,942,474 | $ | 4,688,145 | ||||||||||||
Net realized gain (loss) | 11,282,685 | 7,316,450 | (9,230,908 | ) | (14,302,124 | ) | (22,426,083 | ) | (20,194,826 | ) | ||||||||||||||
Net change in unrealized appreciation (depreciation) | 25,755,064 | 13,784,731 | 167,580,084 | 4,228,087 | 48,276,152 | (8,427,465 | ) | |||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 40,433,756 | 23,054,586 | 166,045,344 | (7,900,358 | ) | 41,792,543 | (23,934,146 | ) | ||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
| |||||||||||||||||||||||
From net investment income | (2,053,497 | ) | (2,182,948 | ) | (1,677,739 | ) | (1,814,739 | ) | (4,632,113 | ) | (637,002 | ) | ||||||||||||
Total distributions to shareholders | (2,053,497 | ) | (2,182,948 | ) | (1,677,739 | ) | (1,814,739 | ) | (4,632,113 | ) | (637,002 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS: |
| |||||||||||||||||||||||
Proceeds from shares sold | 37,191,402 | 14,747,859 | 331,095,006 | 213,845,316 | 391,736,531 | 223,498,562 | ||||||||||||||||||
Cost of shares redeemed | (14,923,708 | ) | (24,651,115 | ) | (112,471,028 | ) | (43,152,032 | ) | (66,484,667 | ) | (43,426,617 | ) | ||||||||||||
Net increase (decrease) in net assets from capital share transactions | 22,267,694 | (9,903,256 | ) | 218,623,978 | 170,693,284 | 325,251,864 | 180,071,945 | |||||||||||||||||
INCREASE IN NET ASSETS | 60,647,953 | 10,968,382 | 382,991,583 | 160,978,187 | 362,412,294 | 155,500,797 | ||||||||||||||||||
NET ASSETS: | ||||||||||||||||||||||||
Beginning of year | 92,882,206 | 81,913,824 | 315,463,702 | 154,485,515 | 390,228,077 | 234,727,280 | ||||||||||||||||||
End of year | $ | 153,530,159 | $ | 92,882,206 | $ | 698,455,285 | $ | 315,463,702 | $ | 752,640,371 | $ | 390,228,077 | ||||||||||||
Undistributed net investment income included in net assets at end of year | $ | 2,645,723 | $ | 1,344,870 | $ | 7,841,332 | $ | 1,634,773 | $ | 15,854,994 | $ | 4,632,113 | ||||||||||||
SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
Shares sold | 500,000 | 250,000 | 10,700,000 | 8,150,000 | 34,150,000 | 18,800,000 | ||||||||||||||||||
Shares redeemed | (200,000 | ) | (450,000 | ) | (3,650,000 | ) | (1,800,000 | ) | (5,700,000 | ) | (3,950,000 | ) | ||||||||||||
Net increase (decrease) in shares outstanding | 300,000 | (200,000 | ) | 7,050,000 | 6,350,000 | 28,450,000 | 14,850,000 | |||||||||||||||||
See notes to the financial statements.
98 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES®, INC .
(For a share outstanding throughout each period)
iShares MSCI Australia Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 13.56 | $ | 11.22 | $ | 9.36 | $ | 9.24 | $ | 9.93 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.70 | 0.45 | 0.32 | 0.23 | 0.24 | |||||||||||||||
Net realized and unrealized gain (loss) | 4.60 | 2.32 | 1.81 | (0.07 | ) | (0.71 | ) | |||||||||||||
Total from investment operations | 5.30 | 2.77 | 2.13 | 0.16 | (0.47 | ) | ||||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.58 | ) | (0.43 | ) | (0.27 | ) | (0.04 | ) | (0.20 | ) | ||||||||||
Return of capital | — | — | — | — | (0.02 | ) | ||||||||||||||
Total distributions | (0.58 | ) | (0.43 | ) | (0.27 | ) | (0.04 | ) | (0.22 | ) | ||||||||||
Net asset value, end of year | $ | 18.28 | $ | 13.56 | $ | 11.22 | $ | 9.36 | $ | 9.24 | ||||||||||
Total return | 39.58 | % | 24.95 | % | 23.33 | % | 1.74 | % | (4.77 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 369,355 | $ | 178,998 | $ | 87,541 | $ | 76,731 | $ | 57,312 | ||||||||||
Ratio of expenses to average net assets | 0.57 | % | 0.79 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of net investment income to average net assets | 4.13 | % | 3.37 | % | 3.21 | % | 2.47 | % | 2.54 | % | ||||||||||
Portfolio turnover rateb | 17 | % | 9 | % | 8 | % | 5 | % | 23 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to the financial statements.
FINANCIAL HIGHLIGHTS | 99 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Brazil Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 16.96 | $ | 12.19 | $ | 8.30 | $ | 11.20 | $ | 19.25 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.89 | 0.55 | 0.32 | 0.38 | 0.68 | |||||||||||||||
Net realized and unrealized gain (loss) | 10.79 | 4.49 | 3.68 | (3.28 | ) | (8.09 | ) | |||||||||||||
Total from investment operations | 11.68 | 5.04 | 4.00 | (2.90 | ) | (7.41 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.46 | ) | (0.27 | ) | (0.11 | ) | — | (0.56 | ) | |||||||||||
Return of capital | — | — | — | — | (0.08 | ) | ||||||||||||||
Total distributions | (0.46 | ) | (0.27 | ) | (0.11 | ) | — | (0.64 | ) | |||||||||||
Net asset value, end of year | $ | 28.18 | $ | 16.96 | $ | 12.19 | $ | 8.30 | $ | 11.20 | ||||||||||
Total return | 69.72 | % | 41.42 | % | 48.85 | % | (25.89 | )% | (38.52 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 552,285 | $ | 209,504 | $ | 103,035 | $ | 83,788 | $ | 14,004 | ||||||||||
Ratio of expenses to average net assets | 0.74 | % | 0.96 | % | 0.99 | % | 0.99 | % | 0.99 | % | ||||||||||
Ratio of net investment income to average net assets | 3.94 | % | 3.59 | % | 3.59 | % | 3.50 | % | 4.44 | % | ||||||||||
Portfolio turnover rateb | 48 | % | 106 | % | 85 | % | 103 | % | 43 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units solely for cash in U.S. dollars. Excluding such transactions, the portfolio turnover rate for the year ended August 31, 2005 would have been 9%. See Note 4. |
See notes to the financial statements.
100 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Canada Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 14.33 | $ | 12.25 | $ | 9.49 | $ | 10.70 | $ | 16.94 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.17 | 0.11 | 0.10 | 0.07 | 0.05 | |||||||||||||||
Net realized and unrealized gain (loss) | 6.00 | 2.17 | 2.69 | (1.27 | ) | (5.92 | ) | |||||||||||||
Total from investment operations | 6.17 | 2.28 | 2.79 | (1.20 | ) | (5.87 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.20 | ) | (0.20 | ) | (0.03 | ) | (0.01 | ) | (0.02 | ) | ||||||||||
Net realized gain | — | — | — | — | (0.31 | ) | ||||||||||||||
Return of capital | — | — | — | — | (0.04 | ) | ||||||||||||||
Total distributions | (0.20 | ) | (0.20 | ) | (0.03 | ) | (0.01 | ) | (0.37 | ) | ||||||||||
Net asset value, end of year | $ | 20.30 | $ | 14.33 | $ | 12.25 | $ | 9.49 | $ | 10.70 | ||||||||||
Total return | 43.35 | % | 18.70 | % | 29.47 | % | (11.23 | )% | (34.95 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 420,301 | $ | 325,298 | $ | 503,407 | $ | 66,420 | $ | 28,889 | ||||||||||
Ratio of expenses to average net assets | 0.57 | % | 0.70 | %c | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of net investment income to average net assets | 1.00 | % | 0.81 | %d | 0.98 | % | 0.70 | % | 0.44 | % | ||||||||||
Portfolio turnover rateb | 9 | % | 10 | % | 10 | % | 5 | % | 63 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
c | Ratio of expenses to average net assets prior to voluntary reimbursed distribution fees for the year ended August 31, 2004 was 0.80%. |
d | Ratio of net investment income to average net assets prior to voluntary reimbursed distribution fees for the year ended August 31, 2004 was 0.71%. |
See notes to the financial statements.
FINANCIAL HIGHLIGHTS | 101 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Emerging Markets Index Fund | ||||||||||||
Year ended Aug. 31, 2005b | Year ended Aug. 31, 2004b | Period from Apr. 7, 2003a to Aug. 31, 2003b | ||||||||||
Net asset value, beginning of period | $ | 53.96 | $ | 45.13 | $ | 33.75 | ||||||
Income from investment operations: | ||||||||||||
Net investment incomec | 1.65 | 1.13 | 0.26 | |||||||||
Net realized and unrealized gain | 24.72 | 7.97 | 11.12 | |||||||||
Total from investment operations | 26.37 | 9.10 | 11.38 | |||||||||
Less distributions from: | ||||||||||||
Net investment income | (2.41 | ) | (0.27 | ) | — | |||||||
Total distributions | (2.41 | ) | (0.27 | ) | — | |||||||
Net asset value, end of period | $ | 77.92 | $ | 53.96 | $ | 45.13 | ||||||
Total return | 46.17 | % | 20.21 | % | 33.72 | %f | ||||||
Ratios/Supplemental data: | ||||||||||||
Net assets, end of period (000s) | $ | 7,000,858 | $ | 1,958,596 | $ | 297,846 | ||||||
Ratio of expenses to average net assets prior to waived feesd | 0.78 | % | 0.77 | % | 0.78 | % | ||||||
Ratio of expenses to average net assets after waived feesd | 0.77 | % | 0.76 | % | 0.78 | % | ||||||
Ratio of expenses to average net assets after waived fees and exclusive of foreign taxesd | 0.74 | % | 0.74 | % | 0.72 | % | ||||||
Ratio of net investment income to average net assetsd | 2.40 | % | 2.10 | % | 1.58 | % | ||||||
Portfolio turnover ratee | 9 | % | 8 | % | 10 | % |
a | Commencement of operations. |
b | Per share amounts were adjusted to reflect a three-for-one stock split effective June 9, 2005. See Note 4. |
c | Based on average shares outstanding throughout each period. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
f | Not annualized. |
See notes to the financial statements.
102 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDER |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Hong Kong Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 10.91 | $ | 9.03 | $ | 7.99 | $ | 8.93 | $ | 13.24 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.33 | 0.28 | 0.23 | 0.23 | 0.23 | |||||||||||||||
Net realized and unrealized gain (loss) | 2.04 | 1.75 | 0.95 | (1.11 | ) | (4.30 | ) | |||||||||||||
Total from investment operations | 2.37 | 2.03 | 1.18 | (0.88 | ) | (4.07 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.27 | ) | (0.15 | ) | (0.14 | ) | (0.06 | ) | (0.23 | ) | ||||||||||
Return of capital | — | — | — | — | (0.01 | ) | ||||||||||||||
Total distributions | (0.27 | ) | (0.15 | ) | (0.14 | ) | (0.06 | ) | (0.24 | ) | ||||||||||
Net asset value, end of year | $ | 13.01 | $ | 10.91 | $ | 9.03 | $ | 7.99 | $ | 8.93 | ||||||||||
Total return | 21.96 | % | 22.69 | % | 15.14 | % | (9.94 | )% | (30.88 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 637,985 | $ | 449,923 | $ | 250,627 | $ | 99,502 | $ | 52,946 | ||||||||||
Ratio of expenses to average net assets | 0.57 | % | 0.80 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of net investment income to average net assets | 2.75 | % | 2.78 | % | 3.06 | % | 2.56 | % | 2.11 | % | ||||||||||
Portfolio turnover rateb | 6 | % | 5 | % | 10 | % | 15 | % | 43 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to the financial statements.
FINANCIAL HIGHLIGHTS | 103 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Malaysia Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 6.54 | $ | 5.99 | $ | 5.68 | $ | 5.11 | $ | 5.96 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.20 | 0.13 | 0.10 | 0.08 | 0.06 | |||||||||||||||
Net realized and unrealized gain (loss) | 0.61 | 0.52 | 0.30 | 0.52 | (0.85 | ) | ||||||||||||||
Total from investment operations | 0.81 | 0.65 | 0.40 | 0.60 | (0.79 | ) | ||||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.16 | ) | (0.10 | ) | (0.09 | ) | (0.03 | ) | (0.06 | ) | ||||||||||
Return of capital | — | — | — | — | (0.00 | )c | ||||||||||||||
Total distributions | (0.16 | ) | (0.10 | ) | (0.09 | ) | (0.03 | ) | (0.06 | ) | ||||||||||
Net asset value, end of year | $ | 7.19 | $ | 6.54 | $ | 5.99 | $ | 5.68 | $ | 5.11 | ||||||||||
Total return | 12.39 | % | 11.01 | % | 7.39 | % | 11.82 | % | (13.22 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 387,575 | $ | 224,218 | $ | 99,730 | $ | 93,262 | $ | 80,877 | ||||||||||
Ratio of expenses to average net assets | 0.57 | % | 0.79 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of net investment income to average net assets | 2.85 | % | 1.97 | % | 1.91 | % | 1.53 | % | 1.19 | % | ||||||||||
Portfolio turnover rateb | 15 | % | 39 | % | 35 | % | 37 | % | 37 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units solely for cash in U.S. dollars. Excluding such transactions, the portfolio turnover rate for the year ended August 31, 2005 would have been 9%. See Note 4. |
c | Rounds to less than $0.01. |
See notes to the financial statements.
104 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Mexico Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 19.35 | $ | 15.04 | $ | 13.65 | $ | 15.35 | $ | 16.72 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.42 | 0.26 | 0.19 | 0.32 | 0.17 | |||||||||||||||
Net realized and unrealized gain (loss) | 9.55 | 4.26 | 1.72 | (1.95 | ) | (1.36 | ) | |||||||||||||
Total from investment operations | 9.97 | 4.52 | 1.91 | (1.63 | ) | (1.19 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.28 | ) | (0.21 | ) | (0.52 | ) | (0.07 | ) | (0.15 | ) | ||||||||||
Net realized gain | — | — | — | — | (0.03 | ) | ||||||||||||||
Total distributions | (0.28 | ) | (0.21 | ) | (0.52 | ) | (0.07 | ) | (0.18 | ) | ||||||||||
Net asset value, end of year | $ | 29.04 | $ | 19.35 | $ | 15.04 | $ | 13.65 | $ | 15.35 | ||||||||||
Total return | 51.77 | % | 30.28 | % | 14.60 | % | (10.67 | )% | (7.02 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 255,557 | $ | 129,623 | $ | 60,155 | $ | 70,994 | $ | 46,056 | ||||||||||
Ratio of expenses to average net assets | 0.57 | % | 0.78 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of net investment income to average net assets | 1.70 | % | 1.40 | % | 1.43 | % | 2.05 | % | 1.12 | % | ||||||||||
Portfolio turnover rateb | 9 | % | 12 | % | 13 | % | 8 | % | 34 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to the financial statements.
FINANCIAL HIGHLIGHTS | 105 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Pacific ex-Japan Index Fund | ||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Period from Oct. 25, 2001a Aug. 31, 2002 | |||||||||||||
Net asset value, beginning of period | $ | 75.73 | $ | 62.03 | $ | 52.51 | $ | 50.03 | ||||||||
Income from investment operations: | ||||||||||||||||
Net investment incomeb | 3.70 | 2.68 | 1.87 | 1.35 | ||||||||||||
Net realized and unrealized gain | 21.15 | 12.53 | 8.53 | 1.40 | ||||||||||||
Total from investment operations | 24.85 | 15.21 | 10.40 | 2.75 | ||||||||||||
Less distributions from: | ||||||||||||||||
Net investment income | (3.01 | ) | (1.51 | ) | (0.88 | ) | (0.27 | ) | ||||||||
Total distributions | (3.01 | ) | (1.51 | ) | (0.88 | ) | (0.27 | ) | ||||||||
Net asset value, end of period | $ | 97.57 | $ | 75.73 | $ | 62.03 | $ | 52.51 | ||||||||
Total return | 33.27 | % | 24.74 | % | 20.15 | % | 5.51 | %e | ||||||||
Ratios/Supplemental data: | ||||||||||||||||
Net assets, end of period (000s) | $ | 1,522,107 | $ | 651,250 | $ | 223,298 | $ | 105,029 | ||||||||
Ratio of expenses to average net assetsc | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | ||||||||
Ratio of net investment income to average net assetsc | 4.09 | % | 3.68 | % | 3.47 | % | 2.87 | % | ||||||||
Portfolio turnover rated | 16 | % | 8 | % | 8 | % | 5 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | Annualized for periods of less than one year. |
d | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
e | Not annualized. |
See notes to the financial statements.
106 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC .
(For a share outstanding throughout each period)
iShares MSCI Singapore Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 6.52 | $ | 5.38 | $ | 5.01 | $ | 5.34 | $ | 7.58 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.38 | 0.22 | 0.12 | 0.07 | 0.07 | |||||||||||||||
Net realized and unrealized gain (loss) | 1.15 | 1.04 | 0.33 | (0.36 | ) | (2.16 | ) | |||||||||||||
Total from investment operations | 1.53 | 1.26 | 0.45 | (0.29 | ) | (2.09 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.28 | ) | (0.12 | ) | (0.08 | ) | (0.04 | ) | (0.07 | ) | ||||||||||
Net realized gain | — | — | — | — | (0.06 | ) | ||||||||||||||
Return of capital | — | — | — | — | (0.02 | ) | ||||||||||||||
Total distributions | (0.28 | ) | (0.12 | ) | (0.08 | ) | (0.04 | ) | (0.15 | ) | ||||||||||
Net asset value, end of year | $ | 7.77 | $ | 6.52 | $ | 5.38 | $ | 5.01 | $ | 5.34 | ||||||||||
Total return | 24.06 | % | 23.47 | % | 9.30 | % | (5.42 | )% | (27.89 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 341,137 | $ | 170,047 | $ | 108,202 | $ | 88,126 | $ | 73,704 | ||||||||||
Ratio of expenses to average net assets | 0.57 | % | 0.79 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of net investment income to average net assets | 5.19 | % | 3.50 | % | 2.67 | % | 1.44 | % | 1.15 | % | ||||||||||
Portfolio turnover rateb | 8 | % | 9 | % | 14 | % | 9 | % | 32 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to the financial statements.
FINANCIAL HIGHLIGHTS | 107 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC .
(For a share outstanding throughout each period)
iShares MSCI South Africa Index Fund | ||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Period from Feb. 3, 2003a Aug. 31, 2003 | ||||||||||
Net asset value, beginning of period | $ | 59.92 | $ | 46.81 | $ | 38.72 | ||||||
Income from investment operations: | ||||||||||||
Net investment incomeb | 1.92 | 1.23 | 0.89 | |||||||||
Net realized and unrealized gain | 22.36 | 13.24 | 7.20 | |||||||||
Total from investment operations | 24.28 | 14.47 | 8.09 | |||||||||
Less distributions from: | ||||||||||||
Net investment income | (1.21 | ) | (1.36 | ) | — | |||||||
Total distributions | (1.21 | ) | (1.36 | ) | — | |||||||
Net asset value, end of period | $ | 82.99 | $ | 59.92 | $ | 46.81 | ||||||
Total return | 40.62 | % | 31.30 | % | 20.89 | %e | ||||||
Ratios/Supplemental data: | ||||||||||||
Net assets, end of period (000s) | $ | 153,530 | $ | 92,882 | $ | 81,914 | ||||||
Ratio of expenses to average net assetsc | 0.74 | % | 0.95 | % | 0.99 | % | ||||||
Ratio of net investment income to average net assetsc | 2.62 | % | 2.23 | % | 3.86 | % | ||||||
Portfolio turnover rated | 32 | % | 13 | % | 17 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | Annualized for periods of less than one year. |
d | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
e | Not annualized. |
See notes to the financial statements.
108 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI South Korea Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 24.17 | $ | 23.06 | $ | 21.17 | $ | 13.25 | $ | 18.16 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income (loss)a | 0.46 | 0.22 | 0.19 | (0.00 | )c | 0.09 | ||||||||||||||
Net realized and unrealized gain (loss) | 10.22 | 1.13 | 1.70 | 7.92 | (4.90 | ) | ||||||||||||||
Total from investment operations | 10.68 | 1.35 | 1.89 | 7.92 | (4.81 | ) | ||||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.10 | ) | (0.24 | ) | — | — | (0.03 | ) | ||||||||||||
Return of capital | — | — | — | — | (0.07 | ) | ||||||||||||||
Total distributions | (0.10 | ) | (0.24 | ) | — | — | (0.10 | ) | ||||||||||||
Net asset value, end of year | $ | 34.75 | $ | 24.17 | $ | 23.06 | $ | 21.17 | $ | 13.25 | ||||||||||
Total return | 44.29 | % | 5.83 | % | 8.93 | % | 59.77 | % | (26.49 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 698,455 | $ | 315,464 | $ | 154,486 | $ | 96,336 | $ | 37,767 | ||||||||||
Ratio of expenses to average net assets | 0.74 | % | 0.94 | % | 0.99 | % | 1.00 | % | 1.01 | % | ||||||||||
Ratio of expenses to average net assets exclusive of foreign taxes | 0.74 | % | 0.94 | % | 0.99 | % | 0.99 | % | 0.99 | % | ||||||||||
Ratio of net investment income (loss) to average net assets | 1.49 | % | 0.87 | % | 0.98 | % | (0.01 | )% | 0.64 | % | ||||||||||
Portfolio turnover rateb | 30 | % | 29 | % | 39 | % | 25 | % | 39 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units solely for cash in U.S. dollars. Excluding such transactions, the portfolio turnover rate for the year ended August 31, 2005 would have been 9%. See Note 4. |
c | Rounds to less than $0.01. |
See notes to the financial statements.
