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: State Street Bank and Trust Company
200 Clarendon Street, Boston, MA 02116
(Address of principal executive offices) (Zip code)
The Corporation Trust Company
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, 2010
Date of reporting period: August 31, 2010
Table of Contents
Item 1. Reports to Stockholders. |
2010 ANNUAL REPORT TO SHAREHOLDERS
iSHARES® MSCI SERIES
AUGUST 31, 2010
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iShares MSCI Austria Investable Market Index Fund | EWO | NYSE Arca
iShares MSCI Belgium Investable Market Index Fund | EWK | NYSE Arca
iShares MSCI Emerging Markets Eastern Europe Index Fund | ESR | NYSE Arca
iShares MSCI EMU Index Fund | EZU | NYSE Arca
iShares MSCI France Index Fund | EWQ | NYSE Arca
iShares MSCI Germany Index Fund | EWG | NYSE Arca
iShares MSCI Italy Index Fund | EWI | NYSE Arca
iShares MSCI Netherlands Investable Market Index Fund | EWN | NYSE Arca
iShares MSCI Spain Index Fund | EWP | NYSE Arca
iShares MSCI Sweden Index Fund | EWD | NYSE Arca
iShares MSCI Switzerland Index Fund | EWL | NYSE Arca
iShares MSCI United Kingdom Index Fund | EWU | NYSE Arca
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Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(11.07)% | (12.28)% | (11.56)% | (5.44)% | (5.78)% | (6.44)% | 10.63% | 10.37% | 10.27% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(11.07)% | (12.28)% | (11.56)% | (24.41)% | (25.74)% | (28.30)% | 174.53% | 168.24% | 165.79% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 1 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Financial | 38.94 | % | ||
Industrial | 19.12 | |||
Energy | 12.07 | |||
Basic Materials | 8.95 | |||
Communications | 8.85 | |||
Utilities | 4.90 | |||
Consumer Cyclical | 3.83 | |||
Consumer Non-Cyclical | 2.19 | |||
Short-Term and Other Net Assets | 1.15 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Erste Group Bank AG | 15.06 | % | ||
OMV AG | 10.65 | |||
Telekom Austria AG | 8.85 | |||
voestalpine AG | 7.29 | |||
IMMOFINANZ AG | 7.03 | |||
Verbund AG | 4.90 | |||
Andritz AG | 4.76 | |||
Raiffeisen International Bank Holding AG | 4.71 | |||
Vienna Insurance Group AG | 4.38 | |||
Wienerberger AG | 3.61 | |||
TOTAL | 71.24 | % | ||
The iShares MSCI Austria Investable Market 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 Austrian market, as measured by the MSCI Austria Investable Market IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was (11.07)%, while the total return for the Index was (11.56)%.
Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.
In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.
Austria’s equity market, as represented by the Index, finished the reporting period in negative territory. Because Austria relies on its European neighbors for the vast majority of its exports, it is vulnerable to the economic health of the constituent markets of the European Union, particularly Germany. During the reporting period, Austria’s economy emerged from the recession that had accompanied the global economic downturn of 2008. Following five consecutive quarters of contraction, Austrian GDP grew for the first two quarters of 2010. However, Austria’s banking sector, which has strong relationships with peripheral European countries, suffered exposure to the sovereign debt crisis and required government intervention to remain stable during the reporting period.
2 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND
The Fund’s ten largest holdings as of August 31, 2010 represented approximately 71% of Fund net assets. Eight of the Fund’s ten largest holdings declined for the reporting period. Wienerberger AG, the world’s largest producer of bricks, suffered the steepest decline, followed by Verbund AG, Austria’s largest electricity provider, and telecommunications company Telekom Austria AG. Banks also experienced double-digit declines, including Raiffeisen International Bank Holding AG and Erste Group Bank AG, the Fund’s largest holding. On the positive side, plant engineering company Andritz AG logged solid gains and property developer IMMOFINANZ AG posted a modest gain for the reporting period.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 3 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI BELGIUM INVESTABLE MARKET INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(0.60)% | (1.37)% | 1.41% | (5.50)% | (5.75)% | (6.05)% | 2.10% | 1.97% | 0.73% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(0.60)% | (1.37)% | 1.41% | (24.66)% | (25.64)% | (26.82)% | 23.13% | 21.58% | 7.51% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
4 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI BELGIUM INVESTABLE MARKET INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Consumer Non-Cyclical | 41.84 | % | ||
Financial | 19.49 | |||
Basic Materials | 10.66 | |||
Diversified | 9.22 | |||
Communications | 8.97 | |||
Industrial | 6.45 | |||
Consumer Cyclical | 1.59 | |||
Technology | 0.48 | |||
Short-Term and Other Net Assets | 1.30 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Anheuser-Busch InBev NV | 24.40 | % | ||
Delhaize Group SA | 6.61 | |||
KBC Groep NV | 6.24 | |||
Groupe Bruxelles Lambert SA | 5.70 | |||
Ageas | 5.11 | |||
Belgacom SA | 4.81 | |||
Solvay SA | 4.75 | |||
Colruyt SA | 4.48 | |||
Umicore | 3.99 | |||
UCB SA | 3.19 | |||
TOTAL | 69.28 | % | ||
The iShares MSCI Belgium Investable Market 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 Belgian market, as measured by the MSCI Belgium Investable Market IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was (0.60)%, while the total return for the Index was 1.41%.
Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.
In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.
Belgium’s equity market, as represented by the Index, delivered a slight gain during the reporting period. With few natural resources, Belgium imports raw materials and exports end products, making the country highly sensitive to the economic state of its trading partners. During the reporting period, Belgium’s economy emerged from the recession that had accompanied the global economic downturn of 2008. Following five consecutive quarters of contraction, Belgian GDP was flat during the first quarter of 2010 and grew during the second quarter of 2010, as it benefited from improvement in neighboring countries, particularly Germany. Beginning in February 2010, industrial production expanded for the first time since September 2008. The depreciating euro, caused by concerns about
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI BELGIUM INVESTABLE MARKET INDEX FUND
European sovereign debt, lowered prices of Belgian goods for non-European countries, helping Belgium’s export demand. However, unemployment remained a problem, climbing to 8.9% in August 2010.
The ten largest holdings as of August 31, 2010 accounted for approximately 69% of the net assets of the Fund. Six of the ten largest Fund holdings delivered positive results for the reporting period. Materials technology company Umicore SA logged solid gains, as did brewer Anheuser-Busch InBev NV, the Fund’s largest holding. Retailer Colruyt SA also posted positive returns. Financial companies among the Fund’s ten largest holdings delivered mixed results: KBC Groep NV logged sound gains, but banking group UCB SA lost ground. Insurance company Ageas also declined for the reporting period.
6 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND
Performance as of August 31, 2010
Cumulative Total Return | ||||
Inception to 8/31/10 | ||||
NAV | MARKET | INDEX | ||
4.68% | 4.39% | 4.31% |
“Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated and is calculated from an inception date of 9/30/09.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (10/2/09), the NAV of the Fund is used as a proxy for the Market Price to calculated market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Energy | 45.65 | % | ||
Financial | 22.01 | |||
Basic Materials | 12.49 | |||
Communications | 9.04 | |||
Consumer Non-Cyclical | 4.81 | |||
Utilities | 4.40 | |||
Industrial | 0.68 | |||
Short-Term and Other Net Assets | 0.92 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
OAO Gazprom SP ADR (Russia) | 19.70 | % | ||
LUKOIL SP ADR (Russia) | 9.47 | |||
Sberbank GDR (Russia) | 8.31 | |||
MMC Norilsk Nickel SP ADR (Russia) | 5.02 | |||
Mobile TeleSystems SP ADR (Russia) | 4.23 | |||
OJSC Rosneft Oil Co. SP GDR (Russia) | 3.66 | |||
Surgutneftegaz SP ADR (Russia) | 3.08 | |||
OAO Tatneft SP ADR (Russia) | 2.87 | |||
CEZ AS (Czech Republic) | 2.86 | |||
Powszechna Kasa Oszczednosci Bank Polski SA (Poland) | 2.84 | |||
TOTAL | 62.04 | % | ||
The iShares MSCI Emerging Markets Eastern Europe 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 Eastern Europe IndexSM (the “Index”). The Index is a free float-adjusted market capitalization weighted index designed to measure the equity performance of the following four emerging market countries: the Czech Republic, Hungary, Poland and Russia. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from September 30, 2009 (inception date of the Fund) through August 31, 2010 (the “reporting period”), the total return for the Fund was 4.68%, while the total return for the Index was 4.31%.
Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.
In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.
The emerging markets of Eastern Europe, as represented by the Index, collectively achieved positive returns for the reporting period. As was the case with many emerging markets, the Russian equity market struggled as the economic crises in Southern European markets eroded investors’ appetite for risk. However, the equity market delivered moderately positive returns as the Central Bank of Russia
8 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND
successfully lowered rates to stimulate the economy. The European debt crisis affected Hungary more than any other emerging market. Hungarian stocks declined, driven almost as much by the drop in its currency, the forint, as by underlying equity performance. With Hungary’s high government debt balances and weak economy, investors have seen parallels between Hungary and Greece. The Czech Republic’s economy, by comparison, was relatively resilient to the effects of the sovereign debt crisis. The country’s equity market gained ground as export growth lifted economic activity. Poland, the sole country in the 27-nation European Union not to fall into recession in 2009, delivered stock market gains as its economy expanded.
The Fund’s ten largest holdings as of August 31, 2010 represented approximately 62% of Fund net assets. Six of the Fund’s ten largest holdings delivered positive returns for the reporting period. Russian nickel producer MMC Norilsk Nickel and Russian bank Sberbank both logged solid gains. Russian oil company OAO Tatneft and Polish bank Powszechna Kasa Oszczednosci Bank Polski SA also performed well. On the negative side, Czech electric company CEZ AS and Russian oil company OJSC Rosneft Oil Co. declined, as did the Fund’s largest holding, Russian natural gas company OAO Gazprom.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMU INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(11.19)% | (12.07)% | (11.17)% | (0.61)% | (0.93)% | (0.45)% | 0.08% | (0.01)% | 0.32% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(11.19)% | (12.07)% | (11.17)% | (3.03)% | (4.55)% | (2.24)% | 0.85% | (0.07)% | 3.25% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
10 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMU INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Financial | 24.08 | % | ||
Consumer Non-Cyclical | 15.26 | |||
Communications | 12.47 | |||
Industrial | 12.33 | |||
Utilities | 8.84 | |||
Basic Materials | 8.08 | |||
Energy | 7.47 | |||
Consumer Cyclical | 7.10 | |||
Technology | 2.67 | |||
Diversified | 1.46 | |||
Short-Term and Other Net Assets | 0.24 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Total SA (France) | 3.55 | % | ||
Banco Santander SA (Spain) | 3.47 | |||
Telefonica SA (Spain) | 3.27 | |||
Siemens AG Registered (Germany) | 2.69 | |||
Sanofi-Aventis (France) | 2.18 | |||
BNP Paribas (France) | 2.13 | |||
Eni SpA (Italy) | 1.86 | |||
E.ON AG (Germany) | 1.82 | |||
Bayer AG (Germany) | 1.81 | |||
BASF SE (Germany) | 1.74 | |||
TOTAL | 24.52 | % | ||
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 European Monetary Union (EMU) markets, as measured by the MSCI EMU IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was (11.19)%, while the total return for the Index was (11.17)%.
Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.
In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.
The collective equity markets of the European Monetary Union, as represented by the Index, declined for the period. Countries across the European Monetary Union grappled with economic recovery as the sovereign debt crisis unfolded. France emerged from recession, as the French government’s massive fiscal stimulus plan appeared to lift economic activity. In the first half of 2010, France’s economy expanded. Unemployment levels remained a problem, however, climbing to 10%. Germany’s economy recovered from recession at an accelerating pace. Following five quarters of declines, GDP grew for the first two quarters of 2010. The depreciating euro helped spur export demand
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Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMU INDEX FUND
for German goods, particularly automobiles. As a result, unemployment levels dropped from a high of 8.3% in August 2009 to 7.6% by August 2010.
The Spanish economy continued to struggle. Economic activity continued to contract, the jobless rate climbed to 20%, household debt grew to unprecedented levels, and corporate debt climbed to 150% of GDP. As economic conditions worsened, government attempts to stimulate activity resulted in a budget deficit that represented 11.4% of GDP. Consequently, two of the three major international rating agencies downgraded Spain’s long-term sovereign debt rating. Italy struggled with affects from the sovereign debt crisis. After contracting for five consecutive quarters, GDP levels grew for the first two quarters of 2010. Although the debt crisis in Greece had no direct impact on Italy, concerns grew that investor perception of a contagion among Mediterranean countries would put pressure on Italy’s banking system.
The Fund’s ten largest holdings as of August 31, 2010 represented approximately 25% of Fund net assets. Seven of the Fund’s ten largest holdings declined for the reporting period. German utility company E.ON AG, Spanish bank Banco Santander SA, and French banking group BNP Paribas were among the weakest performers. The Fund’s largest holding, French oil company Total SA, also detracted meaningfully from returns. On the positive side, German engineering company Siemens AG posted a gain.
12 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI FRANCE INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(10.98)% | (11.96)% | (10.82)% | (0.85)% | (1.09)% | (0.66)% | (0.40)% | (0.50)% | (0.15)% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(10.98)% | (11.96)% | (10.82)% | (4.18)% | (5.35)% | (3.26)% | (3.90)% | (4.88)% | (1.45)% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI FRANCE INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Consumer Non-Cyclical | 20.92 | % | ||
Financial | 18.51 | |||
Industrial | 13.79 | |||
Energy | 11.81 | |||
Communications | 10.92 | |||
Utilities | 6.71 | |||
Basic Materials | 6.12 | |||
Consumer Cyclical | 5.92 | |||
Diversified | 3.13 | |||
Technology | 1.97 | |||
Short-Term and Other Net Assets | 0.20 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Total SA | 10.83 | % | ||
Sanofi-Aventis | 6.60 | |||
BNP Paribas | 6.50 | |||
GDF Suez | 4.22 | |||
France Telecom SA | 4.13 | |||
Societe Generale | 3.51 | |||
Danone SA | 3.44 | |||
L’Air Liquide SA | 3.22 | |||
Vivendi SA | 3.15 | |||
LVMH Moet Hennessy Louis Vuitton SA | 3.13 | |||
TOTAL | 48.73 | % | ||
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 French market, as measured by the MSCI France IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was (10.98)%, while the total return for the Index was (10.82)%.
Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.
In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.
The French equity market, as represented by the Index, registered declines for the reporting period. France emerged from recession during the reporting period, as the French government’s massive fiscal stimulus plan appeared to lift economic activity. In the first half of 2010, France’s economy expanded, as evidenced by GDP figures of 1.2% and 1.7% for the first and second quarters, respectively. Industrial production turned positive in 2010 for the first time since May 2008. Unemployment levels remained a problem, however, climbing to 10%
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Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI FRANCE INDEX FUND
late in the reporting period. Consequently, consumer confidence fell amid worries over unemployment. In addition, concerns began to grow about the sustainability of economic growth once fiscal stimulus measures were phased out.
The ten largest Fund holdings represented approximately 49% of the net assets of the Fund as of August 31, 2010. Seven of the Fund’s ten largest holdings declined for the reporting period. Financial companies among the ten largest holdings were among the negative performers: both investment bank Societe Generale and banking group BNP Paribas posted double-digit declines. Energy companies GDF Suez, a natural gas producer, and the Fund’s largest holding, oil company Total SA, both declined for the reporting period, as did media conglomerate Vivendi SA and pharmaceutical company Sanofi-Aventis. On the positive side, LVMH Moet Henessey Louis Vuitton SA delivered double-digit gains for the reporting period. Industrial gas producer L’Air Liquide SA also posted a gain.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 15 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI GERMANY INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(5.35)% | (6.31)% | (5.44)% | 2.95% | 2.59% | 3.07% | 1.23% | 1.12% | 1.39% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(5.35)% | (6.31)% | (5.44)% | 15.64% | 13.63% | 16.33% | 13.04% | 11.79% | 14.75% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
16 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GERMANY INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/2010 | ||||
Sector | Percentage of Net Assets | |||
Financial | 18.49 | % | ||
Industrial | 18.01 | |||
Basic Materials | 17.09 | |||
Consumer Cyclical | 15.25 | |||
Utilities | 11.32 | |||
Consumer Non-Cyclical | 8.07 | |||
Communications | 5.56 | |||
Technology | 5.47 | |||
Diversified | 0.48 | |||
Short-Term and Other Net Assets | 0.26 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Siemens AG Registered | 10.57 | % | ||
E.ON AG | 7.15 | |||
Bayer AG | 7.12 | |||
BASF SE | 6.84 | |||
Allianz SE Registered | 6.62 | |||
Daimler AG Registered | 6.18 | |||
Deutsche Telekom AG Registered | 5.30 | |||
Deutsche Bank AG Registered | 4.90 | |||
SAP AG | 4.59 | |||
RWE AG | 3.85 | |||
TOTAL | 63.12 | % | ||
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 German market, as measured by the MSCI Germany IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was (5.35)%, while the total return for the Index was (5.44)%.
Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.
In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.
Germany’s equity market, as represented by the Index, finished the reporting period in negative territory, due largely to the dampening effects of the sovereign debt crisis. The German economy recovered from recession at an accelerating pace during the reporting period. Following five quarters of declining GDP levels, GDP grew for the first two quarters of 2010. The depreciating euro helped spur export demand for German goods, particularly automobiles. As a result, unemployment levels dropped more quickly than analysts had anticipated, falling from a high of 8.3% in August 2009 to 7.6% by August 2010. Industrial production expanded sharply in 2010,
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 17 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI GERMANY INDEX FUND
following 20 months of declines. However, equity markets suffered setbacks during the reporting period amid concerns that the debt crisis in Mediterranean European countries would cause a contagion effect and hinder economic growth in Europe.
The ten largest Fund holdings represented approximately 63% of the net assets of the Fund as of August 31, 2010. Five of the Fund’s ten largest holdings delivered positive returns for the reporting period. Car maker Daimler AG and engineering conglomerate Siemens AG, the Fund’s largest holding, both logged positive returns. Telecommunications company Deutsche Telekom AG also delivered gains for the reporting period. On the negative side, utility companies E.ON AG and RWE AG experienced the most significant declines among the Fund’s ten largest holdings. Financial companies Allianz SE and Deutsche Bank AG also declined for the reporting period.
18 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI ITALY INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(19.11)% | (19.95)% | (18.70)% | (6.75)% | (7.02)% | (6.76)% | (1.03)% | (1.17)% | (1.22)% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(19.11)% | (19.95)% | (18.70)% | (29.50)% | (30.51)% | (29.51)% | (9.85)% | (11.11)% | (11.52)% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 19 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI ITALY INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Financial | 35.30 | % | ||
Energy | 22.12 | |||
Utilities | 16.10 | |||
Communications | 7.12 | |||
Industrial | 6.85 | |||
Consumer Non-Cyclical | 6.84 | |||
Consumer Cyclical | 4.92 | |||
Diversified | 0.63 | |||
Short-Term and Other Net Assets | 0.12 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Eni SpA | 18.34 | % | ||
UniCredit SpA | 11.56 | |||
Enel SpA | 10.71 | |||
Intesa Sanpaolo SpA | 7.58 | |||
Assicurazioni Generali SpA | 4.88 | |||
Terna SpA | 3.87 | |||
Saipem SpA | 3.78 | |||
Telecom Italia SpA | 3.53 | |||
Fiat SpA | 3.48 | |||
Tenaris SA | 3.44 | |||
TOTAL | 71.17 | % | ||
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 Italian market, as measured by the MSCI Italy IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was (19.11)%, while the total return for the Index was (18.70)%.
Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.
In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.
Italy’s equity market, as represented by the Index, finished the reporting period in negative territory. Like many European countries, Italy struggled to recover from the recession early in the reporting period. After contracting for five consecutive quarters, GDP levels grew for the first two quarters of 2010. In February 2010, industrial production grew for the first time since April 2008. Just as the country began to experience improved economic activity, however, the sovereign debt crisis dealt it a second blow. Although the debt crisis in Greece had no direct impact on Italy, concerns grew that investor perception of a contagion among Mediterranean countries would put pressure on Italy’s banking system. In May 2010, Italy cut its economic growth outlook for 2011 from 2.0% to 1.5%, and raised its debt forecast for 2011
20 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI ITALY INDEX FUND
to 118.4% of GDP. However, at 5.3% of GDP, Italy’s budget deficit remained substantially that of its Mediterranean neighbors associated with the sovereign debt crisis.
The ten largest Fund holdings represented 71% of the net assets of the Fund as of August 31, 2010. For the reporting period, six of the Fund’s ten largest holdings declined. Financial companies Assicurazioni Generali SpA, UniCredit SpA, and Intesa Sanpaolo SpA all detracted significantly from Fund performance. The Fund’s largest holding, utility company Eni SpA, posted a double-digit decline, as did Enel SpA, Italy’s largest power company. On the positive side, oil and gas industry contractor Saipem SpA gained ground for the reporting period.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 21 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(1.44)% | (2.33)% | (1.17)% | 2.09% | 1.81% | 2.70% | (0.33)% | (0.48)% | 0.45% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(1.44)% | (2.33)% | (1.17)% | 10.88% | 9.36% | 14.26% | (3.21)% | (4.66)% | 4.61% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
22 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Consumer Non-Cyclical | 30.92 | % | ||
Financial | 20.27 | |||
Industrial | 18.04 | |||
Communications | 14.55 | |||
Basic Materials | 7.15 | |||
Technology | 4.98 | |||
Energy | 2.38 | |||
Diversified | 0.81 | |||
Consumer Cyclical | 0.52 | |||
Short-Term and Other Net Assets | 0.38 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Unilever NV CVA | 16.78 | % | ||
ING Groep NV CVA | 12.71 | |||
Koninklijke Philips Electronics NV | 10.32 | |||
Koninklijke KPN NV | 9.20 | |||
Akzo Nobel NV | 4.65 | |||
Koninklijke Ahold NV | 4.50 | |||
ASML Holding NV | 4.04 | |||
Heineken NV | 3.67 | |||
TNT NV | 3.62 | |||
Reed Elsevier NV | 3.24 | |||
TOTAL | 72.73 | % | ||
The iShares MSCI Netherlands Investable Market 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 Dutch market, as measured by the MSCI Netherlands Investable Market IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was (1.44)%, while the total return for the Index was (1.17)%.
Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.
In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.
The Netherlands equity market, as represented by the Index, registered declines for the reporting period. Because the Dutch economy is based heavily on export trade, it is sensitive to the economic health of its trading partners. Neighboring European countries, in particular, account for roughly 75% of the Netherlands’ export market. Sluggish economic conditions in Europe as well as the U.S. had hampered the Netherlands’ economy during the global economic downturn that began in 2008, and the economy fell into deep recession. The Dutch financial sector, which had significant exposure to U.S. mortgage debt, had also suffered significant losses and required government intervention to stabilize. During the reporting period, though, the Dutch economy began to emerge from recession. Following five
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 23 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND
consecutive quarters of contraction, Dutch GDP grew for the first two quarters of 2010 as it benefited from economic improvement in neighboring countries, particularly Germany. Industrial production enjoyed renewed strength as export levels trended upward. Government stimulus programs also boosted economic activity during the period.
The ten largest Fund holdings accounted for approximately 73% of the net assets of the Fund as of August 31, 2010. Five of the ten largest holdings delivered positive returns for the reporting period. Koninklijke Philips Electronics NV delivered the strongest gains among the Fund’s ten largest holdings. Global publisher Reed Elsevier NV also gained ground, as did beer maker Heineken NV. On the negative side, financial company ING Groep NV, the Fund’s second largest holding, detracted from Fund returns. Technology company ASML Holding NV and Akzo Nobel NV, the world’s largest manufacturer of powder coatings, also declined.
24 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SPAIN INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(17.91)% | (18.53)% | (17.65)% | 4.50% | 4.24% | 4.76% | 6.74% | 6.62% | 6.23% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(17.91)% | (18.53)% | (17.65)% | 24.59% | 23.07% | 26.21% | 92.00% | 89.82% | 83.07% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 25 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SPAIN INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Financial | 46.40 | % | ||
Communications | 18.43 | |||
Utilities | 10.80 | |||
Consumer Non-Cyclical | 5.71 | |||
Energy | 5.65 | |||
Consumer Cyclical | 5.45 | |||
Industrial | 5.06 | |||
Technology | 1.21 | |||
Basic Materials | 1.16 | |||
Short-Term and Other Net Assets | 0.13 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Banco Santander SA | 23.60 | % | ||
Telefonica SA | 17.59 | |||
Banco Bilbao Vizcaya | 8.56 | |||
Iberdrola SA | 4.94 | |||
Industria de Diseno Textil SA | 4.81 | |||
Repsol YPF SA | 4.68 | |||
Criteria CaixaCorp SA | 3.85 | |||
Abertis Infraestructuras SA | 3.60 | |||
Mapfre SA | 2.95 | |||
Banco Popular Espanol SA | 2.79 | |||
TOTAL | 77.37 | % | ||
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 Spanish market, as measured by the MSCI Spain IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was (17.91)%, while the total return for the Index was (17.65)%.
Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.
In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.
The Spanish equity market, as represented by the Index, declined for the reporting period. While many of its European neighbors began to recover from the economic slowdown that had begun in 2008, Spain continued to struggle. Economic activity, as measured by GDP, continued to contract throughout the reporting period. The jobless rate climbed, reaching 20% by June 2010. Household debt grew to unprecedented levels, and corporate debt climbed to 150% of GDP. As economic conditions worsened, government attempts to stimulate activity resulted in a budget deficit that represented 11.4% of GDP. As a result, two of the three major international rating agencies downgraded Spain’s long-term sovereign debt rating. Although the Spanish government was able to pass an austerity plan that would
26 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SPAIN INDEX FUND
include spending cuts and labor reforms, the narrowness of the victory caused concern about its ability to enact such measures. Worries grew that Spain might require a bailout similar to Greece’s, but on a much larger scale, as Spain is the eurozone’s fourth largest economy.
The ten largest Fund holdings represented 77% of the net assets of the Fund as of August 31, 2010. Nine of the ten largest holdings declined for the reporting period. Financial companies were the largest detractors from Fund performance, including Banco Bilbao Vizcaya Argentaria SA, Banco Popular Espanol SA, and the Fund’s largest holding, Banco Santander SA. Electric utility company Iberdrola SA and telephone company Telefonica SA also declined for the reporting period. On the positive side, clothing retailer Industria de Diseno Textil SA delivered double-digit gains.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 27 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SWEDEN INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
9.70% | 8.68% | 9.82% | 5.93% | 5.58% | 5.93% | 2.08% | 1.97% | 1.65% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
9.70% | 8.68% | 9.82% | 33.39% | 31.17% | 33.36% | 22.84% | 21.58% | 17.74% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
28 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SWEDEN INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Financial | 26.45 | % | ||
Industrial | 24.44 | |||
Communications | 22.04 | |||
Consumer Cyclical | 15.91 | |||
Basic Materials | 5.64 | |||
Consumer Non-Cyclical | 5.35 | |||
Short-Term and Other Net Assets | 0.17 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Hennes & Mauritz AB Class B | 12.10 | % | ||
Telefonaktiebolaget LM Ericsson Class B | 10.57 | |||
Nordea Bank AB | 10.49 | |||
TeliaSonera AB | 5.84 | |||
Svenska Handelsbanken AB Class A | 4.62 | |||
Volvo AB Class B | 4.57 | |||
Sandvik AB | 4.32 | |||
Atlas Copco AB Class A | 3.69 | |||
Skandinaviska Enskilda Banken AB Class A | 3.18 | |||
Swedbank AB Class A | 2.90 | |||
TOTAL | 62.28 | % | ||
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 Swedish market, as measured by the MSCI Sweden IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 9.70%, while the total return for the Index was 9.82%.
Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.
In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.
Sweden’s equity market, as represented by the Index, delivered positive returns for the reporting period. Because Sweden’s economy relies heavily on exports, it is sensitive to the economic health of its export partners. Sluggish economic conditions in Europe and the U.S., Sweden’s largest export destinations, had hampered the Swedish economy during the global economic downturn that began in 2008. Driven by weak export and consumption levels, Sweden experienced its deepest recession since World War II. As the reporting period progressed, though, Sweden’s economy rebounded. Following five consecutive quarters of contraction, Swedish GDP grew 2.8% and 4.5% in the first and second quarters of 2010, respectively. Escalating export demand, particularly to China and other emerging markets, drove
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 29 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SWEDEN INDEX FUND
economic recovery. Personal consumption within Sweden also climbed, further fueling economic growth. Sweden’s budget deficit remained distinctly lower than that of many of its European neighbors, projected to be a modest 2.1% of GDP for 2010. Unemployment levels, though, remained stubbornly high, nearing 8%.
The ten largest Fund holdings represented 62% of the net assets of the Fund as of August 31, 2010. Eight of the Fund’s ten largest holdings delivered positive returns for the reporting period. Automaker Volvo AB and clothing retailer Hennes & Mauritz AB, the Fund’s largest holding, both achieved double-digit gains. Industrial equipment manufacturer Atlas Copco AB also performed well. Banks among the ten largest holdings delivered mixed results: Swedbank AB posted sound positive returns, while Nordea Bank AB declined.
30 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SWITZERLAND INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
6.35% | 5.93% | 6.08% | 5.81% | 5.67% | 5.02% | 4.37% | 4.25% | 4.63% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
6.35% | 5.93% | 6.08% | 32.62% | 31.75% | 27.75% | 53.33% | 51.55% | 57.25% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 31 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SWITZERLAND INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Consumer Non-Cyclical | 54.84 | % | ||
Financial | 20.74 | |||
Industrial | 9.57 | |||
Basic Materials | 5.78 | |||
Consumer Cyclical | 5.74 | |||
Communications | 1.90 | |||
Technology | 0.34 | |||
Short-Term and Other Net Assets | 1.09 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Nestle SA Registered | 21.71 | % | ||
Novartis AG Registered | 12.93 | |||
Roche Holding AG Genusschein | 11.36 | |||
UBS AG Registered | 4.79 | |||
Credit Suisse Group | 4.70 | |||
ABB Ltd. Registered | 4.58 | |||
Zurich Financial Services | 4.44 | |||
Compagnie Financiere Richemont SA Class A Bearer Units | 3.62 | |||
Syngenta AG Registered | 3.33 | |||
Swiss Reinsurance Co. Registered | 2.27 | |||
TOTAL | 73.73 | % | ||
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 Swiss market, as measured by the MSCI Switzerland IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 6.35%, while the total return for the Index was 6.08%.
Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.
In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.
Switzerland’s equity market, as represented by the Index, delivered positive results for the reporting period. Switzerland is an export-driven economy, with exports accounting for more than 50% of Swiss GDP. Because it relies on countries in the eurozone and the U.S. for the majority of its exports, Switzerland’s economy is sensitive to the financial health of its trading partners. Sluggish economic conditions in Europe and the U.S. had hampered the Swiss economy during the global economic downturn that began in 2008. During the reporting period though, improving economic conditions led to increased demand for Swiss exports. As export levels rebounded, economic activity
32 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SWITZERLAND INDEX FUND
within Switzerland accelerated. Following five consecutive quarters of contraction, Swiss GDP grew 1.9% and 3.4% in the first two quarters of 2010, respectively. In May, the KOF economic indicators that aim to predict the economy’s direction several months in advance, posted a jump of 2.2%, marking its thirteenth consecutive monthly advance. Although Swiss banks have relatively low direct exposure to Greece, Switzerland is exposed to indirect contagion and exchange rate risk. As the Swiss franc appreciated relative to the euro, the Swiss National Bank took steps to weaken the franc, in an effort to maintain prices of Swiss export goods.
The ten largest Fund holdings accounted for 74% of the net assets of the Fund as of August 31, 2010. Five of the ten largest holdings delivered gains for the reporting period. The Fund’s largest holding, packaged foods company Nestle SA posted solid gains, as did luxury goods company Compagnie Financiere Richemont SA. Pharmaceutical company Roche Holding AG and financial company Credit Suisse Group AG were among the detractors from Fund performance.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 33 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI UNITED KINGDOM INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
2.87% | 2.56% | 3.48% | (0.48)% | (0.72)% | 0.11% | 1.04% | 0.92% | 1.75% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
2.87% | 2.56% | 3.48% | (2.38)% | (3.53)% | 0.54% | 10.90% | 9.58% | 18.92% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
34 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Consumer Non-Cyclical | 25.52 | % | ||
Financial | 22.36 | |||
Energy | 17.46 | |||
Basic Materials | 12.26 | |||
Communications | 9.71 | |||
Utilities | 4.40 | |||
Consumer Cyclical | 3.73 | |||
Industrial | 2.84 | |||
Technology | 0.85 | |||
Diversified | 0.21 | |||
Short-Term and Other Net Assets | 0.66 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
HSBC Holdings PLC | 8.40 | % | ||
Vodafone Group PLC | 6.17 | |||
BP PLC | 5.33 | |||
GlaxoSmithKline PLC | 4.72 | |||
Royal Dutch Shell PLC Class A | 4.58 | |||
Rio Tinto PLC | 3.57 | |||
AstraZeneca PLC | 3.47 | |||
Royal Dutch Shell PLC Class B | 3.35 | |||
British American Tobacco PLC | 3.30 | |||
BHP Billiton PLC | 3.01 | |||
TOTAL | 45.90 | % | ||
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 British market, as measured by the MSCI United Kingdom IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 2.87%, while the total return for the Index was 3.48%.
Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.
In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.
The United Kingdom’s equity market, as represented by the Index, delivered positive returns for the reporting period. As with many of its European neighbors, the UK grappled with recession early in the reporting period, struggling to emerge from the global economic slowdown that had begun in 2008. As the period progressed, the UK economy recovered more quickly than analysts had anticipated. After contracting by more than 6% during the recession, the UK economy expanded by 1.7% in the second quarter 2010, its largest increase since 1999. Largely driving the growth was a sharp increase in construction activity, as evidenced by an 8.5% increase for the second
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 35 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
quarter 2010. Following 22 consecutive months of decline, industrial production began to grow in March 2010. However, with unemployment continuing to hover near 8%, consumer confidence remained low. Although the UK has little direct exposure to countries already involved in the sovereign debt crisis, it is susceptible to regional contagion.
The ten largest Fund holdings represented approximately 46% of the net assets of the Fund as of August 31, 2010. Seven of the Fund’s ten largest holdings logged gains for the reporting period. Metals and mining company Rio Tinto PLC delivered solid results, as did wireless telecommunications company Vodafone Group PLC and British American Tobacco PLC. Oil company BP PLC detracted from Fund performance, as did the Fund’s largest holding, financial company HSBC Holdings PLC.
36 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Shareholder Expenses (Unaudited)
iSHARES® , INC.
As a shareholder of a 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, 2010 to August 31, 2010.
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 (3/1/10) | Ending Account Value (8/31/10) | Annualized Expense Ratio | Expenses Paid During Perioda (3/1/10 to 8/31/10) | ||||||||||||
Austria Investable Market | ||||||||||||||||
Actual | $1,000.00 | $946.40 | 0.53 | % | $2.60 | |||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.50 | 0.53 | 2.70 | ||||||||||||
Belgium Investable Market | ||||||||||||||||
Actual | 1,000.00 | 951.90 | 0.53 | 2.61 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.50 | 0.53 | 2.70 | ||||||||||||
Emerging Markets Eastern Europe | ||||||||||||||||
Actual | 1,000.00 | 992.50 | 0.69 | 3.47 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,021.70 | 0.69 | 3.52 | ||||||||||||
EMU | ||||||||||||||||
Actual | 1,000.00 | 933.20 | 0.54 | 2.63 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.50 | 0.54 | 2.75 |
SHAREHOLDER EXPENSES | 37 |
Table of Contents
Shareholder Expenses (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Index Fund | Beginning Account Value (3/1/10) | Ending Account Value (8/31/10) | Annualized Expense Ratio | Expenses Paid During Perioda (3/1/10 to 8/31/10) | ||||||||||||
France | ||||||||||||||||
Actual | $1,000.00 | $910.40 | 0.54 | % | $2.60 | |||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.50 | 0.54 | 2.75 | ||||||||||||
Germany | ||||||||||||||||
Actual | 1,000.00 | 980.70 | 0.53 | 2.65 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.50 | 0.53 | 2.70 | ||||||||||||
Italy | ||||||||||||||||
Actual | 1,000.00 | 895.80 | 0.53 | 2.53 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.50 | 0.53 | 2.70 | ||||||||||||
Netherlands Investable Market | ||||||||||||||||
Actual | 1,000.00 | 953.3 | 0.53 | 2.61 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.50 | 0.53 | 2.70 | ||||||||||||
Spain | ||||||||||||||||
Actual | 1,000.00 | 939.50 | 0.53 | 2.59 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.50 | 0.53 | 2.70 | ||||||||||||
Sweden | ||||||||||||||||
Actual | 1,000.00 | 1,048.80 | 0.53 | 2.74 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.50 | 0.53 | 2.70 | ||||||||||||
Switzerland | ||||||||||||||||
Actual | 1,000.00 | 1,006.10 | 0.53 | 2.68 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.50 | 0.53 | 2.70 | ||||||||||||
United Kingdom | ||||||||||||||||
Actual | 1,000.00 | 1,000.80 | 0.53 | 2.67 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.50 | 0.53 | 2.70 |
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). |
38 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 98.85% |
| |||||||
AUTO MANUFACTURERS – 0.53% |
| |||||||
Rosenbauer International AG | 14,656 | $ | 588,149 | |||||
588,149 | ||||||||
BANKS – 19.77% | ||||||||
Erste Group Bank AG | 457,088 | 16,638,007 | ||||||
Raiffeisen International Bank | 127,040 | 5,207,133 | ||||||
21,845,140 | ||||||||
BIOTECHNOLOGY – 1.70% |
| |||||||
Intercell AGb | 101,824 | 1,876,492 | ||||||
1,876,492 | ||||||||
BUILDING MATERIALS – 3.61% |
| |||||||
Wienerberger AGb | 306,944 | 3,986,929 | ||||||
3,986,929 | ||||||||
COMMERCIAL SERVICES – 0.49% |
| |||||||
Kapsch TrafficCom AGb | 12,338 | 543,973 | ||||||
543,973 | ||||||||
ELECTRIC – 4.90% | ||||||||
Verbund AG | 151,936 | 5,416,541 | ||||||
5,416,541 | ||||||||
ELECTRICAL COMPONENTS & |
| |||||||
Zumtobel AG | 76,096 | 1,266,473 | ||||||
1,266,473 | ||||||||
ELECTRONICS – 0.37% | ||||||||
Austria Technologie & | 30,784 | 404,747 | ||||||
404,747 | ||||||||
ENGINEERING & CONSTRUCTION – 1.54% |
| |||||||
Flughafen Wien AG | 29,056 | 1,698,721 | ||||||
1,698,721 | ||||||||
ENTERTAINMENT – 3.30% |
| |||||||
bwin Interactive | 76,160 | 3,650,644 | ||||||
3,650,644 | ||||||||
ENVIRONMENTAL CONTROL – 0.72% |
| |||||||
BWT AG | 34,624 | 790,777 | ||||||
790,777 | ||||||||
FOREST PRODUCTS & PAPER – 1.66% |
| |||||||
Mayr-Melnhof Karton AG | 19,200 | 1,833,340 | ||||||
1,833,340 |
Security | Shares | Value | ||||||
INSURANCE – 4.38% | ||||||||
Vienna Insurance Group AG | 102,528 | $ | 4,840,941 | |||||
4,840,941 | ||||||||
IRON & STEEL – 7.29% | ||||||||
voestalpine AG | 270,720 | 8,058,157 | ||||||
8,058,157 | ||||||||
MACHINERY – 4.96% | ||||||||
Andritz AG | 86,336 | 5,266,980 | ||||||
A-TEC Industries AGb | 30,272 | 217,033 | ||||||
5,484,013 | ||||||||
MACHINERY – CONSTRUCTION & MINING – 0.76% |
| |||||||
Palfinger AGb | 39,872 | 841,717 | ||||||
841,717 | ||||||||
MANUFACTURING – 3.97% |
| |||||||
RHI AGb | 68,160 | 1,824,818 | ||||||
Semperit AG Holding | 27,008 | 892,471 | ||||||
Strabag SE | 79,296 | 1,666,418 | ||||||
4,383,707 | ||||||||
OIL & GAS – 10.65% | ||||||||
OMV AG | 364,480 | 11,775,455 | ||||||
11,775,455 | ||||||||
OIL & GAS SERVICES – 1.42% |
| |||||||
Schoeller-Bleckmann Oilfield | 29,888 | 1,574,526 | ||||||
1,574,526 | ||||||||
REAL ESTATE – 14.79% | ||||||||
Atrium European Real | 524,928 | 2,768,035 | ||||||
CA Immobilien Anlagen AGb | 208,000 | 2,458,526 | ||||||
conwert Immobilien Invest SE | 196,032 | 2,275,458 | ||||||
IMMOEAST AG Escrowb,c | 998,769 | 127 | ||||||
IMMOFINANZ AGb | 2,368,801 | 7,767,419 | ||||||
IMMOFINANZ AG Escrowb,c | 897,599 | 114 | ||||||
Sparkassen Immobilien AGb | 163,712 | 1,081,963 | ||||||
16,351,642 | ||||||||
TELECOMMUNICATIONS – 8.85% |
| |||||||
Telekom Austria AG | 762,752 | 9,781,444 | ||||||
9,781,444 |
SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
TRANSPORTATION – 2.04% |
| |||||||
Oesterreichische Post AG | 86,848 | $ | 2,251,741 | |||||
2,251,741 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $183,256,977) | 109,245,269 | |||||||
SHORT-TERM INVESTMENTS – 0.65% |
| |||||||
MONEY MARKET FUNDS – 0.65% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.31%d,e,f | 467,158 | 467,158 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.30%d,e,f | 90,779 | 90,779 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.13%d,e | 165,061 | 165,061 | ||||||
722,998 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $722,998) | 722,998 | |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $183,979,975) | 109,968,267 | |||||||
Other Assets, Less Liabilities – 0.50% |
| 551,394 | ||||||
NET ASSETS – 100.00% | $ | 110,519,661 | ||||||
a | All or a portion of this security represents a security on loan. See Note 5. |
b | Non-income earning security. |
c | Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1. |
d | Affiliated issuer. See Note 2. |
e | The rate quoted is the annualized seven-day yield of the fund at period end. |
f | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
40 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI BELGIUM INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 98.70% |
| |||||||
AGRICULTURE – 0.62% | ||||||||
SIPEF NV | 5,500 | $ | 363,492 | |||||
363,492 | ||||||||
BANKS – 13.58% |
| |||||||
Ageas | 1,185,750 | 3,012,551 | ||||||
Dexia SAa,b | 313,876 | 1,312,050 | ||||||
KBC Groep NVa | 88,250 | 3,674,405 | ||||||
7,999,006 | ||||||||
BEVERAGES – 24.40% |
| |||||||
Anheuser-Busch InBev NV | 275,500 | 14,371,772 | ||||||
14,371,772 | ||||||||
BIOTECHNOLOGY – 0.23% |
| |||||||
Ablynx NVa | 9,375 | 85,432 | ||||||
Devgen NVa | 5,524 | 48,794 | ||||||
134,226 | ||||||||
BUILDING MATERIALS – 0.13% |
| |||||||
Deceuninck NVa | 35,082 | 76,690 | ||||||
76,690 | ||||||||
CHEMICALS – 5.62% |
| |||||||
Recticel SA | 15,250 | 137,612 | ||||||
Solvay SA | 30,750 | 2,794,733 | ||||||
Tessenderlo Chemie NV | 13,250 | 375,534 | ||||||
3,307,879 | ||||||||
COMPUTERS – 0.16% |
| |||||||
Econocom Group SA | 6,625 | 91,778 | ||||||
91,778 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 0.57% |
| |||||||
KBC Ancora SCAa | 16,500 | 337,208 | ||||||
337,208 | ||||||||
ELECTRICAL COMPONENTS & |
| |||||||
NV Bekaert SA | 8,194 | 1,666,266 | ||||||
1,666,266 | ||||||||
ELECTRONICS – 0.98% |
| |||||||
Barco NVa | 6,250 | 288,665 | ||||||
EVS Broadcast | 5,750 | 290,857 | ||||||
579,522 | ||||||||
ENGINEERING & CONSTRUCTION – 0.55% |
| |||||||
Compagnie d’Entreprises | 5,152 | 253,405 |
Security | Shares | Value | ||||||
Hamon & Cie (International) SA | 2,125 | $ | 71,516 | |||||
324,921 | ||||||||
ENTERTAINMENT – 0.36% |
| |||||||
Kinepolis Group NV | 3,750 | 209,707 | ||||||
209,707 | ||||||||
FOOD – 11.09% |
| |||||||
Colruyt SA | 10,625 | 2,638,651 | ||||||
Delhaize Group SA | 57,875 | 3,892,596 | ||||||
6,531,247 | ||||||||
HEALTH CARE – PRODUCTS – 0.17% |
| |||||||
Ion Beam Applications SAa | 10,128 | 99,759 | ||||||
99,759 | ||||||||
HOLDING COMPANIES – DIVERSIFIED – 9.22% |
| |||||||
Ackermans & van Haaren NV | 14,875 | 1,011,627 | ||||||
Compagnie Nationale a | 23,500 | 1,064,471 | ||||||
Groupe Bruxelles Lambert SA | 45,375 | 3,356,933 | ||||||
5,433,031 | ||||||||
INVESTMENT COMPANIES – 0.65% |
| |||||||
RHJ International SAa | 47,244 | 380,684 | ||||||
380,684 | ||||||||
MANUFACTURING – 1.00% |
| |||||||
Agfa-Gevaert NVa | 85,875 | 589,371 | ||||||
589,371 | ||||||||
MEDIA – 0.08% |
| |||||||
Roularta Media Group NVa | 2,125 | 50,099 | ||||||
50,099 | ||||||||
MINING – 5.04% |
| |||||||
Nyrstar NV | 57,500 | 617,523 | ||||||
Umicore | 67,500 | 2,353,196 | ||||||
2,970,719 | ||||||||
PHARMACEUTICALS – 5.33% |
| |||||||
Arseus NV | 17,375 | 206,474 | ||||||
Galapagos NVa | 20,125 | 272,660 | ||||||
Omega Pharma SA | 11,625 | 423,372 | ||||||
ThromboGenics NVa,b | 17,276 | 361,411 | ||||||
UCB SA | 65,656 | 1,878,358 | ||||||
3,142,275 |
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BELGIUM INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
REAL ESTATE – 0.21% | ||||||||
Atenor Group SA | 2,812 | $ | 121,906 | |||||
121,906 | ||||||||
REAL ESTATE INVESTMENT TRUSTS – 3.65% |
| |||||||
Befimmo SCA | 8,875 | 665,501 | ||||||
Cofinimmo SA | 6,875 | 824,410 | ||||||
Intervest Offices NV | 4,750 | 135,531 | ||||||
Leasinvest Real Estate SCA | 1,125 | 88,649 | ||||||
Warehouses De Pauw SCA | 6,764 | 300,885 | ||||||
Wereldhave Belgium NV | 1,750 | 136,764 | ||||||
2,151,740 | ||||||||
RETAIL – 1.23% |
| |||||||
SA D’Ieteren NV | 1,541 | 726,420 | ||||||
726,420 | ||||||||
SEMICONDUCTORS – 0.32% |
| |||||||
Melexis NVa | 15,086 | 189,051 | ||||||
189,051 | ||||||||
TELECOMMUNICATIONS – 8.89% |
| |||||||
Belgacom SA | 79,250 | 2,832,325 | ||||||
Mobistar SA | 20,546 | 1,154,584 | ||||||
Telenet Group Holding NVa | 41,640 | 1,246,322 | ||||||
5,233,231 | ||||||||
TRANSPORTATION – 0.96% |
| |||||||
Compagnie Maritime | 9,750 | 264,936 | ||||||
Euronav SA | 17,000 | 297,733 | ||||||
562,669 | ||||||||
VENTURE CAPITAL – 0.83% |
| |||||||
GIMV NV | 10,155 | 488,511 | ||||||
488,511 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $86,354,837) | 58,133,180 | |||||||
SHORT-TERM INVESTMENTS – 0.71% |
| |||||||
MONEY MARKET FUNDS – 0.71% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.31%c,d,e | 322,826 | 322,826 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
0.30%c,d,e | 62,732 | 62,732 |
Security | Shares | Value | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.13%c,d | 30,565 | $ | 30,565 | |||||
416,123 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $416,123) | 416,123 | |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $86,770,960) | 58,549,303 | |||||||
Other Assets, Less Liabilities – 0.59% |
| 346,874 | ||||||
NET ASSETS – 100.00% | $ | 58,896,177 | ||||||
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
42 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.08% |
| |||||||
CZECH REPUBLIC – 5.13% |
| |||||||
Central European Media | 1,420 | $ | 30,246 | |||||
CEZ AS | 8,730 | 366,963 | ||||||
Komercni Banka AS | 700 | 135,445 | ||||||
Telefonica O2 Czech | 5,570 | 125,471 | ||||||
658,125 | ||||||||
HUNGARY – 4.74% |
| |||||||
MOL Hungarian Oil and | 2,320 | 215,526 | ||||||
OTP Bank Nyrta | 10,240 | 216,984 | ||||||
Richter Gedeon Nyrt | 850 | 176,354 | ||||||
608,864 | ||||||||
POLAND – 17.00% |
| |||||||
Bank Handlowy w | 1,620 | 40,099 | ||||||
Bank Millennium SAa | 16,361 | 22,978 | ||||||
Bank Pekao SA | 5,590 | 273,004 | ||||||
Bank Zachodni WBK SA | 1,090 | 65,078 | ||||||
BRE Bank SAa | 680 | 54,881 | ||||||
Cyfrowy Polsat SA | 5,520 | 24,854 | ||||||
Getin Holding SAa | 16,130 | 49,203 | ||||||
Globe Trade Centre SAa | 5,270 | 38,079 | ||||||
Grupa Lotos SAa | 2,690 | 25,480 | ||||||
ING Bank Slaski SAa | 180 | 46,185 | ||||||
Kernel Holding SAa | 2,450 | 48,032 | ||||||
KGHM Polska Miedz SA | 5,470 | 185,801 | ||||||
PBG SA | 520 | 37,507 | ||||||
Polska Grupa Energetyczna SAa | 16,040 | 116,459 | ||||||
Polski Koncern Naftowy | 16,270 | 201,052 | ||||||
Polskie Gornictwo Naftowe i | 74,170 | 82,957 | ||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 30,100 | 364,396 | ||||||
Powszechny Zaklad | 1,790 | 214,767 | ||||||
Tauron Polska Energia SAa | 47,150 | 80,452 | ||||||
Telekomunikacja Polska SA | 31,350 | 170,738 | ||||||
TVN SA | 7,180 | 39,195 | ||||||
2,181,197 | ||||||||
RUSSIA – 72.21% |
| |||||||
Cherepovets MK Severstal | 11,482 | 138,243 | ||||||
LUKOIL SP ADR | 22,800 | 1,215,240 | ||||||
Magnit OJSC SP GDRb | 14,960 | 318,648 | ||||||
Mechel OAO SP ADR | 7,310 | 166,303 | ||||||
MMC Norilsk Nickel SP ADR | 38,000 | 644,100 | ||||||
Mobile TeleSystems SP ADR | 26,020 | 542,777 |
Security | Shares | Value | ||||||
Novolipetsk Steel SP GDRb | 4,620 | $ | 134,442 | |||||
OAO Gazprom SP ADR | 122,125 | 2,527,988 | ||||||
OAO NovaTek SP GDRb | 4,850 | 355,990 | ||||||
OAO Tatneft SP ADR | 12,340 | 368,719 | ||||||
OAO TMK SP GDRa,b | 3,190 | 49,700 | ||||||
OJSC Comstar | 13,600 | 87,992 | ||||||
OJSC Rosneft Oil Co. | 74,026 | 469,325 | ||||||
Polyus Gold SP ADR | 5,815 | 142,758 | ||||||
Sberbank GDRb | 3,730 | 1,066,645 | ||||||
Sistema JSFC SP GDRb | 5,410 | 139,308 | ||||||
Surgutneftegaz SP ADR | 41,997 | 394,772 | ||||||
Uralkali SP GDRb | 8,188 | 189,552 | ||||||
VTB Bank OJSC SP GDRb | 46,000 | 237,360 | ||||||
Wimm-Bill-Dann Foods OJSC | 4,110 | 75,336 | ||||||
9,265,198 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $12,973,390) | 12,713,384 | |||||||
SHORT-TERM INVESTMENTS – 0.06% |
| |||||||
MONEY MARKET FUNDS – 0.06% |
| |||||||
BlackRock Cash Funds: Treasury, |
| |||||||
0.13%c,d | 7,712 | 7,712 | ||||||
7,712 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $7,712) | 7,712 | |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $12,981,102) | 12,721,096 | |||||||
Other Assets, Less Liabilities – 0.86% |
| 110,504 | ||||||
NET ASSETS – 100.00% |
| $ | 12,831,600 | |||||
GDR – Global Depositary Receipts
SP ADR – Sponsored American Depositary Receipts
SP GDR – Sponsored Global Depositary Receipts
a | Non-income earning security. |
b | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
iSHARES® MSCI EMU INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 98.03% |
| |||||||
AUSTRIA – 1.05% |
| |||||||
Erste Group Bank AG | 55,112 | $ | 2,006,077 | |||||
IMMOEAST AG Escrowa,b | 105,078 | 13 | ||||||
IMMOFINANZ AGa | 285,836 | 937,271 | ||||||
IMMOFINANZ AG Escrowa,b | 68,575 | 9 | ||||||
OMV AG | 44,756 | 1,445,957 | ||||||
Raiffeisen International Bank | 17,164 | 703,520 | ||||||
Telekom Austria AG | 94,256 | 1,208,728 | ||||||
Verbund AGc | 22,244 | 793,002 | ||||||
Vienna Insurance Group AG | 12,596 | 594,730 | ||||||
voestalpine AG | 32,160 | 957,263 | ||||||
8,646,570 | ||||||||
BELGIUM – 3.25% |
| |||||||
Ageas | 670,804 | 1,704,264 | ||||||
Anheuser-Busch InBev NV | 212,256 | 11,072,577 | ||||||
Belgacom SA | 45,024 | 1,609,118 | ||||||
Colruyt SA | 5,092 | 1,264,566 | ||||||
Compagnie Nationale a | 9,112 | 412,743 | ||||||
Delhaize Group SA | 29,748 | 2,000,811 | ||||||
Dexia SAa | 176,793 | 739,022 | ||||||
Groupe Bruxelles Lambert SA | 24,924 | 1,843,927 | ||||||
KBC Groep NVa | 47,168 | 1,963,902 | ||||||
Mobistar SA | 7,504 | 421,688 | ||||||
Solvay SA | 17,420 | 1,583,228 | ||||||
UCB SA | 30,427 | 870,489 | ||||||
Umicore | 35,660 | 1,243,185 | ||||||
26,729,520 | ||||||||
FINLAND – 3.53% |
| |||||||
Elisa OYJa | 35,376 | 703,192 | ||||||
Fortum OYJ | 128,662 | 2,971,212 | ||||||
Kesko OYJ Class B | 20,005 | 779,033 | ||||||
Kone OYJ Class B | 45,024 | 2,076,632 | ||||||
Metso OYJ | 38,324 | 1,404,248 | ||||||
Neste Oil OYJ | 36,984 | 499,191 | ||||||
Nokia OYJ | 1,106,036 | 9,481,557 | ||||||
Nokian Renkaat OYJ | 32,964 | 947,678 | ||||||
Orion OYJ Class B | 28,408 | 520,636 | ||||||
Outokumpu OYJ | 38,860 | 637,120 | ||||||
Pohjola Bank PLC | 41,004 | 450,526 |
Security | Shares | Value | ||||||
Rautaruukki OYJ | 25,996 | $ | 457,599 | |||||
Sampo OYJ Class A | 120,868 | 2,920,263 | ||||||
Sanoma OYJ | 25,838 | 479,447 | ||||||
Stora Enso OYJ Class R | 173,396 | 1,340,998 | ||||||
UPM-Kymmene OYJ | 157,496 | 2,167,836 | ||||||
Wartsila OYJ Class B | 23,584 | 1,261,309 | ||||||
29,098,477 | ||||||||
FRANCE – 32.71% |
| |||||||
Accor SA | 43,148 | 1,327,651 | ||||||
Aeroports de Paris | 8,845 | 625,930 | ||||||
Air France-KLMa | 38,056 | 501,569 | ||||||
Alcatel-Lucenta | 683,668 | 1,767,359 | ||||||
ALSTOM | 61,372 | 2,935,948 | ||||||
ArcelorMittal | 252,724 | 7,395,620 | ||||||
Atos Origin SAa | 14,204 | 550,964 | ||||||
AXA | 508,932 | 7,933,335 | ||||||
BioMerieux SA | 3,484 | 356,232 | ||||||
BNP Paribas | 280,328 | 17,589,685 | ||||||
Bouygues SA | 69,412 | 2,826,101 | ||||||
Bureau Veritas SA | 14,204 | 866,524 | ||||||
Cap Gemini SA | 43,416 | 1,840,790 | ||||||
Carrefour SA | 177,148 | 8,066,990 | ||||||
Casino Guichard-Perrachon SA | 16,348 | 1,327,474 | ||||||
Christian Dior SA | 18,492 | 1,875,962 | ||||||
CNP Assurances SA | 43,952 | 748,535 | ||||||
Compagnie de Saint-Gobain | 113,632 | 4,193,974 | ||||||
Compagnie Generale de | 41,808 | 709,364 | ||||||
Compagnie Generale des | 43,684 | 3,254,038 | ||||||
Credit Agricole SA | 276,576 | 3,495,809 | ||||||
Danone SA | 172,860 | 9,316,227 | ||||||
Dassault Systemes SA | 18,224 | 1,102,154 | ||||||
Edenred SAa | 39,785 | 687,681 | ||||||
Eiffage SAc | 12,596 | 576,160 | ||||||
Electricite de France | 75,308 | 3,008,250 | ||||||
Eramet | 1,608 | 409,044 | ||||||
Essilor International SA | 60,300 | 3,670,591 | ||||||
Eurazeo | 8,576 | 501,494 | ||||||
European Aeronautic Defence | 119,952 | 2,647,346 | ||||||
Eutelsat Communications | 27,068 | 975,987 |
44 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Fonciere des Regions | 7,504 | $ | 701,939 | |||||
France Telecom SA | 543,772 | 11,085,357 | ||||||
GDF Suez | 367,696 | 11,419,043 | ||||||
Gecina SA | 5,628 | 562,791 | ||||||
Groupe Eurotunnel SA | 131,613 | 980,725 | ||||||
Hermes International | 15,812 | 2,873,765 | ||||||
Icade | 6,432 | 611,635 | ||||||
Iliad SA | 4,288 | 404,378 | ||||||
Imerys SA | 10,988 | 547,226 | ||||||
Ipsen SA | 7,504 | 257,028 | ||||||
JCDecaux SAa | 18,500 | 443,330 | ||||||
Klepierre | 26,800 | 820,711 | ||||||
Lafarge SA | 59,764 | 2,761,419 | ||||||
Lagardere SCA | 35,912 | 1,297,384 | ||||||
L’Air Liquide SA | 82,813 | 8,636,912 | ||||||
Legrand SA | 37,252 | 1,134,633 | ||||||
L’Oreal SA | 70,484 | 7,032,159 | ||||||
LVMH Moet Hennessy Louis | 72,360 | 8,439,714 | ||||||
M6-Metropole Television | 19,832 | 414,756 | ||||||
Natixisa | 254,064 | 1,388,481 | ||||||
Neopost SA | 9,648 | 683,736 | ||||||
PagesJaunes Groupe SA | 34,433 | 328,176 | ||||||
Pernod Ricard SA | 58,156 | 4,559,716 | ||||||
PPR SA | 22,512 | 2,939,845 | ||||||
PSA Peugeot Citroen SAa | 45,828 | 1,207,421 | ||||||
Publicis Groupe SA | 35,376 | 1,485,965 | ||||||
Renault SAa | 56,280 | 2,293,222 | ||||||
Safran SA | 52,260 | 1,287,881 | ||||||
Sanofi-Aventis | 311,684 | 17,933,021 | ||||||
Schneider Electric SA | 71,020 | 7,554,099 | ||||||
SCOR SE | 51,992 | 1,134,250 | ||||||
SES SA FDR | 86,587 | 1,993,515 | ||||||
Societe BIC | 7,504 | 551,632 | ||||||
Societe Generale | 186,260 | 9,511,697 | ||||||
Societe Television Francaise 1 | 35,916 | 533,847 | ||||||
Sodexo | 28,140 | 1,621,743 | ||||||
STMicroelectronics NV | 184,920 | 1,236,227 | ||||||
Suez Environnement SA | 80,936 | 1,306,393 | ||||||
Technip SA | 29,212 | 1,919,094 | ||||||
Thales SA | 25,996 | 833,589 | ||||||
Total SA | 623,636 | 29,223,537 | ||||||
Unibail-Rodamco SE | 26,800 | 5,068,345 |
Security | Shares | Value | ||||||
Vallourec SA | 32,696 | $ | 2,817,012 | |||||
Veolia Environnement | 102,912 | 2,402,723 | ||||||
Vinci SA | 128,908 | 5,672,808 | ||||||
Vivendi SA | 363,408 | 8,503,089 | ||||||
269,500,757 | ||||||||
GERMANY – 24.19% |
| |||||||
Adidas AG | 60,568 | 3,091,857 | ||||||
Allianz SE Registered | 134,536 | 13,839,811 | ||||||
BASF SE | 271,216 | 14,351,667 | ||||||
Bayer AG | 244,148 | 14,950,249 | ||||||
Bayerische Motoren | 97,820 | 5,179,973 | ||||||
Beiersdorf AG | 29,748 | 1,594,940 | ||||||
Celesio AG | 21,440 | 435,987 | ||||||
Commerzbank AGa,c | 216,168 | 1,706,677 | ||||||
Continental AGa | 14,740 | 893,602 | ||||||
Daimler AG Registereda | 266,124 | 12,974,514 | ||||||
Deutsche Bank AG Registered | 183,312 | 11,551,168 | ||||||
Deutsche Boerse AG | 57,620 | 3,531,254 | ||||||
Deutsche Lufthansa | 66,196 | 1,047,862 | ||||||
Deutsche Post AG Registered | 252,656 | 4,143,965 | ||||||
Deutsche Postbank AGa | 24,924 | 757,242 | ||||||
Deutsche Telekom | 832,944 | 10,999,167 | ||||||
E.ON AG | 532,516 | 15,028,371 | ||||||
Fraport AG | 9,916 | 516,964 | ||||||
Fresenius Medical Care AG & | 58,960 | 3,348,105 | ||||||
Fresenius SE | 7,772 | 553,059 | ||||||
GEA Group AG | 48,370 | 1,007,589 | ||||||
Hannover Rueckversicherung | 18,760 | 834,625 | ||||||
HeidelbergCement AG | 42,076 | 1,692,531 | ||||||
Henkel AG & Co. KGaA | 37,252 | 1,501,087 | ||||||
Hochtief AG | 12,596 | 835,824 | ||||||
Infineon Technologies AGa | 319,724 | 1,788,360 | ||||||
K+S AG | 42,880 | 2,249,691 | ||||||
Linde AG | 49,580 | 5,601,918 | ||||||
MAN SE | 31,892 | 2,751,795 | ||||||
Merck KGaA | 19,564 | 1,704,238 | ||||||
METRO AG | 37,523 | 1,915,940 | ||||||
Muenchener Rueckversicherungs- Gesellschaft | 58,156 | 7,450,467 |
SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Puma AG | 1,608 | $ | 437,758 | |||||
QIAGEN NVa | 71,020 | 1,279,476 | ||||||
RWE AG | 124,396 | 8,170,665 | ||||||
Salzgitter AG | 13,132 | 799,206 | ||||||
SAP AG | 253,260 | 11,090,403 | ||||||
Siemens AG Registered | 242,808 | 22,151,080 | ||||||
Suedzucker AG | 20,636 | 377,280 | ||||||
ThyssenKrupp AG | 99,790 | 2,738,853 | ||||||
TUI AGa | 42,538 | 430,131 | ||||||
United Internet | 37,254 | 478,925 | ||||||
Volkswagen AG | 9,112 | 830,929 | ||||||
Wacker Chemie AG | 4,692 | 713,807 | ||||||
199,329,012 | ||||||||
GREECE – 1.05% | ||||||||
Alpha Bank AEa | 128,430 | 832,463 | ||||||
Bank of Cyprus Public | 135,713 | 722,710 | ||||||
Coca-Cola Hellenic Bottling Co. SA | 71,292 | 1,665,381 | ||||||
EFG Eurobank | 74,494 | 486,646 | ||||||
Hellenic Telecommunications Organization SA | 327,886 | 1,098,418 | ||||||
National Bank of Greece | 877,993 | 2,168,643 | ||||||
OPAP SA | 59,440 | 902,766 | ||||||
Piraeus Bank SAa | 78,525 | 409,185 | ||||||
Public Power Corp. SA | 27,000 | 385,022 | ||||||
8,671,234 | ||||||||
IRELAND – 0.82% | ||||||||
Anglo Irish Bank | 446,666 | 57 | ||||||
Bank of Irelanda | 1,018,936 | 997,163 | ||||||
CRH PLC | 206,628 | 3,223,585 | ||||||
Elan Corp. PLCa | 147,672 | 653,139 | ||||||
Kerry Group PLC Class A | 40,736 | 1,341,708 | ||||||
Ryanair Holdings PLCa | 43,520 | 211,844 | ||||||
Ryanair Holdings PLC | 12,482 | 353,865 | ||||||
6,781,361 | ||||||||
ITALY – 9.22% | ||||||||
A2A SpA | 214,692 | 300,695 | ||||||
Assicurazioni | 349,740 | 6,343,044 | ||||||
Atlantia SpA | 66,673 | 1,260,055 | ||||||
Autogrill SpAa | 35,108 | 406,047 | ||||||
Banca Carige SpA | 209,308 | 445,051 |
Security | Shares | Value | ||||||
Banca Monte dei Paschi di | 709,407 | $ | 851,130 | |||||
Banca Popolare di | 141,605 | 617,307 | ||||||
Banco Popolare SpA | 198,200 | 1,117,816 | ||||||
Enel SpA | 1,928,796 | 9,217,276 | ||||||
Eni SpA | 769,964 | 15,334,439 | ||||||
Exor SpA | 23,265 | 429,632 | ||||||
Fiat SpA | 228,604 | 2,686,082 | ||||||
Finmeccanica SpA | 125,500 | 1,264,071 | ||||||
Intesa Sanpaolo SpA | 2,295,152 | 6,461,207 | ||||||
Luxottica Group SpA | 32,318 | 749,200 | ||||||
Mediaset SpA | 208,236 | 1,294,175 | ||||||
Mediobanca SpAa | 134,698 | 1,063,117 | ||||||
Mediolanum SpA | 52,796 | 195,935 | ||||||
Parmalat SpA | 475,603 | 1,147,884 | ||||||
Pirelli & C. SpA | 66,144 | 440,504 | ||||||
Prysmian SpA | 49,149 | 772,703 | ||||||
Saipem SpA | 76,994 | 2,702,770 | ||||||
Snam Rete Gas SpA | 436,036 | 2,025,528 | ||||||
Telecom Italia SpA | 2,699,832 | 3,661,252 | ||||||
Tenaris SA | 140,802 | 2,394,382 | ||||||
Terna SpA | 402,000 | 1,620,900 | ||||||
UniCredit SpA | 4,042,780 | 9,515,893 | ||||||
Unione di Banche | 186,260 | 1,638,152 | ||||||
75,956,247 | ||||||||
NETHERLANDS – 8.60% | ||||||||
AEGON NVa | 464,712 | 2,384,947 | ||||||
Akzo Nobel NV | 69,147 | 3,661,619 | ||||||
ASML Holding NV | 127,568 | 3,189,958 | ||||||
Corio NV | 16,080 | 925,382 | ||||||
Delta Lloyd NV | 18,224 | 311,642 | ||||||
Fugro NV CVA | 20,535 | 1,159,316 | ||||||
Heineken Holding NV | 30,284 | 1,169,309 | ||||||
Heineken NV | 74,236 | 3,334,338 | ||||||
ING Groep NV CVAa | 1,131,764 | 10,094,800 | ||||||
Koninklijke Ahold NV | 353,492 | 4,364,664 | ||||||
Koninklijke DSM NV | 44,294 | 1,846,210 | ||||||
Koninklijke KPN NV | 475,968 | 6,920,417 | ||||||
Koninklijke Philips | 291,316 | 8,186,185 | ||||||
Randstad Holding NVa | 31,088 | 1,158,669 | ||||||
Reed Elsevier NV | 202,876 | 2,437,411 |
46 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Royal Boskalis Westminster | 21,247 | $ | 794,994 | |||||
Royal Vopak NV | 19,832 | 798,888 | ||||||
SBM Offshore NV | 52,260 | 797,370 | ||||||
TNT NV | 109,756 | 2,794,073 | ||||||
Unilever NV CVA | 481,596 | 12,936,405 | ||||||
Wolters Kluwer NV | 85,224 | 1,595,486 | ||||||
70,862,083 | ||||||||
PORTUGAL – 0.97% |
| |||||||
Banco Comercial Portugues | 885,698 | 709,177 | ||||||
Banco Espirito Santo | 154,490 | 668,569 | ||||||
BRISA – Auto-estradas de | 53,639 | 338,136 | ||||||
CIMPOR – Cimentos de | 63,248 | 389,064 | ||||||
EDP Renovaveis SAa | 71,020 | 396,254 | ||||||
Energias de Portugal SA | 534,928 | 1,631,680 | ||||||
Galp Energia SGPS SA Class B | 68,608 | 1,117,870 | ||||||
Jeronimo Martins SGPS SA | 65,151 | 721,800 | ||||||
Portugal Telecom SGPS | 171,681 | 2,016,149 | ||||||
7,988,699 | ||||||||
SPAIN – 12.64% |
| |||||||
Abertis Infraestructuras SA | 86,987 | 1,446,074 | ||||||
Acciona SA | 7,785 | 616,319 | ||||||
Acerinox SA | 29,212 | 462,045 | ||||||
Actividades de | 39,537 | 1,644,416 | ||||||
Banco Bilbao Vizcaya Argentaria SA | 1,054,312 | 12,751,229 | ||||||
Banco de Sabadell SAc | 290,378 | 1,407,948 | ||||||
Banco de Valencia SAc | 60,196 | 319,795 | ||||||
Banco Popular Espanol SA | 274,261 | 1,640,380 | ||||||
Banco Santander SA | 2,431,296 | 28,573,745 | ||||||
Bankinter SA | 91,120 | 594,216 | ||||||
Criteria CaixaCorp SA | 258,084 | 1,215,284 | ||||||
Enagas SA | 55,819 | 989,657 | ||||||
Ferrovial SA | 121,297 | 1,068,962 | ||||||
Fomento de | 11,364 | 268,280 | ||||||
Gamesa Corporacion | 58,424 | 393,546 |
Security | Shares | Value | ||||||
Gas Natural SDG SA | 68,270 | $ | 1,035,573 | |||||
Gestevision Telecinco SA | 31,892 | 323,860 | ||||||
Grifols SA | 39,800 | 464,815 | ||||||
Iberdrola Renovables SA | 252,016 | 826,694 | ||||||
Iberdrola SA | 1,167,944 | 8,253,255 | ||||||
Iberia Lineas Aereas de | 139,896 | 452,503 | ||||||
Indra Sistemas SA | 28,140 | 472,271 | ||||||
Industria de Diseno | 64,052 | 4,286,073 | ||||||
Mapfre SA | 221,424 | 637,976 | ||||||
Red Electrica | 35,914 | 1,484,372 | ||||||
Repsol YPF SA | 217,080 | 4,970,299 | ||||||
Telefonica SA | 1,210,288 | 26,918,772 | ||||||
Zardoya Otis SA | 40,871 | 639,443 | ||||||
104,157,802 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $1,210,381,524) | 807,721,762 | |||||||
PREFERRED STOCKS – 1.73% |
| |||||||
GERMANY – 1.43% |
| |||||||
Bayerische Motoren | 16,348 | 607,326 | ||||||
Fresenius SE | 23,852 | 1,701,867 | ||||||
Henkel AG & Co. KGaA | 53,332 | 2,514,724 | ||||||
Porsche Automobil | 26,814 | 1,251,901 | ||||||
RWE AG NVS | 12,060 | 744,541 | ||||||
Volkswagen AG | 50,116 | 5,001,963 | ||||||
11,822,322 | ||||||||
ITALY – 0.30% | ||||||||
Intesa Sanpaolo SpA RNC | 270,412 | 614,500 | ||||||
Telecom Italia SpA RNC | 1,675,268 | 1,849,194 | ||||||
2,463,694 | ||||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $20,233,641) | 14,286,016 | |||||||
SHORT-TERM INVESTMENTS – 0.48% |
| |||||||
MONEY MARKET FUNDS – 0.48% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
0.31%d,e,f | 3,003,998 | 3,003,998 |
SCHEDULESOF INVESTMENTS | 47 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMU INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
BlackRock Cash Funds: Prime, | ||||||||
SL Agency Shares | ||||||||
0.30%d,e,f | 583,738 | $ | 583,738 | |||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares | ||||||||
0.13%d,e | 338,258 | 338,258 | ||||||
3,925,994 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $3,925,994) | 3,925,994 | |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $1,234,541,159) | 825,933,772 | |||||||
Other Assets, Less Liabilities – (0.24)% |
| (1,961,735) | ||||||
NET ASSETS – 100.00% | $ | 823,972,037 | ||||||
FDR – Fiduciary Depositary Receipts
NVS – Non-Voting Shares
SP ADR – Sponsored American Depositary Receipts
a | Non-income earning security. |
b | Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1. |
c | All or a portion of this security represents a security on loan. See Note 5. |
d | Affiliated issuer. See Note 2. |
e | The rate quoted is the annualized seven-day yield of the fund at period end. |
f | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
48 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.80% |
| |||||||
ADVERTISING – 0.87% | ||||||||
JCDecaux SAa | 17,328 | $ | 415,244 | |||||
PagesJaunes Groupe SAb | 33,402 | 318,350 | ||||||
Publicis Groupe SA | 32,433 | 1,362,345 | ||||||
2,095,939 | ||||||||
AEROSPACE & DEFENSE – 1.75% |
| |||||||
European Aeronautic Defence and |
| |||||||
Space Co.a | 106,939 | 2,360,149 | ||||||
Safran SA | 43,838 | 1,080,331 | ||||||
Thales SA | 23,313 | 747,556 | ||||||
4,188,036 | ||||||||
AIRLINES – 0.19% | ||||||||
Air France-KLMa | 35,226 | 464,270 | ||||||
464,270 | ||||||||
APPAREL – 1.05% | ||||||||
Hermes International | 13,851 | 2,517,362 | ||||||
2,517,362 | ||||||||
AUTO MANUFACTURERS – 1.30% |
| |||||||
PSA Peugeot Citroen SAa | 40,019 | 1,054,372 | ||||||
Renault SAa | 50,449 | 2,055,628 | ||||||
3,110,000 | ||||||||
AUTO PARTS & EQUIPMENT – 1.20% |
| |||||||
Compagnie Generale des | 38,589 | 2,874,509 | ||||||
2,874,509 | ||||||||
BANKS – 11.82% |
| |||||||
BNP Paribas | 248,349 | 15,583,105 | ||||||
Credit Agricole SA | 243,105 | 3,072,749 | ||||||
Natixisa | 229,625 | 1,254,920 | ||||||
Societe Generale | 164,908 | 8,421,319 | ||||||
28,332,093 | ||||||||
BEVERAGES – 1.70% | ||||||||
Pernod Ricard SA | 51,929 | 4,071,488 | ||||||
4,071,488 | ||||||||
BUILDING MATERIALS – 2.77% |
| |||||||
Compagnie de Saint-Gobain | 100,951 | 3,725,939 | ||||||
Imerys SA | 9,804 | 488,261 | ||||||
Lafarge SA | 52,554 | 2,428,278 | ||||||
6,642,478 |
Security | Shares | Value | ||||||
CHEMICALS – 3.22% |
| |||||||
L’Air Liquide SA | 74,100 | $ | 7,728,197 | |||||
7,728,197 | ||||||||
COMMERCIAL SERVICES – 0.60% |
| |||||||
Bureau Veritas SA | 12,768 | 778,919 | ||||||
Edenred SAa | 38,418 | 664,052 | ||||||
1,442,971 | ||||||||
COMPUTERS – 0.87% | ||||||||
Atos Origin SAa | 11,799 | 457,676 | ||||||
Cap Gemini SA | 38,589 | 1,636,131 | ||||||
2,093,807 | ||||||||
COSMETICS & PERSONAL CARE – 3.32% |
| |||||||
Christian Dior SA | 16,703 | 1,694,473 | ||||||
L’Oreal SA | 62,759 | 6,261,439 | ||||||
7,955,912 | ||||||||
ELECTRIC – 1.13% | ||||||||
Electricite de France | 67,773 | 2,707,257 | ||||||
2,707,257 | ||||||||
ELECTRICAL COMPONENTS & |
| |||||||
Legrand SA | 34,314 | 1,045,147 | ||||||
1,045,147 | ||||||||
ENGINEERING & CONSTRUCTION – 3.55% |
| |||||||
Aeroports de Paris | 7,752 | 548,582 | ||||||
Bouygues SA | 60,425 | 2,460,198 | ||||||
Eiffage SAb | 10,602 | 484,951 | ||||||
Vinci SA | 114,175 | 5,024,458 | ||||||
8,518,189 | ||||||||
FOOD – 6.91% | ||||||||
Carrefour SA | 157,041 | 7,151,355 | ||||||
Casino Guichard-Perrachon SA | 14,478 | 1,175,628 | ||||||
Danone SA | 152,988 | 8,245,232 | ||||||
16,572,215 | ||||||||
FOOD SERVICE – 0.60% | ||||||||
Sodexo | 24,795 | 1,428,966 | ||||||
1,428,966 | ||||||||
GAS – 4.22% | ||||||||
GDF Suez | 325,934 | 10,122,097 | ||||||
10,122,097 |
SCHEDULESOF INVESTMENTS | 49 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
HAND & MACHINE TOOLS – 2.79% |
| |||||||
Schneider Electric SA | 62,985 | $ | 6,699,450 | |||||
6,699,450 | ||||||||
HEALTH CARE – PRODUCTS – 1.34% |
| |||||||
Essilor International SA | 52,782 | 3,212,954 | ||||||
3,212,954 | ||||||||
HEALTH CARE – SERVICES – 0.13% |
| |||||||
BioMerieux SA | 3,135 | 320,547 | ||||||
320,547 | ||||||||
HOLDING COMPANIES – DIVERSIFIED – 3.13% |
| |||||||
LVMH Moet Hennessy Louis | 64,241 | 7,492,754 | ||||||
7,492,754 | ||||||||
HOUSEHOLD PRODUCTS & WARES – 0.21% |
| |||||||
Societe BIC | 6,954 | 511,201 | ||||||
511,201 | ||||||||
INSURANCE – 3.60% | ||||||||
AXA | 450,549 | 7,023,249 | ||||||
CNP Assurances SA | 38,760 | 660,111 | ||||||
SCOR SE | 43,833 | 956,254 | ||||||
8,639,614 | ||||||||
INTERNET – 0.17% | ||||||||
Iliad SA | 4,275 | 403,152 | ||||||
403,152 | ||||||||
INVESTMENT COMPANIES – 0.19% |
| |||||||
Eurazeo | 7,605 | 444,713 | ||||||
444,713 | ||||||||
IRON & STEEL – 2.75% | ||||||||
ArcelorMittal | 225,160 | 6,588,997 | ||||||
6,588,997 | ||||||||
LODGING – 0.49% | ||||||||
Accor SA | 38,537 | 1,185,772 | ||||||
1,185,772 | ||||||||
MACHINERY – 1.08% | ||||||||
ALSTOM | 53,926 | 2,579,742 | ||||||
2,579,742 | ||||||||
MEDIA – 3.95% | ||||||||
Lagardere SCA | 30,837 | 1,114,041 | ||||||
M6-Metropole Television | 16,758 | 350,468 | ||||||
Societe Television Francaise 1 | 30,723 | 456,659 |
Security | Shares | Value | ||||||
Vivendi SA | 322,175 | $ | 7,538,312 | |||||
9,459,480 | ||||||||
MEDICAL – DRUGS – 0.11% |
| |||||||
Ipsen SA | 7,809 | 267,475 | ||||||
267,475 | ||||||||
METAL FABRICATE & HARDWARE – 1.02% |
| |||||||
Vallourec SA | 28,500 | 2,455,494 | ||||||
2,455,494 | ||||||||
MINING – 0.15% | ||||||||
Eramet | 1,368 | 347,993 | ||||||
347,993 | ||||||||
OFFICE & BUSINESS EQUIPMENT – 0.24% |
| |||||||
Neopost SA | 8,208 | 581,686 | ||||||
581,686 | ||||||||
OIL & GAS – 11.10% |
| |||||||
Compagnie Generale de | 37,563 | 637,338 | ||||||
Total SA | 553,999 | 25,960,352 | ||||||
26,597,690 | ||||||||
OIL & GAS SERVICES – 0.71% |
| |||||||
Technip SA | 25,881 | 1,700,263 | ||||||
1,700,263 | ||||||||
PHARMACEUTICALS – 6.60% |
| |||||||
Sanofi-Aventis | 274,911 | 15,817,254 | ||||||
15,817,254 | ||||||||
REAL ESTATE – 2.41% | ||||||||
Gecina SA | 4,959 | 495,892 | ||||||
Klepierre | 24,852 | 761,056 | ||||||
Unibail-Rodamco SE | 23,940 | 4,527,470 | ||||||
5,784,418 | ||||||||
REAL ESTATE INVESTMENT TRUSTS – 0.49% |
| |||||||
Fonciere des Regions | 6,327 | 591,840 | ||||||
Icade | 6,042 | 574,549 | ||||||
1,166,389 | ||||||||
RETAIL – 1.09% | ||||||||
PPR SA | 19,952 | 2,605,534 | ||||||
2,605,534 | ||||||||
SEMICONDUCTORS – 0.47% |
| |||||||
STMicroelectronics NV | 167,254 | 1,118,126 | ||||||
1,118,126 |
50 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI FRANCE INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
SOFTWARE – 0.39% | ||||||||
Dassault Systemes SA | 15,561 | $ | 941,101 | |||||
941,101 | ||||||||
TELECOMMUNICATIONS – 5.93% |
| |||||||
Alcatel-Lucenta | 608,182 | 1,572,219 | ||||||
Eutelsat Communications | 25,821 | 931,024 | ||||||
France Telecom SA | 485,878 | 9,905,127 | ||||||
SES SA FDR | 78,660 | 1,811,010 | ||||||
14,219,380 | ||||||||
TRANSPORTATION – 0.39% |
| |||||||
Groupe Eurotunnel SA | 124,545 | 928,057 | ||||||
928,057 | ||||||||
WATER – 1.36% | ||||||||
Suez Environnement SA | 70,281 | 1,134,410 | ||||||
Veolia Environnement | 90,637 | 2,116,134 | ||||||
3,250,544 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $365,296,893) | 239,230,713 | |||||||
SHORT-TERM INVESTMENTS – 0.24% |
| |||||||
MONEY MARKET FUNDS – 0.24% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares | ||||||||
0.31%c,d,e | 440,966 | 440,966 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares | ||||||||
0.30%c,d,e | 85,689 | 85,689 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares | ||||||||
0.13%c,d | 34,919 | 34,919 | ||||||
561,574 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $561,574) | 561,574 | |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $365,858,467) | 239,792,287 | |||||||
Other Assets, Less Liabilities – (0.04)% |
| (85,853) | ||||||
NET ASSETS – 100.00% | $ | 239,706,434 | ||||||
FDR – Fiduciary Depositary Receipts
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 51 |
Table of Contents
iSHARES® MSCI GERMANY INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 94.10% |
| |||||||
AIRLINES – 0.53% | ||||||||
Deutsche Lufthansa | ||||||||
AG Registereda | 497,250 | $ | 7,871,310 | |||||
7,871,310 | ||||||||
APPAREL – 1.74% | ||||||||
Adidas AG | 440,895 | 22,506,679 | ||||||
Puma AG | 12,558 | 3,418,758 | ||||||
25,925,437 | ||||||||
AUTO MANUFACTURERS – 9.04% |
| |||||||
Bayerische Motoren | 696,660 | 36,891,025 | ||||||
Daimler AG Registereda | 1,885,725 | 91,935,962 | ||||||
Volkswagen AGb | 62,339 | 5,684,735 | ||||||
134,511,722 | ||||||||
AUTO PARTS & EQUIPMENT – 0.44% |
| |||||||
Continental AGa | 107,610 | 6,523,782 | ||||||
6,523,782 | ||||||||
BANKS – 6.12% | ||||||||
Commerzbank AGa,b | 1,539,435 | 12,154,057 | ||||||
Deutsche Bank | 1,156,935 | 72,902,756 | ||||||
Deutsche Postbank AGa | 198,477 | 6,030,140 | ||||||
91,086,953 | ||||||||
BIOTECHNOLOGY – 0.57% |
| |||||||
QIAGEN NVa | 475,065 | 8,558,636 | ||||||
8,558,636 | ||||||||
BUILDING MATERIALS – 0.81% |
| |||||||
HeidelbergCement AG | 298,605 | 12,011,556 | ||||||
12,011,556 | ||||||||
CHEMICALS – 15.41% | ||||||||
BASF SE | 1,924,995 | 101,863,042 | ||||||
Bayer AG | 1,730,940 | 105,993,022 | ||||||
K+S AG | 305,490 | 16,027,477 | ||||||
Wacker Chemie AG | 35,955 | 5,469,932 | ||||||
229,353,473 | ||||||||
COSMETICS & PERSONAL CARE – 0.70% |
| |||||||
Beiersdorf AG | 194,055 | 10,404,264 | ||||||
10,404,264 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 1.73% |
| |||||||
Deutsche Boerse AG | 420,750 | 25,785,752 | ||||||
25,785,752 |
Security | Shares | Value | ||||||
ELECTRIC – 11.00% | ||||||||
E.ON AG | 3,771,705 | $ | 106,442,964 | |||||
RWE AG | 870,825 | 57,198,134 | ||||||
163,641,098 | ||||||||
ENGINEERING & CONSTRUCTION – 3.32% |
| |||||||
Fraport AG | 86,445 | 4,506,756 | ||||||
Hochtief AG | 100,554 | 6,672,391 | ||||||
Linde AG | 338,385 | 38,233,260 | ||||||
49,412,407 | ||||||||
FOOD – 1.09% | ||||||||
METRO AG | 262,395 | 13,397,998 | ||||||
Suedzucker AG | 153,255 | 2,801,902 | ||||||
16,199,900 | ||||||||
HEALTH CARE – PRODUCTS – 1.86% |
| |||||||
Fresenius Medical Care AG & |
| |||||||
Co. KGaA | 410,040 | 23,284,550 | ||||||
Fresenius SE | 62,730 | 4,463,898 | ||||||
27,748,448 | ||||||||
HOLDING COMPANIES – DIVERSIFIED – 0.48% |
| |||||||
GEA Group AG | 347,055 | 7,229,458 | ||||||
7,229,458 | ||||||||
HOUSEHOLD PRODUCTS & WARES – 0.76% |
| |||||||
Henkel AG & Co. KGaA | 280,245 | 11,292,604 | ||||||
11,292,604 | ||||||||
INSURANCE – 10.64% |
| |||||||
Allianz SE Registered | 957,015 | 98,448,796 | ||||||
Hannover Rueckversicherung |
| |||||||
AG Registered | 137,955 | 6,137,563 | ||||||
Muenchener | ||||||||
Rueckversicherungs- | ||||||||
Gesellschaft | 418,965 | 53,674,344 | ||||||
158,260,703 | ||||||||
INTERNET – 0.26% |
| |||||||
United Internet | 298,350 | 3,835,486 | ||||||
3,835,486 | ||||||||
IRON & STEEL – 1.68% |
| |||||||
Salzgitter AG | 87,720 | 5,338,590 | ||||||
ThyssenKrupp AG | 715,020 | 19,624,557 | ||||||
24,963,147 |
52 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI GERMANY INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
LEISURE TIME – 0.22% |
| |||||||
TUI AGa | 325,635 | $ | 3,292,716 | |||||
3,292,716 | ||||||||
MACHINERY – DIVERSIFIED – 1.32% |
| |||||||
MAN SE | 226,977 | 19,584,664 | ||||||
19,584,664 | ||||||||
MANUFACTURING – 10.57% |
| |||||||
Siemens | 1,723,800 | 157,260,190 | ||||||
157,260,190 | ||||||||
PHARMACEUTICALS – 1.05% |
| |||||||
Celesio AG | 171,105 | 3,479,454 | ||||||
Merck KGaA | 139,995 | 12,195,092 | ||||||
15,674,546 | ||||||||
SEMICONDUCTORS – 0.88% |
| |||||||
Infineon | 2,333,250 | 13,050,919 | ||||||
13,050,919 | ||||||||
SOFTWARE – 4.59% |
| |||||||
SAP AG | 1,558,305 | 68,239,083 | ||||||
68,239,083 | ||||||||
TELECOMMUNICATIONS – 5.30% |
| |||||||
Deutsche Telekom | ||||||||
AG Registered | 5,967,765 | 78,805,354 | ||||||
78,805,354 | ||||||||
TRANSPORTATION – 1.99% |
| |||||||
Deutsche Post | 1,806,420 | 29,628,196 | ||||||
29,628,196 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $1,669,076,485) |
| 1,400,151,804 | ||||||
PREFERRED STOCKS – 5.64% |
| |||||||
AUTO MANUFACTURERS – 3.28% |
| |||||||
Bayerische Motoren | 119,340 | 4,433,465 | ||||||
Porsche Automobil | 188,190 | 8,786,280 | ||||||
Volkswagen AG | 357,000 | 35,631,350 | ||||||
48,851,095 | ||||||||
ELECTRIC – 0.32% |
| |||||||
RWE AG NVS | 75,735 | 4,675,606 | ||||||
4,675,606 |
Security | Shares | Value | ||||||
HEALTH CARE – SERVICES – 0.83% |
| |||||||
Fresenius SE | 173,145 | $ | 12,354,092 | |||||
12,354,092 | ||||||||
HOUSEHOLD PRODUCTS & WARES – 1.21% |
| |||||||
Henkel AG & | 383,010 | 18,059,782 | ||||||
18,059,782 | ||||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $91,355,640) |
| 83,940,575 | ||||||
SHORT-TERM INVESTMENTS – 1.11% |
| |||||||
MONEY MARKET FUNDS – 1.11% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares | ||||||||
0.31%c,d,e | 13,493,716 | 13,493,716 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares | ||||||||
0.30%c,d,e | 2,622,105 | 2,622,105 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares | ||||||||
0.13%c,d | 323,992 | 323,992 | ||||||
16,439,813 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $16,439,813) |
| 16,439,813 | ||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $1,776,871,938) |
| 1,500,532,192 | ||||||
Other Assets, Less |
| (12,651,190) | ||||||
NET ASSETS – 100.00% |
| $ | 1,487,881,002 | |||||
NVS – Non-Voting Shares
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 53 |
Table of Contents
iSHARES® MSCI ITALY INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 98.08% |
| |||||||
AEROSPACE & DEFENSE – 2.13% |
| |||||||
Finmeccanica SpA | 161,490 | $ | 1,626,572 | |||||
1,626,572 | ||||||||
AUTO MANUFACTURERS – 3.48% |
| |||||||
Fiat SpA | 226,450 | 2,660,772 | ||||||
2,660,772 | ||||||||
AUTO PARTS & EQUIPMENT – 0.65% |
| |||||||
Pirelli & C. SpA | 74,712 | 497,565 | ||||||
497,565 | ||||||||
BANKS – 26.75% | ||||||||
Banca Carige SpA | 325,430 | 691,962 | ||||||
Banca Monte dei Paschi di |
| |||||||
Siena SpAa | 948,124 | 1,137,537 | ||||||
Banca Popolare di Milano Scrl | 189,947 | 828,047 | ||||||
Banco Popolare SpA | 224,049 | 1,263,601 | ||||||
Intesa Sanpaolo SpA | 2,059,414 | 5,797,568 | ||||||
UniCredit SpA | 3,755,395 | 8,839,446 | ||||||
Unione di Banche Italiane ScpA | 216,716 | 1,906,012 | ||||||
20,464,173 | ||||||||
COMMERCIAL SERVICES – 2.80% |
| |||||||
Atlantia SpA | 113,563 | 2,146,230 | ||||||
2,146,230 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 2.05% |
| |||||||
Mediobanca SpAa | 199,240 | 1,572,522 | ||||||
1,572,522 | ||||||||
ELECTRIC – 16.10% | ||||||||
A2A SpA | 831,600 | 1,164,728 | ||||||
Enel SpA | 1,714,620 | 8,193,778 | ||||||
Terna SpA | 733,040 | 2,955,682 | ||||||
12,314,188 | ||||||||
ELECTRICAL COMPONENTS & |
| |||||||
Prysmian SpA | 62,475 | 982,210 | ||||||
982,210 | ||||||||
FOOD – 2.29% | ||||||||
Parmalat SpA | 726,425 | 1,753,252 | ||||||
1,753,252 |
Security | Shares | Value | ||||||
HEALTH CARE – PRODUCTS – 1.75% |
| |||||||
Luxottica Group SpA | 57,630 | $ | 1,335,986 | |||||
1,335,986 | ||||||||
HOLDING COMPANIES – DIVERSIFIED – 0.63% |
| |||||||
Exor SpA | 26,025 | 480,601 | ||||||
480,601 | ||||||||
INSURANCE – 6.11% |
| |||||||
Assicurazioni Generali SpA | 205,765 | 3,731,848 | ||||||
Mediolanum SpAb | 253,190 | 939,632 | ||||||
4,671,480 | ||||||||
MEDIA – 2.18% | ||||||||
Mediaset SpA | 268,660 | 1,669,707 | ||||||
1,669,707 | ||||||||
METAL FABRICATE & HARDWARE – 3.44% |
| |||||||
Tenaris SA | 154,972 | 2,635,347 | ||||||
2,635,347 | ||||||||
OIL & GAS – 18.34% | ||||||||
Eni SpA | 704,515 | 14,030,970 | ||||||
14,030,970 | ||||||||
OIL & GAS SERVICES – 3.78% |
| |||||||
Saipem SpA | 82,285 | 2,888,503 | ||||||
2,888,503 | ||||||||
RETAIL – 0.79% | ||||||||
Autogrill SpAa | 52,115 | 602,744 | ||||||
602,744 | ||||||||
TELECOMMUNICATIONS – 3.53% |
| |||||||
Telecom Italia SpA | 1,989,260 | 2,697,643 | ||||||
2,697,643 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $133,903,238) |
| 75,030,465 | ||||||
PREFERRED STOCKS – 1.80% |
| |||||||
BANKS – 0.39% | ||||||||
Intesa Sanpaolo SpA RNC | 131,852 | 299,628 | ||||||
299,628 | ||||||||
TELECOMMUNICATIONS – 1.41% |
| |||||||
Telecom Italia SpA RNC | 974,576 | 1,075,757 | ||||||
1,075,757 | ||||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $1,845,008) | 1,375,385 |
54 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ITALY INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS – 0.26% |
| |||||||
MONEY MARKET FUNDS – 0.26% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares | ||||||||
0.31%c,d,e | 165,366 | $ | 165,366 | |||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares | ||||||||
0.30%c,d,e | 32,134 | 32,134 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares | ||||||||
0.13%c,d | 995 | 995 | ||||||
198,495 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $198,495) | 198,495 | |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $135,946,741) | 76,604,345 | |||||||
Other Assets, Less Liabilities – (0.14)% |
| (104,293) | ||||||
NET ASSETS – 100.00% |
| $ | 76,500,052 | |||||
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 55 |
Table of Contents
iSHARES® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.62% |
| |||||||
BANKS – 0.21% | ||||||||
SNS REAAL NVa | 72,105 | $ | 305,626 | |||||
305,626 | ||||||||
BEVERAGES – 4.83% | ||||||||
Heineken Holding NV | 44,385 | 1,713,770 | ||||||
Heineken NV | 120,615 | 5,417,468 | ||||||
7,131,238 | ||||||||
BIOTECHNOLOGY – 0.46% |
| |||||||
Crucell NVa | 36,135 | 681,079 | ||||||
681,079 | ||||||||
BUILDING MATERIALS – 0.19% |
| |||||||
Wavin NVa | 25,029 | 277,070 | ||||||
277,070 | ||||||||
CHEMICALS – 7.15% |
| |||||||
Akzo Nobel NV | 129,690 | 6,867,621 | ||||||
Koninklijke DSM NV | 88,605 | 3,693,128 | ||||||
10,560,749 | ||||||||
COMMERCIAL SERVICES – 1.92% |
| |||||||
Brunel International NV | 5,775 | 147,529 | ||||||
Randstad Holding NVa | 59,400 | 2,213,874 | ||||||
USG People NVa | 36,465 | 464,842 | ||||||
2,826,245 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 0.32% |
| |||||||
BinckBank NV | 26,235 | 339,436 | ||||||
KAS Bank NV CVA | 9,405 | 136,267 | ||||||
475,703 | ||||||||
ELECTRICAL COMPONENTS & |
| |||||||
Draka Holding NVa | 16,005 | 209,721 | ||||||
TKH Group NV | 18,645 | 367,301 | ||||||
577,022 | ||||||||
ELECTRONICS – 10.32% |
| |||||||
Koninklijke Philips | 542,190 | 15,235,921 | ||||||
15,235,921 | ||||||||
ENGINEERING & CONSTRUCTION – 1.64% |
| |||||||
Arcadis NV | 28,875 | 587,913 | ||||||
Koninklijke BAM Groep NV | 92,565 | 464,700 | ||||||
Royal Boskalis Westminster | ||||||||
NV CVA | 36,630 | 1,370,576 | ||||||
2,423,189 |
Security | Shares | Value | ||||||
FOOD – 23.31% | ||||||||
CSM NV CVA | 39,270 | $ | 1,024,157 | |||||
Koninklijke Ahold NV | 538,230 | 6,645,676 | ||||||
Koninklijke Wessanen NVa | 47,600 | 154,268 | ||||||
Nutreco NV | 20,790 | 1,209,912 | ||||||
Sligro Food Group NV | 20,460 | 601,724 | ||||||
Unilever NV CVA | 922,185 | 24,771,298 | ||||||
34,407,035 | ||||||||
HOLDING COMPANIES – DIVERSIFIED – 0.81% |
| |||||||
Imtech NV | 40,095 | 1,129,500 | ||||||
Ordina NVa | 22,440 | 67,479 | ||||||
1,196,979 | ||||||||
HOUSEWARES – 0.10% | ||||||||
Hunter Douglas NV | 4,290 | 147,269 | ||||||
147,269 | ||||||||
INSURANCE – 16.32% | ||||||||
AEGON NVa | 859,320 | 4,410,113 | ||||||
Delta Lloyd NV | 53,790 | 919,843 | ||||||
ING Groep NV CVAa | 2,102,925 | 18,757,097 | ||||||
24,087,053 | ||||||||
INVESTMENT COMPANIES – 0.10% |
| |||||||
Kardan NVa | 33,000 | 145,075 | ||||||
145,075 | ||||||||
LEISURE TIME – 0.13% |
| |||||||
Accell Group NV | 4,477 | 188,198 | ||||||
188,198 | ||||||||
MANUFACTURING – 0.76% |
| |||||||
Aalberts Industries NV | 51,810 | 735,851 | ||||||
Koninklijke Ten Cate NV | 15,345 | 389,469 | ||||||
1,125,320 | ||||||||
MEDIA – 5.35% | ||||||||
Reed Elsevier NV | 398,475 | 4,787,394 | ||||||
Wolters Kluwer NV | 166,320 | 3,113,692 | ||||||
7,901,086 | ||||||||
METAL FABRICATE & HARDWARE – 0.04% |
| |||||||
Advanced Metallurgical | 6,435 | 55,369 | ||||||
55,369 | ||||||||
OIL & GAS SERVICES – 2.38% |
| |||||||
Fugro NV CVA | 37,290 | 2,105,229 |
56 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
SBM Offshore NV | 92,400 | $ | 1,409,817 | |||||
3,515,046 | ||||||||
PHARMACEUTICALS – 0.40% |
| |||||||
Mediq NV | 35,735 | 587,474 | ||||||
587,474 | ||||||||
REAL ESTATE INVESTMENT TRUSTS – 3.32% |
| |||||||
Corio NV | 33,495 | 1,927,591 | ||||||
Eurocommercial Properties NV | 20,955 | 808,837 | ||||||
Nieuwe Steen Investments NV | 19,470 | 355,096 | ||||||
VastNed Offices/ Industrial NV | 8,910 | 128,529 | ||||||
VastNed Retail NV | 10,725 | 581,769 | ||||||
Wereldhave NV | 13,200 | 1,091,482 | ||||||
4,893,304 | ||||||||
RETAIL – 0.29% |
| |||||||
Beter Bed Holding NV | 11,220 | 236,931 | ||||||
Macintosh Retail Group NV | 9,592 | 187,131 | ||||||
424,062 | ||||||||
SEMICONDUCTORS – 4.38% |
| |||||||
ASM International NVa | 22,935 | 508,217 | ||||||
ASML Holding NV | 238,260 | 5,957,916 | ||||||
6,466,133 | ||||||||
SOFTWARE – 0.60% | ||||||||
Exact Holding NV | 9,185 | 212,169 | ||||||
TomTom NVa,b | 66,589 | 356,890 | ||||||
Unit 4 NV | 14,442 | 320,663 | ||||||
889,722 | ||||||||
TELECOMMUNICATIONS – 9.20% |
| |||||||
Koninklijke KPN NV | 934,395 | 13,585,793 | ||||||
13,585,793 | ||||||||
TRANSPORTATION – 4.70% |
| |||||||
Royal Vopak NV | 39,600 | 1,595,197 | ||||||
TNT NV | 210,045 | 5,347,143 | ||||||
6,942,340 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $193,452,008) |
| 147,051,100 |
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS – 0.27% |
| |||||||
MONEY MARKET FUNDS – 0.27% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares | ||||||||
0.31%c,d,e | 299,968 | $ | 299,968 | |||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares | ||||||||
0.30%c,d,e | 58,290 | 58,290 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares | ||||||||
0.13%c,d | 32,472 | 32,472 | ||||||
390,730 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $390,730) | 390,730 | |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $193,842,738) | 147,441,830 | |||||||
Other Assets, Less Liabilities – 0.11% |
| 168,677 | ||||||
NET ASSETS – 100.00% |
| $ | 147,610,507 | |||||
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 57 |
Table of Contents
iSHARES® MSCI SPAIN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.87% |
| |||||||
AIRLINES – 0.64% | ||||||||
Iberia Lineas Aereas de | 384,790 | $ | 1,244,629 | |||||
1,244,629 | ||||||||
BANKS – 39.60% |
| |||||||
Banco Bilbao Vizcaya | 1,375,570 | 16,636,639 | ||||||
Banco de Sabadell SAb | 956,482 | 4,637,670 | ||||||
Banco de Valencia SAb | 343,591 | 1,825,352 | ||||||
Banco Popular Espanol SAb | 906,570 | 5,422,277 | ||||||
Banco Santander SA | 3,902,780 | 45,867,323 | ||||||
Bankinter SA | 394,940 | 2,575,500 | ||||||
76,964,761 | ||||||||
COMMERCIAL SERVICES – 5.14% |
| |||||||
Abertis Infraestructuras SA | 421,149 | 7,001,192 | ||||||
Ferrovial SA | 339,150 | 2,988,850 | ||||||
9,990,042 | ||||||||
COMPUTERS – 1.21% |
| |||||||
Indra Sistemas SA | 139,580 | 2,342,556 | ||||||
2,342,556 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 3.85% |
| |||||||
Criteria CaixaCorp SA | 1,589,840 | 7,486,350 | ||||||
7,486,350 | ||||||||
ELECTRIC – 7.40% |
| |||||||
Iberdrola SA | 1,357,510 | 9,592,820 | ||||||
Red Electrica Corporacion SA | 115,689 | 4,781,576 | ||||||
14,374,396 | ||||||||
ENERGY – ALTERNATE SOURCES – 0.97% |
| |||||||
Gamesa Corporacion | ||||||||
Tecnologica SAa | 280,560 | 1,889,862 | ||||||
1,889,862 | ||||||||
ENGINEERING & CONSTRUCTION – 4.45% |
| |||||||
Acciona SA | 29,120 | 2,305,357 | ||||||
Actividades de Construcciones y |
| |||||||
Servicios SAb | 129,341 | 5,379,530 | ||||||
Fomento de Construcciones y | ||||||||
Contratas SA | 40,740 | 961,786 | ||||||
8,646,673 | ||||||||
GAS – 3.40% |
| |||||||
Enagas SA | 166,530 | 2,952,536 |
Security | Shares | Value | ||||||
Gas Natural SDG SA | 241,150 | $ | 3,657,953 | |||||
6,610,489 | ||||||||
INSURANCE – 2.95% |
| |||||||
Mapfre SA | 1,989,654 | 5,732,678 | ||||||
5,732,678 | ||||||||
IRON & STEEL – 1.16% |
| |||||||
Acerinox SA | 142,120 | 2,247,908 | ||||||
2,247,908 | ||||||||
MACHINERY – 0.61% |
| |||||||
Zardoya Otis SA | 76,313 | 1,193,947 | ||||||
1,193,947 | ||||||||
MEDIA – 0.84% | ||||||||
Gestevision Telecinco SA | 160,230 | 1,627,118 | ||||||
1,627,118 | ||||||||
OIL & GAS – 4.68% |
| |||||||
Repsol YPF SA | 397,670 | 9,105,118 | ||||||
9,105,118 | ||||||||
PHARMACEUTICALS – 0.57% |
| |||||||
Grifols SA | 94,850 | 1,107,730 | ||||||
1,107,730 | ||||||||
RETAIL – 4.81% | ||||||||
Industria de Diseno | 139,790 | 9,354,120 | ||||||
9,354,120 | ||||||||
TELECOMMUNICATIONS – 17.59% |
| |||||||
Telefonica SA | 1,537,480 | 34,196,054 | ||||||
34,196,054 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $294,678,951) |
| 194,114,431 | ||||||
SHORT-TERM INVESTMENTS – 5.53% |
| |||||||
MONEY MARKET FUNDS – 5.53% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares | ||||||||
0.31%c,d,e | 8,901,269 | 8,901,269 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares | ||||||||
0.30%c,d,e | 1,729,699 | 1,729,699 |
58 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SPAIN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares | ||||||||
0.13%c,d | 111,481 | $ | 111,481 | |||||
10,742,449 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $10,742,449) | 10,742,449 | |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $305,421,400) | 204,856,880 | |||||||
Other Assets, Less Liabilities – (5.40)% |
| (10,495,358) | ||||||
NET ASSETS – 100.00% | $ | 194,361,522 | ||||||
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 59 |
Table of Contents
iSHARES® MSCI SWEDEN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.83% |
| |||||||
AGRICULTURE – 1.93% |
| |||||||
Swedish Match AB | 207,944 | $ | 4,804,806 | |||||
4,804,806 | ||||||||
AUTO MANUFACTURERS – 2.14% |
| |||||||
Scania AB Class B | 288,048 | 5,330,821 | ||||||
5,330,821 | ||||||||
BANKS – 21.19% |
| |||||||
Nordea Bank AB | 2,910,944 | 26,165,833 | ||||||
Skandinaviska Enskilda Banken AB |
| |||||||
Class A | 1,269,560 | 7,939,164 | ||||||
Svenska Handelsbanken AB | ||||||||
Class A | 440,504 | 11,535,117 | ||||||
Swedbank AB Class Aa | 643,008 | 7,236,817 | ||||||
52,876,931 | ||||||||
COMMERCIAL SERVICES – 1.04% |
| |||||||
Securitas AB Class B | 281,792 | 2,601,786 | ||||||
2,601,786 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 1.43% |
| |||||||
Kinnevik Investment AB Class B | 195,432 | 3,561,119 | ||||||
3,561,119 | ||||||||
ENGINEERING & CONSTRUCTION – 2.22% |
| |||||||
Skanska AB Class B | 359,448 | 5,540,248 | ||||||
5,540,248 | ||||||||
FOREST PRODUCTS & PAPER – 3.26% |
| |||||||
Holmen AB Class B | 47,600 | 1,263,254 | ||||||
Svenska Cellulosa AB | 515,712 | 6,878,212 | ||||||
8,141,466 | ||||||||
HAND & MACHINE TOOLS – 4.32% |
| |||||||
Sandvik AB | 907,664 | 10,781,920 | ||||||
10,781,920 | ||||||||
HEALTH CARE – PRODUCTS – 1.45% |
| |||||||
Getinge AB Class B | 180,200 | 3,628,303 | ||||||
3,628,303 | ||||||||
HOME FURNISHINGS – 1.67% |
| |||||||
Electrolux AB Class B | 215,968 | 4,175,602 | ||||||
4,175,602 | ||||||||
HOUSEHOLD PRODUCTS & WARES – 0.93% |
| |||||||
Husqvarna AB Class B | 366,656 | 2,308,794 | ||||||
2,308,794 |
Security | Shares | Value | ||||||
INVESTMENT COMPANIES – 3.83% |
| |||||||
Investor AB Class B | 410,040 | $ | 7,098,911 | |||||
Ratos AB Class B | 91,392 | 2,450,248 | ||||||
9,549,159 | ||||||||
IRON & STEEL – 1.26% |
| |||||||
SSAB AB Class A | 162,520 | 2,231,527 | ||||||
SSAB AB Class B | 74,800 | 907,306 | ||||||
3,138,833 | ||||||||
MACHINERY – 11.32% |
| |||||||
Atlas Copco AB Class A | 604,384 | 9,217,096 | ||||||
Atlas Copco AB Class B | 351,288 | 4,832,992 | ||||||
Hexagon AB Class B | 171,224 | 2,806,380 | ||||||
Volvo AB Class Ba | 979,472 | 11,389,055 | ||||||
28,245,523 | ||||||||
MANUFACTURING – 1.79% |
| |||||||
Alfa Laval AB | 303,960 | 4,462,298 | ||||||
4,462,298 | ||||||||
MEDIA – 1.05% |
| |||||||
Modern Times Group MTG AB |
| |||||||
Class B | 45,424 | 2,619,940 | ||||||
2,619,940 | ||||||||
METAL FABRICATE & HARDWARE – 4.79% |
| |||||||
Assa Abloy AB Class B | 280,840 | 5,628,003 | ||||||
SKF AB Class B | 350,744 | 6,315,038 | ||||||
11,943,041 | ||||||||
MINING – 1.12% | ||||||||
Boliden AB | 246,160 | 2,797,159 | ||||||
2,797,159 | ||||||||
RETAIL – 12.10% | ||||||||
Hennes & Mauritz AB | 920,312 | 30,192,997 | ||||||
30,192,997 | ||||||||
TELECOMMUNICATIONS – 20.99% |
| |||||||
Millicom International Cellular |
| |||||||
SA SDR | 68,408 | 6,297,549 | ||||||
Tele2 AB Class B | 284,104 | 5,126,770 | ||||||
Telefonaktiebolaget LM Ericsson |
| |||||||
Class B | 2,710,752 | 26,370,829 |
60 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SWEDEN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
TeliaSonera AB | 2,020,960 | $ | 14,573,901 | |||||
52,369,049 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $300,548,076) |
| 249,069,795 | ||||||
SHORT-TERM INVESTMENTS – 0.01% |
| |||||||
MONEY MARKET FUNDS – 0.01% |
| |||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares | ||||||||
0.13%b,c | 32,861 | 32,861 | ||||||
32,861 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $32,861) | 32,861 | |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $300,580,937) |
| 249,102,656 | ||||||
Other Assets, Less Liabilities – 0.16% |
| 388,532 | ||||||
NET ASSETS – 100.00% |
| $ | 249,491,188 | |||||
SDR – Swedish Depositary Receipts
a | Non-income earning security. |
b | Affiliated issuer. See Note 2. |
c | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 61 |
Table of Contents
iSHARES® MSCI SWITZERLAND INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 98.91% |
| |||||||
BANKS – 7.84% | ||||||||
Baloise Holding AG Registered | 39,600 | $ | 3,210,178 | |||||
Credit Suisse Group | 433,350 | 19,056,288 | ||||||
GAM Holding AGa | 259,650 | 3,239,223 | ||||||
Julius Baer Group Ltd. | 178,249 | 6,294,967 | ||||||
31,800,656 | ||||||||
BUILDING MATERIALS – 3.02% |
| |||||||
Geberit AG Registered | 19,660 | 3,171,969 | ||||||
Holcim Ltd. Registered | 146,700 | 8,839,615 | ||||||
Sika AG Bearer | 150 | 263,905 | ||||||
12,275,489 | ||||||||
CHEMICALS – 5.78% | ||||||||
Givaudan SA Registered | 6,512 | 6,229,428 | ||||||
Lonza Group AG Registered | 44,850 | 3,726,442 | ||||||
Syngenta AG Registered | 58,419 | 13,504,353 | ||||||
23,460,223 | ||||||||
COMMERCIAL SERVICES – 2.41% |
| |||||||
Adecco SA Registered | 78,902 | 3,683,650 | ||||||
SGS SA Registered | 4,200 | 6,088,757 | ||||||
9,772,407 | ||||||||
COMPUTERS – 0.34% | ||||||||
Logitech International | 92,250 | 1,372,833 | ||||||
1,372,833 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 4.79% |
| |||||||
UBS AG Registereda | 1,146,134 | 19,418,720 | ||||||
19,418,720 | ||||||||
ENGINEERING & CONSTRUCTION – 4.58% |
| |||||||
ABB Ltd. Registereda | 961,500 | 18,604,172 | ||||||
18,604,172 | ||||||||
FOOD – 24.02% | ||||||||
Aryzta AG | 62,850 | 2,696,228 | ||||||
Lindt & Spruengli AG | ||||||||
Participation Certificates | 1,145 | 2,685,217 | ||||||
Lindt & Spruengli | 150 | 3,966,716 | ||||||
Nestle SA Registered | 1,698,400 | 88,102,405 | ||||||
97,450,566 |
Security | Shares | Value | ||||||
HAND & MACHINE TOOLS – 1.17% |
| |||||||
Schindler Holding AG | ||||||||
Participation Certificates | 31,730 | $ | 3,166,742 | |||||
Schindler Holding AG Registered | 15,900 | 1,567,263 | ||||||
4,734,005 | ||||||||
HEALTH CARE – PRODUCTS – 3.30% |
| |||||||
Nobel Biocare Holding | ||||||||
AG Registered | 84,938 | 1,336,894 | ||||||
Sonova Holding AG Registered | 37,200 | 4,765,562 | ||||||
Straumann Holding | 7,813 | 1,648,898 | ||||||
Synthes Inc. | 51,150 | 5,649,704 | ||||||
13,401,058 | ||||||||
INSURANCE – 7.33% |
| |||||||
Swiss Life Holding | 24,000 | 2,506,509 | ||||||
Swiss Reinsurance | 221,850 | 9,210,932 | ||||||
Zurich Financial Services | ||||||||
AG Registered | 80,700 | 18,018,225 | ||||||
29,735,666 | ||||||||
INVESTMENT COMPANIES – 0.78% |
| |||||||
Pargesa Holding SA Bearer | 48,369 | 3,157,818 | ||||||
3,157,818 | ||||||||
PHARMACEUTICALS – 25.11% |
| |||||||
Actelion Ltd. Registereda | 77,259 | 3,315,889 | ||||||
Novartis AG Registered | 997,050 | 52,458,203 | ||||||
Roche Holding AG Genusschein | 338,700 | 46,095,266 | ||||||
101,869,358 | ||||||||
RETAIL – 5.74% | ||||||||
Compagnie Financiere Richemont |
| |||||||
SA Class A Bearer Units | 377,550 | 14,692,429 | ||||||
Swatch Group AG (The) Bearer | 19,112 | 6,159,568 | ||||||
Swatch Group AG | 41,328 | 2,449,520 | ||||||
23,301,517 | ||||||||
TELECOMMUNICATIONS – 1.90% |
| |||||||
Swisscom AG Registered | 19,800 | 7,709,112 | ||||||
7,709,112 | ||||||||
TRANSPORTATION – 0.80% |
| |||||||
Kuehne & Nagel International | ||||||||
AG Registered | 31,205 | 3,258,984 | ||||||
3,258,984 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $424,867,406) | 401,322,584 |
62 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SWITZERLAND INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS – 0.05% |
| |||||||
MONEY MARKET FUNDS – 0.05% |
| |||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares | ||||||||
0.13%b,c | 200,001 | $ | 200,001 | |||||
200,001 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $200,001) | 200,001 | |||||||
TOTAL INVESTMENTS |
| 401,522,585 | ||||||
Other Assets, Less Liabilities – 1.04% |
| 4,232,025 | ||||||
NET ASSETS – 100.00% | $ | 405,754,610 | ||||||
a | Non-income earning security. |
b | Affiliated issuer. See Note 2. |
c | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 63 |
Table of Contents
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.34% |
| |||||||
AEROSPACE & DEFENSE – 1.70% |
| |||||||
BAE Systems PLC | 1,554,960 | $ | 7,042,794 | |||||
Cobham PLC | 518,010 | 1,663,911 | ||||||
Rolls-Royce Group PLCa | 835,450 | 7,113,377 | ||||||
15,820,082 | ||||||||
AGRICULTURE – 4.66% |
| |||||||
British American | 900,550 | 30,670,665 | ||||||
Imperial Tobacco | 459,420 | 12,709,487 | ||||||
43,380,152 | ||||||||
AIRLINES – 0.09% |
| |||||||
British Airways PLCa,b | 259,780 | 842,430 | ||||||
842,430 | ||||||||
APPAREL – 0.28% |
| |||||||
Burberry Group PLC | 196,540 | 2,567,530 | ||||||
2,567,530 | ||||||||
BANKS – 16.34% |
| |||||||
Barclays PLC | 5,160,880 | 23,985,632 | ||||||
HSBC Holdings PLC | 7,898,180 | 78,136,895 | ||||||
Lloyds Banking | 18,421,440 | 19,673,947 | ||||||
Royal Bank of Scotland | 7,841,760 | 5,372,782 | ||||||
Standard Chartered PLC | 924,110 | 24,833,327 | ||||||
152,002,583 | ||||||||
BEVERAGES – 3.29% |
| |||||||
Diageo PLC | 1,130,260 | 18,395,853 | ||||||
SABMiller PLC | 428,110 | 12,218,359 | ||||||
30,614,212 | ||||||||
CHEMICALS – 0.25% |
| |||||||
Johnson Matthey PLC | 97,030 | 2,369,603 | ||||||
2,369,603 | ||||||||
COMMERCIAL SERVICES – 2.06% |
| |||||||
Aggreko PLC | 118,420 | 2,582,576 | ||||||
Babcock International Group PLC | 162,130 | 1,259,593 | ||||||
Bunzl PLC | 147,560 | 1,612,441 | ||||||
Capita Group PLC | 278,070 | 3,004,381 | ||||||
Experian PLC | 464,070 | 4,432,719 | ||||||
G4S PLC | 636,740 | 2,470,001 | ||||||
Intertek Group PLC | 71,920 | 1,861,390 | ||||||
Serco Group PLC | 221,340 | 1,979,833 | ||||||
19,202,934 |
Security | Shares | Value | ||||||
DISTRIBUTION & WHOLESALE – 0.27% |
| |||||||
Wolseley PLCa | 128,030 | $ | 2,477,326 | |||||
2,477,326 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 1.31% |
| |||||||
ICAP PLC | 250,170 | 1,576,394 | ||||||
Investec PLC | 217,930 | 1,575,207 | ||||||
London Stock Exchange | 68,510 | 695,460 | ||||||
Man Group PLC | 773,450 | 2,474,905 | ||||||
Old Mutual PLC | 2,453,030 | 4,799,289 | ||||||
Schroders PLC | 51,150 | 1,079,349 | ||||||
12,200,604 | ||||||||
ELECTRIC – 2.63% |
| |||||||
International Power PLC | 688,510 | 3,930,047 | ||||||
National Grid PLC | 1,567,360 | 13,224,727 | ||||||
Scottish & Southern | 416,950 | 7,337,280 | ||||||
24,492,054 | ||||||||
ENGINEERING & CONSTRUCTION – 0.35% |
| |||||||
AMEC PLC | 150,040 | 2,114,570 | ||||||
Balfour Beatty PLC | 307,210 | 1,131,746 | ||||||
3,246,316 | ||||||||
FOOD – 4.87% |
| |||||||
J Sainsbury PLC | 542,500 | 3,044,922 | ||||||
Tesco PLC | 3,618,320 | 22,630,473 | ||||||
Unilever PLC | 579,080 | 15,325,594 | ||||||
Wm Morrison | 957,590 | 4,267,988 | ||||||
45,268,977 | ||||||||
FOOD SERVICE – 1.03% |
| |||||||
Associated British Foods PLC | 161,200 | 2,621,177 | ||||||
Compass Group PLC | 849,090 | 6,961,996 | ||||||
9,583,173 | ||||||||
GAS – 1.25% |
| |||||||
Centrica PLC | 2,322,830 | 11,613,072 | ||||||
11,613,072 | ||||||||
HEALTH CARE – PRODUCTS – 0.36% |
| |||||||
Smith & Nephew PLC | 401,450 | 3,344,078 | ||||||
3,344,078 | ||||||||
HOLDING COMPANIES – DIVERSIFIED – 0.21% |
| |||||||
Tomkins PLC | 395,560 | 1,969,713 | ||||||
1,969,713 |
64 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
HOUSEHOLD PRODUCTS & WARES – 1.50% |
| |||||||
Reckitt Benckiser Group PLC | 278,070 | $ | 13,944,945 | |||||
13,944,945 | ||||||||
INSURANCE – 3.15% |
| |||||||
Admiral Group PLC | 89,900 | 2,102,906 | ||||||
Aviva PLC | 1,265,110 | 7,369,077 | ||||||
Legal & General Group PLC | 2,649,260 | 3,772,382 | ||||||
Prudential PLC | 1,143,900 | 9,950,619 | ||||||
RSA Insurance Group PLC | 1,544,730 | 2,922,512 | ||||||
Standard Life PLC | 1,021,140 | 3,198,417 | ||||||
29,315,913 | ||||||||
INVESTMENT COMPANIES – 0.27% |
| |||||||
Resolution Ltd. | 654,410 | 2,546,591 | ||||||
2,546,591 | ||||||||
LEISURE TIME – 0.48% |
| |||||||
Carnival PLC | 78,120 | 2,541,726 | ||||||
Thomas Cook Group PLC | 391,840 | 1,094,232 | ||||||
TUI Travel PLC | 256,370 | 793,152 | ||||||
4,429,110 | ||||||||
LODGING – 0.21% |
| |||||||
InterContinental Hotels | 129,890 | 1,960,346 | ||||||
1,960,346 | ||||||||
MANUFACTURING – 0.47% |
| |||||||
Invensys PLC | 361,150 | 1,277,728 | ||||||
Smiths Group PLC | 175,460 | 3,087,658 | ||||||
4,365,386 | ||||||||
MEDIA – 2.43% |
| |||||||
British Sky Broadcasting | 514,910 | 5,598,909 | ||||||
ITV PLCa | 1,690,120 | 1,454,625 | ||||||
Pearson PLC | 366,730 | 5,481,276 | ||||||
Reed Elsevier PLC | 548,080 | 4,413,883 | ||||||
WPP PLC | 566,990 | 5,629,289 | ||||||
22,577,982 | ||||||||
MINING – 12.01% |
| |||||||
Anglo American PLC | 594,580 | 21,383,154 | ||||||
Antofagasta PLC | 177,010 | 2,807,522 | ||||||
BHP Billiton PLC | 995,720 | 28,027,849 | ||||||
Eurasian Natural Resources | 116,250 | 1,515,076 |
Security | Shares | Value | ||||||
Fresnillo PLC | 82,150 | $ | 1,376,194 | |||||
Kazakhmys PLC | 96,720 | 1,718,382 | ||||||
Lonmin PLCa | 72,850 | 1,710,797 | ||||||
Randgold Resources Ltd. | 40,610 | 3,794,741 | ||||||
Rio Tinto PLC | 654,100 | 33,174,448 | ||||||
Vedanta Resources PLC | 53,630 | 1,556,988 | ||||||
Xstrata PLC | 928,140 | 14,635,463 | ||||||
111,700,614 | ||||||||
OIL & GAS – 17.19% |
| |||||||
BG Group PLC | 1,525,200 | 24,601,118 | ||||||
BP PLC | 8,474,780 | 49,572,729 | ||||||
Cairn Energy PLCa | 632,400 | 4,542,827 | ||||||
Royal Dutch Shell PLC Class A | 1,599,290 | 42,596,253 | ||||||
Royal Dutch Shell PLC Class B | 1,216,130 | 31,185,436 | ||||||
Tullow Oil PLC | 399,900 | 7,485,905 | ||||||
159,984,268 | ||||||||
OIL & GAS SERVICES – 0.27% |
| |||||||
Petrofac Ltd. | 116,870 | 2,516,441 | ||||||
2,516,441 | ||||||||
PACKAGING & CONTAINERS – 0.20% |
| |||||||
Rexam PLC | 396,180 | 1,842,498 | ||||||
1,842,498 | ||||||||
PHARMACEUTICALS – 8.78% |
| |||||||
AstraZeneca PLC | 650,380 | 32,266,088 | ||||||
GlaxoSmithKline PLC | 2,342,360 | 43,955,671 | ||||||
Shire PLC | 254,200 | 5,492,960 | ||||||
81,714,719 | ||||||||
REAL ESTATE – 0.76% |
| |||||||
British Land Co. PLC | 392,150 | 2,750,702 | ||||||
Capital Shopping Centres | 212,970 | 1,084,717 | ||||||
Land Securities Group PLC | 342,550 | 3,219,334 | ||||||
7,054,753 | ||||||||
REAL ESTATE INVESTMENT TRUSTS – 0.34% |
| |||||||
Hammerson PLC | 319,920 | 1,768,099 | ||||||
SEGRO PLC | 338,520 | 1,406,814 | ||||||
3,174,913 | ||||||||
RETAIL – 1.37% |
| |||||||
Home Retail Group PLC | 384,400 | 1,291,455 | ||||||
Kingfisher PLC | 1,067,330 | 3,354,576 | ||||||
Marks & Spencer | 714,550 | 3,800,842 |
SCHEDULESOF INVESTMENTS | 65 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Next PLC | 85,250 | $ | 2,594,210 | |||||
Whitbread PLC | 78,430 | 1,682,725 | ||||||
12,723,808 | ||||||||
SEMICONDUCTORS – 0.36% |
| |||||||
ARM Holdings PLC | 591,790 | 3,336,127 | ||||||
3,336,127 | ||||||||
SOFTWARE – 0.49% |
| |||||||
Autonomy Corp. PLCa | 97,650 | 2,341,221 | ||||||
Sage Group PLC (The) | 594,580 | 2,237,921 | ||||||
4,579,142 | ||||||||
TELECOMMUNICATIONS – 7.28% |
| |||||||
BT Group PLC | 3,502,380 | 7,169,900 | ||||||
Cable & Wireless Worldwide PLC | 1,166,220 | 1,197,299 | ||||||
Inmarsat PLC | 196,540 | 2,020,797 | ||||||
Vodafone Group PLC | 23,758,090 | 57,381,450 | ||||||
67,769,446 | ||||||||
TRANSPORTATION – 0.12% |
| |||||||
FirstGroup PLC | 216,070 | 1,155,299 | ||||||
1,155,299 | ||||||||
VENTURE CAPITAL – 0.19% |
| |||||||
3i Group PLC | 435,550 | 1,744,448 | ||||||
1,744,448 | ||||||||
WATER – 0.52% |
| |||||||
Severn Trent PLC | 106,020 | 2,110,101 | ||||||
United Utilities Group PLC | 308,140 | 2,701,776 | ||||||
4,811,877 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $1,127,518,022) | 924,243,465 | |||||||
SHORT-TERM INVESTMENTS – 0.11% |
| |||||||
MONEY MARKET FUNDS – 0.11% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares | ||||||||
0.31%c,d,e | 777,523 | 777,523 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares | ||||||||
0.30%c,d,e | 151,088 | 151,088 |
Security | Shares | Value | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares | ||||||||
0.13%c,d | 124,450 | $ | 124,450 | |||||
1,053,061 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $1,053,061) | 1,053,061 | |||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $1,128,571,083) | 925,296,526 | |||||||
Other Assets, Less Liabilities – 0.55% |
| 5,115,123 | ||||||
NET ASSETS – 100.00% | $ | 930,411,649 | ||||||
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
66 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities
iSHARES® , INC.
August 31, 2010
iShares MSCI Index Fund | iShares MSCI Belgium Investable Market Index Fund | iShares MSCI Emerging Markets Eastern Europe | iShares MSCI Index Fund | |||||||||||||
ASSETS | ||||||||||||||||
Investments, at cost: | ||||||||||||||||
Unaffiliated issuers | $ | 183,256,977 | $ | 86,354,837 | $ | 12,973,390 | $ | 1,230,615,165 | ||||||||
Affiliated issuers (Note 2) | 722,998 | 416,123 | 7,712 | 3,925,994 | ||||||||||||
Total cost of investments | $ | 183,979,975 | $ | 86,770,960 | $ | 12,981,102 | $ | 1,234,541,159 | ||||||||
Investments in securities, at fair value | ||||||||||||||||
(including securities on loana) (Note 1): | ||||||||||||||||
Unaffiliated issuers | $ | 109,245,269 | $ | 58,133,180 | $ | 12,713,384 | $ | 822,007,778 | ||||||||
Affiliated issuers (Note 2) | 722,998 | 416,123 | 7,712 | 3,925,994 | ||||||||||||
Total fair value of investments | 109,968,267 | 58,549,303 | 12,721,096 | 825,933,772 | ||||||||||||
Foreign currencies, at valueb | 44,383 | 42,564 | 12,636 | 1,036,665 | ||||||||||||
Receivables: | ||||||||||||||||
Investment securities sold | 146,229 | 290,528 | 150,459 | 2,000,426 | ||||||||||||
Dividends and interest | 1,221,108 | 707,098 | 102,888 | 1,282,760 | ||||||||||||
Total Assets | 111,379,987 | 59,589,493 | 12,987,079 | 830,253,623 | ||||||||||||
LIABILITIES | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | 252,149 | 280,807 | 147,901 | 2,295,352 | ||||||||||||
Collateral for securities on loan (Note 5) | 557,937 | 385,558 | – | 3,587,736 | ||||||||||||
Investment advisory fees (Note 2) | 50,240 | 26,951 | 7,578 | 398,498 | ||||||||||||
Total Liabilities | 860,326 | 693,316 | 155,479 | 6,281,586 | ||||||||||||
NET ASSETS | $ | 110,519,661 | $ | 58,896,177 | $ | 12,831,600 | $ | 823,972,037 | ||||||||
Net assets consist of: | ||||||||||||||||
Paid-in capital | $ | 236,901,049 | $ | 122,432,589 | $ | 13,261,092 | $ | 1,371,974,824 | ||||||||
Undistributed net investment income | 197,221 | 75,785 | 39,362 | 596,192 | ||||||||||||
Accumulated net realized loss | (52,400,940 | ) | (35,245,088 | ) | (208,846 | ) | (139,914,210 | ) | ||||||||
Net unrealized depreciation on investments and translation of assets and liabilities in | (74,177,669 | ) | (28,367,109 | ) | (260,008 | ) | (408,684,769 | ) | ||||||||
NET ASSETS | $ | 110,519,661 | $ | 58,896,177 | $ | 12,831,600 | $ | 823,972,037 | ||||||||
Shares outstandingc | 6,400,000 | 5,000,000 | 500,000 | 26,800,000 | ||||||||||||
Net asset value per share | $ | 17.27 | $ | 11.78 | $ | 25.66 | $ | 30.75 | ||||||||
a | Securities on loan with values of $519,156, $364,726, $ – and $3,411,544, respectively. See Note 5. |
b | Cost of foreign currencies: $45,941, $42,530, $12,717 and $1,059,843, respectively. |
c | $0.001 par value, number of shares authorized: 100 million, 136.2 million, 200 million and 1 billion, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 67 |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES® , INC.
August 31, 2010
iShares MSCI Index Fund | iShares MSCI Index Fund | iShares MSCI Index Fund | iShares MSCI Netherlands Investable Market Index Fund | |||||||||||||
ASSETS | ||||||||||||||||
Investments, at cost: | ||||||||||||||||
Unaffiliated issuers | $ | 365,296,893 | $ | 1,760,432,125 | $ | 135,748,246 | $ | 193,452,008 | ||||||||
Affiliated issuers (Note 2) | 561,574 | 16,439,813 | 198,495 | 390,730 | ||||||||||||
Total cost of investments | $ | 365,858,467 | $ | 1,776,871,938 | $ | 135,946,741 | $ | 193,842,738 | ||||||||
Investments in securities, at fair value | ||||||||||||||||
(including securities on loana) (Note 1): | ||||||||||||||||
Unaffiliated issuers | $ | 239,230,713 | $ | 1,484,092,379 | $ | 76,405,850 | $ | 147,051,100 | ||||||||
Affiliated issuers (Note 2) | 561,574 | 16,439,813 | 198,495 | 390,730 | ||||||||||||
Total fair value of investments | 239,792,287 | 1,500,532,192 | 76,604,345 | 147,441,830 | ||||||||||||
Foreign currencies, at valueb | 189,869 | 1,748,641 | 59,305 | 301,160 | ||||||||||||
Cash | – | – | – | 1,604 | ||||||||||||
Receivables: | ||||||||||||||||
Investment securities sold | 233,761 | – | 1,552,218 | – | ||||||||||||
Due from custodian (Note 4) | – | – | – | 15,077 | ||||||||||||
Dividends and interest | 361,283 | 2,410,430 | 9 | 293,928 | ||||||||||||
Total Assets | 240,577,200 | 1,504,691,263 | 78,215,877 | 148,053,599 | ||||||||||||
LIABILITIES | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | 229,894 | – | 1,418,954 | 15,077 | ||||||||||||
Collateral for securities on loan (Note 5) | 526,655 | 16,115,821 | 197,500 | 358,258 | ||||||||||||
Capital shares redeemed | – | – | 61,889 | – | ||||||||||||
Investment advisory fees (Note 2) | 114,217 | 694,440 | 37,482 | 69,757 | ||||||||||||
Total Liabilities | 870,766 | 16,810,261 | 1,715,825 | 443,092 | ||||||||||||
NET ASSETS | $ | 239,706,434 | $ | 1,487,881,002 | $ | 76,500,052 | $ | 147,610,507 | ||||||||
Net assets consist of: | ||||||||||||||||
Paid-in capital | $ | 386,549,486 | $ | 1,887,751,662 | $ | 173,560,598 | $ | 233,352,537 | ||||||||
Undistributed (distributions in excess of) net investment income | 346,395 | – | (452 | ) | 396,156 | |||||||||||
Accumulated net realized loss | (21,123,855 | ) | (123,550,885 | ) | (37,715,991 | ) | (39,727,370 | ) | ||||||||
Net unrealized depreciation on investments and | (126,065,592 | ) | (276,319,775 | ) | (59,344,103 | ) | (46,410,816 | ) | ||||||||
NET ASSETS | $ | 239,706,434 | $ | 1,487,881,002 | $ | 76,500,052 | $ | 147,610,507 | ||||||||
Shares outstandingc | 11,400,000 | 76,500,000 | 5,100,000 | 8,250,000 | ||||||||||||
Net asset value per share | $ | 21.03 | $ | 19.45 | $ | 15.00 | $ | 17.89 | ||||||||
a | Securities on loan with values of $496,770, $15,325,053, $185,559 and $345,967, respectively. See Note 5. |
b | Cost of foreign currencies: $189,907, $1,702,206, $61,053 and $306,460, respectively. |
c | $0.001 par value, number of shares authorized: 340.2 million, 382.2 million, 63.6 million and 255 million, respectively. |
See notes to financial statements.
68 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES® , INC.
August 31, 2010
iShares MSCI Index Fund | iShares MSCI Index Fund | iShares MSCI Switzerland Index Fund | iShares MSCI United Kingdom Index Fund | |||||||||||||
ASSETS | ||||||||||||||||
Investments, at cost: | ||||||||||||||||
Unaffiliated issuers | $ | 294,678,951 | $ | 300,548,076 | $ | 424,867,406 | $ | 1,127,518,022 | ||||||||
Affiliated issuers (Note 2) | 10,742,449 | 32,861 | 200,001 | 1,053,061 | ||||||||||||
Total cost of investments | $ | 305,421,400 | $ | 300,580,937 | $ | 425,067,407 | $ | 1,128,571,083 | ||||||||
Investments in securities, at fair value | ||||||||||||||||
(including securities on loana) (Note 1): | ||||||||||||||||
Unaffiliated issuers | $ | 194,114,431 | $ | 249,069,795 | $ | 401,322,584 | $ | 924,243,465 | ||||||||
Affiliated issuers (Note 2) | 10,742,449 | 32,861 | 200,001 | 1,053,061 | ||||||||||||
Total fair value of investments | 204,856,880 | 249,102,656 | 401,522,585 | 925,296,526 | ||||||||||||
Foreign currencies, at valueb | 159,709 | 94,601 | 149,251 | 2,227,669 | ||||||||||||
Receivables: | ||||||||||||||||
Investment securities sold | 1,160,472 | 3,214,480 | 2,479,722 | 2,166,243 | ||||||||||||
Dividends and interest | 80,912 | – | 4,040,716 | 5,421,674 | ||||||||||||
Total Assets | 206,257,973 | 252,411,737 | 408,192,274 | 935,112,112 | ||||||||||||
LIABILITIES | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | 1,169,700 | 2,805,259 | 2,255,395 | 3,339,515 | ||||||||||||
Collateral for securities on loan (Note 5) | 10,630,968 | – | – | 928,611 | ||||||||||||
Investment advisory fees (Note 2) | 95,783 | 115,290 | 182,269 | 432,337 | ||||||||||||
Total Liabilities | 11,896,451 | 2,920,549 | 2,437,664 | 4,700,463 | ||||||||||||
NET ASSETS | $ | 194,361,522 | $ | 249,491,188 | $ | 405,754,610 | $ | 930,411,649 | ||||||||
Net assets consist of: | ||||||||||||||||
Paid-in capital | $ | 326,270,923 | $ | 336,048,150 | $ | 472,915,698 | $ | 1,264,623,900 | ||||||||
Undistributed (distributions in excess of) net investment income | 1,264,766 | (2,828 | ) | – | 5,184,563 | |||||||||||
Accumulated net realized loss | (32,606,648 | ) | (35,080,190 | ) | (43,836,668 | ) | (135,961,906 | ) | ||||||||
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies | (100,567,519 | ) | (51,473,944 | ) | (23,324,420 | ) | (203,434,908 | ) | ||||||||
NET ASSETS | $ | 194,361,522 | $ | 249,491,188 | $ | 405,754,610 | $ | 930,411,649 | ||||||||
Shares outstandingc | 5,250,000 | 10,200,000 | 18,750,000 | 62,000,000 | ||||||||||||
Net asset value per share | $ | 37.02 | $ | 24.46 | $ | 21.64 | $ | 15.01 | ||||||||
a | Securities on loan with values of $10,119,716, $ –, $ – and $883,095, respectively. See Note 5. |
b | Cost of foreign currencies: $161,274, $90,264, $144,980 and $2,283,777, respectively. |
c | $0.001 par value, number of shares authorized: 127.8 million, 63.6 million, 318.625 million and 934.2 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 69 |
Table of Contents
Statements of Operations
iSHARES®, INC.
Year ended August 31, 2010
iShares MSCI Austria Investable Market Index Fund | iShares MSCI Belgium Investable Market Index Fund | iShares MSCI Eastern Europe | iShares MSCI EMU Index Fund | |||||||||||||
NET INVESTMENT INCOME | ||||||||||||||||
Dividends from unaffiliated issuersb | $ | 3,839,764 | $ | 1,507,115 | $ | 169,696 | $ | 23,463,682 | ||||||||
Interest from affiliated issuers (Note 2) | 104 | 48 | 7 | 483 | ||||||||||||
Securities lending income from affiliated issuers (Note 2) | 356,492 | 8,159 | 876 | 148,678 | ||||||||||||
Total investment income | 4,196,360 | 1,515,322 | 170,579 | 23,612,843 | ||||||||||||
EXPENSES | ||||||||||||||||
Investment advisory fees (Note 2) | 822,617 | 389,142 | 67,428 | 4,463,524 | ||||||||||||
Foreign taxes (Note 1) | – | – | – | 6,208 | ||||||||||||
Total expenses | 822,617 | 389,142 | 67,428 | 4,469,732 | ||||||||||||
Net investment income | 3,373,743 | 1,126,180 | 103,151 | 19,143,111 | ||||||||||||
NET REALIZED AND UNREALIZED | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments in unaffiliated issuers | (16,644,648 | ) | (22,247,306 | ) | (204,004 | ) | (47,532,171 | ) | ||||||||
In-kind redemptions | 8,493,770 | 12,230,298 | – | 32,507,786 | ||||||||||||
Foreign currency transactions | (51,011 | ) | (59,088 | ) | 561 | (410,544 | ) | |||||||||
Net realized loss | (8,201,889 | ) | (10,076,096 | ) | (203,443 | ) | (15,434,929 | ) | ||||||||
Net change in unrealized appreciation | ||||||||||||||||
Investments | (14,300,063 | ) | 14,469,611 | (260,006 | ) | (93,899,880 | ) | |||||||||
Translation of assets and liabilities in | (119,225 | ) | (94,964 | ) | (2 | ) | (100,079 | ) | ||||||||
Net change in unrealized | (14,419,288 | ) | 14,374,647 | (260,008 | ) | (93,999,959 | ) | |||||||||
Net realized and unrealized gain (loss) | (22,621,177 | ) | 4,298,551 | (463,451 | ) | (109,434,888 | ) | |||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (19,247,434 | ) | $ | 5,424,731 | $ | (360,300 | ) | $ | (90,291,777 | ) | |||||
a | For the period from September 30, 2009 (commencement of operations) to August 31, 2010. |
b | Net of foreign withholding tax of $472,243, $234,912, $27,809 and $3,763,458, respectively. |
See notes to financial statements.
70 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2010
iShares MSCI Index Fund | iShares MSCI Germany Index Fund | iShares MSCI Index Fund | iShares MSCI Netherlands Investable Market Index Fund | |||||||||||||
NET INVESTMENT INCOME | ||||||||||||||||
Dividends from unaffiliated issuersa | $ | 9,510,202 | $ | 23,546,320 | $ | 3,143,623 | $ | 3,175,266 | ||||||||
Interest from affiliated issuers (Note 2) | 180 | 639 | 64 | 77 | ||||||||||||
Securities lending income from affiliated issuers (Note 2) | 12,357 | 358,732 | 5,423 | 19,311 | ||||||||||||
Total investment income | 9,522,739 | 23,905,691 | 3,149,110 | 3,194,654 | ||||||||||||
EXPENSES | ||||||||||||||||
Investment advisory fees (Note 2) | 1,568,843 | 5,468,927 | 623,082 | 599,732 | ||||||||||||
Foreign taxes (Note 1) | 7,136 | – | – | – | ||||||||||||
Total expenses | 1,575,979 | 5,468,927 | 623,082 | 599,732 | ||||||||||||
Net investment income | 7,946,760 | 18,436,764 | 2,526,028 | 2,594,922 | ||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments in unaffiliated issuers | (13,874,817 | ) | (42,280,143 | ) | (12,344,751 | ) | (5,622,865 | ) | ||||||||
In-kind redemptions | 5,367,408 | 44,894,150 | 4,569,172 | 1,761,019 | ||||||||||||
Foreign currency transactions | (101,486 | ) | (117,254 | ) | (15,889 | ) | (211,372 | ) | ||||||||
Net realized gain (loss) | (8,608,895 | ) | 2,496,753 | (7,791,468 | ) | (4,073,218 | ) | |||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments | (40,527,458 | ) | (95,595,703 | ) | (14,932,371 | ) | (4,938,301 | ) | ||||||||
Translation of assets and liabilities in foreign currencies | (380 | ) | (99,385 | ) | (1,902 | ) | (10,749 | ) | ||||||||
Net change in unrealized appreciation (depreciation) | (40,527,838 | ) | (95,695,088 | ) | (14,934,273 | ) | (4,949,050 | ) | ||||||||
Net realized and unrealized loss | (49,136,733 | ) | (93,198,335 | ) | (22,725,741 | ) | (9,022,268 | ) | ||||||||
NET DECREASE IN NET ASSETS RESULTING | $ | (41,189,973 | ) | $ | (74,761,571 | ) | $ | (20,199,713 | ) | $ | (6,427,346 | ) | ||||
a | Net of foreign withholding tax of $1,618,838, $3,448,041, $545,643 and $557,210, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 71 |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2010
iShares MSCI Index Fund | iShares MSCI Index Fund | iShares MSCI Switzerland Index Fund | iShares MSCI United Kingdom Index Fund | |||||||||||||
NET INVESTMENT INCOME | ||||||||||||||||
Dividends from unaffiliated issuersa | $ | 10,090,929 | $ | 5,163,440 | $ | 7,796,880 | $ | 32,630,701 | ||||||||
Dividends from affiliated issuers (Note 2) | – | – | – | 77,129 | ||||||||||||
Interest from affiliated issuers (Note 2) | 162 | 75 | 311 | 470 | ||||||||||||
Securities lending income from affiliated issuers (Note 2) | 229,266 | 12,102 | 37 | 9,718 | ||||||||||||
Total investment income | 10,320,357 | 5,175,617 | 7,797,228 | 32,718,018 | ||||||||||||
EXPENSES | ||||||||||||||||
Investment advisory fees (Note 2) | 1,298,278 | 1,105,743 | 1,783,191 | 4,977,068 | ||||||||||||
Total expenses | 1,298,278 | 1,105,743 | 1,783,191 | 4,977,068 | ||||||||||||
Net investment income | 9,022,079 | 4,069,874 | 6,014,037 | 27,740,950 | ||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments in unaffiliated issuers | (12,011,619 | ) | (10,098,629 | ) | (8,754,001 | ) | (42,066,328 | ) | ||||||||
Investments in affiliated issuers (Note 2) | – | – | – | 1,499,143 | ||||||||||||
In-kind redemptions | (22,617,839 | ) | 7,553,416 | 5,641,249 | 44,629,732 | |||||||||||
Foreign currency transactions | (107,010 | ) | (115,865 | ) | (36,464 | ) | (380,967 | ) | ||||||||
Net realized gain (loss) | (34,736,468 | ) | (2,661,078 | ) | (3,149,216 | ) | 3,681,580 | |||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments | (22,170,236 | ) | 9,085,803 | 13,478,956 | (20,555,177 | ) | ||||||||||
Translation of assets and liabilities in foreign currencies | (2,184 | ) | 1,946 | 187,120 | (82,494 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) | (22,172,420 | ) | 9,087,749 | 13,666,076 | (20,637,671 | ) | ||||||||||
Net realized and unrealized gain (loss) | (56,908,888 | ) | 6,426,671 | 10,516,860 | (16,956,091 | ) | ||||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (47,886,809 | ) | $ | 10,496,545 | $ | 16,530,897 | $ | 10,784,859 | |||||||
a | Net of foreign withholding tax of $1,536,283, $911,196, $1,870,939 and $417,186, respectively. |
See notes to financial statements.
72 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Austria Investable Market Index Fund | iShares MSCI Belgium Investable Market Index Fund | |||||||||||||||
Year ended August 31, 2010 | Year ended August 31, 2009 | Year ended August 31, 2010 | Year ended August 31, 2009 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 3,373,743 | $ | 3,099,628 | $ | 1,126,180 | $ | 1,365,882 | ||||||||
Net realized loss | (8,201,889 | ) | (87,858,013 | ) | (10,076,096 | ) | (47,188,282 | ) | ||||||||
Net change in unrealized appreciation (depreciation) | (14,419,288 | ) | 5,402,819 | 14,374,647 | 7,864,840 | |||||||||||
Net increase (decrease) in net assets resulting from operations | (19,247,434 | ) | (79,355,566 | ) | 5,424,731 | (37,957,560 | ) | |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (5,965,890 | ) | (4,361,827 | ) | (1,145,981 | ) | (1,992,257 | ) | ||||||||
Total distributions to shareholders | (5,965,890 | ) | (4,361,827 | ) | (1,145,981 | ) | (1,992,257 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 154,605,120 | 153,297,660 | 122,747,250 | 71,837,760 | ||||||||||||
Cost of shares redeemed | (178,538,062 | ) | (103,516,511 | ) | (121,172,070 | ) | (98,800,329 | ) | ||||||||
Net increase (decrease) in net assets from capital share transactions | (23,932,942 | ) | 49,781,149 | 1,575,180 | (26,962,569 | ) | ||||||||||
INCREASE (DECREASE) IN NET ASSETS | (49,146,266 | ) | (33,936,244 | ) | 5,853,930 | (66,912,386 | ) | |||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 159,665,927 | 193,602,171 | 53,042,247 | 119,954,633 | ||||||||||||
End of year | $ | 110,519,661 | $ | 159,665,927 | $ | 58,896,177 | $ | 53,042,247 | ||||||||
Undistributed net investment income included in net assets at end of year | $ | 197,221 | $ | 1,306,425 | $ | 75,785 | $ | 124,156 | ||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 7,600,000 | 8,000,000 | 10,160,000 | 7,480,000 | ||||||||||||
Shares redeemed | (9,100,000 | ) | (6,600,000 | ) | (9,560,000 | ) | (9,880,000 | ) | ||||||||
Net increase (decrease) in shares outstanding | (1,500,000 | ) | 1,400,000 | 600,000 | (2,400,000 | ) | ||||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 73 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® , INC.
iShares MSCI Emerging Markets Eastern Europe Index Fund | iShares MSCI EMU Index Fund | |||||||||||
Period from August 31, 2010 | Year ended August 31, 2010 | Year ended August 31, 2009 | ||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||
OPERATIONS: | ||||||||||||
Net investment income | $ | 103,151 | $ | 19,143,111 | $ | 21,630,080 | ||||||
Net realized loss | (203,443 | ) | (15,434,929 | ) | (230,656,541 | ) | ||||||
Net change in unrealized appreciation (depreciation) | (260,008 | ) | (93,999,959 | ) | (85,463,372 | ) | ||||||
Net decrease in net assets resulting from operations | (360,300 | ) | (90,291,777 | ) | (294,489,833 | ) | ||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||
From net investment income | (64,350 | ) | (21,378,328 | ) | (28,747,455 | ) | ||||||
From net realized gain | (4,842 | ) | – | – | ||||||||
Total distributions to shareholders | (69,192 | ) | (21,378,328 | ) | (28,747,455 | ) | ||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||
Proceeds from shares sold | 13,261,092 | 616,111,927 | 245,678,933 | |||||||||
Cost of shares redeemed | – | (421,739,675 | ) | (472,979,784 | ) | |||||||
Net increase (decrease) in net assets from capital share transactions | 13,261,092 | 194,372,252 | (227,300,851 | ) | ||||||||
INCREASE (DECREASE) IN NET ASSETS | 12,831,600 | 82,702,147 | (550,538,139 | ) | ||||||||
NET ASSETS | ||||||||||||
Beginning of period | – | 741,269,890 | 1,291,808,029 | |||||||||
End of period | $ | 12,831,600 | $ | 823,972,037 | $ | 741,269,890 | ||||||
Undistributed net investment income included in net assets at end of period | $ | 39,362 | $ | 596,192 | $ | 3,153,761 | ||||||
SHARES ISSUED AND REDEEMED | ||||||||||||
Shares sold | 500,000 | 18,100,000 | 8,100,000 | |||||||||
Shares redeemed | – | (12,100,000 | ) | (15,400,000 | ) | |||||||
Net increase (decrease) in shares outstanding | 500,000 | 6,000,000 | (7,300,000 | ) | ||||||||
a | Commencement of operations. |
See notes to financial statements.
74 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® , INC.
iShares MSCI France Index Fund | iShares MSCI Germany Index Fund | |||||||||||||||
Year ended August 31, 2010 | Year ended August 31, 2009 | Year ended August 31, 2010 | Year ended August 31, 2009 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 7,946,760 | $ | 5,159,611 | $ | 18,436,764 | $ | 13,569,608 | ||||||||
Net realized gain (loss) | (8,608,895 | ) | (62,251,944 | ) | 2,496,753 | (135,012,966 | ) | |||||||||
Net change in unrealized appreciation (depreciation) | (40,527,838 | ) | (18,839,973 | ) | (95,695,088 | ) | (22,143,511 | ) | ||||||||
Net decrease in net assets resulting from operations | (41,189,973 | ) | (75,932,306 | ) | (74,761,571 | ) | (143,586,869 | ) | ||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (8,068,942 | ) | (6,641,215 | ) | (20,484,235 | ) | (14,693,409 | ) | ||||||||
Total distributions to shareholders | (8,068,942 | ) | (6,641,215 | ) | (20,484,235 | ) | (14,693,409 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 358,661,968 | 138,974,524 | 1,389,774,707 | 443,092,148 | ||||||||||||
Cost of shares redeemed | (254,208,011 | ) | (99,092,138 | ) | (426,285,646 | ) | (334,626,102 | ) | ||||||||
Net increase in net assets from capital share transactions | 104,453,957 | 39,882,386 | 963,489,061 | 108,466,046 | ||||||||||||
INCREASE (DECREASE) IN NET ASSETS | 55,195,042 | (42,691,135 | ) | 868,243,255 | (49,814,232 | ) | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 184,511,392 | 227,202,527 | 619,637,747 | 669,451,979 | ||||||||||||
End of year | $ | 239,706,434 | $ | 184,511,392 | $ | 1,487,881,002 | $ | 619,637,747 | ||||||||
Undistributed net investment income included in net | $ | 346,395 | $ | 559,560 | $ | – | $ | 487,996 | ||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 15,000,000 | 5,600,000 | 67,200,000 | 23,400,000 | ||||||||||||
Shares redeemed | (11,200,000 | ) | (5,400,000 | ) | (20,400,000 | ) | (18,000,000 | ) | ||||||||
Net increase in shares outstanding | 3,800,000 | 200,000 | 46,800,000 | 5,400,000 | ||||||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 75 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® , INC.
iShares MSCI Italy Index Fund | iShares MSCI Netherlands Investable Market Index Fund | |||||||||||||||
Year ended August 31, 2010 | Year ended August 31, 2009 | Year ended August 31, 2010 | Year ended August 31, 2009 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 2,526,028 | $ | 2,932,100 | $ | 2,594,922 | $ | 2,396,987 | ||||||||
Net realized loss | (7,791,468 | ) | (71,721,832 | ) | (4,073,218 | ) | (62,756,045 | ) | ||||||||
Net change in unrealized appreciation (depreciation) | (14,934,273 | ) | 17,636,967 | (4,949,050 | ) | (4,703,274 | ) | |||||||||
Net decrease in net assets resulting from operations | (20,199,713 | ) | (51,152,765 | ) | (6,427,346 | ) | (65,062,332 | ) | ||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (3,028,440 | ) | (3,732,985 | ) | (2,418,715 | ) | (4,230,257 | ) | ||||||||
From return of capital | (96,798 | ) | – | – | – | |||||||||||
Total distributions to shareholders | (3,125,238 | ) | (3,732,985 | ) | (2,418,715 | ) | (4,230,257 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 87,900,548 | 100,094,796 | 94,430,557 | 43,167,203 | ||||||||||||
Cost of shares redeemed | (113,791,470 | ) | (163,647,572 | ) | (21,325,132 | ) | (100,176,018 | ) | ||||||||
Net increase (decrease) in net assets from capital share transactions | (25,890,922 | ) | (63,552,776 | ) | 73,105,425 | (57,008,815 | ) | |||||||||
INCREASE (DECREASE) IN NET ASSETS | (49,215,873 | ) | (118,438,526 | ) | 64,259,364 | (126,301,404 | ) | |||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 125,715,925 | 244,154,451 | 83,351,143 | 209,652,547 | ||||||||||||
End of year | $ | 76,500,052 | $ | 125,715,925 | $ | 147,610,507 | $ | 83,351,143 | ||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (452 | ) | $ | 481,431 | $ | 396,156 | $ | 431,321 | |||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 5,250,000 | 5,850,000 | 4,850,000 | 2,350,000 | ||||||||||||
Shares redeemed | (6,750,000 | ) | (9,000,000 | ) | (1,100,000 | ) | (6,450,000 | ) | ||||||||
Net increase (decrease) in shares outstanding | (1,500,000 | ) | (3,150,000 | ) | 3,750,000 | (4,100,000 | ) | |||||||||
See notes to financial statements.
76 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® , INC.
iShares MSCI Spain Index Fund | iShares MSCI Sweden Index Fund | |||||||||||||||
Year ended August 31, 2010 | Year ended August 31, 2009 | Year ended August 31, 2010 | Year ended August 31, 2009 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 9,022,079 | $ | 10,459,303 | $ | 4,069,874 | $ | 3,182,626 | ||||||||
Net realized loss | (34,736,468 | ) | (75,719,084 | ) | (2,661,078 | ) | (52,284,424 | ) | ||||||||
Net change in unrealized appreciation (depreciation) | (22,172,420 | ) | 22,806,027 | 9,087,749 | 18,464,900 | |||||||||||
Net increase (decrease) in net assets resulting from | (47,886,809 | ) | (42,453,754 | ) | 10,496,545 | (30,636,898 | ) | |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (11,300,415 | ) | (13,662,798 | ) | (4,773,557 | ) | (3,282,327 | ) | ||||||||
Total distributions to shareholders | (11,300,415 | ) | (13,662,798 | ) | (4,773,557 | ) | (3,282,327 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 185,418,132 | 168,127,511 | 136,592,737 | 119,540,017 | ||||||||||||
Cost of shares redeemed | (210,603,819 | ) | (154,625,074 | ) | (83,157,268 | ) | (122,941,857 | ) | ||||||||
Net increase (decrease) in net assets from capital share | (25,185,687 | ) | 13,502,437 | 53,435,469 | (3,401,840 | ) | ||||||||||
INCREASE (DECREASE) IN NET ASSETS | (84,372,911 | ) | (42,614,115 | ) | 59,158,457 | (37,321,065 | ) | |||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 278,734,433 | 321,348,548 | 190,332,731 | 227,653,796 | ||||||||||||
End of year | $ | 194,361,522 | $ | 278,734,433 | $ | 249,491,188 | $ | 190,332,731 | ||||||||
Undistributed (distributions in excess of) net investment | $ | 1,264,766 | $ | 3,516,332 | $ | (2,828 | ) | $ | 299,283 | |||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 4,800,000 | 4,200,000 | 5,400,000 | 6,675,000 | ||||||||||||
Shares redeemed | (5,400,000 | ) | (4,725,000 | ) | (3,525,000 | ) | (7,650,000 | ) | ||||||||
Net increase (decrease) in shares outstanding | (600,000 | ) | (525,000 | ) | 1,875,000 | (975,000 | ) | |||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 77 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® , INC.
iShares MSCI Switzerland Index Fund | iShares MSCI United Kingdom Index Fund | |||||||||||||||
Year ended August 31, 2010 | Year ended August 31, 2009 | Year ended August 31, 2010 | Year ended August 31, 2009 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 6,014,037 | $ | 3,684,012 | $ | 27,740,950 | $ | 22,176,317 | ||||||||
Net realized gain (loss) | (3,149,216 | ) | (66,136,127 | ) | 3,681,580 | (108,752,296 | ) | |||||||||
Net change in unrealized appreciation (depreciation) | 13,666,076 | (2,696,547 | ) | (20,637,671 | ) | (66,350,023 | ) | |||||||||
Net increase (decrease) in net assets resulting from | 16,530,897 | (65,148,662 | ) | 10,784,859 | (152,926,002 | ) | ||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (6,459,032 | ) | (4,322,291 | ) | (27,007,036 | ) | (25,389,028 | ) | ||||||||
Total distributions to shareholders | (6,459,032 | ) | (4,322,291 | ) | (27,007,036 | ) | (25,389,028 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 150,874,722 | 105,041,546 | 352,106,687 | 148,897,281 | ||||||||||||
Cost of shares redeemed | (27,046,917 | ) | (130,240,566 | ) | (144,597,222 | ) | (113,959,957 | ) | ||||||||
Net increase (decrease) in net assets from capital share | 123,827,805 | (25,199,020 | ) | 207,509,465 | 34,937,324 | |||||||||||
INCREASE (DECREASE) IN NET ASSETS | 133,899,670 | (94,669,973 | ) | 191,287,288 | (143,377,706 | ) | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 271,854,940 | 366,524,913 | 739,124,361 | 882,502,067 | ||||||||||||
End of year | $ | 405,754,610 | $ | 271,854,940 | $ | 930,411,649 | $ | 739,124,361 | ||||||||
Undistributed net investment income included in net assets | $ | – | $ | 373,773 | $ | 5,184,563 | $ | 4,727,610 | ||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 6,875,000 | 5,125,000 | 22,200,000 | 12,400,000 | ||||||||||||
Shares redeemed | (1,250,000 | ) | (7,875,000 | ) | (9,400,000 | ) | (8,800,000 | ) | ||||||||
Net increase (decrease) in shares outstanding | 5,625,000 | (2,750,000 | ) | 12,800,000 | 3,600,000 | |||||||||||
See notes to financial statements.