FINANCIAL HIGHLIGHTS | 109 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Taiwan Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 10.66 | $ | 10.79 | $ | 8.82 | $ | 9.01 | $ | 16.41 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income (loss)a | 0.27 | 0.14 | 0.04 | (0.03 | ) | (0.03 | ) | |||||||||||||
Net realized and unrealized gain (loss) | 0.72 | (0.25 | ) | 1.93 | (0.16 | ) | (7.37 | ) | ||||||||||||
Total from investment operations | 0.99 | (0.11 | ) | 1.97 | (0.19 | ) | (7.40 | ) | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.08 | ) | (0.02 | ) | — | — | — | |||||||||||||
Total distributions | (0.08 | ) | (0.02 | ) | — | — | — | |||||||||||||
Net asset value, end of year | $ | 11.57 | $ | 10.66 | $ | 10.79 | $ | 8.82 | $ | 9.01 | ||||||||||
Total return | 9.28 | % | (1.10 | )% | 22.45 | % | (2.11 | )% | (45.09 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 752,640 | $ | 390,228 | $ | 234,727 | $ | 142,043 | $ | 110,786 | ||||||||||
Ratio of expenses to average net assets | 1.03 | % | 1.19 | %c | 1.31 | % | 1.33 | % | 1.60 | % | ||||||||||
Ratio of expenses to average net assets exclusive of foreign taxes | 0.74 | % | 0.92 | % | 0.99 | % | 0.99 | % | 0.99 | % | ||||||||||
Ratio of net investment income (loss) to average net assets | 2.34 | % | 1.23 | %d | 0.43 | % | (0.28 | )% | (0.23 | )% | ||||||||||
Portfolio turnover rateb | 20 | % | 19 | % | 15 | % | 11 | % | 30 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units solely for cash in U.S. dollars. Excluding such transactions, the portfolio turnover rate for the year ended August 31, 2005 would have been 10%. See Note 4. |
c | Ratio of expenses to average net assets prior to voluntary reimbursed distribution fees for the year ended August 31, 2004 was 1.22%. |
d | Ratio of net investment income to average net assets prior to voluntary reimbursed distribution fees for the year ended August 31, 2004 was 1.21%. |
See notes to the financial statements.
110 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
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, 2005, 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 uses 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 securities of 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; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets and the risk of war.
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 the 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.
SECURITY VALUATION
The securities and other assets of each Fund are generally valued using market valuations. A market valuation generally means a valuation (i) obtained from an exchange, a pricing service, or a major market maker (or dealer), (ii) based on a price quotation or other equivalent indication of value supplied by an exchange, a pricing service, or a major market maker (or dealer) or (iii) based on amortized cost. In the case of shares of other funds that are not traded on an exchange, a market valuation means such fund’s published net asset value per share. The investment adviser may use various pricing services or discontinue the use of any pricing service. A price obtained from a pricing service based on such pricing service’s valuation matrix may be considered a market valuation. In the event that current market valuations are not readily available or such valuations do not reflect current market values, the affected investments will be valued using fair value pricing pursuant to the pricing policy and procedures approved by the Board of Directors of the Company (the “Board”).
NOTESTOTHE FINANCIAL STATEMENTS | 111 |
Table of Contents
Notes to the Financial Statements (Continued)
iSHARES®, INC.
SECURITY TRANSACTIONS, INCOME RECOGNITION AND EXPENSES
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source, 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. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Any use of a different rate from the rates used by MSCI may adversely affect a Fund’s ability to track its underlying index. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective date of such transactions.
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 16.50% and up to 20.00%, 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 capital 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.
112 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to the Financial Statements (Continued)
iSHARES®, INC.
As of August 31, 2005, 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 | Capital and Other Losses | Net Distributable | ||||||||||
Australia | $ | 11,268,062 | $ | 38,826,948 | $ | (8,528,588 | ) | $ | 41,566,422 | |||||
Brazil | 12,063,040 | 210,228,016 | (48,085,016 | ) | 174,206,040 | |||||||||
Canada | 1,878,220 | 112,549,843 | (9,513,922 | ) | 104,914,141 | |||||||||
Emerging Markets | 79,503,041 | 1,102,098,554 | (29,041,134 | ) | 1,152,560,461 | |||||||||
Hong Kong | 10,703,450 | 86,296,050 | (15,028,060 | ) | 81,971,440 | |||||||||
Malaysia | 5,762,951 | 54,044,489 | (30,533,932 | ) | 29,273,508 | |||||||||
Mexico | 2,951,033 | 34,454,888 | (7,915,734 | ) | 29,490,187 | |||||||||
Pacific ex-Japan | 45,202,556 | 266,202,916 | (4,737,649 | ) | 306,667,823 | |||||||||
Singapore | 11,794,507 | 38,947,298 | (16,053,851 | ) | 34,687,954 | |||||||||
South Africa | 2,755,624 | 50,894,781 | (1,625,608 | ) | 52,024,797 | |||||||||
South Korea | 7,841,332 | 205,923,480 | (20,164,130 | ) | 193,600,682 | |||||||||
Taiwan | 15,854,994 | 31,951,250 | (57,002,147 | ) | (9,195,903 | ) |
For the years ended August 31, 2005 and August 31, 2004, 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, 2005.
From November 1, 2004 to August 31, 2005, certain Funds incurred net realized capital 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, 2006 as follows:
iShares MSCI Index Fund | Deferred Net Realized | ||
Australia | $ | 6,029 | |
Canada | 443,818 | ||
Emerging Markets | 7,895,800 | ||
Hong Kong | 300,651 | ||
Malaysia | 1,566,514 | ||
Mexico | 1,118,329 | ||
South Africa | 1,095,003 | ||
South Korea | 3,483,155 | ||
Taiwan | 14,627,530 |
NOTESTOTHE FINANCIAL STATEMENTS | 113 |
Table of Contents
Notes to the Financial Statements (Continued)
iSHARES®, INC.
The Funds had tax basis net capital loss carryforwards as of August 31, 2005, the tax year-end of the Funds, as follows:
iShares MSCI Index Fund | Expiring 2007 | Expiring 2008 | Expiring 2009 | Expiring 2010 | Expiring 2011 | Expiring 2012 | Expiring 2013 | Total | ||||||||||||||||
Australia | $ | 674,889 | $ | 630,985 | $ | 1,971,994 | $ | 3,625,203 | $ | 650,082 | $ | 596,240 | $ | 384,424 | $ | 8,533,817 | ||||||||
Brazil | — | — | — | — | 48,085,016 | — | — | 48,085,016 | ||||||||||||||||
Canada | — | — | — | 780,114 | 21,276 | 2,463,817 | 5,786,217 | 9,051,424 | ||||||||||||||||
Emerging Markets | — | — | — | — | — | 840,778 | 20,296,564 | 21,137,342 | ||||||||||||||||
Hong Kong | 4,085,707 | — | — | 4,971,970 | 2,870,602 | 2,330,414 | 468,716 | 14,727,409 | ||||||||||||||||
Malaysia | 8,654,333 | — | — | 9,819,029 | 2,898,105 | 775,477 | 6,820,474 | 28,967,418 | ||||||||||||||||
Mexico | — | — | — | 1,319,032 | 2,329,290 | 3,136,170 | 12,913 | 6,797,405 | ||||||||||||||||
Pacific ex-Japan | — | — | — | — | 329,461 | 2,563,114 | 1,853,572 | 4,746,147 | ||||||||||||||||
Singapore | — | — | — | 4,810,766 | 4,428,316 | 4,256,421 | 2,558,348 | 16,053,851 | ||||||||||||||||
South Africa | — | — | — | — | — | 527,613 | — | 527,613 | ||||||||||||||||
South Korea | — | — | 556,540 | 666,642 | 504,041 | 3,363,449 | 11,590,303 | 16,680,975 | ||||||||||||||||
Taiwan | — | — | — | 12,532,361 | 8,689,663 | 9,129,874 | 12,022,719 | 42,374,617 |
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.
The Funds may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Funds may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such mark-to-market gains.
For the year ended August 31, 2005, each Fund reclassified certain amounts of 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.
As of August 31, 2005, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:
iShares MSCI Index Fund | Tax Cost | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation | |||||||||
Australia | $ | 406,407,023 | $ | 41,692,480 | $ | (2,820,674 | ) | $ | 38,871,806 | ||||
Brazil | 350,871,516 | 211,218,787 | (1,040,928 | ) | 210,177,859 | ||||||||
Canada | 306,866,940 | 117,536,571 | (5,007,921 | ) | 112,528,650 | ||||||||
Emerging Markets | 6,772,058,974 | 1,183,653,484 | (81,530,957 | ) | 1,102,122,527 | ||||||||
Hong Kong | 654,755,046 | 93,488,358 | (7,192,208 | ) | 86,296,150 | ||||||||
Malaysia | 333,411,743 | 61,713,416 | (7,666,473 | ) | 54,046,943 | ||||||||
Mexico | 223,610,203 | 35,292,883 | (839,340 | ) | 34,453,543 | ||||||||
Pacific ex-Japan | 1,565,673,047 | 267,005,012 | (656,132 | ) | 266,348,880 | ||||||||
Singapore | 343,170,275 | 42,608,701 | (3,626,984 | ) | 38,981,717 | ||||||||
South Africa | 102,394,897 | 51,934,874 | (1,043,128 | ) | 50,891,746 | ||||||||
South Korea | 537,340,011 | 208,283,898 | (2,360,418 | ) | 205,923,480 | ||||||||
Taiwan | 714,629,792 | 62,541,168 | (30,324,946 | ) | 32,216,222 |
114 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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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 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. As of August 31, 2005, a portion of the cash collateral for securities on loan for certain Funds 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, 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 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 execution 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 applied to the iShares MSCI Singapore Index Fund through August 31, 2005. Pursuant to a new investment advisory contract effective September 1, 2005, BGFA will be responsible for the Covered Expenses of the Fund and these provisions will no longer apply.
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 Fees | Aggregate Net Assets | |
0.59% | First $7 billion | |
0.54 | Over $7 billion, up to and including $11 billion | |
0.49 | Over $11 billion |
For its investment advisory services to the iShares MSCI Brazil, iShares MSCI South Africa, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate net assets of these four Funds as follows:
Investment Advisory Fees | Aggregate Net Assets | |
0.74% | First $2 billion | |
0.69 | Over $2 billion, up to and including $4 billion | |
0.64 | Over $4 billion |
NOTESTOTHE FINANCIAL STATEMENTS | 115 |
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Notes to the Financial Statements (Continued)
iSHARES®, INC.
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 daily 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 daily net assets of the Fund excluding any investments in other iShares Funds, of 0.75%. BGFA voluntarily waives its advisory fees for the iShares MSCI Emerging Markets Index Fund in an amount equal to the investment advisory fees payable on the amount of the Fund’s investment in other iShares Funds.
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.
Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Funds are permitted to lend portfolio securities to Barclays Capital, Inc. (“BarCap”). Pursuant to the same exemptive order, BGI serves as securities lending agent for the Company. BarCap and BGI are affiliates 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, 2005, BGI earned securities lending agent fees as follows:
iShares MSCI Index Fund | Securities Lending Agent Fees | ||
Australia | $ | 67,101 | |
Brazil | 3,632 | ||
Emerging Markets | 4,057,604 | ||
Hong Kong | 239,418 | ||
Mexico | 4,502 | ||
Pacific ex-Japan | 342,351 | ||
Singapore | 126,439 | ||
South Korea | 334,612 |
SEI Investments Distribution Co. (the “Distributor”) serves as each Fund’s underwriter and distributor of the shares of each Fund, pursuant to a Distribution Agreement with the Company. The Distributor does not currently receive a fee from the Funds for its distribution services. 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.
Pursuant to Rule 17a-7 under the 1940 Act, certain Funds executed cross trades for the year ended August 31, 2005. 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 by Rule 17a-7. The Board is scheduled at its next regularly scheduled meeting to review all such transactions executed during the last two months of the fiscal year.
Pursuant to an exemptive order issued by the SEC, each Fund may invest in the Institutional Shares of the Government Money Market Fund (“GMMF”), Institutional Money Market Fund (“IMMF”) and Prime Money Market Fund (“PMMF”) of Barclays Global Investors Funds. The GMMF, IMMF and PMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Government Money Market Master Portfolio, 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 GMMF, IMMF and PMMF are open-end money market funds available to institutional and accredited investors, including other investment companies managed by BGFA. The GMMF, IMMF and PMMF seek a high level
116 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes to the Financial Statements (Continued)
iSHARES®, INC.
of income consistent with liquidity and the preservation of capital. While the GMMF, 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 GMMF, 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 from affiliated issuers 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 shares of other iShares Funds that invest in securities in the Fund’s benchmark index. As of August 31, 2005, 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 investment by each Fund in shares of issuers of which BGFA is an affiliate for the year ended August 31, 2005, including income earned from these affiliated issuers and net realized gains (losses) from sales of these affiliated issuers.
iShares MSCI Index Fund and | 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 | Dividend and Interest Income | Net Realized Gain (Loss) | |||||||||||
Australia | ||||||||||||||||||
IMMF | 120 | 27,391 | 27,403 | 108 | $ | 108,353 | $ | 3,048 | $ | — | ||||||||
Brazil | ||||||||||||||||||
IMMF | 981 | 245,799 | 245,668 | 1,112 | 1,112,414 | 35,374 | — | |||||||||||
Canada | ||||||||||||||||||
IMMF | 199 | 13,891 | 14,051 | 39 | 39,013 | 2,360 | — | |||||||||||
Emerging Markets | ||||||||||||||||||
IMMF | 5,432 | 1,207,134 | 1,208,531 | 4,035 | 4,035,314 | 184,172 | — | |||||||||||
iShares MSCI Malaysia Index Fund | 851 | 578 | 249 | 1,180 | 8,564,782 | 143,660 | 861 | |||||||||||
iShares MSCI South Korea Index Fund | 299 | 198 | 95 | 402 | 14,097,669 | 37,162 | 364,716 | |||||||||||
iShares MSCI Taiwan Index Fund | 965 | 785 | 234 | 1,516 | 17,815,115 | 99,495 | (126,113 | ) | ||||||||||
Hong Kong | ||||||||||||||||||
IMMF | 213 | 37,744 | 37,934 | 23 | 22,977 | 4,452 | — | |||||||||||
Malaysia | ||||||||||||||||||
IMMF | 394 | 66,384 | 66,377 | 401 | 401,056 | 11,255 | — | |||||||||||
Mexico | ||||||||||||||||||
IMMF | 85 | 16,944 | 17,012 | 17 | 17,275 | 2,247 | — | |||||||||||
Pacific ex-Japan | ||||||||||||||||||
IMMF | 308 | 90,651 | 90,143 | 816 | 815,709 | 10,294 | — | |||||||||||
Singapore | ||||||||||||||||||
IMMF | 87 | 26,455 | 26,490 | 52 | 51,875 | 3,420 | — | |||||||||||
South Africa | ||||||||||||||||||
IMMF | 58 | 7,129 | 7,182 | 5 | 5,136 | 1,014 | — |
NOTESTOTHE FINANCIAL STATEMENTS | 117 |
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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 000s) | Gross Additions (in 000s) | Gross Reductions (in 000s) | Number of Shares Held End of Year (in 000s) | Value at End of Year | Dividend and Interest Income | Net Realized Gain (Loss) | ||||||||||
South Korea | |||||||||||||||||
IMMF | 721 | 198,209 | 197,537 | 1,393 | $ | 1,393,487 | $ | 26,042 | $ | — | |||||||
Taiwan | |||||||||||||||||
IMMF | 366 | 40,107 | 40,403 | 70 | 69,521 | 6,503 | — |
During the year ended August 31, 2005, certain Funds invested cash collateral from securities on loan in the GMMF, 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 Fund’s holdings of the GMMF, IMMF and PMMF in connection with the investment of collateral for securities on loan.
As of August 31, 2005, 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, 2005, were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||
Australia | $ | 51,754,172 | $ | 49,412,736 | ||
Brazil | 343,882,089 | 186,862,192 | ||||
Canada | 30,642,476 | 32,810,205 | ||||
Emerging Markets | 441,525,010 | 363,312,994 | ||||
Hong Kong | 38,846,556 | 37,227,571 | ||||
Malaysia | 188,985,203 | 44,375,401 | ||||
Mexico | 25,022,603 | 19,440,839 | ||||
Pacific ex-Japan | 188,696,014 | 176,418,031 | ||||
Singapore | 23,885,903 | 19,237,847 | ||||
South Africa | 42,198,272 | 41,552,415 | ||||
South Korea | 377,512,363 | 152,639,430 | ||||
Taiwan | 465,850,984 | 132,799,867 |
In-kind transactions (see Note 4) for the year ended August 31, 2005, were as follows:
iShares MSCI Index Fund | In-kind Purchases | In-kind Sales | ||||
Australia | $ | 230,365,963 | $ | 110,374,999 | ||
Canada | 141,016,263 | 166,747,813 | ||||
Emerging Markets | 4,371,169,461 | 786,631,588 | ||||
Hong Kong | 250,835,018 | 157,383,889 | ||||
Mexico | 224,737,659 | 184,770,891 | ||||
Pacific ex-Japan | 631,098,400 | — | ||||
Singapore | 154,683,108 | 23,032,458 | ||||
South Africa | 59,374,940 | 36,386,964 |
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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 | |
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 contribution 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, including Creation Units for cash.
The Board authorized a three-for-one stock split for the iShares MSCI Emerging Markets Index Fund, effective June 9, 2005, for the shareholders of record on June 6, 2005. The impact of the stock split was to increase the number of shares outstanding by a factor of three, while decreasing the net asset value per share by a factor of three, resulting in no effect to the net assets of the Fund. The financial statements for the Fund have been adjusted to reflect the stock split.
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 of at least 102% of the market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other 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, 2005, certain Funds had loaned securities which were collateralized by cash. Pursuant to an exemptive order issued by the SEC, the cash collateral received was invested in a joint account with other investment funds managed by BGFA. The joint account 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 as of August 31, 2005 and the value of the related collateral 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 | 119 |
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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 Series (the “Funds”), at August 31, 2005, 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 periods presented, 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, 2005 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 18, 2005
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iSHARES®, INC.
For the year ended August 31, 2005, 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 | $ | 14,204,553 | $ | 464,895 | ||
Brazil | 20,486,205 | 2,129,744 | ||||
Canada | 6,235,912 | 933,651 | ||||
Emerging Markets | 143,095,262 | 13,211,637 | ||||
Pacific ex-Japan | 51,754,315 | 1,115,308 | ||||
South Korea | 13,330,505 | 2,179,818 | ||||
Taiwan | 28,606,320 | 7,549,658 |
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, 2005:
iShares MSCI Index Fund | Qualified Dividend Income | ||
Australia | $ | 8,182,188 | |
Brazil | 401,159 | ||
Canada | 4,389,728 | ||
Emerging Markets | 83,424,023 | ||
Mexico | 3,763,856 | ||
Pacific ex-Japan | 23,867,947 | ||
South Africa | 3,464,251 | ||
South Korea | 10,064,116 |
In January 2006, shareholders will receive Form 1099-DIV which will include their share of qualified dividends distributed during the calendar year 2005. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
TAX INFORMATION | 121 |
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Shareholder Meeting Results (Unaudited)
iSHARES®, INC.
A special meeting of shareholders of iShares, Inc. was scheduled on July 14, 2005 and subsequently adjourned until August 11, 2005. The proposals acted upon by shareholders at the special meeting and the results of the shareholder vote were as follows:
Proposal 1 *
To elect the eight nominees specified below as Directors of the Company, each of whom will serve until his/her successor is duly elected or appointed and qualified.
Director | Votes For | Votes Withheld | ||
Lee T. Kranefuss | 514,380,779 | 13,203,425 | ||
John E. Martinez | 514,431,297 | 13,152,907 | ||
Richard K. Lyons | 514,795,814 | 12,788,388 | ||
George G.C. Parker | 509,155,829 | 18,428,374 | ||
W. Allen Reed | 514,418,913 | 13,165,293 | ||
Cecilia H. Herbert | 514,381,937 | 13,202,268 | ||
Charles A. Hurty | 514,442,567 | 13,141,638 | ||
John E. Kerrigan | 514,830,983 | 12,753,220 |
Messrs. Kranefuss, Martinez, Lyons, Reed and Parker previously served as Directors of the Company and were re-elected. Ms. Herbert and Messrs. Hurty and Kerrigan were newly elected.
Proposal 2A
To approve a change to the Company’s fundamental investment policy to simplify and conform each Fund’s investment restriction regarding issuing senior securities. Shareholders of the iShares MSCI Emerging Markets Index Fund and iShares MSCI Mexico Index Fund approved this proposal. The proposal did not pass in the other Funds in this shareholder report.
iShares MSCI Index Fund | Votes For | Votes Against | Votes Abstaining | Broker Non-Votes** | ||||
Australia | 6,443,201 | 540,021 | 442,423 | 3,797,755 | ||||
Brazil | 3,540,411 | 197,421 | 110,082 | 5,562,843 | ||||
Canada | 3,498,988 | 429,360 | 134,351 | 5,507,998 | ||||
Emerging Markets | 8,183,122 | 182,334 | 115,171 | 3,328,764 | ||||
Hong Kong | 12,628,551 | 321,277 | 469,240 | 12,725,643 | ||||
Malaysia | 8,593,546 | 2,278,801 | 173,640 | 11,596,325 | ||||
Mexico | 3,717,861 | 90,403 | 154,071 | 1,332,048 | ||||
Pacific ex-Japan | 3,601,359 | 76,920 | 97,534 | 3,443,585 | ||||
Singapore | 6,938,677 | 234,463 | 226,731 | 12,861,936 | ||||
South Africa | 316,330 | 33,665 | 8,397 | 567,359 | ||||
South Korea | 4,464,564 | 123,099 | 130,498 | 4,326,297 | ||||
Taiwan | 18,847,196 | 290,848 | 108,205 | 14,713,998 |
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Shareholder Meeting Results (Unaudited) (Continued)
iSHARES®, INC.
Proposal 2B
To approve a change to the Company’s fundamental investment policy to simplify and conform each Fund’s investment restriction regarding the making of loans. Shareholders of the iShares MSCI Emerging Markets Index Fund and iShares MSCI Mexico Index Fund approved this proposal. The proposal did not pass in the other Funds in this shareholder report.
iShares MSCI Index Fund | Votes For | Votes Against | Votes Abstaining | Broker Non-Votes** | ||||
Australia | 6,334,361 | 640,358 | 450,926 | 3,797,755 | ||||
Brazil | 3,530,579 | 208,837 | 108,498 | 5,562,843 | ||||
Canada | 3,464,553 | 464,210 | 133,936 | 5,507,998 | ||||
Emerging Markets | 8,078,172 | 282,605 | 119,851 | 3,328,763 | ||||
Hong Kong | 12,513,170 | 431,897 | 474,001 | 12,725,643 | ||||
Malaysia | 8,559,872 | 2,311,199 | 174,916 | 11,596,325 | ||||
Mexico | 3,709,723 | 96,717 | 155,895 | 1,332,048 | ||||
Pacific ex-Japan | 3,595,297 | 84,003 | 96,512 | 3,443,586 | ||||
Singapore | 6,896,196 | 273,033 | 230,643 | 12,861,935 | ||||
South Africa | 315,971 | 34,024 | 8,397 | 567,359 | ||||
South Korea | 4,452,275 | 132,235 | 133,651 | 4,326,297 | ||||
Taiwan | 18,792,739 | 320,354 | 133,155 | 14,713,999 |
Proposal 2C
To approve a change to certain Funds’ fundamental investment policy with respect to industry concentration. The shareholders of the iShares MSCI Singapore Index Fund and iShares MSCI South Korea Index Fund did not approve this proposal.
iShares MSCI Index Fund | Votes For | Votes Against | Votes Abstaining | Broker Non-Votes** | ||||
Mexico | 3,718,245 | 88,058 | 156,032 | 1,332,048 | ||||
Singapore | 6,940,982 | 234,581 | 224,308 | 12,861,936 | ||||
South Korea | 4,469,596 | 118,142 | 130,423 | 4,326,297 |
Proposal 2D
To approve a change to certain Funds’ fundamental investment policy to permit each Fund to invest 25% or more of its total assets in a single issuer. The shareholders of the iShares MSCI Singapore Index Fund and iShares MSCI South Korea Index Fund did not approve this proposal.
iShares MSCI Index Fund | Votes For | Votes Against | Votes Abstaining | Broker Non-Votes** | ||||
Mexico | 3,715,336 | 91,427 | 155,572 | 1,332,048 | ||||
Singapore | 6,923,531 | 250,218 | 226,122 | 12,861,936 | ||||
South Korea | 4,461,733 | 122,330 | 134,098 | 4,326,297 |
SHAREHOLDER MEETING RESULTS | 123 |
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Shareholder Meeting Results (Unaudited) (Continued)
iSHARES®, INC.
Proposal 3
To approve a change in the classification of the investment objectives of certain Funds from fundamental to non-fundamental. The shareholders of the iShares MSCI Mexico Index Fund approved this proposal. The proposal did not pass in the other Funds in this shareholder report.
iShares MSCI Index Fund | Votes For | Votes Against | Votes Abstaining | Broker Non-Votes** | ||||
Australia | 6,071,241 | 906,466 | 447,938 | 3,797,755 | ||||
Brazil | 3,370,902 | 363,205 | 113,806 | 5,562,844 | ||||
Canada | 2,820,453 | 1,108,063 | 134,183 | 5,507,998 | ||||
Hong Kong | 11,696,365 | 1,243,883 | 478,820 | 12,725,643 | ||||
Malaysia | 8,039,945 | 2,824,062 | 181,980 | 11,596,325 | ||||
Mexico | 3,636,325 | 170,323 | 155,687 | 1,332,048 | ||||
Pacific ex-Japan | 3,083,503 | 594,257 | 98,053 | 3,443,585 | ||||
Singapore | 6,438,453 | 712,576 | 248,843 | 12,861,935 | ||||
South Korea | 4,242,053 | 340,064 | 136,045 | 4,326,296 | ||||
Taiwan | 14,916,892 | 4,193,901 | 135,455 | 14,713,999 |
Proposal 4
To approve a new advisory agreement for the iShares MSCI Singapore Index Fund with Barclays Global Fund Advisors in order to effect a change to the fee structure. The shareholders approved this proposal.
Votes For | Votes Against | Votes Abstaining | ||
19,933,795 | 114,776 | 213,236 |
* | Denotes Company-wide proposal and voting results. |
** | Broker non-votes are proxies received by the Fund from brokers or nominees, who did not receive instructions from the beneficial owner or other persons entitled to vote, and who have no discretionary power to vote on a particular matter. Broker non-votes have the effect of a vote against the proposal. |
124 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Board Review and Approval of Investment Advisory Contracts (Unaudited)
iSHARES® MSCI SINGAPORE INDEX FUND
At a meeting held on April 22, 2005, the Board approved the Proposed Advisory Agreement, subject to approval by the iShares MSCI Singapore Index Fund’s shareholders, based on the Board’s review of the qualitative and quantitative information provided by BGFA. In approving the Proposed Advisory Agreement, the Board, including the Independent Directors, who are advised by independent counsel, considered various factors, none of which was controlling, and made the following conclusions.
NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY BGFA
The Board reviewed the scope of services to be provided by BGFA under the Proposed Advisory Agreement and noted that there were no differences between the level or type of service provided by BGFA under the Current Advisory Agreement and the level or type of service proposed to be provided by BGFA under the Proposed Advisory Agreement. In reviewing the scope of services provided to the Fund by BGFA, the Board reviewed and discussed BGFA’s investment philosophy and experience. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund. In addition to the above considerations, the Board reviewed and considered BGFA’s investment processes and strategies, and matters related to BGFA’s portfolio transaction policies and procedures. The Board noted that BGFA does not provide investment advisory services to any other fund or account seeking to track the same index as the Fund and, therefore, no comparative performance information was available for additional consideration. The Board noted, however, that during BGFA’s term as investment adviser, the Fund had met its investment objective of seeking investment results that correspond generally to the price and yield performance, before fees and expenses, of the Fund’s underlying index. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Fund under the Proposed Advisory Agreement are appropriate and continue to support the Board’s original selection of BGFA as investment adviser to the Fund.
FUND EXPENSES AND PERFORMANCE OF THE FUND AND BGFA
The Board reviewed statistical information regarding the expense ratio components, contractual advisory fees, actual advisory fees, and actual total expenses of the Fund in comparison with the same information for other funds registered under the 1940 Act objectively determined solely by Lipper Inc. (“Lipper”), an independent provider of investment company data, as the Fund’s applicable peer group (the “Lipper Peer Group”). The Lipper Peer Group included retail no-load or institutional pure index funds with differing investment objective classifications (e.g., regional index funds, funds that hold American Depositary Receipts rather than portfolio securities traded on foreign exchanges) and other attributes (e.g., all-inclusive management fees, “at cost” service providers) as well as other exchange-traded funds, including exchange-traded funds organized as unit investment trusts rather than as managed investment companies like the Fund. In addition, the Board reviewed statistical information regarding the performance of the Fund for the most recent quarter, and the one-, three- and five-year periods, ended March 31, 2005 and a comparison of the Fund’s performance to that of the funds in the Lipper Peer Group. In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to prepare this information. The Board noted that the funds in the Lipper Peer Group did not include a Singapore index fund or any other single-country index fund and, therefore, the statistical information did not provide meaningful direct comparisons. The Board noted that the Fund generally tracked its underlying index over the periods reflected. The Board also discussed that the advisory fee for the Fund for the most recent fiscal year was the highest of the advisory fees of the funds in the Lipper Peer Group, and that the Fund’s actual total expenses equaled the highest actual total expenses of the funds in the Lipper Peer Group, but noted that many of the funds in the Lipper Peer Group had either dissimilar fee structures or had substantial fee waivers and significantly larger asset bases, as well as differing investment objective classifications and other attributes (as discussed above), and therefore did not provide meaningful direct comparisons. The Board also considered that, because the Fund’s investment objective is to seek investment results that correspond generally to the performance, before fees and expenses, of a single-country index, with limited investor demand, the Fund is likely not to achieve consistent asset levels that would result in lower fees under the Current Advisory Agreement. The Board considered, however, that under the Proposed Advisory Agreement, because the Fund’s investment advisory fee rates will be applied to the aggregate assets of the Fund and other series of the Company, the Fund would be charged lower fees by BGFA. The Board also noted that, although not included in the Lipper Peer Group, the other single-country series of the Company provided a meaningful direct comparison to the Fund and the investment advisory
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iSHARES® MSCI SINGAPORE INDEX FUND
fee rate for the Fund under the Proposed Advisory Agreement, and that the investment advisory fee rate under the Proposed Advisory Agreement would be the same as the investment advisory fee rates for most of the other single-country series of the Company. Based on this review, the Board concluded that the expense levels and the historical performance of the Fund, as managed by BGFA, as compared to the expense levels and performance of the funds in the Lipper Peer Group were satisfactory for the purposes of approving the Proposed Advisory Agreement.
COSTS OF SERVICES PROVIDED TO FUND AND PROFITS REALIZED BY BGFA AND AFFILIATES
The Board reviewed information about the profitability of the Fund to BGFA based on the fees payable under the Current Advisory Agreement for the last calendar year, which amounts are not expected to increase under the Proposed Advisory Agreement. The Board analyzed the Fund’s expenses, including its investment advisory fees paid to BGFA. The Board also reviewed information regarding direct revenue received by BGFA and ancillary revenue received by BGFA and/or its affiliates in connection with the services provided to the Fund by BGFA (as discussed in detail below). The Board discussed the differences in fee structure between the Current Advisory Agreement and the Proposed Advisory Agreement and how the proposed new fee structure, under which BGFA will be responsible for paying all expenses of the Fund other than the Excluded Expenses, would change the presentation, but not the amount, of the Fund’s profitability to BGFA going forward, should the Fund’s shareholders vote to approve the Proposed Advisory Agreement. The Board also discussed BGFA’s profit margin as reflected in the Fund’s profitability analysis and as compared to the profit margin currently achieved by BGFA in managing other iShares Funds. Based on this review, the Board concluded that the profits to be realized by BGFA and its affiliates under the Proposed Advisory Agreement and from other relationships between the Fund and BGFA and/or its affiliates, if any, were likely to be within the range the Board considered reasonable and appropriate.
ECONOMIES OF SCALE
In connection with its review of the Fund’s profitability analysis, the Board received information regarding economies of scale or other efficiencies that may result from increases in the Fund’s asset level in light of the investment advisory fee rates and breakpoints under the Current Advisory Agreement and that may result from increases in the asset levels of the Fund and the other series of the Company that would be included in the aggregate assets against which the same investment advisory fee rates and breakpoints would be applied under the Proposed Advisory Agreement. The Board noted that the Fund’s asset levels are not likely to increase sufficiently to reach the breakpoints under the Current Advisory Agreement. In contrast, under the Proposed Advisory Agreement the Fund would achieve an immediate and likely ongoing benefit from the application of those same investment advisory fee breakpoints to aggregate assets of the Fund and certain other series of the Company, in calculating the Fund’s investment advisory fee. Based on this review, the Board concluded that the proposed new fee structure in the Proposed Advisory Agreement reflects a more favorable sharing of economies of scale for the benefit of the Fund’s shareholders and provides the potential to experience further sharing of economies of scale as the Fund or other series of the Company grow in size.
FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA’S AFFILIATES
The Board also received and considered information regarding the Fund’s maximum investment advisory fee rate under the Proposed Advisory Agreement in comparison to the investment management fee rates for other funds/accounts with substantially similar investment objectives and strategies for which BGI, BGFA’s affiliate, provides investment management services. The Board noted that comparative investment management fee information was available only with respect to certain collective funds, as BGFA and its affiliates do not manage any mutual funds, separate accounts or other exchange-traded funds with substantially similar investment objectives and strategies as the Fund. The Board further noted that BGFA had provided the Board with information regarding how the level of services provided to a collective fund differed from an exchange-traded open-end investment company such as the Fund, and with information regarding the marketing and pricing of collective funds that indicated such products were not typically offered on a stand-alone investment basis but only as a part of an allocation among many single-country index collective funds that were each priced on an aggregate client relationship level. The Board analyzed the level of the investment advisory/management fees in relation to the nature and extent of services provided to the Fund in comparison with the nature and extent of
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Board Review and Approval of Investment Advisory Contracts (Unaudited) (Continued)
iSHARES® MSCI SINGAPORE INDEX FUND
services provided to the collective funds, including, among other factors, the level of complexity in managing the Fund and the collective funds under differing regulatory requirements and the various client guidelines or other requirements, the nature and extent of the shareholder support services provided to the Fund and its shareholders in comparison with the nature and extent of the services provided to collective funds and their clients, and in relation to the Fund’s and the collective funds’ fee structures and asset levels. The Board noted that the investment management fee rates for the collective funds were lower than the maximum investment advisory fee rate under the Proposed Advisory Agreement, but that the differences appeared to be fully attributable to, among other things, the externalization of certain expenses by the collective funds including custody and administration expenses and, based on the estimates provided by BGFA, the costs of the regulatory requirements and additional shareholder services applicable to the Fund as an open-end investment company rather than a collective fund. The Board also noted that the investment advisory fee rate under the Proposed Advisory Agreement was the same as the investment advisory fee rates for most of the other single-country series of the Company. Based on this review, the Board determined that the investment advisory fee rates under the Proposed Advisory Agreement do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining and concluded that the investment advisory fee rates under the Proposed Advisory Agreement are fair and reasonable.
OTHER BENEFITS TO BGFA AND/OR ITS AFFILIATES
The Board reviewed any ancillary revenue received by BGFA and/or its affiliates in connection with the services provided to the Fund by BGFA, such as the payment of securities lending revenue to BGI, the Company’s securities lending agent, and the payment of advisory fees and/or administration fees to BGFA and BGI in connection with the Fund’s investments in other funds for which BGFA provides investment advisory services and/or BGI provides administration services. The Board concluded that any such ancillary benefits that will likely continue under the Proposed Advisory Agreement would not be disadvantageous to the Fund’s shareholders.
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Board Review and Approval of Investment Advisory Contracts* (Unaudited)
iSHARES®, INC .
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors, including a majority of Directors who are not interested persons of the Company (as that term is defined in the 1940 Act), who are commonly referred to as the “Independent Directors,” is required annually to consider each Fund’s Investment Advisory Contract with BGFA (each, an “Advisory Contract”). Pursuant to Section 15(c), the Board of Directors (the “Board”) is required to request and evaluate, and BGFA is required to provide, such information as may be reasonably necessary to evaluate the terms of the Advisory Contracts. At a meeting held on June 14, 2005, the Board approved the selection of BGFA and the continuance of the Advisory Contracts, based on its review of qualitative and quantitative information provided by BGFA. With respect to the iShares MSCI Singapore Index Fund (the “Singapore Fund”), the Board approved the continuance of the current Advisory Contract for the Singapore Fund, pending shareholder approval of the new advisory contract for the Singapore Fund which was previously considered and approved by the Board on April 22, 2005. In selecting BGFA and approving the Advisory Contracts for the Funds, the Board, including the Independent Directors, advised by their independent counsel, considered the following factors, none of which was controlling, and made the following conclusions:
NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY BGFA
The Board reviewed the scope of services to be provided by BGFA under the Advisory Contracts and noted that there would be no differences between the scope of services required to be provided by BGFA for the past year and the scope of services required to be provided by BGFA for the upcoming year. In reviewing the scope of services provided to the Funds by BGFA, the Board reviewed and discussed BGFA’s investment philosophy and experience, noting that BGFA and its affiliates have committed significant resources over time, including increasing the number of their employees, to the support of the Funds. The Board also considered BGFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BGFA provides information regarding portfolio management and compliance to the Board on a periodic basis in connection with regularly scheduled meetings of the Board. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds. In addition to the above considerations, the Board reviewed and considered BGFA’s investment processes and strategies, and matters related to BGFA’s portfolio transaction policies and procedures. The Board further noted that BGFA does not serve as investment adviser for any other series of registered investment companies with substantially similar investment objectives and strategies as the Funds; therefore, no comparative performance information was available. However, the Board also noted that the Funds had met their investment objectives consistently since their relevant inception dates. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Funds under the Advisory Contracts were appropriate and continued to support the Board’s original selection of BGFA as investment adviser to the Funds.
FUNDS’ EXPENSES AND PERFORMANCE OF THE FUNDS
The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund in comparison with the same information for other funds registered under the 1940 Act objectively determined solely by Lipper, as comprising each Fund’s applicable peer group (the “Lipper Peer Group”). In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Fund for the one-, three- and five-year, and “latest quarter” periods ended March 31, 2005, as applicable, and a comparison of each Fund’s performance to that of the funds in its Lipper Peer Group for the same periods. Because there are relatively few exchange-traded funds other than the Funds and because few, if any, exchange-traded funds or index funds track indices similar to those tracked by the Funds, the Lipper Peer Groups included open-end, closed-end, and exchange-traded funds, and funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the applicable Lipper Peer Groups and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Peer Groups, the statistical information may or may not provide meaningful direct comparisons to the Funds. The Board noted that most of the Funds generally performed in line with the funds in their respective Lipper Peer Groups over relevant periods, however, certain
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Board Review and Approval of Investment Advisory Contracts (Unaudited) (Continued)
iSHARES®, INC .
of the Funds may have underperformed or outperformed funds in their respective Lipper Peer Groups over relevant periods, but any such Funds also performed in line with their relevant benchmarks over such periods. The Board also noted that the investment advisory fees and overall expenses for the Funds were generally lower than or in line with the investment advisory fee rates and overall expenses of the Funds in their respective Lipper Peer Groups. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Funds, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the Lipper Peer Groups, were satisfactory for the purposes of approving the continuance of the Advisory Contracts.
COSTS OF SERVICES PROVIDED TO FUNDS AND PROFITS REALIZED BY BGFA AND AFFILIATES
The Board reviewed information about the profitability of the Funds to BGFA based on the fees payable under the Advisory Contracts for the last calendar year. The Board analyzed the Funds’ expenses, including the investment advisory fees paid to BGFA. The Board also reviewed information regarding direct revenue received by BGFA and ancillary revenue received by BGFA and/or its affiliates in connection with the services provided to the Funds by BGFA (as discussed below). The Board also discussed BGFA’s profit margin as reflected in the Funds’ profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits to be realized by BGFA and its affiliates under the Advisory Contracts and from other relationships between the Funds and BGFA and/or its affiliates, if any, were within the range the Board considered reasonable and appropriate.
ECONOMIES OF SCALE
In connection with its review of the Funds’ profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds’ asset levels. The Board noted that the Advisory Contracts for most of the Funds provide for breakpoints in the investment advisory fee rates as a result of increases in the asset levels of such Funds on an aggregated basis with certain other Funds. The Board further noted that the Advisory Contract for the iShares MSCI Singapore Index Fund provides for breakpoints in its investment advisory fee rate based on increases in the asset levels of that particular Fund. The Board also noted that the Advisory Contracts for the iShares MSCI Pacific Ex-Japan Index Fund and the iShares MSCI Emerging Markets Index Fund do not provide for any breakpoints in the investment advisory fee rates as a result of increases in the asset levels of such Funds. However, the Board further noted that possible future economies of scale had been taken into consideration by fixing the investment advisory fees at rates at the lower end of the marketplace, effectively giving Fund shareholders, from inception, the benefits of the lower average fee shareholders would have received from a fee structure with declining breakpoints where the initial fee was higher. In addition, the Board noted that as of July 1, 2004, Fund shareholders were no longer paying distribution fees pursuant to the Funds’ distribution plan under Rule 12b-1 of the 1940 Act because such plan had been terminated as of that date, benefiting the Funds’ shareholders by lowering the Funds’ overall expenses. The Board also reviewed BGFA’s historic profitability as investment adviser to the Funds and noted that BGFA had not yet fully recovered losses it had experienced during earlier years when the Funds had not yet achieved reasonable economic scale. In light of this history, the Board determined that reductions in fee rates or additions of further breakpoints were not warranted at this juncture. Based on this review, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees at present reflects the sharing of economies of scale with the Funds’ shareholders.
FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA AND ITS AFFILIATES
The Board received and considered information regarding the Funds’ annual investment advisory fee rates under the Advisory Contracts in comparison to the investment advisory/management fee rates for other funds/accounts for which BGFA or BGI, an affiliate of BGFA, provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and separate accounts. The Board noted that comparative investment advisory/management fee information was not available, as BGFA and its affiliates do not manage any mutual funds, collective funds, separate accounts or other exchange-traded funds with substantially similar investment objectives and strategies as the
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Board Review and Approval of Investment Advisory Contracts (Unaudited) (Continued)
iSHARES®, INC .