78 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Austria Investable Market Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 20.21 | $ | 29.78 | $ | 37.28 | $ | 31.08 | $ | 26.62 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.43 | 0.51 | 0.56 | 0.51 | 0.44 | |||||||||||||||
Net realized and unrealized gain (loss)b | (2.62 | ) | (9.36 | ) | (6.98 | ) | 6.42 | 4.31 | ||||||||||||
Total from investment operations | (2.19 | ) | (8.85 | ) | (6.42 | ) | 6.93 | 4.75 | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.75 | ) | (0.72 | ) | (1.08 | ) | (0.73 | ) | (0.29 | ) | ||||||||||
Total distributions | (0.75 | ) | (0.72 | ) | (1.08 | ) | (0.73 | ) | (0.29 | ) | ||||||||||
Net asset value, end of year | $ | 17.27 | $ | 20.21 | $ | 29.78 | $ | 37.28 | $ | 31.08 | ||||||||||
Total return | (11.07 | )% | (28.52 | )% | (17.64 | )% | 22.35 | % | 18.00 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 110,520 | $ | 159,666 | $ | 193,602 | $ | 473,514 | $ | 391,637 | ||||||||||
Ratio of expenses to average net assets | 0.54 | % | 0.55 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||
Ratio of net investment income to average net assets | 2.20 | % | 3.25 | % | 1.57 | % | 1.36 | % | 1.48 | % | ||||||||||
Portfolio turnover ratec | 11 | % | 26 | % | 26 | % | 21 | % | 32 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 79 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Belgium Investable Market Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 12.06 | $ | 17.64 | $ | 25.89 | $ | 22.83 | $ | 18.94 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.19 | 0.22 | 0.78 | 0.76 | 0.75 | |||||||||||||||
Net realized and unrealized gain (loss)b | (0.27 | ) | (5.46 | ) | (7.27 | ) | 2.74 | 3.95 | ||||||||||||
Total from investment operations | (0.08 | ) | (5.24 | ) | (6.49 | ) | 3.50 | 4.70 | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.20 | ) | (0.34 | ) | (1.76 | ) | (0.44 | ) | (0.81 | ) | ||||||||||
Total distributions | (0.20 | ) | (0.34 | ) | (1.76 | ) | (0.44 | ) | (0.81 | ) | ||||||||||
Net asset value, end of year | $ | 11.78 | $ | 12.06 | $ | 17.64 | $ | 25.89 | $ | 22.83 | ||||||||||
Total return | (0.60 | )% | (29.15 | )% | (26.21 | )% | 15.36 | % | 25.66 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 58,896 | $ | 53,042 | $ | 119,955 | $ | 303,483 | $ | 152,484 | ||||||||||
Ratio of expenses to average net assets | 0.54 | % | 0.56 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||
Ratio of net investment income to average net assets | 1.55 | % | 2.23 | % | 3.32 | % | 2.90 | % | 3.60 | % | ||||||||||
Portfolio turnover ratec | 17 | % | 33 | % | 31 | % | 12 | % | 10 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
80 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI Emerging Markets Eastern Europe Index Fund |
Period from Sep. 30, 2009a to Aug. 31, 2010 | ||||
Net asset value, beginning of period | $ | 24.65 | ||
Income from investment operations: | ||||
Net investment incomeb | 0.26 | |||
Net realized and unrealized gainc | 0.89 | |||
Total from investment operations | 1.15 | |||
Less distributions from: | ||||
Net investment income | (0.13 | ) | ||
Net realized gain | (0.01 | )d | ||
Total distributions | (0.14 | ) | ||
Net asset value, end of period | $ | 25.66 | ||
Total return | 4.68 | %e | ||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 12,832 | ||
Ratio of expenses to average net assetsf | 0.69 | % | ||
Ratio of net investment income to average net assetsf | 1.05 | % | ||
Portfolio turnover rateg | 13 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Represents all short-term capital gain distributions. Short-term capital gain distributions are treated as ordinary income dividends for tax purposes. |
e | Not annualized. |
f | Annualized for periods of less than one year. |
g | Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 81 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI EMU Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008a | Year ended Aug. 31, 2007a | Year ended Aug. 31, 2006a | ||||||||||||||||
Net asset value, beginning of year | $ | 35.64 | $ | 45.97 | $ | 57.15 | $ | 46.14 | $ | 37.49 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomeb | 0.80 | 0.93 | 1.71 | 1.40 | 1.37 | |||||||||||||||
Net realized and unrealized gain (loss)c | (4.76 | ) | (9.97 | ) | (9.59 | ) | 10.54 | 7.94 | ||||||||||||
Total from investment operations | (3.96 | ) | (9.04 | ) | (7.88 | ) | 11.94 | 9.31 | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.93 | ) | (1.29 | ) | (3.30 | ) | (0.93 | ) | (0.66 | ) | ||||||||||
Total distributions | (0.93 | ) | (1.29 | ) | (3.30 | ) | (0.93 | ) | (0.66 | ) | ||||||||||
Net asset value, end of year | $ | 30.75 | $ | 35.64 | $ | 45.97 | $ | 57.15 | $ | 46.14 | ||||||||||
Total return | (11.19 | )% | (19.05 | )% | (14.52 | )% | 26.10 | % | 25.18 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 823,972 | $ | 741,270 | $ | 1,291,808 | $ | 2,971,565 | $ | 1,794,921 | ||||||||||
Ratio of expenses to average net assets | 0.54 | % | 0.56 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||
Ratio of expenses to average net assets | 0.54 | % | 0.56 | % | n/a | n/a | n/a | |||||||||||||
Ratio of net investment income to average net assets | 2.29 | % | 3.07 | % | 3.06 | % | 2.60 | % | 3.23 | % | ||||||||||
Portfolio turnover rated | 5 | % | 8 | % | 27 | % | 5 | % | 8 | % |
a | Per share amounts were adjusted to reflect a two-for-one stock split effective July 24, 2008. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
82 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI France Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 24.28 | $ | 30.70 | $ | 36.53 | $ | 31.16 | $ | 25.41 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.65 | 0.66 | 0.93 | 0.77 | 0.55 | |||||||||||||||
Net realized and unrealized gain (loss)b | (3.30 | ) | (6.13 | ) | (5.17 | ) | 5.06 | 5.52 | ||||||||||||
Total from investment operations | (2.65 | ) | (5.47 | ) | (4.24 | ) | 5.83 | 6.07 | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.60 | ) | (0.95 | ) | (1.59 | ) | (0.46 | ) | (0.32 | ) | ||||||||||
Total distributions | (0.60 | ) | (0.95 | ) | (1.59 | ) | (0.46 | ) | (0.32 | ) | ||||||||||
Net asset value, end of year | $ | 21.03 | $ | 24.28 | $ | 30.70 | $ | 36.53 | $ | 31.16 | ||||||||||
Total return | (10.98 | )% | (17.11 | )% | (11.96 | )% | 18.83 | % | 24.13 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 239,706 | $ | 184,511 | $ | 227,203 | $ | 445,696 | $ | 211,886 | ||||||||||
Ratio of expenses to average net assets | 0.54 | % | 0.55 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | n/a | n/a | n/a | n/a | ||||||||||||||
Ratio of net investment income to average net assets | 2.71 | % | 3.18 | % | 2.60 | % | 2.17 | % | 1.95 | % | ||||||||||
Portfolio turnover ratec | 6 | % | 6 | % | 10 | % | 6 | % | 10 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 83 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Germany Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 20.86 | $ | 27.55 | $ | 32.18 | $ | 23.68 | $ | 19.08 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.38 | 0.58 | 0.88 | 0.68 | 0.57 | |||||||||||||||
Net realized and unrealized gain (loss)b | (1.49 | ) | (6.65 | ) | (3.84 | ) | 8.33 | 4.15 | ||||||||||||
Total from investment operations | (1.11 | ) | (6.07 | ) | (2.96 | ) | 9.01 | 4.72 | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.30 | ) | (0.62 | ) | (1.67 | ) | (0.51 | ) | (0.12 | ) | ||||||||||
Total distributions | (0.30 | ) | (0.62 | ) | (1.67 | ) | (0.51 | ) | (0.12 | ) | ||||||||||
Net asset value, end of year | $ | 19.45 | $ | 20.86 | $ | 27.55 | $ | 32.18 | $ | 23.68 | ||||||||||
Total return | (5.35 | )% | (21.62 | )% | (9.81 | )% | 38.47 | % | 24.82 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 1,487,881 | $ | 619,638 | $ | 669,452 | $ | 1,641,245 | $ | 802,795 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.55 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||
Ratio of net investment income to average net assets | 1.80 | % | 3.18 | % | 2.72 | % | 2.32 | % | 2.62 | % | ||||||||||
Portfolio turnover ratec | 5 | % | 15 | % | 11 | % | 4 | % | 12 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
84 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Italy Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 19.05 | $ | 25.04 | $ | 33.82 | $ | 30.48 | $ | 25.77 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.39 | 0.47 | 1.53 | 1.35 | 1.07 | |||||||||||||||
Net realized and unrealized gain (loss)b | (3.99 | ) | (5.82 | ) | (7.71 | ) | 2.66 | 4.15 | ||||||||||||
Total from investment operations | (3.60 | ) | (5.35 | ) | (6.18 | ) | 4.01 | 5.22 | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.44 | ) | (0.64 | ) | (2.60 | ) | (0.67 | ) | (0.51 | ) | ||||||||||
Return of capital | (0.01 | ) | – | – | – | – | ||||||||||||||
Total distributions | (0.45 | ) | (0.64 | ) | (2.60 | ) | (0.67 | ) | (0.51 | ) | ||||||||||
Net asset value, end of year | $ | 15.00 | $ | 19.05 | $ | 25.04 | $ | 33.82 | $ | 30.48 | ||||||||||
Total return | (19.11 | )% | (20.78 | )% | (19.43 | )% | 13.20 | % | 20.61 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 76,500 | $ | 125,716 | $ | 244,154 | $ | 172,495 | $ | 146,324 | ||||||||||
Ratio of expenses to average net assets | 0.54 | % | 0.59 | % | 0.52 | % | 0.52 | % | 0.54 | % | ||||||||||
Ratio of expenses to average net assets | n/a | 0.55 | % | n/a | n/a | n/a | ||||||||||||||
Ratio of net investment income to average net assets | 2.17 | % | 2.85 | % | 5.06 | % | 4.02 | % | 3.87 | % | ||||||||||
Portfolio turnover ratec | 12 | % | 18 | % | 29 | % | 16 | % | 15 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 85 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Netherlands Investable Market Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 18.52 | $ | 24.38 | $ | 29.75 | $ | 24.17 | $ | 19.10 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.45 | 0.35 | 1.10 | 0.98 | 0.60 | |||||||||||||||
Net realized and unrealized gain (loss)b | (0.70 | ) | (5.55 | ) | (4.68 | ) | 5.05 | 4.95 | ||||||||||||
Total from investment operations | (0.25 | ) | (5.20 | ) | (3.58 | ) | 6.03 | 5.55 | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.38 | ) | (0.66 | ) | (1.79 | ) | (0.45 | ) | (0.48 | ) | ||||||||||
Total distributions | (0.38 | ) | (0.66 | ) | (1.79 | ) | (0.45 | ) | (0.48 | ) | ||||||||||
Net asset value, end of year | $ | 17.89 | $ | 18.52 | $ | 24.38 | $ | 29.75 | $ | 24.17 | ||||||||||
Total return | (1.44 | )% | (20.59 | )% | (12.67 | )% | 25.22 | % | 29.53 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 147,611 | $ | 83,351 | $ | 209,653 | $ | 251,354 | $ | 109,991 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.55 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||
Ratio of net investment income to average net assets | 2.31 | % | 2.24 | % | 3.86 | % | 3.50 | % | 2.78 | % | ||||||||||
Portfolio turnover ratec | 9 | % | 15 | % | 26 | % | 8 | % | 17 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
86 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Spain Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 47.65 | $ | 50.41 | $ | 58.06 | $ | 44.81 | $ | 35.70 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 1.64 | 1.75 | 1.98 | 1.30 | 1.07 | |||||||||||||||
Net realized and unrealized gain (loss)b | (10.01 | ) | (2.14 | ) | (7.33 | ) | 12.33 | 8.78 | ||||||||||||
Total from investment operations | (8.37 | ) | (0.39 | ) | (5.35 | ) | 13.63 | 9.85 | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (2.26 | ) | (2.37 | ) | (2.30 | ) | (0.38 | ) | (0.74 | ) | ||||||||||
Total distributions | (2.26 | ) | (2.37 | ) | (2.30 | ) | (0.38 | ) | (0.74 | ) | ||||||||||
Net asset value, end of year | $ | 37.02 | $ | 47.65 | $ | 50.41 | $ | 58.06 | $ | 44.81 | ||||||||||
Total return | (17.91 | )% | 0.64 | % | (9.76 | )% | 30.47 | % | 28.09 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 194,362 | $ | 278,734 | $ | 321,349 | $ | 522,556 | $ | 178,130 | ||||||||||
Ratio of expenses to average net assets | 0.54 | % | 0.56 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||
Ratio of net investment income to average net assets | 3.72 | % | 4.70 | % | 3.28 | % | 2.36 | % | 2.67 | % | ||||||||||
Portfolio turnover ratec | 9 | % | 19 | % | 22 | % | 12 | % | 6 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 87 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Sweden Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 22.86 | $ | 24.48 | $ | 34.57 | $ | 25.88 | $ | 21.58 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.48 | 0.40 | 0.91 | 1.15 | 0.76 | |||||||||||||||
Net realized and unrealized gain (loss)b | 1.73 | (1.56 | ) | (8.63 | ) | 7.88 | 3.96 | |||||||||||||
Total from investment operations | 2.21 | (1.16 | ) | (7.72 | ) | 9.03 | 4.72 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.61 | ) | (0.46 | ) | (2.37 | ) | (0.34 | ) | (0.42 | ) | ||||||||||
Total distributions | (0.61 | ) | (0.46 | ) | (2.37 | ) | (0.34 | ) | (0.42 | ) | ||||||||||
Net asset value, end of year | $ | 24.46 | $ | 22.86 | $ | 24.48 | $ | 34.57 | $ | 25.88 | ||||||||||
Total return | 9.70 | % | (4.04 | )% | (23.16 | )% | 35.01 | % | 22.16 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 249,491 | $ | 190,333 | $ | 227,654 | $ | 573,026 | $ | 151,427 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.55 | % | 0.51 | % | 0.51 | % | 0.54 | % | ||||||||||
Ratio of net investment income to average net assets | 1.97 | % | 2.34 | % | 2.91 | % | 3.42 | % | 3.13 | % | ||||||||||
Portfolio turnover ratec | 10 | % | 9 | % | 17 | % | 7 | % | 14 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
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iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Switzerland Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 20.71 | $ | 23.09 | $ | 25.78 | $ | 22.49 | $ | 17.63 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.39 | 0.25 | 0.49 | 0.36 | 0.27 | |||||||||||||||
Net realized and unrealized gain (loss)b | 0.90 | (2.30 | ) | (2.51 | ) | 3.12 | 4.71 | |||||||||||||
Total from investment operations | 1.29 | (2.05 | ) | (2.02 | ) | 3.48 | 4.98 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.36 | ) | (0.33 | ) | (0.67 | ) | (0.19 | ) | (0.12 | ) | ||||||||||
Total distributions | (0.36 | ) | (0.33 | ) | (0.67 | ) | (0.19 | ) | (0.12 | ) | ||||||||||
Net asset value, end of year | $ | 21.64 | $ | 20.71 | $ | 23.09 | $ | 25.78 | $ | 22.49 | ||||||||||
Total return | 6.35 | % | (8.63 | )% | (7.97 | )% | 15.53 | % | 28.36 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 405,755 | $ | 271,855 | $ | 366,525 | $ | 318,998 | $ | 188,319 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.56 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||
Ratio of net investment income to average net assets | 1.80 | % | 1.42 | % | 1.93 | % | 1.42 | % | 1.34 | % | ||||||||||
Portfolio turnover ratec | 7 | % | 16 | % | 11 | % | 5 | % | 11 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
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iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI United Kingdom Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 15.02 | $ | 19.35 | $ | 24.73 | $ | 21.92 | $ | 18.74 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.46 | 0.50 | 0.83 | 0.84 | 0.97 | |||||||||||||||
Net realized and unrealized gain (loss)b | (0.03 | ) | (4.26 | ) | (4.89 | ) | 2.78 | 2.79 | ||||||||||||
Total from investment operations | 0.43 | (3.76 | ) | (4.06 | ) | 3.62 | 3.76 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.44 | ) | (0.57 | ) | (1.32 | ) | (0.81 | ) | (0.58 | ) | ||||||||||
Total distributions | (0.44 | ) | (0.57 | ) | (1.32 | ) | (0.81 | ) | (0.58 | ) | ||||||||||
Net asset value, end of year | $ | 15.01 | $ | 15.02 | $ | 19.35 | $ | 24.73 | $ | 21.92 | ||||||||||
Total return | 2.87 | % | (18.68 | )% | (17.16 | )% | 16.77 | % | 20.61 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 930,412 | $ | 739,124 | $ | 882,502 | $ | 1,127,738 | $ | 872,409 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.55 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||
Ratio of net investment income to average net assets | 2.98 | % | 3.90 | % | 3.64 | % | 3.51 | % | 4.81 | % | ||||||||||
Portfolio turnover ratec | 7 | % | 11 | % | 14 | % | 8 | % | 10 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
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iSHARES®, INC.
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.
These financial statements relate only to the iShares MSCI Austria Investable Market, iShares MSCI Belgium Investable Market, iShares MSCI Emerging Markets Eastern Europe, iShares MSCI EMU, iShares MSCI France, iShares MSCI Germany, iShares MSCI Italy, iShares MSCI Netherlands Investable Market, 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 a particular market, as measured by that market’s equity securities index compiled by MSCI Inc. 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 issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
Each Fund invests in the securities of non-U.S. issuers that may trade in non-U.S. markets. This may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets and the risk of war.
Pursuant to the Company’s organizational documents, the 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.
1. SIGNIFICANT ACCOUNTING POLICIES
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”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
SECURITY VALUATION
The securities and other assets of each Fund are valued pursuant to the pricing policy and procedures approved by the Board of Directors of the Company (the “Board”) using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or
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iSHARES® , INC.
liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
• | Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access at the measurement date (a “Level 1 Price”); |
• | Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (a “Level 2 Price”); |
• | Level 3 – Inputs that are unobservable for the asset or liability (a “Level 3 Price”). |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3 of the fair value hierarchy.
The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Funds’ perceived risk of that instrument.
Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 Prices, include active listed equities. The Funds do not adjust the quoted price for such instruments, even in situations where the Funds hold a large position and a sale could reasonably impact the quoted price.
Investments that trade in markets that are not considered to be active, but whose values are based on inputs such as quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified within Level 2. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.
Investments whose values are classified as Level 3 Prices have significant unobservable inputs, as they may trade infrequently or not at all. Investments whose values are classified as Level 3 Prices may include unlisted securities related to corporate actions, securities whose trading have been suspended or which have been de-listed from their primary trading exchange, less liquid corporate debt securities (including distressed debt instruments), collateralized debt obligations, and less liquid mortgage securities (backed by either commercial or residential real estate). When observable prices are not available for these securities, the Funds use one or more valuation techniques (e.g., the market approach or the income approach) for which sufficient and reliable data is available. Within Level 3 of the fair value hierarchy, the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.
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iSHARES® , INC.
The inputs used by the Funds in estimating the value of Level 3 Prices may include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 Prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Funds in the absence of market information. The fair value measurement of Level 3 Prices does not include transaction costs that may have been capitalized as part of the security’s cost basis. Assumptions used by the Funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Funds’ results of operations.
Fair value pricing could result in a difference between the prices used to calculate a Fund’s net asset value and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.
As of August 31, 2010, the value of each of the Funds’ investments was classified as a Level 1 Price. The breakdown of each Fund’s investments into major categories is disclosed in its respective Schedule of Investments.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source, and interest income is accrued daily. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. 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. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates 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
The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, capital gains on investments or currency repatriation. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign markets in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are disclosed in their Statements of Operations. Foreign taxes payable as of August 31, 2010, if any, are reflected in the Funds’ Statements of Assets and Liabilities.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income, if any, are generally declared and paid semi-annually by each Fund. Distributions of net realized capital gains, if any, generally are declared and paid once a year. Distributions are determined on
NOTESTO FINANCIAL STATEMENTS | 93 |
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iSHARES® , INC.
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.
As of August 31, 2010, the tax year-end of the Funds, the components of net accumulated losses on a tax basis were as follows:
iShares MSCI Index Fund | Undistributed Ordinary Income | Unrealized Depreciation | Capital and Other Losses | Net Accumulated Losses | ||||||||||||
Austria Investable Market | $ | 202,354 | $ | (76,981,933 | ) | $ | (49,601,809 | ) | $ | (126,381,388 | ) | |||||
Belgium Investable Market | 93,113 | (29,103,344 | ) | (34,526,181 | ) | (63,536,412 | ) | |||||||||
Emerging Markets Eastern Europe | 39,362 | (265,368 | ) | (203,486 | ) | (429,492 | ) | |||||||||
EMU | 784,220 | (428,900,694 | ) | (119,886,313 | ) | (548,002,787 | ) | |||||||||
France | 346,683 | (131,148,544 | ) | (16,041,191 | ) | (146,843,052 | ) | |||||||||
Germany | – | (301,606,472 | ) | (98,264,188 | ) | (399,870,660 | ) | |||||||||
Italy | – | (64,858,953 | ) | (32,201,593 | ) | (97,060,546 | ) | |||||||||
Netherlands Investable Market | 396,443 | (49,808,593 | ) | (36,329,880 | ) | (85,742,030 | ) | |||||||||
Spain | 1,355,500 | (103,141,330 | ) | (30,123,571 | ) | (131,909,401 | ) | |||||||||
Sweden | – | (56,105,341 | ) | (30,451,621 | ) | (86,556,962 | ) | |||||||||
Switzerland | – | (31,277,705 | ) | (35,883,383 | ) | (67,161,088 | ) | |||||||||
United Kingdom | 5,263,710 | (257,622,146 | ) | (81,853,815 | ) | (334,212,251 | ) |
The tax character of distributions paid during the years ended August 31, 2010 and August 31, 2009 were as follows:
iShares MSCI Index Fund | 2010 | 2009 | ||||||
Austria Investable Market | ||||||||
Distributions paid from: | $ | 5,965,890 | $ | 4,361,827 | ||||
Total Distributions | $ | 5,965,890 | $ | 4,361,827 | ||||
Belgium Investable Market | ||||||||
Distributions paid from: | $ | 1,145,981 | $ | 1,992,257 | ||||
Total Distributions | $ | 1,145,981 | $ | 1,992,257 | ||||
Emerging Markets Eastern Europea | ||||||||
Distributions paid from: | $ | 69,192 | $ | – | ||||
Total Distributions | $ | 69,192 | $ | – | ||||
EMU | ||||||||
Distributions paid from: | $ | 21,378,328 | $ | 28,747,455 | ||||
Total Distributions | $ | 21,378,328 | $ | 28,747,455 | ||||
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iSHARES® , INC.
iShares MSCI Index Fund | 2010 | 2009 | ||||||
France | ||||||||
Distributions paid from: | $ | 8,068,942 | $ | 6,641,215 | ||||
Total Distributions | $ | 8,068,942 | $ | 6,641,215 | ||||
Germany | ||||||||
Distributions paid from: | $ | 20,484,235 | $ | 14,693,409 | ||||
Total Distributions | $ | 20,484,235 | $ | 14,693,409 | ||||
Italy | ||||||||
Distributions paid from: | $ | 3,028,440 | $ | 3,732,985 | ||||
Return of capital | 96,798 | – | ||||||
Total Distributions | $ | 3,125,238 | $ | 3,732,985 | ||||
Netherlands Investable Market | ||||||||
Distributions paid from: | $ | 2,418,715 | $ | 4,230,257 | ||||
Total Distributions | $ | 2,418,715 | $ | 4,230,257 | ||||
Spain | ||||||||
Distributions paid from: | $ | 11,300,415 | $ | 13,662,798 | ||||
Total Distributions | $ | 11,300,415 | $ | 13,662,798 | ||||
Sweden | ||||||||
Distributions paid from: | $ | 4,773,557 | $ | 3,282,327 | ||||
Total Distributions | $ | 4,773,557 | $ | 3,282,327 | ||||
Switzerland | ||||||||
Distributions paid from: | $ | 6,459,032 | $ | 4,322,291 | ||||
Total Distributions | $ | 6,459,032 | $ | 4,322,291 | ||||
United Kingdom | ||||||||
Distributions paid from: | $ | 27,007,036 | $ | 25,389,028 | ||||
Total Distributions | $ | 27,007,036 | $ | 25,389,028 | ||||
a | Commencement of operations on September 30, 2009. |
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 ordinary income and any net capital gains (taking into
NOTESTO FINANCIAL STATEMENTS | 95 |
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iSHARES® , INC.
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, 2010.
From November 1, 2009 to August 31, 2010, the Funds incurred net realized capital and net foreign currency losses. As permitted by tax regulations, the Funds have elected to defer those losses and treat them as arising in the year ending August 31, 2011, as follows:
iShares MSCI Index Fund | Deferred Net Realized Capital/Net Foreign Currency Losses | |||
Austria Investable Market | $ | 12,232,287 | ||
Belgium Investable Market | 15,720,926 | |||
Emerging Markets Eastern Europe | 203,486 | |||
EMU | 22,672,960 | |||
France | 2,492,526 | |||
Germany | 17,992,610 |
iShares MSCI Index Fund | Deferred Net Realized Capital/Net Foreign Currency Losses | |||
Italy | $ | 8,898,333 | ||
Netherlands Investable Market | 2,287,033 | |||
Spain | 8,060,301 | |||
Sweden | 5,346,672 | |||
Switzerland | 6,954,489 | |||
United Kingdom | 22,590,373 |
Certain Funds had tax basis net capital loss carryforwards as of August 31, 2010, the tax year-end of the Funds, as follows:
iShares MSCI Index Fund | Expiring 2011 | Expiring 2012 | Expiring 2013 | Expiring 2014 | Expiring 2015 | Expiring 2016 | Expiring 2017 | Expiring 2018 | Total | |||||||||||||||||||||||||||
Austria Investable | $ | 370,948 | $ | 855,364 | $ | – | $ | – | $ | 9,795,917 | $ | 2,587,916 | $ | 7,102,366 | $ | 16,657,011 | $ | 37,369,522 | ||||||||||||||||||
Belgium Investable | 117,767 | 175,781 | 33,969 | – | – | 1,698,444 | 5,953,120 | 10,826,174 | 18,805,255 | |||||||||||||||||||||||||||
EMU | – | 659,648 | 1,873,963 | – | – | – | 26,644,200 | 68,035,542 | 97,213,353 | |||||||||||||||||||||||||||
France | 236,944 | 2,400,550 | – | – | 158,472 | 335,795 | 3,408,374 | 7,008,530 | 13,548,665 | |||||||||||||||||||||||||||
Germany | 5,469,732 | 8,656,712 | 2,241,687 | – | 4,227,713 | 3,394,735 | 27,790,050 | 28,490,949 | 80,271,578 | |||||||||||||||||||||||||||
Italy | 848,408 | 541,980 | 527,327 | – | – | 472,268 | 2,743,650 | 18,169,627 | 23,303,260 | |||||||||||||||||||||||||||
Netherlands Investable | 1,497,810 | 2,481,175 | 129,137 | 403,525 | 260,715 | 1,195,162 | 5,819,153 | 22,256,170 | 34,042,847 | |||||||||||||||||||||||||||
Spain | – | 995,671 | – | – | – | – | 5,946,927 | 15,120,672 | 22,063,270 | |||||||||||||||||||||||||||
Sweden | 1,577,551 | 1,149,514 | – | 107,613 | – | 100,015 | 13,686,746 | 8,483,510 | 25,104,949 | |||||||||||||||||||||||||||
Switzerland | 1,018,305 | 2,149,171 | 354,252 | – | – | – | 2,837,786 | 22,569,380 | 28,928,894 | |||||||||||||||||||||||||||
United Kingdom | 6,448,554 | 4,272,059 | 1,517,783 | 7,063,063 | – | 261,754 | 16,140,312 | 23,559,917 | 59,263,442 |
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 marked-to-market gains.
Each Fund reclassifies at the end of its tax year certain amounts to paid-in-capital from accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss), respectively, as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, realized foreign currency gains and losses and gains and losses on in-kind redemptions. These reclassifications have no effect on net assets or net asset values per share.
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iSHARES® , INC.
As of August 31, 2010, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:
iShares MSCI Index Fund | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Depreciation | ||||||||||||
Austria Investable Market | $ | 186,784,239 | $ | 32,946 | $ | (76,848,918 | ) | $ | (76,815,972 | ) | ||||||
Belgium Investable Market | 87,507,195 | 1,543,102 | (30,500,994 | ) | (28,957,892 | ) | ||||||||||
Emerging Markets Eastern Europe | 12,986,462 | 604,909 | (870,275 | ) | (265,366 | ) | ||||||||||
EMU | 1,254,757,084 | 4,022,780 | (432,846,092 | ) | (428,823,312 | ) | ||||||||||
France | 370,941,419 | 534,882 | (131,684,014 | ) | (131,149,132 | ) | ||||||||||
Germany | 1,802,158,635 | 5,784,609 | (307,411,052 | ) | (301,626,443 | ) | ||||||||||
Italy | 141,461,591 | – | (64,857,246 | ) | (64,857,246 | ) | ||||||||||
Netherlands Investable Market | 197,240,515 | 384,649 | (50,183,334 | ) | (49,798,685 | ) | ||||||||||
Spain | 307,995,211 | 85,874 | (103,224,205 | ) | (103,138,331 | ) | ||||||||||
Sweden | 305,212,334 | 1,799,983 | (57,909,661 | ) | (56,109,678 | ) | ||||||||||
Switzerland | 433,020,692 | 18,000,241 | (49,498,348 | ) | (31,498,107 | ) | ||||||||||
United Kingdom | 1,182,758,321 | 21,531,110 | (278,992,905 | ) | (257,461,795 | ) |
Management has reviewed the tax positions as of August 31, 2010, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Funds’ financial statements.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
On December 1, 2009, Barclays PLC (“Barclays”) completed the sale of its interest in BlackRock Institutional Trust Company, N.A. (“BTC”), formerly known as Barclays Global Investors, N.A., and certain affiliated companies to BlackRock, Inc. (“BlackRock,” and such sale, the “Transaction”). BTC is a wholly-owned subsidiary of BlackRock.
The PNC Financial Services Group, Inc. (“PNC”), Bank of America Corporation (“BAC”) and Barclays are the largest stockholders of BlackRock. Due to the ownership structure, PNC is an affiliate for 1940 Act purposes, but BAC and Barclays are not.
Under the 1940 Act, upon completion of the Transaction on December 1, 2009, each Fund’s investment advisory agreement with BlackRock Fund Advisors (“BFA”), formerly known as Barclays Global Fund Advisors, was automatically terminated. The Board and shareholders of the Funds approved a new investment advisory agreement with BFA. The investment advisory fee rates and expense arrangements for the Funds remained the same after the Transaction.
Pursuant to an Investment Advisory Agreement with the Company, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for all expenses (“Covered Expenses”) of the Company, 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.
NOTESTO FINANCIAL STATEMENTS | 97 |
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Notes to Financial Statements (Continued)
iSHARES® , INC.
For its investment advisory services to the Funds except for the iShares MSCI Emerging Markets Eastern Europe Index Fund, BFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of the Funds and certain other iShares Funds as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | |
0.59% | First $7 billion | |
0.54 | Over $7 billion, up to and including $11 billion | |
0.49 | Over $11 billion, up to and including $24 billion | |
0.44 | Over $24 billion, up to and including $48 billion | |
0.40 | Over $48 billion |
For its investment advisory services to the iShares MSCI Emerging Markets Eastern Europe Index Fund, BFA is entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares Funds as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | |
0.75% | First $14 billion | |
0.68 | Over $14 billion, up to and including $28 billion | |
0.61 | Over $28 billion |
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BTC to serve as securities lending agent for the Funds, subject to applicable conditions. BTC is an affiliate of BFA, the Funds’ investment adviser. As securities lending agent, BTC 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, 2010, BTC earned securities lending agent fees from the Funds as follows:
iShares MSCI Index Fund | Securities Lending Agent Fees | |||
Austria Investable Market | $ | 220,506 | ||
Belgium Investable Market | 5,212 | |||
Emerging Markets Eastern Europe | 471 | |||
EMU | 99,681 | |||
France | 8,039 | |||
Germany | 214,080 |
iShares MSCI Index Fund | Securities Lending Agent Fees | |||
Italy | $ | 3,285 | ||
Netherlands Investable Market | 10,618 | |||
Spain | 170,209 | |||
Sweden | 11,775 | |||
Switzerland | 36 | |||
United Kingdom | 5,521 |
Cross trades for the year ended August 31, 2010, if any, were executed by the Funds pursuant to Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.
Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in interest from affiliated issuers in the Statements of Operations.
98 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Financial Statements (Continued)
iSHARES® , INC.
Investments in issuers considered to be an affiliate of the iShares MSCI United Kingdom Index Fund (excluding short-term investments) for the period September 1, 2009 to November 30, 2009, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Name of Affiliated Issuer | Number of Shares Held Beginning of Period (in 000s) | Gross Additions (in 000s) | Gross Reductions (in 000s) | Number of Shares Held as of 11/30/09 (in 000s) | Value as of 11/30/09 | Dividend Income | Net Realized Gain | |||||||||||||||||||||
Barclays PLC | 4,025 | 1,003 | (313 | ) | 4,715 | $ | 22,623,237 | $ | 77,129 | $ | 1,499,143 | |||||||||||||||||
Certain directors and officers of the Company are also officers of BTC and/or BFA.
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2010 were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||||
Austria Investable Market | $ | 16,165,103 | $ | 18,466,596 | ||||
Belgium Investable Market | 11,942,900 | 14,424,982 | ||||||
Emerging Markets Eastern Europe | 1,928,669 | 1,352,696 | ||||||
EMU | 41,888,618 | 50,699,640 | ||||||
France | 18,523,104 | 18,241,799 | ||||||
Germany | 52,800,271 | 53,096,566 | ||||||
Italy | 16,429,720 | 13,824,265 | ||||||
Netherlands Investable Market | 10,214,648 | 10,521,153 | ||||||
Spain | 21,766,008 | 25,174,045 | ||||||
Sweden | 20,959,384 | 22,469,890 | ||||||
Switzerland | 39,636,633 | 24,015,246 | ||||||
United Kingdom | 67,198,810 | 62,580,461 |
In-kind transactions (see Note 4) for the year ended August 31, 2010 were as follows:
iShares MSCI Index Fund | In-kind Purchases | In-kind Sales | ||||||
Austria Investable Market | $ | 152,292,545 | $ | 176,706,123 | ||||
Belgium Investable Market | 116,411,746 | 112,323,126 | ||||||
Emerging Markets Eastern Europe | 12,601,421 | – | ||||||
EMU | 609,833,394 | 409,464,082 | ||||||
France | 357,089,602 | 253,073,419 | ||||||
Germany | 1,385,028,404 | 425,014,375 | ||||||
Italy | 79,952,382 | 108,961,556 | ||||||
Netherlands Investable Market | 93,755,141 | 20,741,603 |
NOTESTO FINANCIAL STATEMENTS | 99 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® , INC.
iShares MSCI Index Fund | In-kind Purchases | In-kind Sales | ||||||
Spain | $ | 183,636,556 | $ | 208,666,374 | ||||
Sweden | 136,448,607 | 82,401,394 | ||||||
Switzerland | 132,886,475 | 26,383,926 | ||||||
United Kingdom | 345,937,583 | 143,394,085 |
4. CAPITAL SHARE TRANSACTIONS
The Company issues and redeems capital shares of each Fund only in aggregations of a specified number of shares (each, a “Creation Unit”) at net asset value. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Statements of Changes in Net Assets.
The consideration for the purchase of Creation Units of a Fund generally consists of the in-kind deposit of a designated portfolio of equity securities, which constitutes an optimized representation of the corresponding MSCI Index and an amount of cash. Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.
From time to time, settlement of securities related to in-kind contributions or in-kind redemptions may be delayed. In such cases, securities related to in-kind contributions are reflected as “Due from custodian” and securities related to in-kind redemptions are reflected as “Securities related to in-kind transactions” in the Statements of Assets and Liabilities.
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 current 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 value of the securities on loan. The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. Any securities lending cash collateral may be reinvested in certain short-term instruments either directly on behalf of a Fund or through one or more joint accounts or money market funds, including those managed by BFA or its affiliates; such reinvestments are subject to investment risk.
As of August 31, 2010, certain Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of the securities on loan as of August 31, 2010 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income, as disclosed in the Funds’ Statements of Operations, represents the income earned from the investment of the cash collateral, plus any fees paid by borrowers and less the fees paid to BTC as securities lending agent which are subject to adjustments pursuant to the securities lending agreement.
6. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.
100 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
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 Investable Market Index Fund, iShares MSCI Belgium Investable Market Index Fund, iShares MSCI Emerging Markets Eastern Europe 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 Investable Market 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, 2010, the results of each of their operations, the changes in each of their net assets and their 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, 2010 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 22, 2010
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 101 |
Table of Contents
iSHARES® , INC.
For corporate shareholders, 1.33% of the income dividends paid by the iShares MSCI Switzerland Index Fund during the fiscal year ended August 31, 2010 qualified for the dividends-received deduction.
For the fiscal year ended August 31, 2010, 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 Investable Market | $ | 4,312,007 | $ | 469,813 | ||||
Belgium Investable Market | 1,742,027 | 231,540 | ||||||
Emerging Markets Eastern Europe | 197,505 | 27,420 | ||||||
EMU | 27,227,140 | 3,723,541 | ||||||
France | 11,129,040 | 1,572,116 | ||||||
Germany | 26,994,361 | 3,448,041 | ||||||
Italy | 3,689,266 | 533,847 | ||||||
Netherlands Investable Market | 3,732,476 | 557,122 | ||||||
Spain | 11,627,212 | 1,536,283 | ||||||
Sweden | 6,074,636 | 906,885 | ||||||
Switzerland | 9,581,811 | 1,870,010 | ||||||
United Kingdom | 33,125,016 | 417,186 |
Under Section 854(b)(2) of the Code, the Funds hereby designate the following maximum amounts as qualified dividend income for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended August 31, 2010:
iShares MSCI Index Fund | Qualified Dividend Income | |||
Austria Investable Market | $ | 3,011,360 | ||
Belgium Investable Market | 1,145,981 | |||
Emerging Markets Eastern Europe | 69,192 | |||
EMU | 21,378,328 | |||
France | 8,068,942 | |||
Germany | 20,484,235 |
iShares MSCI Index Fund | Qualified Dividend Income | |||
Italy | $ | 3,028,440 | ||
Netherlands Investable Market | 2,418,715 | |||
Spain | 11,091,843 | |||
Sweden | 4,773,557 | |||
Switzerland | 6,459,032 | |||
United Kingdom | 27,007,036 |
Under Section 871(k)(2)(C) of the Code, the iShares MSCI Emerging Markets Eastern Europe Index Fund designates $4,842 as short-term capital gain dividends for the fiscal year ended August 31, 2010.
In February 2011, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2010. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
102 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited)
iSHARES® , INC.
Section 19(a) Notices
The amounts and sources of distributions reported are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report distributions for federal income tax purposes.
Total Cumulative Distributions for the Fiscal Year | % Breakdown of the Total Cumulative Distributions for the Fiscal Year | |||||||||||||||||||||||||||||||
iShares MSCI Index Fund | Net Investment Income | Net Realized Capital Gains | Return of Capital | Total Per Share | Net Investment Income | Net Realized Capital Gains | Return of Capital | Total Per Share | ||||||||||||||||||||||||
Emerging Markets Eastern Europe | $ | 0.12870 | $ | 0.00968 | $ | – | $ | 0.13838 | 93 | % | 7 | % | – | % | 100 | % |
Premium/Discount Information
The tables that follow present information about the differences between the daily market price on secondary markets for shares of a 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 Fund generally is determined using the midpoint between the highest bid and the lowest offer on the primary 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 fair 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 Funds included in this report. The information shown for each Fund is for five calendar years (or for each full calendar quarter completed after the inception date of such Fund if less than five years) through the date of the most recent calendar quarter-end. 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 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.
SUPPLEMENTAL INFORMATION | 103 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Austria Investable Market Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.5% | 5 | 0.36 | % | |||||
Greater than 5.0% and Less than 5.5% | 1 | 0.07 | ||||||
Greater than 4.5% and Less than 5.0% | 2 | 0.14 | ||||||
Greater than 4.0% and Less than 4.5% | 1 | 0.07 | ||||||
Greater than 3.5% and Less than 4.0% | 4 | 0.29 | ||||||
Greater than 3.0% and Less than 3.5% | 3 | 0.22 | ||||||
Greater than 2.5% and Less than 3.0% | 3 | 0.22 | ||||||
Greater than 2.0% and Less than 2.5% | 12 | 0.87 | ||||||
Greater than 1.5% and Less than 2.0% | 20 | 1.45 | ||||||
Greater than 1.0% and Less than 1.5% | 75 | 5.43 | ||||||
Greater than 0.5% and Less than 1.0% | 192 | 13.89 | ||||||
Between 0.5% and –0.5% | 750 | 54.28 | ||||||
Less than –0.5% and Greater than –1.0% | 158 | 11.43 | ||||||
Less than –1.0% and Greater than –1.5% | 79 | 5.72 | ||||||
Less than –1.5% and Greater than –2.0% | 30 | 2.17 | ||||||
Less than –2.0% and Greater than –2.5% | 22 | 1.59 | ||||||
Less than –2.5% and Greater than –3.0% | 6 | 0.43 | ||||||
Less than –3.0% and Greater than –3.5% | 7 | 0.51 | ||||||
Less than –3.5% and Greater than –4.0% | 5 | 0.36 | ||||||
Less than –4.0% and Greater than –4.5% | 2 | 0.14 | ||||||
Less than –4.5% | 5 | 0.36 | ||||||
1,382 | 100.00 | % | ||||||
104 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Belgium Investable Market Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.5% | 3 | 0.22 | % | |||||
Greater than 4.0% and Less than 4.5% | 3 | 0.22 | ||||||
Greater than 3.5% and Less than 4.0% | 1 | 0.07 | ||||||
Greater than 3.0% and Less than 3.5% | 4 | 0.29 | ||||||
Greater than 2.5% and Less than 3.0% | 6 | 0.43 | ||||||
Greater than 2.0% and Less than 2.5% | 10 | 0.72 | ||||||
Greater than 1.5% and Less than 2.0% | 22 | 1.59 | ||||||
Greater than 1.0% and Less than 1.5% | 61 | 4.41 | ||||||
Greater than 0.5% and Less than 1.0% | 190 | 13.75 | ||||||
Between 0.5% and –0.5% | 822 | 59.49 | ||||||
Less than –0.5% and Greater than –1.0% | 149 | 10.78 | ||||||
Less than –1.0% and Greater than –1.5% | 59 | 4.27 | ||||||
Less than –1.5% and Greater than –2.0% | 26 | 1.88 | ||||||
Less than –2.0% and Greater than –2.5% | 7 | 0.51 | ||||||
Less than –2.5% and Greater than –3.0% | 6 | 0.43 | ||||||
Less than –3.0% and Greater than –3.5% | 4 | 0.29 | ||||||
Less than –3.5% and Greater than –4.0% | 4 | 0.29 | ||||||
Less than –4.0% | 5 | 0.36 | ||||||
1,382 | 100.00 | % | ||||||
iShares MSCI Emerging Markets Eastern Europe Index Fund
Period Covered: October 1, 2009 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.0% | 1 | 0.53 | % | |||||
Greater than 2.5% and Less than 3.0% | 1 | 0.53 | ||||||
Greater than 2.0% and Less than 2.5% | 1 | 0.53 | ||||||
Greater than 1.5% and Less than 2.0% | 13 | 6.95 | ||||||
Greater than 1.0% and Less than 1.5% | 19 | 10.16 | ||||||
Greater than 0.5% and Less than 1.0% | 56 | 29.95 | ||||||
Between 0.5% and –0.5% | 65 | 34.78 | ||||||
Less than –0.5% and Greater than –1.0% | 12 | 6.42 | ||||||
Less than –1.0% and Greater than –1.5% | 8 | 4.28 | ||||||
Less than –1.5% and Greater than –2.0% | 6 | 3.21 | ||||||
Less than –2.0% and Greater than –2.5% | 3 | 1.60 | ||||||
Less than –2.5% and Greater than –3.0% | 1 | 0.53 | ||||||
Less than –3.0% and Greater than –3.5% | 1 | 0.53 | ||||||
187 | 100.00 | % | ||||||
SUPPLEMENTAL INFORMATION | 105 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI EMU Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.5% | 12 | 0.87 | % | |||||
Greater than 3.0% and Less than 3.5% | 5 | 0.36 | ||||||
Greater than 2.5% and Less than 3.0% | 3 | 0.22 | ||||||
Greater than 2.0% and Less than 2.5% | 9 | 0.65 | ||||||
Greater than 1.5% and Less than 2.0% | 25 | 1.81 | ||||||
Greater than 1.0% and Less than 1.5% | 54 | 3.91 | ||||||
Greater than 0.5% and Less than 1.0% | 198 | 14.33 | ||||||
Between 0.5% and –0.5% | 840 | 60.79 | ||||||
Less than –0.5% and Greater than –1.0% | 133 | 9.62 | ||||||
Less than –1.0% and Greater than –1.5% | 57 | 4.12 | ||||||
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% and Greater than –3.0% | 6 | 0.43 | ||||||
Less than –3.0% and Greater than –3.5% | 4 | 0.29 | ||||||
Less than –3.5% and Greater than –4.0% | 1 | 0.07 | ||||||
Less than –4.0% and Greater than –4.5% | 3 | 0.22 | ||||||
Less than –4.5% and Greater than –5.0% | 1 | 0.07 | ||||||
Less than –5.0% | 2 | 0.14 | ||||||
1,382 | 100.00 | % | ||||||
106 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI France Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 4 | 0.29 | % | |||||
Greater than 4.5% and Less than 5.0% | 1 | 0.07 | ||||||
Greater than 4.0% and Less than 4.5% | 4 | 0.29 | ||||||
Greater than 3.5% and Less than 4.0% | 1 | 0.07 | ||||||
Greater than 3.0% and Less than 3.5% | 2 | 0.14 | ||||||
Greater than 2.5% and Less than 3.0% | 6 | 0.43 | ||||||
Greater than 2.0% and Less than 2.5% | 8 | 0.58 | ||||||
Greater than 1.5% and Less than 2.0% | 24 | 1.74 | ||||||
Greater than 1.0% and Less than 1.5% | 57 | 4.12 | ||||||
Greater than 0.5% and Less than 1.0% | 168 | 12.16 | ||||||
Between 0.5% and –0.5% | 891 | 64.49 | ||||||
Less than –0.5% and Greater than –1.0% | 115 | 8.32 | ||||||
Less than –1.0% and Greater than –1.5% | 52 | 3.76 | ||||||
Less than –1.5% and Greater than –2.0% | 24 | 1.74 | ||||||
Less than –2.0% and Greater than –2.5% | 8 | 0.58 | ||||||
Less than –2.5% and Greater than –3.0% | 8 | 0.58 | ||||||
Less than –3.0% and Greater than –3.5% | 1 | 0.07 | ||||||
Less than –3.5% and Greater than –4.0% | 3 | 0.22 | ||||||
Less than –4.0% and Greater than –4.5% | 2 | 0.14 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.14 | ||||||
Less than –5.0% and Greater than –5.5% | 1 | 0.07 | ||||||
1,382 | 100.00 | % | ||||||
SUPPLEMENTAL INFORMATION | 107 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Germany Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 6 | 0.43 | % | |||||
Greater than 4.5% and Less than 5.0% | 2 | 0.14 | ||||||
Greater than 4.0% and Less than 4.5% | 1 | 0.07 | ||||||
Greater than 3.5% and Less than 4.0% | 2 | 0.14 | ||||||
Greater than 3.0% and Less than 3.5% | 3 | 0.22 | ||||||
Greater than 2.5% and Less than 3.0% | 4 | 0.29 | ||||||
Greater than 2.0% and Less than 2.5% | 12 | 0.87 | ||||||
Greater than 1.5% and Less than 2.0% | 13 | 0.94 | ||||||
Greater than 1.0% and Less than 1.5% | 61 | 4.41 | ||||||
Greater than 0.5% and Less than 1.0% | 169 | 12.23 | ||||||
Between 0.5% and –0.5% | 892 | 64.57 | ||||||
Less than –0.5% and Greater than –1.0% | 129 | 9.33 | ||||||
Less than –1.0% and Greater than –1.5% | 54 | 3.91 | ||||||
Less than –1.5% and Greater than –2.0% | 12 | 0.87 | ||||||
Less than –2.0% and Greater than –2.5% | 11 | 0.80 | ||||||
Less than –2.5% and Greater than –3.0% | 3 | 0.22 | ||||||
Less than –3.0% and Greater than –3.5% | 2 | 0.14 | ||||||
Less than –3.5% and Greater than –4.0% | 2 | 0.14 | ||||||
Less than –4.0% and Greater than –4.5% | 2 | 0.14 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.14 | ||||||
1,382 | 100.00 | % | ||||||
108 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Italy Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.5% | 2 | 0.14 | % | |||||
Greater than 5.0% and Less than 5.5% | 1 | 0.07 | ||||||
Greater than 4.5% and Less than 5.0% | 3 | 0.22 | ||||||
Greater than 4.0% and Less than 4.5% | 2 | 0.14 | ||||||
Greater than 3.5% and Less than 4.0% | 2 | 0.14 | ||||||
Greater than 3.0% and Less than 3.5% | 4 | 0.29 | ||||||
Greater than 2.5% and Less than 3.0% | 3 | 0.22 | ||||||
Greater than 2.0% and Less than 2.5% | 12 | 0.87 | ||||||
Greater than 1.5% and Less than 2.0% | 23 | 1.66 | ||||||
Greater than 1.0% and Less than 1.5% | 67 | 4.85 | ||||||
Greater than 0.5% and Less than 1.0% | 149 | 10.78 | ||||||
Between 0.5% and –0.5% | 873 | 63.19 | ||||||
Less than –0.5% and Greater than –1.0% | 134 | 9.70 | ||||||
Less than –1.0% and Greater than –1.5% | 56 | 4.05 | ||||||
Less than –1.5% and Greater than –2.0% | 21 | 1.52 | ||||||
Less than –2.0% and Greater than –2.5% | 10 | 0.72 | ||||||
Less than –2.5% and Greater than –3.0% | 5 | 0.36 | ||||||
Less than –3.0% and Greater than –3.5% | 7 | 0.51 | ||||||
Less than –3.5% and Greater than –4.0% | 2 | 0.14 | ||||||
Less than –4.0% and Greater than –4.5% | 4 | 0.29 | ||||||
Less than –4.5% | 2 | 0.14 | ||||||
1,382 | 100.00 | % | ||||||
SUPPLEMENTAL INFORMATION | 109 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Netherlands Investable Market Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 3 | 0.22 | % | |||||
Greater than 4.5% and Less than 5.0% | 2 | 0.14 | ||||||
Greater than 4.0% and Less than 4.5% | 1 | 0.07 | ||||||
Greater than 3.5% and Less than 4.0% | 2 | 0.14 | ||||||
Greater than 3.0% and Less than 3.5% | 2 | 0.14 | ||||||
Greater than 2.5% and Less than 3.0% | 6 | 0.43 | ||||||
Greater than 2.0% and Less than 2.5% | 11 | 0.80 | ||||||
Greater than 1.5% and Less than 2.0% | 21 | 1.52 | ||||||
Greater than 1.0% and Less than 1.5% | 59 | 4.27 | ||||||
Greater than 0.5% and Less than 1.0% | 203 | 14.69 | ||||||
Between 0.5% and –0.5% | 826 | 59.79 | ||||||
Less than –0.5% and Greater than –1.0% | 137 | 9.91 | ||||||
Less than –1.0% and Greater than –1.5% | 60 | 4.34 | ||||||
Less than –1.5% and Greater than –2.0% | 21 | 1.52 | ||||||
Less than –2.0% and Greater than –2.5% | 8 | 0.58 | ||||||
Less than –2.5% and Greater than –3.0% | 7 | 0.51 | ||||||
Less than –3.0% and Greater than –3.5% | 6 | 0.43 | ||||||
Less than –3.5% and Greater than –4.0% | 2 | 0.14 | ||||||
Less than –4.0% and Greater than –4.5% | 2 | 0.14 | ||||||
Less than –4.5% | 3 | 0.22 | ||||||
1,382 | 100.00 | % | ||||||
110 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Spain Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.5% | 10 | 0.72 | % | |||||
Greater than 3.0% and Less than 3.5% | 2 | 0.14 | ||||||
Greater than 2.5% and Less than 3.0% | 4 | 0.29 | ||||||
Greater than 2.0% and Less than 2.5% | 13 | 0.94 | ||||||
Greater than 1.5% and Less than 2.0% | 20 | 1.45 | ||||||
Greater than 1.0% and Less than 1.5% | 59 | 4.27 | ||||||
Greater than 0.5% and Less than 1.0% | 161 | 11.65 | ||||||
Between 0.5% and –0.5% | 853 | 61.73 | ||||||
Less than –0.5% and Greater than –1.0% | 156 | 11.29 | ||||||
Less than –1.0% and Greater than –1.5% | 54 | 3.91 | ||||||
Less than –1.5% and Greater than –2.0% | 23 | 1.66 | ||||||
Less than –2.0% and Greater than –2.5% | 11 | 0.80 | ||||||
Less than –2.5% and Greater than –3.0% | 7 | 0.51 | ||||||
Less than –3.0% and Greater than –3.5% | 2 | 0.14 | ||||||
Less than –3.5% and Greater than –4.0% | 3 | 0.22 | ||||||
Less than –4.0% and Greater than –4.5% | 1 | 0.07 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.14 | ||||||
Less than –5.0% | 1 | 0.07 | ||||||
1,382 | 100.00 | % | ||||||
SUPPLEMENTAL INFORMATION | 111 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Sweden Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 6.0% | 3 | 0.22 | % | |||||
Greater than 5.5% and Less than 6.0% | 2 | 0.14 | ||||||
Greater than 5.0% and Less than 5.5% | 3 | 0.22 | ||||||
Greater than 4.5% and Less than 5.0% | 1 | 0.07 | ||||||
Greater than 4.0% and Less than 4.5% | 2 | 0.14 | ||||||
Greater than 3.5% and Less than 4.0% | 3 | 0.22 | ||||||
Greater than 3.0% and Less than 3.5% | 5 | 0.36 | ||||||
Greater than 2.5% and Less than 3.0% | 9 | 0.65 | ||||||
Greater than 2.0% and Less than 2.5% | 11 | 0.80 | ||||||
Greater than 1.5% and Less than 2.0% | 30 | 2.17 | ||||||
Greater than 1.0% and Less than 1.5% | 76 | 5.50 | ||||||
Greater than 0.5% and Less than 1.0% | 204 | 14.76 | ||||||
Between 0.5% and –0.5% | 738 | 53.41 | ||||||
Less than –0.5% and Greater than –1.0% | 146 | 10.56 | ||||||
Less than –1.0% and Greater than –1.5% | 71 | 5.14 | ||||||
Less than –1.5% and Greater than –2.0% | 34 | 2.46 | ||||||
Less than –2.0% and Greater than –2.5% | 16 | 1.16 | ||||||
Less than –2.5% and Greater than –3.0% | 9 | 0.65 | ||||||
Less than –3.0% and Greater than –3.5% | 5 | 0.36 | ||||||
Less than –3.5% and Greater than –4.0% | 4 | 0.29 | ||||||
Less than –4.0% and Greater than –4.5% | 3 | 0.22 | ||||||
Less than –4.5% and Greater than –5.0% | 3 | 0.22 | ||||||
Less than –5.0% and Greater than –5.5% | 2 | 0.14 | ||||||
Less than –5.5% and Greater than –6.0% | 1 | 0.07 | ||||||
Less than –6.0% | 1 | 0.07 | ||||||
1,382 | 100.00 | % | ||||||
112 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Switzerland Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.0% | 6 | 0.43 | % | |||||
Greater than 3.5% and Less than 4.0% | 3 | 0.22 | ||||||
Greater than 3.0% and Less than 3.5% | 5 | 0.36 | ||||||
Greater than 2.5% and Less than 3.0% | 1 | 0.07 | ||||||
Greater than 2.0% and Less than 2.5% | 5 | 0.36 | ||||||
Greater than 1.5% and Less than 2.0% | 22 | 1.59 | ||||||
Greater than 1.0% and Less than 1.5% | 59 | 4.27 | ||||||
Greater than 0.5% and Less than 1.0% | 247 | 17.87 | ||||||
Between 0.5% and –0.5% | 847 | 61.30 | ||||||
Less than –0.5% and Greater than –1.0% | 103 | 7.45 | ||||||
Less than –1.0% and Greater than –1.5% | 45 | 3.26 | ||||||
Less than –1.5% and Greater than –2.0% | 15 | 1.09 | ||||||
Less than –2.0% and Greater than –2.5% | 14 | 1.01 | ||||||
Less than –2.5% and Greater than –3.0% | 4 | 0.29 | ||||||
Less than –3.0% | 6 | 0.43 | ||||||
1,382 | 100.00 | % | ||||||
SUPPLEMENTAL INFORMATION | 113 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI United Kingdom Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.0% | 14 | 1.01 | % | |||||
Greater than 2.5% and Less than 3.0% | 3 | 0.22 | ||||||
Greater than 2.0% and Less than 2.5% | 12 | 0.87 | ||||||
Greater than 1.5% and Less than 2.0% | 37 | 2.68 | ||||||
Greater than 1.0% and Less than 1.5% | 122 | 8.83 | ||||||
Greater than 0.5% and Less than 1.0% | 316 | 22.87 | ||||||
Between 0.5% and –0.5% | 686 | 49.64 | ||||||
Less than –0.5% and Greater than –1.0% | 111 | 8.03 | ||||||
Less than –1.0% and Greater than –1.5% | 39 | 2.82 | ||||||
Less than –1.5% and Greater than –2.0% | 20 | 1.45 | ||||||
Less than –2.0% and Greater than –2.5% | 5 | 0.36 | ||||||
Less than –2.5% and Greater than –3.0% | 7 | 0.51 | ||||||
Less than –3.0% and Greater than –3.5% | 4 | 0.29 | ||||||
Less than –3.5% and Greater than –4.0% | 2 | 0.14 | ||||||
Less than –4.0% and Greater than –4.5% | 1 | 0.07 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.14 | ||||||
Less than –5.0% | 1 | 0.07 | ||||||
1,382 | 100.00 | % | ||||||
114 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer 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 BFA and other service providers. Each Director serves until his or her successor is duly elected or appointed and qualified. Each Officer serves until he or she resigns, is removed, dies, retires or becomes disqualified.
iShares, Inc., iShares Trust, BlackRock Funds III (formerly, Barclays Global Investors Funds) and Master Investment Portfolio, each an open-end management investment company registered under the 1940 Act, are considered 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, as a result, oversees a total of 214 funds within the fund complex. With the exception of Robert S. Kapito, the address of each Director and Officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52nd Street, New York, NY 10055. The Board has designated George G.C. Parker as its Independent Chairman. Additional information about the Funds’ Directors and Officers may be found in the Funds’ combined Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-474-2737.
Interested Directors and Officers
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
Robert S. Kapitoa (53) | Director (since 2009). | President and Director, BlackRock, Inc. (since 2006 and 2007, respectively); Vice Chairman of BlackRock, Inc. and Head of BlackRock’s Portfolio Management Group (since its formation in 1998) and BlackRock’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); Chairman, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983). | Trustee of iShares Trust (since 2009); Director of BlackRock, Inc. (since 2007). | |||
Michael Lathamb (45) | Director (since 2010); President (since 2007). | Global Chief Executive Officer of iShares, BTC (since 2010); Managing Director, BTC (since 2009); Head of Americas iShares, Barclays Global Investors (“BGI”) (2007-2009); Director and Chief Financial Officer of Barclays Global Investors International, Inc. (2005-2009); Chief Operating Officer of the Intermediary Investor and Exchange Traded Products Business of BGI (2003-2007). | Trustee of iShares Trust (since 2010). |
a | Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. |
b | Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates. |
DIRECTORAND OFFICER INFORMATION | 115 |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES® , INC.
Independent Directors
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
George G.C. Parker (71) | Director (since 2000); Independent Chairman (since 2010). | Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University: Graduate School of Business (since 1994). | Trustee of iShares Trust (since 2002); Independent Chairman of iShares Trust (since 2010); Director of Continental Airlines Inc. (since 1996); Director of Community First Financial Group (since 1995); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of NETGEAR, Inc. (since 2007). | |||
Darrell Duffie (56) | Director (since 2008). | Professor, Stanford University: Graduate School of Business (since 1984). | Trustee of iShares Trust (since 2008); Director of Moody’s Corp. (since 2008). | |||
Cecilia H. Herbert (61) | Director (since 2005). | Director (since 1998) and President (since 2007) of the Board of Directors, Catholic Charities CYO; Trustee of Pacific Select Funds (2004-2005); Trustee (since 2005) and Chair of the Finance and Investment Committees (since 2006) of the Thacher School; Chair of Investment Committee, Archdiocese of San Francisco (1994-2005). | Trustee of iShares Trust (since 2005); Director, Forward Funds (34 portfolios) (since 2009). | |||
Charles A. Hurty (67) | Director (since 2005). | Retired; Partner, KPMG LLP (1968-2001). | Trustee of iShares Trust (since 2005); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002). | |||
John E. Kerrigan (55) | Director (since 2005). | Chief Investment Officer, Santa Clara University (since 2002). | Trustee of iShares Trust (since 2005). | |||
John E. Martinez (49) | Director (since 2003). | Director of Real Estate Equity Exchange (since 2005). | Trustee of iShares Trust (since 2003); Chairman, Independent Review Committee, Canadian iShares Funds (since 2007). |
116 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES® , INC.
Independent Directors (Continued)
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
Robert H. Silver (55) | Director (since 2007). | President and Co-Founder of The Bravitas Group, Inc. (since 2006); Member, Non-Investor Advisory Board of Russia Partners II, LP (since 2006); President and Chief Operating Officer (2003-2005) and Director (1999-2005) of UBS Financial Services, Inc.; President and Chief Executive Officer of UBS Services USA, LLC (1999-2005); Managing Director, UBS America, Inc. (2000-2005); Director and Vice Chairman of the YMCA of Greater NYC (since 2001); Broadway Producer (since 2006); Co-Founder and Vice President of Parentgiving Inc. (since 2008); Director and Member of the Audit and Compensation Committee of EPAM Systems, Inc. (2006-2009). | Trustee of iShares Trust (since 2007). |
DIRECTORAND OFFICER INFORMATION | 117 |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES®, INC.
Officers
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | ||
Geoffrey D. Flynn (53) | Executive Vice President and Chief Operating Officer (since 2008). | Managing Director, BTC (since 2009); Chief Operating Officer, U.S. iShares, BGI (2007-2009); President, Van Kampen Investors Services (2003-2007); Managing Director, Morgan Stanley (2002-2007); President, Morgan Stanley Trust, FSB (2002- 2007). | ||
Eilleen M. Clavere (58) | Secretary (since 2007). | Director, BTC (since 2009); Director of Legal Administration of Intermediary Investor Business of BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005). | ||
Jack Gee (51) | Treasurer and Chief Financial Officer (since 2008). | Managing Director, BTC (since 2009); Senior Director of Fund Administration of Intermediary Investor Business of BGI (2009); Director of Fund Administration of Intermediary Investor Business of BGI (2004-2009). | ||
Patrick O’Connor (43) | Vice President (since 2007). | Managing Director, BTC (since 2009); Head of iShares Portfolio Management, BGI (2006-2009); Senior Portfolio Manager, BGI (1999-2006). | ||
Amy Schioldager (48) | Executive Vice President (since 2007). | Managing Director, BTC (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006). | ||
Ira P. Shapiro (47) | Vice President and Chief Legal Officer (since 2007). | Managing Director, BTC (since 2009); Associate General Counsel, BGI (2004-2009). | ||
Lee Sterne (45) | Vice President (since 2007). | Managing Director, BTC (since 2009); Head of U.S. Fixed Income Index and iShares, BGI (2007-2009); Senior Portfolio Manager, BGI (2004-2007). | ||
Matt Tucker (38) | Vice President (since 2007). | Managing Director, BTC (since 2009); Director of Fixed Income Investment Strategy, BGI (2009); Head of U.S. Fixed Income Investment Solutions, BGI (2005-2008); Fixed Income Investment Strategist, BGI (2003-2005). |
118 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes:
NOTES | 119 |
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 Russell Domestic Index Funds | Trading Symbol | |
iShares Russell 3000 | IWV | |
iShares Russell 3000 Growth | IWZ | |
iShares Russell 3000 Value | IWW | |
iShares Russell Top 200 | IWL | |
iShares Russell Top 200 Growth | IWY | |
iShares Russell Top 200 Value | IWX | |
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 S&P Domestic Index Funds | ||
iShares S&P 1500 | ISI | |
iShares S&P 100 | OEF | |
iShares S&P 500 | IVV | |
iShares S&P 500 Growth | IVW | |
iShares S&P 500 Value | IVE | |
iShares S&P MidCap 400 | IJH | |
iShares S&P MidCap 400 Growth | IJK | |
iShares S&P MidCap 400 Value | IJJ | |
iShares S&P SmallCap 600 | IJR | |
iShares S&P SmallCap 600 Growth | IJT | |
iShares S&P SmallCap 600 Value | IJS | |
iShares Morningstar Domestic 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 Dow Jones Domestic Index Fund | ||
iShares Dow Jones U.S. | IYY | |
iShares MSCI Domestic Index Fund | ||
iShares MSCI USA | EUSA | |
iShares MSCI Socially Responsible Index Funds | ||
iShares MSCI KLD 400 Social | DSI | |
iShares MSCI USA ESG Select Social | KLD | |
iShares NYSE Domestic Index Funds | ||
iShares NYSE Composite | NYC | |
iShares NYSE 100 | NY |
iShares Domestic Specialty Index Funds | Trading Symbol | |
iShares S&P U.S. Preferred Stock | PFF | |
iShares Dow Jones Select Dividend | DVY | |
iShares North American Sector/Subsector Index Funds | ||
iShares S&P North American Technology Sector | IGM | |
iShares S&P North American Technology-Multimedia | ||
Networking | IGN | |
iShares S&P North American Technology- | ||
Semiconductors | IGW | |
iShares S&P North American Technology-Software | IGV | |
iShares S&P North American Natural Resources Sector | IGE | |
iShares Domestic Sector Index Funds | ||
iShares Dow Jones U.S. Basic Materials Sector | IYM | |
iShares Dow Jones U.S. Consumer Goods Sector | IYK | |
iShares Dow Jones U.S. Consumer Services Sector | IYC | |
iShares Dow Jones U.S. Energy Sector | IYE | |
iShares Dow Jones U.S. Financial Sector | IYF | |
iShares Dow Jones U.S. Healthcare Sector | IYH | |
iShares Dow Jones U.S. Industrial Sector | IYJ | |
iShares Dow Jones U.S. Technology Sector | IYW | |
iShares Dow Jones U.S. Telecommunications Sector | IYZ | |
iShares Dow Jones U.S. Utilities Sector | IDU | |
iShares Domestic Subsector Index Funds | ||
iShares Dow Jones Transportation Average | IYT | |
iShares Dow Jones U.S. Aerospace & Defense | ITA | |
iShares Dow Jones U.S. Broker-Dealers | IAI | |
iShares Dow Jones U.S. Financial Services | IYG | |
iShares Dow Jones U.S. Healthcare Providers | IHF | |
iShares Dow Jones U.S. Home Construction | ITB | |
iShares Dow Jones U.S. Insurance | IAK | |
iShares Dow Jones U.S. Medical Devices | IHI | |
iShares Dow Jones U.S. Oil & Gas Exploration & | ||
Production | IEO | |
iShares Dow Jones U.S. Oil Equipment & Services | IEZ | |
iShares Dow Jones U.S. Pharmaceuticals | IHE | |
iShares Dow Jones U.S. Regional Banks | IAT | |
iShares Nasdaq Biotechnology | IBB | |
iShares Domestic Real Estate Index Funds | ||
iShares Cohen & Steers Realty Majors | ICF | |
iShares Dow Jones U.S. Real Estate | IYR | |
iShares FTSE NAREIT Real Estate 50 | FTY | |
iShares FTSE NAREIT Industrial/Office Capped | FIO | |
iShares FTSE NAREIT Mortgage Plus Capped | REM | |
iShares FTSE NAREIT Residential Plus Capped | REZ | |
iShares FTSE NAREIT Retail Capped | RTL | |
iShares Target Risk Index Funds | ||
iShares S&P Conservative Allocation | AOK | |
iShares S&P Moderate Allocation | AOM | |
iShares S&P Growth Allocation | AOR | |
iShares S&P Aggressive Allocation | AOA |
120 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
The iShares® Family of Funds (Continued)
iShares International Country Index Funds | Trading Symbol | |
iShares FTSE China (HK Listed) | FCHI | |
iShares FTSE/Xinhua China 25 | FXI | |
iShares MSCI Australia | EWA | |
iShares MSCI Austria Investable Market | EWO | |
iShares MSCI Belgium Investable Market | EWK | |
iShares MSCI Brazil | EWZ | |
iShares MSCI Brazil Small Cap | EWZS | |
iShares MSCI Canada | EWC | |
iShares MSCI Chile Investable Market | ECH | |
iShares MSCI China Small Cap | ECNS | |
iShares MSCI France | EWQ | |
iShares MSCI Germany | EWG | |
iShares MSCI Hong Kong | EWH | |
iShares S&P India Nifty 50 | INDY | |
iShares MSCI Indonesia Investable Market | EIDO | |
iShares MSCI Ireland Capped Investable Market | EIRL | |
iShares MSCI Israel Capped Investable Market | EIS | |
iShares MSCI Italy | EWI | |
iShares MSCI Japan | EWJ | |
iShares MSCI Japan Small Cap | SCJ | |
iShares S&P/TOPIX 150 | ITF | |
iShares MSCI Malaysia | EWM | |
iShares MSCI Mexico Investable Market | EWW | |
iShares MSCI Netherlands Investable Market | EWN | |
iShares MSCI New Zealand Investable Market | ENZL | |
iShares MSCI All Peru Capped | EPU | |
iShares MSCI Philippines Investable Market | EPHE | |
iShares MSCI Poland Investable Market | EPOL | |
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 Thailand Investable Market | THD | |
iShares MSCI Turkey Investable Market | TUR | |
iShares MSCI United Kingdom | EWU | |
iShares International Index Funds | ||
iShares MSCI ACWI ex US | ACWX | |
iShares MSCI EAFE | EFA | |
iShares MSCI EAFE Growth | EFG | |
iShares MSCI EAFE Value | EFV | |
iShares MSCI EAFE Small Cap | SCZ | |
iShares FTSE Developed Small Cap ex-North America | IFSM | |
iShares MSCI Emerging Markets | EEM | |
iShares MSCI Emerging Markets Eastern Europe | ESR | |
iShares MSCI BRIC | BKF | |
iShares MSCI EMU | EZU | |
iShares MSCI All Country Asia ex Japan | AAXJ | |
iShares MSCI Pacific ex-Japan | EPP | |
iShares S&P Asia 50 | AIA | |
iShares S&P Europe 350 | IEV | |
iShares S&P Latin America 40 | ILF | |
iShares International/Global Real Estate Index Funds | ||
iShares S&P Developed ex-U.S. Property | WPS | |
iShares FTSE EPRA/NAREIT Developed | ||
Real Estate ex-U.S. | IFGL | |
iShares FTSE EPRA/NAREIT Developed Asia | IFAS | |
iShares FTSE EPRA/NAREIT Developed Europe | IFEU | |
iShares FTSE EPRA/NAREIT North America | IFNA |
iShares Target Date Index Funds | Trading Symbol | |
iShares S&P Target Date Retirement Income | TGR | |
iShares S&P Target Date 2010 | TZD | |
iShares S&P Target Date 2015 | TZE | |
iShares S&P Target Date 2020 | TZG | |
iShares S&P Target Date 2025 | TZI | |
iShares S&P Target Date 2030 | TZL | |
iShares S&P Target Date 2035 | TZO | |
iShares S&P Target Date 2040 | TZV | |
iShares Global Index Funds | ||
iShares MSCI ACWI | ACWI | |
iShares S&P Global 100 | IOO | |
iShares MSCI Kokusai | TOK | |
iShares International/Global Sector Index Funds | ||
iShares MSCI ACWI ex US Consumer Discretionary Sector | AXDI | |
iShares MSCI ACWI ex US Consumer Staples Sector | AXSL | |
iShares MSCI ACWI ex US Energy Sector | AXEN | |
iShares MSCI ACWI ex US Financials Sector | AXFN | |
iShares MSCI ACWI ex US Health Care Sector | AXHE | |
iShares MSCI ACWI ex US Industrials Sector | AXID | |
iShares MSCI ACWI ex US Information Technology | ||
Sector | AXIT | |
iShares MSCI ACWI ex US Materials Sector | AXMT | |
iShares MSCI ACWI ex US Telecommunication Services | ||
Sector | AXTE | |
iShares MSCI ACWI ex US Utilities Sector | AXUT | |
iShares MSCI Emerging Markets Financials Sector | EMFN | |
iShares MSCI Emerging Markets Materials Sector | EMMT | |
iShares MSCI Europe Financials Sector | EUFN | |
iShares MSCI Far East Financials Sector | FEFN | |
iShares S&P Global Consumer Discretionary Sector | RXI | |
iShares S&P Global Consumer Staples Sector | KXI | |
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 Industrials Sector | EXI | |
iShares S&P Global Materials Sector | MXI | |
iShares S&P Global Technology Sector | IXN | |
iShares S&P Global Telecommunications Sector | IXP | |
iShares S&P Global Utilities Sector | JXI | |
iShares International/Global Theme Based and Specialty Index Funds | ||
iShares Dow Jones International Select Dividend | IDV | |
iShares S&P Emerging Markets Infrastructure | EMIF | |
iShares S&P Global Clean Energy | ICLN | |
iShares S&P Global Infrastructure | IGF | |
iShares S&P Global Nuclear Energy | NUCL | |
iShares S&P Global Timber & Forestry | WOOD | |
iShares U.S. Multisector Bond Funds | ||
iShares Barclays Aggregate | AGG | |
iShares Barclays Government/Credit | GBF | |
iShares Barclays Intermediate Government/Credit | GVI | |
iShares 10+ Year Government/Credit | GLJ | |
iShares U.S. Government Bond Funds | ||
iShares Barclays Short Treasury | SHV | |
iShares Barclays 1-3 Year Treasury | SHY | |
iShares Barclays 3-7 Year Treasury | IEI | |
iShares Barclays 7-10 Year Treasury | IEF | |
iShares Barclays 10-20 Year Treasury | TLH | |
iShares Barclays 20+ Year Treasury | TLT | |
iShares Barclays TIPS | TIP | |
iShares Barclays Agency | AGZ |
THE iSHARES FAMILYOF FUNDS | 121 |
Table of Contents
The iShares® Family of Funds (Continued)
iShares U.S. Credit Bond Funds | Trading Symbol | |
iShares Barclays Credit | CFT | |
iShares Barclays 1-3 Year Credit | CSJ | |
iShares Barclays Intermediate Credit | CIU | |
iShares iBoxx $ Investment Grade Corporate | LQD | |
iShares 10+ Year Credit | CLY | |
iShares iBoxx $ High Yield Corporate | HYG |
iShares AMT-Free Municipal Bond Funds | Trading Symbol | |
iShares S&P National AMT-Free Municipal | MUB | |
iShares S&P Short Term National AMT-Free Municipal | SUB | |
iShares S&P California AMT-Free Municipal | CMF | |
iShares S&P New York AMT-Free Municipal | NYF | |
iShares 2012 S&P AMT-Free Municipal Series | MUAA | |
iShares 2013 S&P AMT-Free Municipal Series | MUAB | |
iShares 2014 S&P AMT-Free Municipal Series | MUAC | |
iShares 2015 S&P AMT-Free Municipal Series | MUAD | |
iShares 2016 S&P AMT-Free Municipal Series | MUAE | |
iShares 2017 S&P AMT-Free Municipal Series | MUAF | |
iShares U.S. Securitized Bond Fund | ||
iShares Barclays MBS | MBB | |
iShares International Bond Funds | ||
iShares JPMorgan USD Emerging Markets | EMB | |
iShares S&P/Citigroup International Treasury | IGOV | |
iShares S&P/Citigroup 1-3 Year International Treasury | ISHG |
The iShares Funds that are registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 as iShares, Inc. and iShares Trust (“Funds”) are distributed in the U.S. by SEI Investments Distribution Co. (“SEI”). iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A. The Funds are not sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., European Public Real Estate Association (“EPRA®”), FTSE International Limited (“FTSE”), FTSE/Xinhua Index Limited (“FXI”), iBoxx®, JPMorgan Chase & Co., MSCI Inc., Morningstar Inc., The NASDAQ OMX Group, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), New York Stock Exchange, Inc., Russell Investment Group or Standard & Poor’s, nor are they sponsored, endorsed or issued by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the companies listed above. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50/Residential/Retail/Mortgage or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Developed Real Estate ex-US/North America/Europe/Asia Index; all rights vest in FTSE, NAREIT and EPRA. All rights in the FTSE Developed Small Cap ex-North America Index vest in FTSE. “FTSE” is a trade- and servicemark of London Stock Exchange and The Financial Times Limited; “Xinhua” is a trade- and servicemark of Xinhua Financial Network Limited.
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 2010 Annual Report.
iS-3594-1010
122 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on your iShares holdings. In addition, it’s a way we can all care for our environment. To that end, we are pleased to offer shareholder reports and prospectuses online.
Once you have enrolled, you will no longer receive shareholder reports and prospectuses in the mail. Instead, you will receive e-mail notifications announcing that the shareholder report or prospectus has been posted on the iShares website at www.iShares.com and is available to be viewed or downloaded.
To sign up for electronic delivery, please follow these simple steps:
1. Go to www.icsdelivery.com.
2. From the main page, select the first letter of your brokerage firm’s name.
3. Select your brokerage institution from the list that follows. If your brokerage firm is not listed, electronic delivery may not be available. Please contact your brokerage firm or financial adviser.
4. Fill out the appropriate information and provide the e-mail address where you would like your notifications sent.
Your information and e-mail address will be kept confidential and only used to deliver documents to you. If at any time you are not satisfied, you can cancel electronic delivery at www.icsdelivery.com and once again receive physical delivery of your materials. If you have any questions, please contact your brokerage firm or financial adviser. |
Table of Contents
For more information:
WWW.iSHARES.COM
1-800-iShares (1-800-474-2737)
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.
Investing involves risk, including possible loss of principal.
The iShares Funds are distributed by SEI Investments Distribution Co. (SEI).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the company listed above.
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 ending June 30 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 U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.
The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a monthly basis on the Funds’ website.
Certain financial information required by regulations or listing exchange rules in jurisdictions outside the U.S. in which iShares Funds are cross-listed may be publicly filed in those jurisdictions. This information is available upon request by calling 1-800-474-2737.
©2010 BlackRock Institutional Trust Company, N.A. All rights reserved. iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A. All other trademarks, servicemarks, or registered trademarks are the property of their respective owners.
iS-AR-82-0810
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Table of Contents
2010 ANNUAL REPORT TO SHAREHOLDERS
iSHARES® MSCI SERIES
AUGUST 31, 2010
» Would you prefer to receive materials like this electronically?
See inside back cover for details.
iShares MSCI Brazil Index Fund | EWZ | NYSE Arca
iShares MSCI BRIC Index Fund | BKF | NYSE Arca
iShares MSCI Canada Index Fund | EWC | NYSE Arca
iShares MSCI Chile Investable Market Index Fund | ECH | NYSE Arca
iShares MSCI Israel Capped Investable Market Index Fund | EIS | NYSE Arca
iShares MSCI Mexico Investable Market Index Fund | EWW | NYSE Arca
iShares MSCI South Africa Index Fund | EZA | NYSE Arca
iShares MSCI Turkey Investable Market Index Fund | TUR | NYSE Arca
iShares MSCI USA Index Fund | EUSA | NYSE Arca
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Board Review and Approval of Investment Advisory Contract (Unaudited) | 95 | |||
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112 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI BRAZIL INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
21.12% | 20.64% | 21.16% | 22.92% | 22.83% | 23.97% | 16.41% | 16.10% | 18.35% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
21.12% | 20.64% | 21.16% | 180.63% | 179.59% | 192.86% | 356.82% | 344.96% | 439.21% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 1 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI BRAZIL INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector* | Percentage of Net Assets | |||
Basic Materials | 25.16 | % | ||
Financial | 24.91 | |||
Energy | 19.68 | |||
Consumer Non-Cyclical | 11.16 | |||
Utilities | 5.61 | |||
Diversified | 4.30 | |||
Communications | 3.32 | |||
Consumer Cyclical | 2.54 | |||
Industrial | 2.28 | |||
Short-Term and Other Net Assets | 1.04 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Vale SA Class A Preferred | 9.29 | % | ||
Itau Unibanco Holding | ||||
SA Preferred | 9.21 | |||
Petroleo Brasileiro SA Preferred | 9.11 | |||
Petroleo Brasileiro SA | 7.53 | |||
Vale SA SP ADR | 6.78 | |||
Banco Bradesco SA Preferred | 4.79 | |||
Itausa – Investimentos Itau | ||||
SA Preferred | 3.32 | |||
Companhia de Bebidas das | ||||
Americas Preferred | 3.23 | |||
OGX Petroleo e Gas | ||||
Participacoes SA | 3.04 | |||
BM&F Bovespa SA | 2.81 | |||
TOTAL | 59.11 | % | ||
* | Sector classifications used to describe the Fund’s portfolio may differ from sector classifications used to describe the Fund’s corresponding index elsewhere in this report. |
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 Brazilian market, as measured by the MSCI Brazil IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 21.12%, while the total return for the Index was 21.16%.
As represented by the Index, the Brazilian stock market advanced for the reporting period. Much of the Index’s advance occurred early in the reporting period as investors grew increasingly confident about a robust global economic recovery after the sharp downturn in late 2008 and early 2009. Many developed countries around the world returned to positive GDP growth in the latter half of 2009 after several quarters of economic contraction. As a result, rising global demand for energy and other commodities – which comprise two-thirds of Brazil’s exports – provided a lift to South America’s largest economy. For the 12 months ended June 30, 2010, Brazil’s GDP grew by 8.8%, surpassing expectations. Despite the strong GDP growth rate, inflation in Brazil rose by 4.5% for the reporting period, low by historical standards and in line with the Brazilian central bank’s inflation target. To help keep inflation in check, the central bank embarked on a series of interest rate hikes in mid-2010, raising short-term rates from a record low of 8.75% to 10.75% between April and July.
Healthy economic growth provided a strong boost to Brazil’s stock market; the Index rallied by more than 40% during the first three months of the reporting period. However, after peaking in late 2009, the Index gave back some ground over the remaining months of the reporting period. A sovereign debt crisis in Greece spread to other European countries facing sizable budget shortfalls, and with memories of the 2008 credit crisis still fresh, these fiscal problems led to a significant flight to quality as investors fled riskier markets. In addition, evidence of a slowdown in the pace of economic recovery in many developed countries led to concerns that Brazilian exports would weaken.
Financial and basic materials companies comprised just over half of the Fund and were the sectors that contributed the most to performance while consumer stocks contributed more modestly to Fund returns. Energy holdings were the weakest component of the Fund.
2 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI BRAZIL INDEX FUND
Eight of the Fund’s ten largest holdings as of August 31, 2010 advanced for the reporting period. The top contributor was energy exploration and production company OGX Petroleo e Gas Participacoes SA, returning triple-digits. Beverage maker Companhia de Bebidas das Americas Preferred (known more commonly as AmBev) and investment holding company Itausa – Investimentos Itau SA Preferred were also strong performers. The only two stocks among the top ten holdings to decline for the reporting period were the common and preferred shares of energy producer Petroleo Brasileiro SA.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 3 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI BRIC INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 8/31/10 | Inception to 8/31/10 | Inception to 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
15.95% | 17.13% | 16.73% | (8.07)% | (7.93)% | (8.30)% | (21.04)% | (20.69)% | (21.55)% |
Total returns for the period since inception are calculated from the inception date of the Fund (11/12/07). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (11/16/07), the NAV of the Fund is used as a proxy for the Market Price to calculated market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
4 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI BRIC INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Financial | 29.38 | % | ||
Energy | 23.65 | |||
Basic Materials | 12.20 | |||
Communications | 8.75 | |||
Consumer Non-Cyclical | 7.85 | |||
Technology | 5.12 | |||
Industrial | 3.92 | |||
Consumer Cyclical | 3.26 | |||
Diversified | 3.01 | |||
Utilities | 2.37 | |||
Short-Term and Other Net Assets | 0.49 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
China Mobile Ltd. (China) | 4.03 | % | ||
OAO Gazprom SP ADR (Russia) | 3.54 | |||
Vale SA Class A Preferred (Brazil) | 3.30 | |||
Petroleo Brasileiro SA | ||||
Preferred (Brazil) | 3.18 | |||
Infosys Technologies Ltd. SP | ||||
ADR (India) | 3.02 | |||
Itau Unibanco Holding SA | ||||
Preferred (Brazil) | 3.01 | |||
Reliance Industries Ltd. SP | ||||
GDR (India) | 2.89 | |||
HDFC Bank Ltd. SP ADR (India) | 2.72 | |||
Petroleo Brasileiro SA (Brazil) | 2.59 | |||
Vale SA (Brazil) | 2.36 | |||
TOTAL | 30.64 | % | ||
The iShares MSCI BRIC 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 BRIC IndexSM (the “Index”). The Index is a free float-adjusted market capitalization index that is designed to measure the combined equity market performance in Brazil, Russia, India and China (“BRIC”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 15.95%, while the total return for the Index was 16.73%.
As represented by the Index, the stock markets in the BRIC countries (Brazil, Russia, India, and China) posted double-digit gains, as a group, for the reporting period. Much of the Index’s advance occurred during the first half of the period as investors grew increasingly confident about a robust global economic recovery after the sharp downturn in late 2008 and early 2009. As many developed countries around the world returned to positive GDP growth in the latter half of 2009, rising global demand for exports provided a lift to many emerging economies, including the four countries represented in the Index. In particular, Brazil and Russia benefited from growing demand for energy and commodities, which helped their economies grow by 8.8% and 5.2%, respectively, for the 12 months ended June 30, 2010. Strength in agricultural and industrial exports helped India’s GDP grow by 8.8% for the same 12-month period. Although China’s GDP expanded by 10.3% over the same period – fastest among the four BRIC countries – this represented a slowdown in year-over-year growth from the prior two quarters.
Thanks to the improving economic environment, the Index rallied by more than 30% in the first seven months of the reporting period. However, after peaking in early April 2010, the Index gave back some ground over the last several months of the period as market conditions grew increasingly volatile. A sovereign debt crisis in Greece spread to other European countries facing sizable budget shortfalls, and with memories of the 2008 credit crisis still fresh, these fiscal problems led to a significant flight to quality as investors fled riskier markets. In addition, evidence of a slowdown in the pace of economic recovery in many developed countries led to concerns that exports in BRIC countries and other emerging markets would weaken.
Three of the four markets represented in the Index – Brazil, Russia, and India – generated returns of just over 20% for the reporting period, based on MSCI country indexes. In contrast, China (the largest country weighting in the Index) returned 9% for the reporting period, reflecting evidence of a slowdown in economic activity. In addition, China’s economy remained resilient through the severe global
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI BRIC INDEX FUND
economic downturn in late 2008 and early 2009, and its stock market also held up well during that time. As a result, the Chinese market did not experience as sharp of a rebound as the other three markets did when global economic activity began to recover.
Seven of the Fund’s ten largest holdings as of August 31, 2010 advanced for the reporting period. The best performers were Brazilian firms Vale SA, a metals and mining company, and Itau Unibanco Holding SA, as well as Indian firms Infosys Technologies Ltd., a technology services firm, and commercial bank HDFC Bank Ltd. The only stocks among the top ten holdings to decline for the reporting period were energy companies – Indian energy conglomerate Reliance Industries Ltd. and Brazilian energy producer Petroleo Brasileiro SA.
6 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI CANADA INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
11.91% | 11.39% | 12.20% | 6.72% | 6.56% | 6.97% | 5.82% | 5.80% | 5.37% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
11.91% | 11.39% | 12.20% | 38.45% | 37.42% | 40.08% | 76.13% | 75.72% | 68.78% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI CANADA INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector* | Percentage of Net Assets | |||
Financial | 30.93 | % | ||
Energy | 24.58 | |||
Basic Materials | 23.07 | |||
Industrial | 5.68 | |||
Communications | 4.97 | |||
Consumer Cyclical | 3.00 | |||
Technology | 2.56 | |||
Consumer Non-Cyclical | 2.27 | |||
Diversified | 1.67 | |||
Utilities | 1.22 | |||
Short-Term and Other Net Assets | 0.05 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Royal Bank of Canada | 6.40 | % | ||
Toronto-Dominion Bank (The) | 5.54 | |||
Bank of Nova Scotia | 4.64 | |||
Suncor Energy Inc. | 4.45 | |||
Barrick Gold Corp. | 4.35 | |||
Potash Corp. of Saskatchewan Inc. | 4.11 | |||
Canadian Natural Resources Ltd. | 3.30 | |||
Goldcorp Inc. | 3.07 | |||
Bank of Montreal | 2.91 | |||
Canadian National Railway Co. | 2.70 | |||
TOTAL | 41.47 | % | ||
* | Sector classifications used to describe the Fund’s portfolio may differ from sector classifications used to describe the Fund’s corresponding index elsewhere in this report. |
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 Canadian market, as measured by the MSCI Canada IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 11.91%, while the total return for the Index was 12.20%.
As represented by the Index, the Canadian stock market posted a double-digit gain for the reporting period. Much of the Index’s advance occurred during the first half of the period as investors grew increasingly confident about a robust global economic recovery after the sharp downturn in late 2008 and early 2009. As many developed countries around the world returned to positive GDP growth in the latter half of 2009, rising global demand for energy and other commodities – Canada is one of the few developed nations that is a net exporter of energy – provided a lift to the Canadian economy. For the 12-months ended June 30, 2010, Canadian GDP grew by 3.9%, while inflation remained at a modest 1% over the same period. Despite the benign inflationary environment, the Bank of Canada (the country’s central bank) raised short-term interest rates twice late in the period, its first rate hikes in three years.
Improving economic activity provided a boost to Canada’s stock market – the Index rallied by more than 20% during the first eight months of the reporting period. However, after peaking in April 2010, the Index gave back some ground over the last few months of the period as market conditions grew increasingly volatile. A sovereign debt crisis in Greece spread to other European countries facing sizable budget shortfalls, and with memories of the 2008 credit crisis still fresh, these fiscal problems led to a significant flight to quality. In addition, evidence of a slowdown in the pace of economic recovery in many developed countries – particularly in the U.S., by far Canada’s largest trading partner – led to concerns that Canadian exports would weaken.
8 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI CANADA INDEX FUND
Basic materials companies provided the strongest contribution to performance. Financial and energy stocks, which were the largest sectors of the Fund, contributed more modestly to returns. Technology holdings did not fare as well, as the sector was the only one to detract from performance.
Nine of the Fund’s ten largest holdings as of August 31, 2010 advanced for the reporting period. By far, the top contributor was fertilizer producer Potash Corp. of Saskatchewan Inc. Other strong performers included gold producer Barrick Gold Corp. and railroad operator Canadian National Railway Co. The only decliner among the top ten holdings was Royal Bank of Canada.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI CHILE INVESTABLE MARKET INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 8/31/10 | Inception to 8/31/10 | Inception to 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
52.88% | 54.09% | 54.65% | 13.66% | 13.80% | 14.06% | 43.22% | 43.73% | 44.54% |
Total returns for the period since inception are calculated from the inception date of the Fund (11/12/07). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and 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 primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (11/16/07), the NAV of the Fund is used as a proxy for the Market Price to calculated market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
10 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI CHILE INVESTABLE MARKET INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector* | Percentage of Net Assets | |||
Utilities | 24.76 | % | ||
Basic Materials | 18.70 | |||
Consumer Non-Cyclical | 12.87 | |||
Consumer Cyclical | 12.86 | |||
Diversified | 12.77 | |||
Financial | 10.92 | |||
Industrial | 3.65 | |||
Communications | 2.70 | |||
Technology | 0.79 | |||
Short-Term and Other Net Assets | (0.02 | ) | ||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Empresas Copec SA | 12.77 | % | ||
Enersis SA | 9.26 | |||
Empresa Nacional de | 8.97 | |||
Cencosud SA | 8.80 | |||
Empresas CMPC SA | 8.24 | |||
Banco Santander (Chile) SA | 4.98 | |||
LAN Airlines SA | 4.92 | |||
CAP SA | 4.90 | |||
Sociedad Quimica y Minera de Chile SA Series B | 4.86 | |||
S.A.C.I. Falabella SA | 4.12 | |||
TOTAL | 71.82 | % | ||
* | Sector classifications used to describe the Fund’s portfolio may differ from sector classifications used to describe the Fund’s corresponding index elsewhere in this report. |
The iShares MSCI Chile Investable Market 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 Chile Investable Market IndexSM (the “Index”). The Index is a free float-adjusted market capitalization index that is designed to measure broad based equity market performance in Chile. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 52.88%, while the total return for the Index was 54.65%.
As represented by the Index, the Chilean stock market posted strong gains for the reporting period. Chile’s equity market rallied steadily throughout the period as the country’s GDP grew at its fastest pace in five years. For the 12 months ended June 30, 2010, Chile’s GDP grew by 6.5%, after contracting by 4.5% during the prior 12-month period. The recovery in the Chilean economy was driven by robust demand for commodities and other exports as many developed countries around the world returned to positive GDP growth in the latter half of 2009 after several quarters of economic contraction. In particular, Chile is the world’s largest exporter of copper, and rising demand for the metal helped boost economic activity. State ownership of copper production and a government mandate to run a fiscal surplus enabled Chile to establish and support a sovereign wealth fund that is used to support the economy in lean times.
In late February, the Chilean economic recovery was disrupted by a massive earthquake that caused $30 billion in damage to the central-southern coastal area of the country. However, the reconstruction effort in the wake of the earthquake, led by the construction and transportation industries, was a key factor in getting the recovery back on track. Chile’s renewed recovery, which was in contrast to evidence of a broad slowdown in many developed economies, sparked concerns about rising inflation. The Chilean inflation rate was 2.6% as of August 2010, below the Chilean central bank’s 3% target rate, but higher than the 2% inflation rate for calendar year 2009. To head off this trend, Chile’s central bank raised short-term interest rates three times in the last three months of the reporting period, from 0.5% to 2.0%, removing some of its accommodative monetary policy at a measured pace.
All sectors within the Fund increased more than 20% for the reporting period with industrial, basic materials, financial and consumer stocks contributing the most.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI CHILE INVESTABLE MARKET INDEX FUND
Each of the Fund’s ten largest holdings as of August 31, 2010 posted double-digit gains for the reporting period, with the top three performers returned triple-digit gains. Reflecting the robust returns of consumer stocks, the best contributor was diversified retailer Cencosud SA, followed by airline operator LAN Airlines SA and retailer S.A.C.I. Falabella SA. Banco Santander Chile SA, iron and steel firm CAP SA and forest products and paper company Empresas CMPC SA also had strong returns. Electric power producer Empresa Nacional de Electricidad SA and specialty minerals and chemicals producer Sociedad Quimica y Minera de Chile SA were the only stocks of the top ten holdings to return less than 30% for the reporting period.
12 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 8/31/10 | Inception to 8/31/10 | Inception to 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
8.57% | 8.47% | 9.62% | 1.71% | 1.71% | 2.70% | 4.21% | 4.21% | 6.69% |
Total returns for the period since inception are calculated from the inception date of the Fund (3/26/08). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/28/08), the NAV of the Fund is used as a proxy for the Market Price to calculated market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector* | Percentage of Net Assets | |||
Financial | 29.30 | % | ||
Consumer Non-Cyclical | 27.79 | |||
Communications | 15.26 | |||
Basic Materials | 11.83 | |||
Industrial | 5.23 | |||
Energy | 3.93 | |||
Diversified | 3.69 | |||
Technology | 2.05 | |||
Consumer Cyclical | 0.81 | |||
Short-Term and Other Net Assets | 0.11 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Teva Pharmaceutical | 23.10 | % | ||
Israel Chemicals Ltd. | 9.21 | |||
Bank Leumi le-Israel | 7.92 | |||
Bank Hapoalim Ltd. | 5.88 | |||
Bezeq The Israel Telecommunication Corp. Ltd. | 4.80 | |||
NICE Systems Ltd. | 3.15 | |||
Partner Communications Co. Ltd. | 2.90 | |||
Israel Corp. Ltd. (The) | 2.78 | |||
Cellcom Israel Ltd. | 2.31 | |||
Elbit Systems Ltd. | 2.28 | |||
TOTAL | 64.33 | % | ||
* | Sector classifications used to describe the Fund’s portfolio may differ from sector classifications used to describe the Fund’s corresponding index elsewhere in this report. |
The iShares MSCI Israel Capped Investable Market 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 Israel Capped Investable Market IndexSM (the “Index”). The Index is a custom, free float-adjusted market capitalization index designed to measure broad based equity market performance in Israel. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 8.57%, while the total return for the Index was 9.62%.
As represented by the Index, the Israel stock market gained ground for the reporting period. Much of the Index’s advance occurred during the first half of the period as investors grew increasingly confident about a robust global economic recovery after the sharp downturn in late 2008 and early 2009. Many developed countries – led by the U.S., Israel’s largest trading partner – returned to positive GDP growth in the latter half of 2009 after several quarters of economic contraction. As a result, rising global demand for exports – which comprise almost half of Israel’s GDP – provided a lift to the country’s economy. For the 12 months ended June 30, 2010, Israel’s GDP grew by 4.8%, compared with a growth rate of just 0.1% for the prior 12-month period. Better economic conditions led Israel’s central bank to raise short-term interest rates from 0.5% to 1.75% during the reporting period.
The improving global economic environment provided a boost to Israel’s stock market – the Index rallied by more than 25% during the first seven months of the reporting period. However, after peaking in April 2010, the Index retraced most of its gains over the last few months of the period as market conditions grew increasingly volatile. A sovereign debt crisis in Greece spread to other European countries facing sizable budget shortfalls, and with memories of the 2008 credit crisis still fresh, these fiscal problems led to a significant flight to quality. In addition, evidence of a slowdown in the pace of economic recovery in many developed countries, particularly in the U.S., led to concerns that Israel’s exports would weaken.
14 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND
All sectors of the Fund had positive performance for the reporting period where financials and basic materials contributed the most.
Six of the Fund’s ten largest holdings as of August 31, 2010 advanced for the reporting period. The top performer was energy and chemicals conglomerate, The Israel Corp. Ltd., which posted double-digit gain for the reporting period. Two commercial banks, Bank Hapoalim Ltd. and Bank Leumi le-Israel, were also among the better performers. The most significant decliner among the Fund’s top ten holdings was aerospace and defense company Elbit Systems Ltd., which recorded a double-digit decline for the reporting period.
MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE | 15 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI MEXICO INVESTABLE MARKET INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
14.83% | 14.96% | 14.16% | 12.52% | 12.33% | 11.86% | 13.00% | 13.00% | 13.22% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
14.83% | 14.96% | 14.16% | 80.40% | 78.84% | 75.17% | 239.51% | 239.32% | 246.27% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
16 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI MEXICO INVESTABLE MARKET INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector* | Percentage of Net Assets | |||
Communications | 34.41 | % | ||
Consumer Cyclical | 15.93 | |||
Basic Materials | 13.79 | |||
Consumer Non-Cyclical | 13.57 | |||
Industrial | 9.06 | |||
Financial | 8.37 | |||
Diversified | 4.78 | |||
Short-Term and Other Net Assets | 0.09 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
America Movil SAB de CV Series L | 24.25 | % | ||
Wal-Mart de Mexico SAB de CV | 10.29 | |||
Grupo Mexico SAB de CV Series B | 6.33 | |||
Fomento Economico Mexicano SAB de | 6.18 | |||
Grupo Televisa SA CPO | 4.76 | |||
Cemex SAB de CV CPO | 4.76 | |||
Grupo Financiero Banorte SAB de CV | 3.70 | |||
Telefonos de Mexico SAB de CV | 3.50 | |||
Kimberly-Clark de Mexico SAB de CV | 3.20 | |||
Grupo Modelo SAB de CV Series C | 3.15 | |||
TOTAL | 70.12 | % | ||
* | Sector classifications used to describe the Fund’s portfolio may differ from sector classifications used to describe the Fund’s corresponding index elsewhere in this report. |
The iShares MSCI Mexico Investable Market 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 Mexican market, as measured by the MSCI Mexico Investable Market IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 14.83%, while the total return for the Index was 14.16%.
As represented by the Index, the Mexican stock market posted a double-digit gain for the reporting period. Much of the Index’s advance occurred during the first half of the period as investors grew increasingly confident about a robust global economic recovery after the sharp downturn in late 2008 and early 2009. In particular, the United States – Mexico’s largest trading partner, where more than 80% of the country’s exports are distributed – was one of the first developed nations to return to positive GDP growth in the latter half of 2009 after several quarters of economic contraction. Furthermore, rising global demand for oil, Mexico’s largest export, provided an additional lift to the country’s economy. For the 12 months ended June 30, 2010, Mexican GDP grew by 7.6%, compared with a 10.3% contraction for the previous 12-month period. Domestic demand, however, remained tepid amid sluggish consumer spending and weak tourism.
The improving global economic environment provided a boost to Mexico’s stock market – the Index rallied by more than 30% during the first seven months of the reporting period. However, after peaking in mid-April 2010, the Index gave back some ground over the last few months of the period as market conditions grew increasingly volatile. A sovereign debt crisis in Greece spread to other European countries facing sizable budget shortfalls, and with memories of the 2008 credit crisis still fresh, these fiscal problems led to a significant flight to quality as investors fled riskier markets. In addition, evidence of a slowdown in the pace of economic recovery in many developed countries – especially in the U.S. – led to concerns that Mexican exports would weaken.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 17 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI MEXICO INVESTABLE MARKET INDEX FUND
Every sector within the Fund advanced for the reporting period. By far, the best performing sector was consumer holdings followed by communications.
Eight of the Fund’s ten largest holdings as of August 31, 2010 gained ground for the reporting period. The best performer was metals and mining company Grupo Mexico SAB de CV, which recorded strong double-digit gains for the reporting period. Other top contributors included brewery Grupo Modelo SAB de CV and paper products maker Kimberly-Clark de Mexico SAB de CV. The only two stocks among the Fund’s top ten holdings to decline for the reporting period were cement producer Cemex SAB de CV and telecom services provider Telefonos de Mexico SAB de CV. Wireless telecom services firm America Movil SAB de CV, the Fund’s largest holding as of August 31, 2010, posted a modest gain for the reporting period.
18 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SOUTH AFRICA INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Inception to 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
15.80% | 14.66% | 16.53% | 10.69% | 10.13% | 11.87% | 18.89% | 18.80% | 20.22% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Inception to 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
15.80% | 14.66% | 16.53% | 66.16% | 62.02% | 75.22% | 270.90% | 268.71% | 303.37% |
Total returns for the period since inception are calculated from the inception date of the Fund (2/3/03). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (2/7/03), the NAV of the Fund is used as a proxy for the Market Price to calculated market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 19 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SOUTH AFRICA INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector* | Percentage of Net Assets | |||
Basic Materials | 25.52 | % | ||
Financial | 23.69 | |||
Communications | 19.96 | |||
Energy | 9.31 | |||
Consumer Cyclical | 6.50 | |||
Consumer Non-Cyclical | 5.89 | |||
Diversified | 5.82 | |||
Industrial | 3.09 | |||
Short-Term and Other Net Assets | 0.22 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
MTN Group Ltd. | 11.51 | % | ||
Sasol Ltd. | 9.31 | |||
Standard Bank Group Ltd. | 7.15 | |||
Naspers Ltd. Class N | 6.62 | |||
AngloGold Ashanti Ltd. | 6.61 | |||
Impala Platinum Holdings Ltd. | 5.07 | |||
Gold Fields Ltd. | 4.31 | |||
FirstRand Ltd. | 3.15 | |||
Sanlam Ltd. | 2.54 | |||
Remgro Ltd. | 2.49 | |||
TOTAL | 58.76 | % | ||
* | Sector classifications used to describe the Fund’s portfolio may differ from sector classifications used to describe the Fund’s corresponding index elsewhere in this report. |
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 South African market, as measured by the MSCI South Africa IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 15.80%, while the total return for the Index was 16.53%.
As represented by the Index, the South African stock market posted a double-digit gain for the reporting period. Much of the Index’s advance occurred during the first half of the period as investors grew increasingly confident about a robust global economic recovery after the sharp downturn in late 2008 and early 2009. Many developed countries around the world returned to positive GDP growth in the latter half of 2009 after several quarters of economic contraction. As a result, rising global demand for commodities – a major component of South Africa’s exports – provided a lift to the country’s economy. For the 12 months ended June 30, 2010, South Africa’s GDP grew by 3.0%, compared with a contraction of 2.7% for the prior 12-month period (the country’s first recession since 1992). Despite the improvement in South Africa’s GDP growth rate, inflation decelerated – South Africa’s inflation rate for the 12 months ended June 30, 2010, was 4.2%, down from 6.9% for the previous 12 months.
Healthy economic growth provided a strong boost to South Africa’s stock market – the Index rallied by more than 20% during the first seven months of the reporting period. However, after peaking in April 2010, the Index gave back some ground over the last few months of the period as market conditions grew increasingly volatile. A sovereign debt crisis in Greece spread to other European countries facing sizable budget shortfalls, and with memories of the 2008 credit crisis still fresh, these fiscal problems led to a significant flight to quality as investors fled riskier markets. In addition, evidence of a slowdown in the pace of economic recovery in many developed countries led to concerns that South African exports would weaken. In response, the South African central bank lowered interest rates from 7% to 6.5% to help stimulate additional economic activity.
20 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SOUTH AFRICA INDEX FUND
All sectors within the Fund returned positive performance for the reporting period, led by financial, consumer and basic materials.
Each of the Fund’s ten largest holdings as of August 31, 2010 advanced for the reporting period. The best performers were financial services firms FirstRand Ltd., which posted double-digit gains for the reporting period, and Sanlam Ltd. Other top contributors included electronic media company Naspers Ltd. and industrial conglomerate Remgro Ltd. Laggards among the Fund’s top ten holdings included wireless telecommunications company MTN Group Ltd. along with energy producer Sasol Ltd. and metals and mining company Impala Platinum Holdings Ltd.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 21 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI TURKEY INVESTABLE MARKET INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 8/31/10 | Inception to 8/31/10 | Inception to 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
29.55% | 28.05% | 29.99% | 10.49% | 10.28% | 10.79% | 27.51% | 26.92% | 28.27% |
Total returns for the period since inception are calculated from the inception date of the Fund (3/26/08). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/28/08), the NAV of the Fund is used as a proxy for the Market Price to calculated market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
22 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI TURKEY INVESTABLE MARKET INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector* | Percentage of Net Assets | |||
Financial | 48.10 | % | ||
Communications | 11.03 | |||
Consumer Non-Cyclical | 10.56 | |||
Diversified | 9.76 | |||
Consumer Cyclical | 6.16 | |||
Industrial | 5.02 | |||
Basic Materials | 4.56 | |||
Energy | 4.10 | |||
Utilities | 0.63 | |||
Short-Term and Other Net Assets | 0.08 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Turkiye Garanti Bankasi AS | 14.87 | % | ||
Akbank TAS | 9.30 | |||
Turkiye Is Bankasi AS | 8.44 | |||
Turkcell Iletisim Hizmetleri AS | 7.11 | |||
Turkiye Petrol Rafinerileri AS | 4.10 | |||
Haci Omer Sabanci Holding AS | 4.05 | |||
Anadolu Efes Biracilik ve Malt Sanayii AS | 3.97 | |||
Yapi ve Kredi Bankasi AS | 3.79 | |||
Turkiye Halk Bankasi AS | 3.71 | |||
KOC Holding AS | 3.44 | |||
TOTAL | 62.78 | % | ||
* | Sector classifications used to describe the Fund’s portfolio may differ from sector classifications used to describe the Fund’s corresponding index elsewhere in this report. |
The iShares MSCI Turkey Investable Market 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 Turkey Investable Market IndexSM (the “Index”). The Index is a free float-adjusted market capitalization index designed to measure broad based equity market performance in Turkey. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 29.55%, while the total return for the Index was 29.99%.
As represented by the Index, the Turkish stock market advanced for the reporting period. Much of the Index’s advance occurred during the first half of the period as investors grew increasingly confident about a robust global economic recovery after the sharp downturn in late 2008 and early 2009. Many developed countries around the world returned to positive GDP growth in the latter half of 2009 after several quarters of economic contraction. In particular, evidence of a recovery in Europe – where half of Turkey’s exports are distributed – provided a lift to the country’s economy. Furthermore, the Turkish central bank slashed interest rates from 16.75% in late 2008 to 6.50% by the beginning of 2010 to help stimulate domestic economic activity. As a result, Turkey’s GDP grew by 10.3% for the 12 months ended June 30, 2010, a dramatic improvement over a contraction of 7% for the prior 12-month period.
The improving economic environment provided a strong boost to Turkey’s stock market – the Index rallied by as much as 35% during the first eight months of the reporting period. However, after peaking in April 2010, the Index gave back some ground over the last few months of the period as market conditions grew increasingly volatile. A sovereign debt crisis in Greece spread to other European countries facing sizable budget shortfalls, and with memories of the 2008 credit crisis still fresh, these fiscal problems led to a significant flight to quality as investors fled riskier markets. In addition, evidence of a slowdown in the pace of economic recovery in many developed countries led to concerns that Turkish exports would weaken.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 23 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI TURKEY INVESTABLE MARKET INDEX FUND
Each sector within the Fund advanced for the reporting period, led by financial stocks, which represented almost 48% of the Fund and made the most substantial contribution to performance.
Each of the Fund’s ten largest holdings advanced for the reporting period. The top performers included oil producer Turkiye Petrol Rafinerileri AS, along with commercial bank Turkiye Halk Bankasi AS and industrial conglomerate KOC Holding AS. Each of these stocks posted double-digit gain for the reporting period. Wireless telecommunication services provider Turkcell Iletisim Hizmitleri AS was the only stock among the Fund’s top ten holdings to post a single-digit gain.
24 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI USA INDEX FUND
Performance as of August 31, 2010
Cumulative Total Returns | ||||
Inception to 8/31/10 | ||||
NAV | MARKET | INDEX | ||
(9.37)% | (9.41)% | (9.36)% |
“Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated and is calculated from an inception date of 5/5/10.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (5/7/10), the NAV of the Fund is used as a proxy for the Market Price to calculated market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
As of the fiscal year ended 8/31/10, the Fund did not have six months of performance and therefore line graphs are not presented.
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector* | Percentage of Net Assets | |||
Consumer Non-cyclical | 22.88 | % | ||
Financial | 15.11 | |||
Technology | 12.46 | |||
Communications | 11.60 | |||
Energy | 11.25 | |||
Industrial | 10.75 | |||
Consumer Cyclical | 8.40 | |||
Utilities | 3.69 | |||
Basic Materials | 3.48 | |||
Diversified | 0.04 | |||
Short-term And Other Net Assets | 0.34 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Exxon Mobil Corp. | 3.03 | % | ||
Apple Inc. | 2.21 | |||
Microsoft Corp. | 1.87 | |||
Procter & Gamble Co. (The) | 1.74 | |||
AT&T Inc. | 1.61 | |||
International Business | 1.59 | |||
Johnson & Johnson | 1.59 | |||
General Electric Co. | 1.56 | |||
Chevron Corp. | 1.50 | |||
JPMorgan Chase & Co. | 1.46 | |||
TOTAL | 18.16 | % | ||
* | Sector classifications used to describe the Fund’s portfolio may differ from sector classifications used to describe the Fund’s corresponding index elsewhere in this report. |
The iShares MSCI USA 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 USA IndexSM (the “Index”). The Index is a market capitalization weighted index designed to measure the performance of equity securities in the top 85% by market capitalization of equity securities listed on stock exchanges in the United States. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from May 5, 2010 (inception date of the Fund) through August 31, 2010 (the “reporting period”), the total return for the Fund was (9.37)%, while the total return for the Index was (9.36)%.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 25 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI USA INDEX FUND
As represented by the Index, the U.S. stock market declined for the reporting period in an increasingly volatile market environment. One contributing factor was a sovereign debt crisis in Greece, which spread to other European countries facing sizable budget shortfalls. With memories of the 2008 credit crisis still fresh, these fiscal problems led to a significant flight to quality as investors fled stocks for the relative safety of bonds. Although the European Central Bank provided liquidity to Greece and other fiscally challenged countries, investors remained concerned about the risk of default, as well as the potential impact that could have on the European financial sector.
In addition, evidence of a slowdown in the pace of economic recovery put downward pressure on the U.S. equity market. Persistently high unemployment, sluggish retail sales, and fresh deterioration in the housing market all contributed to concerns about the sustainability of the U.S. economic expansion. These concerns, in turn, sparked renewed speculation about additional fiscal stimulus from Congress or the Federal Reserve. As a result, the Index generally declined throughout the reporting period, though it enjoyed a modest rebound in July before resuming its downward trajectory in August.
Communications and utilities were the only two sectors that contributed positively to Fund performance for the reporting period while financial and technology holdings were hardest hit.
Nine of the Fund’s ten largest holdings as of August 31, 2010 declined for the reporting period. The biggest decliners included software maker Microsoft Corp. and industrial conglomerate General Electric Co., both of which recorded a double-digit decline for the reporting period. Investment bank JPMorgan Chase & Co. and healthcare company Johnson & Johnson also posted double-digit declines overall. Energy producer Exxon Mobil Corp., the Fund’s largest holding as of August 31, 2010 was another notable decliner. The lone stock among the top ten holdings to advance for the reporting period was diversified telecommunication services company AT&T Inc.
26 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Shareholder Expenses (Unaudited)
iSHARES® , INC.
As a shareholder of a 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, 2010 to August 31, 2010.
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 Valuea (3/1/10) | Ending Account Valuea (8/31/10) | Annualized Expense Ratio | Expenses Paid During Periodb (3/1/10 to 8/31/10) | ||||||||||||
Brazil | ||||||||||||||||
Actual | $1,000.00 | $996.50 | 0.61 | % | $3.07 | |||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.10 | 0.61 | 3.11 | ||||||||||||
BRIC | ||||||||||||||||
Actual | 1,000.00 | 1,010.30 | 0.69 | 3.50 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,021.70 | 0.69 | 3.52 | ||||||||||||
Canada | ||||||||||||||||
Actual | 1,000.00 | 1,017.00 | 0.53 | 2.69 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.50 | 0.53 | 2.70 | ||||||||||||
Chile Investable Market | ||||||||||||||||
Actual | 1,000.00 | 1,206.70 | 0.61 | 3.39 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.10 | 0.61 | 3.11 |
SHAREHOLDER EXPENSES | 27 |
Table of Contents
Shareholder Expenses (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Index Fund | Beginning Account Valuea | Ending Account Valuea | Annualized Expense Ratio | Expenses Paid During Periodb (3/1/10 to 8/31/10) | ||||||||||||
Israel Capped Investable Market | ||||||||||||||||
Actual | $1,000.00 | $916.10 | 0.61 | % | $2.95 | |||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.10 | 0.61 | 3.11 | ||||||||||||
Mexico Investable Market | ||||||||||||||||
Actual | 1,000.00 | 992.30 | 0.53 | 2.66 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.50 | 0.53 | 2.70 | ||||||||||||
South Africa | ||||||||||||||||
Actual | 1,000.00 | 1,092.90 | 0.61 | 3.22 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.10 | 0.61 | 3.11 | ||||||||||||
Turkey Investable Market | ||||||||||||||||
Actual | 1,000.00 | 1,242.70 | 0.61 | 3.45 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,022.10 | 0.61 | 3.11 | ||||||||||||
USA | ||||||||||||||||
Actual | 1,000.00 | 906.30 | 0.15 | 0.46 | ||||||||||||
Hypothetical (5% return | 1,000.00 | 1,024.40 | 0.15 | 0.77 |
a | Account values are based on a start date of May 5, 2010 (commencement of operations) for the iShares MSCI USA Index Fund. |
b | Except for the actual expenses of the iShares MSCI USA Index Fund, actual and hypothetical 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). Actual expenses for the iShares MSCI USA Index Fund, which commenced operations on May 5, 2010, are calculated using the Fund’s annualized expenses ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (118 days) and divided by the number of days in the year (365 days). |
28 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI BRAZIL INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 44.72% |
| |||||||
AEROSPACE & DEFENSE – 0.60% |
| |||||||
Empresa Brasileira de | 8,959,532 | $ | 55,104,183 | |||||
55,104,183 | ||||||||
AGRICULTURE – 0.81% | ||||||||
Souza Cruz SA | 1,629,000 | 75,095,416 | ||||||
75,095,416 | ||||||||
BANKS – 3.43% | ||||||||
Banco do Brasil SA | 10,588,597 | 171,733,054 | ||||||
Banco Santander (Brasil) SA | 11,403,041 | 144,810,828 | ||||||
316,543,882 | ||||||||
BUILDING MATERIALS – 0.42% |
| |||||||
Duratex SA | 3,801,000 | 38,529,499 | ||||||
38,529,499 | ||||||||
COMMERCIAL SERVICES – 2.19% |
| |||||||
Cielo SA | 11,131,500 | 95,086,845 | ||||||
Companhia de | 3,529,500 | 81,001,623 | ||||||
Localiza Rent A Car SA | 1,900,500 | 26,516,088 | ||||||
202,604,556 | ||||||||
COSMETICS & PERSONAL CARE – 0.85% |
| |||||||
Natura Cosmeticos SA | 3,258,000 | 78,481,435 | ||||||
78,481,435 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 3.69% |
| |||||||
BM&F Bovespa SA | 35,566,500 | 259,254,670 | ||||||
Redecard SA | 5,973,000 | 81,635,535 | ||||||
340,890,205 | ||||||||
ELECTRIC – 1.57% | ||||||||
Centrais Eletricas | 4,072,599 | 49,562,324 | ||||||
CPFL Energia SA | 1,900,550 | 43,887,986 | ||||||
EDP Energias do Brasil SA | 1,086,000 | 23,185,729 | ||||||
Tractebel Energia SA | 2,172,000 | 28,733,235 | ||||||
145,369,274 | ||||||||
ENGINEERING & CONSTRUCTION – 0.22% |
| |||||||
Multiplan Empreendimentos | 1,086,000 | 20,594,419 | ||||||
20,594,419 | ||||||||
FOOD – 2.73% | ||||||||
BRF – Brasil Foods SA | 11,674,550 | 156,569,278 |
Security | Shares | Value | ||||||
Cosan SA Industria | 2,172,090 | $ | 28,313,861 | |||||
JBS SA | 9,119,722 | 38,691,304 | ||||||
Marfrig Alimentos SA | 2,986,500 | 28,912,585 | ||||||
252,487,028 | ||||||||
FOREST PRODUCTS & PAPER – 0.50% |
| |||||||
Fibria Celulose SAa | 2,986,526 | 46,022,434 | ||||||
46,022,434 | ||||||||
HOME BUILDERS – 0.68% |
| |||||||
Brookfield Incorporacoes SA | 3,801,000 | 19,611,082 | ||||||
MRV Engenharia e | 5,158,547 | 43,036,853 | ||||||
62,647,935 | ||||||||
INSURANCE – 0.37% | ||||||||
Porto Seguro SA | 2,172,000 | 26,469,704 | ||||||
SulAmerica SA | 814,500 | 7,954,826 | ||||||
34,424,530 | ||||||||
INTERNET – 0.19% | ||||||||
B2W Companhia Global | 1,086,030 | 17,317,107 | ||||||
17,317,107 | ||||||||
IRON & STEEL – 2.86% | ||||||||
Companhia Siderurgica | 13,575,054 | 207,954,984 | ||||||
MMX Mineracao e | 1,900,500 | 13,582,731 | ||||||
Usinas Siderurgicas de Minas | 1,629,000 | 42,802,995 | ||||||
264,340,710 | ||||||||
MINING – 6.78% | ||||||||
Vale SA SP ADR | 23,428,454 | 626,711,145 | ||||||
626,711,145 | ||||||||
OIL & GAS – 10.57% | ||||||||
OGX Petroleo e Gas | 23,620,500 | 280,863,348 | ||||||
Petroleo Brasileiro SA | 41,268,044 | 695,399,443 | ||||||
976,262,791 | ||||||||
PHARMACEUTICALS – 0.70% |
| |||||||
Hypermarcas SAa | 4,887,000 | 64,371,475 | ||||||
64,371,475 |
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BRAZIL INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
REAL ESTATE – 3.01% |
| |||||||
BR Malls Participacoes SA | 2,443,500 | $ | 38,266,657 | |||||
Cyrela Brazil Realty SA | 5,430,000 | 67,503,929 | ||||||
Gafisa SA | 6,787,500 | 46,770,359 | ||||||
PDG Realty SA | 9,502,500 | 97,622,494 | ||||||
Rossi Residencial SA | 3,258,000 | 28,127,153 | ||||||
278,290,592 | ||||||||
RETAIL – 0.76% | ||||||||
Lojas Renner SA | 2,172,000 | 70,132,346 | ||||||
70,132,346 | ||||||||
TELECOMMUNICATIONS – 0.25% |
| |||||||
Tele Norte Leste | 1,357,538 | 23,540,451 | ||||||
23,540,451 | ||||||||
TRANSPORTATION – 1.04% |
| |||||||
ALL – America Latina | 7,602,000 | 70,089,055 | ||||||
LLX Logistica SAa | 5,158,500 | 26,145,017 | ||||||
96,234,072 | ||||||||
WATER – 0.50% | ||||||||
Companhia de Saneamento | 2,443,500 | 46,490,510 | ||||||
46,490,510 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $2,554,704,765) |
| 4,132,485,995 | ||||||
PREFERRED STOCKS – 54.24% |
| |||||||
AIRLINES – 0.55% | ||||||||
GOL Linhas Aereas | 1,900,500 | 24,567,967 | ||||||
TAM SA | 1,357,500 | 26,485,165 | ||||||
51,053,132 | ||||||||
BANKS – 14.41% | ||||||||
Banco Bradesco SA | 25,521,044 | 442,694,191 | ||||||
Banco do Estado do Rio | 4,344,010 | 38,294,576 | ||||||
Itau Unibanco Holding SA | 39,500,549 | 850,746,448 | ||||||
1,331,735,215 |
Security | Shares | Value | ||||||
BEVERAGES – 3.26% |
| |||||||
Companhia de Bebidas | 2,713,180 | $ | 298,959,680 | |||||
Companhia de Bebidas das | 25,274 | 2,669,890 | ||||||
301,629,570 | ||||||||
CHEMICALS – 1.32% | ||||||||
Braskem SA Class A | 2,715,036 | 23,934,372 | ||||||
Fertilizantes Fosfatados SAa | 2,443,580 | 23,559,117 | ||||||
Ultrapar Participacoes SA | 1,357,500 | 74,600,655 | ||||||
122,094,144 | ||||||||
ELECTRIC – 3.54% | ||||||||
AES Tiete SA | 1,956,000 | 23,748,246 | ||||||
Centrais Eletricas Brasileiras | 3,529,500 | 50,972,734 | ||||||
Companhia de Transmissao de | 824,776 | 23,390,572 | ||||||
Companhia Energetica de | 6,877,235 | 109,659,784 | ||||||
Companhia Energetica de Sao | 3,258,070 | 47,368,182 | ||||||
Companhia Paranaense de | 1,900,500 | 41,614,023 | ||||||
Eletropaulo Metropolitana | 1,629,020 | 30,613,702 | ||||||
327,367,243 | ||||||||
FOOD – 0.62% | ||||||||
Companhia Brasileira de | 1,629,028 | 57,424,165 | ||||||
57,424,165 | ||||||||
FOREST PRODUCTS & PAPER – 0.66% |
| |||||||
Klabin SA | 11,131,500 | 31,061,703 | ||||||
Suzano Bahia Sul Papel e | 3,258,207 | 29,613,316 | ||||||
60,675,019 | ||||||||
HOLDING COMPANIES – DIVERSIFIED – 4.30% |
| |||||||
Bradespar SA | 4,344,000 | 90,541,230 | ||||||
Itausa – Investimentos Itau SA | 43,737,384 | 306,360,947 | ||||||
396,902,177 |
30 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BRAZIL INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
IRON & STEEL – 3.75% |
| |||||||
Gerdau SA | 11,946,046 | $ | 158,917,787 | |||||
Metalurgica Gerdau SA | 4,887,090 | 78,399,388 | ||||||
Usinas Siderurgicas de | 4,344,000 | 108,921,595 | ||||||
346,238,770 | ||||||||
MEDIA – 0.45% | ||||||||
Net Servicos de | 3,258,082 | 41,338,307 | ||||||
41,338,307 | ||||||||
MINING – 9.29% | ||||||||
Vale SA Class A | 36,381,000 | 858,351,270 | ||||||
858,351,270 | ||||||||
OIL & GAS – 9.11% | ||||||||
Petroleo Brasileiro SA | 56,743,550 | 842,105,304 | ||||||
842,105,304 | ||||||||
RETAIL – 0.55% | ||||||||
Lojas Americanas SA | 5,973,000 | 50,307,899 | ||||||
50,307,899 | ||||||||
TELECOMMUNICATIONS – 2.43% |
| |||||||
Brasil Telecom SAa | 6,787,515 | 42,943,788 | ||||||
Tele Norte Leste | 4,887,039 | 66,514,938 | ||||||
Telemar Norte Leste SA | 543,000 | 13,763,627 | ||||||
TIM Participacoes SA | 10,588,519 | 29,908,345 | ||||||
Vivo Participacoes SA | 2,986,580 | 71,773,164 | ||||||
224,903,862 | ||||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $2,761,432,332) |
| 5,012,126,077 | ||||||
RIGHTS – 0.00% | ||||||||
FOOD – 0.00% | ||||||||
Marfrig Alimentos SAa | 2,154 | 797 | ||||||
797 | ||||||||
TOTAL RIGHTS | ||||||||
(Cost: $0) | 797 |
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS – 0.00% |
| |||||||
MONEY MARKET FUNDS – 0.00% |
| |||||||
BlackRock Cash Funds: Treasury, | 1,000 | $ | 1,000 | |||||
1,000 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $1,000) | 1,000 | |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $5,316,138,097) | 9,144,613,869 | |||||||
Other Assets, Less Liabilities – 1.04% |
| 95,838,647 | ||||||
NET ASSETS – 100.00% | $ | 9,240,452,516 | ||||||
SP ADR – Sponsored American Depositary Receipts
a | Non-income earning security. |
b | Affiliated issuer. See Note 2. |
c | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
iSHARES® MSCI BRIC INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 80.62% | ||||||||
BRAZIL – 14.24% | ||||||||
ALL – America Latina | ||||||||
Logistica SA | 308,700 | $ | 2,846,158 | |||||
B2W Companhia Global | ||||||||
do Varejo | 44,100 | 703,189 | ||||||
Banco do Brasil SA | 314,989 | 5,108,705 | ||||||
Banco Santander (Brasil) SA | 308,737 | 3,920,749 | ||||||
BM&F Bovespa SA | 1,015,369 | 7,401,323 | ||||||
BR Malls Participacoes SA | 88,200 | 1,381,264 | ||||||
BRF – Brasil Foods SA | 308,700 | 4,140,026 | ||||||
Centrais Eletricas Brasileiras SA | 176,400 | 2,146,736 | ||||||
Cielo SA | 338,200 | 2,888,952 | ||||||
Companhia de | 132,300 | 3,036,270 | ||||||
Companhia Siderurgica | 529,200 | 8,106,765 | ||||||
Cosan SA Industria e Comercio | 88,200 | 1,149,714 | ||||||
CPFL Energia SA | 88,200 | 2,036,737 | ||||||
Cyrela Brazil Realty SA | 176,400 | 2,192,945 | ||||||
Duratex SA | 176,400 | 1,788,109 | ||||||
Empresa Brasileira de | 352,800 | 2,169,841 | ||||||
Fibria Celulose SAa | 143,441 | 2,210,429 | ||||||
Gafisa SA | 176,400 | 1,215,513 | ||||||
Hypermarcas SAa | 132,300 | 1,742,653 | ||||||
JBS SA | 264,652 | 1,122,812 | ||||||
LLX Logistica SAa | 176,400 | 894,055 | ||||||
Lojas Renner SA | 44,100 | 1,423,958 | ||||||
Marfrig Alimentos SA | 132,300 | 1,280,809 | ||||||
MMX Mineracao e | ||||||||
Metalicos SAa | 88,200 | 630,359 | ||||||
MRV Engenharia e | 220,500 | 1,839,593 | ||||||
Multiplan Empreendimentos | 44,100 | 836,293 | ||||||
OGX Petroleo e Gas | 705,600 | 8,390,050 | ||||||
PDG Realty SA Empreendimentos e Participacoes | 220,500 | 2,265,273 | ||||||
Petroleo Brasileiro SA | 1,455,300 | 24,522,965 | ||||||
Redecard SA | 220,500 | 3,013,667 | ||||||
Rossi Residencial SA | 132,300 | 1,142,180 | ||||||
Souza Cruz SA | 88,200 | 4,065,940 | ||||||
Tele Norte Leste | ||||||||
Participacoes SA | 44,100 | 764,718 |
Security | Shares | Value | ||||||
Tractebel Energia SA | 132,300 | $ | 1,750,187 | |||||
Usinas Siderurgicas de Minas | 88,200 | 2,317,510 | ||||||
Vale SA | 837,900 | 22,369,449 | ||||||
134,815,896 | ||||||||
CHINA – 38.63% | ||||||||
Agile Property Holdings Ltd.b | 1,764,000 | 2,061,421 | ||||||
Agricultural Bank of China Ltd. | 5,292,000 | 2,394,786 | ||||||
Air China Ltd. Class Ha | 1,764,000 | 1,882,265 | ||||||
Alibaba.com Ltd.b | 882,000 | 1,721,252 | ||||||
Aluminum Corp. of China Ltd. | 2,646,000 | 2,102,241 | ||||||
Angang New Steel Co. Ltd. | 882,000 | 1,247,284 | ||||||
Anhui Conch Cement Co. Ltd. | 76,000 | 270,155 | ||||||
Anta Sports Products Ltd. | 441,040 | 903,796 | ||||||
Bank of China Ltd. Class H | 35,721,000 | 17,955,790 | ||||||
Bank of Communications Co. | ||||||||
Ltd. Class H | 3,969,000 | 4,209,584 | ||||||
BBMG Corp. Class H | 1,102,500 | 1,417,368 | ||||||
Beijing Capital International | 882,000 | 426,344 | ||||||
Belle International Holdings Ltd. | 3,087,000 | 5,389,402 | ||||||
BYD Co. Ltd. Class Hb | 441,000 | 2,539,924 | ||||||
Chaoda Modern Agriculture | 1,086,556 | 810,185 | ||||||
China Agri-Industries | 1,764,000 | 2,145,329 | ||||||
China CITIC Bank Class H | 3,528,000 | 2,290,467 | ||||||
China Coal Energy Co. Class H | 2,646,000 | 3,728,246 | ||||||
China Communications | 3,087,000 | 2,730,419 | ||||||
China Construction Bank Corp. | 25,137,000 | 20,746,871 | ||||||
China COSCO Holdings Co. | ||||||||
Ltd. Class Ha,b | 1,764,000 | 1,834,642 | ||||||
China Dongxiang (Group) | 2,646,000 | 1,394,691 | ||||||
China Everbright Ltd.b | 882,000 | 1,945,763 | ||||||
China High Speed Transmission | 882,000 | 1,966,173 |
32 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BRIC INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
China Life Insurance Co. Ltd. | ||||||||
Class H | 4,851,000 | $ | 18,522,170 | |||||
China Longyuan Power Group | ||||||||
Corp. Ltd. Class Ha,b | 882,000 | 890,107 | ||||||
China Mengniu Dairy Co. Ltd. | 882,000 | 2,437,874 | ||||||
China Merchants Bank Co. Ltd. | ||||||||
Class H | 2,425,797 | 6,252,778 | ||||||
China Merchants Holdings | ||||||||
(International) Co. Ltd. | 882,000 | 2,976,474 | ||||||
China Minsheng Banking Corp. | ||||||||
Ltd. Class H | 1,850,000 | 1,681,494 | ||||||
China Mobile Ltd. | 3,748,500 | 38,142,802 | ||||||
China National Building | ||||||||
Material Co. Ltd. Class Hb | 882,000 | 1,612,398 | ||||||
China Oilfield Services Ltd. | ||||||||
Class H | 1,764,000 | 2,256,451 | ||||||
China Overseas Land & | ||||||||
Investment Ltd. | 2,646,800 | 5,648,503 | ||||||
China Pacific Insurance (Group) | ||||||||
Co. Ltd. Class H | 176,400 | 633,847 | ||||||
China Petroleum & Chemical | ||||||||
Corp. Class H | 10,584,000 | 8,381,750 | ||||||
China Railway Construction | ||||||||
Corp. Ltd. Class H | 1,764,000 | 2,249,647 | ||||||
China Railway Group Ltd. | 2,646,000 | 1,925,353 | ||||||
China Resources | 882,000 | 3,673,819 | ||||||
China Resources Land Ltd.b | 1,764,000 | 3,374,471 | ||||||
China Resources Power | ||||||||
Holdings Co. Ltd. | 916,200 | 2,021,211 | ||||||
China Shenhua Energy Co. Ltd. | ||||||||
Class H | 1,984,500 | 7,232,831 | ||||||
China Shipping Container Lines | ||||||||
Co. Ltd. Class Ha,b | 2,646,000 | 911,651 | ||||||
China Shipping Development | ||||||||
Co. Ltd. Class Hb | 882,000 | 1,167,912 | ||||||
China Taiping Insurance | ||||||||
Holdings Co. Ltd.a | 441,000 | 1,369,178 | ||||||
China Telecom Corp. Ltd. | 7,938,000 | 3,837,100 | ||||||
China Unicom | 3,555,900 | 4,900,591 | ||||||
China Yurun Food Group Ltd. | 882,000 | 3,203,252 | ||||||
China Zhongwang | 830,800 | 491,313 | ||||||
CITIC Pacific Ltd. | 882,000 | 1,802,893 | ||||||
CNOOC Ltd. | 10,584,000 | 18,287,454 |
Security | Shares | Value | ||||||
CNPC (Hong Kong) Ltd. | 2,646,000 | $ | 3,275,822 | |||||
COSCO Pacific Ltd. | 882,000 | 1,161,108 | ||||||
Country Garden Holdings | 1,323,000 | 396,296 | ||||||
CSR Corp Ltd. | 1,323,000 | 1,114,052 | ||||||
Datang International Power | ||||||||
Generation Co. Ltd. Class H | 1,764,000 | 698,479 | ||||||
Dongfeng Motor Group Co. | ||||||||
Ltd. Class H | 1,764,000 | 2,739,490 | ||||||
Fosun International Ltd. | 2,425,500 | 1,852,217 | ||||||
Franshion Properties | 2,646,000 | 761,977 | ||||||
Fushan International Energy | ||||||||
Group Ltd. | 2,646,000 | 1,384,485 | ||||||
Geely Automobile | 4,410,000 | 1,445,716 | ||||||
GOME Electrical Appliances | ||||||||
Holdings Ltd.a | 5,292,400 | 1,605,716 | ||||||
Greentown China Holdings Ltd. | 441,000 | 472,834 | ||||||
Guangdong Investment Ltd. | 2,646,000 | 1,289,238 | ||||||
Guangzhou Automobile Group | ||||||||
Co. Ltd. Class Ha | 2,090,454 | 2,450,979 | ||||||
Guangzhou R&F Properties | ||||||||
Co. Ltd. Class H | 705,600 | 1,023,226 | ||||||
Hengan International Group | ||||||||
Co. Ltd. | 882,000 | 7,818,204 | ||||||
Hidili Industry International | ||||||||
Development Ltd. | 882,000 | 722,291 | ||||||
Hopson Development | ||||||||
Holdings Ltd.b | 882,000 | 1,029,576 | ||||||
Huabao International | ||||||||
Holdings Ltd. | 441,000 | 644,052 | ||||||
Huaneng Power International | ||||||||
Inc. Class H | 2,646,000 | 1,588,586 | ||||||
Industrial and Commercial Bank | ||||||||
of China Ltd. Class H | 29,547,000 | 21,461,792 | ||||||
Jiangsu Expressway Co. Ltd. | ||||||||
Class H | 1,764,000 | 1,721,252 | ||||||
Jiangxi Copper Co. Ltd. | 1,323,000 | 2,871,022 | ||||||
Kingboard Chemical Holdings | ||||||||
Co. Ltd. | 220,500 | 1,041,766 | ||||||
Lee & Man Paper | ||||||||
Manufacturing Ltd. | 441,000 | 306,152 | ||||||
Lenovo Group Ltd. | 2,646,000 | 1,517,151 | ||||||
Li Ning Co. Ltd. | 882,000 | 2,840,406 | ||||||
Longfor Properties Co. Ltd. | 1,543,500 | 1,726,355 |
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BRIC INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Maanshan Iron & Steel Co. | 1,764,000 | $ | 900,312 | |||||
Metallurgical Corp. of China | 2,646,000 | 1,149,769 | ||||||
Nine Dragons Paper | ||||||||
(Holdings) Ltd.b | 882,000 | 1,211,000 | ||||||
Parkson Retail Group Ltd.b | 661,500 | 1,098,744 | ||||||
PetroChina Co. Ltd. Class H | 13,230,000 | 14,355,107 | ||||||
PICC Property and Casualty | ||||||||
Co. Ltd. Class Ha,b | 1,764,000 | 2,018,333 | ||||||
Ping An Insurance (Group) Co. of China Ltd. | 1,075,000 | 8,893,263 | ||||||
Poly (Hong Kong) | ||||||||
Investments Ltd. | 1,331,984 | 1,421,285 | ||||||
Renhe Commercial Holdings | ||||||||
Co. Ltd. | 2,646,000 | 523,859 | ||||||
Semiconductor Manufacturing | ||||||||
International Corp.a | 3,528,000 | 224,511 | ||||||
Shanghai Electric Group Co. | 2,646,000 | 1,173,581 | ||||||
Shanghai Industrial | 441,000 | 2,148,730 | ||||||
Shimao Property | 1,323,000 | 2,146,463 | ||||||
Shui On Land Ltd. | 3,087,000 | 1,357,272 | ||||||
Sinofert Holdings Ltd.a | 1,764,000 | 918,455 | ||||||
Sino-Ocean Land | 2,866,500 | 2,008,411 | ||||||
Sinopharm Group Co. Ltd. Class H | 176,400 | 672,400 | ||||||
Soho China Ltd. | 2,646,000 | 1,694,039 | ||||||
Tencent Holdings Ltd. | 529,200 | 9,681,193 | ||||||
Tingyi (Cayman Islands) | ||||||||
Holding Corp. | 1,764,000 | 4,458,474 | ||||||
Want Want China | 2,205,000 | 1,783,049 | ||||||
Weichai Power Co. Ltd. | 441,000 | 3,668,149 | ||||||
Yanzhou Coal Mining Co. | 882,000 | 1,809,696 | ||||||
Zhejiang Expressway Co. | 1,764,000 | 1,567,042 | ||||||
Zijin Mining Group Co. | 2,254,000 | 1,558,979 | ||||||
ZTE Corp. Class H | 88,200 | 327,696 | ||||||
365,729,774 |
Security | Shares | Value | ||||||
INDIA – 14.54% | ||||||||
Dr. Reddy’s Laboratories Ltd. | ||||||||
SP ADRb | 438,795 | $ | 12,641,684 | |||||
HDFC Bank Ltd. SP ADRb | 160,965 | 25,722,207 | ||||||
ICICI Bank Ltd. SP ADR | 535,815 | 22,134,518 | ||||||
Infosys Technologies Ltd. | 498,330 | 28,549,326 | ||||||
Mahanagar Telephone Nigam | ||||||||
Ltd. SP ADRb | 285,241 | 750,184 | ||||||
Reliance Industries | 699,426 | 27,340,562 | ||||||
Satyam Computer Services | ||||||||
Ltd. SP ADRa | 933,597 | 4,219,858 | ||||||
Tata Communications Ltd. | ||||||||
SP ADRa | 164,566 | 2,320,381 | ||||||
Wipro Ltd. SP ADR | 1,091,463 | 14,003,470 | ||||||
137,682,190 | ||||||||
RUSSIA – 13.21% | ||||||||
Cherepovets MK Severstal | ||||||||
SP GDRa,e | 238,581 | 2,872,515 | ||||||
JSC MMC Norilsk Nickel | 589,111 | 9,985,431 | ||||||
LUKOIL SP ADR | 331,191 | 17,652,480 | ||||||
Magnit OJSC SP GDRe | 148,176 | 3,156,149 | ||||||
Mechel OAO SP ADRb | 120,834 | 2,748,974 | ||||||
Mobile TeleSystems SP ADR | 330,750 | 6,899,445 | ||||||
Novolipetsk Steel SP GDRe | 78,498 | 2,284,292 | ||||||
OAO Gazprom SP ADR | 1,621,071 | 33,556,170 | ||||||
OAO NovaTek SP GDRe | 65,268 | 4,790,671 | ||||||
OAO Tatneft SP ADRe | 162,323 | 4,850,211 | ||||||
OAO TMK SP GDRa,e | 61,299 | 955,038 | ||||||
OJSC Comstar United | ||||||||
Telesystems SP GDRa | 185,220 | 1,198,373 | ||||||
OJSC Rosneft Oil Co. | 925,218 | 5,865,882 | ||||||
Polyus Gold SP ADR | 54,684 | 1,342,492 | ||||||
Sberbank GDRe | 50,274 | 14,376,542 | ||||||
Sistema JSFC SP GDRe | 83,349 | 2,146,237 | ||||||
Surgutneftegaz SP ADR | 480,690 | 4,518,486 | ||||||
Uralkali SP GDRe | 106,281 | 2,460,405 | ||||||
VTB Bank OJSC SP GDRe | 436,149 | 2,250,529 | ||||||
Wimm-Bill-Dann Foods OJSC | ||||||||
SP ADR | 67,032 | 1,228,697 | ||||||
125,139,019 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $732,423,298) | 763,366,879 |
34 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BRIC INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
PREFERRED STOCKS – 18.89% |
| |||||||
BRAZIL – 18.89% |
| |||||||
AES Tiete SA | 44,100 | $ | 535,428 | |||||
Banco Bradesco SA | 1,212,376 | 21,030,167 | ||||||
Banco do Estado do | 44,100 | 388,763 | ||||||
Bradespar SA | 176,400 | 3,676,674 | ||||||
Brasil Telecom SAa | 163,098 | 1,031,902 | ||||||
Braskem SA Class A | 132,300 | 1,166,289 | ||||||
Centrais Eletricas | 132,300 | 1,910,665 | ||||||
Companhia de Bebidas | 89,295 | 9,839,231 | ||||||
Companhia de Bebidas das | 968 | 102,257 | ||||||
Companhia de Transmissao de | 44,271 | 1,255,521 | ||||||
Companhia Energetica de | 242,193 | 3,861,847 | ||||||
Companhia Energetica de Sao | 132,300 | 1,923,473 | ||||||
Companhia Paranaense de | 88,200 | 1,931,259 | ||||||
Eletropaulo Metropolitana | 44,100 | 828,759 | ||||||
Fertilizantes Fosfatados SAa | 88,220 | 850,549 | ||||||
Gerdau SA | 485,100 | 6,453,266 | ||||||
GOL Linhas Aereas | 44,100 | 570,085 | ||||||
Itau Unibanco Holding SA | 1,323,067 | 28,495,669 | ||||||
Itausa – Investimentos Itau SA | 1,608,817 | 11,269,048 | ||||||
Klabin SA | 352,800 | 984,465 | ||||||
Lojas Americanas SA | 264,600 | 2,228,607 | ||||||
Metalurgica Gerdau SA | 183,200 | 2,938,920 | ||||||
Net Servicos de | 132,640 | 1,682,927 | ||||||
Petroleo Brasileiro SA | 2,028,600 | 30,105,533 | ||||||
Suzano Bahia Sul Papel e | 44,100 | 400,818 | ||||||
TAM SA | 44,100 | 860,402 | ||||||
Tele Norte Leste | 176,400 | 2,400,888 |
Security | Shares | Value | ||||||
Telemar Norte Leste SA Class A | 44,100 | $ | 1,117,820 | |||||
TIM Participacoes SA | 397,057 | 1,121,528 | ||||||
Usinas Siderurgicas de Minas | 178,550 | 4,476,969 | ||||||
Vale SA Class A | 1,323,000 | 31,214,060 | ||||||
Vivo Participacoes SA | 90,519 | 2,175,343 | ||||||
178,829,132 | ||||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $168,558,465) | 178,829,132 | |||||||
RIGHTS – 0.00% | ||||||||
BRAZIL – 0.00% | ||||||||
Marfrig Alimentos SAa | 93 | 35 | ||||||
35 | ||||||||
TOTAL RIGHTS | ||||||||
(Cost: $0) | 35 | |||||||
WARRANTS – 0.00% | ||||||||
CHINA – 0.00% | ||||||||
Kingboard Chemical Holdings Ltd. | 20,200 | 8,881 | ||||||
8,881 | ||||||||
TOTAL WARRANTS | ||||||||
(Cost: $0) | 8,881 | |||||||
SHORT-TERM INVESTMENTS – 5.80% |
| |||||||
MONEY MARKET FUNDS – 5.80% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares | ||||||||
0.31%f,g,h | 45,558,546 | 45,558,546 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares | ||||||||
0.30%f,g,h | 8,852,957 | 8,852,957 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares | ||||||||
0.13%f,g | 494,565 | 494,565 | ||||||
54,906,068 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $54,906,068) | 54,906,068 | |||||||
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI BRIC INDEX FUND
August 31, 2010
Value | ||||
TOTAL INVESTMENTS | ||||
IN SECURITIES – 105.31% | ||||
(Cost: $955,887,831) | $ | 997,110,995 | ||
Other Assets, Less Liabilities – (5.31)% | (50,296,541) | |||
NET ASSETS – 100.00% | $ | 946,814,454 | ||
GDR – Global Depositary Receipts
SP ADR – Sponsored American Depositary Receipts
SP GDR – Sponsored Global Depositary Receipts
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1. |
d | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
e | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
f | Affiliated issuer. See Note 2. |
g | The rate quoted is the annualized seven-day yield of the fund at period end. |
h | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
36 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI CANADA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.95% |
| |||||||
AEROSPACE & DEFENSE – 0.23% |
| |||||||
CAE Inc. | 831,195 | $ | 7,833,741 | |||||
7,833,741 | ||||||||
APPAREL – 0.30% |
| |||||||
Gildan Activewear Inc.a | 372,709 | 10,223,415 | ||||||
10,223,415 | ||||||||
AUTO PARTS & EQUIPMENT – 0.78% |
| |||||||
Magna International Inc. Class A | 345,920 | 26,937,869 | ||||||
26,937,869 | ||||||||
BANKS – 22.86% | ||||||||
Bank of Montreal | 1,818,543 | 100,447,492 | ||||||
Bank of Nova Scotia | 3,329,281 | 160,009,051 | ||||||
Canadian Imperial Bank | 1,261,230 | 85,749,683 | ||||||
National Bank of Canada | 526,215 | 30,388,071 | ||||||
Royal Bank of Canada | 4,613,512 | 220,649,048 | ||||||
Toronto-Dominion | 2,822,102 | 190,945,430 | ||||||
788,188,775 | ||||||||
CHEMICALS – 5.14% | ||||||||
Agrium Inc. | 511,158 | 35,591,955 | ||||||
Potash Corp. of | 961,402 | 141,548,379 | ||||||
177,140,334 | ||||||||
COMMERCIAL SERVICES – 0.16% |
| |||||||
Ritchie Bros. | 309,422 | 5,678,613 | ||||||
5,678,613 | ||||||||
COMPUTERS – 2.33% | ||||||||
CGI Group Inc. Class Aa | 817,228 | 11,296,423 | ||||||
Research In Motion Ltd.a | 1,613,649 | 69,155,305 | ||||||
80,451,728 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 0.89% |
| |||||||
CI Financial Corp. | 523,782 | 9,725,591 | ||||||
IGM Financial Inc. | 385,057 | 14,461,980 | ||||||
TMX Group Inc. | 240,673 | 6,403,051 | ||||||
30,590,622 | ||||||||
ELECTRIC – 0.86% | ||||||||
Fortis Inc. | 559,008 | 15,459,414 | ||||||
TransAlta Corp. | 707,368 | 14,016,679 | ||||||
29,476,093 |
Security | Shares | Value | ||||||
ENGINEERING & CONSTRUCTION – 0.66% |
| |||||||
SNC-Lavalin Group Inc. | 489,344 | $ | 22,646,529 | |||||
22,646,529 | ||||||||
FOOD – 1.80% | ||||||||
Empire Co. Ltd. Class A | 95,112 | 4,855,720 | ||||||
George Weston Ltd. | 168,259 | 12,877,214 | ||||||
Loblaw Companies Ltd. | 359,782 | 14,673,343 | ||||||
Metro Inc. Class A | 346,379 | 14,662,679 | ||||||
Saputo Inc. | 472,523 | 15,035,125 | ||||||
62,104,081 | ||||||||
FOREST PRODUCTS & PAPER – 0.39% |
| |||||||
Sino-Forest Corp. Class Aa | 789,507 | 13,600,829 | ||||||
13,600,829 | ||||||||
GAS – 0.36% | ||||||||
Canadian Utilities Ltd. Class A | 278,668 | 12,465,385 | ||||||
12,465,385 | ||||||||
HAND & MACHINE TOOLS – 0.31% |
| |||||||
Finning International Inc. | 553,468 | 10,692,025 | ||||||
10,692,025 | ||||||||
HOLDING COMPANIES – DIVERSIFIED – 1.67% |
| |||||||
Brookfield Asset Management | 1,675,123 | 43,105,336 | ||||||
Onex Corp. | 313,367 | 8,251,836 | ||||||
Sherritt International Corp. | 946,828 | 6,082,217 | ||||||
57,439,389 | ||||||||
INSURANCE – 6.56% | ||||||||
Fairfax Financial | 64,698 | 25,657,746 | ||||||
Great-West Lifeco Inc. | 918,970 | 21,113,860 | ||||||
Industrial Alliance Insurance and |
| |||||||
Financial Services Inc. | 271,100 | 7,652,375 | ||||||
Intact Financial Corp. | 374,859 | 15,601,109 | ||||||
Manulife Financial Corp. | 5,709,979 | 63,560,229 | ||||||
Power Corp. of Canada | 1,129,077 | 27,836,484 | ||||||
Power Financial Corp. | 800,595 | 21,374,726 | ||||||
Sun Life Financial Inc. | 1,838,502 | 43,171,651 | ||||||
225,968,180 | ||||||||
IRON & STEEL – 0.16% | ||||||||
Gerdau Ameristeel Corp.a | 486,660 | 5,335,073 | ||||||
5,335,073 |
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI CANADA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
MANUFACTURING – 0.56% |
| |||||||
Bombardier Inc. Class B | 4,656,032 | $ | 19,386,489 | |||||
19,386,489 | ||||||||
MEDIA – 3.47% | ||||||||
Rogers Communications Inc. Class B | 1,452,876 | 50,425,227 | ||||||
Shaw Communications Inc. | 1,127,052 | 23,114,950 | ||||||
Thomson Reuters Corp. | 1,213,000 | 42,122,558 | ||||||
Yellow Pages Income Fund | 838,835 | 4,059,069 | ||||||
119,721,804 | ||||||||
MINING – 17.38% | ||||||||
Agnico-Eagle Mines Ltd. | 542,146 | 35,304,186 | ||||||
Barrick Gold Corp. | 3,198,043 | 149,802,830 | ||||||
Cameco Corp. | 1,276,991 | 31,159,850 | ||||||
Eldorado Gold Corp. | 1,748,880 | 34,342,896 | ||||||
First Quantum Minerals Ltd. | 260,822 | 15,037,592 | ||||||
Franco-Nevada Corp. | 371,301 | 11,076,180 | ||||||
Goldcorp Inc. | 2,382,691 | 105,688,830 | ||||||
IAMGOLD Corp. | 1,144,269 | 21,461,415 | ||||||
Inmet Mining Corp. | 163,708 | 7,840,360 | ||||||
Ivanhoe Mines Ltd.a | 860,049 | 15,324,172 | ||||||
Kinross Gold Corp. | 2,281,519 | 38,576,253 | ||||||
Pan American Silver Corp. | 330,896 | 8,226,242 | ||||||
Red Back Mining Inc.a | 789,449 | 23,564,647 | ||||||
Silver Wheaton Corp.a | 1,053,743 | 23,765,667 | ||||||
Teck Resources Ltd. Class B | 1,599,934 | 53,518,681 | ||||||
Yamana Gold Inc. | 2,404,409 | 24,351,871 | ||||||
599,041,672 | ||||||||
OIL & GAS – 20.59% | ||||||||
ARC Energy Trust | 444,761 | 8,262,499 | ||||||
Athabasca Oil Sands Corp.a | 629,760 | 6,136,078 | ||||||
Bonavista Energy Trust | 216,316 | 4,998,383 | ||||||
Canadian Natural | 3,534,730 | 113,697,416 | ||||||
Canadian Oil Sands Trust | 769,240 | 18,092,127 | ||||||
Cenovus Energy Inc. | 2,441,073 | 65,676,733 | ||||||
Crescent Point Energy Corp. | 723,304 | 25,470,123 | ||||||
EnCana Corp. | 2,400,623 | 65,849,133 | ||||||
Enerplus Resources Fund | 573,873 | 13,142,007 | ||||||
Ensign Energy Services Inc. | 421,286 | 4,570,994 | ||||||
Husky Energy Inc. | 826,219 | 19,246,289 | ||||||
Imperial Oil Ltd. | 963,943 | 35,543,901 |
Security | Shares | Value | ||||||
Nexen Inc. | 1,700,797 | $ | 31,500,671 | |||||
Niko Resources Ltd. | 148,695 | 14,676,371 | ||||||
Pacific Rubiales | 810,878 | 19,124,660 | ||||||
Penn West Energy Trust | 1,383,058 | 25,978,948 | ||||||
PetroBakken Energy Ltd. Class A | 243,920 | 4,604,595 | ||||||
Petrobank Energy and | 326,330 | 11,316,813 | ||||||
Progress Energy | 589,941 | 6,494,966 | ||||||
Provident Energy Trust | 866,471 | 5,427,886 | ||||||
Suncor Energy Inc. | 5,068,505 | 153,573,776 | ||||||
Talisman Energy Inc. | 3,307,167 | 52,010,307 | ||||||
Vermilion Energy Trust | 130,311 | 4,358,975 | ||||||
709,753,651 | ||||||||
PHARMACEUTICALS – 0.31% |
| |||||||
Biovail Corp. | 464,414 | 10,622,270 | ||||||
10,622,270 | ||||||||
PIPELINES – 3.99% | ||||||||
Enbridge Inc. | 1,166,298 | 58,022,327 | ||||||
TransCanada Corp. | 2,230,754 | 79,494,211 | ||||||
137,516,538 | ||||||||
REAL ESTATE – 0.40% | ||||||||
Brookfield Properties Corp. | 973,318 | 13,946,921 | ||||||
13,946,921 | ||||||||
REAL ESTATE INVESTMENT TRUSTS – 0.22% |
| |||||||
RioCan Real Estate | 385,988 | 7,557,959 | ||||||
7,557,959 | ||||||||
RETAIL – 1.92% | ||||||||
Alimentation Couche-Tard Inc. |
| |||||||
Class B | 405,473 | 8,703,781 | ||||||
Canadian Tire Corp. Ltd. Class A | 254,885 | 13,220,509 | ||||||
Shoppers Drug Mart Corp. | 704,596 | 23,992,011 | ||||||
Tim Hortons Inc. | 568,137 | 20,139,334 | ||||||
66,055,635 | ||||||||
SOFTWARE – 0.23% | ||||||||
Open Text Corp.a | 183,062 | 8,058,264 | ||||||
8,058,264 | ||||||||
TELECOMMUNICATIONS – 1.50% |
| |||||||
BCE Inc. | 820,412 | 25,673,699 | ||||||
TELUS Corp. | 186,158 | 7,681,298 |
38 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI CANADA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
TELUS Corp. NVS | 469,109 | $ | 18,498,648 | |||||
51,853,645 | ||||||||
TRANSPORTATION – 3.92% |
| |||||||
Canadian National | 1,527,911 | 93,235,025 | ||||||
Canadian Pacific | 547,698 | 32,260,432 | ||||||
Viterra Inc.a | 1,210,780 | 9,537,724 | ||||||
135,033,181 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $3,730,000,989) | 3,445,320,710 | |||||||
SHORT-TERM INVESTMENTS – 0.18% |
| |||||||
MONEY MARKET FUNDS – 0.18% |
| |||||||
BlackRock Cash Funds: | ||||||||
0.31%c,d,e | 4,899,739 | 4,899,739 | ||||||
BlackRock Cash Funds: | ||||||||
0.30%c,d,e | 952,119 | 952,119 | ||||||
BlackRock Cash Funds: | ||||||||
0.13%c,d | 453,081 | 453,081 | ||||||
6,304,939 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $6,304,939) | 6,304,939 | |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $3,736,305,928) | 3,451,625,649 | |||||||
Other Assets, Less Liabilities – (0.13)% |
| (4,383,152) | ||||||
NET ASSETS – 100.00% | $ | 3,447,242,497 | ||||||
NVS – Non-Voting Shares
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
iSHARES® MSCI CHILE INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 100.02% |
| |||||||
AIRLINES – 4.92% |
| |||||||
LAN Airlines SA | 1,233,601 | $ | 32,999,072 | |||||
32,999,072 | ||||||||
APPAREL – 0.34% |
| |||||||
Forus SA | 965,548 | 2,267,924 | ||||||
2,267,924 | ||||||||
BANKS – 9.84% | ||||||||
Banco de Credito | 389,642 | 21,155,980 | ||||||
Banco Santander | 401,718,514 | 33,356,697 | ||||||
CorpBanca SA | 948,748,611 | 11,432,914 | ||||||
65,945,591 | ||||||||
BEVERAGES – 4.07% | ||||||||
Compania Cervecerias | 1,357,976 | 15,799,840 | ||||||
Vina Concha y Toro SA | 4,944,155 | �� | 11,505,879 | |||||
27,305,719 | ||||||||
BUILDING MATERIALS – 0.72% |
| |||||||
SalfaCorp SA | 1,842,939 | 4,801,611 | ||||||
4,801,611 | ||||||||
CHEMICALS – 4.86% | ||||||||
Sociedad Quimica y Minera de Chile SA Series B | 760,976 | 32,615,419 | ||||||
32,615,419 | ||||||||
COMPUTERS – 0.79% | ||||||||
Sonda SA | 3,018,850 | 5,313,608 | ||||||
5,313,608 | ||||||||
ELECTRIC – 23.62% | ||||||||
AES Gener SA | 25,658,065 | 14,186,440 | ||||||
Colbun SA | 74,636,542 | 20,767,010 | ||||||
Empresa Electrica | 263,675 | 1,127,488 | ||||||
Empresa Nacional de | 34,953,554 | 60,132,904 | ||||||
Enersis SA | 140,010,828 | 62,097,086 | ||||||
158,310,928 | ||||||||
ENGINEERING & CONSTRUCTION – 0.48% |
| |||||||
Socovesa SA | 5,782,741 | 3,254,804 | ||||||
3,254,804 |
Security | Shares | Value | ||||||
FOOD – 8.80% | ||||||||
Cencosud SA | 9,837,366 | $ | 58,988,979 | |||||
58,988,979 | ||||||||
FOREST PRODUCTS & PAPER – 8.94% |
| |||||||
Empresas CMPC SA | 1,207,731 | 55,265,463 | ||||||
Masisa SAa | 28,590,131 | 4,662,670 | ||||||
59,928,133 | ||||||||
HOLDING COMPANIES – DIVERSIFIED – 12.77% |
| |||||||
Empresas Copec SA | 4,919,280 | 85,607,995 | ||||||
85,607,995 | ||||||||
IRON & STEEL – 4.90% |
| |||||||
CAP SA | 829,631 | 32,835,435 | ||||||
32,835,435 | ||||||||
METAL FABRICATE & HARDWARE – 0.40% |
| |||||||
Madeco SA | 44,882,858 | 2,673,512 | ||||||
2,673,512 | ||||||||
REAL ESTATE – 1.08% | ||||||||
Parque Arauco SA | 4,458,993 | 7,227,684 | ||||||
7,227,684 | ||||||||
RETAIL – 7.60% | ||||||||
La Polar SA | 2,454,665 | 16,842,869 | ||||||
Ripley Corp. SA | 5,141,165 | 6,522,572 | ||||||
S.A.C.I. Falabella SA | 3,304,992 | 27,594,186 | ||||||
50,959,627 | ||||||||
TELECOMMUNICATIONS – 2.70% |
| |||||||
Empresa Nacional de | 1,126,738 | 18,106,689 | ||||||
18,106,689 | ||||||||
TRANSPORTATION – 2.05% |
| |||||||
Compania SudAmericana de | 10,565,507 | 13,763,737 | ||||||
13,763,737 | ||||||||
WATER – 1.14% | ||||||||
Inversiones Aguas | 5,468,122 | 7,612,739 | ||||||
7,612,739 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $486,780,244) | 670,519,206 |
40 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI CHILE INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS – 0.12% |
| |||||||
MONEY MARKET FUNDS – 0.12% |
| |||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 782,832 | $ | 782,832 | |||||
782,832 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $782,832) | 782,832 | |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $487,563,076) | 671,302,038 | |||||||
Other Assets, Less Liabilities – (0.14)% |
| (951,632) | ||||||
NET ASSETS – 100.00% | $ | 670,350,406 | ||||||
a | Non-income earning security. |
b | Affiliated issuer. See Note 2. |
c | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
iSHARES® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.89% |
| |||||||
AEROSPACE & DEFENSE – 2.28% |
| |||||||
Elbit Systems Ltd. | 58,604 | $ | 2,924,428 | |||||
2,924,428 | ||||||||
BANKS – 18.48% | ||||||||
Bank Hapoalim Ltd.a | 1,846,208 | 7,549,694 | ||||||
Bank Leumi le-Israela | 2,457,728 | 10,173,025 | ||||||
Israel Discount Bank Ltd. | 1,468,064 | 2,594,897 | ||||||
Mizrahi Tefahot Bank Ltd. | 352,612 | 2,894,058 | ||||||
Union Bank of Israela | 127,296 | 527,573 | ||||||
23,739,247 | ||||||||
BIOTECHNOLOGY – 0.13% |
| |||||||
Clal Biotechnology | 37,024 | 161,126 | ||||||
161,126 | ||||||||
CHEMICALS – 11.47% | ||||||||
Frutaromb | 109,148 | 960,330 | ||||||
Israel Chemicals Ltd. | 935,844 | 11,829,855 | ||||||
Makhteshim-Agan | 566,748 | 1,949,941 | ||||||
14,740,126 | ||||||||
COMMERCIAL SERVICES – 0.72% |
| |||||||
AL-ROV (Israel) Ltd.a | 11,128 | 283,497 | ||||||
Nitsba Holdings 1995 Ltd.a | 75,400 | 647,163 | ||||||
930,660 | ||||||||
COMPUTERS – 0.34% | ||||||||
MATRIX IT Ltd. | 86,216 | 440,647 | ||||||
440,647 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 0.80% |
| |||||||
FIBI Holdings Ltd.a | 28,704 | 580,262 | ||||||
Mivtach Shamir Holdings Ltd.a,c | 14,910 | 442,111 | ||||||
1,022,373 | ||||||||
ELECTRICAL COMPONENTS & |
| |||||||
Electra (Israel) Ltd.a | 3,640 | 348,943 | ||||||
348,943 | ||||||||
ELECTRONICS – 0.59% | ||||||||
Elron Electronic Industries Ltd.a | 45,552 | 219,894 | ||||||
Ituran Location and Control Ltd. | 39,885 | 541,577 | ||||||
761,471 | ||||||||
ENGINEERING & CONSTRUCTION – 0.74% |
| |||||||
Shikun & Binui Ltd. | 472,524 | 947,034 | ||||||
947,034 |
Security | Shares | Value | ||||||
FOOD – 3.38% | ||||||||
Blue Square-Israel Ltd. | 40,508 | $ | 432,688 | |||||
Osem Investment Ltd. | 83,304 | 1,184,744 | ||||||
Rami Levi Chain Stores Hashikma | 26,572 | 646,801 | ||||||
Shufersal Ltd. | 161,096 | 924,477 | ||||||
Strauss Group Ltd. | 82,955 | 1,154,943 | ||||||
4,343,653 | ||||||||
FOREST PRODUCTS & PAPER – 0.36% |
| |||||||
Hadera Paper Ltd.a | 6,604 | 459,808 | ||||||
459,808 | ||||||||
HEALTH CARE – PRODUCTS – 0.46% |
| |||||||
Given Imaging Ltd.a | 41,808 | 590,308 | ||||||
590,308 | ||||||||
HOLDING COMPANIES – DIVERSIFIED – 3.69% |
| |||||||
Clal Industries and Investments Ltd. | 92,664 | 588,961 | ||||||
Elco Holdings Ltd.a | 24,290 | 321,017 | ||||||
Granite Hacarmel Investments Ltd. | 135,304 | 262,008 | ||||||
Israel Corp. Ltd. (The)a,b | 4,420 | 3,563,861 | ||||||
4,735,847 | ||||||||
HOME BUILDERS – 0.14% |
| |||||||
Bayside Land Corp. Ltd. | 52 | 11,917 | ||||||
Property & Building Corp. Ltd. | 2,132 | 164,289 | ||||||
176,206 | ||||||||
INSURANCE – 2.52% |
| |||||||
Clal Insurance Enterprises | 33,332 | 720,041 | ||||||
Harel Insurance Investments & | 25,428 | 1,175,398 | ||||||
Menorah Mivtachim Holdings Ltd.a | 78,468 | 840,221 | ||||||
Phoenix Holdings Ltd.a | 195,313 | 502,555 | ||||||
3,238,215 | ||||||||
INTERNET – 0.34% |
| |||||||
Internet Gold-Golden Lines Ltd.a | 8,268 | 151,810 | ||||||
NetVision Ltd. | 27,612 | 283,481 | ||||||
435,291 | ||||||||
INVESTMENT COMPANIES – 3.14% |
| |||||||
Delek Group Ltd. (The)b | 9,776 | 2,457,159 | ||||||
Discount Investment Corp. Ltd. | 32,708 | 616,964 | ||||||
Elbit Imaging Ltd.a | 33,956 | 428,073 |
42 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Koor Industries Ltd. | 26,520 | $ | 536,320 | |||||
4,038,516 | ||||||||
MACHINERY – 0.91% | ||||||||
Ormat Industries Ltd.b | 158,704 | 1,175,431 | ||||||
1,175,431 | ||||||||
MANUFACTURING – 0.44% |
| |||||||
FMS Enterprises Migun Ltd. | 11,752 | 297,141 | ||||||
Plasson Industries Ltd. | 11,908 | 262,148 | ||||||
559,289 | ||||||||
MEDIA – 0.36% | ||||||||
Hot Telecommunication | ||||||||
Systems Ltd.a | 46,488 | 463,354 | ||||||
463,354 | ||||||||
OIL & GAS – 3.93% | ||||||||
Delek Drilling LPa,b | 461,656 | 1,600,488 | ||||||
Delek Energy Systems Ltd.a | 1,456 | 493,300 | ||||||
Delek Israeli Fuel Corp. Ltd. | 4,548 | 137,007 | ||||||
Jerusalem Oil Exploration Ltd.a | 20,671 | 326,176 | ||||||
Naphtha Israel Petroleum | ||||||||
Corp. Ltd.a | 61,564 | 225,559 | ||||||
Oil Refineries Ltd. | 2,374,164 | 1,190,979 | ||||||
Paz Oil Co. Ltd. | 7,644 | 1,079,897 | ||||||
5,053,406 | ||||||||
PHARMACEUTICALS – 23.10% |
| |||||||
Teva Pharmaceutical | 585,988 | 29,672,616 | ||||||
29,672,616 | ||||||||
REAL ESTATE – 4.36% | ||||||||
Africa Israel Investments Ltd.a,b | 96,460 | 506,683 | ||||||
Africa Israel Properties Ltd.a | 27,249 | 308,805 | ||||||
Airport City Ltd.a | 74,360 | 308,572 | ||||||
Alony Hetz Properties & | ||||||||
Investments Ltd. | 156,988 | 721,547 | ||||||
Amot Investments Ltd. | 192,504 | 497,957 | ||||||
Azorim-Investment Development & Construction Co. Ltd.a |
| 25,595 |
|
| 102,111 |
| ||
British Israel Investments Ltd. | 124,436 | 364,402 | ||||||
Delek Real Estate Ltd.a,b | 188,708 | 81,778 | ||||||
Electra Real Estate Ltd.a | 25,272 | 167,001 | ||||||
Gazit Globe Ltd.b | 142,636 | 1,399,575 | ||||||
Gazit Inc. | 14,196 | 318,371 | ||||||
Jerusalem Economy Ltd.a | 33,484 | 244,479 |
Security | Shares | Value | ||||||
Melisron Ltd. | 25,480 | $ | 575,115 | |||||
5,596,396 | ||||||||
RETAIL – 0.67% |
| |||||||
Delek Automotive | 79,040 | 863,576 | ||||||
863,576 | ||||||||
SEMICONDUCTORS – 1.35% |
| |||||||
Mellanox Technologies Ltd.a | 68,068 | 1,101,423 | ||||||
Tower Semiconductor Ltd.a | 453,076 | 636,865 | ||||||
1,738,288 | ||||||||