Funds. However, the Board noted that BGFA provided the Board with general information regarding how the level of services provided to the other funds registered under the 1940 Act, collective funds and separate accounts differed from the level of services provided to the Funds. Based on this review, the Board determined that the investment advisory fee rates under the Advisory Contracts do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Advisory Contracts are fair and reasonable.
OTHER BENEFITS TO BGFA AND/OR ITS AFFILIATES
The Board reviewed any ancillary revenue received by BGFA and/or its affiliates in connection with the services provided to the Funds by BGFA, such as the payment of securities lending revenue to BGI, the Company’s securities lending agent, and the payment of advisory fees and/or administration fees to BGFA and BGI in connection with the Funds’ investments in other funds for which BGFA provides investment advisory services and/or BGI provides administration services. The Board noted that BGFA and its affiliates do not use soft dollars or consider the value of research or other services that may be provided to BGFA or its affiliates in connection with portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through an affiliate of the Funds or BGFA are reported to the Board pursuant to Rule 17e-1 under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders.
Based on the above analysis, the Board determined that the Advisory Contracts, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Funds and their shareholders to continue the Advisory Contracts.
* | Denotes the Board’s approval of Investment Advisory Contracts for all series of the Company, including the Funds. |
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Table of Contents
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 (the “Exchange”), 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 Exchange, the Market Price is determined using the midpoint of the bid/ask spread as of the opening of regular trading on the Exchange. 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, 2000 through June 30, 2005, the date of the most recent calendar quarter-end. The information shown 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 is for each full calendar quarter completed after the inception date of each Fund through June 30, 2005. 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 Australia Index Fund
Period Covered: January 1, 2000 through June 30, 2005
Number of Days | Percentage of Total Days | ||||
Greater than 2.5% | 10 | 0.72 | % | ||
Greater than 2.0% and Less than 2.5% | 12 | 0.87 | |||
Greater than 1.5% and Less than 2.0% | 44 | 3.19 | |||
Greater than 1.0% and Less than 1.5% | 134 | 9.70 | |||
Greater than 0.5% and Less than 1.0% | 320 | 23.17 | |||
Between 0.5% and – 0.5% | 676 | 48.94 | |||
Less than – 0.5% and Greater than – 1.0% | 110 | 7.97 | |||
Less than – 1.0% and Greater than – 1.5% | 41 | 2.97 | |||
Less than – 1.5% and Greater than – 2.0% | 19 | 1.38 | |||
Less than – 2.0% and Greater than – 2.5% | 7 | 0.51 | |||
Less than – 2.5% | 8 | 0.58 | |||
1,381 | 100.00 | % | |||
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iSHARES®, INC.
iShares MSCI Brazil Index Fund
Period Covered: October 1, 2000 through June 30, 2005
Number of Days | Percentage of Total Days | ||||
Greater than 3.0% | 7 | 0.59 | % | ||
Greater than 2.5% and Less than 3.0% | 14 | 1.17 | |||
Greater than 2.0% and Less than 2.5% | 24 | 2.01 | |||
Greater than 1.5% and Less than 2.0% | 37 | 3.10 | |||
Greater than 1.0% and Less than 1.5% | 91 | 7.63 | |||
Greater than 0.5% and Less than 1.0% | 173 | 14.51 | |||
Between 0.5% and – 0.5% | 577 | 48.43 | |||
Less than – 0.5% and Greater than – 1.0% | 126 | 10.57 | |||
Less than – 1.0% and Greater than – 1.5% | 41 | 3.44 | |||
Less than – 1.5% and Greater than – 2.0% | 37 | 3.10 | |||
Less than – 2.0% and Greater than – 2.5% | 25 | 2.10 | |||
Less than – 2.5% and Greater than – 3.0% | 11 | 0.92 | |||
Less than – 3.0% and Greater than – 3.5% | 8 | 0.67 | |||
Less than – 3.5% and Greater than – 4.0% | 7 | 0.59 | |||
Less than – 4.0% and Greater than – 4.5% | 6 | 0.50 | |||
Less than – 4.5% | 8 | 0.67 | |||
1,192 | 100.00 | % | |||
iShares MSCI Canada Index Fund
Period Covered: January 1, 2000 through June 30, 2005
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% | 51 | 3.69 | |||
Greater than 1.0% and Less than 1.5% | 108 | 7.82 | |||
Greater than 0.5% and Less than 1.0% | 236 | 17.09 | |||
Between 0.5% and – 0.5% | 805 | 58.29 | |||
Less than – 0.5% and Greater than – 1.0% | 95 | 6.88 | |||
Less than – 1.0% and Greater than – 1.5% | 23 | 1.67 | |||
Less than – 1.5% and Greater than – 2.0% | 8 | 0.58 | |||
Less than – 2.0% | 7 | 0.51 | |||
1,381 | 100.00 | % | |||
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Index Fund
Period Covered: July 1, 2003 through June 30, 2005
Number of Days | Percentage of Total Days | ||||
Greater than 1.5% | 13 | 2.58 | % | ||
Greater than 1.0% and Less than 1.5% | 31 | 6.15 | |||
Greater than 0.5% and Less than 1.0% | 150 | 29.76 | |||
Between 0.5% and – 0.5% | 259 | 51.39 | |||
Less than – 0.5% and Greater than – 1.0% | 34 | 6.75 | |||
Less than – 1.0% and Greater than – 1.5% | 11 | 2.18 | |||
Less than – 1.5% | 6 | 1.19 | |||
504 | 100.00 | % | |||
iShares MSCI Hong Kong Index Fund
Period Covered: January 1, 2000 through June 30, 2005
Number of Days | Percentage of Total Days | ||||
Greater than 4.0% | 7 | 0.51 | % | ||
Greater than 3.5% and Less than 4.0% | 5 | 0.36 | |||
Greater than 3.0% and Less than 3.5% | 5 | 0.36 | |||
Greater than 2.5% and Less than 3.0% | 8 | 0.58 | |||
Greater than 2.0% and Less than 2.5% | 23 | 1.67 | |||
Greater than 1.5% and Less than 2.0% | 59 | 4.27 | |||
Greater than 1.0% and Less than 1.5% | 126 | 9.12 | |||
Greater than 0.5% and Less than 1.0% | 239 | 17.31 | |||
Between 0.5% and – 0.5% | 509 | 36.86 | |||
Less than – 0.5% and Greater than – 1.0% | 163 | 11.80 | |||
Less than – 1.0% and Greater than – 1.5% | 97 | 7.02 | |||
Less than – 1.5% and Greater than – 2.0% | 70 | 5.07 | |||
Less than – 2.0% and Greater than – 2.5% | 28 | 2.03 | |||
Less than – 2.5% and Greater than – 3.0% | 19 | 1.38 | |||
Less than – 3.0% and Greater than – 3.5% | 10 | 0.72 | |||
Less than – 3.5% and Greater than – 4.5% | 7 | 0.51 | |||
Less than – 4.5% | 6 | 0.43 | |||
1,381 | 100.00 | % | |||
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Malaysia Index Fund
Period Covered: January 1, 2000 through June 30, 2005
Number of Days | Percentage of Total Days | ||||
Greater than 6.0% | 16 | 1.16 | % | ||
Greater than 5.5% and Less than 6.0% | 1 | 0.07 | |||
Greater than 5.0% and Less than 5.5% | 1 | 0.07 | |||
Greater than 4.0% and Less than 5.0% | 4 | 0.29 | |||
Greater than 3.5% and Less than 4.0% | 4 | 0.29 | |||
Greater than 3.0% and Less than 3.5% | 6 | 0.43 | |||
Greater than 2.5% and Less than 3.0% | 13 | 0.94 | |||
Greater than 2.0% and Less than 2.5% | 37 | 2.68 | |||
Greater than 1.5% and Less than 2.0% | 71 | 5.14 | |||
Greater than 1.0% and Less than 1.5% | 116 | 8.40 | |||
Greater than 0.5% and Less than 1.0% | 150 | 10.86 | |||
Between 0.5% and – 0.5% | 307 | 22.24 | |||
Less than – 0.5% and Greater than – 1.0% | 122 | 8.83 | |||
Less than – 1.0% and Greater than – 1.5% | 134 | 9.70 | |||
Less than – 1.5% and Greater than – 2.0% | 95 | 6.88 | |||
Less than – 2.0% and Greater than – 2.5% | 87 | 6.30 | |||
Less than – 2.5% and Greater than – 3.0% | 63 | 4.56 | |||
Less than – 3.0% and Greater than – 3.5% | 47 | 3.40 | |||
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% | 3 | 0.22 | |||
Less than – 5.5% and Greater than – 6.0% | 8 | 0.58 | |||
Less than – 6.0% | 28 | 2.03 | |||
1,381 | 100.00 | % | |||
iShares MSCI Mexico Index Fund
Period Covered: January 1, 2000 through June 30, 2005
Number of Days | Percentage of Total Days | ||||
Greater than 2.5% | 4 | 0.29 | % | ||
Greater than 2.0% and Less than 2.5% | 10 | 0.72 | |||
Greater than 1.5% and Less than 2.0% | 37 | 2.68 | |||
Greater than 1.0% and Less than 1.5% | 96 | 6.95 | |||
Greater than 0.5% and Less than 1.0% | 207 | 14.99 | |||
Between 0.5% and – 0.5% | 715 | 51.78 | |||
Less than – 0.5% and Greater than – 1.0% | 190 | 13.76 | |||
Less than – 1.0% and Greater than – 1.5% | 89 | 6.44 | |||
Less than – 1.5% and Greater than – 2.0% | 22 | 1.59 | |||
Less than – 2.0% and Greater than – 2.5% | 7 | 0.51 | |||
Less than – 2.5% | 4 | 0.29 | |||
1,381 | 100.00 | % | |||
134 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Pacific ex-Japan Index Fund
Period Covered: January 1, 2002 through June 30, 2005
Number of Days | Percentage of Total Days | ||||
Greater than 3.0% | 4 | 0.45 | % | ||
Greater than 2.5% and Less than 3.0% | 6 | 0.68 | |||
Greater than 2.0% and Less than 2.5% | 10 | 1.14 | |||
Greater than 1.5% and Less than 2.0% | 58 | 6.59 | |||
Greater than 1.0% and Less than 1.5% | 177 | 20.11 | |||
Greater than 0.5% and Less than 1.0% | 225 | 25.57 | |||
Between 0.5% and – 0.5% | 358 | 40.68 | |||
Less than – 0.5% and Greater than – 1.0% | 32 | 3.64 | |||
Less than – 1.0% and Greater than – 1.5% | 8 | 0.91 | |||
Less than – 1.5% | 2 | 0.23 | |||
880 | 100.00 | % | |||
iShares MSCI Singapore Index Fund
Period Covered: January 1, 2000 through June 30, 2005
Number of Days | Percentage of Total Days | ||||
Greater than 3.0% | 7 | 0.51 | % | ||
Greater than 2.5% and Less than 3.0% | 6 | 0.43 | |||
Greater than 2.0% and Less than 2.5% | 25 | 1.81 | |||
Greater than 1.5% and Less than 2.0% | 63 | 4.56 | |||
Greater than 1.0% and Less than 1.5% | 158 | 11.44 | |||
Greater than 0.5% and Less than 1.0% | 154 | 11.15 | |||
Between 0.5% and – 0.5% | 405 | 29.33 | |||
Less than – 0.5% and Greater than – 1.0% | 168 | 12.17 | |||
Less than – 1.0% and Greater than – 1.5% | 138 | 9.99 | |||
Less than – 1.5% and Greater than – 2.0% | 79 | 5.72 | |||
Less than – 2.0% and Greater than – 2.5% | 68 | 4.92 | |||
Less than – 2.5% and Greater than – 3.0% | 40 | 2.90 | |||
Less than – 3.0% and Greater than – 3.5% | 26 | 1.88 | |||
Less than – 3.5% and Greater than – 4.0% | 21 | 1.52 | |||
Less than – 4.0% and Greater than – 4.5% | 9 | 0.65 | |||
Less than – 4.5% and Greater than – 5.0% | 7 | 0.51 | |||
Less than – 5.0% | 7 | 0.51 | |||
1,381 | 100.00 | % | |||
SUPPLEMENTAL INFORMATION | 135 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI South Africa Index Fund
Period Covered: April 1, 2003 through June 30, 2005
Number of Days | Percentage of Total Days | ||||
Greater than 2.0% | 3 | 0.53 | % | ||
Greater than 1.5% and Less than 2.0% | 6 | 1.06 | |||
Greater than 1.0% and Less than 1.5% | 38 | 6.70 | |||
Greater than 0.5% and Less than 1.0% | 112 | 19.75 | |||
Between 0.5% and – 0.5% | 351 | 61.91 | |||
Less than – 0.5% and Greater than – 1.0% | 36 | 6.35 | |||
Less than – 1.0% and Greater than – 1.5% | 13 | 2.29 | |||
Less than – 1.5% and Greater than – 2.0% | 5 | 0.88 | |||
Less than – 2.0% | 3 | 0.53 | |||
567 | 100.00 | % | |||
iShares MSCI South Korea Index Fund
Period Covered: July 1, 2000 through June 30, 2005
Number of Days | Percentage of Total Days | ||||
Greater than 4.5% | 10 | 0.80 | % | ||
Greater than 4.0% and Less than 4.5% | 3 | 0.24 | |||
Greater than 3.5% and Less than 4.0% | 8 | 0.64 | |||
Greater than 3.0% and Less than 3.5% | 8 | 0.64 | |||
Greater than 2.5% and Less than 3.0% | 19 | 1.51 | |||
Greater than 2.0% and Less than 2.5% | 46 | 3.66 | |||
Greater than 1.5% and Less than 2.0% | 88 | 7.01 | |||
Greater than 1.0% and Less than 1.5% | 136 | 10.84 | |||
Greater than 0.5% and Less than 1.0% | 210 | 16.73 | |||
Between 0.5% and – 0.5% | 414 | 32.99 | |||
Less than – 0.5% and Greater than – 1.0% | 125 | 9.96 | |||
Less than – 1.0% and Greater than – 1.5% | 78 | 6.22 | |||
Less than – 1.5% and Greater than – 2.0% | 47 | 3.74 | |||
Less than – 2.0% and Greater than – 2.5% | 28 | 2.23 | |||
Less than – 2.5% and Greater than – 3.0% | 13 | 1.03 | |||
Less than – 3.0% and Greater than – 3.5% | 12 | 0.96 | |||
Less than – 3.5% | 10 | 0.80 | |||
1,255 | 100.00 | % | |||
136 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Taiwan Index Fund
Period Covered: July 1, 2000 through June 30, 2005
Number of Days | Percentage of Total Days | ||||
Greater than 6.0% | 8 | 0.64 | % | ||
Greater than 5.0% and Less than 6.0% | 5 | 0.40 | |||
Greater than 4.5% and Less than 5.0% | 9 | 0.72 | |||
Greater than 4.0% and Less than 4.5% | 4 | 0.32 | |||
Greater than 3.5% and Less than 4.0% | 19 | 1.51 | |||
Greater than 3.0% and Less than 3.5% | 27 | 2.15 | |||
Greater than 2.5% and Less than 3.0% | 43 | 3.43 | |||
Greater than 2.0% and Less than 2.5% | 59 | 4.70 | |||
Greater than 1.5% and Less than 2.0% | 125 | 9.96 | |||
Greater than 1.0% and Less than 1.5% | 152 | 12.11 | |||
Greater than 0.5% and Less than 1.0% | 185 | 14.74 | |||
Between 0.5% and – 0.5% | 303 | 24.14 | |||
Less than – 0.5% and Greater than – 1.0% | 108 | 8.61 | |||
Less than – 1.0% and Greater than – 1.5% | 85 | 6.77 | |||
Less than – 1.5% and Greater than – 2.0% | 56 | 4.46 | |||
Less than – 2.0% and Greater than – 2.5% | 18 | 1.43 | |||
Less than – 2.5% and Greater than – 3.0% | 25 | 1.99 | |||
Less than – 3.0% and Greater than – 3.5% | 12 | 0.96 | |||
Less than – 3.5% and Greater than – 4.5% | 5 | 0.40 | |||
Less than – 4.5% | 7 | 0.56 | |||
1,255 | 100.00 | % | |||
SUPPLEMENTAL INFORMATION | 137 |
Table of Contents
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 101 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 126 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 and Officers
Name, Year of Birth | Position(s), Length of Service | Principal Occupation(s) During Past 5 Years | Other Directorships Held | |||
*Lee T. Kranefuss, 1961 | Director, Chairman and President (since June 18, 2003). | Chief Executive Officer of Intermediary Investor and Exchange Traded Products Business of BGI (since 2003); Chief Executive Officer of the Individual Investor Business of BGI (1997-2003). | Trustee (since 2003) of iShares Trust; Trustee (since 2001) of Barclays Global Investors Funds and Master Investment Portfolio; Director (since 2003) of BGI Cayman Prime Money Market Fund, Ltd.; Director (since 2003) of iShares PLC and EETF PLC (Dublin). | |||
*John E. Martinez, 1961 | 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 2003) of iShares Trust; Director (since 2005) of Real Estate Equity Exchange; Director (since 2003) of Larkin Street Youth Services; Director (2000-2002) of Barclays Global Investors UK Holdings. |
* | Lee T. Kranefuss and John E. Martinez are considered to be “interested persons” (as defined in the 1940 Act) of the Company due to their affiliations with BGFA, the Funds’ investment adviser, and BGFA affiliates. |
138 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director Information (Unaudited) (Continued)
iSHARES®, INC.
Independent Directors
Name, Year of Birth | Position(s), Length of Service | Principal Occupation(s) | Other Directorships Held | |||
Richard K. Lyons, 1961 | Director (since February 28, 2002). | Acting Dean (2004-2005) and Sylvan Coleman Professor of Finance (since 1993) University of California, Berkeley: Haas School of Business; Consultant for IMF World Bank, Federal Reserve Bank and Citibank N.A. (since 2000). | Trustee (since 2000) of iShares Trust; Trustee (since 2001) of Barclays Global Investors Funds and Master Investment Portfolio; Director (since 2003) of BGI Cayman Prime Money Market Fund, Ltd.; Trustee and Chairman (since 1995) of Matthews Asian Funds (oversees 6 portfolios). | |||
George G. C. Parker, 1939 | Director (since February 28, 2002). | Dean Witter Distinguished Professor of Finance (since 1994); Senior Associate Dean for Academic Affairs, Director of MBA Program, Stanford University: Graduate School of Business (1993-2001). | Trustee (since 2000) of iShares Trust; Director (since 1998) of Affinity Group Holdings; 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 1996) of Community First Financial Group; Director (since 1999) of Tejon Ranch Company; Director (since 2003) of First Republic Bank; Director (since 2000) of Converium Re-Insurance; Director (since 2004) of Threshold Pharmaceuticals. | |||
W. Allen Reed, 1947 | Director (since December 16, 1996). | President and Chief Executive Officer of General Motors Investment Management Corporation (since 1994); Chief Executive Officer of General Motors Trust Bank (since 2003); Chief Executive Officer of General Motors Trust Company (since 1999). | Trustee (since 2002) of iShares Trust; Director (since 1994) of General Motors Investment Management Corporation; Director and Chairman (since 2003) of General Motors Trust Bank; Director and Chairman (since 1999) of General Motors Trust Company; Director (since 2002) of GMAM ARS Fund I; 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; Member (since 2004) of Board of Executives of New York Stock Exchange; Member (since 1995) of New York State Retirement System Advisory Board; Member (since 2004) of the Auburn University Foundation Fund Investment Committee. |
DIRECTOR INFORMATION | 139 |
Table of Contents
Director Information (Unaudited) (Continued)
iSHARES®, INC.
Independent Directors (Continued)
Name, Year of Birth | Position(s), | Principal Occupation(s) | Other Directorships Held | |||
Cecilia H. Herbert, 1949 | Director (since August 11, 2005). | Member of Finance Council, Archdiocese of San Francisco (since 1991); Chair of Investment Committee, Archdiocese of San Francisco (since 1994). | Trustee (since 2005) of iShares Trust; Trustee (since 2004) of Pacific Select Funds (31 portfolios); Trustee (1992-2003) of the Montgomery Funds (20 portfolios); Trustee (since 2005) of the Thatcher School; Director (since 1998) of Catholic Charities CYO; Trustee (1998-2000) of the Groton School; Director (since 2005) of Women’s Forum West (professional association). | |||
Charles A. Hurty, 1944 | Director (since August 11, 2005). | Partner, KPMG LLP (1968-2001). | Trustee (since 2005) of iShares Trust; Director (since 2002) of GMAM Absolute Return Strategy Fund (1 portfolio); Director (since 2002) of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (2 portfolios); Director (since 2005) of CSFB Alternative Investments Fund (15 portfolios). | |||
John E. Kerrigan, 1956 | Director (since August 11, 2005). | Chief Investment Officer, Santa Clara University (since 2002); Managing Director, Merrill Lynch (1994-2002). | Trustee (since 2005) of iShares Trust; Member (since 2004) of Advisory Council for Commonfund Distressed Debt Partners II. | |||
Officer
| ||||||
Name, Year of Birth | Position(s), | Principal Occupation(s) | Other Directorships Held | |||
Michael A. Latham, 1965 | Secretary, Treasurer and Principal Financial Officer (since February 28, 2002). | Chief Operating Officer of the Intermediary Investor 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. |
140 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes:
NOTES | 141 |
Table of Contents
The following is a list of iShares Funds being offered, along with their respective exchange trading symbols. Please call 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 100 (OEF) |
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 Domestic Sector Index Funds |
iShares Cohen & Steers Realty Majors (ICF) |
iShares Dow Jones U.S. Basic Materials Sector (IYM) |
iShares Dow Jones U.S. Consumer Services Sector (IYC) |
iShares Dow Jones U.S. Consumer Goods 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 U.S. Technology Sector (IYW) |
iShares Dow Jones U.S. Telecommunications Sector (IYZ) |
iShares Dow Jones Transportation Average (IYT) |
iShares Dow Jones U.S. Utilities Sector (IDU) |
iShares Dow Jones U.S. Total Market (IYY) |
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 Global Index Funds |
iShares S&P Global 100 (IOO) |
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 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 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 Russell Microcap™ (IWC) |
iShares International Country 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 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 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/TOPIX 150 (ITF) |
iShares Specialty Index Funds |
iShares KLD Select SocialSM (KLD) |
iShares Dow Jones Select Dividend (DVY) |
iShares International Index Funds |
iShares MSCI EAFE (EFA) |
iShares MSCI EAFE Growth (EFG) |
iShares MSCI EAFE Value (EFV) |
iShares MSCI Emerging Markets (EEM) |
iShares MSCI EMU (EZU) |
iShares MSCI Pacific ex-Japan (EPP) |
iShares S&P Europe 350 (IEV) |
iShares S&P Latin America 40 (ILF) |
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 NYSE Index Funds |
iShares NYSE Composite (NYC) |
iShares NYSE 100 (NY) |
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, KLD Research & Analytics, Inc., 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 a deposit of a bank and it 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 2005 Annual Report.