SOFTWARE – 0.36% | ||||||||
Retalix Ltd.a | 38,792 | 464,485 | ||||||
464,485 | ||||||||
TELECOMMUNICATIONS – 14.56% |
| |||||||
012 Smile.Communications Ltd.a | 21,372 | 465,890 | ||||||
Alvarion Ltd.a | 130,072 | 246,001 | ||||||
AudioCodes Ltd.a | 79,924 | 204,517 | ||||||
Bezeq The Israel Telecommunication | 2,790,060 | 6,169,275 | ||||||
Cellcom Israel Ltd. | 106,392 | 2,970,314 | ||||||
Ceragon Networks Ltd.a | 66,825 | 562,681 | ||||||
Gilat Satellite Networks Ltd.a | 57,370 | 268,957 | ||||||
NICE Systems Ltd.a | 150,228 | 4,040,275 | ||||||
Partner Communications | 223,236 | 3,722,457 | ||||||
Suny Electronic Inc. Ltd.a | 6,064 | 52,032 | ||||||
18,702,399 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $152,236,948) | 128,323,139 | |||||||
SHORT-TERM INVESTMENTS – 3.56% |
| |||||||
MONEY MARKET FUNDS – 3.56% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares | ||||||||
0.31%d,e,f | 3,755,686 | 3,755,686 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares | ||||||||
0.30%d,e,f | 729,807 | 729,807 |
SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
SL Agency Shares | ||||||||
0.13%d,e | 90,194 | $ | 90,194 | |||||
4,575,687 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $4,575,687) | 4,575,687 | |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $156,812,635) | 132,898,826 | |||||||
Other Assets, Less Liabilities – (3.45)% |
| (4,426,122) | ||||||
NET ASSETS – 100.00% | $ | 128,472,704 | ||||||
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1. |
d | Affiliated issuer. See Note 2. |
e | The rate quoted is the annualized seven-day yield of the fund at period end. |
f | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
44 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI MEXICO INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.91% |
| |||||||
BANKS – 1.42% | ||||||||
Banco Compartamos SAa | 3,723,400 | $ | 20,569,489 | |||||
20,569,489 | ||||||||
BEVERAGES – 9.33% | ||||||||
Fomento Economico Mexicano |
| |||||||
SAB de CV BD Units | 18,240,608 | 89,583,973 | ||||||
Grupo Modelo SAB de CV |
| |||||||
Series C | 8,578,556 | 45,703,111 | ||||||
135,287,084 | ||||||||
BUILDING MATERIALS – 4.76% |
| |||||||
Cemex SAB de CV CPOa,b | 88,283,380 | 68,954,360 | ||||||
68,954,360 | ||||||||
CHEMICALS – 1.74% |
| |||||||
Mexichem SAB de CV | 9,800,031 | 25,301,163 | ||||||
25,301,163 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 6.95% |
| |||||||
Bolsa Mexicana de Valores | 4,515,000 | 7,052,946 | ||||||
Financiera Independencia SAB |
| |||||||
de CVa,b | 1,355,568 | 1,249,315 | ||||||
Grupo Financiero Banorte SAB |
| |||||||
de CV Series O | 14,884,500 | 53,706,405 | ||||||
Grupo Financiero Inbursa SAB |
| |||||||
de CV Series O | 10,444,700 | 38,710,379 | ||||||
100,719,045 | ||||||||
ENGINEERING & CONSTRUCTION – 4.11% |
| |||||||
Carso Infraestructura y |
| |||||||
Construccion SAB de CV |
| |||||||
Series B1a,b | 10,655,400 | 6,233,761 | ||||||
Empresas ICA SAB | 6,471,574 | 14,839,485 | ||||||
Grupo Aeroportuario del | 2,408,000 | 3,602,399 | ||||||
Grupo Aeroportuario del | 6,832,700 | 19,021,181 | ||||||
Grupo Aeroportuario del | ||||||||
Sureste SAB de CV Series B |
| |||||||
SP ADR | 382,452 | 15,883,232 | ||||||
59,580,058 | ||||||||
FOOD – 3.36% | ||||||||
Alsea SAB de CVa | 4,876,245 | 4,582,947 |
Security | Shares | Value | ||||||
Gruma SAB de CV Series Ba,b | 3,130,469 | $ | 4,181,364 | |||||
Grupo Bimbo SAB de CV | 5,809,300 | 39,971,448 | ||||||
48,735,759 | ||||||||
FOREST PRODUCTS & PAPER – 3.23% |
| |||||||
Bio Pappel SAB de CVa,b | 511,700 | 414,052 | ||||||
Kimberly-Clark de Mexico SAB |
| |||||||
de CV Series A | 8,006,600 | 46,476,258 | ||||||
46,890,310 | ||||||||
HOLDING COMPANIES - DIVERSIFIED – 4.78% |
| |||||||
Alfa SAB de CV Series A | 4,153,800 | 28,621,649 | ||||||
Grupo Carso SAB de CV | 9,180,530 | 40,749,189 | ||||||
69,370,838 | ||||||||
HOME BUILDERS – 3.10% |
| |||||||
Consorcio ARA SAB de CVa | 10,775,800 | 6,230,513 | ||||||
Corporacion Geo SAB de CV | 4,966,960 | 12,857,379 | ||||||
Desarrolladora Homex SAB | 2,618,730 | 12,095,185 | ||||||
Sare Holding SAB de CV | 1,715,700 | 333,711 | ||||||
Urbi Desarrollos Urbanos SAB |
| |||||||
de CVb | 7,103,600 | 13,395,839 | ||||||
44,912,627 | ||||||||
IRON & STEEL – 0.26% |
| |||||||
Compania Minera Autlan SAB |
| |||||||
de CV Series Ba,b | 711,800 | 1,313,636 | ||||||
Grupo Simec SAB de CV | 1,053,500 | 2,462,928 | ||||||
3,776,564 | ||||||||
MACHINERY – 0.62% |
| |||||||
Industrias CH SAB de CV | 2,528,400 | 8,942,421 | ||||||
8,942,421 | ||||||||
MEDIA – 6.08% | ||||||||
Grupo Televisa SA CPO | 18,541,699 | 68,973,235 | ||||||
Megacable Holdings SAB de | 3,250,800 | 7,970,377 | ||||||
TV Azteca SAB de CV CPOa | 17,307,500 | 11,203,755 | ||||||
88,147,367 |
SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI MEXICO INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
MINING – 8.13% | ||||||||
Grupo Mexico SAB de CV |
| |||||||
Series B | 35,698,610 | $ | 91,784,918 | |||||
Industrias Penoles SAB | 1,232,300 | 26,081,038 | ||||||
117,865,956 | ||||||||
PHARMACEUTICALS – 0.88% |
| |||||||
Genomma Lab Internacional |
| |||||||
SAB de CV Series Ba,b | 6,953,100 | 12,821,473 | ||||||
12,821,473 | ||||||||
RETAIL – 12.83% | ||||||||
Controladora Comercial | 8,064,800 | 6,770,887 | ||||||
Grupo Elektra SA | 830,760 | 26,662,412 | ||||||
Grupo Famsa SAB de | 3,040,115 | 3,333,082 | ||||||
Wal-Mart de Mexico SAB de |
| |||||||
CV Series V | 66,551,100 | 149,215,559 | ||||||
185,981,940 | ||||||||
TELECOMMUNICATIONS – 28.33% |
| |||||||
America Movil SAB de CV |
| |||||||
Series L | 150,138,885 | 351,572,974 | ||||||
Axtel SAB de | 14,417,900 | 7,405,227 | ||||||
Maxcom Telecomunicaciones |
| |||||||
SAB de CVa,b | 2,252,400 | 1,064,451 | ||||||
Telefonos de Mexico SAB de |
| |||||||
CV Series L | 72,691,500 | 50,756,165 | ||||||
410,798,817 | ||||||||
TOTAL COMMON STOCKS |
| 1,448,655,271 | ||||||
SHORT-TERM INVESTMENTS – 4.91% |
| |||||||
MONEY MARKET FUNDS – 4.91% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares |
| |||||||
0.31%c,d,e | 59,606,860 | 59,606,860 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares |
| |||||||
0.30%c,d,e | 11,582,832 | 11,582,832 |
Security | Shares | Value | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares |
| |||||||
0.13%c,d | 25,314 | $ | 25,314 | |||||
71,215,006 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $71,215,006) | 71,215,006 | |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $1,729,586,580) | 1,519,870,277 | |||||||
Other Assets, Less Liabilities – (4.82)% |
| (69,831,706) | ||||||
NET ASSETS – 100.00% | $ | 1,450,038,571 | ||||||
CPO – Certificates of Participation (Ordinary)
SP ADR – Sponsored American Depositary Receipts
a | All or a portion of this security represents a security on loan. See Note 5. |
b | Non-income earning security. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
46 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI SOUTH AFRICA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.78% |
| |||||||
BANKS – 14.05% | ||||||||
Absa Group Ltd. | 695,998 | $ | 11,630,241 | |||||
FirstRand Ltd. | 6,067,730 | 15,902,006 | ||||||
Nedbank Group Ltd. | 384,162 | 7,310,576 | ||||||
Standard Bank Group Ltd. | 2,548,524 | 36,117,983 | ||||||
70,960,806 | ||||||||
BUILDING MATERIALS – 0.92% |
| |||||||
Pretoria Portland Cement | 1,134,168 | 4,617,709 | ||||||
4,617,709 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 3.48% |
| |||||||
African Bank | 1,555,912 | 6,834,769 | ||||||
Investec Ltd. | 492,522 | 3,701,386 | ||||||
RMB Holdings Ltd. | 1,559,610 | 7,047,663 | ||||||
17,583,818 | ||||||||
ELECTRONICS – 0.59% |
| |||||||
Reunert Ltd. | 383,474 | 2,988,973 | ||||||
2,988,973 | ||||||||
ENGINEERING & CONSTRUCTION – 1.58% |
| |||||||
Aveng Ltd. | 808,056 | 4,163,119 | ||||||
Murray & Roberts | 677,250 | 3,810,579 | ||||||
7,973,698 | ||||||||
FOOD – 3.81% | ||||||||
Shoprite Holdings Ltd. | 878,060 | 10,761,838 | ||||||
Tiger Brands Ltd. | 347,010 | 8,503,821 | ||||||
19,265,659 | ||||||||
FOREST PRODUCTS & PAPER – 1.08% |
| |||||||
Sappi Ltd.a | 1,154,722 | 5,471,652 | ||||||
5,471,652 | ||||||||
HEALTH CARE - PRODUCTS – 1.26% |
| |||||||
Aspen Pharmacare | 555,818 | 6,337,565 | ||||||
6,337,565 | ||||||||
HEALTH CARE - SERVICES – 0.82% |
| |||||||
Netcare Ltd.a | 2,305,574 | 4,135,545 | ||||||
4,135,545 | ||||||||
HOLDING COMPANIES - DIVERSIFIED – 5.82% |
| |||||||
Bidvest Group Ltd. | 637,432 | 11,770,768 | ||||||
Imperial Holdings Ltd. | 366,360 | 5,071,397 | ||||||
Remgro Ltd. | 932,412 | 12,578,381 | ||||||
29,420,546 |
Security | Shares | Value | ||||||
HOME FURNISHINGS – 1.28% |
| |||||||
Steinhoff International | 2,538,720 | $ | 6,470,927 | |||||
6,470,927 | ||||||||
INSURANCE – 3.49% | ||||||||
Discovery Holdings Ltd. | 575,254 | 2,732,081 | ||||||
Liberty Holdings Ltd. | 216,290 | 2,052,713 | ||||||
Sanlam Ltd. | 4,061,952 | 12,820,695 | ||||||
17,605,489 | ||||||||
IRON & STEEL – 2.40% | ||||||||
ArcelorMittal South | 383,044 | 4,279,270 | ||||||
Kumba Iron Ore Ltd. | 172,774 | 7,853,566 | ||||||
12,132,836 | ||||||||
MEDIA – 6.62% | ||||||||
Naspers Ltd. Class N | 828,438 | 33,446,398 | ||||||
33,446,398 | ||||||||
MINING – 22.04% | ||||||||
African Rainbow | 228,158 | 4,772,425 | ||||||
Anglo Platinum Ltd.a | 141,556 | 11,716,766 | ||||||
AngloGold Ashanti Ltd. | 778,988 | 33,416,507 | ||||||
Exxaro Resources Ltd. | 268,578 | 4,167,178 | ||||||
Gold Fields Ltd. | 1,516,180 | 21,789,659 | ||||||
Harmony Gold Mining | 827,234 | 8,575,441 | ||||||
Impala Platinum | 1,085,750 | 25,613,734 | ||||||
Northam Platinum Ltd.b | 233,576 | 1,274,641 | ||||||
111,326,351 | ||||||||
OIL & GAS – 9.31% | ||||||||
Sasol Ltd. | 1,235,734 | 47,053,641 | ||||||
47,053,641 | ||||||||
REAL ESTATE – 2.67% | ||||||||
Growthpoint Properties Ltd. | 3,326,824 | 7,600,174 | ||||||
Redefine Properties Ltd. | 5,447,928 | 5,901,630 | ||||||
13,501,804 | ||||||||
RETAIL – 5.22% | ||||||||
Foschini Ltd. | 439,202 | 4,227,820 | ||||||
Massmart Holdings Ltd. | 411,338 | 6,829,468 | ||||||
Pick’n Pay Stores Ltd. | 466,894 | 2,809,308 | ||||||
Truworths International Ltd. | 930,176 | 7,383,901 | ||||||
Woolworths Holdings Ltd. | 1,541,292 | 5,140,600 | ||||||
26,391,097 |
SCHEDULESOF INVESTMENTS | 47 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH AFRICA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
TELECOMMUNICATIONS – 13.34% |
| |||||||
MTN Group Ltd. | 3,558,508 | $ | 58,136,490 | |||||
Telkom South Africa Ltd. | 562,870 | 2,564,137 | ||||||
Vodacom Group | 799,714 | 6,688,724 | ||||||
67,389,351 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $540,229,937) | 504,073,865 | |||||||
SHORT-TERM INVESTMENTS – 1.12% |
| |||||||
MONEY MARKET FUNDS – 1.12% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares |
| |||||||
0.31%c,d,e | 4,708,194 | 4,708,194 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares |
| |||||||
0.30%c,d,e | 914,899 | 914,899 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares |
| |||||||
0.13%c,d | 18,200 | 18,200 | ||||||
5,641,293 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $5,641,293) | 5,641,293 | |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $545,871,230) | 509,715,158 | |||||||
Other Assets, Less Liabilities – (0.90)% |
| (4,524,420) | ||||||
NET ASSETS – 100.00% | $ | 505,190,738 | ||||||
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
48 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI TURKEY INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.92% |
| |||||||
AEROSPACE & DEFENSE – 0.29% |
| |||||||
Aselsan Elektronik Sanayi | 415,008 | $ | 1,757,700 | |||||
1,757,700 | ||||||||
AIRLINES – 1.84% | ||||||||
Turk Hava Yollari | 3,507,372 | 11,054,820 | ||||||
11,054,820 | ||||||||
AUTO MANUFACTURERS – 0.12% |
| |||||||
Otokar Otomotiv Ve Savunma |
| |||||||
Sanayi ASa | 74,052 | 739,110 | ||||||
739,110 | ||||||||
BANKS – 45.50% | ||||||||
Akbank TAS | 10,528,650 | 55,999,780 | ||||||
Albaraka Turk Katilim | 1,656,468 | 2,762,774 | ||||||
Asya Katilim Bankasi AS | 3,951,288 | 8,769,685 | ||||||
Sekerbank TASa | 2,304,918 | 2,330,799 | ||||||
Tekstil Bankasi ASb | 928,224 | 633,891 | ||||||
Turkiye Garanti Bankasi AS | 18,428,454 | 89,546,628 | ||||||
Turkiye Halk Bankasi AS | 2,741,904 | 22,325,569 | ||||||
Turkiye Is Bankasi AS | 13,818,816 | 50,814,479 | ||||||
Turkiye Vakiflar Bankasi TAO | 6,579,738 | 17,887,002 | ||||||
Yapi ve Kredi | 7,628,743 | 22,842,647 | ||||||
273,913,254 | ||||||||
BEVERAGES – 4.95% | ||||||||
Anadolu Efes Biracilik ve Malt |
| |||||||
Sanayii AS | 1,776,654 | 23,915,823 | ||||||
Coca-Cola Icecek ASa | 558,360 | 5,866,281 | ||||||
29,782,104 | ||||||||
BUILDING MATERIALS – 2.31% |
| |||||||
Adana Cimento Sanayii TAS |
| |||||||
Class A | 502,128 | 1,641,999 | ||||||
Afyon Cimento Sanayi TAS | 6,336 | 744,727 | ||||||
Akcansa Cimento Sanayi | 420,354 | 2,083,967 | ||||||
Baticim Bati Anodolu Cimento |
| |||||||
Sanayii AS | 279,576 | 1,358,502 | ||||||
Bolu Cimento Sanayii AS | 618,552 | 633,621 | ||||||
Bursa Cimento | 417,978 | 1,262,525 | ||||||
Cimsa Cimento Sanayi | 355,806 | 2,207,871 | ||||||
Goltas Goller Bolgesi Cimento |
| |||||||
Sanayi ve TAS | 25,344 | 1,031,800 |
Security | Shares | Value | ||||||
Konya Cimento Sanayii AS | 8,514 | $ | 771,510 | |||||
Mardin Cimento Sanayii ve TAS | 432,828 | 2,145,808 | ||||||
13,882,330 | ||||||||
CHEMICALS – 1.50% | ||||||||
Aksa Akrilik Kimya Sanayii AS | 730,620 | 1,285,745 | ||||||
Bagfas Bandirma Gubre | ||||||||
Fabrikalari ASa,b | 15,840 | 1,237,744 | ||||||
Gubre Fabrikalari TASa,b | 183,348 | 1,444,730 | ||||||
Petkim Petrokimya Holding ASa,b | 3,512,322 | 5,050,880 | ||||||
9,019,099 | ||||||||
COMMERCIAL SERVICES – 0.57% |
| |||||||
Ihlas Holding ASa,b | 2,608,452 | 1,250,358 | ||||||
Koza Anadolu Metal Madencilik |
| |||||||
Isletmeleri ASa,b | 851,994 | 2,204,253 | ||||||
3,454,611 | ||||||||
DISTRIBUTION & WHOLESALE – 0.57% |
| |||||||
Aygaz AS | 790,218 | 3,450,620 | ||||||
3,450,620 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 0.93% |
| |||||||
Finans Finansal Kiralama ASb | 259,657 | 494,455 | ||||||
Is Finansal Fabrikasi ASb | 1,165,626 | 872,555 | ||||||
Is Yatirim Menkul Degerler AS | 527,472 | 682,330 | ||||||
Turkiye Sinai Kalkinma | 2,469,131 | 3,534,510 | ||||||
5,583,850 | ||||||||
ELECTRIC – 0.63% | ||||||||
Akenerji Elektrik Uretim ASa,b | 990,000 | 2,301,267 | ||||||
Zorlu Enerji Elektrik Uretim ASa,b | 864,666 | 1,498,928 | ||||||
3,800,195 | ||||||||
ENGINEERING & CONSTRUCTION – 1.52% |
| |||||||
Enka Insaat ve Sanayi AS | 2,511,235 | 9,151,851 | ||||||
9,151,851 | ||||||||
ENTERTAINMENT – 0.38% |
| |||||||
Fenerbahce Sportif Hizmetler | 33,066 | 1,139,907 | ||||||
Galatasaray Sportif Sinai ve Ticari |
| |||||||
Yatirimlar AS | 7,173 | 1,153,973 | ||||||
2,293,880 | ||||||||
FOOD – 4.17% | ||||||||
Banvit Bandirma Vitaminli Yem | 220,572 | 760,393 |
SCHEDULESOF INVESTMENTS | 49 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI TURKEY INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
BIM Birlesik Magazalar ASa | 732,600 | $ | 20,084,083 | |||||
Pinar Sut Mamulleri | 158,202 | 1,033,627 | ||||||
Tat Konserve | 412,632 | 872,464 | ||||||
Ulker Biskuvi | 825,462 | 2,330,742 | ||||||
25,081,309 | ||||||||
FOREST PRODUCTS & PAPER – 0.51% |
| |||||||
Ipek Matbaacilik Sanayi | 456,192 | 976,549 | ||||||
Kartonsan Karton Sanayi | 16,236 | 1,343,316 | ||||||
Tire Kutu Ve Kagit | 705,870 | 741,606 | ||||||
3,061,471 | ||||||||
HOLDING COMPANIES - DIVERSIFIED – 9.76% |
| |||||||
Alarko Holding ASa | 589,248 | 1,253,637 | ||||||
Dogan Sirketler Grubu | ||||||||
Holdings AS | 7,529,545 | 4,944,215 | ||||||
Eczacibasi Yatirim Holding | 273,240 | 882,751 | ||||||
Haci Omer Sabanci | 5,374,908 | 24,352,791 | ||||||
KOC Holding AS | 5,297,688 | 20,698,172 | ||||||
Tekfen Holding ASa | 1,137,114 | 4,181,390 | ||||||
Yazicilar Holding AS | 351,252 | 2,421,791 | ||||||
58,734,747 | ||||||||
HOME FURNISHINGS – 1.58% |
| |||||||
Arcelik ASa | 1,483,416 | 7,062,030 | ||||||
Vestel Beyaz Esya Sanayi | 584,100 | 1,373,089 | ||||||
Vestel Elektronik Sanayi | 729,234 | 1,082,192 | ||||||
9,517,311 | ||||||||
HOUSEWARES – 0.95% | ||||||||
Anadolu Cam Sanayii ASb | 760,914 | 1,219,141 | ||||||
Turk Sise ve Cam | 3,013,560 | 4,511,732 | ||||||
5,730,873 | ||||||||
INSURANCE – 1.05% | ||||||||
Aksigorta ASa | 1,074,942 | 1,334,060 | ||||||
Anadolu Anonim Turk | 1,981,114 | 1,456,988 | ||||||
Anadolu Hayat Emeklilik AS | 438,372 | 1,306,855 | ||||||
Gunes Sigorta ASa,b | 323,334 | 399,152 | ||||||
Yapi Kredi Sigorta ASa,b | 245,916 | 1,840,858 | ||||||
6,337,913 | ||||||||
IRON & STEEL – 2.40% | ||||||||
Eregli Demir ve Celik | 3,512,322 | 10,194,015 |
Security | Shares | Value | ||||||
Izmir Demir Celik Sanayi ASb | 331,254 | $ | 511,161 | |||||
Kardemir Karabuk Demir Celik |
| |||||||
Sanayi ve TAS Class Ab | 1,609,938 | 1,110,010 | ||||||
Kardemir Karabuk Demir Celik |
| |||||||
Sanayi ve TAS Class Bb | 811,998 | 575,847 | ||||||
Kardemir Karabuk Demir Celik |
| |||||||
Sanayi ve TAS Class Da,b | 5,009,400 | 2,039,417 | ||||||
14,430,450 | ||||||||
LODGING – 0.20% | ||||||||
Net Holding ASa,b | 1,935,252 | 1,181,814 | ||||||
1,181,814 | ||||||||
MACHINERY – 0.22% | ||||||||
Turk Traktor ve Ziraat | 117,216 | 1,308,472 | ||||||
1,308,472 | ||||||||
MANUFACTURING – 0.44% |
| |||||||
Trakya Cam Sanayii ASa,b | 1,588,949 | 2,639,728 | ||||||
2,639,728 | ||||||||
MEDIA – 0.64% | ||||||||
Dogan Gazetecilik ASb | 273,473 | 492,033 | ||||||
Dogan Yayin Holding ASa,b | 2,195,226 | 1,830,676 | ||||||
Hurriyet Gazetecilik ve | 1,694,682 | 1,557,919 | ||||||
3,880,628 | ||||||||
METAL FABRICATE & HARDWARE – 0.15% |
| |||||||
Borusan Mannesmann Boru | 75,042 | 891,891 | ||||||
891,891 | ||||||||
MINING – 0.15% | ||||||||
Park Elektrik Madencilik Sanayi | 581,922 | 920,896 | ||||||
920,896 | ||||||||
OIL & GAS – 4.10% | ||||||||
Turkiye Petrol Rafinerileri AS | 1,098,702 | 24,709,793 | ||||||
24,709,793 | ||||||||
PHARMACEUTICALS – 0.87% |
| |||||||
Deva Holding ASb | 714,384 | 1,341,610 | ||||||
EIS Eczacibasi Ilac Sanayi ve TASa | 1,444,014 | 2,294,644 | ||||||
Selcuk Ecza Deposu Ticaret ve | 1,087,614 | 1,578,322 | ||||||
5,214,576 |
50 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI TURKEY INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
REAL ESTATE INVESTMENT TRUSTS – 0.62% |
| |||||||
Is Gayrimenkul Yatirim | 1,975,644 | $ | 2,062,692 | |||||
Sinpas Gayrimenkul Yatirim | 1,543,125 | 1,651,647 | ||||||
3,714,339 | ||||||||
RETAIL – 0.52% | ||||||||
Dogus Otomotiv Servis | 337,986 | 1,842,067 | ||||||
Turcas Petrolculuk ASa | 359,568 | 1,310,397 | ||||||
3,152,464 | ||||||||
TELECOMMUNICATIONS – 10.39% |
| |||||||
Nortel Networks Netas | 20,196 | 709,492 | ||||||
Turk Telekomunikasyon AS | 4,606,074 | 19,054,610 | ||||||
Turkcell Iletisim | 6,755,958 | 42,809,767 | ||||||
62,573,869 | ||||||||
TRANSPORTATION – 0.09% |
| |||||||
Celebi Hava Servisi AS | 53,262 | 573,575 | ||||||
573,575 | ||||||||
TOTAL COMMON STOCKS |
| 601,539,543 | ||||||
SHORT-TERM INVESTMENTS – 4.08% |
| |||||||
MONEY MARKET FUNDS – 4.08% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares |
| |||||||
0.31%c,d,e | 20,330,266 | 20,330,266 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares |
| |||||||
0.30%c,d,e | 3,950,587 | 3,950,587 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares |
| |||||||
0.13%c,d | 269,858 | 269,858 | ||||||
24,550,711 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $24,550,711) | 24,550,711 | |||||||
Value | ||||
TOTAL INVESTMENTS | ||||
IN SECURITIES – 104.00% | ||||
(Cost: $573,524,603) | $ | 626,090,254 | ||
Other Assets, Less Liabilities – (4.00)% | (24,102,115) | |||
NET ASSETS – 100.00% | $ | 601,988,139 | ||
a | All or a portion of this security represents a security on loan. See Note 5. |
b | Non-income earning security. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 51 |
Table of Contents
iSHARES® MSCI USA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.66% |
| |||||||
ADVERTISING – 0.16% | ||||||||
Interpublic Group of Companies | 108 | $ | 921 | |||||
Omnicom Group Inc. | 74 | 2,591 | ||||||
3,512 | ||||||||
AEROSPACE & DEFENSE – 2.00% |
| |||||||
Boeing Co. (The) | 157 | 9,597 | ||||||
General Dynamics Corp. | 76 | 4,246 | ||||||
Goodrich Corp. | 28 | 1,917 | ||||||
L-3 Communications Holdings Inc. | 26 | 1,732 | ||||||
Lockheed Martin Corp. | 72 | 5,006 | ||||||
Northrop Grumman Corp. | 66 | 3,572 | ||||||
Raytheon Co. | 88 | 3,865 | ||||||
Rockwell Collins Inc. | 34 | 1,834 | ||||||
United Technologies Corp. | 202 | 13,172 | ||||||
44,941 | ||||||||
AGRICULTURE – 2.23% | ||||||||
Altria Group Inc. | 470 | 10,490 | ||||||
Archer-Daniels-Midland Co. | 146 | 4,494 | ||||||
Bunge Ltd. | 30 | 1,590 | ||||||
Lorillard Inc. | 36 | 2,736 | ||||||
Monsanto Co. | 124 | 6,529 | ||||||
Philip Morris International Inc. | 426 | 21,913 | ||||||
Reynolds American Inc. | 42 | 2,291 | ||||||
50,043 | ||||||||
AIRLINES – 0.04% | ||||||||
Delta Air Lines Inc.a | 44 | 460 | ||||||
Southwest Airlines Co. | 40 | 442 | ||||||
902 | ||||||||
APPAREL – 0.48% | ||||||||
Coach Inc. | 70 | 2,509 | ||||||
Nike Inc. Class B | 86 | 6,020 | ||||||
Polo Ralph Lauren Corp. | 12 | 909 | ||||||
VF Corp. | 20 | 1,412 | ||||||
10,850 | ||||||||
AUTO MANUFACTURERS – 0.48% |
| |||||||
Ford Motor Co.a | 670 | 7,564 | ||||||
PACCAR Inc. | 76 | 3,115 | ||||||
10,679 |
Security | Shares | Value | ||||||
AUTO PARTS & EQUIPMENT – 0.26% |
| |||||||
BorgWarner Inc.a | 26 | $ | 1,135 | |||||
Goodyear Tire & Rubber Co. (The)a | 50 | 462 | ||||||
Johnson Controls Inc. | 156 | 4,139 | ||||||
5,736 | ||||||||
BANKS – 4.34% | ||||||||
Bank of America Corp. | 2,266 | 28,212 | ||||||
Bank of New York Mellon Corp. (The) | 274 | 6,650 | ||||||
BB&T Corp. | 160 | 3,539 | ||||||
Comerica Inc. | 38 | 1,307 | ||||||
Fifth Third Bancorp | 182 | 2,011 | ||||||
KeyCorp | 194 | 1,430 | ||||||
M&T Bank Corp. | 20 | 1,713 | ||||||
Marshall & Ilsley Corp. | 110 | 720 | ||||||
Northern Trust Corp. | 48 | 2,215 | ||||||
PNC Financial Services Group Inc. (The)b | 118 | 6,013 | ||||||
Regions Financial Corp. | 262 | 1,685 | ||||||
State Street Corp. | 116 | 4,069 | ||||||
SunTrust Banks Inc. | 112 | 2,519 | ||||||
U.S. Bancorp | 434 | 9,027 | ||||||
Wells Fargo & Co. | 1,112 | 26,188 | ||||||
97,298 | ||||||||
BEVERAGES – 2.57% | ||||||||
Brown-Forman Corp. Class B NVS | 18 | 1,103 | ||||||
Coca-Cola Co. (The) | 468 | 26,171 | ||||||
Coca-Cola Enterprises Inc. | 64 | 1,821 | ||||||
Constellation Brands Inc. Class Aa | 44 | 733 | ||||||
Dr Pepper Snapple Group Inc. | 56 | 2,062 | ||||||
Hansen Natural Corp.a | 16 | 721 | ||||||
Molson Coors Brewing Co. | 34 | 1,481 | ||||||
PepsiCo Inc. | 368 | 23,618 | ||||||
57,710 | ||||||||
BIOTECHNOLOGY – 1.35% | ||||||||
Amgen Inc.a | 218 | 11,127 | ||||||
Biogen Idec Inc.a | 60 | 3,228 | ||||||
Celgene Corp.a | 106 | 5,461 | ||||||
Charles River Laboratories | 14 | 395 | ||||||
Genzyme Corp.a | 62 | 4,347 | ||||||
Human Genome Sciences Inc.a | 44 | 1,280 | ||||||
Illumina Inc.a | 28 | 1,201 | ||||||
Life Technologies Corp.a | 40 | 1,711 |
52 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Vertex Pharmaceuticals Inc.a | 48 | $ | 1,600 | |||||
30,350 | ||||||||
BUILDING MATERIALS – 0.07% |
| |||||||
Martin Marietta Materials Inc. | 10 | 732 | ||||||
Masco Corp. | 80 | 839 | ||||||
1,571 | ||||||||
CHEMICALS – 1.89% | ||||||||
Air Products and Chemicals Inc. | 50 | 3,702 | ||||||
Airgas Inc. | 16 | 1,053 | ||||||
Celanese Corp. Series A | 32 | 854 | ||||||
CF Industries Holdings Inc. | 16 | 1,480 | ||||||
Dow Chemical Co. (The) | 260 | 6,336 | ||||||
E.I. du Pont de Nemours and Co. | 206 | 8,399 | ||||||
Eastman Chemical Co. | 16 | 985 | ||||||
Ecolab Inc. | 52 | 2,465 | ||||||
FMC Corp. | 16 | 997 | ||||||
International Flavors & | 18 | 822 | ||||||
Lubrizol Corp. | 16 | 1,493 | ||||||
Mosaic Co. (The) | 34 | 1,994 | ||||||
PPG Industries Inc. | 40 | 2,633 | ||||||
Praxair Inc. | 70 | 6,022 | ||||||
Sherwin-Williams Co. (The) | 22 | 1,548 | ||||||
Sigma-Aldrich Corp. | 30 | 1,595 | ||||||
42,378 | ||||||||
COAL – 0.26% | ||||||||
Alpha Natural Resources Inc.a | 26 | 965 | ||||||
Arch Coal Inc. | 36 | 810 | ||||||
CONSOL Energy Inc. | 48 | 1,546 | ||||||
Peabody Energy Corp. | 60 | 2,568 | ||||||
5,889 | ||||||||
COMMERCIAL SERVICES – 1.35% |
| |||||||
Alliance Data Systems Corp.a | 12 | 674 | ||||||
Apollo Group Inc. Class Aa | 32 | 1,359 | ||||||
DeVry Inc. | 14 | 534 | ||||||
Equifax Inc. | 28 | 825 | ||||||
H&R Block Inc. | 74 | 951 | ||||||
Iron Mountain Inc. | 40 | 811 | ||||||
ITT Educational Services Inc.a | 8 | 426 | ||||||
Lender Processing Services Inc. | 22 | 645 | ||||||
Manpower Inc. | 18 | 765 | ||||||
MasterCard Inc. Class A | 22 | 4,364 | ||||||
McKesson Corp. | 60 | 3,483 |
Security | Shares | Value | ||||||
Moody’s Corp. | 44 | $ | 930 | |||||
Pharmaceutical Product | 24 | 551 | ||||||
Quanta Services Inc.a | 46 | 825 | ||||||
R.R. Donnelley & Sons Co. | 46 | 697 | ||||||
Robert Half International Inc. | 32 | 691 | ||||||
SAIC Inc.a | 88 | 1,310 | ||||||
Verisk Analytics Inc. Class Aa | 24 | 668 | ||||||
Visa Inc. Class A | 108 | 7,450 | ||||||
Western Union Co. | 152 | 2,383 | ||||||
30,342 | ||||||||
COMPUTERS – 6.19% | ||||||||
Accenture PLC Class A | 144 | 5,270 | ||||||
Apple Inc.a | 204 | 49,648 | ||||||
Cognizant Technology Solutions Corp. |
| |||||||
Class Aa | 66 | 3,802 | ||||||
Computer Sciences Corp.a | 34 | 1,354 | ||||||
Dell Inc.a | 398 | 4,684 | ||||||
EMC Corp.a | 462 | 8,427 | ||||||
Hewlett-Packard Co. | 532 | 20,471 | ||||||
IHS Inc. Class Aa | 10 | 618 | ||||||
International Business | 290 | 35,737 | ||||||
NetApp Inc.a | 74 | 2,993 | ||||||
SanDisk Corp.a | 50 | 1,662 | ||||||
Seagate Technology PLCa | 110 | 1,114 | ||||||
Synopsys Inc.a | 32 | 732 | ||||||
Teradata Corp.a | 38 | 1,244 | ||||||
Western Digital Corp.a | 50 | 1,208 | ||||||
138,964 | ||||||||
COSMETICS & PERSONAL CARE – 2.31% |
| |||||||
Avon Products Inc. | 96 | 2,794 | ||||||
Colgate-Palmolive Co. | 114 | 8,418 | ||||||
Estee Lauder Companies Inc. (The) | 24 | 1,346 | ||||||
Procter & Gamble Co. (The) | 656 | 39,143 | ||||||
51,701 | ||||||||
DISTRIBUTION & WHOLESALE – 0.19% |
| |||||||
Fastenal Co.c | 30 | 1,358 | ||||||
Genuine Parts Co. | 36 | 1,510 | ||||||
W.W. Grainger Inc. | 14 | 1,481 | ||||||
4,349 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 5.27% |
| |||||||
American Express Co. | 242 | 9,649 |
SCHEDULESOF INVESTMENTS | 53 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Ameriprise Financial Inc. | 56 | $ | 2,441 | |||||
BlackRock Inc.b | 8 | 1,136 | ||||||
Capital One Financial Corp. | 106 | 4,013 | ||||||
Charles Schwab Corp. (The) | 230 | 2,935 | ||||||
CIT Group Inc.a | 44 | 1,614 | ||||||
Citigroup Inc.a | 5,566 | 20,706 | ||||||
CME Group Inc. | 16 | 3,969 | ||||||
Discover Financial Services | 120 | 1,741 | ||||||
Eaton Vance Corp. | 24 | 624 | ||||||
Franklin Resources Inc. | 36 | 3,474 | ||||||
Goldman Sachs Group Inc. (The) | 110 | 15,063 | ||||||
IntercontinentalExchange Inc.a | 14 | 1,338 | ||||||
Invesco Ltd. | 94 | 1,701 | ||||||
Jefferies Group Inc. | 22 | 495 | ||||||
JPMorgan Chase & Co. | 898 | 32,651 | ||||||
Legg Mason Inc. | 36 | 912 | ||||||
Morgan Stanley | 286 | 7,061 | ||||||
NASDAQ OMX Group Inc. (The)a | 32 | 573 | ||||||
NYSE Euronext Inc. | 58 | 1,609 | ||||||
SLM Corp.a | 104 | 1,149 | ||||||
T. Rowe Price Group Inc. | 60 | 2,627 | ||||||
TD AMERITRADE Holding Corp.a | 58 | 847 | ||||||
118,328 | ||||||||
ELECTRIC – 3.46% | ||||||||
AES Corp. (The)a | 148 | 1,516 | ||||||
Allegheny Energy Inc. | 38 | 857 | ||||||
Alliant Energy Corp. | 24 | 840 | ||||||
Ameren Corp. | 52 | 1,460 | ||||||
American Electric Power Co. Inc. | 106 | 3,753 | ||||||
Calpine Corp.a | 78 | 992 | ||||||
CenterPoint Energy Inc. | 82 | 1,213 | ||||||
Consolidated Edison Inc. | 66 | 3,137 | ||||||
Constellation Energy Group Inc. | 40 | 1,173 | ||||||
Dominion Resources Inc. | 138 | 5,901 | ||||||
DTE Energy Co. | 36 | 1,687 | ||||||
Duke Energy Corp. | 300 | 5,157 | ||||||
Edison International | 68 | 2,295 | ||||||
Entergy Corp. | 42 | 3,311 | ||||||
Exelon Corp. | 152 | 6,189 | ||||||
FirstEnergy Corp. | 68 | 2,484 | ||||||
FPL Group Inc. | 90 | 4,836 | ||||||
Integrys Energy Group Inc. | 16 | 775 |
Security | Shares | Value | ||||||
MDU Resources Group Inc. | 40 | $ | 752 | |||||
Northeast Utilities | 38 | 1,101 | ||||||
NRG Energy Inc.a | 56 | 1,138 | ||||||
NSTAR | 24 | 913 | ||||||
Pepco Holdings Inc. | 48 | 862 | ||||||
PG&E Corp. | 82 | 3,834 | ||||||
Pinnacle West Capital Corp. | 24 | 956 | ||||||
PPL Corp. | 105 | 2,852 | ||||||
Progress Energy Inc. | 62 | 2,660 | ||||||
Public Service Enterprise | 112 | 3,580 | ||||||
SCANA Corp. | 26 | 1,015 | ||||||
Southern Co. | 182 | 6,678 | ||||||
Wisconsin Energy Corp. | 26 | 1,449 | ||||||
Xcel Energy Inc. | 100 | 2,231 | ||||||
77,597 | ||||||||
ELECTRICAL COMPONENTS & EQUIPMENT – 0.44% |
| |||||||
AMETEK Inc. | 24 | 1,032 | ||||||
Emerson Electric Co. | 172 | 8,024 | ||||||
Energizer Holdings Inc.a | 14 | 882 | ||||||
9,938 | ||||||||
ELECTRONICS – 0.71% | ||||||||
Agilent Technologies Inc.a | 76 | 2,050 | ||||||
Amphenol Corp. Class A | 38 | 1,547 | ||||||
Arrow Electronics Inc.a | 26 | 595 | ||||||
Avnet Inc.a | 34 | 779 | ||||||
Dolby Laboratories Inc. Class Aa | 12 | 665 | ||||||
Flextronics International Ltd.a,c | 180 | 887 | ||||||
FLIR Systems Inc.a | 34 | 854 | ||||||
Garmin Ltd. | 26 | 692 | ||||||
Thermo Fisher Scientific Inc.a | 94 | 3,959 | ||||||
Tyco Electronics Ltd. | 102 | 2,501 | ||||||
Waters Corp.a | 24 | 1,453 | ||||||
15,982 | ||||||||
ENERGY - ALTERNATE SOURCES – 0.07% |
| |||||||
First Solar Inc.a | 12 | 1,534 | ||||||
1,534 | ||||||||
ENGINEERING & CONSTRUCTION – 0.22% |
| |||||||
Fluor Corp. | 40 | 1,787 | ||||||
Foster Wheeler AGa,c | 28 | 597 | ||||||
Jacobs Engineering Group Inc.a | 28 | 971 | ||||||
KBR Inc. | 36 | 835 |
54 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
URS Corp.a | 18 | $ | 642 | |||||
4,832 | ||||||||
ENTERTAINMENT – 0.04% |
| |||||||
International Game Technology | 66 | 964 | ||||||
964 | ||||||||
ENVIRONMENTAL CONTROL – 0.32% |
| |||||||
Republic Services Inc. | 84 | 2,472 | ||||||
Stericycle Inc.a | 18 | 1,179 | ||||||
Waste Management Inc. | 108 | 3,574 | ||||||
7,225 | ||||||||
FOOD – 2.07% | ||||||||
Campbell Soup Co. | 46 | 1,714 | ||||||
ConAgra Foods Inc. | 98 | 2,116 | ||||||
Dean Foods Co.a | 40 | 409 | ||||||
General Mills Inc. | 152 | 5,496 | ||||||
H.J. Heinz Co. | 70 | 3,237 | ||||||
Hershey Co. (The) | 36 | 1,673 | ||||||
Hormel Foods Corp. | 16 | 690 | ||||||
J.M. Smucker Co. (The) | 26 | 1,521 | ||||||
Kellogg Co. | 62 | 3,080 | ||||||
Kraft Foods Inc. Class A | 396 | 11,860 | ||||||
Kroger Co. (The) | 140 | 2,762 | ||||||
McCormick & Co. Inc. NVS | 26 | 1,037 | ||||||
Ralcorp Holdings Inc.a | 12 | 716 | ||||||
Safeway Inc. | 90 | 1,692 | ||||||
Sara Lee Corp. | 146 | 2,108 | ||||||
SUPERVALU Inc. | 46 | 447 | ||||||
Sysco Corp. | 138 | 3,794 | ||||||
Tyson Foods Inc. Class A | 64 | 1,048 | ||||||
Whole Foods Market Inc.a | 32 | 1,113 | ||||||
46,513 | ||||||||
FOREST PRODUCTS & PAPER – 0.25% |
| |||||||
International Paper Co. | 90 | 1,842 | ||||||
MeadWestvaco Corp. | 38 | 827 | ||||||
Plum Creek Timber Co. Inc.c | 36 | 1,241 | ||||||
Rayonier Inc. | 18 | 851 | ||||||
Weyerhaeuser Co. | 46 | 722 | ||||||
5,483 | ||||||||
GAS – 0.20% | ||||||||
Energen Corp. | 16 | 683 | ||||||
NiSource Inc. | 60 | 1,040 |
Security | Shares | Value | ||||||
Sempra Energy | 52 | $ | 2,648 | |||||
4,371 | ||||||||
HAND & MACHINE TOOLS – 0.08% |
| |||||||
Stanley Black & Decker Inc. | 34 | 1,824 | ||||||
1,824 | ||||||||
HEALTH CARE - PRODUCTS – 3.50% |
| |||||||
Baxter International Inc. | 136 | 5,788 | ||||||
Beckman Coulter Inc. | 16 | 730 | ||||||
Becton, Dickinson and Co. | 52 | 3,546 | ||||||
Boston Scientific Corp.a | 334 | 1,734 | ||||||
C.R. Bard Inc. | 22 | 1,690 | ||||||
CareFusion Corp.a | 42 | 906 | ||||||
Covidien PLC | 116 | 4,099 | ||||||
DENTSPLY International Inc. | 32 | 890 | ||||||
Edwards Lifesciences Corp.a | 28 | 1,612 | ||||||
Henry Schein Inc.a | 20 | 1,056 | ||||||
Hologic Inc.a | 56 | 795 | ||||||
Intuitive Surgical Inc.a | 9 | 2,385 | ||||||
Johnson & Johnson | 624 | 35,581 | ||||||
Medtronic Inc. | 252 | 7,933 | ||||||
Patterson Companies Inc. | 20 | 506 | ||||||
St. Jude Medical Inc.a | 74 | 2,558 | ||||||
Stryker Corp. | 66 | 2,851 | ||||||
Varian Medical Systems Inc.a | 28 | 1,491 | ||||||
Zimmer Holdings Inc.a | 48 | 2,264 | ||||||
78,415 | ||||||||
HEALTH CARE - SERVICES – 1.05% |
| |||||||
Aetna Inc. | 96 | 2,565 | ||||||
Covance Inc.a | 14 | 531 | ||||||
Coventry Health Care Inc.a | 32 | 619 | ||||||
DaVita Inc.a | 22 | 1,422 | ||||||
Humana Inc.a | 38 | 1,816 | ||||||
Laboratory Corp. of | 24 | 1,743 | ||||||
Quest Diagnostics Inc. | 34 | 1,479 | ||||||
UnitedHealth Group Inc. | 264 | 8,374 | ||||||
WellPoint Inc.a | 102 | 5,067 | ||||||
23,616 | ||||||||
HOLDING COMPANIES - DIVERSIFIED – 0.04% |
| |||||||
Leucadia National Corp.a | 42 | 897 | ||||||
897 |
SCHEDULESOF INVESTMENTS | 55 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
HOME BUILDERS – 0.08% | ||||||||
D.R. Horton Inc. | 64 | $ | 657 | |||||
Pulte Homes Inc.a | 76 | 610 | ||||||
Toll Brothers Inc.a | 30 | 518 | ||||||
1,785 | ||||||||
HOME FURNISHINGS – 0.06% | ||||||||
Whirlpool Corp. | 18 | 1,335 | ||||||
1,335 | ||||||||
HOUSEHOLD PRODUCTS & WARES – 0.51% |
| |||||||
Avery Dennison Corp. | 22 | 715 | ||||||
Church & Dwight Co. Inc. | 16 | 980 | ||||||
Clorox Co. (The) | 30 | 1,945 | ||||||
Fortune Brands Inc. | 34 | 1,523 | ||||||
Kimberly-Clark Corp. | 96 | 6,182 | ||||||
11,345 | ||||||||
HOUSEWARES – 0.04% | ||||||||
Newell Rubbermaid Inc. | 62 | 931 | ||||||
931 | ||||||||
INSURANCE – 3.77% | ||||||||
ACE Ltd. | 78 | 4,171 | ||||||
Aflac Inc. | 106 | 5,009 | ||||||
Allstate Corp. (The) | 114 | 3,146 | ||||||
American International Group Inc.a | 26 | 882 | ||||||
Aon Corp. | 54 | 1,957 | ||||||
Arch Capital Group Ltd.a | 12 | 958 | ||||||
Assurant Inc. | 26 | 951 | ||||||
Axis Capital Holdings Ltd. | 30 | 926 | ||||||
Berkshire Hathaway Inc. Class Ba | 186 | 14,653 | ||||||
Chubb Corp. | 76 | 4,189 | ||||||
CIGNA Corp. | 60 | 1,933 | ||||||
Cincinnati Financial Corp. | 34 | 907 | ||||||
Everest Re Group Ltd. | 14 | 1,108 | ||||||
Fidelity National Financial Inc. Class A | 48 | 696 | ||||||
Genworth Financial Inc. Class Aa | 108 | 1,170 | ||||||
Hartford Financial Services Group | 92 | 1,855 | ||||||
Lincoln National Corp. | 66 | 1,542 | ||||||
Loews Corp. | 76 | 2,671 | ||||||
Marsh & McLennan Companies Inc. | 116 | 2,752 | ||||||
MetLife Inc. | 202 | 7,595 | ||||||
Old Republic International Corp. | 54 | 690 | ||||||
PartnerRe Ltd. | 14 | 1,042 |
Security | Shares | Value | ||||||
Principal Financial Group Inc. | 70 | $ | 1,614 | |||||
Progressive Corp. (The) | 142 | 2,812 | ||||||
Prudential Financial Inc. | 106 | 5,360 | ||||||
RenaissanceRe Holdings Ltd. | 14 | 795 | ||||||
Torchmark Corp. | 18 | 888 | ||||||
Transatlantic Holdings Inc. | 14 | 667 | ||||||
Travelers Companies Inc. (The) | 118 | 5,780 | ||||||
Unum Group | 74 | 1,484 | ||||||
Validus Holdings Ltd. | 20 | 509 | ||||||
W.R. Berkley Corp. | 32 | 843 | ||||||
White Mountains Insurance Group Ltd. | 2 | 607 | ||||||
Willis Group Holdings PLC | 38 | 1,105 | ||||||
XL Group PLC | 76 | 1,361 | ||||||
84,628 | ||||||||
INTERNET – 2.67% | ||||||||
Akamai Technologies Inc.a | 38 | 1,751 | ||||||
Amazon.com Inc.a | 80 | 9,986 | ||||||
eBay Inc.a | 268 | 6,228 | ||||||
Expedia Inc. | 44 | 1,006 | ||||||
F5 Networks Inc.a | 18 | 1,574 | ||||||
Google Inc. Class Aa | 55 | 24,751 | ||||||
Liberty Media Corp. - Liberty Interactive | 126 | 1,329 | ||||||
McAfee Inc.a | 34 | 1,600 | ||||||
Netflix Inc.a | 10 | 1,255 | ||||||
Priceline.com Inc.a | 10 | 2,915 | ||||||
Symantec Corp.a | 180 | 2,453 | ||||||
VeriSign Inc.a | 42 | 1,224 | ||||||
Yahoo! Inc.a | 300 | 3,924 | ||||||
59,996 | ||||||||
IRON & STEEL – 0.29% | ||||||||
Allegheny Technologies Inc. | 20 | 814 | ||||||
Cliffs Natural Resources Inc. | 30 | 1,836 | ||||||
Nucor Corp. | 70 | 2,575 | ||||||
United States Steel Corp. | 32 | 1,360 | ||||||
6,585 | ||||||||
LEISURE TIME – 0.24% | ||||||||
Carnival Corp. | 108 | 3,367 | ||||||
Harley-Davidson Inc. | 52 | 1,265 | ||||||
Royal Caribbean Cruises Ltd.a | 30 | 737 | ||||||
5,369 |
56 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
LODGING – 0.37% | ||||||||
Las Vegas Sands Corp.a | 72 | $ | 2,040 | |||||
Marriott International Inc. Class A | 66 | 2,113 | ||||||
MGM Resorts Internationala | 58 | 522 | ||||||
Starwood Hotels & Resorts | 42 | 1,963 | ||||||
Wynn Resorts Ltd. | 20 | 1,612 | ||||||
8,250 | ||||||||
MACHINERY – 1.08% | ||||||||
AGCO Corp.a | 20 | 661 | ||||||
Bucyrus International Inc. | 18 | 1,035 | ||||||
Caterpillar Inc. | 142 | 9,253 | ||||||
Cummins Inc. | 46 | 3,423 | ||||||
Deere & Co. | 94 | 5,947 | ||||||
Flowserve Corp. | 12 | 1,073 | ||||||
Joy Global Inc. | 22 | 1,248 | ||||||
Rockwell Automation Inc. | 32 | 1,636 | ||||||
24,276 | ||||||||
MANUFACTURING – 3.75% |
| |||||||
3M Co. | 152 | 11,940 | ||||||
Cooper Industries PLC | 38 | 1,599 | ||||||
Danaher Corp. | 128 | 4,650 | ||||||
Dover Corp. | 42 | 1,880 | ||||||
Eaton Corp. | 38 | 2,640 | ||||||
General Electric Co. | 2,412 | 34,926 | ||||||
Harsco Corp. | 18 | 359 | ||||||
Honeywell International Inc. | 166 | 6,489 | ||||||
Illinois Tool Works Inc. | 100 | 4,126 | ||||||
Ingersoll-Rand PLC | 76 | 2,472 | ||||||
ITT Corp. | 38 | 1,615 | ||||||
Leggett & Platt Inc. | 32 | 613 | ||||||
Pall Corp. | 26 | 889 | ||||||
Parker Hannifin Corp. | 36 | 2,130 | ||||||
Pentair Inc. | 20 | 602 | ||||||
Roper Industries Inc. | 20 | 1,162 | ||||||
SPX Corp. | 10 | 561 | ||||||
Textron Inc.c | 60 | 1,024 | ||||||
Tyco International Ltd. | 118 | 4,399 | ||||||
84,076 | ||||||||
MEDIA – 2.94% | ||||||||
Cablevision NY Group Class A | 54 | 1,355 | ||||||
CBS Corp. Class B NVS | 142 | 1,962 |
Security | Shares | Value | ||||||
Comcast Corp. Class A | 468 | $ | 8,012 | |||||
Comcast Corp. Class A Special | 174 | 2,796 | ||||||
DIRECTV Class Aa | 206 | 7,812 | ||||||
Discovery Communications Inc. Series Aa | 30 | 1,132 | ||||||
Discovery Communications Inc. Series Ca | 32 | 1,082 | ||||||
DISH Network Corp. Class A | 46 | 826 | ||||||
Liberty Global Inc. Series Aa | 28 | 771 | ||||||
Liberty Global Inc. Series Ca | 26 | 716 | ||||||
McGraw-Hill Companies Inc. (The) | 70 | 1,935 | ||||||
News Corp. Class A NVS | 416 | 5,229 | ||||||
News Corp. Class B | 98 | 1,382 | ||||||
Scripps Networks Interactive Inc. Class A | 20 | 804 | ||||||
Time Warner Cable Inc. | 82 | 4,232 | ||||||
Time Warner Inc. | 258 | 7,735 | ||||||
Viacom Inc. Class B NVSa | 128 | 4,022 | ||||||
Walt Disney Co. (The) | 414 | 13,492 | ||||||
Washington Post Co. (The) Class B | 2 | 720 | ||||||
66,015 | ||||||||
METAL FABRICATE & HARDWARE – 0.16% |
| |||||||
Precision Castparts Corp. | 32 | 3,622 | ||||||
3,622 | ||||||||
MINING – 0.77% | ||||||||
Alcoa Inc. | 234 | 2,389 | ||||||
Freeport-McMoRan Copper & Gold Inc. | 98 | 7,054 | ||||||
Newmont Mining Corp. | 110 | 6,745 | ||||||
Vulcan Materials Co. | 28 | 1,030 | ||||||
17,218 | ||||||||
OFFICE & BUSINESS EQUIPMENT – 0.15% |
| |||||||
Pitney Bowes Inc. | 46 | 885 | ||||||
Xerox Corp. | 296 | 2,498 | ||||||
3,383 | ||||||||
OIL & GAS – 8.89% | ||||||||
Anadarko Petroleum Corp. | 112 | 5,151 | ||||||
Apache Corp. | 82 | 7,368 | ||||||
Cabot Oil & Gas Corp. | 22 | 612 | ||||||
Chesapeake Energy Corp. | 148 | 3,061 | ||||||
Chevron Corp. | 454 | 33,669 | ||||||
Cimarex Energy Co. | 18 | 1,178 | ||||||
ConocoPhillips | 320 | 16,778 | ||||||
Denbury Resources Inc.a | 84 | 1,238 | ||||||
Devon Energy Corp. | 98 | 5,907 | ||||||
Diamond Offshore Drilling Inc. | 16 | 931 |
SCHEDULESOF INVESTMENTS | 57 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
EOG Resources Inc. | 58 | $ | 5,038 | |||||
EQT Corp. | 30 | 978 | ||||||
Exxon Mobil Corp. | 1,150 | 68,034 | ||||||
Helmerich & Payne Inc. | 24 | 889 | ||||||
Hess Corp. | 66 | 3,317 | ||||||
Marathon Oil Corp. | 164 | 5,000 | ||||||
Murphy Oil Corp. | 40 | 2,142 | ||||||
Nabors Industries Ltd.a | 62 | 972 | ||||||
Newfield Exploration Co.a | 30 | 1,440 | ||||||
Noble Corp.a | 58 | 1,805 | ||||||
Noble Energy Inc. | 42 | 2,931 | ||||||
Occidental Petroleum Corp. | 184 | 13,447 | ||||||
Petrohawk Energy Corp.a | 66 | 998 | ||||||
Pioneer Natural Resources Co. | 26 | 1,503 | ||||||
Plains Exploration & | 30 | 716 | ||||||
Pride International Inc.a | 38 | 895 | ||||||
QEP Resources Inc. | 38 | 1,103 | ||||||
Range Resources Corp. | 40 | 1,352 | ||||||
Rowan Companies Inc.a | 26 | 668 | ||||||
Southwestern Energy Co.a | 76 | 2,487 | ||||||
Sunoco Inc. | 26 | 876 | ||||||
Transocean Ltd.a | 74 | 3,767 | ||||||
Ultra Petroleum Corp.a | 34 | 1,326 | ||||||
Valero Energy Corp. | 124 | 1,956 | ||||||
199,533 | ||||||||
OIL & GAS SERVICES – 1.61% | ||||||||
Baker Hughes Inc. | 101 | 3,796 | ||||||
Cameron International Corp.a | 54 | 1,986 | ||||||
FMC Technologies Inc.a | 26 | 1,608 | ||||||
Halliburton Co. | 208 | 5,868 | ||||||
National Oilwell Varco Inc. | 98 | 3,684 | ||||||
Schlumberger Ltd. | 313 | 16,692 | ||||||
Weatherford International Ltd.a | 166 | 2,475 | ||||||
36,109 | ||||||||
PACKAGING & CONTAINERS – 0.21% |
| |||||||
Ball Corp. | 20 | 1,122 | ||||||
Crown Holdings Inc.a | 36 | 1,003 | ||||||
Owens-Illinois Inc.a | 38 | 952 | ||||||
Pactiv Corp.a | 30 | 963 | ||||||
Sealed Air Corp. | 36 | 738 | ||||||
4,778 |
Security | Shares | Value | ||||||
PHARMACEUTICALS – 5.55% | ||||||||
Abbott Laboratories | 350 | $ | 17,269 | |||||
Allergan Inc. | 68 | 4,176 | ||||||
AmerisourceBergen Corp. | 64 | 1,746 | ||||||
Bristol-Myers Squibb Co. | 388 | 10,119 | ||||||
Cardinal Health Inc. | 80 | 2,397 | ||||||
Cephalon Inc.a | 16 | 906 | ||||||
Eli Lilly and Co. | 234 | 7,853 | ||||||
Express Scripts Inc.a | 120 | 5,112 | ||||||
Forest Laboratories Inc.a | 66 | 1,801 | ||||||
Gilead Sciences Inc.a | 204 | 6,499 | ||||||
Hospira Inc.a | 36 | 1,849 | ||||||
Mead Johnson Nutrition Co. Class A | 46 | 2,401 | ||||||
Medco Health Solutions Inc.a | 106 | 4,609 | ||||||
Merck & Co. Inc. | 692 | 24,331 | ||||||
Mylan Inc.a | 68 | 1,167 | ||||||
Omnicare Inc. | 26 | 499 | ||||||
Perrigo Co. | 18 | 1,026 | ||||||
Pfizer Inc. | 1,828 | 29,120 | ||||||
Warner Chilcott PLC Class Aa | 24 | 682 | ||||||
Watson Pharmaceuticals Inc.a | 22 | 947 | ||||||
124,509 | ||||||||
PIPELINES – 0.41% | ||||||||
El Paso Corp. | 154 | 1,754 | ||||||
Kinder Morgan Management LLCa | 18 | 1,063 | ||||||
ONEOK Inc. | 22 | 944 | ||||||
Spectra Energy Corp. | 146 | 2,970 | ||||||
Williams Companies Inc. (The) | 138 | 2,502 | ||||||
9,233 | ||||||||
REAL ESTATE INVESTMENT TRUSTS – 1.65% |
| |||||||
AMB Property Corp. | 36 | 856 | ||||||
Annaly Capital Management Inc. | 150 | 2,607 | ||||||
AvalonBay Communities Inc. | 18 | 1,894 | ||||||
Boston Properties Inc. | 34 | 2,768 | ||||||
Duke Realty Corp. | 50 | 561 | ||||||
Equity Residential | 62 | 2,842 | ||||||
Federal Realty Investment Trust | 14 | 1,110 | ||||||
HCP Inc. | 64 | 2,254 | ||||||
Health Care REIT Inc. | 28 | 1,286 | ||||||
Host Hotels & Resorts Inc. | 140 | 1,838 | ||||||
Kimco Realty Corp. | 88 | 1,312 | ||||||
Liberty Property Trust | 24 | 729 |
58 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Macerich Co. (The) | 30 | $ | 1,243 | |||||
ProLogis | 104 | 1,128 | ||||||
Public Storage | 34 | 3,333 | ||||||
Regency Centers Corp. | 20 | 729 | ||||||
Simon Property Group Inc. | 64 | 5,789 | ||||||
Ventas Inc. | 34 | 1,717 | ||||||
Vornado Realty Trust | 36 | 2,918 | ||||||
36,914 | ||||||||
RETAIL – 5.93% | ||||||||
Abercrombie & Fitch Co. Class A | 20 | 692 | ||||||
Advance Auto Parts Inc. | 20 | 1,089 | ||||||
American Eagle Outfitters Inc. | 42 | 531 | ||||||
AutoNation Inc.a | 16 | 361 | ||||||
AutoZone Inc.a | 6 | 1,259 | ||||||
Bed Bath & Beyond Inc.a | 58 | 2,086 | ||||||
Best Buy Co. Inc. | 80 | 2,511 | ||||||
CarMax Inc.a | 50 | 996 | ||||||
Costco Wholesale Corp. | 100 | 5,655 | ||||||
CVS Caremark Corp. | 314 | 8,478 | ||||||
Darden Restaurants Inc. | 30 | 1,238 | ||||||
Dollar General Corp.a | 20 | 546 | ||||||
Dollar Tree Inc.a | 30 | 1,360 | ||||||
Family Dollar Stores Inc. | 30 | 1,284 | ||||||
GameStop Corp. Class Aa | 34 | 609 | ||||||
Gap Inc. (The) | 108 | 1,824 | ||||||
Home Depot Inc. (The) | 386 | 10,735 | ||||||
J.C. Penney Co. Inc. | 46 | 920 | ||||||
Kohl’s Corp.a | 68 | 3,195 | ||||||
Limited Brands Inc. | 60 | 1,416 | ||||||
Lowe’s Companies Inc. | 330 | 6,699 | ||||||
Macy’s Inc. | 94 | 1,827 | ||||||
McDonald’s Corp. | 244 | 17,827 | ||||||
Nordstrom Inc. | 44 | 1,272 | ||||||
O’Reilly Automotive Inc.a | 30 | 1,418 | ||||||
PetSmart Inc. | 28 | 893 | ||||||
Ross Stores Inc. | 28 | 1,390 | ||||||
Sears Holdings Corp.a,c | 10 | 619 | ||||||
Staples Inc. | 164 | 2,914 | ||||||
Starbucks Corp. | 172 | 3,954 | ||||||
Target Corp. | 162 | 8,288 | ||||||
Tiffany & Co. | 28 | 1,110 | ||||||
TJX Companies Inc. (The) | 94 | 3,731 |
Security | Shares | Value | ||||||
Urban Outfitters Inc.a | 28 | $ | 849 | |||||
Wal-Mart Stores Inc. | 462 | 23,165 | ||||||
Walgreen Co. | 224 | 6,021 | ||||||
Yum! Brands Inc. | 104 | 4,337 | ||||||
133,099 | ||||||||
SAVINGS & LOANS – 0.17% | ||||||||
Hudson City Bancorp Inc. | 104 | 1,199 | ||||||
New York Community Bancorp Inc. | 88 | 1,398 | ||||||
People’s United Financial Inc. | 82 | 1,043 | ||||||
TFS Financial Corp. | 20 | 184 | ||||||
3,824 | ||||||||
SEMICONDUCTORS – 2.38% | ||||||||
Advanced Micro Devices Inc.a | 126 | 708 | ||||||
Altera Corp. | 66 | 1,628 | ||||||
Analog Devices Inc. | 64 | 1,784 | ||||||
Applied Materials Inc. | 310 | 3,221 | ||||||
Broadcom Corp. Class A | 102 | 3,057 | ||||||
Cree Inc.a | 22 | 1,178 | ||||||
Intel Corp. | 1,250 | 22,150 | ||||||
KLA-Tencor Corp. | 38 | 1,064 | ||||||
Lam Research Corp.a | 28 | 1,011 | ||||||
Linear Technology Corp. | 50 | 1,433 | ||||||
LSI Corp.a | 144 | 579 | ||||||
Marvell Technology Group Ltd.a | 116 | 1,849 | ||||||
Maxim Integrated Products Inc. | 68 | 1,079 | ||||||
MEMC Electronic Materials Inc.a | 50 | 515 | ||||||
Microchip Technology Inc. | 40 | 1,108 | ||||||
Micron Technology Inc.a | 188 | 1,215 | ||||||
National Semiconductor Corp. | 52 | 656 | ||||||
NVIDIA Corp.a | 122 | 1,138 | ||||||
Texas Instruments Inc. | 284 | 6,541 | ||||||
Xilinx Inc. | 62 | 1,497 | ||||||
53,411 | ||||||||
SOFTWARE – 4.30% | ||||||||
Activision Blizzard Inc. | 126 | 1,347 | ||||||
Adobe Systems Inc.a | 116 | 3,220 | ||||||
Autodesk Inc.a | 50 | 1,387 | ||||||
Automatic Data Processing Inc. | 118 | 4,556 | ||||||
BMC Software Inc.a | 40 | 1,442 | ||||||
CA Inc. | 92 | 1,657 | ||||||
Cerner Corp.a | 16 | 1,166 | ||||||
Citrix Systems Inc.a | 40 | 2,318 |
SCHEDULESOF INVESTMENTS | 59 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Dun & Bradstreet Corp. (The) | 12 | $ | 791 | |||||
Electronic Arts Inc.a | 72 | 1,097 | ||||||
Fidelity National Information Services Inc. | 70 | 1,809 | ||||||
Fiserv Inc.a | 34 | 1,701 | ||||||
Intuit Inc.a | 66 | 2,825 | ||||||
Microsoft Corp. | 1,784 | 41,888 | ||||||
Nuance Communications Inc.a | 46 | 675 | ||||||
Oracle Corp. | 908 | 19,867 | ||||||
Paychex Inc. | 72 | 1,792 | ||||||
Red Hat Inc.a | 42 | 1,451 | ||||||
Salesforce.com Inc.a | 28 | 3,077 | ||||||
SEI Investments Co. | 30 | 531 | ||||||
Total System Services Inc. | 38 | 540 | ||||||
VMware Inc. Class Aa | 16 | 1,257 | ||||||
96,394 | ||||||||
TELECOMMUNICATIONS – 5.86% |
| |||||||
American Tower Corp. Class Aa | 94 | 4,405 | ||||||
AT&T Inc. | 1,336 | 36,112 | ||||||
CenturyLink Inc. | 66 | 2,387 | ||||||
Cisco Systems Inc.a | 1,294 | 25,945 | ||||||
Corning Inc. | 352 | 5,519 | ||||||
Crown Castle International Corp.a | 64 | 2,632 | ||||||
Frontier Communications Corp. | 221 | 1,708 | ||||||
Harris Corp. | 30 | 1,262 | ||||||
Juniper Networks Inc.a | 116 | 3,155 | ||||||
Level 3 Communications Inc.a | 372 | 383 | ||||||
MetroPCS Communications Inc.a | 54 | 483 | ||||||
Motorola Inc.a | 524 | 3,946 | ||||||
NII Holdings Inc.a | 36 | 1,305 | ||||||
QUALCOMM Inc. | 378 | 14,481 | ||||||
Qwest Communications International Inc. | 344 | 1,944 | ||||||
SBA Communications Corp. | 24 | 859 | ||||||
Sprint Nextel Corp.a | 666 | 2,717 | ||||||
Telephone and Data Systems Inc. | 12 | 347 | ||||||
Verizon Communications Inc. | 644 | 19,004 | ||||||
Virgin Media Inc. | 72 | 1,498 | ||||||
Windstream Corp. | 123 | 1,419 | ||||||
131,511 | ||||||||
TEXTILES – 0.06% | ||||||||
Cintas Corp. | 30 | 764 | ||||||
Mohawk Industries Inc.a | 12 | 532 | ||||||
1,296 |
Security | Shares | Value | ||||||
TOYS, GAMES & HOBBIES – 0.13% |
| |||||||
Hasbro Inc. | 28 | $ | 1,130 | |||||
Mattel Inc. | 80 | 1,679 | ||||||
2,809 | ||||||||
TRANSPORTATION – 1.70% | ||||||||
C.H. Robinson Worldwide Inc. | 38 | 2,469 | ||||||
CSX Corp. | 90 | 4,490 | ||||||
Expeditors International of Washington Inc. | 52 | 2,059 | ||||||
FedEx Corp. | 68 | 5,307 | ||||||
J.B. Hunt Transport Services Inc. | 20 | 655 | ||||||
Norfolk Southern Corp. | 82 | 4,402 | ||||||
Union Pacific Corp. | 116 | 8,461 | ||||||
United Parcel Service Inc. Class B | 160 | 10,208 | ||||||
38,051 | ||||||||
WATER – 0.04% | ||||||||
American Water Works Co. Inc. | 38 | 858 | ||||||
858 | ||||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $2,482,481) | 2,235,877 | |||||||
SHORT-TERM INVESTMENTS – 0.28% |
| |||||||
MONEY MARKET FUNDS – 0.28% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares | ||||||||
0.31%b,d,e | 3,697 | 3,697 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
SL Agency Shares | ||||||||
0.30%b,d,e | 718 | 718 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
SL Agency Shares | ||||||||
0.13%b,d | 1,977 | 1,977 | ||||||
6,392 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $6,392) | 6,392 | |||||||
60 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI USA INDEX FUND
August 31, 2010
Value | ||||
TOTAL INVESTMENTS | ||||
(Cost: $2,488,873) | $ | 2,242,269 | ||
Other Assets, Less Liabilities – 0.06% | 1,291 | |||
NET ASSETS – 100.00% | $ | 2,243,560 | ||
NVS – Non-Voting Shares
a | Non-income earning security. |
b | Affiliated issuer. See Note 2. |
c | All or a portion of this security represents a security on loan. See Note 5. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 61 |
Table of Contents
Statements of Assets and Liabilities
iSHARES® , INC.
August 31, 2010
iShares MSCI Index Fund | iShares MSCI Index Fund | iShares MSCI Index Fund | iShares MSCI Investable Market | |||||||||||||
ASSETS | ||||||||||||||||
Investments, at cost: | ||||||||||||||||
Unaffiliated issuers | $ | 5,316,137,097 | $ | 900,981,763 | $ | 3,730,000,989 | $ | 486,780,244 | ||||||||
Affiliated issuers (Note 2) | 1,000 | 54,906,068 | 6,304,939 | 782,832 | ||||||||||||
Total cost of investments | $ | 5,316,138,097 | $ | 955,887,831 | $ | 3,736,305,928 | $ | 487,563,076 | ||||||||
Investments in securities, at fair value | ||||||||||||||||
(including securities on loana) (Note 1): | ||||||||||||||||
Unaffiliated issuers | $ | 9,144,612,869 | $ | 942,204,927 | $ | 3,445,320,710 | $ | 670,519,206 | ||||||||
Affiliated issuers (Note 2) | 1,000 | 54,906,068 | 6,304,939 | 782,832 | ||||||||||||
Total fair value of investments | 9,144,613,869 | 997,110,995 | 3,451,625,649 | 671,302,038 | ||||||||||||
Foreign currencies, at valueb | 31,803,026 | 1,793,491 | 5,960,619 | – | ||||||||||||
Cash | – | – | 8,528 | – | ||||||||||||
Receivables: | ||||||||||||||||
Investment securities sold | 47,521,174 | – | 4,251,542 | 11,754,666 | ||||||||||||
Dividends and interest | 47,226,621 | 2,878,033 | 4,200,890 | 15,472 | ||||||||||||
Capital shares sold | – | – | 297,203 | 10,081,691 | ||||||||||||
Total Assets | 9,271,164,690 | 1,001,782,519 | 3,466,344,431 | 693,153,867 | ||||||||||||
LIABILITIES | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | 25,824,413 | – | 11,674,652 | 22,486,074 | ||||||||||||
Collateral for securities on loan (Note 5) | – | 54,411,503 | 5,851,858 | – | ||||||||||||
Investment advisory fees (Note 2) | 4,887,761 | 556,562 | 1,575,424 | 317,387 | ||||||||||||
Total Liabilities | 30,712,174 | 54,968,065 | 19,101,934 | 22,803,461 | ||||||||||||
NET ASSETS | $ | 9,240,452,516 | $ | 946,814,454 | $ | 3,447,242,497 | $ | 670,350,406 | ||||||||
Net assets consist of: | ||||||||||||||||
Paid-in capital | $ | 6,142,982,705 | $ | 936,345,256 | $ | 3,914,294,994 | $ | 513,094,985 | ||||||||
Undistributed (distributions in excess of) net investment income | (43,826,642 | ) | 617,952 | 11,237,296 | – | |||||||||||
Accumulated net realized loss | (688,433,503 | ) | (31,409,074 | ) | (193,413,952 | ) | (26,483,064 | ) | ||||||||
Net unrealized appreciation (depreciation) | 3,829,729,956 | 41,260,320 | (284,875,841 | ) | 183,738,485 | |||||||||||
NET ASSETS | $ | 9,240,452,516 | $ | 946,814,454 | $ | 3,447,242,497 | $ | 670,350,406 | ||||||||
Shares outstandingc | 135,750,000 | 22,050,000 | 132,100,000 | 9,950,000 | ||||||||||||
Net asset value per share | $ | 68.07 | $ | 42.94 | $ | 26.10 | $ | 67.37 | ||||||||
a | Securities on loan with market values of $ –, $51,452,981, $5,622,785 and $ –, respectively. See Note 5. |
b | Cost of foreign currencies: $31,664,437, $1,794,283, $6,094,341 and $ –, respectively. |
c | $0.001 par value, number of shares authorized: 500 million, 500 million, 340.2 million and 200 million, respectively. |
See notes to financial statements.
62 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES® , INC.
August 31, 2010
iShares MSCI Israel Capped Investable Market Index Fund | iShares MSCI Mexico Investable Market Index Fund | iShares MSCI South Africa Index Fund | iShares MSCI Turkey Investable Market Index Fund | |||||||||||||
ASSETS | ||||||||||||||||
Investments, at cost: | ||||||||||||||||
Unaffiliated issuers | $ | 152,236,948 | $ | 1,658,371,574 | $ | 540,229,937 | $ | 548,973,892 | ||||||||
Affiliated issuers (Note 2) | 4,575,687 | 71,215,006 | 5,641,293 | 24,550,711 | ||||||||||||
Total cost of investments | $ | 156,812,635 | $ | 1,729,586,580 | $ | 545,871,230 | $ | 573,524,603 | ||||||||
Investments in securities, at fair value | ||||||||||||||||
(including securities on loana) (Note 1): | ||||||||||||||||
Unaffiliated issuers | $ | 128,323,139 | $ | 1,448,655,271 | $ | 504,073,865 | $ | 601,539,543 | ||||||||
Affiliated issuers (Note 2) | 4,575,687 | 71,215,006 | 5,641,293 | 24,550,711 | ||||||||||||
Total fair value of investments | 132,898,826 | 1,519,870,277 | 509,715,158 | 626,090,254 | ||||||||||||
Foreign currencies, at valueb | 105,633 | 2,058,891 | 1,261,138 | 188,077 | ||||||||||||
Cash | – | 50,717 | 703 | – | ||||||||||||
Receivables: | ||||||||||||||||
Investment securities sold | 3,789,155 | 44,222,300 | 662,658 | 6,581,706 | ||||||||||||
Dividends and interest | 151,309 | 67,417 | 196,362 | 57,146 | ||||||||||||
Capital shares sold | – | 9,314 | – | 6,819 | ||||||||||||
Total Assets | 136,944,923 | 1,566,278,916 | 511,836,019 | 632,924,002 | ||||||||||||
LIABILITIES | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | 3,906,552 | 44,347,641 | 757,964 | 6,358,399 | ||||||||||||
Collateral for securities on loan (Note 5) | 4,485,493 | 71,189,692 | 5,623,093 | 24,280,853 | ||||||||||||
Capital shares redeemed | – | 7,892 | – | – | ||||||||||||
Investment advisory fees (Note 2) | 80,174 | 695,120 | 264,224 | 296,611 | ||||||||||||
Total Liabilities | 8,472,219 | 116,240,345 | 6,645,281 | 30,935,863 | ||||||||||||
NET ASSETS | $ | 128,472,704 | $ | 1,450,038,571 | $ | 505,190,738 | $ | 601,988,139 | ||||||||
Net assets consist of: | ||||||||||||||||
Paid-in capital | $ | 171,931,475 | $ | 1,718,265,416 | $ | 589,474,214 | $ | 564,662,074 | ||||||||
Undistributed (distributions in excess of) net investment income | 236,701 | 1,975,060 | 1,244,736 | (557,958 | ) | |||||||||||
Accumulated net realized loss | (19,781,507 | ) | (60,419,117 | ) | (49,372,809 | ) | (14,688,285 | ) | ||||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | (23,913,965 | ) | (209,782,788 | ) | (36,155,403 | ) | 52,572,308 | |||||||||
NET ASSETS | $ | 128,472,704 | $ | 1,450,038,571 | $ | 505,190,738 | $ | 601,988,139 | ||||||||
Shares outstandingc | 2,600,000 | 30,100,000 | 8,600,000 | 9,900,000 | ||||||||||||
Net asset value per share | $ | 49.41 | $ | 48.17 | $ | 58.74 | $ | 60.81 | ||||||||
a | Securities on loan with market values of $4,231,812, $67,739,685, $5,414,630 and $22,970,904, respectively. See Note 5. |
b | Cost of foreign currencies: $106,007, $2,125,359, $1,259,330 and $181,409, respectively. |
c | $0.001 par value, number of shares authorized: 500 million, 255 million, 400 million and 200 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 63 |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES® , INC.
August 31, 2010
iShares MSCI Index Fund | ||||
ASSETS | ||||
Investments, at cost: | ||||
Unaffiliated issuers | $ | 2,473,141 | ||
Affiliated issuers (Note 2) | 15,732 | |||
Total cost of investments | $ | 2,488,873 | ||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||
Unaffiliated issuers | $ | 2,228,728 | ||
Affiliated issuers (Note 2) | 13,541 | |||
Total fair value of investments | 2,242,269 | |||
Receivables: | ||||
Investment securities sold | 7,066 | |||
Dividends and interest | 6,672 | |||
Total Assets | 2,256,007 | |||
LIABILITIES | ||||
Payables: | ||||
Investment securities purchased | 7,736 | |||
Collateral for securities on loan (Note 5) | 4,415 | |||
Investment advisory fees (Note 2) | 296 | |||
Total Liabilities | 12,447 | |||
NET ASSETS | $ | 2,243,560 | ||
Net assets consist of: | ||||
Paid-in capital | $ | 2,482,623 | ||
Undistributed net investment income | 9,975 | |||
Accumulated net realized loss | (2,434 | ) | ||
Net unrealized depreciation | (246,604 | ) | ||
NET ASSETS | $ | 2,243,560 | ||
Shares outstandingb | 100,000 | |||
Net asset value per share | $ | 22.44 | ||
a | Securities on loan with a value of $4,316. See Note 5. |
b | $0.001 par value, number of shares authorized: 500 million. |
See notes to financial statements.
64 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations
iSHARES®, INC.
Year ended August 31, 2010
iShares MSCI Index Fund | iShares MSCI Index Fund | iShares MSCI Index Fund | iShares MSCI Investable Market Index Fund | |||||||||||||
NET INVESTMENT INCOME | ||||||||||||||||
Dividends from unaffiliated issuersa | $ | 290,593,540 | $ | 17,723,523 | $ | 68,879,911 | $ | 5,860,940 | ||||||||
Interest from affiliated issuers (Note 2) | 6,183 | 527 | 1,301 | 681 | ||||||||||||
Securities lending income from affiliated issuers (Note 2) | 27,898 | 344,968 | 101,613 | – | ||||||||||||
Total investment income | 290,627,621 | 18,069,018 | 68,982,825 | 5,861,621 | ||||||||||||
EXPENSES | ||||||||||||||||
Investment advisory fees (Note 2) | 62,208,369 | 5,634,510 | 17,081,917 | 2,148,159 | ||||||||||||
Total expenses | 62,208,369 | 5,634,510 | 17,081,917 | 2,148,159 | ||||||||||||
Net investment income | 228,419,252 | 12,434,508 | 51,900,908 | 3,713,462 | ||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments in unaffiliated issuers | 368,372,227 | (12,252,741 | ) | (78,047,718 | ) | (2,773,934 | ) | |||||||||
In-kind redemptions | – | – | 186,832,607 | – | ||||||||||||
Foreign currency transactions | 4,444,155 | (229,716 | ) | 219,606 | (67,001 | ) | ||||||||||
Net realized gain (loss) | 372,816,382 | (12,482,457 | ) | 109,004,495 | (2,840,935 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments | 1,246,267,635 | 63,797,865 | 93,475,647 | 149,611,290 | ||||||||||||
Translation of assets and liabilities in foreign currencies | (235,100 | ) | 23,015 | (132,732 | ) | (490 | ) | |||||||||
Net change in unrealized appreciation (depreciation) | 1,246,032,535 | 63,820,880 | 93,342,915 | 149,610,800 | ||||||||||||
Net realized and unrealized gain | 1,618,848,917 | 51,338,423 | 202,347,410 | 146,769,865 | ||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 1,847,268,169 | $ | 63,772,931 | $ | 254,248,318 | $ | 150,483,327 | ||||||||
a | Net of foreign withholding tax of $29,621,449, $1,702,706, $12,144,978 and $2,295,882, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 65 |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2010
iShares MSCI Israel Capped Investable Market Index Fund | iShares MSCI Mexico Investable Market Index Fund | iShares MSCI South Africa Index Fund | iShares MSCI Turkey Investable Market Index Fund | |||||||||||||
NET INVESTMENT INCOME | ||||||||||||||||
Dividends from unaffiliated issuersa | $ | 5,726,705 | $ | 23,110,648 | $ | 13,884,705 | $ | 9,120,581 | ||||||||
Interest from affiliated issuers (Note 2) | 123 | 610 | 145 | 405 | ||||||||||||
Securities lending income from affiliated issuers (Note 2) | 177,023 | 743,404 | 36,327 | 789,907 | ||||||||||||
Total investment income | 5,903,851 | 23,854,662 | 13,921,177 | 9,910,893 | ||||||||||||
EXPENSES | ||||||||||||||||
Investment advisory fees (Note 2) | 1,106,791 | 6,401,000 | 3,137,352 | 2,492,426 | ||||||||||||
Total expenses | 1,106,791 | 6,401,000 | 3,137,352 | 2,492,426 | ||||||||||||
Net investment income | 4,797,060 | 17,453,662 | 10,783,825 | 7,418,467 | ||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
| |||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments in unaffiliated issuers | (10,729,401 | ) | (43,573,745 | ) | (9,372,462 | ) | (9,647,140 | ) | ||||||||
In-kind redemptions | 10,828,730 | 72,820,613 | 40,224,814 | 34,943,768 | ||||||||||||
Foreign currency transactions | (28,980 | ) | 186,943 | 49,959 | (22,159 | ) | ||||||||||
Net realized gain | 70,349 | 29,433,811 | 30,902,311 | 25,274,469 | ||||||||||||
Net change in unrealized appreciation (depreciation) on: |
| |||||||||||||||
Investments | (1,526,887 | ) | (1,646,195 | ) | 23,526,400 | 46,428,259 | ||||||||||
Translation of assets and liabilities in | (4,832 | ) | (50,597 | ) | 986 | 5,698 | ||||||||||
Net change in unrealized appreciation (depreciation) | (1,531,719 | ) | (1,696,792 | ) | 23,527,386 | 46,433,957 | ||||||||||
Net realized and unrealized gain (loss) | (1,461,370 | ) | 27,737,019 | 54,429,697 | 71,708,426 | |||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 3,335,690 | $ | 45,190,681 | $ | 65,213,522 | $ | 79,126,893 | ||||||||
a | Net of foreign withholding tax of $964,279, $ –, $ – and $1,238,305, respectively. |
See notes to financial statements.
66 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2010
iShares MSCI Index Funda | ||||
NET INVESTMENT INCOME | ||||
Dividends from unaffiliated issuersb | $ | 17,676 | ||
Dividends from affiliated issuers (Note 2) | 28 | |||
Interest from affiliated issuers (Note 2) | 2 | |||
Securities lending income from affiliated issuers (Note 2) | 22 | |||
Total investment income | 17,728 | |||
EXPENSES | ||||
Investment advisory fees (Note 2) | 1,127 | |||
Total expenses | 1,127 | |||
Net investment income | 16,601 | |||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments in unaffiliated issuers | (2,434 | ) | ||
Net realized loss | (2,434 | ) | ||
Net change in unrealized appreciation (depreciation) | (246,604 | ) | ||
Net realized and unrealized loss | (249,038 | ) | ||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (232,437 | ) | |
a | For the period from May 5, 2010 (commencement of operations) to August 31, 2010. |
b | Net of foreign withholding tax of $4. |
See notes to financial statements.
FINANCIAL STATEMENTS | 67 |
Table of Contents
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Brazil Index Fund | iShares MSCI BRIC Index Fund | |||||||||||||||
Year ended August 31, 2010 | Year ended August 31, 2009 | Year ended August 31, 2010 | Year ended August 31, 2009 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 228,419,252 | $ | 192,844,870 | $ | 12,434,508 | $ | 3,504,150 | ||||||||
Net realized gain (loss) | 372,816,382 | (963,274,219 | ) | (12,482,457 | ) | (17,449,387 | ) | |||||||||
Net change in unrealized appreciation (depreciation) | 1,246,032,535 | 238,177,276 | 63,820,880 | 16,000,615 | ||||||||||||
Net increase (decrease) in net assets resulting from operations | 1,847,268,169 | (532,252,073 | ) | 63,772,931 | 2,055,378 | |||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (384,786,885 | ) | (222,728,833 | ) | (12,829,123 | ) | (3,193,491 | ) | ||||||||
Total distributions to shareholders | (384,786,885 | ) | (222,728,833 | ) | (12,829,123 | ) | (3,193,491 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 6,659,059 | 3,187,809,782 | 398,031,773 | 340,101,221 | ||||||||||||
Cost of shares redeemed | (1,006,054,310 | ) | (897,722,395 | ) | – | (2,215,782 | ) | |||||||||
Net increase (decrease) in net assets from capital share transactions | (999,395,251 | ) | 2,290,087,387 | 398,031,773 | 337,885,439 | |||||||||||
INCREASE IN NET ASSETS | 463,086,033 | 1,535,106,481 | 448,975,581 | 336,747,326 | ||||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 8,777,366,483 | 7,242,260,002 | 497,838,873 | 161,091,547 | ||||||||||||
End of year | $ | 9,240,452,516 | $ | 8,777,366,483 | $ | 946,814,454 | $ | 497,838,873 | ||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | (43,826,642 | ) | $ | 71,899,211 | $ | 617,952 | $ | 1,242,283 | |||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 100,000 | 69,150,000 | 8,800,000 | 9,700,000 | ||||||||||||
Shares redeemed | (15,000,000 | ) | (17,350,000 | ) | – | (100,000 | ) | |||||||||
Net increase (decrease) in shares outstanding | (14,900,000 | ) | 51,800,000 | 8,800,000 | 9,600,000 | |||||||||||
See notes to financial statements.
68 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® , INC.
iShares MSCI Canada Index Fund | iShares MSCI Chile Investable Market Index Fund | |||||||||||||||
Year ended August 31, 2010 | Year ended August 31, 2009 | Year ended August 31, 2010 | Year ended August 31, 2009 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 51,900,908 | $ | 29,085,589 | $ | 3,713,462 | $ | 3,711,626 | ||||||||
Net realized gain (loss) | 109,004,495 | (88,665,380 | ) | (2,840,935 | ) | (21,842,611 | ) | |||||||||
Net change in unrealized appreciation (depreciation) | 93,342,915 | (320,275,596 | ) | 149,610,800 | 41,659,903 | |||||||||||
Net increase (decrease) in net assets resulting from operations | 254,248,318 | (379,855,387 | ) | 150,483,327 | 23,528,918 | |||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (50,623,009 | ) | (29,274,634 | ) | (4,266,725 | ) | (3,316,556 | ) | ||||||||
Return of capital | – | – | (214,415 | ) | – | |||||||||||
Total distributions to shareholders | (50,623,009 | ) | (29,274,634 | ) | (4,481,140 | ) | (3,316,556 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 1,858,101,617 | 1,115,573,096 | 378,631,231 | 234,309,554 | ||||||||||||
Cost of shares redeemed | (1,008,121,985 | ) | (383,866,414 | ) | (117,487,891 | ) | (67,475,216 | ) | ||||||||
Net increase in net assets from capital share | 849,979,632 | 731,706,682 | 261,143,340 | 166,834,338 | ||||||||||||
INCREASE IN NET ASSETS | 1,053,604,941 | 322,576,661 | 407,145,527 | 187,046,700 | ||||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 2,393,637,556 | 2,071,060,895 | 263,204,879 | 76,158,179 | ||||||||||||
End of year | $ | 3,447,242,497 | $ | 2,393,637,556 | $ | 670,350,406 | $ | 263,204,879 | ||||||||
Undistributed net investment income included in net | $ | 11,237,296 | $ | 9,728,466 | $ | – | $ | 553,151 | ||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 69,800,000 | 50,600,000 | 6,350,000 | 5,850,000 | ||||||||||||
Shares redeemed | (38,700,000 | ) | (17,400,000 | ) | (2,300,000 | ) | (1,650,000 | ) | ||||||||
Net increase in shares outstanding | 31,100,000 | 33,200,000 | 4,050,000 | 4,200,000 | ||||||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 69 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® , INC.
iShares MSCI Israel Capped Investable Market Index Fund | iShares MSCI Mexico Investable Market Index Fund | |||||||||||||||
Year ended August 31, 2010 | Year ended August 31, 2009 | Year ended August 31, 2010 | Year ended August 31, 2009 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 4,797,060 | $ | 2,794,735 | $ | 17,453,662 | $ | 6,673,063 | ||||||||
Net realized gain (loss) | 70,349 | (32,145,219 | ) | 29,433,811 | (266,827,625 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) | (1,531,719 | ) | 2,015,065 | (1,696,792 | ) | 12,202,418 | ||||||||||
Net increase (decrease) in net assets resulting from operations | 3,335,690 | (27,335,419 | ) | 45,190,681 | (247,952,144 | ) | ||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (5,130,542 | ) | (2,877,576 | ) | (18,506,573 | ) | (9,905,910 | ) | ||||||||
Total distributions to shareholders | (5,130,542 | ) | (2,877,576 | ) | (18,506,573 | ) | (9,905,910 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 136,885,872 | 1,502,612 | 1,412,598,195 | 800,186,831 | ||||||||||||
Cost of shares redeemed | (114,410,341 | ) | (67,698,624 | ) | (683,521,351 | ) | (803,735,494 | ) | ||||||||
Net increase (decrease) in net assets from capital share transactions | 22,475,531 | (66,196,012 | ) | 729,076,844 | (3,548,663 | ) | ||||||||||
INCREASE (DECREASE) IN NET ASSETS | 20,680,679 | (96,409,007 | ) | 755,760,952 | (261,406,717 | ) | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 107,792,025 | 204,201,032 | 694,277,619 | 955,684,336 | ||||||||||||
End of year | $ | 128,472,704 | $ | 107,792,025 | $ | 1,450,038,571 | $ | 694,277,619 | ||||||||
Undistributed net investment income included in net | $ | 236,701 | $ | 339,150 | $ | 1,975,060 | $ | 2,841,028 | ||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 2,550,000 | 50,000 | 28,100,000 | 22,900,000 | ||||||||||||
Shares redeemed | (2,250,000 | ) | (1,950,000 | ) | (14,300,000 | ) | (25,000,000 | ) | ||||||||
Net increase (decrease) in shares outstanding | 300,000 | (1,900,000 | ) | 13,800,000 | (2,100,000 | ) | ||||||||||
See notes to financial statements.
70 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® , INC.
iShares MSCI South Africa Index Fund | iShares MSCI Turkey Investable Market Index Fund | |||||||||||||||
Year ended August 31, 2010 | Year ended August 31, 2009 | Year ended August 31, 2010 | Year ended August 31, 2009 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 10,783,825 | $ | 15,496,775 | $ | 7,418,467 | $ | 2,499,255 | ||||||||
Net realized gain (loss) | 30,902,311 | (51,609,671 | ) | 25,274,469 | (5,778,951 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) | 23,527,386 | 22,370,334 | 46,433,957 | 4,879,633 | ||||||||||||
Net increase (decrease) in net assets resulting from | 65,213,522 | (13,742,562 | ) | 79,126,893 | 1,599,937 | |||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (12,009,132 | ) | (16,108,974 | ) | (8,702,771 | ) | (3,253,085 | ) | ||||||||
Total distributions to shareholders | (12,009,132 | ) | (16,108,974 | ) | (8,702,771 | ) | (3,253,085 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 215,358,696 | 240,171,487 | 471,556,198 | 172,031,636 | ||||||||||||
Cost of shares redeemed | (252,100,617 | ) | (151,246,258 | ) | (182,426,990 | ) | (79,964,959 | ) | ||||||||
Net increase (decrease) in net assets from capital share transactions | (36,741,921 | ) | 88,925,229 | 289,129,208 | 92,066,677 | |||||||||||
INCREASE IN NET ASSETS | 16,462,469 | 59,073,693 | 359,553,330 | 90,413,529 | ||||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 488,728,269 | 429,654,576 | 242,434,809 | 152,021,280 | ||||||||||||
End of year | $ | 505,190,738 | $ | 488,728,269 | $ | 601,988,139 | $ | 242,434,809 | ||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of year | $ | 1,244,736 | $ | 2,312,820 | $ | (557,958 | ) | $ | 181,540 | |||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 3,800,000 | 5,600,000 | 8,350,000 | 4,250,000 | ||||||||||||
Shares redeemed | (4,600,000 | ) | (3,900,000 | ) | (3,500,000 | ) | (2,100,000 | ) | ||||||||
Net increase (decrease) in shares outstanding | (800,000 | ) | 1,700,000 | 4,850,000 | 2,150,000 | |||||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 71 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® , INC.
iShares MSCI USA Index Fund | ||||
Period from May 5, 2010a to | ||||
INCREASE (DECREASE) IN NET ASSETS | ||||
OPERATIONS: | ||||
Net investment income | $ | 16,601 | ||
Net realized loss | (2,434 | ) | ||
Net change in unrealized appreciation (depreciation) | (246,604 | ) | ||
Net decrease in net assets resulting from operations | (232,437 | ) | ||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||
From net investment income | (6,626 | ) | ||
Total distributions to shareholders | (6,626 | ) | ||
CAPITAL SHARE TRANSACTIONS: | ||||
Proceeds from shares sold | 2,482,623 | |||
Net increase in net assets from capital share transactions | 2,482,623 | |||
INCREASE IN NET ASSETS | 2,243,560 | |||
NET ASSETS | ||||
Beginning of period | – | |||
End of period | $ | 2,243,560 | ||
Undistributed net investment income included in net assets at end of period | $ | 9,975 | ||
SHARES ISSUED | ||||
Shares sold | 100,000 | |||
Net increase in shares outstanding | 100,000 | |||
a | Commencement of operations. |
See notes to financial statements.
72 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Brazil Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 58.26 | $ | 73.27 | $ | 61.59 | $ | 39.09 | $ | 28.18 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 1.56 | 1.56 | 1.93 | 1.09 | 1.00 | |||||||||||||||
Net realized and unrealized gain (loss)b | 10.83 | (14.63 | ) | 11.59 | 22.35 | 10.49 | ||||||||||||||
Total from investment operations | 12.39 | (13.07 | ) | 13.52 | 23.44 | 11.49 | ||||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (2.58 | ) | (1.94 | ) | (1.41 | ) | (0.94 | ) | (0.58 | ) | ||||||||||
Net realized gain | – | – | (0.43 | ) | – | – | ||||||||||||||
Total distributions | (2.58 | ) | (1.94 | ) | (1.84 | ) | (0.94 | ) | (0.58 | ) | ||||||||||
Net asset value, end of year | $ | 68.07 | $ | 58.26 | $ | 73.27 | $ | 61.59 | $ | 39.09 | ||||||||||
Total return | 21.12 | % | (16.05 | )% | 21.58 | % | 60.82 | % | 41.13 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 9,240,453 | $ | 8,777,366 | $ | 7,242,260 | $ | 4,434,334 | $ | 2,468,295 | ||||||||||
Ratio of expenses to average net assets | 0.61 | % | 0.65 | % | 0.63 | % | 0.69 | % | 0.70 | % | ||||||||||
Ratio of expenses to average net assets | n/a | n/a | 0.63 | % | 0.68 | % | n/a | |||||||||||||
Ratio of net investment income to average net assets | 2.24 | % | 3.38 | % | 2.37 | % | 2.17 | % | 2.65 | % | ||||||||||
Portfolio turnover ratec | 13 | % | 30 | % | 30 | % | 22 | % | 15 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | 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 years ended August 31, 2010, August 31, 2009, August 31, 2008, August 31, 2007 and August 31, 2006 would have been 13%, 14%, 19%, 6% and 13%, respectively. See Note 4. |
See notes to financial statements.
FINANCIAL STATEMENTS | 73 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI BRIC Index Fund | ||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Period from Nov. 12, 2007a Aug. 31, 2008 | ||||||||||
Net asset value, beginning of period | $ | 37.57 | $ | 44.13 | $ | 56.50 | ||||||
Income from investment operations: | ||||||||||||
Net investment incomeb | 0.66 | 0.58 | 0.72 | |||||||||
Net realized and unrealized gain (loss)c | 5.35 | (6.60 | ) | (12.93 | ) | |||||||
Total from investment operations | 6.01 | (6.02 | ) | (12.21 | ) | |||||||
Less distributions from: | ||||||||||||
Net investment income | (0.64 | ) | (0.54 | ) | (0.16 | ) | ||||||
Total distributions | (0.64 | ) | (0.54 | ) | (0.16 | ) | ||||||
Net asset value, end of period | $ | 42.94 | $ | 37.57 | $ | 44.13 | ||||||
Total return | 15.95 | % | (13.08 | )% | (21.65 | )%d | ||||||
Ratios/Supplemental data: | ||||||||||||
Net assets, end of period (000s) | $ | 946,814 | $ | 497,839 | $ | 161,092 | ||||||
Ratio of expenses to average net assetse | 0.69 | % | 0.72 | % | 0.72 | % | ||||||
Ratio of expenses to average net assets exclusive of foreign taxese | n/a | n/a | 0.72 | % | ||||||||
Ratio of net investment income to average net assetse | 1.52 | % | 1.87 | % | 1.74 | % | ||||||
Portfolio turnover ratef | 9 | % | 7 | % | 9 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered in Creation Units but include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rate for the years ended August 31, 2010, August 31, 2009 and the period ended August 31, 2008 would have been 8%, 6%, and 2%, respectively. See Note 4. |
See notes to financial statements.
74 | 2010 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, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 23.70 | $ | 30.55 | $ | 29.87 | $ | 24.69 | $ | 20.30 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.43 | 0.41 | 0.47 | 0.35 | 0.25 | |||||||||||||||
Net realized and unrealized gain (loss)b | 2.39 | (6.84 | ) | 0.72 | 5.11 | 4.29 | ||||||||||||||
Total from investment operations | 2.82 | (6.43 | ) | 1.19 | 5.46 | 4.54 | ||||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.42 | ) | (0.42 | ) | (0.51 | ) | (0.28 | ) | (0.15 | ) | ||||||||||
Total distributions | (0.42 | ) | (0.42 | ) | (0.51 | ) | (0.28 | ) | (0.15 | ) | ||||||||||
Net asset value, end of year | $ | 26.10 | $ | 23.70 | $ | 30.55 | $ | 29.87 | $ | 24.69 | ||||||||||
Total return | 11.91 | % | (20.51 | )% | 3.88 | % | 22.33 | % | 22.46 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 3,447,242 | $ | 2,393,638 | $ | 2,071,061 | $ | 1,323,122 | $ | 1,101,161 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.55 | % | 0.52 | % | 0.52 | % | 0.54 | % | ||||||||||
Ratio of expenses to average net assets exclusive of foreign taxes | n/a | 0.55 | % | n/a | 0.52 | % | n/a | |||||||||||||
Ratio of net investment income to average net assets | 1.63 | % | 2.00 | % | 1.46 | % | 1.32 | % | 1.09 | % | ||||||||||
Portfolio turnover ratec | 6 | % | 6 | % | 11 | % | 8 | % | 20 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 75 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Chile Investable Market Index Fund | ||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Period from Aug. 31, 2008 | ||||||||||
Net asset value, beginning of period | $ | 44.61 | $ | 44.80 | $ | 48.84 | ||||||
Income from investment operations: | ||||||||||||
Net investment incomeb | 0.59 | 0.76 | 0.92 | |||||||||
Net realized and unrealized gain (loss)c | 22.86 | (0.42 | ) | (4.38 | ) | |||||||
Total from investment operations | 23.45 | 0.34 | (3.46 | ) | ||||||||
Less distributions from: | ||||||||||||
Net investment income | (0.66 | ) | (0.53 | ) | (0.58 | ) | ||||||
Return of capital | (0.03 | ) | – | – | ||||||||
Total distributions | (0.69 | ) | (0.53 | ) | (0.58 | ) | ||||||
Net asset value, end of period | $ | 67.37 | $ | 44.61 | $ | 44.80 | ||||||
Total return | 52.88 | % | 0.89 | % | (7.15 | )%d | ||||||
Ratios/Supplemental data: | ||||||||||||
Net assets, end of period (000s) | $ | 670,350 | $ | 263,205 | $ | 76,158 | ||||||
Ratio of expenses to average net assetse | 0.61 | % | 0.65 | % | 0.63 | % | ||||||
Ratio of net investment income to average net assetse | 1.05 | % | 1.98 | % | 2.38 | % | ||||||
Portfolio turnover ratef | 42 | % | 53 | % | 16 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates 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 years ended August 31, 2010, August 31, 2009 and the period ended August 31, 2008 would have been 9%, 14% and 16%, respectively. See Note 4. |
See notes to financial statements.
76 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Israel Capped Investable Market Index Fund | ||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Period from Aug. 31, 2008 | ||||||||||
Net asset value, beginning of period | $ | 46.87 | $ | 48.62 | $ | 50.33 | ||||||
Income from investment operations: | ||||||||||||
Net investment incomeb | 1.40 | 0.98 | 0.21 | |||||||||
Net realized and unrealized gain (loss)c | 2.63 | (1.75 | ) | (1.92 | ) | |||||||
Total from investment operations | 4.03 | (0.77 | ) | (1.71 | ) | |||||||
Less distributions from: | ||||||||||||
Net investment income | (1.49 | ) | (0.98 | ) | – | |||||||
Total distributions | (1.49 | ) | (0.98 | ) | – | |||||||
Net asset value, end of period | $ | 49.41 | $ | 46.87 | $ | 48.62 | ||||||
Total return | 8.57 | % | (0.63 | )% | (3.40 | )%d | ||||||
Ratios/Supplemental data: | ||||||||||||
Net assets, end of period (000s) | $ | 128,473 | $ | 107,792 | $ | 204,201 | ||||||
Ratio of expenses to average net assetse | 0.61 | % | 0.66 | % | 0.63 | % | ||||||
Ratio of net investment income to average net assetse | 2.64 | % | 2.66 | % | 0.93 | % | ||||||
Portfolio turnover ratef | 21 | % | 27 | % | 8 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 77 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Mexico Investable Market Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 42.59 | $ | 51.94 | $ | 58.35 | $ | 41.30 | $ | 29.04 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.72 | 0.43 | 1.40 | 0.64 | 0.76 | |||||||||||||||
Net realized and unrealized gain (loss)b | 5.61 | (9.17 | ) | (6.21 | ) | 16.87 | 11.98 | |||||||||||||
Total from investment operations | 6.33 | (8.74 | ) | (4.81 | ) | 17.51 | 12.74 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.75 | ) | (0.61 | ) | (1.60 | ) | (0.46 | ) | (0.48 | ) | ||||||||||
Total distributions | (0.75 | ) | (0.61 | ) | (1.60 | ) | (0.46 | ) | (0.48 | ) | ||||||||||
Net asset value, end of year | $ | 48.17 | $ | 42.59 | $ | 51.94 | $ | 58.35 | $ | 41.30 | ||||||||||
Total return | 14.83 | % | (16.50 | )% | (8.44 | )% | 42.58 | % | 44.11 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 1,450,039 | $ | 694,278 | $ | 955,684 | $ | 1,382,810 | $ | 764,107 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.55 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||
Ratio of net investment income to average net assets | 1.46 | % | 1.25 | % | 2.42 | % | 1.19 | % | 2.06 | % | ||||||||||
Portfolio turnover ratec | 11 | % | 13 | % | 13 | % | 14 | % | 12 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
78 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008a | Year ended Aug. 31, 2007a | Year ended Aug. 31, 2006a | ||||||||||||||||
Net asset value, beginning of year | $ | 51.99 | $ | 55.80 | $ | 62.26 | $ | 48.84 | $ | 41.50 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomeb | 1.18 | 1.94 | 2.28 | 1.50 | 1.44 | |||||||||||||||
Net realized and unrealized gain (loss)c | 6.92 | (3.84 | ) | (6.02 | ) | 13.18 | 6.89 | |||||||||||||
Total from investment operations | 8.10 | (1.90 | ) | (3.74 | ) | 14.68 | 8.33 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.35 | ) | (1.91 | ) | (2.72 | ) | (1.26 | ) | (0.99 | ) | ||||||||||
Total distributions | (1.35 | ) | (1.91 | ) | (2.72 | ) | (1.26 | ) | (0.99 | ) | ||||||||||
Net asset value, end of year | $ | 58.74 | $ | 51.99 | $ | 55.80 | $ | 62.26 | $ | 48.84 | ||||||||||
Total return | 15.80 | % | (2.23 | )% | (6.18 | )% | 30.34 | % | 20.06 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 505,191 | $ | 488,728 | $ | 429,655 | $ | 466,940 | $ | 297,898 | ||||||||||
Ratio of expenses to average net assets | 0.61 | % | 0.66 | % | 0.63 | % | 0.68 | % | 0.70 | % | ||||||||||
Ratio of net investment income to average net assets | 2.09 | % | 4.81 | % | 3.61 | % | 2.58 | % | 2.79 | % | ||||||||||
Portfolio turnover rated | 5 | % | 16 | % | 21 | % | 8 | % | 7 | % |
a | Per share amounts were adjusted to reflect a two-for-one stock split effective July 24, 2008. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities |
d | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 79 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Turkey Investable Market Index Fund | ||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Period from Aug. 31, 2008 | ||||||||||
Net asset value, beginning of period | $ | 48.01 | $ | 52.42 | $ | 50.30 | ||||||
Income from investment operations: | ||||||||||||
Net investment incomeb | 1.00 | 0.78 | 0.83 | |||||||||
Net realized and unrealized gain (loss)c | 13.02 | (4.22 | ) | 1.29 | ||||||||
Total from investment operations | 14.02 | (3.44 | ) | 2.12 | ||||||||
Less distributions from: | ||||||||||||
Net investment income | (1.22 | ) | (0.97 | ) | – | |||||||
Total distributions | (1.22 | ) | (0.97 | ) | – | |||||||
Net asset value, end of period | $ | 60.81 | $ | 48.01 | $ | 52.42 | ||||||
Total return | 29.55 | % | (5.56 | )% | 4.22 | %d | ||||||
Ratios/Supplemental data: | ||||||||||||
Net assets, end of period (000s) | $ | 601,988 | $ | 242,435 | $ | 152,021 | ||||||
Ratio of expenses to average net assetse | 0.61 | % | 0.65 | % | 0.63 | % | ||||||
Ratio of net investment income to average net assetse | 1.81 | % | 2.39 | % | 3.78 | % | ||||||
Portfolio turnover ratef | 13 | % | 16 | % | 27 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
80 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares MSCI USA Index Fund | ||||
Period from May 5, 2010a to Aug. 31, 2010 | ||||
Net asset value, beginning of period | $ | 24.83 | ||
Income from investment operations: | ||||
Net investment incomeb | 0.17 | |||
Net realized and unrealized loss | (2.49 | ) | ||
Total from investment operations | (2.32 | ) | ||
Less distributions from: | ||||
Net investment income | (0.07 | ) | ||
Total distributions | (0.07 | ) | ||
Net asset value, end of period | $ | 22.44 | ||
Total return | (9.37 | )%c | ||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 2,244 | ||
Ratio of expenses to average net assetsd | 0.15 | % | ||
Ratio of net investment income to average net assetsd | 2.21 | % | ||
Portfolio turnover ratee | 1 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | Not annualized. |
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. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 81 |
Table of Contents
iSHARES®, INC.
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.
These financial statements relate only to the iShares MSCI Brazil, iShares MSCI BRIC, iShares MSCI Canada, iShares MSCI Chile Investable Market, iShares MSCI Israel Capped Investable Market, iShares MSCI Mexico Investable Market, iShares MSCI South Africa, iShares MSCI Turkey Investable Market and iShares MSCI USA Index Funds (each, a “Fund,” collectively, the “Funds”). The iShares MSCI USA Index Fund commenced operations on May 5, 2010.
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 a particular market, as measured by that market’s equity securities index compiled by MSCI Inc. 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 issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
Each Fund, except for the iShares MSCI USA Index Fund, invests in the securities of non-U.S. issuers that may trade in non-U.S. markets. This may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets and the risk of war.
Pursuant to the Company’s organizational documents, the 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.
1. SIGNIFICANT ACCOUNTING POLICIES
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”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
SECURITY VALUATION
The securities and other assets of each Fund are valued pursuant to the pricing policy and procedures approved by the Board of Directors of the Company (the “Board”) using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or
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liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
• | Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access at the measurement date (a “Level 1 Price”); |
• | Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (a “Level 2 Price”); |
• | Level 3 – Inputs that are unobservable for the asset or liability (a “Level 3 Price”). |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3 of the fair value hierarchy.
The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Funds’ perceived risk of that instrument.
Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 Prices, include active listed equities. The Funds do not adjust the quoted price for such instruments, even in situations where the Funds hold a large position and a sale could reasonably impact the quoted price.
Investments that trade in markets that are not considered to be active, but whose values are based on inputs such as quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified within Level 2. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.
Investments whose values are classified as Level 3 Prices have significant unobservable inputs, as they may trade infrequently or not at all. Investments whose values are classified as Level 3 Prices may include unlisted securities related to corporate actions, securities whose trading have been suspended or which have been de-listed from their primary trading exchange, less liquid corporate debt securities (including distressed debt instruments), collateralized debt obligations, and less liquid mortgage securities (backed by either commercial or residential real estate). When observable prices are not available for these securities, the Funds use one or more valuation techniques (e.g., the market approach or the income approach) for which sufficient and reliable data is available. Within Level 3 of the fair value hierarchy, the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.
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The inputs used by the Funds in estimating the value of Level 3 Prices may include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 Prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Funds in the absence of market information. The fair value measurement of Level 3 Prices does not include transaction costs that may have been capitalized as part of the security’s cost basis. Assumptions used by the Funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Funds’ results of operations.
Fair value pricing could result in a difference between the prices used to calculate a Fund’s net asset value and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.
The following table summarizes the values of each Fund’s investments according to the fair value hierarchy as of August 31, 2010. The breakdown of each Fund’s investments into major categories is disclosed in its respective Schedule of Investments.
Investments in Securities | ||||||||||||||||
iShares MSCI Index Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Brazil | $ | 9,144,613,869 | $ | – | $ | – | $ | 9,144,613,869 | ||||||||
BRIC | ||||||||||||||||
Common Stocks | $ | 754,473,616 | $ | – | $ | 8,893,263 | $ | 763,366,879 | ||||||||
Preferred Stocks | 178,829,132 | – | – | 178,829,132 | ||||||||||||
Rights | 35 | – | – | 35 | ||||||||||||
Warrants | 8,881 | – | – | 8,881 | ||||||||||||
Short-Term Investments | 54,906,068 | – | – | 54,906,068 | ||||||||||||
$ | 988,217,732 | $ | – | $ | 8,893,263 | $ | 997,110,995 | |||||||||
Canada | $ | 3,451,625,649 | $ | – | $ | – | $ | 3,451,625,649 | ||||||||
Chile Investable Market | $ | 671,302,038 | $ | – | $ | – | $ | 671,302,038 | ||||||||
Israel Capped Investable Market | $ | 132,898,826 | $ | – | $ | – | $ | 132,898,826 | ||||||||
Mexico Investable Market | $ | 1,519,870,277 | $ | – | $ | – | $ | 1,519,870,277 | ||||||||
South Africa | $ | 509,715,158 | $ | – | $ | – | $ | 509,715,158 | ||||||||
Turkey Investable Market | $ | 626,090,254 | $ | – | $ | – | $ | 626,090,254 | ||||||||
USA | $ | 2,242,269 | $ | – | $ | – | $ | 2,242,269 | ||||||||
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The following table provides the reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value for the year ended August 31, 2010:
iShares MSCI Index Fund | Balance at Beginning of Year | Realized Gain (Loss) and | Net Purchases (Sales) | Net In (Out)a | Balance at Year | Net Change in End of Year | ||||||||||||||||||
BRIC | ||||||||||||||||||||||||
Common Stocks | $ | – | $ | 298,041 | $ | 5,175,380 | $ | 3,419,842 | b | $ | 8,893,263 | $ | 298,041 | |||||||||||
a | The Funds’ policy is to recognize transfers in and transfers out as of the beginning of the period in which the event occurred. |
b | Represents the transfer in of Ping An Insurance (Group) Company of China, Ltd. (“Ping An”) Class H shares from Level 1 to Level 3. At the request of Ping An, shares of its stock were suspended from trading on the Hong Kong Stock Exchange beginning June 30, 2010 pending the release of an announcement in relation to a potential transaction. |
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. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. 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. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates 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
The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, capital gains on investments or currency repatriation. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign markets in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are disclosed in their Statements of Operations. Foreign taxes payable as of August 31, 2010, if any, are reflected in the Funds’ Statements of Assets and Liabilities.
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DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income, if any, are generally declared and paid at least semi-annually by each Fund. Distributions of net realized capital gains, if any, generally are declared and paid 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.
As of August 31, 2010, the tax year-end of the Funds, the components of net distributable earnings (accumulated losses) on a tax basis were as follows:
iShares MSCI Index Fund | Undistributed Ordinary Income | Unrealized Appreciation (Depreciation) | Capital and Other Losses | Net Distributable Earnings (Accumulated Losses) | ||||||||||||
Brazil | $ | 243,268,643 | $ | 3,098,800,505 | $ | (244,599,337 | ) | $ | 3,097,469,811 | |||||||
BRIC | 4,425,959 | 24,792,158 | (18,748,919 | ) | 10,469,198 | |||||||||||
Canada | 15,978,886 | (353,007,101 | ) | (130,024,282 | ) | (467,052,497 | ) | |||||||||
Chile Investable Market | – | 171,712,492 | (14,457,071 | ) | 157,255,421 | |||||||||||
Israel Capped Investable Market | 404,129 | (25,626,346 | ) | (18,236,554 | ) | (43,458,771 | ) | |||||||||
Mexico Investable Market | 1,975,060 | (238,441,963 | ) | (31,759,942 | ) | (268,226,845 | ) | |||||||||
South Africa | 4,013,683 | (48,641,393 | ) | (39,655,766 | ) | (84,283,476 | ) | |||||||||
Turkey Investable Market | 1,160,723 | 46,705,977 | (10,540,635 | ) | 37,326,065 | |||||||||||
USA | 9,975 | (248,373 | ) | (665 | ) | (239,063 | ) | |||||||||
For the years ended August 31, 2010 and August 31, 2009, 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 ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the year ended August 31, 2010.
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From November 1, 2009 to August 31, 2010, certain Funds incurred net realized capital losses and net foreign currency losses. As permitted by tax regulations, these Funds have elected to defer those losses and treat them as arising in the year ending August 31, 2011 as follows:
iShares MSCI Index Fund | Deferred Net Realized Capital/Net Foreign Currency Losses | |||
BRIC | $ | 5,940,093 | ||
Canada | 19,806,312 | |||
Chile Investable Market | 858,100 | |||
Israel Capped Investable Market | 6,650,884 |
iShares MSCI Index Fund | Deferred Net Realized Capital/Net Foreign Currency Losses | |||
Mexico Investable Market | $ | 13,032,194 | ||
South Africa | 6,091,717 | |||
Turkey Investable Market | 3,837,262 | |||
USA | 665 |
Certain Funds had tax basis net capital loss carryforwards as of August 31, 2010, the tax year-end of the Funds, as follows:
iShares MSCI Index Fund | Expiring 2011 | Expiring 2012 | Expiring 2013 | Expiring 2014 | Expiring 2015 | Expiring 2016 | Expiring 2017 | Expiring 2018 | Total | |||||||||||||||||||||||||||
Brazil | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | 29,287,453 | $ | 215,311,884 | $ | 244,599,337 | ||||||||||||||||||
BRIC | – | – | – | – | – | – | 1,540,740 | 11,268,086 | 12,808,826 | |||||||||||||||||||||||||||
Canada | – | – | 2,931,648 | – | 5,363,291 | 5,107,471 | 27,886,883 | 68,928,677 | 110,217,970 | |||||||||||||||||||||||||||
Chile Investable Market | – | – | – | – | – | – | 1,886,881 | 11,712,090 | 13,598,971 | |||||||||||||||||||||||||||
Israel Capped Investable Market | – | – | – | – | – | – | 784,479 | 10,801,191 | 11,585,670 | |||||||||||||||||||||||||||
Mexico Investable Market | 2,329,290 | 3,136,171 | 12,912 | 632,766 | – | 853,150 | 8,973,988 | 2,789,471 | 18,727,748 | |||||||||||||||||||||||||||
South Africa | – | 527,613 | – | 260,738 | 1,607,845 | 972,024 | 15,339,464 | 14,856,365 | 33,564,049 | |||||||||||||||||||||||||||
Turkey Investable Market | – | – | – | – | – | – | 720,636 | 5,982,737 | 6,703,373 |
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 marked-to-market gains.
Each Fund reclassifies at the end of its tax year certain amounts to paid-in-capital from accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss), respectively, as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, realized foreign currency gains and losses and gains and losses on in-kind redemptions. These reclassifications have no effect on net assets or net asset values per share.
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As of August 31, 2010, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:
iShares MSCI Index Fund | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
Brazil | $ | 6,047,067,548 | $ | 3,875,619,595 | $ | (778,073,274 | ) | $ | 3,097,546,321 | |||||||
BRIC | 972,355,993 | 100,421,968 | (75,666,966 | ) | 24,755,002 | |||||||||||
Canada | 3,804,437,188 | 169,862,303 | (522,673,842 | ) | (352,811,539 | ) | ||||||||||
Chile Investable Market | 499,589,069 | 171,712,969 | – | 171,712,969 | ||||||||||||
Israel Capped Investable Market | 158,525,016 | 1,822,650 | (27,448,840 | ) | (25,626,190 | ) | ||||||||||
Mexico Investable Market | 1,758,245,755 | 23,235,601 | (261,611,079 | ) | (238,375,478 | ) | ||||||||||
South Africa | 558,357,220 | 29,182,099 | (77,824,161 | ) | (48,642,062 | ) | ||||||||||
Turkey Investable Market | 579,390,934 | 59,788,534 | (13,089,214 | ) | 46,699,320 | |||||||||||
USA | 2,490,642 | 29,261 | (277,634 | ) | (248,373 | ) | ||||||||||
Management has reviewed the tax positions as of August 31, 2010, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Funds’ financial statements.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
On December 1, 2009, Barclays PLC (“Barclays”) completed the sale of its interest in BlackRock Institutional Trust Company, N.A. (“BTC”), formerly known as Barclays Global Investors, N.A., and certain affiliated companies to BlackRock, Inc. (“BlackRock,” and such sale, the “Transaction”). BTC is a wholly-owned subsidiary of BlackRock.
The PNC Financial Services Group, Inc. (“PNC”), Bank of America Corporation (“BAC”) and Barclays are the largest stockholders of BlackRock. Due to the ownership structure, PNC is an affiliate for 1940 Act purposes, but BAC and Barclays are not.
Under the 1940 Act, upon completion of the Transaction on December 1, 2009, each Fund’s investment advisory agreement with BlackRock Fund Advisors (“BFA”), formerly known as Barclays Global Fund Advisors, was automatically terminated. The Board and shareholders of the Funds approved a new investment advisory agreement with BFA. The investment advisory fee rates and expense arrangements for the Funds remained the same after the Transaction.
Pursuant to an Investment Advisory Agreement with the Company, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for all expenses (“Covered Expenses”) of the Company, 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.
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For its investment advisory services to the iShares MSCI Canada and iShares MSCI Mexico Investable Market Index Funds, BFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of these Funds and certain other iShares Funds as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | |
0.59% | First $7 billion | |
0.54 | Over $7 billion, up to and including $11 billion | |
0.49 | Over $11 billion, up to and including $24 billion | |
0.44 | Over $24 billion, up to and including $48 billion | |
0.40 | Over $48 billion |
For its investment advisory services to the iShares MSCI Brazil, iShares MSCI Chile Investable Market, iShares MSCI Israel Capped Investable Market, iShares MSCI South Africa and iShares MSCI Turkey Investable Market Index Funds, BFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of these Funds and certain other iShares Funds as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | |
0.74% | First $2 billion | |
0.69 | Over $2 billion, up to and including $4 billion | |
0.64 | Over $4 billion, up to and including $8 billion | |
0.57 | Over $8 billion, up to and including $16 billion | |
0.51 | Over $16 billion |
For its investment advisory services to the iShares MSCI BRIC Index Fund, BFA is entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares Funds as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | |
0.75% | First $14 billion | |
0.68 | Over $14 billion, up to and including $28 billion | |
0.61 | Over $28 billion |
For its investment advisory services to the iShares MSCI USA Index Fund, BFA is entitled to an annual investment advisory fee of 0.15% of the average daily net assets of the Fund.
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BTC to serve as securities lending agent for the Funds, subject to applicable conditions. BTC is an affiliate of BFA, the Funds’ investment adviser. As securities lending agent, BTC
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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, 2010, BTC earned securities lending agent fees from the Funds as follows:
iShares MSCI Index Fund | Securities Lending Agent Fees | |||
Brazil | $ | 16,665 | ||
BRIC | 204,584 | |||
Canada | 61,367 | |||
Israel Capped Investable Market | 103,210 |
iShares MSCI Index Fund | Securities Lending Agent Fees | |||
Mexico Investable Market | $ | 432,133 | ||
South Africa | 20,303 | |||
Turkey Investable Market | 464,373 | |||
USA | 10 |
Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in interest from affiliated issuers in the Statements of Operations.
Investments in issuers considered to be an affiliate of the Funds (excluding short-term investments) for the period May 5, 2010 to August 31, 2010, for the purposes of Section 2(a)(3) of the 1940 Act, were as follows:
iShares Index Fund and Name of Affiliated Issuer | Number of Shares Held Beginning of Period | Gross Additions | Gross Reductions | Number of Shares Held End of Period | Value at End of Period | Dividend Income | Net Realized | |||||||||||||||||||||
MSCI USA | ||||||||||||||||||||||||||||
BlackRock Inc. | – | 8 | – | 8 | $ | 1,136 | $ | 16 | $ | – | ||||||||||||||||||
PNC Financial Services Group Inc. (The) | – | 118 | – | 118 | 6,013 | 12 | – | |||||||||||||||||||||
$ | 7,149 | $ | 28 | $ | – | |||||||||||||||||||||||
Certain directors and officers of the Company are also officers of BTC and/or BFA.
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2010 were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||||
Brazil | $ | 1,274,928,741 | $ | 2,460,716,045 | ||||
BRIC | 204,648,201 | 68,245,976 | ||||||
Canada | 199,957,098 | 187,986,739 | ||||||
Chile Investable Market | 412,135,393 | 151,392,914 | ||||||
Israel Capped Investable Market | 35,582,801 | 35,791,526 | ||||||
Mexico Investable Market | 189,847,645 | 131,590,118 | ||||||
South Africa | 25,885,966 | 26,744,235 | ||||||
Turkey Investable Market | 63,193,786 | 54,173,734 | ||||||
USA | 114,654 | 29,842 |
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In-kind transactions (see Note 4) for the year ended August 31, 2010 were as follows:
iShares MSCI Index Fund | In-kind Purchases | In-kind Sales | ||||||
BRIC | $ | 258,019,810 | $ | – | ||||
Canada | 1,847,162,513 | 1,002,116,858 | ||||||
Israel Capped Investable Market | 135,518,033 | 112,879,849 | ||||||
Mexico Investable Market | 1,407,217,454 | 682,310,813 | ||||||
South Africa | 214,140,028 | 251,737,355 | ||||||
Turkey Investable Market | 459,486,094 | 175,246,388 | ||||||
USA | 2,401,432 | – |
4. CAPITAL SHARE TRANSACTIONS
The Company issues and redeems capital shares of each Fund only in aggregations of a specified number of shares (each, a “Creation Unit”) at net asset value. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Statements of Changes in Net Assets.
The consideration for the purchase of Creation Units of a Fund generally consists of the in-kind deposit of a designated portfolio of equity securities, which constitutes an optimized representation of the corresponding MSCI Index and an amount of cash (except for the iShares MSCI Brazil, iShares MSCI BRIC and iShares MSCI Chile Investable Market Index Funds which are offered in Creation Units solely or partially for cash in U.S. dollars). Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash pay an additional variable charge to compensate the relevant Fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities.
5. 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 current 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 value of the securities on loan. The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. Any securities lending cash collateral may be reinvested in certain short-term instruments either directly on behalf of a Fund or through one or more joint accounts or money market funds, including those managed by BFA or its affiliates; such reinvestments are subject to investment risk.
As of August 31, 2010, certain Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of the securities on loan as of August 31, 2010 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income, as disclosed in the Funds’ Statements of Operations, represents the income earned from the investment of the cash collateral, plus any fees paid by borrowers and less the fees paid to BTC as securities lending agent which are subject to adjustments pursuant to the securities lending agreement.
NOTESTO FINANCIAL STATEMENTS | 91 |
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Notes to Financial Statements (Continued)
iSHARES® , INC.
6. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.
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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 Brazil Index Fund, iShares MSCI BRIC Index Fund, iShares MSCI Canada Index Fund, iShares MSCI Chile Investable Market Index Fund, iShares MSCI Israel Capped Investable Market Index Fund, iShares MSCI Mexico Investable Market Index Fund, iShares MSCI South Africa Index Fund, iShares MSCI Turkey Investable Market Index Fund and iShares MSCI USA Index Fund, each a portfolio of the iShares MSCI Series (the “Funds”), at August 31, 2010, the results of each of their operations, the changes in each of their net assets and their 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, 2010 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 22, 2010
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 93 |
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iSHARES® INC.
For corporate shareholders, 100% of the income dividends paid by the iShares MSCI USA Index Fund during the fiscal period ended August 31, 2010 qualified for the dividends-received deduction.
For the fiscal year ended August 31, 2010, certain 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 | ||||||
Brazil | $ | 320,214,989 | $ | 29,620,138 | ||||
BRIC | 19,426,229 | 1,694,560 | ||||||
Canada | 81,024,889 | 12,132,596 | ||||||
Chile Investable Market | 8,156,822 | 2,285,598 | ||||||
Israel Capped Investable Market | 6,690,984 | 934,861 | ||||||
Turkey Investable Market | 10,358,886 | 1,231,213 | ||||||
Under Section 854(b)(2) of the Code, certain Funds hereby designate the following maximum amounts as qualified dividend income for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended August 31, 2010:
iShares MSCI Index Fund | Qualified Dividend Income | |||
Brazil | $ | 14,222,394 | ||
BRIC | 7,175,525 | |||
Canada | 50,623,009 | |||
Israel Capped Investable Market | 5,130,542 | |||
iShares MSCI Index Fund | Qualified Dividend Income | |||
Mexico Investable Market | $ | 18,506,573 | ||
South Africa | 12,009,132 | |||
Turkey Investable Market | 8,702,771 | |||
USA | 6,626 | |||
In February 2011, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2010. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
94 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
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Board Review and Approval of Investment Advisory Contract (Unaudited)
iSHARES® MSCI USA Index Fund
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors (the “Board”), including a majority of Directors who are not “interested persons” of the Company (as that term is defined in the 1940 Act) (the “Independent Directors”), is required to consider and approve the Fund entering into an Investment Advisory Contract with BlackRock Fund Advisors (“BFA”) (the “Advisory Contract”). As required by Section 15(c), the Board requested, and BFA provided, such information as the Board deemed reasonably necessary to evaluate the terms of the proposed Advisory Contract.
On December 1, 2009, BlackRock, Inc. (“BlackRock”) completed a transaction whereby it acquired from Barclays Bank PLC (“Barclays”) the interests in BFA, formerly known as Barclays Global Fund Advisors, and certain affiliated companies, including BlackRock Institutional Trust Company, N.A. (“BTC”), formerly known as Barclays Global Investors, N.A. (the “Transaction”).
At a meeting held on September 16-17, 2009, the Board approved the selection of BFA and the Advisory Contract for the Fund, based on its review of qualitative and quantitative information provided by BFA, BTC and BlackRock, as applicable, at the September 2009 Board meeting and at prior Board meetings. In that regard, at telephonic and in-person meetings held in June, July and August 2009, the Board, including the Independent Directors, discussed the Transaction and its potential impact on BFA. The Board received, in response to a written due diligence request prepared by the Board and its independent counsel, comprehensive written information from BFA, BTC and BlackRock, as applicable, covering a range of issues and received, in response to additional requests, further information in advance of and at an August 13, 2009 in-person Board meeting. To assist the Board, BlackRock provided materials and information about itself, including its history, management, investment, risk management and compliance capabilities and processes, and financial condition, and BFA provided materials and information about the Transaction. In addition, the Independent Directors consulted with their independent legal counsel and Fund counsel on numerous occasions, discussing, among other things, the legal standards and certain other considerations relevant to the Board’s deliberations.
In selecting BFA and approving the Advisory Contract for the Fund, the Board, including the Independent Directors, advised by their independent counsel, considered the following factors, no one of which was controlling, and made the following conclusions:
Nature, extent and quality of services to be provided by BFA – The Board reviewed the scope of services to be provided by BFA under the Advisory Contract. In reviewing the scope of services to be provided to the Fund by BFA, the Board considered BFA’s investment philosophy and experience, noting that over the past several years BFA and its affiliates have committed significant resources to the support of the other iShares funds. The Board considered in particular that BFA’s services for the other iShares funds capitalize on BFA’s core competencies, including the effective use of its proprietary investment models analyzing securities market risk, asset class correlations and expected returns. The Board also considered services provided by BFA and its affiliates in connection with the review of counterparty and issuer credit risk and securities lending opportunities and the oversight of intermediaries that provide shareholder support and processing functions.
The Board also considered BFA’s compliance program and its compliance record with respect to the other iShares funds. The Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and has made appropriate officers available as needed to provide further assistance with these matters, similar to the other iShares funds. The Board also reviewed the background and experience of the persons who will be responsible for the day-to-day management of the Fund. In addition to the above considerations, the Board reviewed and considered BFA’s investment processes and strategies, and matters related to BFA’s portfolio transaction policies and procedures. The Board noted that BFA does not serve as investment adviser for any other series of registered investment companies with substantially similar investment objectives and strategies as the Fund; therefore, comparative performance information was generally not available.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 95 |
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Board Review and Approval of Investment Advisory Contract (Unaudited) (Continued)
iSHARES® MSCI USA Index Fund
The Board noted the representations of BFA, BTC and BlackRock made at the June, July and August 2009 Board meetings that the Transaction was not expected to have any adverse effect on the resources and strengths of BFA in managing the Fund. The Board also considered that the Fund and its shareholders may benefit from having direct access to BlackRock’s technology and risk management analytic tools, including the investment tools provided under the BlackRock Solutions® brand name. At the prior Board meetings, the Board discussed BlackRock’s current financial condition, its anticipated financial condition following the completion of the Transaction and its lines of business, and its current ownership structure and expected ownership structure following the completion of the Transaction. The Board also discussed BFA’s anticipated financial condition following the completion of the Transaction.
Based on review of this information, the Board concluded that the nature, extent and quality of services to be provided by BFA to the Fund under the Advisory Contract were appropriate and supported the Board’s selection of BFA as investment adviser to the Fund.
Fund expenses – 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 the Fund in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising the Fund’s applicable peer group pursuant to Lipper’s proprietary methodology and any registered funds that would otherwise have been excluded from Lipper’s comparison group because of their size or other differentiating factors, but were nonetheless included at the request of BFA (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track indexes similar to that tracked by the Fund, the Lipper Groups included in part mutual funds, closed-end funds, exchange traded funds, or 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 Groups and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Fund. The Board noted that the investment advisory fee rates and overall expenses for the Fund were generally lower than the median or average investment advisory fee rates and overall expenses of the funds in the Lipper Groups.
Based on this review, the Board concluded that the investment advisory fee and expense level of the Fund, as proposed to be managed by BFA, as compared to the investment advisory fees and expense levels of the funds in the relevant Lipper Group, were satisfactory for the purposes of approving the Advisory Contract.
Costs of services to be provided to the fund and profits to be realized by BFA and affiliates – The Board did not consider the profitability of the Fund to BFA based on the fees payable under the Advisory Contract or revenue to be received by BFA or its affiliates in connection with services to be provided to the Fund since the proposed relationships had not yet commenced. The Board noted that it expects to receive profitability information from BFA on at least an annual basis following the expiration of the Advisory Contract’s initial two year term and thus be in a position to evaluate whether any adjustments in Fund fees would be appropriate.
Economies of scale – In connection with its review of the Fund’s profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Fund’s assets. The Board noted that the Advisory Contract did not provide for any breakpoints in the Fund’s investment advisory fee rates as the assets of the Fund increase. However, the Board further noted that possible future economies of scale for the Fund had been taken into consideration by fixing the investment advisory fee rate 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 structuring with declining breakpoints where the initial fee was higher. The Board also reviewed BFA’s historic profitability as investment adviser to the iShares fund complex and noted that BFA had continued to make significant investments in the iShares fund complex and that expenses had grown at a pace similar to the growth in revenue. The Board
96 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
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Board Review and Approval of Investment Advisory Contract (Unaudited) (Continued)
iSHARES® MSCI USA Index Fund
noted representations from BFA and BlackRock at the June, July and August 2009 Board meetings that BFA will continue to make significant investments in the iShares fund complex and the infrastructure supporting the iShares funds. It was noted at the prior Board meetings that it was not possible to evaluate how the Transaction would create opportunities for additional economies of scale.
Based on this review, as well as the discussions described above in connection with the Lipper Group comparisons, the Board, recognizing its responsibility to consider this issue at least annually following an initial two-year period, concluded that the structure of the investment advisory fee reflects the sharing of potential economies of scale with the Fund’s shareholders.
Fees and services provided for other comparable funds/accounts managed by BFA and its affiliates – The Board considered certain information regarding the Fund’s annual investment advisory fee rate under the Advisory Contract in comparison to the investment advisory/management fee rates for other funds/accounts with substantially similar investment objectives and strategies, for which BFA (or its affiliate, BTC) provides investment advisory/management services, including collective funds and separate accounts (together, the “Other Accounts”). The Board noted that directly comparative investment advisory/management fee information was available for the Fund, as BFA and its affiliates do manage Other Accounts with substantially similar investment objectives and strategies as the Fund. In reviewing the comparative investment advisory/management fee information for the Fund, the Board considered the general structure of the investment advisory/management fee in relation to the nature and extent of services to be provided to the Fund in comparison with the nature and extent of services provided to the Other Accounts, including, among other things, the level of complexity in managing the Fund and the Other Accounts under differing regulatory requirements and client guidelines. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for the Other Accounts for which BFA or BTC provides investment advisory/management services, but that the differences appeared to be attributable to, among other things, the type and level of services provided to the Fund as compared to the Other Accounts. Based on this review, as well as the discussions described above in connection with the Lipper Group comparisons, the Board determined that the investment advisory fee rate under the Advisory Contract does not constitute a fee that is 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 rate under the Advisory Contract, is fair and reasonable.
Other benefits to BFA and/or its affiliates – Except as noted below, the Board did not consider any ancillary revenue to be received by BFA and/or its affiliates in connection with the services to be provided to the Fund by BFA since the proposed relationship had not yet commenced. However, the Board noted that BFA would not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board also considered the potential for revenue to BTC, the Company’s securities lending agent, in the event of any loaning of portfolio securities of the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act.
Based on this analysis, the Board determined that the Advisory Contract, including the investment advisory fee rate thereunder, is fair and reasonable in light of all relevant circumstances.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 97 |
Table of Contents
Supplemental Information (Unaudited)
iSHARES® , INC.
Premium/Discount Information
The tables that follow present information about the differences between the daily market price on secondary markets for shares of a 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 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 fair 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 Funds, except for the iShares MSCI USA Index Fund, included in this report. The information shown for each Fund is for five calendar years (or for each full calendar quarter completed after the inception date of such Fund if less than five years) through the date of the most recent calendar quarter-end. 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 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 Brazil Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.0% | 3 | 0.22 | % | |||||
Greater than 3.5% and Less than 4.0% | 1 | 0.07 | ||||||
Greater than 3.0% and Less than 3.5% | 3 | 0.22 | ||||||
Greater than 2.5% and Less than 3.0% | 6 | 0.43 | ||||||
Greater than 2.0% and Less than 2.5% | 10 | 0.72 | ||||||
Greater than 1.5% and Less than 2.0% | 21 | 1.52 | ||||||
Greater than 1.0% and Less than 1.5% | 48 | 3.47 | ||||||
Greater than 0.5% and Less than 1.0% | 107 | 7.74 | ||||||
Between 0.5% and –0.5% | 1,037 | 75.05 | ||||||
Less than –0.5% and Greater than –1.0% | 99 | 7.16 | ||||||
Less than –1.0% and Greater than –1.5% | 16 | 1.16 | ||||||
Less than –1.5% and Greater than –2.0% | 11 | 0.80 | ||||||
Less than –2.0% and Greater than –2.5% | 7 | 0.51 | ||||||
Less than –2.5% and Greater than –3.0% | 3 | 0.22 | ||||||
Less than –3.0% and Greater than –3.5% | 1 | 0.07 | ||||||
Less than –3.5% and Greater than –4.0% | 4 | 0.29 | ||||||
Less than –4.0% and Greater than –4.5% | 1 | 0.07 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.14 | ||||||
Less than –5.0% | 2 | 0.14 | ||||||
1,382 | 100.00 | % | ||||||
98 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI BRIC Index Fund
Period Covered: January 1, 2008 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.5% | 3 | 0.48 | % | |||||
Greater than 5.0% and Less than 5.5% | 1 | 0.16 | ||||||
Greater than 4.5% and Less than 5.0% | 2 | 0.32 | ||||||
Greater than 4.0% and Less than 4.5% | 2 | 0.32 | ||||||
Greater than 3.5% and Less than 4.0% | 2 | 0.32 | ||||||
Greater than 3.0% and Less than 3.5% | 5 | 0.80 | ||||||
Greater than 2.5% and Less than 3.0% | 8 | 1.27 | ||||||
Greater than 2.0% and Less than 2.5% | 22 | 3.50 | ||||||
Greater than 1.5% and Less than 2.0% | 41 | 6.53 | ||||||
Greater than 1.0% and Less than 1.5% | 102 | 16.24 | ||||||
Greater than 0.5% and Less than 1.0% | 129 | 20.54 | ||||||
Between 0.5% and –0.5% | 206 | 32.81 | ||||||
Less than –0.5% and Greater than –1.0% | 56 | 8.92 | ||||||
Less than –1.0% and Greater than –1.5% | 20 | 3.18 | ||||||
Less than –1.5% and Greater than –2.0% | 10 | 1.59 | ||||||
Less than –2.0% and Greater than –2.5% | 8 | 1.27 | ||||||
Less than –2.5% and Greater than –3.0% | 1 | 0.16 | ||||||
Less than –3.5% | 10 | 1.59 | ||||||
628 | 100.00 | % | ||||||
iShares MSCI Canada Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.0% | 1 | 0.07 | % | |||||
Greater than 3.5% and Less than 4.0% | 1 | 0.07 | ||||||
Greater than 3.0% and Less than 3.5% | 1 | 0.07 | ||||||
Greater than 2.5% and Less than 3.0% | 2 | 0.14 | ||||||
Greater than 2.0% and Less than 2.5% | 3 | 0.22 | ||||||
Greater than 1.5% and Less than 2.0% | 3 | 0.22 | ||||||
Greater than 1.0% and Less than 1.5% | 22 | 1.59 | ||||||
Greater than 0.5% and Less than 1.0% | 137 | 9.91 | ||||||
Between 0.5% and –0.5% | 1,092 | 79.03 | ||||||
Less than –0.5% and Greater than –1.0% | 93 | 6.73 | ||||||
Less than –1.0% and Greater than –1.5% | 21 | 1.52 | ||||||
Less than –1.5% and Greater than –2.0% | 3 | 0.22 | ||||||
Less than –2.0% and Greater than –2.5% | 1 | 0.07 | ||||||
Less than –2.5% | 2 | 0.14 | ||||||
1,382 | 100.00 | % | ||||||
SUPPLEMENTAL INFORMATION | 99 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Chile Investable Market Index Fund
Period Covered: January 1, 2008 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.0% | 4 | 0.64 | % | |||||
Greater than 3.5% and Less than 4.0% | 2 | 0.32 | ||||||
Greater than 3.0% and Less than 3.5% | 1 | 0.16 | ||||||
Greater than 2.5% and Less than 3.0% | 4 | 0.64 | ||||||
Greater than 2.0% and Less than 2.5% | 7 | 1.11 | ||||||
Greater than 1.5% and Less than 2.0% | 11 | 1.75 | ||||||
Greater than 1.0% and Less than 1.5% | 45 | 7.17 | ||||||
Greater than 0.5% and Less than 1.0% | 150 | 23.89 | ||||||
Between 0.5% and –0.5% | 269 | 42.82 | ||||||
Less than –0.5% and Greater than –1.0% | 89 | 14.17 | ||||||
Less than –1.0% and Greater than –1.5% | 22 | 3.50 | ||||||
Less than –1.5% and Greater than –2.0% | 11 | 1.75 | ||||||
Less than –2.0% and Greater than –2.5% | 3 | 0.48 | ||||||
Less than –2.5% and Greater than –3.0% | 4 | 0.64 | ||||||
Less than –3.0% | 6 | 0.96 | ||||||
628 | 100.00 | % | ||||||
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Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Israel Capped Investable Market Index Fund
Period Covered: April 1, 2008 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 3 | 0.53 | % | |||||
Greater than 4.5% and Less than 5.0% | 1 | 0.18 | ||||||
Greater than 4.0% and Less than 4.5% | 3 | 0.53 | ||||||
Greater than 3.5% and Less than 4.0% | 1 | 0.18 | ||||||
Greater than 3.0% and Less than 3.5% | 5 | 0.88 | ||||||
Greater than 2.5% and Less than 3.0% | 4 | 0.71 | ||||||
Greater than 2.0% and Less than 2.5% | 9 | 1.59 | ||||||
Greater than 1.5% and Less than 2.0% | 24 | 4.23 | ||||||
Greater than 1.0% and Less than 1.5% | 45 | 7.94 | ||||||
Greater than 0.5% and Less than 1.0% | 96 | 16.93 | ||||||
Between 0.5% and –0.5% | 242 | 42.66 | ||||||
Less than –0.5% and Greater than –1.0% | 50 | 8.82 | ||||||
Less than –1.0% and Greater than –1.5% | 31 | 5.47 | ||||||
Less than –1.5% and Greater than –2.0% | 26 | 4.59 | ||||||
Less than –2.0% and Greater than –2.5% | 6 | 1.06 | ||||||
Less than –2.5% and Greater than –3.0% | 7 | 1.23 | ||||||
Less than –3.0% and Greater than –3.5% | 3 | 0.53 | ||||||
Less than –3.5% and Greater than –4.0% | 1 | 0.18 | ||||||
Less than –4.0% and Greater than –4.5% | 1 | 0.18 | ||||||
Less than –4.5% and Greater than –5.0% | 3 | 0.53 | ||||||
Less than –5.0% and Greater than –5.5% | 2 | 0.35 | ||||||
Less than –5.5% and Greater than –6.0% | 2 | 0.35 | ||||||
Less than –6.0% | 2 | 0.35 | ||||||
567 | 100.00 | % | ||||||
SUPPLEMENTAL INFORMATION | 101 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Mexico Investable Market Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.5% | 2 | 0.14 | % | |||||
Greater than 3.0% and Less than 3.5% | 3 | 0.22 | ||||||
Greater than 2.5% and Less than 3.0% | 3 | 0.22 | ||||||
Greater than 2.0% and Less than 2.5% | 1 | 0.07 | ||||||
Greater than 1.5% and Less than 2.0% | 11 | 0.80 | ||||||
Greater than 1.0% and Less than 1.5% | 25 | 1.81 | ||||||
Greater than 0.5% and Less than 1.0% | 130 | 9.41 | ||||||
Between 0.5% and –0.5% | 959 | 69.40 | ||||||
Less than –0.5% and Greater than –1.0% | 177 | 12.81 | ||||||
Less than –1.0% and Greater than –1.5% | 43 | 3.11 | ||||||
Less than –1.5% and Greater than –2.0% | 14 | 1.01 | ||||||
Less than –2.0% and Greater than –2.5% | 5 | 0.36 | ||||||
Less than –2.5% and Greater than –3.0% | 6 | 0.43 | ||||||
Less than –3.0% and Greater than –3.5% | 2 | 0.14 | ||||||
Less than –3.5% | 1 | 0.07 | ||||||
1,382 | 100.00 | % | ||||||
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Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI South Africa Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.5% | 10 | 0.72 | % | |||||
Greater than 4.0% and Less than 4.5% | 4 | 0.29 | ||||||
Greater than 3.5% and Less than 4.0% | 4 | 0.29 | ||||||
Greater than 3.0% and Less than 3.5% | 12 | 0.87 | ||||||
Greater than 2.5% and Less than 3.0% | 13 | 0.94 | ||||||
Greater than 2.0% and Less than 2.5% | 45 | 3.26 | ||||||
Greater than 1.5% and Less than 2.0% | 68 | 4.92 | ||||||
Greater than 1.0% and Less than 1.5% | 131 | 9.48 | ||||||
Greater than 0.5% and Less than 1.0% | 230 | 16.64 | ||||||
Between 0.5% and –0.5% | 509 | 36.84 | ||||||
Less than –0.5% and Greater than –1.0% | 137 | 9.91 | ||||||
Less than –1.0% and Greater than –1.5% | 72 | 5.21 | ||||||
Less than –1.5% and Greater than –2.0% | 61 | 4.41 | ||||||
Less than –2.0% and Greater than –2.5% | 31 | 2.24 | ||||||
Less than –2.5% and Greater than –3.0% | 13 | 0.94 | ||||||
Less than –3.0% and Greater than –3.5% | 20 | 1.45 | ||||||
Less than –3.5% and Greater than –4.0% | 4 | 0.29 | ||||||
Less than –4.0% and Greater than –4.5% | 4 | 0.29 | ||||||
Less than –4.5% and Greater than –5.0% | 1 | 0.07 | ||||||
Less than –5.0% and Greater than –5.5% | 2 | 0.14 | ||||||
Less than –5.5% and Greater than –6.0% | 3 | 0.22 | ||||||
Less than –6.0% | 8 | 0.58 | ||||||
1,382 | 100.00 | % | ||||||
SUPPLEMENTAL INFORMATION | 103 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Turkey Investable Market Index Fund
Period Covered: April 1, 2008 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 6.0% | 7 | 1.23 | % | |||||
Greater than 5.5% and Less than 6.0% | 3 | 0.53 | ||||||
Greater than 5.0% and Less than 5.5% | 1 | 0.18 | ||||||
Greater than 4.5% and Less than 5.0% | 2 | 0.35 | ||||||
Greater than 4.0% and Less than 4.5% | 3 | 0.53 | ||||||
Greater than 3.5% and Less than 4.0% | 1 | 0.18 | ||||||
Greater than 3.0% and Less than 3.5% | 8 | 1.41 | ||||||
Greater than 2.5% and Less than 3.0% | 15 | 2.65 | ||||||
Greater than 2.0% and Less than 2.5% | 18 | 3.17 | ||||||
Greater than 1.5% and Less than 2.0% | 27 | 4.76 | ||||||
Greater than 1.0% and Less than 1.5% | 66 | 11.64 | ||||||
Greater than 0.5% and Less than 1.0% | 80 | 14.11 | ||||||
Between 0.5% and –0.5% | 168 | 29.62 | ||||||
Less than –0.5% and Greater than –1.0% | 45 | 7.94 | ||||||
Less than –1.0% and Greater than –1.5% | 42 | 7.41 | ||||||
Less than –1.5% and Greater than –2.0% | 29 | 5.11 | ||||||
Less than –2.0% and Greater than –2.5% | 15 | 2.65 | ||||||
Less than –2.5% and Greater than –3.0% | 9 | 1.59 | ||||||
Less than –3.0% and Greater than –3.5% | 6 | 1.06 | ||||||
Less than –3.5% and Greater than –4.0% | 5 | 0.88 | ||||||
Less than –4.0% and Greater than –4.5% | 3 | 0.53 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.35 | ||||||
Less than –5.0% and Greater than –5.5% | 1 | 0.18 | ||||||
Less than –5.5% and Greater than –6.0% | 4 | 0.71 | ||||||
Less than –6.0% | 7 | 1.23 | ||||||
567 | 100.00 | % | ||||||
104 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer 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 BFA and other service providers. Each Director serves until his or her successor is duly elected or appointed and qualified. Each Officer serves until he or she resigns, is removed, dies, retires or becomes disqualified.
iShares, Inc., iShares Trust, BlackRock Funds III (formerly, Barclays Global Investors Funds) and Master Investment Portfolio, each an open-end management investment company registered under the 1940 Act, are considered 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, as a result, oversees a total of 214 funds within the fund complex. With the exception of Robert S. Kapito, the address of each Director and Officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52nd Street, New York, NY 10055. The Board has designated George G.C. Parker as its Independent Chairman. Additional information about the Funds’ Directors and Officers may be found in the Funds’ combined Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-474-2737.
Interested Directors and Officers
| ||||||
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
Robert S. Kapitoa (53) | Director (since 2009). | President and Director, BlackRock, Inc. (since 2006 and 2007, respectively); Vice Chairman of BlackRock, Inc. and Head of BlackRock’s Portfolio Management Group (since its formation in 1998) and BlackRock’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); Chairman, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983). | Trustee of iShares Trust (since 2009); Director of BlackRock, Inc. (since 2007). | |||
Michael Lathamb (45) | Director (since 2010); President (since 2007). | Global Chief Executive Officer of iShares, BTC (since 2010); Managing Director, BTC (since 2009); Head of Americas iShares, Barclays Global Investors (“BGI”) (2007-2009); Director and Chief Financial Officer of Barclays Global Investors International, Inc. (2005-2009); Chief Operating Officer of the Intermediary Investor and Exchange Traded Products Business of BGI (2003-2007). | Trustee of iShares Trust (since 2010). |
a | Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. |
b | Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates. |
DIRECTORAND OFFICER INFORMATION | 105 |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES® , INC.
Independent Directors
| ||||||
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
George G.C. Parker (71) | Director (since 2000); Independent Chairman (since 2010). | Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University: Graduate School of Business (since 1994). | Trustee of iShares Trust (since 2002); Independent Chairman of iShares Trust (since 2010); Director of Continental Airlines Inc. (since 1996); Director of Community First Financial Group (since 1995); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of NETGEAR, Inc. (since 2007). | |||
Darrell Duffie (56) | Director (since 2008). | Professor, Stanford University: Graduate School of Business (since 1984). | Trustee of iShares Trust (since 2008); Director of Moody’s Corp. (since 2008). | |||
Cecilia H. Herbert (61) | Director (since 2005). | Director (since 1998) and President (since 2007) of the Board of Directors, Catholic Charities CYO; Trustee of Pacific Select Funds (2004-2005); Trustee (since 2005) and Chair of the Finance and Investment Committees (since 2006) of the Thacher School; Chair of Investment Committee, Archdiocese of San Francisco (1994-2005). | Trustee of iShares Trust (since 2005); Director, Forward Funds (34 portfolios) (since 2009). | |||
Charles A. Hurty (67) | Director (since 2005). | Retired; Partner, KPMG LLP (1968-2001). | Trustee of iShares Trust (since 2005); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002). | |||
John E. Kerrigan (55) | Director (since 2005). | Chief Investment Officer, Santa Clara University (since 2002). | Trustee of iShares Trust (since 2005). | |||
John E. Martinez (49) | Director (since 2003). | Director of Real Estate Equity Exchange (since 2005). | Trustee of iShares Trust (since 2003); Chairman, Independent Review Committee, Canadian iShares Funds (since 2007). |
106 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES® , INC.
Independent Directors (Continued)
| ||||||
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
Robert H. Silver (55) | Director (since 2007). | President and Co-Founder of The Bravitas Group, Inc. (since 2006); Member, Non-Investor Advisory Board of Russia Partners II, LP (since 2006); President and Chief Operating Officer (2003-2005) and Director (1999-2005) of UBS Financial Services, Inc.; President and Chief Executive Officer of UBS Services USA, LLC (1999-2005); Managing Director, UBS America, Inc. (2000-2005); Director and Vice Chairman of the YMCA of Greater NYC (since 2001); Broadway Producer (since 2006); Co-Founder and Vice President of Parentgiving Inc. (since 2008); Director and Member of the Audit and Compensation Committee of EPAM Systems, Inc. (2006-2009). | Trustee of iShares Trust (since 2007). |
DIRECTORAND OFFICER INFORMATION | 107 |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES® , INC.
Officers
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | ||
Geoffrey D. Flynn (53) | Executive Vice President and Chief Operating Officer (since 2008). | Managing Director, BTC (since 2009); Chief Operating Officer, U.S. iShares, BGI (2007-2009); President, Van Kampen Investors Services (2003-2007); Managing Director, Morgan Stanley (2002-2007); President, Morgan Stanley Trust, FSB (2002- 2007). | ||
Eilleen M. Clavere (58) | Secretary (since 2007). | Director, BTC (since 2009); Director of Legal Administration of Intermediary Investor Business of BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005). | ||
Jack Gee (51) | Treasurer and Chief Financial Officer (since 2008). | Managing Director, BTC (since 2009); Senior Director of Fund Administration of Intermediary Investor Business of BGI (2009); Director of Fund Administration of Intermediary Investor Business of BGI (2004-2009). | ||
Patrick O’Connor (43) | Vice President (since 2007). | Managing Director, BTC (since 2009); Head of iShares Portfolio Management, BGI (2006-2009); Senior Portfolio Manager, BGI (1999-2006). | ||
Amy Schioldager (48) | Executive Vice President (since 2007). | Managing Director, BTC (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006). | ||
Ira P. Shapiro (47) | Vice President and Chief Legal Officer (since 2007). | Managing Director, BTC (since 2009); Associate General Counsel, BGI (2004-2009). | ||
Lee Sterne (45) | Vice President (since 2007). | Managing Director, BTC (since 2009); Head of U.S. Fixed Income Index and iShares, BGI (2007-2009); Senior Portfolio Manager, BGI (2004-2007). | ||
Matt Tucker (38) | Vice President (since 2007). | Managing Director, BTC (since 2009); Director of Fixed Income Investment Strategy, BGI (2009); Head of U.S. Fixed Income Investment Solutions, BGI (2005-2008); Fixed Income Investment Strategist, BGI (2003-2005). |
108 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes:
NOTES | 109 |
Table of Contents
Notes:
110 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes:
NOTES | 111 |
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 Russell Domestic Index Funds | Trading Symbol | |
iShares Russell 3000 | IWV | |
iShares Russell 3000 Growth | IWZ | |
iShares Russell 3000 Value | IWW | |
iShares Russell Top 200 | IWL | |
iShares Russell Top 200 Growth | IWY | |
iShares Russell Top 200 Value | IWX | |
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 S&P Domestic Index Funds | ||
iShares S&P 1500 | ISI | |
iShares S&P 100 | OEF | |
iShares S&P 500 | IVV | |
iShares S&P 500 Growth | IVW | |
iShares S&P 500 Value | IVE | |
iShares S&P MidCap 400 | IJH | |
iShares S&P MidCap 400 Growth | IJK | |
iShares S&P MidCap 400 Value | IJJ | |
iShares S&P SmallCap 600 | IJR | |
iShares S&P SmallCap 600 Growth | IJT | |
iShares S&P SmallCap 600 Value | IJS | |
iShares Morningstar Domestic 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 Dow Jones Domestic Index Fund | ||
iShares Dow Jones U.S. | IYY | |
iShares MSCI Domestic Index Fund | ||
iShares MSCI USA | EUSA | |
iShares MSCI Socially Responsible Index Funds | ||
iShares MSCI KLD 400 Social | DSI | |
iShares MSCI USA ESG Select Social | KLD | |
iShares NYSE Domestic Index Funds | ||
iShares NYSE Composite | NYC | |
iShares NYSE 100 | NY |
iShares Domestic Specialty Index Funds | Trading Symbol | |
iShares S&P U.S. Preferred Stock | PFF | |
iShares Dow Jones Select Dividend | DVY | |
iShares North American Sector/Subsector Index Funds | ||
iShares S&P North American Technology Sector | IGM | |
iShares S&P North American Technology-Multimedia | IGN | |
iShares S&P North American Technology- | IGW | |
iShares S&P North American Technology-Software | IGV | |
iShares S&P North American Natural Resources Sector | IGE | |
iShares Domestic Sector Index Funds | ||
iShares Dow Jones U.S. Basic Materials Sector | IYM | |
iShares Dow Jones U.S. Consumer Goods Sector | IYK | |
iShares Dow Jones U.S. Consumer Services Sector | IYC | |
iShares Dow Jones U.S. Energy Sector | IYE | |
iShares Dow Jones U.S. Financial Sector | IYF | |
iShares Dow Jones U.S. Healthcare Sector | IYH | |
iShares Dow Jones U.S. Industrial Sector | IYJ | |
iShares Dow Jones U.S. Technology Sector | IYW | |
iShares Dow Jones U.S. Telecommunications Sector | IYZ | |
iShares Dow Jones U.S. Utilities Sector | IDU | |
iShares Domestic Subsector Index Funds | ||
iShares Dow Jones Transportation Average | IYT | |
iShares Dow Jones U.S. Aerospace & Defense | ITA | |
iShares Dow Jones U.S. Broker-Dealers | IAI | |
iShares Dow Jones U.S. Financial Services | IYG | |
iShares Dow Jones U.S. Healthcare Providers | IHF | |
iShares Dow Jones U.S. Home Construction | ITB | |
iShares Dow Jones U.S. Insurance | IAK | |
iShares Dow Jones U.S. Medical Devices | IHI | |
iShares Dow Jones U.S. Oil & Gas Exploration & | IEO | |
iShares Dow Jones U.S. Oil Equipment & Services | IEZ | |
iShares Dow Jones U.S. Pharmaceuticals | IHE | |
iShares Dow Jones U.S. Regional Banks | IAT | |
iShares Nasdaq Biotechnology | IBB | |
iShares Domestic Real Estate Index Funds | ||
iShares Cohen & Steers Realty Majors | ICF | |
iShares Dow Jones U.S. Real Estate | IYR | |
iShares FTSE NAREIT Real Estate 50 | FTY | |
iShares FTSE NAREIT Industrial/Office Capped | FIO | |
iShares FTSE NAREIT Mortgage Plus Capped | REM | |
iShares FTSE NAREIT Residential Plus Capped | REZ | |
iShares FTSE NAREIT Retail Capped | RTL | |
iShares Target Risk Index Funds | ||
iShares S&P Conservative Allocation | AOK | |
iShares S&P Moderate Allocation | AOM | |
iShares S&P Growth Allocation | AOR | |
iShares S&P Aggressive Allocation | AOA |
112 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
The iShares® Family of Funds (Continued)
iShares International Country Index Funds | Trading Symbol | |
iShares FTSE China (HK Listed) | FCHI | |
iShares FTSE/Xinhua China 25 | FXI | |
iShares MSCI Australia | EWA | |
iShares MSCI Austria Investable Market | EWO | |
iShares MSCI Belgium Investable Market | EWK | |
iShares MSCI Brazil | EWZ | |
iShares MSCI Brazil Small Cap | EWZS | |
iShares MSCI Canada | EWC | |
iShares MSCI Chile Investable Market | ECH | |
iShares MSCI China Small Cap | ECNS | |
iShares MSCI France | EWQ | |
iShares MSCI Germany | EWG | |
iShares MSCI Hong Kong | EWH | |
iShares S&P India Nifty 50 | INDY | |
iShares MSCI Indonesia Investable Market | EIDO | |
iShares MSCI Ireland Capped Investable Market | EIRL | |
iShares MSCI Israel Capped Investable Market | EIS | |
iShares MSCI Italy | EWI | |
iShares MSCI Japan | EWJ | |
iShares MSCI Japan Small Cap | SCJ | |
iShares S&P/TOPIX 150 | ITF | |
iShares MSCI Malaysia | EWM | |
iShares MSCI Mexico Investable Market | EWW | |
iShares MSCI Netherlands Investable Market | EWN | |
iShares MSCI New Zealand Investable Market | ENZL | |
iShares MSCI All Peru Capped | EPU | |
iShares MSCI Philippines Investable Market | EPHE | |
iShares MSCI Poland Investable Market | EPOL | |
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 Thailand Investable Market | THD | |
iShares MSCI Turkey Investable Market | TUR | |
iShares MSCI United Kingdom | EWU | |
iShares International Index Funds | ||
iShares MSCI ACWI ex US | ACWX | |
iShares MSCI EAFE | EFA | |
iShares MSCI EAFE Growth | EFG | |
iShares MSCI EAFE Value | EFV | |
iShares MSCI EAFE Small Cap | SCZ | |
iShares FTSE Developed Small Cap ex-North America | IFSM | |
iShares MSCI Emerging Markets | EEM | |
iShares MSCI Emerging Markets Eastern Europe | ESR | |
iShares MSCI BRIC | BKF | |
iShares MSCI EMU | EZU | |
iShares MSCI All Country Asia ex Japan | AAXJ | |
iShares MSCI Pacific ex-Japan | EPP | |
iShares S&P Asia 50 | AIA | |
iShares S&P Europe 350 | IEV | |
iShares S&P Latin America 40 | ILF | |
iShares International/Global Real Estate Index Funds | ||
iShares S&P Developed ex-U.S. Property | WPS | |
iShares FTSE EPRA/NAREIT Developed | IFGL | |
iShares FTSE EPRA/NAREIT Developed Asia | IFAS | |
iShares FTSE EPRA/NAREIT Developed Europe | IFEU | |
iShares FTSE EPRA/NAREIT North America | IFNA |
iShares Target Date Index Funds | Trading Symbol | |
iShares S&P Target Date Retirement Income | TGR | |
iShares S&P Target Date 2010 | TZD | |
iShares S&P Target Date 2015 | TZE | |
iShares S&P Target Date 2020 | TZG | |
iShares S&P Target Date 2025 | TZI | |
iShares S&P Target Date 2030 | TZL | |
iShares S&P Target Date 2035 | TZO | |
iShares S&P Target Date 2040 | TZV | |
iShares Global Index Funds | ||
iShares MSCI ACWI | ACWI | |
iShares S&P Global 100 | IOO | |
iShares MSCI Kokusai | TOK | |
iShares International/Global Sector Index Funds | ||
iShares MSCI ACWI ex US Consumer Discretionary Sector | AXDI | |
iShares MSCI ACWI ex US Consumer Staples Sector | AXSL | |
iShares MSCI ACWI ex US Energy Sector | AXEN | |
iShares MSCI ACWI ex US Financials Sector | AXFN | |
iShares MSCI ACWI ex US Health Care Sector | AXHE | |
iShares MSCI ACWI ex US Industrials Sector | AXID | |
iShares MSCI ACWI ex US Information Technology | AXIT | |
iShares MSCI ACWI ex US Materials Sector | AXMT | |
iShares MSCI ACWI ex US Telecommunication Services | AXTE | |
iShares MSCI ACWI ex US Utilities Sector | AXUT | |
iShares MSCI Emerging Markets Financials Sector | EMFN | |
iShares MSCI Emerging Markets Materials Sector | EMMT | |
iShares MSCI Europe Financials Sector | EUFN | |
iShares MSCI Far East Financials Sector | FEFN | |
iShares S&P Global Consumer Discretionary Sector | RXI | |
iShares S&P Global Consumer Staples Sector | KXI | |
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 Industrials Sector | EXI | |
iShares S&P Global Materials Sector | MXI | |
iShares S&P Global Technology Sector | IXN | |
iShares S&P Global Telecommunications Sector | IXP | |
iShares S&P Global Utilities Sector | JXI | |
iShares International/Global Theme Based and Specialty Index Funds | ||
iShares Dow Jones International Select Dividend | IDV | |
iShares S&P Emerging Markets Infrastructure | EMIF | |
iShares S&P Global Clean Energy | ICLN | |
iShares S&P Global Infrastructure | IGF | |
iShares S&P Global Nuclear Energy | NUCL | |
iShares S&P Global Timber & Forestry | WOOD | |
iShares U.S. Multisector Bond Funds | ||
iShares Barclays Aggregate | AGG | |
iShares Barclays Government/Credit | GBF | |
iShares Barclays Intermediate Government/Credit | GVI | |
iShares 10+ Year Government/Credit | GLJ | |
iShares U.S. Government Bond Funds | ||
iShares Barclays Short Treasury | SHV | |
iShares Barclays 1-3 Year Treasury | SHY | |
iShares Barclays 3-7 Year Treasury | IEI | |
iShares Barclays 7-10 Year Treasury | IEF | |
iShares Barclays 10-20 Year Treasury | TLH | |
iShares Barclays 20+ Year Treasury | TLT | |
iShares Barclays TIPS | TIP | |
iShares Barclays Agency | AGZ |
THE iSHARES FAMILYOF FUNDS | 113 |
Table of Contents
The iShares® Family of Funds (Continued)
iShares U.S. Credit Bond Funds | Trading Symbol | |
iShares Barclays Credit | CFT | |
iShares Barclays 1-3 Year Credit | CSJ | |
iShares Barclays Intermediate Credit | CIU | |
iShares iBoxx $ Investment Grade Corporate | LQD | |
iShares 10+ Year Credit | CLY | |
iShares iBoxx $ High Yield Corporate | HYG |
iShares AMT-Free Municipal Bond Funds | Trading Symbol | |
iShares S&P National AMT-Free Municipal | MUB | |
iShares S&P Short Term National AMT-Free Municipal | SUB | |
iShares S&P California AMT-Free Municipal | CMF | |
iShares S&P New York AMT-Free Municipal | NYF | |
iShares 2012 S&P AMT-Free Municipal Series | MUAA | |
iShares 2013 S&P AMT-Free Municipal Series | MUAB | |
iShares 2014 S&P AMT-Free Municipal Series | MUAC | |
iShares 2015 S&P AMT-Free Municipal Series | MUAD | |
iShares 2016 S&P AMT-Free Municipal Series | MUAE | |
iShares 2017 S&P AMT-Free Municipal Series | MUAF | |
iShares U.S. Securitized Bond Fund | ||
iShares Barclays MBS | MBB | |
iShares International Bond Funds | ||
iShares JPMorgan USD Emerging Markets | EMB | |
iShares S&P/Citigroup International Treasury | IGOV | |
iShares S&P/Citigroup 1-3 Year International Treasury | ISHG |
The iShares Funds that are registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 as iShares, Inc. and iShares Trust (“Funds”) are distributed in the U.S. by SEI Investments Distribution Co. (“SEI”). iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A. The Funds are not sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., European Public Real Estate Association (“EPRA®”), FTSE International Limited (“FTSE”), FTSE/Xinhua Index Limited (“FXI”), iBoxx®, JPMorgan Chase & Co., MSCI Inc., Morningstar Inc., The NASDAQ OMX Group, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), New York Stock Exchange, Inc., Russell Investment Group or Standard & Poor’s, nor are they sponsored, endorsed or issued by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the companies listed above. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50/Residential/Retail/Mortgage or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Developed Real Estate ex-US/North America/Europe/Asia Index; all rights vest in FTSE, NAREIT and EPRA. All rights in the FTSE Developed Small Cap ex-North America Index vest in FTSE. “FTSE” is a trade- and servicemark of London Stock Exchange and The Financial Times Limited; “Xinhua” is a trade- and servicemark of Xinhua Financial Network Limited.
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 2010 Annual Report.
iS-3594-1010
114 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
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Table of Contents
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iS-AR-84-0810
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Table of Contents
2010 ANNUAL REPORT TO SHAREHOLDERS
iSHARES® MSCI SERIES
AUGUST 31, 2010
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iShares MSCI Australia Index Fund | EWA | NYSE Arca
iShares MSCI Hong Kong Index Fund | EWH | NYSE Arca
iShares MSCI Japan Small Cap Index Fund | SCJ | NYSE Arca
iShares MSCI Malaysia Index Fund | EWM | NYSE Arca
iShares MSCI Pacific ex-Japan Index Fund | EPP | NYSE Arca
iShares MSCI Singapore Index Fund | EWS | NYSE Arca
iShares MSCI South Korea Index Fund | EWY | NYSE Arca
iShares MSCI Taiwan Index Fund | EWT | NYSE Arca
iShares MSCI Thailand Investable Market Index Fund | THD | NYSE Arca
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Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI AUSTRALIA INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
6.86% | 7.72% | 7.45% | 7.68% | 7.59% | 7.38% | 11.68% | 11.66% | 11.27% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
6.86% | 7.72% | 7.45% | 44.79% | 44.16% | 42.79% | 201.73% | 201.30% | 190.82% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 1 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Financial | 43.09 | % | ||
Basic Materials | 24.08 | |||
Consumer Non-Cyclical | 11.60 | |||
Industrial | 9.38 | |||
Energy | 5.74 | |||
Consumer Cyclical | 2.06 | |||
Communications | 1.69 | |||
Utilities | 0.88 | |||
Technology | 0.48 | |||
Short-Term and Other Net Assets | 1.00 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
BHP Billiton Ltd. | 14.00 | % | ||
Commonwealth Bank of Australia | 8.77 | |||
Westpac Banking Corp. | 7.28 | |||
Australia and New Zealand | 6.45 | |||
National Australia Bank Ltd. | 5.54 | |||
Woolworths Ltd. | 3.88 | |||
Wesfarmers Ltd. | 3.62 | |||
Rio Tinto Ltd. | 3.44 | |||
Newcrest Mining Ltd. | 3.21 | |||
Westfield Group | 3.09 | |||
TOTAL | 59.28 | % | ||
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 Australian market, as measured by the MSCI Australia IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 6.86%, while the total return for the Index was 7.45%.
Australia’s economy remained relatively calm through the global financial crisis and into the early part of the reporting period, and then gained momentum as the reporting period progressed. GDP grew 3.3% in the second quarter of 2010 versus the year-ago quarter. Driven by international trade and rising metals prices, it was Australia’s strongest quarter in three years. Export volumes rose 5.6% during the second quarter, driven by a boom in mining as China continued its strong demand for steel and energy products. Coal exports grew in value by about $4 billion as prices rose 25% and volumes increased by 22%. Metal ore exports increased $5 billion as prices rose nearly 40%.
Noting the strength in the Australian economy, the Reserve Bank of Australia (“RBA”), boosted short-term interest rates to 4.5%, up from 3.0% a year ago in an effort to contain inflation. Household consumption remained strong in the face of higher borrowing costs, and the RBA indicated that the economy was growing at close to full capacity. Discretionary spending also grew, as spending in cafes and restaurants was up 5% in the second quarter versus a year ago. Meanwhile, housing construction rebounded during the summer, snapping a contraction in recent months, as employment and wages grew steadily.
In agriculture, Australia temporarily replaced Russia as a leading supplier of wheat to the world. Australia, already a major exporter of agricultural products, produced significantly more wheat than expected during the one-year period ended March 31, 2010, up 36% from its five-year average due to above-normal rainfall. Combined with sharply higher global grain prices, this boost in volume has added billions of dollars to Australia’s export revenue. In Russia, by contrast, wheat production fell sharply after a drought destroyed its wheat crop, prompting the government to halt grain exports. Australia remains a major agricultural supplier to Asia, especially Indonesia, the world’s fourth largest wheat importer behind Egypt, Brazil and the European Union.
2 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
In this environment, eight of the Fund’s top ten holdings as of August 31, 2010 recorded gains for the reporting period, led by manufacturing conglomerate Wesfarmers Ltd., mining firm Rio Tinto Ltd., and international gold producer Newcrest Mining Ltd. Two of the Fund’s top ten holdings, National Australia Bank Ltd. and Westpac Banking Corp., recorded losses.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 3 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI HONG KONG INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
14.85% | 14.64% | 15.63% | 7.61% | 7.48% | 8.22% | 4.46% | 4.27% | 5.26% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
14.85% | 14.64% | 15.63% | 44.29% | 43.44% | 48.46% | 54.74% | 51.88% | 67.03% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
4 | | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS | |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI HONG KONG INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Financial | 51.76 | % | ||
Diversified | 14.11 | |||
Utilities | 13.81 | |||
Consumer Cyclical | 13.67 | |||
Industrial | 3.39 | |||
Communications | 1.65 | |||
Technology | 0.67 | |||
Basic Materials | 0.49 | |||
Short-Term and Other Net Assets | 0.45 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Sun Hung Kai Properties Ltd. | 8.17 | % | ||
Cheung Kong (Holdings) Ltd. | 7.33 | |||
Hong Kong Exchanges and Clearing Ltd. | 6.52 | |||
Hutchison Whampoa Ltd. | 6.36 | |||
CLP Holdings Ltd. | 6.05 | |||
Li & Fung Ltd. | 4.55 | |||
Hang Seng Bank Ltd. | 4.34 | |||
Hong Kong and China Gas Co. Ltd. (The) | 4.22 | |||
BOC Hong Kong (Holdings) Ltd. | 4.05 | |||
Swire Pacific Ltd. Class A | 4.01 | |||
TOTAL | 55.60 | % | ||
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 Hong Kong market, as measured by the MSCI Hong Kong IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 14.85%, while the total return for the Index was 15.63%.
Hong Kong’s economy remained buoyant throughout the reporting period, expanding 6.3% during the second quarter of 2010 versus the year-ago quarter as the city’s jobless rate fell to 4.2%, the lowest level in nearly two years. Exports rose 22% during the first quarter and 20% during the second quarter. Meanwhile, tourism reached record levels, with a record 16.9 million visitors, including 10.5 million from China, entering the city in the first six months of 2010.