2117-iS-0805
142 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
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.
©2005 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, 2005 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 web-site at www.sec.gov.
The Funds file 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. The Funds’ Forms N-Q are available on the Commission’s website at www.sec.gov. 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.
BARCLAYS GLOBAL INVESTORS
BARCLAYS
Table of Contents
iShares®
2005 ANNUAL REPORT TO SHAREHOLDERS | AUGUST 31, 2005
iSHARES MSCI SERIES
iSHARES MSCI JAPAN INDEX FUND
Table of Contents
1 | ||
3 | ||
4 | ||
15 | ||
17 | ||
18 | ||
23 | ||
24 | ||
25 | ||
Board Review and Approval of Investment Advisory Contracts (Unaudited) | 27 | |
30 | ||
31 | ||
34 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI JAPAN INDEX FUND
Performance as of August 31, 2005
Average Annual Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
11.58% | 12.50 | % | 12.32 | % | (4.40 | )% | (4.23 | )% | (3.98 | )% | (2.58 | )% | (2.43 | )% | (1.84 | )% | ||||||||
Cumulative Total Returns | ||||||||||||||||||||||||
Year Ended 8/31/05 | Five Years Ended 8/31/05 | Inception to 8/31/05 | ||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||||||||||
11.58% | 12.50 | % | 12.32 | % | (20.14 | )% | (19.43 | )% | (18.38 | )% | (21.96 | )% | (20.77 | )% | (16.15 | )% |
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.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund, and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the 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 shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the Index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the tables above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION AT NET ASSET VALUE
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.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 1 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI JAPAN INDEX FUND
PORTFOLIO ALLOCATION
As of 8/31/05
Sector | % of Net Assets | ||
Consumer Cyclical | 24.89 | % | |
Industrial | 20.59 | ||
Financial | 19.76 | ||
Consumer Non-Cyclical | 11.07 | ||
Basic Materials | 7.55 | ||
Communications | 5.43 | ||
Utilities | 4.94 | ||
Technology | 4.70 | ||
Energy | 1.03 | ||
Short-Term and Other Net Assets | 0.04 | ||
TOTAL | 100.00 | % | |
TOP TEN FUND HOLDINGS
As of 8/31/05
Security | % of Net Assets | ||
Toyota Motor Corp. | 5.46 | % | |
Mitsubishi Tokyo Financial Group Inc. | 2.31 | ||
Takeda Pharmaceutical Co. Ltd. | 2.20 | ||
Mizuho Financial Group Inc. | 2.18 | ||
Honda Motor Co. Ltd. | 2.02 | ||
Canon Inc. | 1.75 | ||
Sumitomo Mitsui Financial Group Inc. | 1.72 | ||
Matsushita Electric Industrial Co. Ltd. | 1.58 | ||
Sony Corp. | 1.56 | ||
Tokyo Electric Power Co. Inc. (The) | 1.34 | ||
TOTAL | 22.12 | % | |
The iShares MSCI Japan Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Japanese market, as measured by the MSCI Japan Index (the “Index”). The Fund invests in a representative sample of securities in the Index, which have a similar investment profile as the Index. For the twelve months ended August 31, 2005 (the “reporting period”), the Fund returned 11.58%, while the Index returned 12.32%.
Japan’s market delivered moderate gains for the reporting period. During the first half of the reporting period, Japan’s export-driven economy slowed. A strengthening yen made Japanese exports more expensive to its trading partners, dampening Japan’s export trade. Slower export growth, in turn, led to a decline in industrial production. Fourth quarter gross domestic product (“GDP”) growth for the fourth quarter 2004 was 0.1% lower than GDP growth for the third quarter. The economic slowdown became evident in the early months of 2005 as consumers and businesses reduced their spending levels. Consumer spending levels fell 4.1% in February as the unemployment level rose for the first time in six months.
As the reporting period progressed, however, economic conditions appeared to be recovering, following positive news on both the consumer and the business front. Unemployment levels declined to a seven-year low by July as wages increased, helping to drive household spending and retail sales. Industrial production reversed direction, climbing 1.2% in August 2005, compared with a decline of 0.03% in August 2004. In July, optimism about further growth was supported by the most recent Tankan survey, which was positive for the first time in three quarters.
Among the Fund’s ten largest holdings as of August 31, 2005, performance was mostly positive for the reporting period. The two strongest performers were both banks. Mizuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. both delivered healthy gains for the reporting period. Consumer electronics company Matsushita Electrical Industrial Co. Ltd. also performed well, and Takeda Pharmaceutical Co. Ltd. contributed positively to Fund performance for the reporting period. The sole negative performance among the Fund’s ten largest holdings came from consumer electronics giant Sony Corp., which posted a modest decline for the reporting period.
2 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
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, 2005 to August 31, 2005.
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, 2005) | Ending Account Value (August 31, 2005) | Annualized Expense Ratio | Expenses Paid During Perioda (March 1 to August 31, 2005) | |||||||||
Actual | $ | 1,000.00 | $ | 1,016.70 | 0.57 | % | $ | 2.90 | ||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.33 | 0.57 | 2.91 |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). |
SHAREHOLDER EXPENSES | 3 |
Table of Contents
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2005
Security | Shares | Value | |||
COMMON STOCKS – 99.96% | |||||
ADVERTISING – 0.34% | |||||
Asatsu-DK Inc.1 | 109,900 | $ | 3,213,884 | ||
Dentsu Inc.1 | 5,495 | 14,388,312 | |||
Hakuhodo DY Holdings Inc. | 109,900 | 7,396,878 | |||
24,999,074 | |||||
AGRICULTURE – 0.65% | |||||
Japan Tobacco Inc. | 3,297 | 47,466,595 | |||
47,466,595 | |||||
AIRLINES – 0.18% | |||||
All Nippon Airways Co. Ltd.1 | 2,198,000 | 7,159,545 | |||
Japan Airlines System Corp.1 | 2,198,000 | 6,150,880 | |||
13,310,425 | |||||
APPAREL – 0.36% | |||||
Gunze Ltd. | 1,099,000 | 5,349,881 | |||
Onward Kashiyama Co. Ltd. | 1,099,000 | 16,366,086 | |||
World Co. Ltd. | 108,300 | 4,570,360 | |||
26,286,327 | |||||
AUTO MANUFACTURERS – 8.70% | |||||
Hino Motors Ltd.1 | 1,099,000 | 6,971,656 | |||
Honda Motor Co. Ltd. | 2,747,600 | 146,360,660 | |||
Nissan Motors Co. Ltd.1 | 7,802,900 | 81,163,921 | |||
Toyota Motor Corp. | 9,781,100 | 396,049,400 | |||
630,545,637 | |||||
AUTO PARTS & EQUIPMENT– 1.76% | |||||
Aisin Seiki Co. Ltd. | 879,200 | 22,230,189 | |||
Bridgestone Corp.1 | 2,198,000 | 43,115,491 | |||
Denso Corp. | 1,978,200 | 49,750,925 | |||
NOK Corp.1 | 329,700 | 8,810,987 | |||
Toyoda Gosei Co. Ltd.1 | 219,800 | 3,648,995 | |||
127,556,587 | |||||
BANKS – 10.60% | |||||
Bank of Fukuoka Ltd.1 | 2,198,000 | 13,903,757 | |||
Bank of Yokohama Ltd. (The)1 | 4,396,000 | 28,044,846 | |||
Chiba Bank Ltd. (The)1 | 2,198,000 | 15,604,643 | |||
Gunma Bank Ltd. | 1,099,000 | 6,467,323 | |||
Joyo Bank Ltd. | 3,297,000 | 17,948,306 | |||
Kokuhoku Financial Group Inc. | 3,297,000 | 9,849,319 | |||
Mitsubishi Tokyo Financial Group Inc.1 | 16,485 | 167,616,413 | |||
Mitsui Trust Holdings Inc.1 | 2,198,000 | 24,425,518 | |||
Mizuho Financial Group Inc. | 28,574 | 157,865,983 | |||
Nishi-Nippon City Bank Ltd. (The)1 | 2,198,000 | 9,255,986 | |||
Resona Holdings Inc.2 | 15,386 | 32,672,839 | |||
77 Bank Ltd. (The) | 1,099,000 | 7,446,318 | |||
Shinsei Bank Ltd. | 3,297,000 | 20,202,969 | |||
Shizuoka Bank Ltd. (The) | 2,198,000 | 19,935,970 | |||
Sumitomo Mitsui Financial Group Inc.1 | 15,385 | 124,868,584 | |||
Sumitomo Trust & Banking Co. Ltd. (The) | 4,396,000 | 30,339,065 | |||
UFJ Holdings Inc.2 | 13,188 | 81,879,876 | |||
768,327,715 | |||||
BEVERAGES – 0.95% | |||||
Asahi Breweries Ltd. | 1,099,000 | 13,478,535 | |||
Coca-Cola West Japan Co. Ltd. | 219,800 | 4,964,215 | |||
Ito En Ltd.1 | 109,900 | 5,547,658 | |||
Kirin Brewery Co. Ltd.1 | 3,297,000 | 32,929,950 | |||
Sapporo Breweries Ltd.1 | 1,099,000 | 5,013,659 | |||
Takara Holdings Inc.1 | 1,099,000 | 7,100,211 | |||
69,034,228 | |||||
BUILDING MATERIALS – 1.38% | |||||
Asahi Glass Co. Ltd.1 | 3,297,000 | 33,641,949 | |||
Daikin Industries Ltd. | 769,300 | 20,455,136 | |||
JS Group Corp.1 | 989,100 | 16,642,974 | |||
Matsushita Electric Works Ltd. | 1,099,000 | 10,264,651 | |||
Nippon Sheet Glass Co. Ltd.1 | 1,099,000 | 4,736,770 | |||
Sumitomo Osaka Cement Co. Ltd. | 1,099,000 | 3,075,440 | |||
Taiheiyo Cement Corp.1 | 3,297,000 | 11,065,650 | |||
99,882,570 | |||||
CHEMICALS – 3.93% | |||||
Asahi Kasei Corp.1 | 4,396,000 | 20,450,191 | |||
Daicel Chemical Industries Ltd. | 1,099,000 | 6,536,545 | |||
Dainippon Ink & Chemical Inc. | 2,198,000 | 6,843,101 | |||
Denki Kagaku Kogyo Kabushiki Kaisha1 | 2,198,000 | 8,563,764 | |||
Ishihara Sangyo Kaisha Ltd.1 | 1,099,000 | 2,234,885 | |||
JSR Corp. | 879,200 | 19,619,526 | |||
Kaneka Corp. | 1,099,000 | 13,122,536 | |||
Mitsubishi Chemical Corp. | 6,594,000 | 21,003,968 | |||
Mitsubishi Gas Chemical Co. Inc. | 1,099,000 | 7,110,101 |
4 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2005
Security | Shares | Value | |||
Mitsui Chemicals Inc.1 | 2,198,000 | $ | 12,875,314 | ||
Nippon Kayaku Co. Ltd.1 | 1,099,000 | 7,911,099 | |||
Nissan Chemical Industries Ltd.1 | 1,099,000 | 13,330,202 | |||
Nitto Denko Corp.1 | 549,500 | 34,759,392 | |||
Shin-Etsu Chemical Co. Ltd. | 1,318,700 | 52,921,240 | |||
Showa Denko K.K.1 | 3,297,000 | 9,849,318 | |||
Sumitomo Chemical Co. Ltd. | 4,396,000 | 24,287,074 | |||
Taiyo Nippon Sanso Corp.1 | 1,099,000 | 6,487,101 | |||
Tosoh Corp.1 | 2,198,000 | 8,781,320 | |||
Ube Industries Ltd.1 | 3,297,000 | 7,950,654 | |||
284,637,331 | |||||
COMMERCIAL SERVICES – 1.04% | |||||
Benesse Corp.1 | 219,800 | 7,317,767 | |||
Dai Nippon Printing Co. Ltd. | 2,198,000 | 34,848,392 | |||
Kamigumi Co. Ltd. | 1,099,000 | 8,316,543 | |||
TIS Inc.1 | 109,900 | 3,263,328 | |||
Toppan Printing Co. Ltd. | 2,198,000 | 21,775,300 | |||
75,521,330 | |||||
COMPUTERS – 1.27% | |||||
CSK Corp. | 219,800 | 9,473,541 | |||
Fujitsu Ltd. | 6,594,000 | 38,922,608 | |||
Meitec Corp.1 | 109,900 | 3,421,550 | |||
NET One Systems Co. Ltd.1 | 3,297 | 7,920,988 | |||
TDK Corp. | 439,600 | 32,435,506 | |||
92,174,193 | |||||
COSMETICS & PERSONAL CARE – 0.96% | |||||
Aderans Co. Ltd.1 | 109,900 | 2,541,441 | |||
Kao Corp.1 | 2,198,000 | 51,916,588 | |||
Shiseido Co. Ltd.1 | 1,099,000 | 15,377,199 | |||
69,835,228 | |||||
DISTRIBUTION & WHOLESALE – 2.77% | |||||
Itochu Corp. | 5,495,000 | 32,682,728 | |||
Marubeni Corp. | 5,495,000 | 22,744,410 | |||
Mitsubishi Corp.1 | 4,176,200 | 68,278,719 | |||
Mitsui & Co. Ltd.1 | 4,396,000 | 46,003,041 | |||
Sumitomo Corp. | 3,297,000 | 31,001,620 | |||
200,710,518 | |||||
DIVERSIFIED FINANCIAL SERVICES – 4.27% | |||||
ACOM Co. Ltd. | 252,770 | 16,512,442 | |||
Aeon Credit Service Co. Ltd.1 | 109,990 | 7,185,202 | |||
AIFUL Corp. | 274,750 | 20,964,413 | |||
Credit Saison Co. Ltd. | 549,500 | 21,359,967 | |||
Daiwa Securities Group Inc.1 | 4,396,000 | 29,627,066 | |||
Nikko Cordial Corp.1,3 | 5,490,000 | 26,972,061 | |||
Nomura Holdings Inc. | 6,264,300 | 84,831,705 | |||
ORIX Corp. | 329,700 | 54,200,918 | |||
Promise Co. Ltd. | 329,700 | 22,249,966 | |||
Takefuji Corp.1 | 362,670 | 25,225,528 | |||
309,129,268 | |||||
ELECTRIC – 4.15% | |||||
Chubu Electric Power Co. Inc.1 | 2,198,000 | 53,399,919 | |||
Electric Power Development Co. Ltd.1 | 549,500 | 16,860,530 | |||
Kansai Electric Power Co. Inc. (The)1 | 2,747,500 | 58,220,745 | |||
Kyushu Electric Power Co. Inc.1 | 1,648,500 | 37,231,610 | |||
Tohoku Electric Power Co. Inc.1 | 1,758,400 | 37,973,276 | |||
Tokyo Electric Power Co. Inc. (The)1 | 3,956,400 | 96,831,853 | |||
300,517,933 | |||||
ELECTRICAL COMPONENTS & EQUIPMENT – 3.87% | |||||
Casio Computer Co. Ltd.1 | 1,099,000 | 15,387,088 | |||
Fujikura Ltd. | 1,099,000 | 6,259,657 | |||
Furukawa Electric Co. Ltd.1,2 | 2,198,000 | 10,264,651 | |||
Hitachi Cable Ltd. | 1,099,000 | 4,598,326 | |||
Hitachi Ltd.1 | 10,990,000 | 66,749,899 | |||
Mitsubishi Electric Corp. | 6,594,000 | 35,184,613 | |||
SANYO Electric Co. Ltd.1 | 5,495,000 | 14,388,311 | |||
Sharp Corp. | 3,297,000 | 49,454,259 | |||
Stanley Electric Co. Ltd.1 | 769,300 | 12,196,937 | |||
Sumitomo Electric Industries Ltd. | 2,198,000 | 26,858,182 | |||
Toshiba Corp. | 9,891,000 | 38,803,941 | |||
280,145,864 | |||||
ELECTRONICS – 4.78% | |||||
Advantest Corp.1 | 219,900 | 17,095,749 | |||
Fanuc Ltd. | 549,500 | 41,137,715 | |||
Hirose Electric Co. Ltd. | 109,900 | 12,459,981 | |||
IBIDEN Co. Ltd.1 | 439,600 | 14,951,977 | |||
Keyence Corp. | 109,920 | 25,656,407 | |||
Kyocera Corp. | 549,500 | 37,874,387 | |||
Mabuchi Motor Co. Ltd.1 | 109,900 | 5,646,547 |
SCHEDULEOF INVESTMENTS | 5 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2005
Security | Shares | Value | |||
Minebea Co. Ltd.1 | 1,099,000 | $ | 4,529,104 | ||
Murata Manufacturing Co. Ltd. | 769,300 | 39,941,162 | |||
NEC Corp. | 6,594,000 | 34,947,280 | |||
NGK Insulators Ltd. | 1,099,000 | 11,718,316 | |||
Nippon Electric Glass Co. Ltd. | 1,099,000 | 19,520,637 | |||
Omron Corp. | 879,200 | 19,382,193 | |||
Secom Co. Ltd. | 1,099,000 | 50,037,702 | |||
Yokogawa Electric Corp.1 | 879,200 | 11,494,827 | |||
346,393,984 | |||||
ENGINEERING & CONSTRUCTION – 1.12% | |||||
JGC Corp.1 | 1,099,000 | 14,764,089 | |||
Kajima Corp.1 | 3,297,000 | 13,142,314 | |||
Nishimatsu Construction Co. Ltd.1 | 1,099,000 | 4,182,994 | |||
Obayashi Corp. | 2,198,000 | 13,508,202 | |||
Okumura Corp. | 1,099,000 | 6,773,878 | |||
Shimizu Corp.1 | 2,198,000 | 11,708,427 | |||
Taisei Corp.1 | 3,297,000 | 11,925,982 | |||
Toda Corp. | 1,099,000 | 5,003,770 | |||
81,009,656 | |||||
ENTERTAINMENT – 0.34% | |||||
Oriental Land Co. Ltd.1 | 219,800 | 13,033,536 | |||
Toho Co. Ltd.1 | 769,300 | 11,691,616 | |||
24,725,152 | |||||
FOOD – 1.23% | |||||
Ajinomoto Co. Inc. | 2,198,000 | 22,981,743 | |||
Ariake Japan Co. Ltd.1 | 116,630 | 2,964,680 | |||
Katokichi Co. Ltd. | 677,400 | 4,583,658 | |||
Kikkoman Corp.1 | 1,099,000 | 10,719,539 | |||
Meiji Dairies Corp.1 | 1,099,000 | 6,081,657 | |||
Meiji Seika Kaisha Ltd.1 | 1,099,000 | 5,488,325 | |||
Nichirei Corp. | 1,099,000 | 4,449,993 | |||
Nippon Meat Packers Inc. | 1,099,000 | 11,738,093 | |||
Nisshin Seifun Group Inc. | 1,099,000 | 11,846,871 | |||
Nissin Food Products Co. Ltd. | 329,700 | 8,529,154 | |||
89,383,713 | |||||
FOREST PRODUCTS & PAPER – 0.41% | |||||
Nippon Paper Group Inc. | �� | 3,297 | 12,400,648 | ||
OJI Paper Co. Ltd.1 | 3,297,000 | 17,176,974 | |||
29,577,622 | |||||
GAS – 0.79% | |||||
Osaka Gas Co. Ltd.1 | 7,693,000 | 24,504,630 | |||
Tokyo Gas Co. Ltd.1 | 8,792,000 | 32,672,839 | |||
57,177,469 | |||||
HAND & MACHINE TOOLS – 0.96% | |||||
Fuji Electric Holdings Co. Ltd. | 2,198,000 | 8,108,876 | |||
Nidec Corp.1 | 219,800 | 24,741,963 | |||
SMC Corp. | 219,800 | 27,016,403 | |||
THK Co. Ltd.1 | 439,600 | 9,908,651 | |||
69,775,893 | |||||
HEALTH CARE - PRODUCTS – 1.05% | |||||
Hoya Corp. | 439,600 | 56,999,469 | |||
Terumo Corp. | 659,400 | 18,808,638 | |||
75,808,107 | |||||
HOME BUILDERS – 0.89% | |||||
Daiwa House Industry Co. Ltd. | 2,198,000 | 26,462,627 | |||
Sekisui Chemical Co. Ltd. | 2,198,000 | 14,141,090 | |||
Sekisui House Ltd.1 | 2,198,000 | 24,029,964 | |||
64,633,681 | |||||
HOME FURNISHINGS – 3.48% | |||||
Matsushita Electric Industrial Co. Ltd. | 6,594,015 | 114,216,753 | |||
Pioneer Corp.1 | 879,200 | 13,512,157 | |||
Sony Corp. | 3,406,800 | 113,422,054 | |||
Yamaha Corp. | 659,400 | 11,302,983 | |||
252,453,947 | |||||
HOUSEWARES – 0.12% | |||||
Toto Ltd.1 | 1,099,000 | 8,692,320 | |||
8,692,320 | |||||
INSURANCE – 2.88% | |||||
Millea Holdings Inc. | 5,495 | 80,099,879 | |||
Mitsui Sumitomo Insurance Co. Ltd. | 4,396,000 | 44,539,488 | |||
Sompo Japan Insurance Inc. | 3,297,000 | 37,557,943 | |||
T&D Holdings Inc. | 824,250 | 46,799,096 | |||
208,996,406 | |||||
INTERNET – 1.65% | |||||
Index Corp.1 | 2,198 | 3,144,662 | |||
Index Corp. When Issued2 | 2,194 | 3,059,972 | |||
Rakuten Inc.1 | 14,287 | 11,300,016 | |||
SBI Holdings Inc.1 | 20,881 | 7,684,644 |
6 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2005
Security | Shares | Value | |||
Softbank Corp.1 | 879,200 | $ | 44,381,266 | ||
Trend Micro Inc.1 | 549,500 | 18,986,638 | |||
Yahoo! Japan Corp.1 | 13,188 | 30,853,287 | |||
119,410,485 | |||||
IRON & STEEL – 2.59% | |||||
JFE Holdings Inc.1 | 1,868,350 | 53,796,914 | |||
Kobe Steel Ltd.1 | 8,792,000 | 20,647,969 | |||
Nippon Steel Corp. | 21,980,000 | 63,684,348 | |||
Nisshin Steel Co. Ltd.1 | 3,297,000 | 9,433,986 | |||
Sumitomo Metal Industries Ltd.1 | 14,287,000 | 32,524,506 | |||
Tokyo Steel Manufacturing Co. Ltd.1 | 549,500 | 7,876,488 | |||
187,964,211 | |||||