Hong Kong’s closest business partner is mainland China whose GDP continued to advance at a 10.3% annual rate. Through August, industrial production was up 13.9% from the prior year, accelerating from 13.4% in July. China’s currency, the yuan, controlled by the People’s Bank of China, continued to increase in value against other currencies since the central bank ended fixed exchange rates in June.
Commercial rents in Hong Kong have nearly doubled since the beginning of the financial crisis in late 2007. Home prices rose 30% in 2009 and another 13% through August 2010. In particular, Hong Kong’s real estate market was supported by capital inflows from wealthy mainland Chinese residents who bought property for investment purposes. In addition, Hong Kong pegs its interest rates to the U.S., which continue to be at historically low levels. The Hong Kong Monetary Authority has kept its base interest rate at a record low of 0.5% since December 2008. That has made real estate financing extremely attractive to borrowers.
To cool the city’s hot real estate market, the government raised the tax on high-end transactions. It also banned sales contracts on new condominiums “flipped” before the buildings were completed. The Hong Kong Monetary Authority ordered banks to “stress-test” mortgage applications to ensure borrowers can withstand a two-percentage point increase in interest rates. Indeed, some developers are beginning to shy away, preferring land prices in mainland China.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI HONG KONG INDEX FUND
In this environment, nine of the Fund’s top ten holdings as of August 31, 2010 recorded gains for the reporting period, led by exporter Li & Fung Ltd., major bank holding company BOC Hong Kong (Holdings) Ltd. and The Hong Kong and China Gas Co. Ltd., all of which posted solid double-digit gains. Only one top ten holding, Hong Kong Exchanges and Clearing Ltd., the stock exchange of Hong Kong, recorded a loss.
6 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 8/31/10 | Inception to 8/31/10 | Inception to 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(6.25)% | (5.81)% | (6.01)% | (4.98)% | (5.05)% | (4.73)% | (12.88)% | (13.05)% | (12.25)% |
Total returns for the period since inception are calculated from the inception date of the Fund (12/20/07). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (12/21/07), the NAV of the Fund is used as a proxy for the Market Price to calculated market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Industrial | 25.00 | % | ||
Consumer Cyclical | 24.74 | |||
Financial | 18.12 | |||
Consumer Non-Cyclical | 14.09 | |||
Basic Materials | 10.46 | |||
Communications | 4.20 | |||
Technology | 2.33 | |||
Utilities | 0.69 | |||
Energy | 0.06 | |||
Short-Term and Other Net Assets | 0.31 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Sotetsu Holdings Inc. | 0.59 | % | ||
Miraca Holdings Inc. | 0.57 | |||
Sawai Pharmaceutical Co. Ltd. | 0.50 | |||
Rengo Co. Ltd. | 0.49 | |||
Ebara Corp. | 0.49 | |||
Yamatake Corp. | 0.48 | |||
Misumi Group Inc. | 0.48 | |||
Awa Bank Ltd. (The) | 0.48 | |||
Nippon Kayaku Co. Ltd. | 0.46 | |||
Shiga Bank Ltd. (The) | 0.46 | |||
TOTAL | 5.00 | % | ||
The iShares MSCI Japan Small Cap 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 Japan Small Cap IndexSM (the “Index”). The Index targets 40% of the eligible small-cap universe within each industry group in the MSCI Japan IndexSM, which consists of stocks traded primarily on the Tokyo Stock Exchange. MSCI defines the small-cap universe as all listed securities that have a market capitalization in the range of $202 —$1,723 million. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was (6.25)%, while the total return for the Index was (6.01)%.
Japanese small capitalization stocks performed in line with the broad Japanese equity market, but underperformed other Asian small cap markets for the reporting period. After showing signs of recovery early in the reporting period, Japan’s economy slowed sharply as the reporting period came to a close. GDP rose just 0.4% in the most recent quarter against the year-ago period, down from growth of 4.4% in the quarter ended March 31. In many ways, 2010 echoed back to 2009: weak consumer spending, concerns of deflation, soaring federal debt and weak demand for Japanese exports. Consumer spending, which accounts for 60% of Japan’s economy, was flat during the first half of 2010. Persistent deflation created a drag on economic growth, as consumers waited for prices to drop before buying goods and services. Inflation was a negative 1.9% in the most recent quarter, a slight improvement over the prior quarter, when prices fell 2.8%. Japan’s federal debt is nearly 200% of annual GDP, and the International Monetary Fund recently warned that Japan was reaching a point at which markets become concerned about the threat of default.
Despite these concerns, Japan’s currency continued to strengthen, reaching a 15-year high against the U.S. dollar, dampening demand for Japanese exports. In response, as the reporting period came to a close, the Japanese government was considering options to weaken the yen by intervening in the market. Still, the strong yen has had its advantages, elevating Japan’s buying power in other countries. Through August 2010, Japanese corporations have already spent more money acquiring foreign companies than in all of 2009 with major acquisitions having taken place in telecommunications, convenience stores and e-commerce.
However, the Japanese government, which last intervened in 2004, faced resistance from the U.S. and Europe, because a weaker Japanese currency translates into a potentially stronger dollar and euro, which in turn could dampen U.S. and European exports. Political resistance was also felt from within Japan. The Democratic Party of Japan, which took power from the long-ruling Liberal Democratic Party, announced plans to cut Japan’s top corporate tax rate, the highest in the industrialized world, from 40% to 25%. However, political
8 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
concerns make such a move difficult to accomplish. Already, Prime Minister Naoto Kan has had to fend off a challenge to his power from within his own party.
In this economic environment, eight of the Fund’s top ten holdings as of August 31, 2010 recorded gains for the reporting period, including generic drug maker Sawai Pharmaceutical Co. Ltd., medical diagnostics company Miraca Holdings Inc. and conglomerate Sotetsu Holdings Inc., with interests in transportation, construction, real estate, supermarkets and leisure. Two of the top ten holdings to post losses for the reporting period were engineering firm Ebara Corp. and Shiga Bank Ltd.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI MALAYSIA INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
35.76% | 36.50% | 36.44% | 16.52% | 16.22% | 17.10% | 10.82% | 10.72% | 11.72% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
35.76% | 36.50% | 36.44% | 114.77% | 112.04% | 120.20% | 179.25% | 176.84% | 202.80% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and 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 primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. As the Fund has a NAV which is determined prior to the opening of the regular trading day on the primary 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. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
10 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI MALAYSIA INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Financial | 31.03 | % | ||
Consumer Non-Cyclical | 14.99 | |||
Consumer Cyclical | 14.49 | |||
Communications | 11.47 | |||
Industrial | 9.62 | |||
Utilities | 8.75 | |||
Diversified | 7.74 | |||
Energy | 0.85 | |||
Basic Materials | 0.83 | |||
Short-Term and Other Net Assets | 0.23 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
CIMB Group Holdings Bhd | 9.71 | % | ||
Malayan Banking Bhd | 8.57 | |||
Sime Darby Bhd | 7.25 | |||
Genting Bhd | 6.74 | |||
IOI Corp. Bhd | 5.62 | |||
Tenaga Nasional Bhd | 5.54 | |||
Public Bank Bhd Foreign | 4.15 | |||
Maxis Communications Bhd | 3.88 | |||
Axiata Group Bhd | 3.63 | |||
AMMB Holdings Bhd | 3.28 | |||
TOTAL | 58.37 | % | ||
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 Malaysian market, as measured by the MSCI Malaysia IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 35.76%, while the total return for the Index was 36.44%.
After a difficult 2009, Malaysia’s economy became one of the fastest growing in the world although it slowed somewhat as the reporting period came to a close. Malaysia’s GDP grew 8.9% during the second quarter of 2010 compared to the year-earlier period, following growth of 10.1% in the first quarter of 2010, its fastest growth in 10 years. Meanwhile, inflation appeared under control. Consumer prices rose about 1.5% during the first seven months of 2010 versus the year-ago period.
In an effort to cut the country’s budget deficit, the government has pledged to reduce expensive state subsidies on such staples as food and energy. Subsidies on fuel and sugar are gradually phasing out in an effort to reduce the deficit and attract foreign investment. Malaysia, which had a budget deficit of 7% of GDP in 2009, is aiming for 5% in 2010, according to government pronouncements. Meanwhile, the country’s exports earnings grew by 22% in the second quarter and 31% in the first quarter compared to the year-ago quarters.
During 2010, China moved to facilitate trade between the two countries when it allowed the Chinese yuan to trade against the Malaysian ringgit. Just prior to this move, Malaysia’s central bank removed restrictions on the trading of its currency by outside investors. In this less regulated environment, the ringgit reached a 13-year high against the U.S. dollar in August.
Like many countries in Asia, Malaysia’s population has become wealthier as a whole, with a rising middle class, a strong banking system, an improving infrastructure and an emerging domestic economy that is becoming less dependent on international trade, particularly with the U.S. and Europe. In June, the government issued a Five-Year Economic Plan which calls for a focus on private-sector jobs in areas such as financial services, electronics, agriculture, tourism and green technology.
In this environment, all of the Fund’s top ten holdings as of August 31, 2010 recorded double-digit gains for the reporting period, led by CIMB Group Holdings Bhd, Malaysia’s second largest financial services provider and the Fund’s largest holding. Genting Bhd, a hotel and
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI MALAYSIA INDEX FUND
resort company, Axiata Group Bhd, a mobile telecommunications firm, and AMMB Holdings Bhd, an investment holding company, all posted strong gains. Sime Darby Bhd, a multinational conglomerate and Maxis Communications Bhd, a mobile communications service provider, recorded more modest double-digit gains.
12 | 2010 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, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Inception to 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
10.27% | 10.30% | 10.80% | 8.18% | 7.94% | 8.13% | 13.72% | 13.73% | 13.68% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Inception to 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
10.27% | 10.30% | 10.80% | 48.19% | 46.50% | 47.84% | 212.17% | 212.25% | 210.90% |
Total returns for the period since inception are calculated from the inception date of the Fund (10/25/01). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (10/26/01), the NAV of the Fund is used as a proxy for the Market Price to calculated market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Financial | 45.72 | % | ||
Basic Materials | 15.87 | |||
Consumer Non-Cyclical | 9.09 | |||
Industrial | 8.50 | |||
Consumer Cyclical | 4.88 | |||
Diversified | 3.76 | |||
Energy | 3.76 | |||
Communications | 3.65 | |||
Utilities | 3.48 | |||
Technology | 0.45 | |||
Short-Term and Other Net Assets | 0.84 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
BHP Billiton Ltd. (Australia) | 9.17 | % | ||
Commonwealth Bank of | 5.74 | |||
Westpac Banking | 4.76 | |||
Australia and New Zealand Banking Group | 4.22 | |||
National Australia Bank | 3.63 | |||
Woolworths Ltd. (Australia) | 2.54 | |||
Wesfarmers Ltd. (Australia) | 2.37 | |||
Rio Tinto Ltd. (Australia) | 2.25 | |||
Newcrest Mining Ltd. (Australia) | 2.11 | |||
Westfield Group (Australia) | 2.02 | |||
TOTAL | 38.81 | % | ||
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 Australia, Hong Kong, New Zealand and Singapore markets, as measured by the MSCI Pacific ex-Japan IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 10.27%, while the total return for the Index was 10.80%.
As of the end of the reporting period, the majority of the Fund was invested in three countries: Australia, Hong Kong and Singapore, all of which recovered quickly from the global financial crisis that had abated as the reporting period began. Australia’s economy was relatively strong during the reporting period, as GDP grew 3.3% in the second quarter of 2010 versus the year-ago quarter. Driven by international trade and rising metals prices, it was Australia’s strongest quarter in three years. Export volumes rose 5.6% during the second quarter, driven by a boom in mining as China continued its strong demand for steel and energy products. Coal exports grew in value by about $4 billion as prices rose 25% and volumes increased by 22%. Metal ore exports increased $5 billion as prices rose nearly 40%.
Noting the strength in the Australian economy, the Reserve Bank of Australia (“RBA”), boosted short-term interest rates to 4.5%, up from 3.0% a year ago in an effort to contain inflation. Household consumption remained strong in the face of higher borrowing costs, and the RBA indicated that the economy is growing at close to full capacity. Meanwhile, housing construction rebounded during the summer, snapping a contraction in recent months, as employment and wages grew steadily. In agriculture, Australia temporarily replaced Russia as a leading supplier of wheat to the world. Australia, already a major exporter of agricultural products, produced significantly more wheat than expected during the one-year period ended March 31, 2010, up 36% from its five-year average due to above-normal rainfall. Combined with sharply higher global grain prices, this boost in volume has added billions of dollars to Australia’s export revenue.
Hong Kong’s economy was buoyant during the reporting period, as the city’s jobless rate fell to 4.2%. Commercial rents have nearly doubled since the beginning of the financial crisis in late 2007. Home prices rose 30% in 2009 and another 13% through August 2010. To cool the city’s hot real estate market, the government raised the tax on high-end transactions. It also banned sales contracts on new
14 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
condominiums “flipped” before the buildings were completed. The Hong Kong Monetary Authority ordered banks to “stress-test” mortgage applications to ensure borrowers can withstand a two-percentage point increase in interest rates.
Singapore’s economy was surging during the reporting period, with GDP rising 18.8% and 19.3% in the second and first quarters of 2010, respectively, compared to the same periods in 2009. According to Singapore’s Ministry of Trade and Industry, Singapore’s expansion in the first half of 2010 was the fastest on record.
In this environment, eight of the Fund’s top ten holdings as of August 31, 2010 – all based in Australia – recorded gains for the reporting period, led by manufacturing conglomerate Wesfarmers Ltd., mining firm Rio Tinto Ltd., and international gold producer Newcrest Mining Ltd. The two negative performers were banks, National Australia Bank Ltd. and Westpac Banking Corp.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 15 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SINGAPORE INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
22.68% | 22.57% | 22.87% | 13.75% | 13.58% | 13.95% | 8.08% | 7.95% | 7.99% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
22.68% | 22.57% | 22.87% | 90.41% | 89.01% | 92.16% | 117.41% | 114.86% | 115.63% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
16 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SINGAPORE INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Financial | 51.50 | % | ||
Communications | 14.48 | |||
Consumer Non-Cyclical | 10.60 | |||
Industrial | 9.78 | |||
Diversified | 7.19 | |||
Consumer Cyclical | 5.63 | |||
Short-Term and Other Net Assets | 0.82 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Singapore Telecommunications Ltd. | 11.02 | % | ||
DBS Group Holdings Ltd. | 10.94 | |||
United Overseas Bank Ltd. | 10.22 | |||
Oversea-Chinese Banking | 9.46 | |||
Keppel Corp. Ltd. | 5.00 | |||
Genting Singapore PLC | 4.71 | |||
Wilmar International Ltd. | 4.69 | |||
CapitaLand Ltd. | 4.03 | |||
Singapore Airlines Ltd. | 3.66 | |||
Singapore Exchange Ltd. | 3.19 | |||
TOTAL | 66.92 | % | ||
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 Singapore market, as measured by the MSCI Singapore IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 22.68%, while the total return for the Index was 22.87%.
Singapore’s economy, which was among the hardest hit economies during the global financial crisis, surged during the reporting period, with GDP rising 18.8% and 19.3% in the second and first quarters of 2010 compared to the same periods in 2009. According to Singapore’s Ministry of Trade and Industry, Singapore’s expansion in the first half of 2010 was the fastest on record.
Exports were very strong late in the reporting period, particularly for electronics and pharmaceuticals to the U.S. and Europe. August 2010 exports to the European Union more than doubled from a year earlier, up from July’s 27% growth. Shipments to the U.S. were up 42% in August after rising 30% in July. Exports to China rose 36% in August versus the year-ago period and 34% in July.
The strong economy has led the Singapore government to introduce curbs on housing market speculation after prices reached record highs. Measures include requiring a higher down payment on home purchases as well as increased supply of housing and land for development. Meanwhile, the financial services sector grew strongly during the reporting period, particularly foreign-exchange trading and bank lending.
In 2010, the government lifted a 40-year ban on gaming, launching this industry in order to boost tourism and retail spending. Two casinos opened for business and produced earnings that beat market expectations. Visitor arrivals grew 24% in July 2010 compared to July 2009 to a record 1.1 million people.
In this environment, nine of the Fund’s top ten holdings as of August 31, 2010 recorded gains for the reporting period, led by Genting Singapore PLC, a resorts and gaming company, Keppel Corp. Ltd., which manufactures offshore oil rigs and Singapore Airlines Ltd. The only top-ten holding posting a loss was Singapore Exchange Ltd., the stock exchange of Singapore.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 17 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI SOUTH KOREA INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
14.65% | 15.71% | 15.16% | 7.65% | 7.88% | 8.13% | 10.94% | 10.44% | 11.73% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
14.65% | 15.71% | 15.16% | 44.57% | 46.10% | 47.84% | 182.45% | 170.04% | 203.24% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. As the Fund has a NAV which is determined prior to the opening of the regular trading day on the primary 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. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
18 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SOUTH KOREA INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Technology | 21.74 | % | ||
Industrial | 16.64 | |||
Consumer Cyclical | 16.28 | |||
Financial | 16.23 | |||
Basic Materials | 13.52 | |||
Communications | 5.08 | |||
Consumer Non-Cyclical | 4.05 | |||
Energy | 2.47 | |||
Diversified | 2.08 | |||
Utilities | 1.67 | |||
Short-Term and Other Net Assets | 0.24 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Samsung Electronics Co. Ltd. | 16.37 | % | ||
POSCO | 6.28 | |||
Hyundai Motor Co. Ltd. | 4.28 | |||
Shinhan Financial Group Co. Ltd. | 3.62 | |||
LG Chem Ltd. | 3.13 | |||
KB Financial Group Inc. | 3.12 | |||
Hyundai Mobis Co. Ltd. | 2.88 | |||
Samsung Electronics Co. | 2.23 | |||
Hynix Semiconductor Inc. | 2.07 | |||
Hyundai Heavy | 1.93 | |||
TOTAL | 45.91 | % | ||
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 South Korean market, as measured by the MSCI Korea IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 14.65%, while the total return for the Index was 15.16%.
After recovering from the effects of the global financial crisis of 2008-2009, South Korea’s economy showed solid growth during the reporting period. GDP rose 7.2% during the second quarter of 2010 compared to the year-ago period, after rising 8.1% in the first quarter. Officials at South Korea’s central bank said that the country’s economy had recovered to pre-recession levels of growth.
The expansion was propelled by exports in a wide variety of industries ranging from automobiles to semiconductors. In July 2010, exports to the European Union, the U.S. and China rose 60%, 49% and 37%, respectively. As a result, South Korea’s trade surplus - the difference between exports and imports - approached record levels. Meanwhile, European governments approved a free trade agreement with South Korea calling for the removal of tariffs within three years. A similar U.S.-South Korea trade agreement is bogged down in the U.S. Congress.
Due to South Korea’s buoyant economic growth rates, the Bank of Korea (South Korea’s central bank) raised short-term interest rates from 2.0% to 2.25% during the summer of 2010, after keeping them steady for the prior year and a half. Consumer prices in South Korea rose about 2.6% in July from a year ago; the central bank’s target for inflation is 2% to 4%. As in the U.S., the central bank must balance the need to control inflation with concerns about sluggish economic growth. Higher interest rates tend to slow the economy while lower interest rates tend to create inflation when the economy grows too fast.
However, in contrast to buoyant real estate markets in the rest of Asia, South Korea’s housing market is in a slump, with prices down anywhere between 10% and 20% at the end of the reporting period from their highs prior to the global recession in 2008. Sagging demand reflects the actions of households, banks and the government, all of which are aggressively reducing debt rather than investing in new projects. The country’s major builders are focusing on better opportunities outside the country.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 19 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI SOUTH KOREA INDEX FUND
In this environment, nine of the Fund’s top ten holdings as of August 31, 2010 recorded gains for the reporting period. LG Chem Ltd., a chemicals and electronic materials maker, Hyundai Mobis Co. Ltd., an automobile parts manufacturer and shipbuilder Hyundai Heavy Industries Co. Ltd., all posted strong double-digit gains. The only top ten holding to post a loss was diversified financial services company KB Financial Group Inc.
20 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI TAIWAN INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
13.30% | 13.86% | 14.18% | 4.25% | 4.29% | 5.09% | (1.32)% | (1.55)% | (0.43)% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
13.30% | 13.86% | 14.18% | 23.13% | 23.34% | 28.17% | (12.42)% | (14.50)% | (4.24)% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. As the Fund has a NAV which is determined prior to the opening of the regular trading day on the primary 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. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 21 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI TAIWAN INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Technology | 36.66 | % | ||
Industrial | 23.58 | |||
Financial | 15.40 | |||
Basic Materials | 11.12 | |||
Consumer Cyclical | 5.06 | |||
Communications | 4.65 | |||
Consumer Non-Cyclical | 1.25 | |||
Energy | 1.06 | |||
Short-Term and Other Net Assets | 1.22 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Taiwan Semiconductor Manufacturing Co. Ltd. | 13.12 | % | ||
Hon Hai Precision | 8.91 | |||
HTC Corp. | 3.94 | |||
MediaTek Inc. | 3.68 | |||
Chunghwa Telecom Co. Ltd. | 2.85 | |||
China Steel Corp. | 2.79 | |||
Cathay Financial | 2.79 | |||
Nan Ya Plastics Corp. | 2.61 | |||
Formosa Plastics Corp. | 2.55 | |||
AU Optronics Corp. | 1.88 | |||
TOTAL | 45.12 | % | ||
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 Taiwanese market, as measured by the MSCI Taiwan IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 13.30%, while the total return for the Index was 14.18%.
Taiwan’s economy began the reporting period under slow growth but gained momentum with each passing month, with GDP advancing 12.5% in the second quarter of 2010 versus the year-ago quarter. This followed a 13.7% increase in the first quarter of 2010. In August, the government raised its full-year 2010 forecast to 8.2%, up from a 6.1% projection earlier in the year. In addition, the government raised its growth forecasts for exports to 33% from a previous estimate of 24%. In this environment of strong growth, the Taiwan central bank raised short-term interest rates slightly during the second quarter of 2010 from 1.25% to 1.375%.
Manufacturing is a key component to Taiwan’s economy, as this is the location of many of the world’s largest manufacturers of semiconductors, telecommunications and PCs. Taiwan’s PC makers reported strong increases in net profit as demand for electronics products recovered. Although trade with the West is important for Taiwan, its number one trading partner is China, where the economy grew at a 10.3% pace in the second quarter.
In 2010, a major development took place between Taiwan and China that eased historic tensions between the two countries. In August, Taiwan’s legislature approved a broad trade agreement with China that will reduce tariffs between the two countries. In addition, Chinese companies are beginning to trade shares on the Taiwan stock exchange. Historically, the Hong Kong and Singapore stock exchanges were the most likely destinations for Chinese companies seeking listings outside of China.
22 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI TAIWAN INDEX FUND
In this environment, eight of the Fund’s top ten holdings as of August 31, 2010 recorded gains for the reporting period, led by smartphone manufacturer HTC Corp., Nan Ya Plastics Corp. and Formosa Plastics Corp., both plastic product manufacturing firms. Two top ten holdings, AU Optronics Corp., a maker of LCD screens and MediaTek Inc., a semiconductor manufacturer for wireless communications, recorded losses.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 23 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI THAILAND INVESTABLE MARKET INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 8/31/10 | Inception to 8/31/10 | Inception to 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
53.19% | 53.36% | 53.99% | 7.22% | 7.42% | 7.64% | 18.51% | 19.03% | 19.60% |
Total returns for the period since inception are calculated from the inception date of the Fund (3/26/08). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and 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 primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/28/08), the NAV of the Fund is used as a proxy for the Market Price to calculated market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
24 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI THAILAND INVESTABLE MARKET INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Financial | 36.39 | % | ||
Energy | 25.67 | |||
Consumer Cyclical | 8.00 | |||
Industrial | 7.85 | |||
Communications | 6.56 | |||
Consumer Non-Cyclical | 6.42 | |||
Basic Materials | 6.22 | |||
Utilities | 2.04 | |||
Technology | 0.32 | |||
Short-Term and Other Net Assets | 0.53 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
PTT PCL NVDR | 10.83 | % | ||
Bangkok Bank PCL NVDR | 9.28 | |||
Kasikornbank PCL NVDR | 8.54 | |||
PTT Exploration & Production PCL NVDR | 8.06 | |||
Siam Commercial Bank | 6.93 | |||
Banpu PCL NVDR | 4.43 | |||
Siam Cement PCL NVDR | 4.36 | |||
Advanced Info Service | 4.00 | |||
CP All PCL NVDR | 3.41 | |||
Charoen Pokphand Foods | 2.94 | |||
TOTAL | 62.78 | % | ||
The iShares MSCI Thailand Investable Market 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 Thailand Investable Market IndexSM (the “Index”). The Index is a free float-adjusted market capitalization index designed to measure broad based equity market performance in Thailand. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 53.19%, while the total return for the Index was 53.99%.
As the reporting period began, Thailand’s economy was beginning to bounce back from the global economic downturn, aided by strong exports and growing domestic demand. Despite a massive anti-government protest that paralyzed Bangkok during the spring, Thailand’s economy expanded 9.1% in the second quarter of 2010 versus the year-ago period. To protect against inflationary pressures, the country’s central bank raised short-term interest rates in July and August by a total of 50 basis points to 1.75%. Rates had been at 1.25% since April 2009. In June, exports posted a 46% increase from a year earlier to a record $18 billion, with particular strength in electronics, automobiles and agriculture.
Like many Asian countries, Thailand’s currency, the baht, has been rising in value against the U.S. dollar, as investors seek economies with strong growth prospects. As economies strengthen, central banks raise interest rates to keep inflation at bay, a move that often boosts currencies even higher. However, a stronger currency can make exports less competitive. At the end of the reporting period, the government urged the Thailand central bank to take action to stabilize the baht, because export growth during the summer began to slow down, particularly in the food/agricultural sectors.
Meanwhile, U.S. and Japanese automakers have increased operations in Thailand, making it a manufacturing hub for Southeast Asia. In June, Ford announced plans for a $450 million manufacturing facility, its first wholly-owned plant in the country. Toyota and General Motors have also announced their intentions to expand their manufacturing operations in the country. GM received loans from three Thai banks to finance its expansion plans in Thailand. Automakers are moving production to Thailand because labor costs are lower than Japan and the U.S.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 25 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI THAILAND INVESTABLE MARKET INDEX FUND
In this environment, all of the Fund’s top ten holdings recorded substantial gains. Charoen Pokphand Foods PCL, an agro-industrial and food conglomerate, and convenience store retailer CP All PCL, returned triple-digit gains for the reporting period. Siam Cement PCL, Banpu PCL and Kasikornbank PCL also performed well. Energy company PTT Exploration & Production PCL and state-owned oil and gas company PTT PCL posted the lowest double-digit gains among the top ten holdings.
26 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Shareholder Expenses (Unaudited)
iSHARES® , INC.
As a shareholder of a 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, 2010 to August 31, 2010.
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 (3/1/10) | Ending Account Value (8/31/10) | Annualized Expense Ratio | Expenses Paid During Perioda (3/1/10 to 8/31/10) | ||||||||||||
Australia | ||||||||||||||||
Actual | $1,000.00 | $952.00 | 0.53 | % | $2.61 | |||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.70 | ||||||||||||
Hong Kong | ||||||||||||||||
Actual | 1,000.00 | 1,058.20 | 0.53 | 2.75 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.70 | ||||||||||||
Japan Small Cap | ||||||||||||||||
Actual | 1,000.00 | 993.00 | 0.53 | 2.66 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.70 | ||||||||||||
Malaysia | ||||||||||||||||
Actual | 1,000.00 | 1,226.70 | 0.53 | 2.97 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.70 |
SHAREHOLDER EXPENSES | 27 |
Table of Contents
Shareholder Expenses (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Index Fund | Beginning Account Value (3/1/10) | Ending Account Value (8/31/10) | Annualized Expense Ratio | Expenses Paid During Perioda (3/1/10 to 8/31/10) | ||||||||||||
Pacific ex-Japan | ||||||||||||||||
Actual | $1,000.00 | $992.50 | 0.50 | % | $2.51 | |||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1022.70 | 0.50 | 2.55 | ||||||||||||
Singapore | ||||||||||||||||
Actual | 1,000.00 | 1,116.70 | 0.53 | 2.83 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.70 | ||||||||||||
South Korea | ||||||||||||||||
Actual | 1,000.00 | 1,055.40 | 0.61 | 3.16 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.10 | 0.61 | 3.11 | ||||||||||||
Taiwan | ||||||||||||||||
Actual | 1,000.00 | 1,036.60 | 0.81 | 4.16 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.10 | 0.81 | 4.13 | ||||||||||||
Thailand Investable Market | ||||||||||||||||
Actual | 1,000.00 | 1,339.50 | 0.61 | 3.60 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.10 | 0.61 | 3.11 |
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). |
28 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.00% |
| |||||||
AIRLINES – 0.31% | ||||||||
Qantas Airways Ltd.a | 3,085,425 | $ | 6,892,918 | |||||
6,892,918 | ||||||||
APPAREL – 0.17% | ||||||||
Billabong International Ltd. | 562,800 | 3,786,956 | ||||||
3,786,956 | ||||||||
BANKS – 29.59% | ||||||||
Australia and New Zealand Banking Group Ltd. | 7,042,875 | 141,605,661 | ||||||
Bendigo and Adelaide | 1,004,325 | 7,535,573 | ||||||
Commonwealth Bank | 4,305,525 | 192,756,266 | ||||||
National Australia Bank Ltd. | 5,896,275 | 121,753,126 | ||||||
Suncorp-Metway Ltd. | 3,562,125 | 26,473,419 | ||||||
Westpac Banking Corp. | 8,276,100 | 159,845,299 | ||||||
649,969,344 | ||||||||
BEVERAGES – 2.08% | ||||||||
Coca-Cola Amatil Ltd. | 1,572,900 | 16,701,519 | ||||||
Foster’s Group Ltd. | 5,366,550 | 28,945,577 | ||||||
45,647,096 | ||||||||
BIOTECHNOLOGY – 0.46% | ||||||||
Sonic Healthcare Ltd. | 1,025,850 | 10,089,289 | ||||||
10,089,289 | ||||||||
BUILDING MATERIALS – 0.91% |
| |||||||
Boral Ltd. | 1,998,150 | 7,825,195 | ||||||
CSR Ltd. | 4,211,550 | 6,391,176 | ||||||
James Hardie Industries SEa | 1,208,025 | 5,730,830 | ||||||
19,947,201 | ||||||||
CHEMICALS – 0.62% | ||||||||
Incitec Pivot Ltd. | 4,517,100 | 13,548,899 | ||||||
13,548,899 | ||||||||
COAL – 0.16% | ||||||||
Macarthur Coal Ltd. | 353,325 | 3,547,300 | ||||||
3,547,300 | ||||||||
COMMERCIAL SERVICES – 2.01% |
| |||||||
Brambles Ltd. | 3,953,250 | 20,618,938 | ||||||
Intoll Group | 6,287,400 | 8,254,248 | ||||||
Transurban Group | 3,539,025 | 15,340,058 | ||||||
44,213,244 |
Security | Shares | Value | ||||||
COMPUTERS – 0.48% | ||||||||
Computershare Ltd. | 1,235,850 | $ | 10,438,699 | |||||
10,438,699 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 2.02% |
| |||||||
ASX Ltd.b | 482,475 | 12,500,616 | ||||||
Macquarie Group Ltd. | 957,600 | 31,927,603 | ||||||
44,428,219 | ||||||||
ELECTRIC – DISTRIBUTION – 0.88% |
| |||||||
AGL Energy Ltd. | 1,251,075 | 16,725,060 | ||||||
SP AusNet | 3,760,050 | 2,677,306 | ||||||
19,402,366 | ||||||||
ENGINEERING & CONSTRUCTION – 0.92% |
| |||||||
Leighton Holdings Ltd. | 375,900 | 10,271,293 | ||||||
WorleyParsons Ltd. | 532,350 | 9,841,202 | ||||||
20,112,495 | ||||||||
ENTERTAINMENT – 0.95% | ||||||||
Aristocrat Leisure Ltd. | 1,111,950 | 3,681,651 | ||||||
Tabcorp Holdings Ltd. | 1,703,100 | 9,686,244 | �� | |||||
Tatts Group Ltd. | 3,563,700 | 7,580,772 | ||||||
20,948,667 | ||||||||
FOOD – 4.47% | ||||||||
Goodman Fielder Ltd. | 3,837,225 | 4,576,532 | ||||||
Metcash Ltd. | 2,128,350 | 8,316,143 | ||||||
Woolworths Ltd. | 3,448,725 | 85,210,366 | ||||||
98,103,041 | ||||||||
HEALTH CARE – PRODUCTS – 0.44% |
| |||||||
Cochlear Ltd. | 156,975 | 9,668,319 | ||||||
9,668,319 | ||||||||
INSURANCE – 4.54% | ||||||||
AMP Ltd. | 5,759,775 | 25,837,498 | ||||||
AXA Asia Pacific Holdings Ltd. | 2,873,325 | 14,065,716 | ||||||
Insurance Australia Group Ltd. | 5,779,200 | 17,694,593 | ||||||
QBE Insurance Group Ltd. | 2,877,525 | 42,233,217 | ||||||
99,831,024 | ||||||||
IRON & STEEL – 0.87% | ||||||||
BlueScope Steel Ltd.a | 5,068,350 | 9,653,722 | ||||||
OneSteel Ltd. | 3,701,775 | 9,488,923 | ||||||
19,142,645 |
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
LODGING – 0.42% | ||||||||
Crown Ltd. | 1,256,850 | $ | 9,262,499 | |||||
9,262,499 | ||||||||
MANUFACTURING – 5.19% |
| |||||||
Orica Ltd. | 1,003,800 | 22,380,476 | ||||||
Wesfarmers Ltd. | 2,794,050 | 79,479,541 | ||||||
Wesfarmers Ltd. | ||||||||
Partially Protected | 422,100 | 12,085,951 | ||||||
113,945,968 | ||||||||
MEDIA – 0.34% | ||||||||
Fairfax Media Ltd.b | 5,884,200 | 7,541,614 | ||||||
7,541,614 | ||||||||
METAL FABRICATE & HARDWARE – 0.30% |
| |||||||
Sims Metal Management Ltd. | 453,600 | 6,701,863 | ||||||
6,701,863 | ||||||||
MINING – 22.59% | ||||||||
Alumina Ltd. | 6,783,525 | 10,354,615 | ||||||
BHP Billiton Ltd. | 9,329,250 | 307,644,636 | ||||||
Energy Resources of | 185,325 | 2,169,073 | ||||||
Fortescue Metals Group Ltd.a | 3,454,500 | 14,389,492 | ||||||
Newcrest Mining Ltd. | 2,125,200 | 70,459,651 | ||||||
OZ Minerals Ltd.a | 8,677,200 | 9,422,233 | ||||||
Paladin Energy Ltd.a | 1,893,675 | 6,253,077 | ||||||
Rio Tinto Ltd. | 1,211,175 | 75,557,462 | ||||||
496,250,239 | ||||||||
OIL & GAS – 5.58% | ||||||||
Caltex Australia Ltd. | 375,375 | 3,755,312 | ||||||
Origin Energy Ltd. | 2,448,075 | 33,228,365 | ||||||
Santos Ltd. | 2,316,825 | 29,281,679 | ||||||
Woodside Petroleum Ltd. | 1,512,525 | 56,366,352 | ||||||
122,631,708 | ||||||||
PACKAGING & CONTAINERS – 0.93% |
| |||||||
Amcor Ltd. | 3,395,175 | 20,367,441 | ||||||
20,367,441 | ||||||||
PHARMACEUTICALS – 2.14% |
| |||||||
CSL Ltd. | 1,599,675 | 46,928,143 | ||||||
46,928,143 | ||||||||
REAL ESTATE – 6.56% | ||||||||
BGP Holdings PLCc | 18,888,372 | 2,401 | ||||||
Dexus Property Group | 13,401,150 | 9,899,986 |
Security | Shares | Value | ||||||
Goodman Group | 17,707,200 | $ | 10,007,786 | |||||
GPT Group | 4,900,350 | 13,041,054 | ||||||
Lend Lease Group | 1,493,625 | 9,226,043 | ||||||
Mirvac Group | 9,079,875 | 10,829,267 | ||||||
Stockland Corp. Ltd. | 6,624,450 | 23,230,602 | ||||||
Westfield Group | 6,094,725 | 67,861,871 | ||||||
144,099,010 | ||||||||
REAL ESTATE INVESTMENT TRUSTS – 0.38% |
| |||||||
CFS Retail | 4,885,650 | 8,414,295 | ||||||
8,414,295 | ||||||||
RETAIL – 0.21% | ||||||||
Harvey Norman | 1,476,300 | 4,533,234 | ||||||
4,533,234 | ||||||||
TELECOMMUNICATIONS – 1.35% |
| |||||||
Telstra Corp. Ltd. | 12,106,500 | 29,632,323 | ||||||
29,632,323 | ||||||||
TRANSPORTATION – 1.13% |
| |||||||
Asciano Groupa | 8,134,350 | 12,126,963 | ||||||
MAp Group | 1,034,775 | 2,726,164 | ||||||
Toll Holdings Ltd. | 1,856,400 | 10,029,393 | ||||||
24,882,520 | ||||||||
TOTAL COMMON STOCKS |
| 2,174,908,579 | ||||||
SHORT-TERM INVESTMENTS – 0.47% |
| |||||||
MONEY MARKET FUNDS – 0.47% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares 0.31%d,e,f | 8,317,669 | 8,317,669 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares 0.30%d,e,f | 1,616,293 | 1,616,293 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares 0.13%d,e | 431,894 | 431,894 | ||||||
10,365,856 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $10,365,856) |
| 10,365,856 | ||||||
30 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
August 31, 2010
Value | ||||
TOTAL INVESTMENTS | ||||
(Cost: $2,386,157,730) | $ | 2,185,274,435 | ||
Other Assets, Less Liabilities – 0.53% | 11,542,709 | |||
NET ASSETS – 100.00% | $ | 2,196,817,144 | ||
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1. |
d | Affiliated issuer. See Note 2. |
e | The rate quoted is the annualized seven-day yield of the fund at period end. |
f | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
iSHARES® MSCI HONG KONG INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.55% |
| |||||||
AIRLINES – 1.23% | ||||||||
Cathay Pacific Airways Ltd. | 9,870,000 | $ | 24,337,160 | |||||
24,337,160 | ||||||||
APPAREL – 0.96% | ||||||||
Yue Yuen Industrial | 5,757,500 | 18,874,622 | ||||||
18,874,622 | ||||||||
BANKS – 11.65% | ||||||||
Bank of East Asia Ltd. (The)a | 12,502,110 | 47,012,498 | ||||||
BOC Hong Kong | 30,432,500 | 80,008,308 | ||||||
Hang Seng Bank Ltd.a | 6,251,000 | 85,746,828 | ||||||
Wing Hang Bank Ltd. | 1,645,000 | 17,383,686 | ||||||
230,151,320 | ||||||||
DISTRIBUTION & WHOLESALE – 7.21% |
| |||||||
Esprit Holdings Ltd. | 9,376,532 | 52,557,279 | ||||||
Li & Fung Ltd. | 17,771,000 | 90,014,450 | ||||||
142,571,729 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 6.52% |
| |||||||
Hong Kong Exchanges and | 8,225,000 | 128,897,281 | ||||||
128,897,281 | ||||||||
ELECTRIC – 9.59% | ||||||||
CLP Holdings Ltd. | 15,627,700 | 119,641,259 | ||||||
Hongkong Electric | 11,515,000 | 69,947,130 | ||||||
189,588,389 | ||||||||
ENGINEERING & CONSTRUCTION – 0.64% |
| |||||||
Cheung Kong Infrastructure | 3,290,000 | 12,667,674 | ||||||
12,667,674 | ||||||||
GAS – 4.22% | ||||||||
Hong Kong and China Gas Co. | 34,545,883 | 83,316,933 | ||||||
83,316,933 | ||||||||
HOLDING COMPANIES – DIVERSIFIED – 14.11% |
| |||||||
Hutchison Whampoa Ltd. | 17,005,800 | 125,709,777 | ||||||
NWS Holdings Ltd. | 6,580,000 | 11,944,411 | ||||||
Swire Pacific Ltd. Class A | 6,580,000 | 79,305,136 |
Security | Shares | Value | ||||||
Wharf (Holdings) Ltd. (The) | 11,515,500 | $ | 61,955,862 | |||||
278,915,186 | ||||||||
LODGING – 3.73% | ||||||||
Sands China Ltd.b | 19,740,000 | 30,656,193 | ||||||
Shangri-La Asia Ltd. | 9,870,000 | 21,570,997 | ||||||
Wynn Macau Ltd.b | 12,502,000 | 21,569,305 | ||||||
73,796,495 | ||||||||
MEDIA – 0.52% | ||||||||
Television Broadcasts Ltd. | 2,045,000 | 10,174,391 | ||||||
10,174,391 | ||||||||
MINING – 0.49% | ||||||||
Mongolia Energy Corp. Ltd.b | 24,675,000 | 9,738,671 | ||||||
9,738,671 | ||||||||
REAL ESTATE – 30.92% |
| |||||||
Cheung Kong (Holdings) Ltd. | 11,515,000 | 144,927,492 | ||||||
Hang Lung Group Ltd. | 6,580,000 | 39,335,347 | ||||||
Hang Lung Properties Ltd. | 16,450,000 | 73,489,426 | ||||||
Henderson Land Development | 8,725,332 | 53,394,074 | ||||||
Hopewell Holdings Ltd. | 4,935,000 | 15,512,085 | ||||||
Hysan Development Co. Ltd. | 4,935,000 | 15,638,973 | ||||||
Kerry Properties Ltd. | 5,757,500 | 29,015,106 | ||||||
New World Development | 19,740,800 | 31,672,583 | ||||||
Sino Land Co. Ltd.a | 13,160,000 | 22,975,227 | ||||||
Sun Hung Kai Properties Ltd. | 11,515,000 | 161,359,517 | ||||||
Wheelock and Co. Ltd. | 8,225,000 | 23,738,671 | ||||||
611,058,501 | ||||||||
REAL ESTATE INVESTMENT TRUSTS – 2.67% |
| |||||||
Link REIT (The) | 18,095,000 | 52,806,646 | ||||||
52,806,646 | ||||||||
RETAIL – 0.54% | ||||||||
Lifestyle International | 4,935,000 | 10,683,988 | ||||||
10,683,988 | ||||||||
SEMICONDUCTORS – 0.67% |
| |||||||
ASM Pacific Technology Ltd. | 1,645,000 | 13,312,689 | ||||||
13,312,689 | ||||||||
TELECOMMUNICATIONS – 1.13% |
| |||||||
Foxconn International | 18,095,000 | 12,026,888 |
32 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI HONG KONG INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
PCCW Ltd. | 31,255,000 | $ | 10,206,042 | |||||
22,232,930 | ||||||||
TRANSPORTATION – 2.75% |
| |||||||
MTR Corp. Ltd. | 11,515,083 | 41,154,375 | ||||||
Orient Overseas | 1,645,200 | 13,176,829 | ||||||
54,331,204 | ||||||||
TOTAL COMMON STOCKS |
| 1,967,455,809 | ||||||
SHORT-TERM INVESTMENTS – 3.43% |
| |||||||
MONEY MARKET FUNDS – 3.43% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares 0.31%c,d,e | 55,829,526 | 55,829,526 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares 0.30%c,d,e | 10,848,819 | 10,848,819 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares 0.13%c,d | 1,143,229 | 1,143,229 | ||||||
67,821,574 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $67,821,574) |
| 67,821,574 | ||||||
TOTAL INVESTMENTS |
| 2,035,277,383 | ||||||
Other Assets, Less |
| (58,960,559) | ||||||
NET ASSETS – 100.00% | $ | 1,976,316,824 | ||||||
a | All or a portion of this security represents a security on loan. See Note 5. |
b | Non-income earning security. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.69% | ||||||||
ADVERTISING – 0.36% | ||||||||
Asatsu-DK Inc. | 3,600 | $ | 75,927 | |||||
Moshi Moshi Hotline Inc. | 2,700 | 54,984 | ||||||
130,911 | ||||||||
AEROSPACE & DEFENSE – 0.14% |
| |||||||
Japan Aviation Electronics | 9,000 | 49,303 | ||||||
49,303 | ||||||||
AGRICULTURE – 0.36% | ||||||||
Hokuto Corp. | 2,700 | 60,932 | ||||||
Sakata Seed Corp. | 5,400 | 71,897 | ||||||
132,829 | ||||||||
APPAREL – 1.41% | ||||||||
Descente Ltd. | 9,000 | 54,341 | ||||||
Gunze Ltd. | 18,000 | 59,164 | ||||||
Japan Wool Textile Co. Ltd. (The) | 9,000 | 68,167 | ||||||
Katakura Industries Co. Ltd. | 3,600 | 34,641 | ||||||
Onward Holdings Co. Ltd. | 9,000 | 64,630 | ||||||
Sanyo Shokai Ltd. | 9,000 | 36,227 | ||||||
Shikibo Ltd. | 9,000 | 11,040 | ||||||
Tokyo Style Co. Ltd. | 9,000 | 65,166 | ||||||
Wacoal Holdings Corp. | 9,000 | 122,615 | ||||||
515,991 | ||||||||
AUTO MANUFACTURERS – 0.44% |
| |||||||
Kanto Auto Works Ltd. | 5,400 | 36,527 | ||||||
Nissan Shatai Co. Ltd. | 9,000 | 61,736 | ||||||
ShinMaywa Industries Ltd. | 18,000 | 62,594 | ||||||
160,857 | ||||||||
AUTO PARTS & EQUIPMENT – 3.92% |
| |||||||
Aisan Industry Co. Ltd. | 2,700 | 18,875 | ||||||
Akebono Brake Industry Co. Ltd.a | 7,200 | 36,184 | ||||||
Calsonic Kansei Corp.b | 18,000 | 50,589 | ||||||
Exedy Corp. | 3,600 | 103,837 | ||||||
FCC Co. Ltd. | 4,500 | 96,141 | ||||||
Futaba Industrial Co. Ltd.b | 6,300 | 35,038 | ||||||
Kayaba Industry Co. Ltd. | 18,000 | 82,529 | ||||||
Keihin Corp. | 4,500 | 86,066 | ||||||
Musashi Seimitsu Industry Co. Ltd. | 2,700 | 59,389 | ||||||
Nifco Inc. | 4,500 | 100,054 | ||||||
Nissin Kogyo Co. Ltd. | 4,500 | 65,595 |
Security | Shares | Value | ||||||
Press Kogyo Co. Ltd.b | 9,000 | $ | 27,760 | |||||
Riken Corp. | 9,000 | 29,260 | ||||||
Sanden Corp. | 18,000 | 59,164 | ||||||
Showa Corp.b | 6,300 | 33,162 | ||||||
T.RAD Co. Ltd. | 9,000 | 26,688 | ||||||
Tachi-S Co. Ltd. | 1,800 | 22,015 | ||||||
Takata Corp. | 3,600 | 77,213 | ||||||
Teikoku Piston Ring Co. Ltd. | 900 | 6,056 | ||||||
Tokai Rika Co. Ltd. | 5,400 | 84,116 | ||||||
Topre Corp. | 6,300 | 44,566 | ||||||
Toyo Tire & Rubber Co. Ltd. | 18,000 | 36,227 | ||||||
TS Tech Co. Ltd. | 5,400 | 78,071 | ||||||
Unipres Corp. | 3,600 | 55,777 | ||||||
Yokohama Rubber Co. Ltd. (The) | 27,000 | 124,116 | ||||||
1,438,488 | ||||||||
BANKS – 9.56% | ||||||||
Aichi Bank Ltd. (The) | 900 | 55,091 | ||||||
Akita Bank Ltd. (The) | 27,000 | 88,424 | ||||||
Aomori Bank Ltd. (The) | 18,000 | 45,659 | ||||||
Awa Bank Ltd. (The) | 27,000 | 174,598 | ||||||
Bank of Iwate Ltd. (The) | 1,800 | 83,708 | ||||||
Bank of Nagoya Ltd. (The) | 18,000 | 63,022 | ||||||
Bank of Okinawa Ltd. (The) | 2,700 | 103,859 | ||||||
Bank of Saga Ltd. (The) | 18,000 | 51,233 | ||||||
Bank of the Ryukyus Ltd. | 4,500 | 53,591 | ||||||
Chiba Kogyo Bank Ltd. (The)b | 4,500 | 27,278 | ||||||
Chukyo Bank Ltd. (The) | 18,000 | 58,092 | ||||||
Daishi Bank Ltd. (The) | 36,000 | 129,046 | ||||||
Ehime Bank Ltd. (The) | 18,000 | 46,945 | ||||||
Eighteenth Bank Ltd. (The) | 18,000 | 52,519 | ||||||
FIDEA Holdings Co. Ltd. | 10,800 | 21,479 | ||||||
Fukui Bank Ltd. (The) | 27,000 | 92,926 | ||||||
Higashi-Nippon Bank Ltd. (The) | 18,000 | 33,441 | ||||||
Higo Bank Ltd. (The) | 18,000 | 96,463 | ||||||
Hokkoku Bank Ltd. (The) | 27,000 | 116,077 | ||||||
Hokuetsu Bank Ltd. (The) | 27,000 | 47,910 | ||||||
Hyakugo Bank Ltd. (The) | 27,000 | 116,399 | ||||||
Hyakujushi Bank Ltd. (The) | 27,000 | 102,572 | ||||||
Juroku Bank Ltd. (The) | 36,000 | 120,043 | ||||||
Kagoshima Bank Ltd. (The) | 18,000 | 109,325 | ||||||
Kansai Urban Banking Corp. | 27,000 | 40,836 | ||||||
Keiyo Bank Ltd. (The) | 27,000 | 137,621 |
34 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Kiyo Holdings Inc. | 72,000 | $ | 98,607 | |||||
Michinoku Bank Ltd. (The) | 18,000 | 36,870 | ||||||
Mie Bank Ltd. (The) | 18,000 | 48,660 | ||||||
Minato Bank Ltd. (The) | 18,000 | 28,939 | ||||||
Miyazaki Bank Ltd. (The) | 18,000 | 48,875 | ||||||
Musashino Bank Ltd. (The) | 3,600 | 109,711 | ||||||
Nanto Bank Ltd. (The) | 27,000 | 156,592 | ||||||
Ogaki Kyoritsu Bank Ltd. (The) | 27,000 | 83,923 | ||||||
Oita Bank Ltd. (The) | 18,000 | 58,950 | ||||||
San-in Godo Bank Ltd. (The) | 18,000 | 126,259 | ||||||
Shiga Bank Ltd. (The) | 27,000 | 168,489 | ||||||
Shikoku Bank Ltd. (The) | 18,000 | 57,878 | ||||||
Tochigi Bank Ltd. (The) | 9,000 | 36,013 | ||||||
Toho Bank Ltd. (The) | 27,000 | 77,170 | ||||||
Tokyo Tomin Bank Ltd. (The) | 3,600 | 39,057 | ||||||
TOMONY Holdings Inc.b | 9,000 | 27,331 | ||||||
Towa Bank Ltd. (The) | 18,000 | 14,791 | ||||||
Tsukuba Bank Ltd.b | 6,300 | 19,432 | ||||||
Yachiyo Bank Ltd. (The) | 1,800 | 39,228 | ||||||
Yamagata Bank Ltd. (The) | 18,000 | 87,031 | ||||||
Yamanashi Chuo Bank Ltd. (The) | 18,000 | 73,098 | ||||||
3,505,061 | ||||||||
BEVERAGES – 0.69% | ||||||||
Kagome Co. Ltd. | 8,100 | 158,392 | ||||||
Takara Holdings Inc. | 18,000 | 93,462 | ||||||
251,854 | ||||||||
BIOTECHNOLOGY – 0.16% | ||||||||
AnGes MG Inc.b | 18 | 22,551 | ||||||
OncoTherapy Science Inc.b | 9 | 17,085 | ||||||
Takara Bio Inc.b | 9 | 20,364 | ||||||
60,000 | ||||||||
BUILDING MATERIALS – 1.21% |
| |||||||
Central Glass Co. Ltd. | 18,000 | 65,380 | ||||||
Chofu Seisakusho Co. Ltd. | 2,700 | 60,836 | ||||||
Nichias Corp. | 9,000 | 37,192 | ||||||
Nichiha Corp. | 900 | 5,927 | ||||||
Sanwa Holdings Corp. | 27,000 | 79,421 | ||||||
Sumitomo Osaka Cement Co. Ltd. | 45,000 | 74,491 | ||||||
Takara Standard Co. Ltd. | 18,000 | 120,686 | ||||||
443,933 |
Security | Shares | Value | ||||||
CHEMICALS – 6.41% | ||||||||
Adeka Corp. | 10,800 | $ | 110,225 | |||||
Aica Kogyo Co. Ltd. | 8,100 | 90,675 | ||||||
Arisawa Manufacturing Co. Ltd. | 1,800 | 10,997 | ||||||
C. Uyemura & Co. Ltd. | 900 | 33,601 | ||||||
Chugoku Marine Paints Ltd. | 9,000 | 61,308 | ||||||
Dai Nippon Toryo Co. Ltd.b | 9,000 | 9,003 | ||||||
Dainichiseika Color & Chemicals | 9,000 | 38,049 | ||||||
Daiso Co. Ltd. | 9,000 | 24,544 | ||||||
DIC Corp. | 63,000 | 103,537 | ||||||
Earth Chemical Co. Ltd. | 1,800 | 57,320 | ||||||
Fujimi Inc. | 2,700 | 36,945 | ||||||
Ishihara Sangyo Kaisha Ltd.b | 45,000 | 32,690 | ||||||
Lintec Corp. | 5,400 | 109,775 | ||||||
Nihon Nohyaku Co. Ltd. | 9,000 | 49,196 | ||||||
Nihon Parkerizing Co. Ltd. | 9,000 | 107,288 | ||||||
Nippon Carbon Co. Ltd. | 18,000 | 53,162 | ||||||
Nippon Kayaku Co. Ltd. | 18,000 | 169,561 | ||||||
Nippon Paint Co. Ltd. | 27,000 | 166,238 | ||||||
Nippon Shokubai Co. Ltd. | 9,000 | 78,457 | ||||||
Nippon Soda Co. Ltd. | 18,000 | 58,307 | ||||||
Nippon Synthetic Chemical Industry | 9,000 | 47,588 | ||||||
NOF Corp. | 18,000 | 74,169 | ||||||
Sakai Chemical Industry Co. Ltd. | 9,000 | 34,084 | ||||||
Stella Chemifa Corp. | 900 | 32,369 | ||||||
Sumitomo Bakelite Co. Ltd. | 27,000 | 130,868 | ||||||
T. Hasegawa Co. Ltd. | 900 | 14,898 | ||||||
Taiyo Ink Manufacturing Co. Ltd. | 1,800 | 48,725 | ||||||
Takasago International Corp. | 9,000 | 42,229 | ||||||
Tanaka Chemical Corp. | 900 | 10,075 | ||||||
Toagosei Co. Ltd. | 27,000 | 102,251 | ||||||
Tokai Carbon Co. Ltd. | 18,000 | 104,609 | ||||||
Tokyo Ohka Kogyo Co. Ltd. | 5,400 | 86,945 | ||||||
Toyo Ink Manufacturing Co. Ltd. | 27,000 | 99,035 | ||||||
Zeon Corp. | 18,000 | 121,329 | ||||||
2,350,052 | ||||||||
COMMERCIAL SERVICES – 1.88% |
| |||||||
Aeon Delight Co. Ltd. | 1,800 | 33,762 | ||||||
Daiseki Co. Ltd. | 3,660 | 66,557 | ||||||
Future Architect Inc. | 18 | 6,219 |
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Kyodo Printing Co. Ltd. | 9,000 | $ | 21,222 | |||||
Meitec Corp. | 4,500 | 74,116 | ||||||
Nichii Gakkan Co. | 5,400 | 46,302 | ||||||
Nishio Rent All Co. Ltd. | 2,700 | 16,367 | ||||||
PARK24 Co. Ltd. | 11,700 | 126,377 | ||||||
Pasona Group Inc. | 36 | 24,609 | ||||||
Pronexus Inc. | 1,800 | �� | 9,646 | |||||
Sohgo Security Services Co. Ltd. | 7,200 | 70,311 | ||||||
So-net M3 Inc. | 9 | 40,836 | ||||||
Temp Holdings Co. Ltd. | 900 | 7,856 | ||||||
TKC Corp. | 2,700 | 48,778 | ||||||
Toppan Forms Co. Ltd. | 7,200 | 68,081 | ||||||
Zenrin Co. Ltd. | 2,700 | 28,457 | ||||||
689,496 | ||||||||
COMPUTERS – 0.70% | ||||||||
CSK Holdings Corp.b | 8,100 | 26,527 | ||||||
DTS Corp. | 3,600 | 36,570 | ||||||
Ferrotec Corp. | 1,800 | 19,486 | ||||||
Ines Corp. | 2,700 | 17,588 | ||||||
Japan Digital Laboratory Co. Ltd. | 900 | 9,078 | ||||||
Melco Holdings Inc. | 900 | 27,138 | ||||||
Net One Systems Co. Ltd. | 54 | 62,251 | ||||||
NS Solutions Corp. | 2,700 | 46,785 | ||||||
Roland DG Corp. | 900 | 12,015 | ||||||
257,438 | ||||||||
COSMETICS & PERSONAL CARE – 1.31% |
| |||||||
Aderans Holdings Co. Ltd.b | 3,600 | 42,658 | ||||||
Dr. Ci:Labo Co. Ltd. | 9 | 28,596 | ||||||
Fancl Corp. | 5,400 | 88,039 | ||||||
Kose Corp. | 3,600 | 84,673 | ||||||
Lion Corp. | 18,000 | 96,892 | ||||||
Mandom Corp. | 2,700 | 72,701 | ||||||
Pigeon Corp. | 1,800 | 66,238 | ||||||
479,797 | ||||||||
DISTRIBUTION & WHOLESALE – 2.40% |
| |||||||
Doshisha Co. Ltd. | 2,700 | 63,987 | ||||||
F&A Aqua Holdings Inc. | 3,600 | 33,312 | ||||||
Hakuto Co. Ltd. | 900 | 7,578 | ||||||
Hanwa Co. Ltd. | 27,000 | 97,749 | ||||||
Inaba Denki Sangyo Co. Ltd. | 2,700 | 62,476 | ||||||
Inabata & Co. Ltd. | 1,800 | 8,574 | ||||||
Itochu Enex Co. Ltd. | 10,800 | 50,675 |
Security | Shares | Value | ||||||
Iwatani Corp. | 27,000 | $ | 74,598 | |||||
Japan Pulp & Paper Co. Ltd. | 18,000 | 58,092 | ||||||
Japan Wind Development Co. Ltd.b | 9 | 10,847 | ||||||
JFE Shoji Holdings Inc. | 18,000 | 62,165 | ||||||
Kanematsu Corp.b | 54,000 | 43,087 | ||||||
Matsuda Sangyo Co. Ltd. | 1,860 | 26,670 | ||||||
Nagase & Co. Ltd. | 9,000 | 97,535 | ||||||
Nippon Gas Co. Ltd. | 5,400 | 85,531 | ||||||
Ryoyo Electro Corp. | 900 | 8,167 | ||||||
Ship Healthcare Holdings Inc. | 36 | 29,282 | ||||||
Sumikin Bussan Corp. | 9,000 | 17,042 | ||||||
Trusco Nakayama Corp. | 2,700 | 35,402 | ||||||
Yuasa Trading Co. Ltd.b | 9,000 | 8,467 | ||||||
881,236 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 2.67% |
| |||||||
AIFUL Corp.b | 13,050 | 16,318 | ||||||
Cedyna Financial Corp.b | 16,200 | 28,167 | ||||||
Century Tokyo Leasing Corp. | 6,380 | 82,134 | ||||||
Fuyo General Lease Co. Ltd. | 1,800 | 47,288 | ||||||
GCA Savvian Group Corp.b | 9 | 8,307 | ||||||
Hitachi Capital Corp. | 4,500 | 63,558 | ||||||
IBJ Leasing Co. Ltd. | 2,700 | 54,855 | ||||||
Ichiyoshi Securities Co. Ltd. | 5,400 | 36,077 | ||||||
Iwai Cosmo Holdings Inc. | 900 | 7,245 | ||||||
Jaccs Co. Ltd. | 18,000 | 33,012 | ||||||
Japan Securities Finance Co. Ltd. | 9,900 | 56,238 | ||||||
Kenedix Inc.b | 216 | 35,241 | ||||||
Marusan Securities Co. Ltd. | 8,100 | 43,215 | ||||||
Mizuho Investors Securities Co. Ltd.b | 36,000 | 36,442 | ||||||
Okasan Securities Group Inc. | 18,000 | 64,309 | ||||||
Orient Corp.a,b | 27,000 | 18,328 | ||||||
Osaka Securities Exchange Co. Ltd. | 27 | 131,190 | ||||||
Promise Co. Ltd. | 7,650 | 60,038 | ||||||
Ricoh Leasing Co. Ltd. | 2,700 | 63,505 | ||||||
SPARX Group Co. Ltd.b | 45 | 3,859 | ||||||
Takefuji Corp.a | 7,290 | 17,537 | ||||||
Tokai Tokyo Financial Holdings Inc. | 18,000 | 59,593 | ||||||
Toyo Securities Co. Ltd. | 9,000 | 13,934 | ||||||
980,390 | ||||||||
ELECTRIC – 0.26% | ||||||||
Okinawa Electric Power Co. Inc. (The) | 1,800 | 95,284 | ||||||
95,284 |
36 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
ELECTRICAL COMPONENTS & |
| |||||||
Fujikura Ltd. | 36,000 | $ | 156,484 | |||||
Funai Electric Co. Ltd. | 1,800 | 54,598 | ||||||
Hitachi Cable Ltd. | 18,000 | 43,944 | ||||||
Icom Inc. | 900 | 23,623 | ||||||
Nippon Signal Co. Ltd. (The) | 4,500 | 32,047 | ||||||
NPC Inc. | 900 | 17,910 | ||||||
Sinfonia Technology Co. Ltd. | 18,000 | 35,155 | ||||||
SWCC Showa Holdings Co. Ltd.b | 9,000 | 7,824 | ||||||
Takaoka Electric Manufacturing | 9,000 | 28,617 | ||||||
Tokyo Rope Manufacturing Co. Ltd. | 18,000 | 40,300 | ||||||
Toshiba Tec Corp. | 18,000 | 64,523 | ||||||
505,025 | ||||||||
ELECTRONICS – 5.82% |
| |||||||
Alps Electric Co. Ltd.b | 18,000 | 124,116 | ||||||
Anritsu Corp.b | 18,000 | 107,824 | ||||||
Chiyoda Integre Co. Ltd. | 2,700 | 28,971 | ||||||
CMK Corp.a | 5,400 | 24,180 | ||||||
Cosel Co. Ltd. | 4,500 | 53,162 | ||||||
Dai-ichi Seiko Co. Ltd. | 900 | 35,531 | ||||||
Dainippon Screen Manufacturing | 27,000 | 118,328 | ||||||
Eizo Nanao Corp. | 2,700 | 52,669 | ||||||
Enplas Corp. | 900 | 14,277 | ||||||
FDK Corp.b | 9,000 | 12,326 | ||||||
Fujitsu General Ltd. | 9,000 | 44,909 | ||||||
Furuno Electric Co. Ltd. | 3,600 | 15,434 | ||||||
Futaba Corp. | 4,500 | 69,561 | ||||||
HORIBA Ltd. | 3,600 | 85,745 | ||||||
Hosiden Corp. | 7,200 | 67,138 | ||||||
IDEC Corp. | 900 | 8,221 | ||||||
JEOL Ltd. | 9,000 | 27,010 | ||||||
Kaga Electronics Co. Ltd. | 4,500 | 48,499 | ||||||
Koa Corp. | 5,400 | 48,360 | ||||||
Kuroda Electric Co. Ltd. | 3,600 | 40,943 | ||||||
Macnica Inc. | 2,700 | 47,846 | ||||||
Meiko Electronics Co. Ltd. | 900 | 14,695 | ||||||
Micronics Japan Co. Ltd. | 1,800 | 18,864 | ||||||
Nichicon Corp. | 8,100 | 86,817 | ||||||
Nihon Dempa Kogyo Co. Ltd. | 1,800 | 23,408 | ||||||
Nippon Ceramic Co. Ltd. | 900 | 13,773 |
Security | Shares | Value | ||||||
Nippon Chemi-Con Corp.b | 18,000 | $ | 71,811 | |||||
Nitto Kogyo Corp. | 3,600 | 29,582 | ||||||
Ryosan Co. Ltd. | 5,400 | 137,621 | ||||||
Sanshin Electronics Co. Ltd. | 3,600 | 30,525 | ||||||
Sanyo Denki Co. Ltd. | 9,000 | 34,512 | ||||||
SATO Corp. | 900 | 10,868 | ||||||
Shinko Shoji Co. Ltd. | 1,800 | 14,877 | ||||||
Star Micronics Co. Ltd. | 5,400 | 46,367 | ||||||
Taiyo Yuden Co. Ltd. | 9,000 | 99,250 | ||||||
Tamura Corp. | 9,000 | 22,830 | ||||||
TOKO Inc.b | 9,000 | 12,004 | ||||||
Tokyo Seimitsu Co. Ltd.b | 4,500 | 55,145 | ||||||
Toyo Corp. | 4,500 | 49,893 | ||||||
ULVAC Inc. | 3,600 | 59,550 | ||||||
Wacom Co. Ltd. | 45 | 50,589 | ||||||
Yamatake Corp. | 7,200 | 176,206 | ||||||
2,134,237 | ||||||||
ENGINEERING & CONSTRUCTION – 3.52% |
| |||||||
Chudenko Corp. | 3,600 | 38,885 | ||||||
COMSYS Holdings Corp. | 12,600 | 108,039 | ||||||
Japan Airport Terminal Co. Ltd. | 4,500 | 77,063 | ||||||
Kandenko Co. Ltd. | 9,000 | 53,162 | ||||||
Kyowa Exeo Corp. | 9,000 | 78,671 | ||||||
Maeda Corp. | 18,000 | 43,516 | ||||||
Maeda Road Construction | 9,000 | 64,952 | ||||||
Nippo Corp. | 9,000 | 59,057 | ||||||
Nippon Road Co. Ltd. (The) | 9,000 | 17,149 | ||||||
Nishimatsu Construction Co. Ltd. | 36,000 | 42,015 | ||||||
Okumura Corp. | 18,000 | 59,593 | ||||||
Penta-Ocean Construction | 31,500 | 41,640 | ||||||
Shinko Plantech Co. Ltd. | 4,500 | 35,423 | ||||||
SHO-BOND Holdings Co. Ltd. | 3,600 | 75,241 | ||||||
Taihei Kogyo Co. Ltd. | 9,000 | 31,618 | ||||||
Taikisha Ltd. | 4,500 | 70,525 | ||||||
Takasago Thermal Engineering Co. Ltd. | 9,000 | 68,167 | ||||||
Takuma Co. Ltd.b | 9,000 | 17,149 | ||||||
Toa Corp. | 18,000 | 17,792 | ||||||
Toda Corp. | 27,000 | 85,531 | ||||||
Tokyu Construction Co. Ltd. | 11,340 | 29,981 | ||||||
Toshiba Plant Systems & | 9,000 | 103,108 | ||||||
Toyo Construction Co. Ltd. | 45,000 | 21,436 |
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Toyo Engineering Corp. | 18,000 | $ | 51,233 | |||||
1,290,946 | ||||||||
ENTERTAINMENT – 0.79% | ||||||||
Avex Group Holdings Inc. | 4,500 | 65,434 | ||||||
Resorttrust Inc. | 4,500 | 65,863 | ||||||
Shochiku Co. Ltd. | 9,000 | 61,415 | ||||||
Toei Co. Ltd. | 9,000 | 39,550 | ||||||
Tokyotokeiba Co. Ltd. | 18,000 | 25,509 | ||||||
Yomiuri Land Co. Ltd. | 9,000 | 30,654 | ||||||
288,425 | ||||||||
ENVIRONMENTAL CONTROL – 0.13% |
| |||||||
Asahi Holdings Inc. | 2,700 | 48,071 | ||||||
48,071 | ||||||||
FOOD – 4.17% | ||||||||
Ariake Japan Co. Ltd. | 2,700 | 41,704 | ||||||
Ezaki Glico Co. Ltd. | 9,000 | 116,077 | ||||||
Fuji Oil Co. Ltd. | 8,100 | 125,016 | ||||||
House Foods Corp. | 7,200 | 112,240 | ||||||
Itoham Foods Inc. | 18,000 | 63,666 | ||||||
J-Oil Mills Inc. | 9,000 | 24,973 | ||||||
Kato Sangyo Co. Ltd. | 2,700 | 40,772 | ||||||
Kewpie Corp. | 10,800 | 136,592 | ||||||
Maruha Nichiro Holdings Inc. | 45,000 | 72,883 | ||||||
MEGMILK SNOW BRAND | 4,500 | 84,887 | ||||||
Mitsui Sugar Co. Ltd. | 9,000 | 33,226 | ||||||
Morinaga & Co. Ltd. | 36,000 | 84,887 | ||||||
Morinaga Milk Industry Co. Ltd. | 27,000 | 116,720 | ||||||
Nichirei Corp. | 36,000 | 153,483 | ||||||
Nippon Beet Sugar Manufacturing | 18,000 | 39,657 | ||||||
Nippon Flour Mills Co. Ltd. | 18,000 | 93,033 | ||||||
Nippon Suisan Kaisha Ltd. | 26,100 | 82,369 | ||||||
Nisshin OilliO Group Ltd. (The) | 18,000 | 85,316 | ||||||
Prima Meat Packers Ltd. | 18,000 | 19,507 | ||||||
1,527,008 | ||||||||
FOREST PRODUCTS & PAPER – 1.31% |
| |||||||
Daio Paper Corp. | 9,000 | 64,309 | ||||||
Hokuetsu Kishu Paper Co. Ltd. | 13,500 | 64,791 | ||||||
Mitsubishi Paper Mills Ltd.b | 45,000 | 48,232 | ||||||
Rengo Co. Ltd. | 27,000 | 180,707 | ||||||
Sumitomo Forestry Co. Ltd. | 17,100 | 122,594 | ||||||
480,633 |
Security | Shares | Value | ||||||
GAS – 0.43% | ||||||||
Saibu Gas Co. Ltd. | 45,000 | $ | 130,761 | |||||
Shizuoka Gas Co. Ltd. | 4,500 | 28,457 | ||||||
159,218 | ||||||||
HAND & MACHINE TOOLS – 1.27% |
| |||||||
DISCO Corp. | 2,700 | 134,887 | ||||||
Hitachi Koki Co. Ltd. | 6,300 | 54,019 | ||||||
Meidensha Corp.a | 18,000 | 54,234 | ||||||
Mori Seiki Co. Ltd. | 10,800 | 91,961 | ||||||
OSG Corp. | 9,900 | 92,669 | ||||||
Union Tool Co. | 1,800 | 38,928 | ||||||
466,698 | ||||||||
HEALTH CARE – PRODUCTS – 1.36% |
| |||||||
Aloka Co. Ltd. | 900 | 5,798 | ||||||
Hogy Medical Co. Ltd. | 1,800 | 89,925 | ||||||
Nakanishi Inc. | 900 | 93,462 | ||||||
Nihon Kohden Corp. | 4,500 | 91,318 | ||||||
Nipro Corp. | 6,300 | 124,169 | ||||||
Paramount Bed Co. Ltd. | 2,700 | 64,244 | ||||||
Topcon Corp. | 7,200 | 29,925 | ||||||
498,841 | ||||||||
HEALTH CARE – SERVICES – 0.06% |
| |||||||
Message Co. Ltd. | 9 | 21,425 | ||||||
21,425 | ||||||||
HOME BUILDERS – 0.51% |
| |||||||
Haseko Corp.b | 121,500 | 101,286 | ||||||
PanaHome Corp. | 9,000 | 54,019 | ||||||
Token Corp. | 1,080 | 29,621 | ||||||
184,926 | ||||||||
HOME FURNISHINGS – 1.44% |
| |||||||
Alpine Electronics Inc.b | 5,400 | 61,736 | ||||||
Canon Electronics Inc. | 2,700 | 62,926 | ||||||
Daiwa Industries Ltd. | 9,000 | 39,657 | ||||||
Foster Electric Co. Ltd. | 2,700 | 57,910 | ||||||
France Bed Holdings Co. Ltd. | 18,000 | 25,295 | ||||||
Hoshizaki Electric Co. Ltd. | 1,800 | 32,090 | ||||||
Juki Corp.a,b | 18,000 | 27,653 | ||||||
JVC KENWOOD Holdings Inc.a,b | 7,740 | 18,988 | ||||||
Nidec Sankyo Corp. | 9,000 | 65,488 | ||||||
Noritz Corp. | 3,600 | 68,982 |
38 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Pioneer Corp.b | 22,500 | $ | 66,720 | |||||
527,445 | ||||||||
HOUSEHOLD PRODUCTS & WARES – 0.14% |
| |||||||
Pilot Corp. | 27 | 49,389 | ||||||
49,389 | ||||||||
HOUSEWARES – 0.36% | ||||||||
Noritake Co. Ltd. | 18,000 | 56,377 | ||||||
Sangetsu Co. Ltd. | 3,600 | 76,913 | ||||||
133,290 | ||||||||
INTERNET – 2.07% | ||||||||
Access Co. Ltd. | 27 | 36,752 | ||||||
CyberAgent Inc. | 63 | 101,061 | ||||||
Digital Garage Inc.b | 9 | 16,184 | ||||||
Dwango Co. Ltd. | 9 | 17,899 | ||||||
eAccess Ltd. | 153 | 111,511 | ||||||
En-Japan Inc. | 18 | 25,702 | ||||||
GMO Internet Inc. | 6,300 | 21,833 | ||||||
Gourmet Navigator Inc.a | 18 | 24,137 | ||||||
Index Holdingsb | 126 | 6,310 | ||||||
Internet Initiative Japan Inc. | 18 | 47,374 | ||||||
kabu.com Securities Co. Ltd. | 9,000 | 42,015 | ||||||
Kakaku.com Inc. | 18 | 87,996 | ||||||
Macromill Inc. | 9 | 13,891 | ||||||
Mixi Inc. | 9 | 48,339 | ||||||
Monex Group Inc. | 126 | 50,568 | ||||||
Opt Inc. | 9 | 12,111 | ||||||
So-net Entertainment Corp. | 18 | 46,517 | ||||||
Start Today Co. Ltd. | 9 | 22,326 | ||||||
VeriSign Japan K.K. | 36 | 13,248 | ||||||
Zappallas Inc. | 9 | 12,165 | ||||||
757,939 | ||||||||
IRON & STEEL – 1.18% | ||||||||
Aichi Steel Corp. | 18,000 | 81,672 | ||||||
Godo Steel Ltd. | 18,000 | 38,585 | ||||||
Kyoei Steel Ltd. | 1,800 | 24,759 | ||||||
Mitsubishi Steel Manufacturing | 18,000 | 35,370 | ||||||
Nakayama Steel Works Ltd.b | 18,000 | 24,437 | ||||||
Nippon Metal Industry Co. Ltd. | 18,000 | 23,151 | ||||||
Nippon Yakin Kogyo Co. Ltd.a,b | 13,500 | 39,228 | ||||||
Sanyo Special Steel Co. Ltd.b | 9,000 | 41,479 | ||||||
TOPY Industries Ltd. | 27,000 | 56,592 |
Security | Shares | Value | ||||||
Yodogawa Steel Works Ltd. | 18,000 | $ | 68,167 | |||||
433,440 | ||||||||
LEISURE TIME – 1.49% | ||||||||
Accordia Golf Co. Ltd. | 63 | 62,122 | ||||||
Daiichikosho Co. Ltd. | 5,400 | 83,022 | ||||||
Fields Corp. | 18 | 22,551 | ||||||
GLOBERIDE Inc. | 9,000 | 10,504 | ||||||
H.I.S. Co. Ltd. | 2,700 | 57,685 | ||||||
Heiwa Corp. | 5,400 | 66,817 | ||||||
Mars Engineering Corp. | 900 | 15,113 | ||||||
Mizuno Corp. | 9,000 | 40,407 | ||||||
PGM Holdings K.K. | 63 | 40,439 | ||||||
Roland Corp. | 2,700 | 26,817 | ||||||
Round One Corp. | 5,400 | 23,408 | ||||||
Tokyo Dome Corp. | 18,000 | 44,802 | ||||||
Universal Entertainment Corp.b | 2,700 | 53,055 | ||||||
546,742 | ||||||||
LODGING – 0.11% | ||||||||
Fujita Kanko Inc. | 9,000 | 41,693 | ||||||
41,693 | ||||||||
MACHINERY – 3.89% | ||||||||
Aida Engineering Ltd. | 9,900 | 31,951 | ||||||
Chugai Ro Co. Ltd. | 9,000 | 28,617 | ||||||
CKD Corp. | 8,100 | 48,039 | ||||||
Daifuku Co. Ltd. | 9,000 | 42,444 | ||||||
Daihen Corp. | 18,000 | 74,169 | ||||||
Fuji Machine Manufacturing | 4,500 | 71,275 | ||||||
Furukawa Co. Ltd.b | 36,000 | 34,727 | ||||||
Harmonic Drive Systems Inc. | 9 | 35,959 | ||||||
Iseki & Co. Ltd.a,b | 18,000 | 48,017 | ||||||
Komori Corp. | 7,200 | 68,939 | ||||||