LEISURE TIME – 0.85% | |||||
Namco Ltd.1 | 439,600 | 7,203,056 | |||
Sankyo Co. Ltd. | 219,800 | 10,719,539 | |||
Sega Sammy Holdings Inc. | 220,600 | 16,078,283 | |||
Shimano Inc. | 329,700 | 9,048,320 | |||
Yamaha Motor Co. Ltd. | 989,100 | 18,467,472 | |||
61,516,670 | |||||
MACHINERY - CONSTRUCTION & MINING – 0.50% | |||||
Komatsu Ltd. | 3,297,000 | 36,341,611 | |||
36,341,611 | |||||
MACHINERY - DIVERSIFIED– 1.01% | |||||
Amada Co. Ltd.1 | 1,099,000 | 8,435,210 | |||
Ebara Corp.1 | 1,099,000 | 4,182,994 | |||
Kubota Corp. | 3,297,000 | 20,380,969 | |||
Sumitomo Heavy Industries Ltd.1 | 2,198,000 | 12,222,648 | |||
Toyota Industries Corp.1 | 989,100 | 27,678,958 | |||
72,900,779 | |||||
MANUFACTURING – 2.10% | |||||
Fuji Photo Film Co. Ltd. | 1,648,500 | 52,806,587 | |||
Ishikawajima-Harima Heavy Industries Co. Ltd.1,2 | 4,396,000 | 7,040,878 | |||
Kawasaki Heavy Industries Ltd.1 | 5,495,000 | 11,718,316 | |||
Konica Minolta Holdings Inc. | 1,648,500 | 15,738,143 | |||
Mitsubishi Heavy Industries Ltd. | 10,990,000 | 30,754,398 | |||
Nikon Corp.1 | 1,099,000 | 12,835,758 | |||
Olympus Corp.1 | 1,099,000 | 21,557,745 | |||
152,451,825 | |||||
MEDIA – 0.04% | |||||
Fuji Television Network Inc. | 1,154 | 2,606,325 | |||
2,606,325 | |||||
METAL FABRICATE & HARDWARE – 0.26% | |||||
NSK Ltd. | 2,198,000 | 11,827,093 | |||
NTN Corp.1 | 1,099,000 | 6,694,767 | |||
18,521,860 | |||||
MINING – 0.62% | |||||
Dowa Mining Co. Ltd.1 | 1,099,000 | 7,822,099 | |||
Mitsubishi Materials Corp. | 3,297,000 | 9,493,319 | |||
Mitsui Mining & Smelting Co. Ltd. | 2,198,000 | 10,798,650 | |||
Sumitomo Metal Mining Co. Ltd.1 | 2,198,000 | 16,534,197 | |||
44,648,265 | |||||
OFFICE & BUSINESS EQUIPMENT – 2.36% | |||||
Canon Inc. | 2,527,700 | 126,686,363 | |||
Ricoh Co. Ltd. | 2,198,000 | 33,879,282 | |||
Seiko Epson Corp. | 329,700 | 10,205,318 | |||
170,770,963 | |||||
OIL & GAS – 1.03% | |||||
Nippon Mining Holdings Inc. | 2,747,500 | 18,393,305 | |||
Nippon Oil Corp. | 4,396,500 | 35,089,715 | |||
Teikoku Oil Co. Ltd.1 | 1,099,000 | 9,196,653 | |||
TonenGeneral Sekiyu K.K.1 | 1,099,000 | 11,985,315 | |||
74,664,988 | |||||
PACKAGING & CONTAINERS – 0.16% | |||||
Toyo Seikan Kaisha Ltd.1 | 769,300 | 11,490,872 | |||
11,490,872 | |||||
PHARMACEUTICALS – 5.19% | |||||
Astellas Pharma Inc. | 1,868,330 | 66,068,627 | |||
Chugai Pharmaceutical Co. Ltd. | 1,099,000 | 20,568,858 | |||
Daiichi Pharmaceutical Co. Ltd.1 | 879,200 | 20,410,636 | |||
Eisai Co. Ltd. | 879,200 | 33,147,505 | |||
Kyowa Hakko Kogyo Co. Ltd. | 1,099,000 | 8,059,432 | |||
Sankyo Co. Ltd.1 | 1,099,000 | 22,151,078 | |||
Shionogi & Co. Ltd. | 1,099,000 | 14,180,645 | |||
Taisho Pharmaceutical Co. Ltd. | 1,099,000 | 21,804,967 | |||
Takeda Pharmaceutical Co. Ltd. | 2,967,300 | 159,398,758 | |||
Tanabe Seiyaku Co. Ltd. | 1,099,000 | 10,531,651 | |||
376,322,157 |
SCHEDULEOF INVESTMENTS | 7 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2005
Security | Shares | Value | |||
REAL ESTATE – 1.79% | |||||
Daito Trust Construction Co. Ltd. | 329,700 | $ | 13,705,979 | ||
Leopalace21 Corp. | 439,600 | 8,168,210 | |||
Mitsubishi Estate Co. Ltd. | 3,297,000 | 39,159,941 | |||
Mitsui Fudosan Co. Ltd.1 | 3,297,000 | 42,126,603 | |||
Sumitomo Realty & Development Co. Ltd. | 1,099,000 | 13,982,868 | |||
Tokyu Land Corp.1 | 2,198,000 | 12,242,426 | |||
129,386,027 | |||||
REAL ESTATE INVESTMENT TRUSTS – 0.13% | |||||
Japan Real Estate Investment Corp. | 1,099 | 9,295,541 | |||
9,295,541 | |||||
RETAIL – 3.88% | |||||
Aeon Co. Ltd. | 2,307,900 | 42,779,268 | |||
Aoyama Trading Co. Ltd. | 219,800 | 5,933,325 | |||
Autobacs Seven Co. Ltd.1 | 109,900 | 4,212,660 | |||
Citizen Watch Co. Ltd.1 | 1,099,000 | 8,781,320 | |||
Daimaru Inc. (The)1 | 1,099,000 | 11,085,427 | |||
FamilyMart Co. Ltd.1 | 219,800 | 6,763,990 | |||
Fast Retailing Co. Ltd.1 | 219,800 | 16,672,641 | |||
Isetan Co. Ltd.1 | 879,200 | 13,314,380 | |||
Ito-Yokado Co. Ltd.1,3 | 1,316,400 | 46,669,510 | |||
Lawson Inc.1 | 219,800 | 8,168,210 | |||
Marui Co. Ltd.1 | 1,099,000 | 17,888,973 | |||
Mitsukoshi Ltd.1 | 1,099,000 | 5,379,548 | |||
Seven-Eleven Japan Co. Ltd.1,3 | 1,206,700 | 35,505,547 | |||
Shimachu Co. Ltd.1 | 219,800 | 5,537,769 | |||
Takashimaya Co. Ltd.1 | 1,099,000 | 12,103,981 | |||
UNY Co. Ltd.1 | 1,099,000 | 12,875,313 | |||
USS Co. Ltd.1 | 98,910 | 6,888,589 | |||
Yamada Denki Co. Ltd.1 | 329,700 | 21,003,968 | |||
281,564,419 | |||||
SEMICONDUCTORS – 0.97% | |||||
Rohm Co. Ltd. | 439,600 | 39,753,273 | |||
Tokyo Electron Ltd. | 549,552 | 30,856,206 | |||
70,609,479 | |||||
SHIPBUILDING – 0.09% | |||||
Mitsui Engineering & Shipbuilding Co. Ltd.1 | 3,297,000 | 6,793,656 | |||
6,793,656 | |||||
SOFTWARE – 0.10% | |||||
Konami Corp.1 | 329,700 | 7,490,822 | |||
7,490,822 | |||||
TELECOMMUNICATIONS – 3.40% | |||||
Hikari Tsushin Inc.1 | 109,900 | 7,693,544 | |||
KDDI Corp. | 8,792 | 46,121,708 | |||
Nippon Telegraph & Telephone Corp.1 | 17,584 | 75,946,552 | |||
NTT Data Corp.1 | 5,495 | 18,788,860 | |||
NTT DoCoMo Inc. | 57,151 | 91,021,974 | |||
Oki Electric Industry Co. Ltd.1 | 2,198,000 | 7,021,101 | |||
246,593,739 | |||||
TEXTILES – 0.97% | |||||
Kuraray Co. Ltd. | 1,099,000 | 9,631,763 | |||
Mitsubishi Rayon Co. Ltd. | 2,198,000 | 9,532,875 | |||
Nisshinbo Industries Inc. | 1,099,000 | 8,751,654 | |||
Teijin Ltd.1 | 3,297,000 | 17,414,307 | |||
Toray Industries Inc. | 4,396,000 | 19,975,525 | |||
Toyobo Co. Ltd. | 2,198,000 | 5,082,881 | |||
70,389,005 | |||||
TOYS, GAMES & HOBBIES – 0.59% | |||||
Bandai Co. Ltd.1 | 329,799 | 8,131,095 | |||
Nintendo Co. Ltd. | 330,400 | 34,486,345 | |||
42,617,440 | |||||
TRANSPORTATION – 4.36% | |||||
Central Japan Railway Co.1 | 5,495 | 41,829,937 | |||
East Japan Railway Co. | 12,089 | 64,722,680 | |||
Kawasaki Kisen Kaisha Ltd.1 | 2,198,000 | 14,299,312 | |||
Keihin Electric Express Railway Co. Ltd.1 | 2,198,000 | 13,567,535 | |||
Keio Corp. | 2,198,000 | 11,965,538 | |||
Kintetsu Corp.1 | 5,495,000 | 17,651,640 | |||
Mitsui O.S.K. Lines Ltd.1 | 4,396,000 | 31,960,840 | |||
Nippon Express Co. Ltd. | 3,297,000 | 14,625,645 | |||
Nippon Yusen Kabushiki Kaisha1 | 4,396,000 | 27,491,069 | |||
Seino Transportation Co. Ltd. | 1,099,000 | 9,809,763 | |||
Tobu Railway Co. Ltd.1 | 3,297,000 | 12,578,648 | |||
Tokyu Corp.1 | 3,297,000 | 15,396,977 | |||
West Japan Railway Co. | 6,594 | 23,495,964 | |||
Yamato Transport Co. Ltd. | 1,099,000 | 16,415,531 | |||
315,811,079 |
8 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
VENTURE CAPITAL – 0.09% | ||||||
JAFCO Co. Ltd.1 | 109,900 | $ | 6,566,213 | |||
6,566,213 | ||||||
TOTAL COMMON STOCKS | 7,245,437,204 | |||||
SHORT-TERM INVESTMENTS – 21.82% | ||||||
CERTIFICATES OF DEPOSIT4 – 2.48% | ||||||
Banco Bilbao Vizcaya Argentaria SA | ||||||
3.18% - 3.83%, 09/14/05 - 01/25/06 | $ | 10,245,682 | 10,245,681 | |||
Bank of Nova Scotia | ||||||
3.45% - 3.56%, 09/26/05 - 01/03/06 | 4,439,795 | 4,439,457 | ||||
Credit Suisse First Boston | ||||||
3.53%, 05/09/06 | 6,830,454 | 6,830,454 | ||||
Danske Bank | ||||||
3.50%, 10/17/05 | 6,830,454 | 6,830,198 | ||||
Dexia Credit Local | ||||||
3.61%, 08/30/06 | 3,415,227 | 3,414,548 | ||||
First Tennessee Bank | ||||||
3.52%, 09/15/05 | 11,611,772 | 11,611,772 | ||||
Fortis Bank NY | ||||||
3.83% - 3.84%, 01/25/06 | 10,245,682 | 10,245,749 | ||||
HBOS Treasury Services PLC | ||||||
3.39%, 12/14/05 | 4,098,273 | 4,098,273 | ||||
HSBC Bank USA N.A. | ||||||
3.72%, 08/03/06 | 3,415,227 | 3,416,344 | ||||
Royal Bank of Scotland | ||||||
3.61%, 06/27/06 | 3,415,227 | 3,414,809 | ||||
Societe Generale | ||||||
3.51% - 3.60%, 03/30/06 - 06/13/06 | 10,587,204 | 10,585,331 | ||||
Toronto-Dominion Bank | ||||||
2.66% - 3.94%, 09/14/05 - 07/10/06 | 24,248,113 | 24,248,598 | ||||
UBS AG | ||||||
2.67% - 3.40%, 11/09/05 - 12/15/05 | 5,464,363 | 5,464,352 | ||||
US Bank N.A. | ||||||
3.54%, 09/19/05 | 17,076,136 | 17,076,136 | ||||
Security | Principal | Value | ||||
Washington Mutual Bank | ||||||
3.50% - 3.55%, 09/15/05 - 09/19/05 | $ | 30,737,045 | $ | 30,737,044 | ||
Wells Fargo Bank N.A. | ||||||
3.50%, 09/06/05 - 09/20/05 | 26,980,295 | 26,980,283 | ||||
179,639,029 | ||||||
COMMERCIAL PAPER4 – 4.99% | ||||||
Alpine Securitization Corp. | ||||||
3.52%, 09/09/05 | 13,660,909 | 13,650,223 | ||||
Amstel Funding Corp. | ||||||
3.49% - 3.91%, 09/15/05 - 02/15/06 | 14,412,259 | 14,335,388 | ||||
Aspen Funding Corp. | ||||||
3.49%, 09/01/05 | 6,830,454 | 6,830,454 | ||||
Barton Capital Corp. | ||||||
3.51%, 09/07/05 | 7,746,077 | 7,741,545 | ||||
Blue Ridge Asset Funding Corp. | ||||||
3.48% - 3.49%, 09/09/05 - 09/21/05 | 11,270,250 | 11,256,369 | ||||
Bryant Park Funding LLC | ||||||
3.51% - 3.92%, 09/06/05 - 02/22/06 | 3,476,633 | 3,442,765 | ||||
Cantabric Finance LLC | ||||||
3.73%, 10/31/05 | 2,626,105 | 2,609,779 | ||||
Charta LLC | ||||||
3.54%, 09/20/05 | 4,781,318 | 4,772,385 | ||||
Chesham Finance LLC | ||||||
3.54%, 09/15/05 | 2,049,136 | 2,046,315 | ||||
Dorada Finance Inc. | ||||||
3.76%, 01/26/06 | 683,045 | 672,558 | ||||
Edison Asset Securitization LLC | ||||||
3.12%, 09/06/05 | 5,122,841 | 5,120,621 | ||||
Fairway Finance LLC | ||||||
3.15% - 3.56%, 09/15/05 - 10/20/05 | 8,808,212 | 8,800,751 | ||||
Ford Credit Floorplan Motown | ||||||
3.47% - 3.72%, 09/09/05 - 11/08/05 | 31,076,382 | 30,934,598 | ||||
Gemini Securitization Corp. | ||||||
3.49%, 09/06/05 | 10,958,098 | 10,952,786 |
SCHEDULEOF INVESTMENTS | 9 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Georgetown Funding Co. LLC | ||||||
3.49% - 3.53%, 09/20/05 - 09/21/05 | $ | 22,198,977 | $ | 22,156,053 | ||
Giro Funding Corp. | ||||||
3.53% - 3.56%, 09/16/05 - 09/22/05 | 5,122,841 | 5,114,271 | ||||
Grampian Funding LLC | ||||||
3.13% - 3.84%, 09/09/05 - 01/31/06 | 10,587,204 | 10,473,847 | ||||
Greenwich Capital Holdings Inc. | ||||||
3.48% - 3.53%, 09/02/05 - 02/10/06 | 7,855,023 | 7,855,022 | ||||
HSBC PLC | ||||||
3.88%, 02/03/06 | 2,049,136 | 2,014,904 | ||||
Jupiter Securitization Corp. | ||||||
3.51%, 09/21/05 | 3,871,980 | 3,864,429 | ||||
Leafs LLC | ||||||
3.61%, 01/20/06 - 02/21/065 | 7,171,344 | 7,171,345 | ||||
Lockhart Funding LLC | ||||||
3.47% - 3.55%, 09/16/05 - 09/19/05 | 9,415,303 | 9,401,245 | ||||
Mortgage Interest Networking Trust | ||||||
3.47% - 3.51%, 09/01/05 - 09/21/05 | 16,734,613 | 16,712,739 | ||||
New Center Asset Trust | ||||||
3.60%, 09/01/05 | 23,906,590 | 23,906,590 | ||||
Park Avenue Receivables Corp. | ||||||
3.50%, 09/19/05 | 3,852,649 | 3,845,907 | ||||
Park Granada LLC | ||||||
3.48% - 3.51%, 09/15/05 - 09/20/05 | 9,248,640 | 9,234,488 | ||||
Santander Central Hispano Finance Inc. | ||||||
3.91%, 02/17/06 | 6,830,454 | 6,705,080 | ||||
Scaldis Capital LLC | ||||||
3.52%, 09/07/05 | 13,660,909 | 13,652,894 | ||||
Sedna Finance Inc. | ||||||
3.92%, 02/21/06 | 1,707,614 | 1,675,446 | ||||
Security | Shares or Principal | Value | ||||
Solitaire Funding Ltd. | ||||||
3.49% - 3.52%, 09/02/05 - 09/06/05 | $ | 20,081,536 | $ | 20,076,243 | ||
Sydney Capital Corp. | ||||||
3.49%, 09/01/05 | 4,219,855 | 4,219,855 | ||||
Thames Asset Global Securitization No. 1 Inc. | ||||||
3.54%, 09/20/05 | 14,343,954 | 14,317,155 | ||||
Three Pillars Funding Corp. | ||||||
3.49% - 3.52%, 09/01/05 - 09/07/05 | 14,635,341 | 14,630,347 | ||||
Thunder Bay Funding Inc. | ||||||
3.50%, 09/01/05 | 1,141,710 | 1,141,710 | ||||
Tulip Funding Corp. | ||||||
3.49%, 09/01/05 | 25,202,396 | 25,202,396 | ||||
Windmill Funding Corp. | ||||||
3.52%, 09/09/05 | 3,142,009 | 3,139,551 | ||||
World Savings Bank | ||||||
3.51%, 09/09/05 | 2,390,659 | 2,390,654 | ||||
Yorktown Capital LLC | ||||||
3.53%, 09/19/05 | 9,904,159 | 9,886,678 | ||||
361,955,386 | ||||||
MEDIUM-TERM NOTES4 – 0.09% | ||||||
Dorada Finance Inc. | ||||||
3.93%, 07/07/065 | 2,117,441 | 2,117,262 | ||||
K2 USA LLC | ||||||
3.94%, 07/07/065 | 4,098,273 | 4,098,099 | ||||
6,215,361 | ||||||
MONEY MARKET FUNDS – 0.43% | ||||||
Barclays Global Investors Funds Government Money Market Fund, Institutional Shares 3.63%4,6,7 | 27,321,817 | 27,321,817 | ||||
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 3.56%6,7 | 694,161 | 694,161 | ||||
BlackRock Temp Cash Money Market Fund 3.41%4,7 | 723,737 | 723,737 |
10 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2005
Security | Shares or Principal | Value | ||||
Short Term Investments Co. - Prime Money Market Portfolio, Institutional Shares 3.50%4,7 | 2,394,457 | $ | 2,394,457 | |||
31,134,172 | ||||||
REPURCHASE AGREEMENTS4 – 4.21% | ||||||
Bank of America N.A. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $163,947,298 and an effective yield of 3.60%.8 | $ | 163,930,905 | 163,930,905 | |||
Goldman Sachs Group Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $126,376,042 and an effective yield of 3.60%.8 | 126,363,406 | 126,363,406 | ||||
Merrill Lynch Government Securities Inc. Repurchase Agreement, dated 8/31/05, due 9/1/05, with a maturity value of $14,891,880 and an effective yield of 3.60%.8 | 14,890,391 | 14,890,391 | ||||
305,184,702 | ||||||
TIME DEPOSITS4 – 0.88% | ||||||
Abbey National Treasury Services PLC | ||||||
3.50%, 09/01/05 | 13,660,909 | 13,660,909 | ||||
Chase Bank USA N.A. | ||||||
3.58%, 09/01/05 | 37,567,499 | 37,567,499 | ||||
JP Morgan Chase Bank N.A. | ||||||
3.59%, 09/01/05 | 9,017,381 | 9,017,381 | ||||
Natexis Banques Populaires | ||||||
3.51%, 09/20/059 | 3,415,227 | 3,415,227 | ||||
63,661,016 | ||||||
VARIABLE & FLOATING RATE NOTES4 – 8.74% | ||||||
Allstate Life Global Funding II | ||||||
3.58% - 3.66%, 07/08/06 - 07/27/065 | 12,704,645 | 12,704,714 | ||||
Security | Principal | Value | ||||
American Express Bank | ||||||
3.55% - 3.63%, 10/17/05 - 07/19/06 | $ | 18,442,227 | $ | 18,442,284 | ||
American Express Centurion Bank | ||||||
3.55% - 3.63%, 06/29/06 - 07/19/06 | 11,270,250 | 11,270,250 | ||||
American Express Credit Corp. | ||||||
3.65%, 10/26/05 | 13,660,909 | 13,661,935 | ||||
ASIF Global Financing XXII | ||||||
3.99%, 05/30/065 | 6,830,454 | 6,838,968 | ||||
Australia & New Zealand Banking Group Ltd. | ||||||
3.60%, 06/23/065 | 4,439,795 | 4,439,795 | ||||
Bank of America N.A. | ||||||
3.56%, 08/10/06 | 34,152,272 | 34,152,272 | ||||
Beta Finance Inc. | ||||||
3.51% - 3.72%, 09/23/05 - 06/09/065 | 35,108,535 | 35,108,063 | ||||
BMW US Capital LLC | ||||||
3.54%, 07/14/065 | 6,830,454 | 6,830,454 | ||||
Canadian Imperial Bank of Commerce | ||||||
3.50% - 3.61%, 09/13/05 - 12/14/05 | 23,223,545 | 23,222,576 | ||||
CC USA Inc. | ||||||
3.52% - 3.59%, 03/23/06 - 07/14/065 | 18,373,922 | 18,373,154 | ||||
Commodore CDO Ltd. | ||||||
3.47%, 12/12/055 | 1,707,614 | 1,707,614 | ||||
Credit Suisse First Boston | ||||||
3.57%, 07/19/06 | 17,076,136 | 17,076,136 | ||||
DEPFA Bank PLC | ||||||
3.42%, 03/15/06 | 6,830,454 | 6,830,454 | ||||
Dorada Finance Inc. | ||||||
3.59% - 3.62%, 03/27/06 - 06/26/065 | 10,860,422 | 10,860,987 | ||||
Eli Lilly Services Inc. | ||||||
3.53%, 09/01/065 | 6,830,454 | 6,830,454 | ||||
Fifth Third Bancorp | ||||||
3.58%, 04/21/065 | 13,660,909 | 13,660,909 |
SCHEDULEOF INVESTMENTS | 11 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2005
Security | Principal | Value | ||||
Five Finance Inc. | ||||||
3.60% - 3.63%, 02/27/06 - 06/26/065 | $ | 4,781,318 | $ | 4,781,425 | ||
General Electric Capital Corp. | ||||||
3.66%, 07/07/06 | 3,073,704 | 3,076,478 | ||||
Hartford Life Global Funding Trust | ||||||
3.56%, 08/15/06 | 6,830,454 | 6,830,454 | ||||
HBOS Treasury Services PLC | ||||||
3.51% - 3.57%, 01/10/06 - 04/24/065 | 20,491,363 | 20,491,362 | ||||
HSBC Bank USA N.A. | ||||||
3.70%, 05/04/06 | 2,390,659 | 2,391,963 | ||||
K2 USA LLC | ||||||
3.47% - 3.58%, 09/12/05 - 06/02/065 | 26,638,772 | 26,638,994 | ||||
Links Finance LLC | ||||||
3.52% - 3.71%, 11/16/05 - 03/15/065 | 26,638,772 | 26,641,640 | ||||
Lothian Mortgages PLC | ||||||
3.63%, 01/24/06 | 6,830,454 | 6,830,454 | ||||
Marshall & Ilsley Bank | ||||||
3.71%, 02/20/06 | 6,830,454 | 6,834,323 | ||||
Metropolitan Life Global Funding I | ||||||
3.55% - 4.01%, 08/28/06 - 09/06/065 | 13,660,909 | 13,666,913 | ||||
National City Bank (Ohio) | ||||||
3.50%, 01/06/06 | 3,415,227 | 3,414,868 | ||||
Nationwide Building Society | ||||||
3.51% - 3.62%, 01/13/06 - 07/07/065 | 25,272,681 | 25,275,133 | ||||
Nordea Bank AB | ||||||
3.55%, 08/11/065 | 11,953,295 | 11,953,295 | ||||
Northern Rock PLC | ||||||
3.54% - 3.61%, 10/25/05 - 08/03/065 | 21,857,454 | 21,857,839 | ||||
Permanent Financing PLC | ||||||
3.53% - 3.54%, 09/12/05 - 06/12/065 | 26,297,249 | 26,297,250 | ||||
Principal Life Income Funding Trusts | ||||||
3.74%, 05/10/06 | 5,122,841 | 5,123,031 | ||||
Royal Bank of Scotland | ||||||
3.47% - 3.61%, 04/05/06 - 08/30/06 | 22,796,641 | 22,791,438 | ||||
Sedna Finance Inc. | ||||||
3.54%, 01/10/06 - 01/17/065 | 3,756,750 | 3,756,445 | ||||
Sigma Finance Inc. | ||||||
3.50% - 3.72%, 09/15/05 - 08/15/065 | 39,001,894 | 39,002,084 | ||||
Skandinaviska Enskilda Bank NY | ||||||
3.58%, 07/18/065 | 6,830,454 | 6,830,454 | ||||
Strips III LLC | ||||||
3.69%, 07/24/065,9 | 2,006,445 | 2,006,445 | ||||
SunTrust Bank | ||||||
3.63%, 04/28/06 | 10,245,682 | 10,245,682 | ||||
Tango Finance Corp. | ||||||
3.54% - 3.60%, 09/15/05 - 06/21/065 | 16,598,004 | 16,596,987 | ||||
Toyota Motor Credit Corp. | ||||||
3.57%, 04/10/06 | 3,073,704 | 3,073,677 | ||||
Unicredito Italiano SpA | ||||||
3.34%, 06/14/06 | 8,879,591 | 8,877,124 | ||||
Wachovia Asset Securitization Inc. | ||||||
3.63%, 09/25/055 | 16,443,260 | 16,443,260 | ||||
Wells Fargo & Co. | ||||||
3.56%, 09/15/065 | 3,415,227 | 3,415,566 | ||||
WhistleJacket Capital LLC | ||||||
3.52% - 3.62%, 09/15/05 - 07/28/065 | 27,321,817 | 27,320,632 | ||||
White Pine Finance LLC | ||||||
3.47% - 3.61%, 11/01/05 - 06/20/065 | 14,412,259 | 14,411,890 | ||||
Winston Funding Ltd. | ||||||
3.71%, 10/23/055 | 4,876,944 | 4,876,944 | ||||
633,765,069 | ||||||
TOTAL SHORT-TERM INVESTMENTS | 1,581,554,735 | |||||
12 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2005
Value | ||||
TOTAL INVESTMENTS IN SECURITIES – 121.78% | $ | 8,826,991,939 | ||
Other Assets, Less Liabilities – (21.78)% | (1,578,884,543 | ) | ||
NET ASSETS – 100.00% | $ | 7,248,107,396 | ||
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 (these securities) represent(s) an investment of securities lending collateral. See Note 5. |
5 | This security or a portion of these securities is 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 | The Fund’s investment adviser is an affiliate of the issuer. See Note 2. |
7 | The rate quoted is the annualized seven-day yield of the fund at period end. |
8 | Repurchase agreements held as collateral for securities on loan are fully collateralized by U.S. Government securities, with interest rates ranging from 3.35% to 8.50% and maturity dates ranging from 11/1/07 to 8/1/35. |
9 | The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund. |
See notes to the financial statements.
SCHEDULEOF INVESTMENTS | 13 |
Table of Contents
Statement of Assets and Liabilities
iSHARES®, INC.
August 31, 2005
iShares MSCI Japan Index Fund | ||||
ASSETS | ||||
Investments, at cost: | ||||
Unaffiliated issuers | $ | 7,950,194,701 | ||
Affiliated issuersa | $ | 28,015,978 | ||
Foreign currency, at cost | $ | 3,144,948 | ||
Investments in securities, at value (including securities on loanb) (Note 1): | ||||
Unaffiliated issuers | $ | 8,798,975,961 | ||
Affiliated issuersa | 28,015,978 | |||
Foreign currency, at value | 3,145,497 | |||
Receivables: | ||||
Investment securities sold | 16,541,197 | |||
Dividends and interest | 2,349,255 | |||
Capital shares sold | 204,180 | |||
Total Assets | 8,849,232,068 | |||
LIABILITIES | ||||
Payables: | ||||
Investment securities purchased | 16,970,257 | |||
Collateral for securities on loan (Note 5) | 1,580,860,574 | |||
Investment advisory fees (Note 2) | 3,293,841 | |||
Total Liabilities | 1,601,124,672 | |||
NET ASSETS | $ | 7,248,107,396 | ||
Net assets consist of: | ||||
Paid-in capital | $ | 6,570,259,033 | ||
Undistributed net investment income | 21,558,909 | |||
Accumulated net realized loss | (192,457,628 | ) | ||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies | 848,747,082 | |||
NET ASSETS | $ | 7,248,107,396 | ||
Shares outstanding | 659,400,000 | |||
Net asset value per share | $ | 10.99 | ||
a | The Fund’s invesment adviser is an affiliate of the issuers. See Note 2. |
b | Securities on loan with market value of $1,501,410,347. See Note 5. |
See notes to the financial statements.
14 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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iSHARES®, INC.
Year Ended August 31, 2005
iShares MSCI Japan Index Fund | ||||
NET INVESTMENT INCOME | ||||
Dividendsa | $ | 72,440,203 | ||
Interest from affiliated issuersb | 36,740 | |||
Securities lending incomec | 1,906,190 | |||
Total investment income | 74,383,133 | |||
EXPENSES (NOTE 2) | ||||
Investment advisory fees | 36,714,546 | |||
Total expenses | 36,714,546 | |||
Net investment income | 37,668,587 | |||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments | (73,911,977 | ) | ||
In-kind redemptions | 137,863,746 | |||
Foreign currency transactions | (287,807 | ) | ||
Net realized gain | 63,663,962 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 584,175,072 | |||
Translation of assets and liabilities in foreign currencies | (16,875 | ) | ||
Net change in unrealized appreciation (depreciation) | 584,158,197 | |||
Net realized and unrealized gain | 647,822,159 | |||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 685,490,746 | ||
a | Net of foreign withholding tax of $3,157,040. |
b | The Fund’s investment adviser is an affiliate of the issuers. See Note 2. |
c | Includes income earned from issuers of which the Fund’s investment adviser is an affiliate. See Note 2. |
See notes to the financial statements.
FINANCIAL STATEMENTS | 15 |
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Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Japan Index Fund | ||||||||
For the year ended | For the year ended | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 37,668,587 | $ | 10,691,336 | ||||
Net realized gain | 63,663,962 | 35,554,240 | ||||||
Net change in unrealized appreciation (depreciation) | 584,158,197 | 309,251,117 | ||||||
Net increase in net assets resulting from operations | 685,490,746 | 355,496,693 | ||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (26,096,423 | ) | �� | (474,213 | ) | |||
Total distributions to shareholders | (26,096,423 | ) | (474,213 | ) | ||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 1,159,930,120 | 4,011,503,336 | ||||||
Cost of shares redeemed | (434,548,691 | ) | (230,049,073 | ) | ||||
Net increase in net assets from capital share transactions | 725,381,429 | 3,781,454,263 | ||||||
INCREASE IN NET ASSETS | 1,384,775,752 | 4,136,476,743 | ||||||
NET ASSETS: | ||||||||
Beginning of year | 5,863,331,644 | 1,726,854,901 | ||||||
End of year | $ | 7,248,107,396 | $ | 5,863,331,644 | ||||
Undistributed net investment income included in net assets at end of year | $ | 21,558,909 | $ | 9,816,919 | ||||
SHARES ISSUED AND REDEEMED: | ||||||||
Shares sold | 109,200,000 | 408,600,000 | ||||||
Shares redeemed | (42,600,000 | ) | (24,000,000 | ) | ||||
Net increase in shares outstanding | 66,600,000 | 384,600,000 | ||||||
See notes to the financial statements.
16 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Japan Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2005 | Year ended Aug. 31, 2004 | Year ended Aug. 31, 2003 | Year ended Aug. 31, 2002 | Year ended Aug. 31, 2001 | ||||||||||||||||
Net asset value, beginning of year | $ | 9.89 | $ | 8.29 | $ | 7.77 | $ | 9.07 | $ | 13.82 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income (loss)a | 0.06 | 0.03 | 0.00c | (0.01 | ) | (0.01 | ) | |||||||||||||
Net realized and unrealized gain (loss) | 1.08 | 1.57 | 0.52 | (1.29 | ) | (4.74 | ) | |||||||||||||
Total from investment operations | 1.14 | 1.60 | 0.52 | (1.30 | ) | (4.75 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.04 | ) | (0.00 | )c | — | — | — | |||||||||||||
Total distributions | (0.04 | ) | (0.00 | )c | — | — | — | |||||||||||||
Net asset value, end of year | $ | 10.99 | $ | 9.89 | $ | 8.29 | $ | 7.77 | $ | 9.07 | ||||||||||
Total return | 11.58 | % | 19.32 | % | 6.69 | % | (14.33 | )% | (34.37 | )% | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 7,248,107 | $ | 5,863,332 | $ | 1,726,855 | $ | 666,376 | $ | 527,899 | ||||||||||
Ratio of expenses to average net assets | 0.57 | % | 0.64 | %d | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||
Ratio of net investment income (loss) to average net assets | 0.59 | % | 0.28 | %e | 0.03 | % | (0.12 | )% | (0.11 | )% | ||||||||||
Portfolio turnover rateb | 6 | % | 5 | % | 2 | % | 2 | % | 21 | % |
a | Based on average shares outstanding throughout each period. |
b | Portfolio turnover rates exclude 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 voluntary 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 voluntary reimbursed distribution fees for the year ended August 31, 2004 was 0.14%. |
See notes to the financial statements.
FINANCIAL HIGHLIGHTS | 17 |
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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, 2005, 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 uses 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 securities of 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; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets and the risk of war.
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 the financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
SECURITY VALUATION
The securities and other assets of the Fund are generally valued using market valuations. A market valuation generally means a valuation (i) obtained from an exchange, a pricing service or a major market maker (or dealer), (ii) based on a price quotation or other equivalent indication of value supplied by an exchange, a pricing service, or a major market maker (or dealer) or (iii) based on amortized cost. In the case of shares of other funds that are not traded on an exchange, a market valuation means such fund’s published net asset value per share. The investment adviser may use various pricing services or discontinue the use of any pricing service. A price obtained from a pricing service based on such pricing service’s valuation matrix may be considered a market valuation. In the event that current market valuations are not readily available or such valuations do not reflect current market values, the affected investments will be valued using fair value pricing pursuant to the pricing policy and procedures approved by the Board of Directors of the Company (the “Board”).
18 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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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, net of any foreign taxes withheld at source, 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 Fund are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Any use of a different rate from the rates used by MSCI may adversely affect the Fund’s ability to track its underlying index. 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.
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 capital 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.
As of August 31, 2005, the tax year-end of the Fund, the components of distributable earnings (accumulated losses) on a tax basis consisted of undistributed ordinary income of $29,121,833, unrealized appreciation of $798,412,174 and capital and other losses of $149,685,644, for net distributable earnings of $677,848,363.
For the years ended August 31, 2005 and 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, 2005.
From November 1, 2004 to August 31, 2005, the Fund incurred net realized capital losses and net foreign currency losses of $66,204,379. As permitted by tax regulations, the Fund has elected to defer those losses and treat them as arising in the year ending August 31, 2006.
As of August 31, 2005, 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, $5,594,562 and $8,733,802 expiring in 2009, 2010, 2011, 2012 and 2013, 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.
NOTESTOTHE FINANCIAL STATEMENTS | 19 |
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Notes to the Financial Statements (Continued)
iSHARES®, INC.
The Fund may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Fund may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such mark-to-market gains.
For the year ended August 31, 2005, the Fund reclassified certain amounts of paid-in-capital from accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss), respectively, as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, realized foreign currency gains and losses and gains and losses on in-kind redemptions. These reclassifications have no effect on net assets or net asset value per share.
As of August 31, 2005, the cost of investments for federal income tax purposes was $8,028,545,587. Net unrealized appreciation aggregated $798,446,352, of which $1,004,957,713 represented gross unrealized appreciation on securities and $206,511,361 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. As of August 31, 2005, a portion of the cash collateral for securities on loan for the Fund 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, 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 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 execution 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 Fee | Aggregate Net Assets | |
0.59% | First $7 billion | |
0.54 | Over $7 billion, up to and including $11 billion | |
0.49 | Over $11 billion |
Barclays Global Investors, N.A. (“BGI”) has a license agreement with MSCI for the use of the MSCI Japan Index. Under a sub-license agreement between BGI and the Fund, the fee for the use of the MSCI Japan Index is paid directly by BGI to MSCI.
20 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes to the Financial Statements (Continued)
iSHARES®, INC.
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.
Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Fund is permitted to lend portfolio securities to Barclays Capital, Inc. (“BarCap”). Pursuant to the same exemptive order, BGI serves as securities lending agent for the Company. BarCap and BGI are affiliates 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, 2005, BGI earned securities lending agent fees of $1,906,190.
SEI Investments Distribution Co. (the “Distributor”) serves as the Fund’s underwriter and distributor of the shares of the Fund, pursuant to a Distribution Agreement with the Company. The Distributor does not currently receive a fee from the Fund for its distribution services. 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.
Pursuant to Rule 17a-7 under the 1940 Act, the Fund executed cross trades for the year ended August 31, 2005. 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 ended August 31, 2005 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 regularly scheduled meeting to review all such transactions executed during the last two months of the fiscal year.
Pursuant to an exemptive order issued by the SEC, the Fund may invest in the Institutional Shares of the Government Money Market Fund (“GMMF”), Institutional Money Market Fund (“IMMF”) and Prime Money Market Fund (“PMMF”) of Barclays Global Investors Funds. The GMMF, IMMF and PMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Government Money Market Master Portfolio, 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 GMMF, IMMF and PMMF are open-end money market funds available to institutional and accredited investors, including other investment companies managed by BGFA. The GMMF, IMMF and PMMF seek a high level of income consistent with liquidity and the preservation of capital. While the GMMF, 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 GMMF, 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 from affiliated issuers or securities lending income, respectively, in the accompanying Statement of Operations.
The following table provides information about the investment by the Fund in shares of issuers of which BGFA is an affiliate for the year ended August 31, 2005, including income earned from these affiliated issuers.
Name of Affiliated Issuer | Number of (in 000s) | Gross Additions (in 000s) | Gross Reductions (in 000s) | Number of (in 000s) | Value at End of Year | Interest Income | ||||||||
IMMF | 3,155 | 234,923 | 237,384 | 694 | $ | 694,161 | $ | 36,740 |
NOTESTOTHE FINANCIAL STATEMENTS | 21 |
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Notes to the Financial Statements (Continued)
iSHARES®, INC.
During the year ended August 31, 2005, the Fund invested cash collateral from securities on loan in the GMMF, 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 GMMF, IMMF and PMMF in connection with the investment of collateral for securities on loan.
As of August 31, 2005, 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, 2005, aggregated $419,110,953 and $405,253,216, respectively.
In-kind purchases and sales (see Note 4) for the year ended August 31, 2005, aggregated $1,155,122,016 and $430,395,093, respectively.
4. CAPITAL SHARE TRANSACTIONS
The Company has authorized 10.9 billion shares of $.001 par value capital stock. As of August 31, 2005, 2,124,600,000 shares were authorized to the Fund.
The Company issues and redeems capital shares of the Fund only in aggregations of a specified number of shares (each, a “Creation Unit”) at net asset value. Except when aggregated in Creation Units, shares of the Fund are not redeemable. Transactions in capital shares for the Fund are disclosed in detail in the Statements of Changes in Net Assets.
The consideration for 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 by the Fund is required to have a value of at least 105% of the market value of the loaned securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Fund of securities lending are that the borrower may not provide additional collateral when required, or may not return the securities when due.
As of August 31, 2005, the Fund had loaned securities which were collateralized by cash. Pursuant to an exemptive order issued by the SEC, the cash collateral received was invested in a joint account with other investment funds managed by BGFA. The joint account 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 as of August 31, 2005 and the value of the related collateral 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.
22 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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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 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 Japan Index Fund, a portfolio of the iShares MSCI Series (the “Fund”) at August 31, 2005, 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 five 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, 2005 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 18, 2005
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 23 |
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iSHARES®, INC.
For the year ended August 31, 2005, the iShares MSCI Japan Index Fund earned foreign source income of $75,597,244 and paid foreign taxes of $3,143,784 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 the maximum amount of $43,802,876 as qualified dividends for purposes of the maximum rate under Section 1(h)(11) of the Code for the year ended August 31, 2005.
In January 2006, shareholders will receive Form 1099-DIV which will include their share of qualified dividends distributed during the calendar year 2005. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
24 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Shareholder Meeting Results (Unaudited)
iSHARES®, INC.
A special meeting of shareholders of iShares, Inc. was scheduled on July 14, 2005 and subsequently adjourned until August 11, 2005. All proposals were approved by the shareholders except as noted below. The proposals acted upon by shareholders at the special meeting and the results of the shareholder vote were as follows:
Proposal 1*
To elect the eight nominees specified below as Directors of the Company, each of whom will serve until his/her successor is duly elected or appointed and qualified.
Director | Votes For | Votes Withheld | ||
Lee T. Kranefuss | 514,380,779 | 13,203,425 | ||
John E. Martinez | 514,431,297 | 13,152,907 | ||
Richard K. Lyons | 514,795,814 | 12,788,388 | ||
George G.C. Parker | 509,155,829 | 18,428,374 | ||
W. Allen Reed | 514,418,913 | 13,165,293 | ||
Cecilia H. Herbert | 514,381,937 | 13,202,268 | ||
Charles A. Hurty | 514,442,567 | 13,141,638 | ||
John E. Kerrigan | 514,830,983 | 12,753,220 |
Messrs. Kranefuss, Martinez, Lyons, Reed and Parker previously served as Directors of the Company and were re-elected. Ms. Herbert and Messrs. Hurty and Kerrigan were newly elected.
Proposal 2A
To approve a change to the Company’s fundamental investment policy to simplify and conform the Fund’s investment restriction regarding issuing senior securities.
Votes For | Votes Against | Votes Abstaining | Broker Non-Votes** | |||
228,253,406 | 6,247,816 | 2,102,848 | 86,351,206 |
Proposal 2B
To approve a change to the Company’s fundamental investment policy to simplify and conform the Fund’s investment restriction regarding the making of loans.
Votes For | Votes Against | Votes Abstaining | Broker Non-Votes** | |||
227,119,660 | 6,799,093 | 2,685,316 | 86,351,207 |
Proposal 2C
This proposal did not apply to the Fund.
Proposal 2D
This proposal did not apply to the Fund.
SHAREHOLDER MEETING RESULTS | 25 |
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Shareholder Meeting Results (Unaudited) (Continued)
iSHARES®, INC.
Proposal 3
To approve a change in the classification of the investment objectives of the Fund from fundamental to non-fundamental. The shareholders of the Fund did not approve this proposal.
Votes For | Votes Against | Votes Abstaining | Broker Non-Votes** | |||
214,218,625 | 19,731,770 | 2,653,675 | 86,351,206 |
Proposal 4
This proposal did not apply to the Fund.
* | Denotes Company-wide proposal and voting results. |
** | Broker non-votes are proxies received by the Fund from brokers or nominees, who did not receive instructions from the beneficial owner or other persons entitled to vote, and who have no discretionary power to vote on a particular matter. Broker non-votes have the effect of a vote against the proposal. |
26 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory Contracts* (Unaudited)
iSHARES®, INC.
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors, including a majority of Directors who are not interested persons of the Company (as that term is defined in the 1940 Act), who are commonly referred to as the “Independent Directors,” is required annually to consider each Fund’s Investment Advisory Contract with BGFA (each, an “Advisory Contract”). Pursuant to Section 15(c), the Board of Directors (the “Board”) is required to request and evaluate, and BGFA is required to provide, such information as may be reasonably necessary to evaluate the terms of the Advisory Contracts. At a meeting held on June 14, 2005, the Board approved the selection of BGFA and the continuance of the Advisory Contracts, based on its review of qualitative and quantitative information provided by BGFA. With respect to the iShares MSCI Singapore Index Fund (the “Singapore Fund”), the Board approved the continuance of the current Advisory Contract for the Singapore Fund, pending shareholder approval of the new advisory contract for the Singapore Fund which was previously considered and approved by the Board on April 22, 2005. In selecting BGFA and approving the Advisory Contracts for the Funds, the Board, including the Independent Directors, advised by their independent counsel, considered the following factors, none of which was controlling, and made the following conclusions:
NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY BGFA
The Board reviewed the scope of services to be provided by BGFA under the Advisory Contracts and noted that there would be no differences between the scope of services required to be provided by BGFA for the past year and the scope of services required to be provided by BGFA for the upcoming year. In reviewing the scope of services provided to the Funds by BGFA, the Board reviewed and discussed BGFA’s investment philosophy and experience, noting that BGFA and its affiliates have committed significant resources over time, including increasing the number of their employees, to the support of the Funds. The Board also considered BGFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BGFA provides information regarding portfolio management and compliance to the Board on a periodic basis in connection with regularly scheduled meetings of the Board. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds. In addition to the above considerations, the Board reviewed and considered BGFA’s investment processes and strategies, and matters related to BGFA’s portfolio transaction policies and procedures. The Board further noted that BGFA does not serve as investment adviser for any other series of registered investment companies with substantially similar investment objectives and strategies as the Funds; therefore, no comparative performance information was available. However, the Board also noted that the Funds had met their investment objectives consistently since their relevant inception dates. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Funds under the Advisory Contracts were appropriate and continued to support the Board’s original selection of BGFA as investment adviser to the Funds.
FUNDS’ EXPENSES AND PERFORMANCE OF THE FUNDS
The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund in comparison with the same information for other funds registered under the 1940 Act objectively determined solely by Lipper, as comprising each Fund’s applicable peer group (the “Lipper Peer Group”). In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Fund for the one-, three- and five-year, and “latest quarter” periods ended March 31, 2005, as applicable, and a comparison of each Fund’s performance to that of the funds in its Lipper Peer Group for the same periods. Because there are relatively few exchange-traded funds other than the Funds and because few, if any, exchange-traded funds or index funds track indices similar to those tracked by the Funds, the Lipper Peer Groups included open-end, closed-end, and exchange-traded funds, and funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the applicable Lipper Peer Groups and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Peer Groups, the statistical information may or may not provide meaningful direct comparisons to the Funds. The Board noted that most of the Funds generally performed in line with the funds in their respective Lipper Peer Groups over relevant periods, however, certain
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACTS | 27 |
Table of Contents
Board Review and Approval of Investment Advisory Contracts (Unaudited) (Continued)
iSHARES®, INC.
of the Funds may have underperformed or outperformed funds in their respective Lipper Peer Groups over relevant periods, but any such Funds also performed in line with their relevant benchmarks over such periods. The Board also noted that the investment advisory fees and overall expenses for the Funds were generally lower than or in line with the investment advisory fee rates and overall expenses of the Funds in their respective Lipper Peer Groups. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Funds, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the Lipper Peer Groups, were satisfactory for the purposes of approving the continuance of the Advisory Contracts.
COSTS OF SERVICES PROVIDED TO FUNDS AND PROFITS REALIZED BY BGFA AND AFFILIATES
The Board reviewed information about the profitability of the Funds to BGFA based on the fees payable under the Advisory Contracts for the last calendar year. The Board analyzed the Funds’ expenses, including the investment advisory fees paid to BGFA. The Board also reviewed information regarding direct revenue received by BGFA and ancillary revenue received by BGFA and/or its affiliates in connection with the services provided to the Funds by BGFA (as discussed below). The Board also discussed BGFA’s profit margin as reflected in the Funds’ profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits to be realized by BGFA and its affiliates under the Advisory Contracts and from other relationships between the Funds and BGFA and/or its affiliates, if any, were within the range the Board considered reasonable and appropriate.
ECONOMIES OF SCALE
In connection with its review of the Funds’ profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds’ asset levels. The Board noted that the Advisory Contracts for most of the Funds provide for breakpoints in the investment advisory fee rates as a result of increases in the asset levels of such Funds on an aggregated basis with certain other Funds. The Board further noted that the Advisory Contract for the iShares MSCI Singapore Index Fund provides for breakpoints in its investment advisory fee rate based on increases in the asset levels of that particular Fund. The Board also noted that the Advisory Contracts for the iShares MSCI Pacific Ex-Japan Index Fund and the iShares MSCI Emerging Markets Index Fund do not provide for any breakpoints in the investment advisory fee rates as a result of increases in the asset levels of such Funds. However, the Board further noted that possible future economies of scale had been taken into consideration by fixing the investment advisory fees at rates at the lower end of the marketplace, effectively giving Fund shareholders, from inception, the benefits of the lower average fee shareholders would have received from a fee structure with declining breakpoints where the initial fee was higher. In addition, the Board noted that as of July 1, 2004, Fund shareholders were no longer paying distribution fees pursuant to the Funds’ distribution plan under Rule 12b-1 of the 1940 Act because such plan had been terminated as of that date, benefiting the Funds’ shareholders by lowering the Funds’ overall expenses. The Board also reviewed BGFA’s historic profitability as investment adviser to the Funds and noted that BGFA had not yet fully recovered losses it had experienced during earlier years when the Funds had not yet achieved reasonable economic scale. In light of this history, the Board determined that reductions in fee rates or additions of further breakpoints were not warranted at this juncture. Based on this review, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees at present reflects the sharing of economies of scale with the Funds’ shareholders.
FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA AND ITS AFFILIATES
The Board received and considered information regarding the Funds’ annual investment advisory fee rates under the Advisory Contracts in comparison to the investment advisory/management fee rates for other funds/accounts for which BGFA or BGI, an affiliate of BGFA, provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and separate accounts. The Board noted that comparative investment advisory/management fee information was not available, as BGFA and its affiliates do not manage any mutual funds, collective funds, separate accounts or other exchange-traded funds with substantially similar investment objectives and strategies as the
28 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory Contracts (Unaudited) (Continued)
iSHARES®, INC.
Funds. However, the Board noted that BGFA provided the Board with general information regarding how the level of services provided to the other funds registered under the 1940 Act, collective funds and separate accounts differed from the level of services provided to the Funds. Based on this review, the Board determined that the investment advisory fee rates under the Advisory Contracts do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Advisory Contracts are fair and reasonable.
OTHER BENEFITS TO BGFA AND/OR ITS AFFILIATES
The Board reviewed any ancillary revenue received by BGFA and/or its affiliates in connection with the services provided to the Funds by BGFA, such as the payment of securities lending revenue to BGI, the Company’s securities lending agent, and the payment of advisory fees and/or administration fees to BGFA and BGI in connection with the Funds’ investments in other funds for which BGFA provides investment advisory services and/or BGI provides administration services. The Board noted that BGFA and its affiliates do not use soft dollars or consider the value of research or other services that may be provided to BGFA or its affiliates in connection with portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through an affiliate of the Funds or BGFA are reported to the Board pursuant to Rule 17e-1 under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders.
Based on the above analysis, the Board determined that the Advisory Contracts, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Funds and their shareholders to continue the Advisory Contracts.
* | Denotes the Board’s approval of Investment Advisory Contracts for all series of the Company, including the Fund. |
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACTS | 29 |
Table of Contents
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, 2000 through June 30, 2005, 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, 2000 through June 30, 2005
Premium/Discount Range | Number of Days | Percentage of Total Days | |||
Greater than 3.0% | 6 | 0.43 | % | ||
Greater than 2.5% and Less than 3.0% | 9 | 0.65 | |||
Greater than 2.0% and Less than 2.5% | 21 | 1.52 | |||
Greater than 1.5% and Less than 2.0% | 47 | 3.40 | |||
Greater than 1.0% and Less than 1.5% | 136 | 9.85 | |||
Greater than 0.5% and Less than 1.0% | 249 | 18.03 | |||
Between 0.5% and –0.5% | 603 | 43.67 | |||
Less than –0.5% and Greater than –1.0% | 177 | 12.82 | |||
Less than –1.0% and Greater than –1.5% | 76 | 5.50 | |||
Less than –1.5% and Greater than –2.0% | 40 | 2.90 | |||
Less than –2.0% and Greater than –2.5% | 8 | 0.58 | |||
Less than –2.5% | 9 | 0.65 | |||
1,381 | 100.00 | % | |||
30 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
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 101 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 126 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 and Officers
Name, Year of Birth | Position(s), Length of Service | Principal Occupation(s) During Past 5 Years | Other Directorships Held | |||
*Lee T. Kranefuss, 1961 | Director, Chairman and President (since June 18, 2003). | Chief Executive Officer of Intermediary Investor and Exchange Traded Products Business of BGI (since 2003); Chief Executive Officer of the Individual Investor Business of BGI (1997-2003). | Trustee (since 2003) of iShares Trust; Trustee (since 2001) of Barclays Global Investors Funds and Master Investment Portfolio; Director (since 2003) of BGI Cayman Prime Money Market Fund, Ltd.; Director (since 2003) of iShares PLC and EETF PLC (Dublin). | |||
*John E. Martinez, 1961 | 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 2003) of iShares Trust; Director (since 2005) of Real Estate Equity Exchange; Director (since 2003) of Larkin Street Youth Services; Director (2000-2002) of Barclays Global Investors UK Holdings. |
* | Lee T. Kranefuss and John E. Martinez are considered to be “interested persons” (as defined in the 1940 Act) of the Company due to their affiliations with BGFA, the Funds’ investment adviser, and BGFA affiliates. |
DIRECTOR INFORMATION | 31 |
Table of Contents
Director Information (Unaudited) (Continued)
iSHARES®, INC.
Independent Directors
Name, Year of Birth | Position(s), Length of Service | Principal Occupation(s) During Past 5 Years | Other Directorships Held | |||
Richard K. Lyons, 1961 | Director (since February 28, 2002). | Acting Dean (2004-2005) and Sylvan Coleman Professor of Finance (since 1993) University of California, Berkeley: Haas School of Business; Consultant for IMF World Bank, Federal Reserve Bank and Citibank N.A. (since 2000). | Trustee (since 2000) of iShares Trust; Trustee (since 2001) of Barclays Global Investors Funds and Master Investment Portfolio; Director (since 2003) of BGI Cayman Prime Money Market Fund, Ltd.; Trustee and Chairman (since 1995) of Matthews Asian Funds (oversees 6 portfolios). | |||
George G. C. Parker, 1939 | Director (since February 28, 2002). | Dean Witter Distinguished Professor of Finance (since 1994); Senior Associate Dean for Academic Affairs, Director of MBA Program, Stanford University: Graduate School of Business (1993-2001). | Trustee (since 2000) of iShares Trust; Director (since 1998) of Affinity Group Holdings; 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 1996) of Community First Financial Group; Director (since 1999) of Tejon Ranch Company; Director (since 2003) of First Republic Bank; Director (since 2000) of Converium Re-Insurance; Director (since 2004) of Threshold Pharmaceuticals. | |||
W. Allen Reed, 1947 | Director (since December 16, 1996). | President and Chief Executive Officer of General Motors Investment Management Corporation (since 1994); Chief Executive Officer of General Motors Trust Bank (since 2003); Chief Executive Officer of General Motors Trust Company (since 1999). | Trustee (since 2002) of iShares Trust; Director (since 1994) of General Motors Investment Management Corporation; Director and Chairman (since 2003) of General Motors Trust Bank; Director and Chairman (since 1999) of General Motors Trust Company; Director (since 2002) of GMAM ARS Fund I; 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; Member (since 2004) of Board of Executives of New York Stock Exchange; Member (since 1995) of New York State Retirement System Advisory Board; Member (since 2004) of the Auburn University Foundation Fund Investment Committee. |
32 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director Information (Unaudited) (Continued)
iSHARES®, INC.
Independent Directors (Continued)
Name, Year of Birth | Position(s), Length of Service | Principal Occupation(s) During Past 5 Years | Other Directorships Held | |||
Cecilia H. Herbert, 1949 | Director (since August 11, 2005). | Member of Finance Council, Archdiocese of San Francisco (since 1991); Chair of Investment Committee, Archdiocese of San Francisco (since 1994). | Trustee (since 2005) of iShares Trust; Trustee (since 2004) of Pacific Select Funds (31 portfolios); Trustee (1992-2003) of the Montgomery Funds (20 portfolios); Trustee (since 2005) of the Thatcher School; Director (since 1998) of Catholic Charities CYO; Trustee (1998-2000) of the Groton School; Director (since 2005) of Women’s Forum West (professional association). | |||
Charles A. Hurty, 1944 | Director (since August 11, 2005). | Partner, KPMG LLP (1968-2001). | Trustee (since 2005) of iShares Trust; Director (since 2002) of GMAM Absolute Return Strategy Fund (1 portfolio); Director (since 2002) of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (2 portfolios); Director (since 2005) of CSFB Alternative Investments Fund (15 portfolios). | |||
John E. Kerrigan, 1956 | Director (since August 11, 2005). | Chief Investment Officer, Santa Clara University (since 2002); Managing Director, Merrill Lynch (1994-2002). | Trustee (since 2005) of iShares Trust; Member (since 2004) of Advisory Council for Commonfund Distressed Debt Partners II. | |||
Officer
| ||||||
Name, Year of Birth | Position(s), Length of Service | Principal Occupation(s) During Past 5 Years | Other Directorships Held | |||
Michael A. Latham, 1965 | Secretary, Treasurer and Principal Financial Officer (since February 28, 2002). | Chief Operating Officer of the Intermediary Investor 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 | 33 |
Table of Contents
The following is a list of iShares Funds being offered, along with their respective exchange trading symbols. Please call 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 100 (OEF)
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 Domestic Sector Index Funds
iShares Cohen & Steers Realty Majors (ICF)
iShares Dow Jones U.S. Basic Materials Sector (IYM)
iShares Dow Jones U.S. Consumer Services Sector (IYC)
iShares Dow Jones U.S. Consumer Goods 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 U.S. Technology Sector (IYW)
iShares Dow Jones U.S. Telecommunications Sector (IYZ)
iShares Dow Jones Transportation Average (IYT)
iShares Dow Jones U.S. Utilities Sector (IDU)
iShares Dow Jones U.S. Total Market (IYY)
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 Global Index Funds
iShares S&P Global 100 (IOO)
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 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 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 Russell Microcap™ (IWC)
iShares International Country 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 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 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/TOPIX 150 (ITF)
iShares Specialty Index Funds
iShares KLD Select SocialSM (KLD)
iShares Dow Jones Select Dividend (DVY)
iShares International Index Funds
iShares MSCI EAFE (EFA)
iShares MSCI EAFE Growth (EFG )
iShares MSCI EAFE Value (EFV )
iShares MSCI Emerging Markets (EEM)
iShares MSCI EMU (EZU)
iShares MSCI Pacific ex-Japan (EPP)
iShares S&P Europe 350 (IEV)
iShares S&P Latin America 40 (ILF)
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 NYSE Index Funds
iShares NYSE Composite (NYC)
iShares NYSE 100 (NY)
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, KLD Research & Analytics, Inc., 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 a deposit of a bank and it 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 2005 Annual Report.
2117-iS-0805 |
34 | 2005 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
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.
©2005 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, 2005 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.
The Funds file 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. The Funds’ Forms N-Q are available on the Commission’s website at www.sec.gov. 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.
BGI-F-005-09051
Table of Contents
Item 2. Code of Ethics.
As of August 31, 2005, 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 and President, Chief Financial Officer, Treasurer and/or Chief Accounting Officer, and any persons performing similar functions. For the fiscal year ended August 31, 2005, 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 12(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 Richard K. Lyons, George G.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.
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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 Funds’ 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 $324,000 for the fiscal year ended August 31, 2004 and $348,000 for the fiscal year ended August 31, 2005. |
(b) | Audit-Related Fees – There were no fees billed for the fiscal years ended August 31, 2004 and August 31, 2005 for assurance and related services by the principal accountant that were reasonably related to the performance of the audit of the Funds’ 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 Funds’ tax returns and excise tax calculations, were $158,880 for the fiscal year ended August 31, 2004 and $166,800 for the fiscal year ended August 31, 2005. |
(d) | All Other Fees – There were no other fees billed for the fiscal years ended August 31, 2004 and August 31, 2005 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 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 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 Funds’ financial statements for the fiscal year ended August 31, 2005 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 Funds, 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 last two fiscal years, were $992,543 for the year ended August 31, 2004 and $705,969 for the year ended August 31, 2005. |
(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 Richard K. Lyons, George G.C. Parker and W. Allen Reed.
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Item 6. Schedule of Investments.
The Funds’ full schedules of investments are included as part of the reports 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. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to the Registrant.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to the Registrant.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Directors.
Item 11. Controls and Procedures.
(a) The President 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 quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a) (1) Code of Ethics for Senior Officers that is the subject of Item 2 is attached.
(a) (2) Section 302 Certifications are attached.
(a) (3) Not applicable to the Registrant.
(b) Section 906 Certifications are attached.
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
iShares, Inc. | ||||
By: | /s/ Lee T. Kranefuss | |||
Lee T. Kranefuss, President | ||||
Date: November 4, 2005 |
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 4, 2005 | ||||
By: | /s/ Michael A. Latham | |||
Michael A. Latham, Principal Financial Officer | ||||
Date: November 4, 2005 |