Makino Milling Machine Co. Ltd.b | 9,000 | 50,054 | ||||||
Max Co. Ltd. | 9,000 | 105,895 | ||||||
Miura Co. Ltd. | 3,600 | 76,399 | ||||||
Modec Inc. | 2,700 | 35,273 | ||||||
Nabtesco Corp. | 9,000 | 135,263 | ||||||
Nippon Sharyo Ltd. | 9,000 | 38,907 | ||||||
Nippon Thompson Co. Ltd. | 9,000 | 51,233 | ||||||
Obara Corp. | 1,800 | 15,413 | ||||||
Okuma Corp.b | 18,000 | 87,245 | ||||||
Shima Seiki Manufacturing Ltd. | 2,700 | 50,482 | ||||||
Sintokogio Ltd. | 7,200 | 48,274 |
SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Tadano Ltd. | 18,000 | $ | 87,674 | |||||
Takeuchi Manufacturing Co. Ltd.b | 900 | 9,003 | ||||||
Toshiba Machine Co. Ltd. | 18,000 | 57,663 | ||||||
Toyo Kanetsu K.K. | 18,000 | 28,296 | ||||||
Tsubakimoto Chain Co. | 18,000 | 65,595 | ||||||
1,426,806 | ||||||||
MACHINERY – DIVERSIFIED – 0.56% |
| |||||||
Ebara Corp.b | 45,000 | 178,457 | ||||||
Torishima Pump Manufacturing | 1,800 | 26,581 | ||||||
205,038 | ||||||||
MANUFACTURING – 1.70% |
| |||||||
Achilles Corp. | 9,000 | 12,219 | ||||||
Amano Corp. | 9,000 | 69,346 | ||||||
Glory Ltd. | 7,200 | 153,741 | ||||||
Japan Cash Machine Co. Ltd. | 900 | 6,270 | ||||||
JSP Corp. | 900 | 9,271 | ||||||
Kureha Corp. | 18,000 | 91,533 | ||||||
Nikkiso Co. Ltd. | 9,000 | 58,842 | ||||||
Nippon Valqua Industries Ltd. | 9,000 | 23,044 | ||||||
Nitta Corp. | 3,600 | 48,532 | ||||||
Tamron Co. Ltd. | 1,800 | 32,497 | ||||||
Tenma Corp. | 3,600 | 35,841 | ||||||
Tokai Rubber Industries Ltd. | 3,600 | 37,256 | ||||||
Toyo Tanso Co. Ltd.a | 900 | 43,569 | ||||||
621,961 | ||||||||
MEDIA – 0.42% |
| |||||||
Gakken Holdings Co. Ltd. | 9,000 | 18,435 | ||||||
Kadokawa Group Holdings Inc. | 2,700 | 60,032 | ||||||
SKY Perfect JSAT Holdings Inc. | 180 | 63,408 | ||||||
Tohokushinsha Film Corp. | 900 | 4,159 | ||||||
USEN Corp.b | 11,880 | 7,781 | ||||||
153,815 | ||||||||
METAL FABRICATE & HARDWARE – 1.59% |
| |||||||
Kitz Corp. | 9,000 | 37,085 | ||||||
Misumi Group Inc. | 9,000 | 175,241 | ||||||
Mitsui High-Tech Inc.b | 900 | 4,759 | ||||||
Nachi-Fujikoshi Corp. | 27,000 | 66,238 | ||||||
Neturen Co. Ltd. | 5,400 | 37,235 | ||||||
Oiles Corp. | 4,580 | 69,815 | ||||||
Onoken Co. Ltd. | 1,800 | 13,591 | ||||||
Ryobi Ltd.b | 18,000 | 61,093 |
Security | Shares | Value | ||||||
Tocalo Co. Ltd. | 1,800 | $ | 25,466 | |||||
Toho Zinc Co. Ltd. | 18,000 | 63,237 | ||||||
Yamazen Corp. | 8,100 | 29,325 | ||||||
583,085 | ||||||||
MINING – 1.56% |
| |||||||
Nippon Coke & Engineering Co. Ltd. | 18,000 | 24,437 | ||||||
Nippon Denko Co. Ltd. | 9,000 | 67,203 | ||||||
Nippon Light Metal Co. Ltd.b | 63,000 | 100,536 | ||||||
Nittetsu Mining Co. Ltd. | 9,000 | 29,260 | ||||||
OSAKA Titanium technologies | 1,800 | 82,851 | ||||||
Pacific Metals Co. Ltd. | 18,000 | 129,475 | ||||||
Sumitomo Light Metal | 45,000 | 47,696 | ||||||
Toho Titanium Co. Ltd. | 3,600 | 89,603 | ||||||
571,061 | ||||||||
OFFICE & BUSINESS EQUIPMENT – 0.06% |
| |||||||
Riso Kagaku Corp. | 1,800 | 21,672 | ||||||
21,672 | ||||||||
OFFICE FURNISHINGS – 0.36% |
| |||||||
Kokuyo Co. Ltd. | 10,800 | 82,830 | ||||||
Okamura Corp. | 9,000 | 47,588 | ||||||
130,418 | ||||||||
OIL & GAS – 0.06% |
| |||||||
AOC Holdings Inc.b | 5,400 | 23,344 | ||||||
23,344 | ||||||||
PACKAGING & CONTAINERS – 0.41% |
| |||||||
FP Corp. | 1,800 | 97,535 | ||||||
Fuji Seal International Inc. | 2,700 | 53,441 | ||||||
150,976 | ||||||||
PHARMACEUTICALS – 3.96% |
| |||||||
EPS Co. Ltd. | 18 | 45,145 | ||||||
Kaken Pharmaceutical Co. Ltd. | 9,000 | 97,535 | ||||||
Kissei Pharmaceutical Co. Ltd. | 900 | 17,728 | ||||||
Kobayashi Pharmaceutical Co. Ltd. | 3,600 | 165,488 | ||||||
KYORIN Holdings Inc | 9,000 | 129,260 | ||||||
Miraca Holdings Inc. | 6,300 | 211,125 | ||||||
Mochida Pharmaceutical Co. Ltd. | 9,000 | 90,032 | ||||||
Nichi-Iko Pharmaceutical Co. Ltd. | 2,700 | 97,910 | ||||||
Nippon Shinyaku Co. Ltd. | 9,000 | 115,970 | ||||||
Rohto Pharmaceutical Co. Ltd. | 9,000 | 109,968 | ||||||
Sawai Pharmaceutical Co. Ltd. | 1,800 | 184,566 | ||||||
Seikagaku Corp. | 4,500 | 48,071 |
40 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Taiko Pharmaceutical Co. Ltd. | 900 | $ | 10,236 | |||||
Toho Holdings Co. Ltd. | 4,500 | 64,898 | ||||||
Towa Pharmaceutical Co. Ltd. | 900 | 53,805 | ||||||
Vital KSK Holdings Inc. | 1,800 | 10,225 | ||||||
1,451,962 | ||||||||
REAL ESTATE – 1.29% |
| |||||||
Airport Facilities Co. Ltd. | 1,800 | 6,538 | ||||||
Arnest One Corp. | 4,500 | 45,498 | ||||||
Daibiru Corp. | 6,300 | 46,517 | ||||||
Daikyo Inc.b | 27,000 | 37,942 | ||||||
Goldcrest Co. Ltd. | 2,160 | 45,042 | ||||||
Heiwa Real Estate Co. Ltd. | 22,500 | 53,859 | ||||||
Hulic Co. Ltd. | 6,300 | 43,365 | ||||||
Iida Home Max Co. Ltd. | 900 | 6,752 | ||||||
Leopalace21 Corp.b | 11,700 | 25,220 | ||||||
Sankei Building Co. Ltd. (The) | 3,600 | 19,721 | ||||||
Shoei Co. Ltd. | 3,600 | 25,509 | ||||||
Sumitomo Real Estate Sales | 900 | 37,996 | ||||||
TOC Co. Ltd. | 9,000 | 36,549 | ||||||
Toho Real Estate Co. Ltd. | 900 | 5,016 | ||||||
Tokyu Livable Inc. | 2,700 | 30,161 | ||||||
Touei Housing Corp. | 900 | 8,467 | ||||||
474,152 | ||||||||
REAL ESTATE INVESTMENT TRUSTS – 4.60% |
| |||||||
Advance Residence | 99 | 154,448 | ||||||
DA Office Investment Corp. | 27 | 73,666 | ||||||
Frontier Real Estate | 18 | 140,407 | ||||||
Fukuoka REIT Corp. | 9 | 57,556 | ||||||
Global One Real Estate Investment Corp. Ltd. | 9 | 68,489 | ||||||
Hankyu REIT Inc. | 9 | 38,800 | ||||||
Japan Excellent Inc. | 18 | 86,174 | ||||||
Japan Logistics Fund Inc.a | 18 | 136,334 | ||||||
Kenedix Realty | 27 | 94,534 | ||||||
MID REIT Inc. | 18 | 38,821 | ||||||
Mori Hills REIT | 18 | 36,442 | ||||||
MORI TRUST Sogo REIT Inc. | 9 | 74,491 | ||||||
Nippon Accommodations | 18 | 104,609 | ||||||
Nippon Commercial | 27 | 27,846 | ||||||
Nomura Real Estate Residential | 9 | 37,728 | ||||||
ORIX JREIT Inc. | 27 | 127,492 |
Security | Shares | Value | ||||||
Premier Investment Corp. | 18 | $ | 78,028 | |||||
TOKYU REIT Inc. | 18 | 97,964 | ||||||
Top REIT Inc. | 18 | 96,570 | ||||||
United Urban Investment Corp. | 18 | 116,613 | ||||||
1,687,012 | ||||||||
RETAIL – 9.61% |
| |||||||
Alpen Co. Ltd. | 1,800 | 28,382 | ||||||
Aoki Holdings Inc. | 3,600 | 44,587 | ||||||
Aoyama Trading Co. Ltd. | 7,200 | 99,207 | ||||||
Arcs Co. Ltd. | 3,600 | 47,203 | ||||||
Askul Corp. | 2,700 | 50,643 | ||||||
Autobacs Seven Co. Ltd. | 3,600 | 134,834 | ||||||
Belluna Co. Ltd. | 3,150 | 15,531 | ||||||
Best Denki Co. Ltd.b | 9,000 | 21,115 | ||||||
BIC Camera Inc.a | 81 | 31,013 | ||||||
Cawachi Ltd. | 1,800 | 32,755 | ||||||
Chiyoda Co. Ltd. | 3,600 | 40,943 | ||||||
Circle K Sunkus Co. Ltd. | 6,300 | 86,206 | ||||||
cocokara fine HOLDINGS Inc. | 900 | 18,671 | ||||||
Colowide Co. Ltd. | 4,500 | 24,973 | ||||||
Culture Convenience Club | 10,800 | 47,331 | ||||||
Daiei Inc. (The)b | 8,100 | 32,797 | ||||||
DCM Holdings Co. Ltd. | 9,000 | 42,444 | ||||||
Don Quijote Co. Ltd. | 5,400 | 131,897 | ||||||
Doutor Nichires Holdings | 4,500 | 59,646 | ||||||
Duskin Co. Ltd. | 6,300 | 112,915 | ||||||
EDION Corp. | 9,000 | 62,058 | ||||||
Fuji Co. Ltd. | 1,800 | 34,448 | ||||||
GEO Corp. | 45 | 52,894 | ||||||
Gulliver International Co. Ltd. | 450 | 17,524 | ||||||
H2O Retailing Corp. | 9,000 | 54,126 | ||||||
Heiwado Co. Ltd. | 4,500 | 53,430 | ||||||
Honeys Co. Ltd. | 2,340 | 35,196 | ||||||
Izumi Co. Ltd. | 6,300 | 77,803 | ||||||
Izumiya Co. Ltd. | 9,000 | 36,656 | ||||||
Joshin Denki Co. Ltd. | 9,000 | 84,244 | ||||||
Kasumi Co. Ltd. | 900 | 4,802 | ||||||
Keiyo Co. Ltd. | 4,500 | 24,062 | ||||||
Kisoji Co. Ltd. | 3,600 | 78,285 | ||||||
Kohnan Shoji Co. Ltd. | 2,700 | 28,778 | ||||||
Kojima Co. Ltd. | 900 | 4,427 | ||||||
Komeri Co. Ltd. | 3,600 | 82,872 |
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
K’s Holdings Corp. | 5,400 | $ | 116,720 | |||||
Kura Corp. | 900 | 15,531 | ||||||
Maruetsu Inc. (The) | 9,000 | 36,763 | ||||||
Matsumotokiyoshi Co. Ltd. | 4,500 | 85,477 | ||||||
Matsuya Co. Ltd.b | 3,600 | 25,809 | ||||||
Megane Top Co. Ltd. | 1,800 | 11,897 | ||||||
MOS Food Services Inc. | 3,600 | 64,652 | ||||||
Nishimatsuya Chain Co. Ltd. | 6,300 | 54,770 | ||||||
Nissen Holdings Co. Ltd. | 6,300 | 27,085 | ||||||
Parco Co. Ltd. | 5,400 | 41,543 | ||||||
Paris Miki Holdings Inc. | 4,500 | 35,852 | ||||||
Plenus Co. Ltd. | 3,600 | 55,863 | ||||||
Point Inc. | 1,620 | 75,820 | ||||||
Right On Co. Ltd. | 2,700 | 15,691 | ||||||
Ringer Hut Co. Ltd. | 1,800 | 20,836 | ||||||
Ryohin Keikaku Co. Ltd. | 2,700 | 94,469 | ||||||
Saint Marc Holdings Co. Ltd. | 900 | 34,780 | ||||||
Saizeriya Co. Ltd. | 3,600 | 70,139 | ||||||
San-A & Co. Ltd. | 900 | 33,226 | ||||||
Sankyo-Tateyama Holdings Inc.b | 45,000 | 48,767 | ||||||
Seiko Holdings Corp.b | 9,000 | 25,831 | ||||||
Senshukai Co. Ltd. | 5,400 | 31,768 | ||||||
Shimachu Co. Ltd. | 5,400 | 106,238 | ||||||
Sugi Holdings Co. Ltd. | 3,600 | 78,028 | ||||||
Sundrug Co. Ltd. | 3,600 | 97,406 | ||||||
Toridoll Corp. | 9 | 15,316 | ||||||
Tsuruha Holdings Inc. | 1,800 | 74,062 | ||||||
Valor Co. Ltd. | 4,500 | 33,119 | ||||||
Watami Co. Ltd. | 3,600 | 70,525 | ||||||
Xebio Co. Ltd. | 2,700 | 49,068 | ||||||
Yoshinoya Holdings Co. Ltd. | 54 | 63,408 | ||||||
Zensho Co. Ltd. | 8,100 | 76,592 | ||||||
3,521,749 | ||||||||
SEMICONDUCTORS – 0.37% |
| |||||||
Megachips Corp. | 1,800 | 32,197 | ||||||
Mimasu Semiconductor Industry | 2,700 | 26,752 | ||||||
Sanken Electric Co. Ltd.b | 9,000 | 28,510 | ||||||
Shindengen Electric Manufacturing Co. Ltd.b | 9,000 | 29,904 | ||||||
Shinkawa Ltd. | 900 | 9,861 |
Security | Shares | Value | ||||||
THine Electronics Inc. | 9 | $ | 9,432 | |||||
136,656 | ||||||||
SHIPBUILDING – 0.52% |
| |||||||
Hitachi Zosen Corp. | 94,500 | 128,296 | ||||||
Namura Shipbuilding Co. Ltd. | 5,400 | 27,010 | ||||||
Sasebo Heavy Industries Co. Ltd. | 18,000 | 36,013 | ||||||
191,319 | ||||||||
SOFTWARE – 1.20% |
| |||||||
Capcom Co. Ltd. | 5,400 | 78,714 | ||||||
Fuji Soft Inc. | 3,600 | 54,577 | ||||||
NEC Mobiling Ltd. | 900 | 24,759 | ||||||
Nihon Unisys Ltd. | 7,200 | 49,218 | ||||||
NSD Co. Ltd. | 4,500 | 48,499 | ||||||
Obic Business Consultants Co. Ltd. | 900 | 46,141 | ||||||
Simplex Technology Inc. | 18 | 11,768 | ||||||
Sumisho Computer Systems Corp. | 2,700 | 41,672 | ||||||
Tecmo Koei Holdings Co. Ltd. | 5,400 | 34,662 | ||||||
Trans Cosmos Inc. | 3,600 | 29,239 | ||||||
Works Applications Co. Ltd. | 45 | 21,517 | ||||||
440,766 | ||||||||
STORAGE & WAREHOUSING – 0.50% |
| |||||||
Mitsui-Soko Co. Ltd. | 18,000 | 64,952 | ||||||
Shibusawa Warehouse | 9,000 | 32,047 | ||||||
Sumitomo Warehouse | 18,000 | 86,174 | ||||||
183,173 | ||||||||
TELECOMMUNICATIONS – 1.35% |
| |||||||
AIPHONE Co. Ltd. | 900 | 14,341 | ||||||
Daimei Telecom | 3,600 | 24,266 | ||||||
Denki Kogyo Co. Ltd. | 9,000 | 40,622 | ||||||
Hikari Tsushin Inc. | 2,700 | 47,717 | ||||||
Hitachi Kokusai Electric Inc. | 9,000 | 67,846 | ||||||
IT Holdings Corp. | 9,048 | 102,150 | ||||||
Japan Radio Co. Ltd. | 9,000 | 20,686 | ||||||
MTI Ltd. | 9 | 10,300 | ||||||
Oki Electric Industry Co. Ltd.b | 90,000 | 69,668 | ||||||
Okinawa Cellular Telephone Co. | 18 | 36,506 | ||||||
Telepark Corp. | 27 | 42,315 | ||||||
Uniden Corp.b | 9,000 | 19,293 | ||||||
495,710 |
42 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
TEXTILES – 0.96% |
| |||||||
Daiwabo Holdings Co. Ltd. | 18,000 | $ | 37,513 | |||||
Kurabo Industries Ltd. | 27,000 | 42,444 | ||||||
Nitto Boseki Co. Ltd. | 36,000 | 69,882 | ||||||
Seiren Co. Ltd. | 7,200 | 42,358 | ||||||
Toyobo Co. Ltd. | 72,000 | 110,611 | ||||||
Unitika Ltd.b | 63,000 | 50,268 | ||||||
353,076 | ||||||||
TOYS, GAMES & HOBBIES – 0.44% |
| |||||||
Sanrio Co. Ltd. | 5,400 | 90,804 | ||||||
Tomy Co. Ltd. | 9,000 | 69,453 | ||||||
160,257 | ||||||||
TRANSPORTATION – 2.86% |
| |||||||
Daiichi Chuo Kisen Kaishab | 9,000 | 22,079 | ||||||
Fukuyama Transporting | 18,000 | 91,961 | ||||||
Hitachi Transport System Ltd. | 5,400 | 78,842 | ||||||
Iino Kaiun Kaisha Ltd. | 10,800 | 56,077 | ||||||
Inui Steamship Co. Ltd. | 2,700 | 15,177 | ||||||
Kintetsu World Express Inc. | 1,800 | 42,787 | ||||||
Nippon Konpo Unyu Soko | 9,000 | 105,895 | ||||||
Nishi-Nippon Railroad | 36,000 | 157,771 | ||||||
Sankyu Inc. | 27,000 | 103,215 | ||||||
Seino Holdings Co. Ltd. | 18,000 | 112,111 | ||||||
Shinwa Kaiun Kaisha Ltd. | 9,000 | 22,401 | ||||||
Sotetsu Holdings Inc. | 45,000 | 215,970 | ||||||
Yusen Air & Sea Service | 1,800 | 25,123 | ||||||
1,049,409 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $39,920,860) |
| 36,551,728 | ||||||
SHORT-TERM INVESTMENTS – 1.41% |
| |||||||
MONEY MARKET FUNDS – 1.41% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares 0.31%c,d,e | 424,518 | 424,518 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares 0.30%c,d,e | 82,493 | 82,493 |
Security | Shares | Value | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares 0.13%c,d | 7,839 | $ | 7,839 | |||||
514,850 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $514,850) | 514,850 | |||||||
TOTAL INVESTMENTS |
| |||||||
IN SECURITIES – 101.10% |
| |||||||
(Cost: $40,435,710) | 37,066,578 | |||||||
Other Assets, Less Liabilities – (1.10)% |
| (402,265) | ||||||
NET ASSETS – 100.00% |
| $ | 36,664,313 | |||||
a | All or a portion of this security represents a security on loan. See Note 5. |
b | Non-income earning security. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
iSHARES® MSCI MALAYSIA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.77% |
| |||||||
AGRICULTURE – 10.68% |
| |||||||
British American Tobacco | ||||||||
(Malaysia) Bhd | 1,060,800 | $ | 15,245,313 | |||||
Genting Plantations Bhd | 1,795,200 | 4,170,294 | ||||||
IOI Corp. Bhd | 26,683,230 | 44,639,981 | ||||||
Kuala Lumpur Kepong Bhd | 3,835,200 | 20,727,177 | ||||||
84,782,765 | ||||||||
AIRLINES – 1.25% |
| |||||||
AirAsia Bhda | 9,955,200 | 5,329,489 | ||||||
Malaysian Airline | 6,691,800 | 4,584,666 | ||||||
9,914,155 | ||||||||
AUTO PARTS & EQUIPMENT – 1.21% |
| |||||||
UMW Holdings Bhd | 4,569,600 | 9,610,554 | ||||||
9,610,554 | ||||||||
BANKS – 28.86% |
| |||||||
Alliance Financial | 7,425,600 | 7,264,341 | ||||||
AMMB Holdings Bhd | 14,443,237 | 26,049,973 | ||||||
CIMB Group Holdings Bhd | 31,008,064 | 77,071,809 | ||||||
Hong Leong Bank Bhd | 3,753,600 | 10,573,690 | ||||||
Malayan Banking Bhd | 25,459,220 | 68,066,490 | ||||||
Public Bank Bhd Foreign | 8,486,400 | 32,937,990 | ||||||
RHB Capital Bhd | 3,427,200 | 7,262,521 | ||||||
229,226,814 | ||||||||
BUILDING MATERIALS – 0.81% |
| |||||||
Lafarge Malayan | 2,692,860 | 6,418,620 | ||||||
6,418,620 | ||||||||
COMMERCIAL SERVICES – 2.02% |
| |||||||
PLUS Expressways Bhd | 11,995,200 | 16,053,994 | ||||||
16,053,994 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 1.32% |
| |||||||
Bursa Malaysia Bhd | 2,529,600 | 5,779,594 | ||||||
Hong Leong Financial | 1,713,600 | 4,745,211 | ||||||
10,524,805 | ||||||||
ELECTRIC – 7.10% |
| |||||||
Tenaga Nasional Bhd | 15,585,650 | 44,003,269 | ||||||
YTL Power | 17,217,675 | 12,344,779 | ||||||
56,348,048 |
Security | Shares | Value | ||||||
ENGINEERING & CONSTRUCTION – 5.67% |
| |||||||
Gamuda Bhd | 12,892,800 | $ | 14,215,091 | |||||
IJM Corp. Bhd | 8,486,440 | 13,494,363 | ||||||
MMC Corp. Bhd | 6,038,400 | 4,868,203 | ||||||
YTL Corp. Bhd | 5,304,021 | 12,439,684 | ||||||
45,017,341 | ||||||||
ENTERTAINMENT – 2.43% |
| |||||||
Berjaya Sports Toto Bhd | 5,385,650 | 7,105,011 | ||||||
Tanjong PLC | 1,795,200 | 12,196,251 | ||||||
19,301,262 | ||||||||
FOOD – 2.29% |
| |||||||
PPB Group Bhd | 3,345,666 | 18,209,447 | ||||||
18,209,447 | ||||||||
GAS – 1.65% |
| |||||||
Petronas Gas Bhd | 3,916,800 | 13,105,301 | ||||||
13,105,301 | ||||||||
HOLDING COMPANIES – DIVERSIFIED – 7.74% |
| |||||||
Berjaya Corp. Bhd | 12,892,800 | 3,902,987 | ||||||
Sime Darby Bhd | 21,624,025 | 57,537,278 | ||||||
61,440,265 | ||||||||
IRON & STEEL – 0.83% |
| |||||||
Parkson Holdings Bhd | 3,753,633 | 6,578,711 | ||||||
6,578,711 | ||||||||
LODGING – 9.60% |
| |||||||
Genting Bhd | 17,788,800 | 53,567,917 | ||||||
Genting Malaysia Bhd | 23,582,400 | 22,694,533 | ||||||
76,262,450 | ||||||||
OIL & GAS – 0.85% |
| |||||||
Petronas Dagangan Bhd | 1,958,400 | 6,714,907 | ||||||
6,714,907 | ||||||||
REAL ESTATE – 0.85% |
| |||||||
SP Setia Bhd | 4,896,000 | 6,755,471 | ||||||
6,755,471 | ||||||||
TELECOMMUNICATIONS – 11.47% |
| |||||||
Axiata Group Bhda | 20,236,800 | 28,825,421 | ||||||
DiGi.Com Bhd | 2,774,400 | 21,872,331 | ||||||
Maxis Communications Bhd | 17,952,000 | 30,776,655 | ||||||
Telekom Malaysia Bhd | 8,568,000 | 9,637,857 | ||||||
91,112,264 |
44 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI MALAYSIA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
TRANSPORTATION – 3.14% |
| |||||||
MISC Bhd | 8,894,420 | $ | 24,913,389 | |||||
24,913,389 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $439,490,666) | 792,290,563 | |||||||
SHORT-TERM INVESTMENTS – 0.05% |
| |||||||
MONEY MARKET FUNDS – 0.05% |
| |||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares 0.13%b,c | 437,397 | 437,397 | ||||||
437,397 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $437,397) | 437,397 | |||||||
TOTAL INVESTMENTS |
| |||||||
IN SECURITIES – 99.82% |
| |||||||
(Cost: $439,928,063) |
| 792,727,960 | ||||||
Other Assets, Less |
| 1,414,230 | ||||||
NET ASSETS – 100.00% |
| $ | 794,142,190 | |||||
a | Non-income earning security. |
b | Affiliated issuer. See Note 2. |
c | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.16% |
| |||||||
AUSTRALIA – 64.80% | ||||||||
AGL Energy Ltd. | 1,281,588 | $ | 17,132,975 | |||||
Alumina Ltd. | 6,947,556 | 10,604,998 | ||||||
Amcor Ltd. | 3,477,720 | 20,862,623 | ||||||
AMP Ltd. | 5,900,736 | 26,469,828 | ||||||
Aristocrat Leisure Ltd. | 1,139,092 | 3,771,518 | ||||||
Asciano Groupa | 8,331,636 | 12,421,084 | ||||||
ASX Ltd. | 489,684 | 12,687,397 | ||||||
Australia and New Zealand | ||||||||
Banking Group Ltd. | 7,214,444 | 145,055,267 | ||||||
AXA Asia Pacific | 2,943,068 | 14,407,127 | ||||||
Bendigo and Adelaide | 991,048 | 7,435,954 | ||||||
BGP Holdings PLCb | 27,004,595 | 3,432 | ||||||
BHP Billiton Ltd. | 9,556,576 | 315,141,019 | ||||||
Billabong International Ltd. | 576,700 | 3,880,486 | ||||||
BlueScope Steel Ltd.a | 5,191,176 | 9,887,669 | ||||||
Boral Ltd. | 2,046,628 | 8,015,046 | ||||||
Brambles Ltd. | 4,050,040 | 21,123,765 | ||||||
Caltex Australia Ltd. | 384,564 | 3,847,241 | ||||||
CFS Retail Property Trust | 5,004,296 | 8,618,633 | ||||||
Coca-Cola Amatil Ltd. | 1,609,504 | 17,090,191 | ||||||
Cochlear Ltd. | 160,892 | 9,909,573 | ||||||
Commonwealth Bank | 4,410,368 | 197,450,036 | ||||||
Computershare Ltd. | 1,266,404 | 10,696,776 | ||||||
Crown Ltd. | 1,287,428 | 9,487,847 | ||||||
CSL Ltd. | 1,639,288 | 48,090,232 | ||||||
CSR Ltd. | 4,313,424 | 6,545,773 | ||||||
Dexus Property Group | 13,728,380 | 10,141,724 | ||||||
Energy Resources of | ||||||||
Australia Ltd. | 190,092 | 2,224,867 | ||||||
Fairfax Media Ltd.c | 5,992,716 | 7,680,696 | ||||||
Fortescue Metals | 3,538,164 | 14,737,989 | ||||||
Foster’s Group Ltd. | 5,496,900 | 29,648,646 | ||||||
Goodman Fielder Ltd. | 3,930,612 | 4,687,911 | ||||||
Goodman Group | 17,980,192 | 10,162,076 | ||||||
GPT Group | 5,019,188 | 13,357,312 | ||||||
Harvey Norman | 1,512,560 | 4,644,576 | ||||||
Incitec Pivot Ltd. | 4,626,740 | 13,877,761 | ||||||
Insurance Australia | 5,919,716 | 18,124,821 | ||||||
Intoll Group | 6,439,768 | 8,454,280 |
Security | Shares | Value | ||||||
James Hardie | 1,241,000 | $ | 5,887,263 | |||||
Leighton Holdings Ltd. | 385,440 | 10,531,969 | ||||||
Lend Lease Group | 1,529,788 | 9,449,419 | ||||||
Macarthur Coal Ltd. | 361,788 | 3,632,266 | ||||||
Macquarie Group Ltd. | 981,704 | 32,731,261 | ||||||
MAp Group | 1,074,852 | 2,831,749 | ||||||
Metcash Ltd. | 2,180,072 | 8,518,238 | ||||||
Mirvac Group | 9,311,296 | 11,105,276 | ||||||
National Australia | 6,040,020 | 124,721,339 | ||||||
Newcrest Mining Ltd. | 2,187,956 | 72,540,286 | ||||||
OneSteel Ltd. | 3,791,620 | 9,719,226 | ||||||
Orica Ltd. | 1,028,132 | 22,922,977 | ||||||
Origin Energy Ltd. | 2,507,988 | 34,041,580 | ||||||
OZ Minerals Ltd.a | 8,887,312 | 9,650,386 | ||||||
Paladin Energy Ltd.a | 1,939,756 | 6,405,240 | ||||||
Qantas Airways Ltd.a | 3,160,024 | 7,059,574 | ||||||
QBE Insurance | 2,947,740 | 43,263,757 | ||||||
Rio Tinto Ltd. | 1,240,708 | 77,399,837 | ||||||
Santos Ltd. | 2,373,084 | 29,992,720 | ||||||
Sims Metal | 464,572 | 6,863,972 | ||||||
Sonic Healthcare Ltd. | 1,048,572 | 10,312,761 | ||||||
SP AusNet | 3,850,896 | 2,741,992 | ||||||
Stockland Corp. Ltd. | 6,785,496 | 23,795,357 | ||||||
Suncorp-Metway Ltd. | 3,649,124 | 27,119,989 | ||||||
Tabcorp Holdings Ltd. | 1,744,408 | 9,921,180 | ||||||
Tatts Group Ltd. | 3,650,292 | 7,764,972 | ||||||
Telstra Corp. Ltd. | 12,401,240 | 30,353,740 | ||||||
Toll Holdings Ltd. | 1,901,504 | 10,273,072 | ||||||
Transurban Group | 3,625,764 | 15,716,032 | ||||||
Wesfarmers Ltd. | 2,862,184 | 81,417,680 | ||||||
Wesfarmers Ltd. | ||||||||
Partially Protected | 432,744 | 12,390,719 | ||||||
Westfield Group | 6,242,668 | 69,509,146 | ||||||
Westpac Banking Corp. | 8,477,636 | 163,737,782 | ||||||
Woodside Petroleum Ltd. | 1,549,352 | 57,738,761 | ||||||
Woolworths Ltd. | 3,532,908 | 87,290,342 | ||||||
WorleyParsons Ltd. | 543,996 | 10,056,494 | ||||||
2,227,787,503 | ||||||||
HONG KONG – 20.09% |
| |||||||
ASM Pacific | 584,000 | 4,726,207 | ||||||
Bank of East Asia | 4,321,720 | 16,251,245 | ||||||
BOC Hong Kong | 10,512,000 | 27,636,485 |
46 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Cathay Pacific Airways Ltd. | 3,212,000 | $ | 7,920,057 | |||||
Cheung Kong (Holdings) Ltd. | 4,088,000 | 51,451,463 | ||||||
Cheung Kong Infrastructure | ||||||||
Holdings Ltd. | 1,168,000 | 4,497,217 | ||||||
CLP Holdings Ltd. | 5,548,000 | 42,473,922 | ||||||
Esprit Holdings Ltd. | 3,299,611 | 18,494,959 | ||||||
Foxconn International | ||||||||
Holdings Ltd.a,c | 6,132,000 | 4,075,650 | ||||||
Hang Lung Group Ltd. | 2,336,000 | 13,964,646 | ||||||
Hang Lung Properties Ltd.c | 5,840,736 | 26,093,151 | ||||||
Hang Seng Bank Ltd. | 2,190,000 | 30,040,882 | ||||||
Henderson Land Development | ||||||||
Co. Ltd. | 3,212,056 | 19,655,958 | ||||||
Hong Kong and China Gas | ||||||||
Co. Ltd. (The)c | 12,264,627 | 29,579,534 | ||||||
Hong Kong Exchanges and | ||||||||
Clearing Ltd. | 2,920,000 | 45,760,494 | ||||||
Hongkong Electric | 3,942,000 | 23,945,427 | ||||||
Hopewell Holdings Ltd.c | 1,606,000 | 5,048,107 | ||||||
Hutchison Whampoa Ltd. | 6,132,000 | 45,328,791 | ||||||
Hysan Development Co. Ltd. | 1,752,000 | 5,552,073 | ||||||
Kerry Properties Ltd.c | 2,044,000 | 10,300,803 | ||||||
Li & Fung Ltd.c | 6,425,600 | 32,547,231 | ||||||
Lifestyle International | ||||||||
Holdings Ltd. | 1,606,000 | 3,476,897 | ||||||
Link REIT (The) | 6,278,000 | 18,321,090 | ||||||
Mongolia Energy Corp. Ltd.a | 8,760,000 | 3,457,376 | ||||||
MTR Corp. Ltd. | 4,088,000 | 14,610,323 | ||||||
New World Development | ||||||||
Co. Ltd. | 7,300,941 | 11,713,794 | ||||||
NWS Holdings Ltd. | 2,336,000 | 4,240,447 | ||||||
Orient Overseas | ||||||||
International Ltd.a,c | 584,000 | 4,677,406 | ||||||
PCCW Ltd.c | 10,512,000 | 3,432,600 | ||||||
Sands China Ltd.a | 6,891,200 | 10,702,024 | ||||||
Shangri-La Asia Ltd. | 3,504,000 | 7,658,032 | ||||||
Sino Land Co. Ltd. | 4,672,000 | 8,156,555 | ||||||
Sun Hung Kai Properties Ltd. | 4,088,000 | 57,285,081 | ||||||
Swire Pacific Ltd. Class Ac | 2,190,000 | 26,394,870 | ||||||
Television Broadcasts Ltd. | 876,000 | 4,358,321 | ||||||
Wharf (Holdings) Ltd. (The) | 3,796,000 | 20,423,295 | ||||||
Wheelock and Co. Ltd. | 2,628,000 | 7,584,830 | ||||||
Wing Hang Bank Ltd.c | 438,000 | 4,628,604 |
Security | Shares | Value | ||||||
Wynn Macau Ltd.a | 4,438,400 | $ | 7,657,431 | |||||
Yue Yuen Industrial | ||||||||
(Holdings) Ltd. | 2,044,000 | 6,700,778 | ||||||
690,824,056 | ||||||||
NEW ZEALAND – 0.79% |
| |||||||
Auckland International Airport Ltd. | 2,611,940 | 3,659,589 | ||||||
Contact Energy Ltd.a | 861,108 | 3,408,358 | ||||||
Fletcher Building Ltd. | 1,728,348 | 9,105,172 | ||||||
Sky City Entertainment | ||||||||
Group Ltd. | 1,637,536 | 3,292,395 | ||||||
Telecom Corp. of New | ||||||||
Zealand Ltd. | 5,351,776 | 7,723,325 | ||||||
27,188,839 | ||||||||
SINGAPORE – 13.48% |
| |||||||
Ascendas Real Estate | ||||||||
Investment Trustc | 4,380,813 | 6,693,942 | ||||||
CapitaLand Ltd. | 7,300,000 | 21,069,609 | ||||||
CapitaMall Trust | ||||||||
Management Ltd. | 6,424,781 | 9,200,616 | ||||||
CapitaMalls Asia Ltd. | 3,796,000 | 5,884,403 | ||||||
City Developments Ltd. | 1,460,000 | 11,790,359 | ||||||
ComfortDelGro Corp. Ltd. | 5,256,000 | 5,780,940 | ||||||
COSCO Corp. | 2,920,104 | 3,405,746 | ||||||
DBS Group Holdings Ltd. | 4,964,000 | 50,860,205 | ||||||
Fraser and Neave Ltd. | 2,628,150 | 10,767,131 | ||||||
Genting Singapore PLCa | 17,228,400 | 21,492,578 | ||||||
Golden Agri-Resources Ltd. | 18,980,987 | 7,846,278 | ||||||
Jardine Cycle & | 292,000 | 7,009,552 | ||||||
Keppel Corp. Ltd. | 3,504,000 | 23,149,627 | ||||||
Keppel Land Ltd.c | 2,044,000 | 5,854,226 | ||||||
Neptune Orient Lines Ltd.a,c | 2,628,750 | 3,706,291 | ||||||
Noble Group Ltd. | 8,468,708 | 9,814,624 | ||||||
Olam International Ltd. | 3,504,600 | 6,907,273 | ||||||
Oversea-Chinese Banking | ||||||||
Corp. Ltd. | 7,008,600 | 44,854,626 | ||||||
SembCorp Industries Ltd. | 2,920,240 | 9,183,009 | ||||||
SembCorp Marine Ltd. | 2,336,200 | 6,570,401 | ||||||
Singapore Airlines Ltd. | 1,460,800 | 16,282,631 | ||||||
Singapore Exchange Ltd.c | 2,336,000 | 12,967,240 | ||||||
Singapore Press | 4,380,517 | 13,192,965 |
SCHEDULESOF INVESTMENTS | 47 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Singapore Technologies | ||||||||
Engineering Ltd. | 4,672,000 | $ | 11,035,949 | |||||
Singapore | ||||||||
Telecommunications Ltd. | 22,776,328 | 51,783,487 | ||||||
StarHub Ltd. | 1,752,000 | 3,181,457 | ||||||
United Overseas | 3,504,000 | 48,420,226 | ||||||
UOL Group Ltd. | 1,460,000 | 4,300,140 | ||||||
Wilmar | 5,548,000 | 25,637,027 | ||||||
Yangzijiang Shipbuilding | ||||||||
(Holdings) Ltd. | 4,088,000 | 4,798,051 | ||||||
463,440,609 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $3,068,279,054) |
| 3,409,241,007 | ||||||
SHORT-TERM INVESTMENTS – 1.53% |
| |||||||
MONEY MARKET FUNDS – 1.53% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares 0.31%d,e,f | 43,685,525 | 43,685,525 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares 0.30%d,e,f | 8,488,991 | 8,488,991 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares 0.13%d,e | 297,340 | 297,340 | ||||||
52,471,856 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $52,471,856) |
| 52,471,856 | ||||||
TOTAL INVESTMENTS |
| |||||||
IN SECURITIES – 100.69% |
| |||||||
(Cost: $3,120,750,910) |
| 3,461,712,863 | ||||||
Other Assets, Less |
| (23,564,193) | ||||||
NET ASSETS – 100.00% |
| $ | 3,438,148,670 | |||||
a | Non-income earning security. |
b | Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1. |
c | All or a portion of this security represents a security on loan. See Note 5. |
d | Affiliated issuer. See Note 2. |
e | The rate quoted is the annualized seven-day yield of the fund at period end. |
f | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
48 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI SINGAPORE INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.18% |
| |||||||
AGRICULTURE – 6.45% |
| |||||||
Golden Agri-Resources Ltd. | 73,892,628 | $ | 30,545,414 | |||||
Wilmar International Ltd. | 17,546,000 | 81,079,176 | ||||||
111,624,590 | ||||||||
AIRLINES – 3.66% |
| |||||||
Singapore Airlines Ltd. | 5,684,467 | 63,361,225 | ||||||
63,361,225 | ||||||||
BANKS – 30.62% |
| |||||||
DBS Group Holdings Ltd. | 18,473,500 | 189,275,987 | ||||||
Oversea-Chinese Banking | ||||||||
Corp. Ltd. | 25,578,000 | 163,697,690 | ||||||
United Overseas Bank Ltd. | 12,789,000 | 176,725,533 | ||||||
529,699,210 | ||||||||
BEVERAGES – 2.69% |
| |||||||
Fraser and Neave Ltd. | 11,368,000 | 46,572,968 | ||||||
46,572,968 | ||||||||
DISTRIBUTION & WHOLESALE – 1.97% |
| |||||||
Jardine Cycle & | 1,421,000 | 34,111,552 | ||||||
34,111,552 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 3.19% |
| |||||||
Singapore Exchange Ltd.a | 9,947,000 | 55,216,240 | ||||||
55,216,240 | ||||||||
ENGINEERING & CONSTRUCTION – 4.40% |
| |||||||
SembCorp Industries Ltd. | 11,368,000 | 35,747,900 | ||||||
Singapore Technologies | ||||||||
Engineering Ltd. | 17,052,000 | 40,279,324 | ||||||
76,027,224 | ||||||||
FOOD – 1.46% |
| |||||||
Olam International Ltd.a | 12,789,000 | 25,206,046 | ||||||
25,206,046 | ||||||||
HOLDING COMPANIES – DIVERSIFIED – 7.19% |
| |||||||
Keppel Corp. Ltd. | 13,089,000 | 86,474,164 | ||||||
Noble Group Ltd.a | 32,683,999 | 37,878,407 | ||||||
124,352,571 | ||||||||
MEDIA – 2.72% |
| |||||||
Singapore Press | 15,631,000 | 47,076,460 | ||||||
47,076,460 | ||||||||
REAL ESTATE – 14.18% |
| |||||||
CapitaLand Ltd. | 24,157,000 | 69,723,090 |
Security | Shares | Value | ||||||
CapitaMalls Asia Ltd. | 7,105,000 | $ | 11,013,878 | |||||
City Developments Ltd. | 5,684,000 | 45,901,646 | ||||||
Genting Singapore PLCb | 65,366,400 | 81,545,151 | ||||||
Keppel Land Ltd. | 7,105,000 | 20,349,450 | ||||||
UOL Group Ltd. | 5,684,000 | 16,741,094 | ||||||
245,274,309 | ||||||||
REAL ESTATE INVESTMENT TRUSTS – 3.51% |
| |||||||
Ascendas Real Estate | ||||||||
Investment Trusta | 17,052,335 | 26,056,199 | ||||||
CapitaMall Trust | ||||||||
Management Ltd. | 24,157,800 | 34,595,211 | ||||||
60,651,410 | ||||||||
SHIPBUILDING – 2.54% |
| |||||||
SembCorp Marine Ltd.a | 8,526,000 | 23,978,785 | ||||||
Yangzijiang Shipbuilding (Holdings) Ltd. | 17,052,000 | 20,013,789 | ||||||
43,992,574 | ||||||||
TELECOMMUNICATIONS – 11.76% |
| |||||||
Singapore Telecommunications Ltd. | 83,839,568 | 190,614,800 | ||||||
StarHub Ltd. | 7,105,000 | 12,901,971 | ||||||
203,516,771 | ||||||||
TRANSPORTATION – 2.84% |
| |||||||
ComfortDelGro | 19,894,000 | 21,880,903 | ||||||
COSCO Corp. (Singapore) Ltd.a | 11,368,000 | 13,258,611 | ||||||
Neptune Orient | 9,947,499 | 14,025,041 | ||||||
49,164,555 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $1,596,447,705) |
| 1,715,847,705 | ||||||
SHORT-TERM INVESTMENTS – 4.99% |
| |||||||
MONEY MARKET FUNDS – 4.99% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares 0.31%c,d,e | 71,934,665 | 71,934,665 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares 0.30%c,d,e | 13,978,377 | 13,978,377 |
SCHEDULESOF INVESTMENTS | 49 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SINGAPORE INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares 0.13%c,d | 363,421 | $ | 363,421 | |||||
86,276,463 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $86,276,463) |
| 86,276,463 | ||||||
TOTAL INVESTMENTS |
| |||||||
IN SECURITIES – 104.17% |
| |||||||
(Cost: $1,682,724,168) |
| 1,802,124,168 | ||||||
Other Assets, Less |
| (72,123,385) | ||||||
NET ASSETS – 100.00% |
| $ | 1,730,000,783 | |||||
a | All or a portion of this security represents a security on loan. See Note 5. |
b | Non-income earning security. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
50 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI SOUTH KOREA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 96.79% |
| |||||||
AGRICULTURE – 1.30% |
| |||||||
KT&G Corp. | 831,436 | $ | 42,303,441 | |||||
42,303,441 | ||||||||
AIRLINES – 0.51% |
| |||||||
Korean Air Lines | 272,602 | 16,575,766 | ||||||
16,575,766 | ||||||||
AUTO MANUFACTURERS – 5.70% |
| |||||||
Hyundai Motor Co. Ltd.b | 1,180,358 | 139,311,583 | ||||||
Kia Motors Corp. | 1,799,160 | 46,220,809 | ||||||
185,532,392 | ||||||||
AUTO PARTS & EQUIPMENT – 3.27% |
| |||||||
Hankook Tire Co. Ltd.b | 586,090 | 12,734,710 | ||||||
Hyundai Mobis Co. Ltd. | 517,946 | 93,747,837 | ||||||
106,482,547 | ||||||||
BANKS – 1.81% |
| |||||||
Busan Bank | 1,131,292 | 12,031,006 | ||||||
Daegu Bank | 954,100 | 11,101,589 | ||||||
Industrial Bank of Korea | 1,253,960 | 15,165,919 | ||||||
Korea Exchange Bank | 1,962,720 | 20,709,323 | ||||||
59,007,837 | ||||||||
BEVERAGES – 0.13% |
| |||||||
Hite Brewery Co. Ltd.b | 39,527 | 4,286,020 | ||||||
4,286,020 | ||||||||
BIOTECHNOLOGY – 0.22% |
| |||||||
Celltrion Inc.a,b | 417,078 | 7,183,803 | ||||||
7,183,803 | ||||||||
CHEMICALS – 5.91% |
| |||||||
Hanwha Chemical Corp.b | 640,610 | 14,346,800 | ||||||
Honam Petrochemical Corp.b | 109,040 | 17,007,657 | ||||||
KCC Corp.b | 40,890 | 10,163,667 | ||||||
Korea Zinc Co. Ltd.b | 68,150 | 15,148,865 | ||||||
LG Chem Ltd.b | 354,385 | 101,979,168 | ||||||
OCI Co. Ltd. | 109,040 | 33,833,414 | ||||||
192,479,571 | ||||||||
COMMERCIAL SERVICES – 0.18% |
| |||||||
S1 Corp.b | 122,678 | 5,934,877 | ||||||
5,934,877 |
Security | Shares | Value | ||||||
COMPUTERS – 0.26% | ||||||||
SK C&C Co. Ltd.b | 109,040 | $ | 8,312,833 | |||||
8,312,833 | ||||||||
COSMETICS & PERSONAL CARE – 0.77% |
| |||||||
AmorePacific Corp.b | 27,260 | 25,011,260 | ||||||
25,011,260 | ||||||||
DISTRIBUTION & WHOLESALE – 2.73% |
| |||||||
Daewoo International Corp.b | 381,643 | 10,616,226 | ||||||
Hanwha Corp. | 340,750 | 12,661,950 | ||||||
Hyosung Corp.b | 173,101 | 15,449,001 | ||||||
Samsung C&T Corp. | 954,100 | 44,883,844 | ||||||
SK Networks Co. Ltd. | 654,240 | 5,386,061 | ||||||
88,997,082 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 11.46% |
| |||||||
Daewoo Securities Co. Ltd. | 940,470 | 17,296,992 | ||||||
Hana Financial Group Inc. | 1,458,411 | 37,527,716 | ||||||
Hyundai Securities Co. Ltd. | 913,217 | 10,930,573 | ||||||
KB Financial Group Inc. | 2,507,920 | 101,663,952 | ||||||
Korea Investment Holdings | ||||||||
Co. Ltd. | 299,865 | 7,866,172 | ||||||
Mirae Asset Securities | 177,199 | 8,395,115 | ||||||
Samsung Card Co. Ltd. | 327,125 | 14,597,704 | ||||||
Samsung Securities Co. Ltd. | 381,640 | 18,462,858 | ||||||
Shinhan Financial Group | ||||||||
Co. Ltd. | 3,080,387 | 117,932,908 | ||||||
Tong Yang Securities Inc. | 545,200 | 4,442,909 | ||||||
Woori Finance Holdings | ||||||||
Co. Ltd. | 2,153,540 | 24,159,741 | ||||||
Woori Investment & | ||||||||
Securities Co. Ltd. | 654,240 | 9,577,039 | ||||||
372,853,679 | ||||||||
ELECTRIC – 1.47% |
| |||||||
Korea Electric Power Corp.a | 1,962,720 | 47,721,485 | ||||||
47,721,485 | ||||||||
ELECTRICAL COMPONENTS & |
| |||||||
LG Electronics Inc.b | 722,396 | 58,085,724 | ||||||
LG Innotek Co. Ltd.b | 68,150 | 7,503,378 | ||||||
LS Corp. | 136,300 | 13,358,287 | ||||||
LS Industrial Systems | 113,129 | 9,115,240 | ||||||
88,062,629 |
SCHEDULESOF INVESTMENTS | 51 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH KOREA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
ELECTRONICS – 4.20% |
| |||||||
LG Display Co. Ltd.b | 1,785,532 | $ | 49,593,974 | |||||
Samsung Electro-Mechanics | ||||||||
Co. Ltd.b | 457,968 | 43,546,878 | ||||||
Samsung SDI Co. Ltd.b | 258,970 | 36,289,065 | ||||||
Seoul Semiconductor | 241,251 | 7,344,784 | ||||||
136,774,701 | ||||||||
ENGINEERING & CONSTRUCTION – 3.57% |
| |||||||
Daelim Industrial Co. Ltd. | 211,265 | 13,286,664 | ||||||
Daewoo Engineering & | ||||||||
Construction Co. Ltd.b | 858,694 | 7,076,401 | ||||||
Doosan Heavy Industries & | ||||||||
Construction Co. Ltd.b | 323,031 | 18,537,437 | ||||||
GS Engineering & | ||||||||
Construction Corp. | 272,600 | 19,463,308 | ||||||
Hanjin Heavy Industries & | ||||||||
Construction Co. Ltd.b | 231,714 | 5,556,575 | ||||||
Hyundai Engineering & | ||||||||
Construction Co. Inc. | 509,762 | 27,212,251 | ||||||
Samsung Engineering | 228,984 | 25,211,350 | ||||||
116,343,986 | ||||||||
ENVIRONMENTAL CONTROL – 0.39% |
| |||||||
Woongjin Coway Co. Ltd. | 381,640 | 12,748,921 | ||||||
12,748,921 | ||||||||
FOOD – 0.48% |
| |||||||
CJ CheilJedang Corp. | 61,335 | 11,382,966 | ||||||
Lotte Confectionery Co. Ltd.b | 4,200 | 4,319,460 | ||||||
15,702,426 | ||||||||
GAS – 0.20% |
| |||||||
Korea Gas Corp. | 177,190 | 6,384,693 | ||||||
6,384,693 | ||||||||
HOLDING COMPANIES – DIVERSIFIED – 2.08% |
| |||||||
GS Holdings Corp.b | 381,640 | 15,661,597 | ||||||
LG Corp.b | 723,753 | 51,916,555 | ||||||
67,578,152 | ||||||||
HOME BUILDERS – 0.31% |
| |||||||
Hyundai Development Co. | 436,167 | 10,004,665 | ||||||
10,004,665 |
Security | Shares | Value | ||||||
HOUSEHOLD PRODUCTS & WARES – 0.70% |
| |||||||
LG Household & Health | ||||||||
Care Ltd.b | 68,150 | $ | 22,851,197 | |||||
22,851,197 | ||||||||
INSURANCE – 2.96% |
| |||||||
Dongbu Insurance Co. Ltd. | 327,120 | 9,208,691 | ||||||
Korea Life Insurance Co. Ltd. | 1,335,740 | 8,924,245 | ||||||
Samsung Fire & Marine | ||||||||
Insurance Co. Ltd. | 272,605 | 43,543,129 | ||||||
Samsung Life Insurance | ||||||||
Co. Ltd. | 381,640 | 34,697,439 | ||||||
96,373,504 | ||||||||
INTERNET – 2.37% |
| |||||||
NCsoft Corp.b | 109,040 | 20,918,509 | ||||||
NHN Corp.a,b | 312,127 | 51,157,691 | ||||||
SK Broadband Co. Ltd.a | 1,117,663 | 4,940,874 | ||||||
77,017,074 | ||||||||
IRON & STEEL – 7.61% |
| |||||||
Dongkuk Steel Mill Co. Ltd. | 272,601 | 5,457,022 | ||||||
Hyundai Steel Co.b | 418,441 | 37,694,243 | ||||||
POSCOb | 504,310 | 204,643,269 | ||||||
247,794,534 | ||||||||
LODGING – 0.41% |
| |||||||
Kangwon Land Inc. | 736,022 | 13,475,422 | ||||||
13,475,422 | ||||||||
MACHINERY – 0.32% |
| |||||||
Doosan Infracore Co. Ltd.a | 640,610 | 10,312,597 | ||||||
10,312,597 | ||||||||
MANUFACTURING – 1.18% |
| |||||||
Cheil Industries Inc. | 346,202 | 30,176,086 | ||||||
Doosan Corp.b | 81,780 | 8,185,504 | ||||||
38,361,590 | ||||||||
OIL & GAS – 2.47% |
| |||||||
SK Energy Co. Ltd.b | 463,422 | 49,283,764 | ||||||
SK Holdings Co. Ltd. | 190,824 | 14,643,263 | ||||||
S-Oil Corp. | 340,750 | 16,427,850 | ||||||
80,354,877 | ||||||||
PHARMACEUTICALS – 0.27% |
| |||||||
Yuhan Corp. | 59,972 | 8,904,009 | ||||||
8,904,009 |
52 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI SOUTH KOREA INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
RETAIL – 2.76% |
| |||||||
Hyundai Department | 109,040 | $ | 10,914,005 | |||||
Lotte Shopping Co. Ltd. | 81,785 | 26,502,188 | ||||||
Shinsegae Co. Ltd. | 109,040 | 52,478,172 | ||||||
89,894,365 | ||||||||
SEMICONDUCTORS – 19.25% |
| |||||||
Hynix | 3,830,030 | 67,406,483 | ||||||
Samsung Electronics | 845,060 | 532,876,270 | ||||||
Samsung Techwin | 286,230 | 26,381,195 | ||||||
626,663,948 | ||||||||
SHIPBUILDING – 3.54% |
| |||||||
Daewoo Shipbuilding & Marine Engineering Co. Ltd.b | 722,390 | 14,039,275 | ||||||
Hyundai Heavy Industries | ||||||||
Co. Ltd.b | 286,230 | 63,028,376 | ||||||
Hyundai Mipo Dockyard | ||||||||
Co. Ltd. | 81,780 | 10,948,111 | ||||||
Samsung Heavy Industries | ||||||||
Co. Ltd. | 1,226,700 | 27,267,958 | ||||||
115,283,720 | ||||||||
TELECOMMUNICATIONS – 2.71% |
| |||||||
KT Corp. | 763,282 | 27,917,187 | ||||||
KT Corp. SP ADRb | 406,174 | 7,583,269 | ||||||
LG Uplus Corp. | 1,758,275 | 10,984,636 | ||||||
SK Telecom Co. Ltd. | 175,560 | 23,649,128 | ||||||
SK Telecom Co. Ltd. | 1,128,564 | 18,079,595 | ||||||
88,213,815 | ||||||||
TRANSPORTATION – 0.58% |
| |||||||
GLOVIS Co. Ltd. | 81,780 | 11,186,855 | ||||||
STX Pan Ocean Co. Ltd.b | 817,830 | 7,810,621 | ||||||
18,997,476 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $1,981,414,397) |
| 3,150,780,894 | ||||||
PREFERRED STOCKS – 2.97% |
| |||||||
AUTO MANUFACTURERS – 0.59% |
| |||||||
Hyundai Motor Co. Ltd.b | 177,190 | 7,168,000 | ||||||
Hyundai Motor Co. Ltd. | ||||||||
Series 2 | 286,230 | 12,056,564 | ||||||
19,224,564 |
Security | Shares | Value | ||||||
ELECTRICAL COMPONENTS & |
| |||||||
LG Electronics Inc.b | 136,306 | $ | 4,729,610 | |||||
4,729,610 | ||||||||
SEMICONDUCTORS – 2.23% |
| |||||||
Samsung Electronics Co. Ltd. | 163,560 | 72,714,555 | ||||||
72,714,555 | ||||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $68,304,249) |
| 96,668,729 | ||||||
SHORT-TERM INVESTMENTS – 11.57% |
| |||||||
MONEY MARKET FUNDS – 11.57% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares 0.31%c,d,e | 310,450,098 | 310,450,098 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares 0.30%c,d,e | 60,326,804 | 60,326,804 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares 0.13%c,d | 5,646,730 | 5,646,730 | ||||||
376,423,632 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $376,423,632) |
| 376,423,632 | ||||||
TOTAL INVESTMENTS |
| |||||||
IN SECURITIES – 111.33% |
| |||||||
(Cost: $2,426,142,278) |
| 3,623,873,255 | ||||||
Other Assets, Less |
| (368,705,636) | ||||||
NET ASSETS – 100.00% |
| $ | 3,255,167,619 | |||||
SP ADR – Sponsored American Depositary Receipts
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 53 |
Table of Contents
iSHARES® MSCI TAIWAN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 98.78% |
| |||||||
AIRLINES – 0.63% |
| |||||||
China Airlines Ltd.a | 15,624,752 | $ | 9,316,125 | |||||
EVA Airways Corp.a | 11,160,193 | 7,925,779 | ||||||
17,241,904 | ||||||||
APPAREL – 0.90% |
| |||||||
Pou Chen Corp. | 18,230,103 | 14,710,875 | ||||||
Ruentex Industries Ltd. | 3,348,000 | 9,887,020 | ||||||
24,597,895 | ||||||||
AUTO MANUFACTURERS – 0.30% |
| |||||||
Yulon Motor Co. Ltd. | 5,580,362 | 8,135,197 | ||||||
8,135,197 | ||||||||
AUTO PARTS & EQUIPMENT – 0.67% |
| |||||||
Cheng Shin Rubber Industry Co. Ltd. | 8,928,615 | 18,144,872 | ||||||
18,144,872 | ||||||||
BANKS – 6.73% |
| |||||||
Chang Hwa Commercial | ||||||||
Bank Ltd. | 29,016,446 | 16,485,588 | ||||||
Chinatrust Financial | 71,250,596 | 39,924,712 | ||||||
E.Sun Financial | ||||||||
Holding Co. Ltd. | 25,564,368 | 11,451,854 | ||||||
First Financial | 38,933,386 | 22,484,474 | ||||||
Hua Nan Financial | ||||||||
Holdings Co. Ltd. | 31,812,506 | 18,670,010 | ||||||
Mega Financial | ||||||||
Holding Co. Ltd. | 61,380,136 | 37,076,407 | ||||||
Taishin Financial | ||||||||
Holdings Co. Ltd.a | 32,249,117 | 13,187,970 | ||||||
Taiwan Business | 18,972,000 | 5,507,885 | ||||||
Taiwan Cooperative Bank | ||||||||
Co. Ltd. | 29,471,915 | 18,400,397 | ||||||
183,189,297 | ||||||||
BUILDING MATERIALS – 1.53% |
| |||||||
Asia Cement Corp. | 14,956,353 | 13,446,431 | ||||||
Taiwan Cement Corp. | 23,436,558 | 21,546,065 | ||||||
Taiwan Glass | 6,907,414 | 6,684,455 | ||||||
41,676,951 |
Security | Shares | Value | ||||||
CHEMICALS – 7.96% | ||||||||
Eternal Chemical Co. Ltd. | 4,697,561 | $ | 4,589,925 | |||||
Formosa Chemicals & | ||||||||
Fibre Corp. | 22,320,204 | 49,609,744 | ||||||
Formosa Plastics Corp. | 31,248,768 | 69,259,616 | ||||||
Nan Ya Plastics Corp. | 36,828,860 | 71,050,245 | ||||||
Taiwan Fertilizer Co. Ltd. | 5,580,000 | 17,070,613 | ||||||
TSRC Corp. | 3,348,000 | 4,886,027 | ||||||
216,466,170 | ||||||||
COMPUTERS – 13.25% |
| |||||||
Acer Inc. | 20,109,841 | 47,145,192 | ||||||
Advantech Co. Ltd. | 2,232,883 | 5,060,477 | ||||||
Chicony Electronics | 3,523,515 | 6,324,596 | ||||||
Chimei Innolux Corp. | 36,829,008 | 38,054,572 | ||||||
Clevo Co. | 3,553,300 | 7,376,364 | ||||||
CMC Magnetics Corp.a | 20,088,400 | 4,916,434 | ||||||
Compal Electronics Inc. | 32,364,554 | 36,270,447 | ||||||
Foxconn Technology | 5,102,742 | 14,622,954 | ||||||
HTC Corp. | 5,872,080 | 107,235,025 | ||||||
Inotera Memories Inc.a | 13,968,024 | 6,736,779 | ||||||
Inventec Co. Ltd. | 14,508,752 | 7,133,447 | ||||||
Lite-On Technology Corp. | 15,706,178 | 18,091,964 | ||||||
MiTAC International Corp. | 8,928,585 | 3,316,793 | ||||||
Qisda Corp.a | 12,276,211 | 6,936,362 | ||||||
Quanta Computer Inc. | 18,972,240 | 28,783,507 | ||||||
Wistron Corp. | 14,508,443 | 22,690,672 | ||||||
360,695,585 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 4.01% |
| |||||||
Capital Securities Corp. | 8,928,199 | 3,901,941 | ||||||
Fubon Financial Holding Co. Ltd. | 40,176,979 | 46,844,296 | ||||||
KGI Securities Co. Ltd. | 21,204,000 | 8,836,655 | ||||||
Polaris Securities Co. Ltd. | 15,624,991 | 6,950,619 | ||||||
SinoPac Financial Holdings Co. Ltd. | 43,524,193 | 15,285,234 | ||||||
Yuanta Financial Holding Co. Ltd. | 47,988,076 | 27,264,250 | ||||||
109,082,995 | ||||||||
ELECTRICAL COMPONENTS & |
| |||||||
Delta Electronics Inc. | 13,392,180 | 50,794,464 | ||||||
Pacific Electric Wire & Cable Co. Ltd.b | 197 | – |
54 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI TAIWAN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Simplo Technology Co. Ltd. | 1,383,930 | $ | 6,761,099 | |||||
Tatung Co. Ltd.a | 37,944,120 | 6,348,894 | ||||||
Walsin Lihwa Corp.a | 20,088,069 | 9,468,997 | ||||||
Young Fast Optoelectronics | ||||||||
Co. Ltd. | 700,000 | 7,385,903 | ||||||
80,759,357 | ||||||||
ELECTRONICS – 17.09% |
| |||||||
ASUSTeK Computer Inc. | 4,839,670 | 32,255,402 | ||||||
AU Optronics Corp. | 59,148,830 | 51,054,041 | ||||||
Cheng Uei Precision | ||||||||
Industry Co. Ltd. | 2,256,239 | 3,648,411 | ||||||
Chunghwa Picture | 34,826,621 | 5,381,525 | ||||||
Coretronic Corp. | 4,464,000 | 5,978,198 | ||||||
HannStar Display Corp.a | 36,828,675 | 6,748,590 | ||||||
Hon Hai Precision Industry | ||||||||
Co. Ltd. | 68,760,926 | 242,554,306 | ||||||
Kinsus Interconnect | 2,232,043 | 4,459,348 | ||||||
Micro-Star International | ||||||||
Co. Ltd. | 6,696,855 | 3,282,157 | ||||||
Nan Ya Printed Circuit | 1,144,453 | 3,679,798 | ||||||
Pegatron Corp.a | 13,008,037 | 16,283,395 | ||||||
Phison Electronics Corp. | 1,350,698 | 5,418,140 | ||||||
Pixart Imaging Inc. | 1,116,682 | 5,176,602 | ||||||
Prime View International | ||||||||
Co. Ltd.a | 5,580,000 | 8,265,312 | ||||||
Synnex Technology | 9,847,538 | 20,227,508 | ||||||
Tripod Technology Corp. | 3,348,488 | 11,498,211 | ||||||
Unimicron | 10,044,794 | 15,897,829 | ||||||
Wintek Corp.a | 8,928,000 | 11,092,414 | ||||||
WPG Holdings Co. Ltd. | 6,626,243 | 12,286,909 | ||||||
Ya Hsin Industrial Co. Ltd.b | 6,845,461 | 21 | ||||||
465,188,117 | ||||||||
ENERGY – ALTERNATE SOURCES – 0.32% |
| |||||||
Motech Industries Inc. | 2,255,803 | 8,767,169 | ||||||
8,767,169 | ||||||||
FOOD – 1.25% |
| |||||||
Uni-President | 29,481,823 | 34,098,194 | ||||||
34,098,194 |
Security | Shares | Value | ||||||
HOME FURNISHINGS – 0.24% |
| |||||||
Teco Electric and Machinery | ||||||||
Co. Ltd. | 13,392,092 | $ | 6,459,007 | |||||
6,459,007 | ||||||||
INSURANCE – 3.55% |
| |||||||
Cathay Financial Holding | ||||||||
Co. Ltd. | 52,745,960 | 75,906,498 | ||||||
China Life Insurance Co. Ltd. | 9,008,152 | 7,311,355 | ||||||
Shin Kong Financial Holding | ||||||||
Co. Ltd.a | 40,176,343 | 13,356,997 | ||||||
96,574,850 | ||||||||
INTERNET – 0.10% |
| |||||||
Chinese Gamer | ||||||||
International Corp. | 356,000 | 2,822,751 | ||||||
2,822,751 | ||||||||
INVESTMENT COMPANIES – 0.73% |
| |||||||
China Development Financial | 72,168,820 | 19,757,775 | ||||||
19,757,775 | ||||||||
IRON & STEEL – 3.16% |
| |||||||
China Steel Corp. | 80,352,467 | 76,002,989 | ||||||
Feng Hsin Iron & Steel | 3,348,050 | 5,142,163 | ||||||
Tung Ho Steel | 5,580,882 | 4,825,823 | ||||||
85,970,975 | ||||||||
LEISURE TIME – 0.30% |
| |||||||
Giant Manufacturing Co. Ltd. | 2,232,800 | 8,085,309 | ||||||
8,085,309 | ||||||||
MANUFACTURING – 0.74% |
| |||||||
Largan Precision Co. Ltd. | 1,116,794 | 20,150,682 | ||||||
20,150,682 | ||||||||
METAL FABRICATE & HARDWARE – 0.27% |
| |||||||
Catcher Technology Co. Ltd. | 3,348,743 | 7,401,230 | ||||||
7,401,230 | ||||||||
OIL & GAS – 0.74% |
| |||||||
Formosa Petrochemical Corp. | 8,928,950 | 20,040,941 | ||||||
20,040,941 |
SCHEDULESOF INVESTMENTS | 55 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI TAIWAN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
REAL ESTATE – 0.38% |
| |||||||
Farglory Land Development | ||||||||
Co. Ltd. | 2,232,000 | $ | 4,821,577 | |||||
Ruentex Development | 3,393,000 | 5,465,406 | ||||||
10,286,983 | ||||||||
RETAIL – 0.86% |
| |||||||
Far Eastern Department | 6,871,203 | 6,799,561 | ||||||
President Chain Store Corp. | 4,464,215 | 16,514,000 | ||||||
23,313,561 | ||||||||
SEMICONDUCTORS – 23.41% |
| |||||||
Advanced Semiconductor | 38,057,755 | 26,196,338 | ||||||
Epistar Corp. | 4,464,047 | 11,510,591 | ||||||
Everlight Electronics | 2,232,784 | 5,736,346 | ||||||
Macronix International | 25,668,527 | 13,661,996 | ||||||
MediaTek Inc. | 7,360,632 | 100,297,055 | ||||||
Nanya Technology Corp.a | 9,400,587 | 5,370,255 | ||||||
Novatek Microelectronics | ||||||||
Corp. Ltd. | 3,348,544 | 7,986,163 | ||||||
Powerchip | 70,183,901 | 10,516,411 | ||||||
Powertech Technology Inc. | 4,464,760 | 13,240,688 | ||||||
Realtek | 3,382,621 | 6,684,145 | ||||||
Richtek Technology Corp. | 1,175,416 | 7,999,023 | ||||||
Siliconware Precision | ||||||||
Industries Co. Ltd. | 23,436,214 | 21,106,786 | ||||||
Taiwan Semiconductor | ||||||||
Manufacturing Co. Ltd. | 194,184,882 | 357,042,191 | ||||||
Transcend Information Inc. | 1,116,905 | 2,876,464 | ||||||
United | 97,092,501 | 39,401,964 | ||||||
Vanguard International | ||||||||
Semiconductor Corp. | 5,580,416 | 2,229,797 | ||||||
Winbond Electronics Corp.a | 21,204,000 | 5,341,708 | ||||||
637,197,921 | ||||||||
TELECOMMUNICATIONS – 4.55% |
| |||||||
Chunghwa Telecom Co. Ltd. | 37,944,560 | 77,585,337 | ||||||
Compal | 2,232,810 | 1,746,016 | ||||||
Far EasTone Telecommunications | 12,276,259 | 15,903,875 | ||||||
Taiwan Mobile Co. Ltd. | 14,508,677 | 28,533,641 | ||||||
123,768,869 |
Security | Shares | Value | ||||||
TEXTILES – 1.16% |
| |||||||
Far Eastern New | 22,776,201 | $ | 26,591,431 | |||||
Formosa Taffeta Co. Ltd. | 6,696,515 | 5,006,603 | ||||||
31,598,034 | ||||||||
TRANSPORTATION – 0.98% |
| |||||||
Evergreen International | 3,348,000 | 2,581,495 | ||||||
Evergreen Marine | 10,044,467 | 6,663,074 | ||||||
U-Ming Marine | 3,348,800 | 6,470,960 | ||||||
Wan Hai Lines Ltd.a | 7,812,433 | 4,999,528 | ||||||
Yang Ming Marine | ||||||||
Transport Corp. | 10,044,305 | 5,957,476 | ||||||
26,672,533 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $2,017,848,733) |
| 2,688,145,124 | ||||||
SHORT-TERM INVESTMENTS – 0.57% |
| |||||||
MONEY MARKET FUNDS – 0.57% |
| |||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares | ||||||||
0.13%c,d | 15,647,864 | 15,647,864 | ||||||
15,647,864 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $15,647,864) |
| 15,647,864 | ||||||
TOTAL INVESTMENTS |
| |||||||
IN SECURITIES – 99.35% |
| |||||||
(Cost: $2,033,496,597) |
| 2,703,792,988 | ||||||
Other Assets, Less Liabilities – 0.65% |
| 17,645,545 | ||||||
NET ASSETS – 100.00% | $ | 2,721,438,533 | ||||||
a | Non-income earning security. |
b | Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to financial statements.
56 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI THAILAND INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.45% |
| |||||||
AGRICULTURE – 2.94% |
| |||||||
Charoen Pokphand Foods | ||||||||
PCL NVDR | 18,791,000 | $ | 15,311,408 | |||||
15,311,408 | ||||||||
BANKS – 30.21% |
| |||||||
Bangkok Bank PCL Foreign | 869,400 | 4,250,462 | ||||||
Bangkok Bank PCL NVDR | 10,243,800 | 48,281,211 | ||||||
Bank of Ayudhya | 14,118,300 | 9,834,764 | ||||||
Kasikornbank PCL Foreign | 529,200 | 1,927,746 | ||||||
Kasikornbank PCL NVDR | 12,814,200 | 44,426,928 | ||||||
Kiatnakin Bank PCL NVDR | 1,833,300 | 1,903,890 | ||||||
Krung Thai Bank | 22,850,100 | 10,514,186 | ||||||
Siam Commercial Bank | ||||||||
PCL NVDR | 11,850,300 | 36,067,777 | ||||||
157,206,964 | ||||||||
BUILDING MATERIALS – 4.98% |
| |||||||
Dynasty Ceramic | 1,323,000 | 1,860,106 | ||||||
Siam Cement PCL NVDR | 2,400,300 | 22,702,949 | ||||||
TPI Polene PCL NVDR | 3,345,300 | 1,368,265 | ||||||
25,931,320 | ||||||||
CHEMICALS – 4.88% |
| |||||||
IRPC PCL NVDR | 81,062,100 | 10,412,834 | ||||||
PTT Chemical PCL NVDR | 2,948,400 | 9,986,592 | ||||||
Siam Gas and Petrochemicals PCL NVDR | 2,740,500 | 1,296,035 | ||||||
Sri Trang Agro-Industry | ||||||||
PCL NVDR | 3,591,000 | 2,432,631 | ||||||
Thai Plastic & Chemical | ||||||||
PCL NVDR | 2,154,600 | 1,253,035 | ||||||
25,381,127 | ||||||||
COAL – 4.43% |
| |||||||
Banpu PCL NVDR | 1,178,000 | 23,036,779 | ||||||
23,036,779 | ||||||||
COMMERCIAL SERVICES – 0.36% |
| |||||||
Bangkok Expressway | 3,099,600 | 1,871,943 | ||||||
1,871,943 | ||||||||
COMPUTERS – 0.32% |
| |||||||
Cal-Comp Electronics (Thailand) PCL NVDR | 13,853,700 | 1,655,627 | ||||||
1,655,627 |
Security | Shares | Value | ||||||
DIVERSIFIED FINANCIAL SERVICES – 2.09% |
| |||||||
Kim Eng Securities (Thailand) | ||||||||
PCL NVDR | 2,343,600 | $ | 1,078,378 | |||||
Phatra Securities PCL NVDR | 926,100 | 799,000 | ||||||
Thanachart Capital | 5,443,200 | 6,000,652 | ||||||
TISCO Financial Group | ||||||||
PCL NVDR | 2,721,600 | 3,000,326 | ||||||
10,878,356 | ||||||||
ELECTRIC – 1.69% |
| |||||||
Electricity Generating | 1,058,400 | 3,170,634 | ||||||
Glow Energy PCL NVDR | 3,990,000 | 5,609,842 | ||||||
8,780,476 | ||||||||
ELECTRONICS – 1.37% |
| |||||||
Delta Electronics (Thailand) | ||||||||
PCL NVDR | 3,515,400 | 3,229,517 | ||||||
Hana Microelectronics | ||||||||
PCL NVDR | 4,649,400 | 3,899,880 | ||||||
7,129,397 | ||||||||
ENGINEERING & CONSTRUCTION – 0.65% |
| |||||||
CH. Karnchang PCL NVDR | 2,135,700 | 576,663 | ||||||
Italian-Thai Development | ||||||||
PCL NVDRa | 10,848,600 | 1,185,563 | ||||||
Sino-Thai Engineering & | ||||||||
Construction PCL NVDR | 4,195,800 | 1,608,870 | ||||||
3,371,096 | ||||||||
ENTERTAINMENT – 0.29% |
| |||||||
Major Cineplex Group | ||||||||
PCL NVDR | 3,439,800 | 1,494,848 | ||||||
1,494,848 | ||||||||
FOOD – 2.14% | ||||||||
GFPT PCL NVDR | �� | 5,871,000 | 1,650,896 | |||||
Khon Kaen Sugar Industry | ||||||||
PCL NVDR | 4,120,200 | 1,553,550 | ||||||
Thai Union Frozen Products | ||||||||
PCL NVDR | 3,078,000 | 6,171,737 | ||||||
Thai Vegetable Oil | 2,249,180 | 1,775,196 | ||||||
11,151,379 | ||||||||
HEALTH CARE – SERVICES – 0.97% |
| |||||||
Bangkok Chain Hospital | ||||||||
PCL NVDR | 4,195,800 | 659,637 |
SCHEDULESOF INVESTMENTS | 57 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI THAILAND INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Bangkok Dusit Medical Services PCL NVDR | 2,060,100 | $ | 2,172,337 | |||||
Bumrungrad Hospital | 2,154,600 | 2,203,138 | ||||||
5,035,112 | ||||||||
HOME BUILDERS – 0.17% |
| |||||||
Asian Property Development PCL NVDR | 4,158,000 | 876,907 | ||||||
876,907 | ||||||||
IRON & STEEL – 1.34% |
| |||||||
G J Steel PCL NVDRa | 155,244,600 | 1,190,565 | ||||||
G Steel PCL NVDRa | 34,927,200 | 636,156 | ||||||
Sahaviriya Steel Industries | ||||||||
PCL NVDRa | 53,732,700 | 3,227,911 | ||||||
Tata Steel (Thailand) | 15,176,700 | 897,169 | ||||||
Thainox Stainless | 20,317,500 | 993,314 | ||||||
6,945,115 | ||||||||
LODGING – 0.81% |
| |||||||
Central Plaza Hotel | 3,477,600 | 633,402 | ||||||
Minor International | 9,412,200 | 3,579,012 | ||||||
4,212,414 | ||||||||
MEDIA – 1.53% |
| |||||||
BEC World PCL NVDR | 7,238,700 | 7,343,944 | ||||||
MCOT PCL NVDR | 756,000 | 640,166 | ||||||
7,984,110 | ||||||||
OIL & GAS – 21.24% |
| |||||||
Bangchak Petroleum | 2,589,300 | 1,241,077 | ||||||
Esso (Thailand) | 8,448,300 | 1,754,719 | ||||||
PTT Exploration & Production PCL NVDR | 9,147,600 | 41,945,378 | ||||||
PTT PCL NVDR | 6,652,800 | 56,334,621 | ||||||
Thai Oil PCL NVDR | 6,577,200 | 9,247,381 | ||||||
110,523,176 | ||||||||
REAL ESTATE – 4.09% |
| |||||||
Amata Corp. PCL NVDR | 3,194,100 | 1,449,312 | ||||||
Bangkok Land | 50,784,300 | 1,590,306 | ||||||
Central Pattana PCL NVDR | 4,365,900 | 4,185,237 | ||||||
Hemaraj Land and Development PCL NVDR | 34,983,900 | 2,258,108 | ||||||
LPN Development | 4,139,100 | 1,276,316 | ||||||
Pruksa Real Estate | 4,800,600 | 3,681,559 | ||||||
Quality Houses PCL NVDR | 24,532,200 | 1,865,686 |
Security | Shares | Value | ||||||
Rojana Industrial Park | ||||||||
PCL NVDR | 2,362,500 | $ | 951,190 | |||||
Sansiri PCL NVDR | 3,534,300 | 643,729 | ||||||
Supalai PCL NVDR | 6,596,100 | 2,487,106 | ||||||
Ticon Industrial Connection | 2,249,183 | 898,380 | ||||||
21,286,929 | ||||||||
RETAIL – 6.72% |
| |||||||
CP All PCL NVDR | 13,965,000 | 17,737,937 | ||||||
Home Product Center | ||||||||
PCL NVDR | 11,132,100 | 3,770,579 | ||||||
PTT Aromatics & Refining PCL NVDR | 9,166,500 | 6,854,006 | ||||||
Robinson Department Store PCL NVDR | 3,534,300 | 2,529,743 | ||||||
Siam Makro | 963,900 | 4,096,459 | ||||||
34,988,724 | ||||||||
TELECOMMUNICATIONS – 5.03% |
| |||||||
Advanced Information Service PCL NVDR | 7,049,700 | 20,780,790 | ||||||
Samart Corp. | 869,400 | 212,523 | ||||||
Thaicom PCL NVDRa | 2,570,400 | 661,183 | ||||||
True Corp. PCL NVDRa | 21,300,300 | 4,492,155 | ||||||
26,146,651 | ||||||||
TRANSPORTATION – 0.85% |
| |||||||
Bangkok Metro | 20,166,300 | 534,847 | ||||||
Precious Shipping | 2,948,400 | 1,705,258 | ||||||
Regional Container Lines PCL NVDRa | 1,039,500 | 508,207 | ||||||
Thoresen Thai Agencies | ||||||||
PCL NVDR | 2,192,430 | 1,695,376 | ||||||
4,443,688 | ||||||||
WATER – 0.35% | ||||||||
Thai Tap Water Supply | ||||||||
PCL NVDR | 10,829,700 | 1,816,774 | ||||||
1,816,774 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $454,698,564) |
| 517,460,320 |
58 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI THAILAND INVESTABLE MARKET INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
RIGHTS – 0.00% | ||||||||
IRON & STEEL – 0.00% | ||||||||
G J Steel PCL Series | ||||||||
W2 Warrantsa,b | 12,827,908 | $ | 41 | |||||
41 | ||||||||
TOTAL RIGHTS | ||||||||
(Cost: $0) | 41 | |||||||
WARRANTS – 0.02% | ||||||||
FOOD – 0.01% | ||||||||
Khon Kaen Sugar | ||||||||
Series W1 (Expires 3/15/13)a | 222,000 | 26,105 | ||||||
26,105 | ||||||||
LODGING – 0.01% | ||||||||
Minor International PCL | ||||||||
Series W4 (Expires 5/18/13)a | 625,140 | 49,939 | ||||||
49,939 | ||||||||
REAL ESTATE – 0.00% | ||||||||
Bangkok Land PCL Series W2 | ||||||||
(Expires 5/2/13)a | 1,083,411 | 7,616 | ||||||
Ticon Industrial | ||||||||
Series W3 (Expires 1/31/14)a | 79,167 | 1,822 | ||||||
9,438 | ||||||||
TOTAL WARRANTS | ||||||||
(Cost: $0) | 85,482 | |||||||
SHORT-TERM INVESTMENTS – 0.08% |
| |||||||
MONEY MARKET FUNDS – 0.08% |
| |||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares | ||||||||
0.13%c,d | 414,009 | 414,009 | ||||||
414,009 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $414,009) | 414,009 | |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $455,112,573) | 517,959,852 | |||||||
Other Assets, Less Liabilities – 0.45% |
| 2,343,953 | ||||||
NET ASSETS – 100.00% | $ | 520,303,805 | ||||||
NVDR | – Non-Voting Depositary Receipts |
a | Non-income earning security. |
b | Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 59 |
Table of Contents
Statements of Assets and Liabilities
iSHARES®, INC.
August 31, 2010
iShares MSCI Index Fund | iShares MSCI Index Fund | iShares MSCI Japan Small Cap Index Fund | iShares MSCI Index Fund | |||||||||||||
ASSETS | ||||||||||||||||
Investments, at cost: | ||||||||||||||||
Unaffiliated issuers | $ | 2,375,791,874 | $ | 2,214,702,721 | $ | 39,920,860 | $ | 439,490,666 | ||||||||
Affiliated issuers (Note 2) | 10,365,856 | 67,821,574 | 514,850 | 437,397 | ||||||||||||
Total cost of investments | $ | 2,386,157,730 | $ | 2,282,524,295 | $ | 40,435,710 | $ | 439,928,063 | ||||||||
Investments in securities, at fair value | ||||||||||||||||
(including securities on loana) (Note 1): | ||||||||||||||||
Unaffiliated issuers | $ | 2,174,908,579 | $ | 1,967,455,809 | $ | 36,551,728 | $ | 792,290,563 | ||||||||
Affiliated issuers (Note 2) | 10,365,856 | 67,821,574 | 514,850 | 437,397 | ||||||||||||
Total fair value of investments | 2,185,274,435 | 2,035,277,383 | 37,066,578 | 792,727,960 | ||||||||||||
Foreign currencies, at valueb | 3,015,548 | 980,416 | 31,097 | 2,402,208 | ||||||||||||
Receivables: | ||||||||||||||||
Investment securities sold | 28,126,780 | 5,549,098 | 218,730 | 3,772,004 | ||||||||||||
Dividends and interest | 18,901,598 | 5,782,708 | 67,031 | 303,780 | ||||||||||||
Capital shares sold | – | 80,256 | – | 14,479,297 | ||||||||||||
Total Assets | 2,235,318,361 | 2,047,669,861 | 37,383,436 | 813,685,249 | ||||||||||||
LIABILITIES | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | 27,548,457 | 3,826,661 | 195,312 | 19,212,258 | ||||||||||||
Collateral for securities on loan (Note 5) | 9,933,962 | 66,678,345 | 507,011 | – | ||||||||||||
Investment advisory fees (Note 2) | 1,018,798 | 848,031 | 16,800 | 330,801 | ||||||||||||
Total Liabilities | 38,501,217 | 71,353,037 | 719,123 | 19,543,059 | ||||||||||||
NET ASSETS | $ | 2,196,817,144 | $ | 1,976,316,824 | $ | 36,664,313 | $ | 794,142,190 | ||||||||
Net assets consist of: | ||||||||||||||||
Paid-in capital | $ | 2,535,929,467 | $ | 2,438,819,813 | $ | 40,989,726 | $ | 524,806,205 | ||||||||
Undistributed (distributions in excess of) net investment income | 14,570,669 | 2,742,569 | (75,394 | ) | 2,529,953 | |||||||||||
Accumulated net realized loss | (152,688,211 | ) | (217,996,694 | ) | (884,612 | ) | (86,000,350 | ) | ||||||||
Net unrealized appreciation (depreciation) on | (200,994,781 | ) | (247,248,864 | ) | (3,365,407 | ) | 352,806,382 | |||||||||
NET ASSETS | $ | 2,196,817,144 | $ | 1,976,316,824 | $ | 36,664,313 | $ | 794,142,190 | ||||||||
Shares outstandingc | 105,000,000 | 123,375,000 | 900,000 | 61,200,000 | ||||||||||||
Net asset value per share | $ | 20.92 | $ | 16.02 | $ | 40.74 | $ | 12.98 | ||||||||
a | Securities on loan with values of $9,432,798, $63,426,723, $482,708 and $ –, respectively. See Note 5. |
b | Cost of foreign currencies: $3,063,129, $980,810, $30,166 and $2,395,091, respectively. |
c | $0.001 par value, number of shares authorized: 627.8 million, 250 million, 500 million and 300 million, respectively. |
See notes to financial statements.
60 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES® , INC.
August 31, 2010
iShares MSCI Pacific ex-Japan Index Fund | iShares MSCI Index Fund | iShares MSCI South Korea Index Fund | iShares MSCI Index Fund | |||||||||||||
ASSETS | ||||||||||||||||
Investments, at cost: | ||||||||||||||||
Unaffiliated issuers | $ | 3,068,279,054 | $ | 1,596,447,705 | $ | 2,049,718,646 | $ | 2,017,848,733 | ||||||||
Affiliated issuers (Note 2) | 52,471,856 | 86,276,463 | 376,423,632 | 15,647,864 | ||||||||||||
Total cost of investments | $ | 3,120,750,910 | $ | 1,682,724,168 | $ | 2,426,142,278 | $ | 2,033,496,597 | ||||||||
Investments in securities, at fair value | ||||||||||||||||
(including securities on loana) (Note 1): | ||||||||||||||||
Unaffiliated issuers | $ | 3,409,241,007 | $ | 1,715,847,705 | $ | 3,247,449,623 | $ | 2,688,145,124 | ||||||||
Affiliated issuers (Note 2) | 52,471,856 | 86,276,463 | 376,423,632 | 15,647,864 | ||||||||||||
Total fair value of investments | 3,461,712,863 | 1,802,124,168 | 3,623,873,255 | 2,703,792,988 | ||||||||||||
Foreign currencies, at valueb | 7,208,247 | 7,355,773 | – | 2,982,674 | ||||||||||||
Receivables: | ||||||||||||||||
Investment securities sold | 38,437,250 | 29,459,289 | – | 37,974,832 | ||||||||||||
Dividends and interest | 23,158,771 | 5,804,401 | 3,805,832 | 22,802,867 | ||||||||||||
Capital shares sold | – | 33,533 | – | – | ||||||||||||
Total Assets | 3,530,517,131 | 1,844,777,164 | 3,627,679,087 | 2,767,553,361 | ||||||||||||
LIABILITIES | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | 38,466,224 | 28,087,282 | – | 2,545,150 | ||||||||||||
Collateral for securities on loan (Note 5) | 52,174,516 | 85,913,042 | 370,776,902 | – | ||||||||||||
Capital shares redeemed | 225,619 | – | – | 39,434,980 | ||||||||||||
Foreign taxes (Note 1) | – | – | – | 2,620,907 | ||||||||||||
Investment advisory fees (Note 2) | 1,502,102 | 776,057 | 1,734,566 | 1,513,791 | ||||||||||||
Total Liabilities | 92,368,461 | 114,776,381 | 372,511,468 | 46,114,828 | ||||||||||||
NET ASSETS | $ | 3,438,148,670 | $ | 1,730,000,783 | $ | 3,255,167,619 | $ | 2,721,438,533 | ||||||||
Net assets consist of: | ||||||||||||||||
Paid-in capital | $ | 3,459,742,720 | $ | 1,831,386,456 | $ | 3,163,770,052 | $ | 3,060,566,156 | ||||||||
Undistributed (distributions in excess of) net | 10,259,102 | 8,927,555 | (5,138,651 | ) | 59,235,519 | |||||||||||
Accumulated net realized loss | (372,668,749 | ) | (229,728,152 | ) | (1,101,247,876 | ) | (1,068,563,232 | ) | ||||||||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies | 340,815,597 | 119,414,924 | 1,197,784,094 | 670,200,090 | ||||||||||||
NET ASSETS | $ | 3,438,148,670 | $ | 1,730,000,783 | $ | 3,255,167,619 | $ | 2,721,438,533 | ||||||||
Shares outstandingc | 87,600,000 | 142,100,000 | 68,150,000 | 223,200,000 | ||||||||||||
Net asset value per share | $ | 39.25 | $ | 12.17 | $ | 47.76 | $ | 12.19 | ||||||||
a | Securities on loan with values of $49,548,691, $80,869,229, $351,136,593 and $ –, respectively. See Note 5. |
b | Cost of foreign currencies: $7,290,982, $7,357,367, $ – and $2,985,330, respectively. |
c | $0.001 par value, number of shares authorized: 1 billion, 300 million, 200 million and 900 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 61 |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES® , INC.
August 31, 2010
iShares MSCI Thailand Investable Market Index Fund | ||||
ASSETS | ||||
Investments, at cost: | ||||
Unaffiliated issuers | $ | 454,698,564 | ||
Affiliated issuers (Note 2) | 414,009 | |||
Total cost of investments | $ | 455,112,573 | ||
Investments in securities, at fair value (Note 1): | ||||
Unaffiliated issuers | $ | 517,545,843 | ||
Affiliated issuers (Note 2) | 414,009 | |||
Total fair value of investments | 517,959,852 | |||
Foreign currency, at valuea | 127,662 | |||
Cash | 254,466 | |||
Receivables: | ||||
Investment securities sold | 2,543,591 | |||
Dividends and interest | 1,991,680 | |||
Capital shares sold | 2,863,961 | |||
Total Assets | 525,741,212 | |||
LIABILITIES | ||||
Payables: | ||||
Investment securities purchased | 4,943,035 | |||
Capital shares redeemed | 272,734 | |||
Investment advisory fees (Note 2) | 221,638 | |||
Total Liabilities | 5,437,407 | |||
NET ASSETS | $ | 520,303,805 | ||
Net assets consist of: | ||||
Paid-in capital | $ | 461,532,422 | ||
Undistributed net investment income | 1,923,968 | |||
Accumulated net realized loss | (6,019,210 | ) | ||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies | 62,866,625 | |||
NET ASSETS | $ | 520,303,805 | ||
Shares outstandingb | 9,450,000 | |||
Net asset value per share | $ | 55.06 | ||
a | Cost of foreign currency: $127,703. |
b | $0.001 par value, number of shares authorized: 200 million. |
See notes to financial statements.
62 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations
iSHARES®, INC.
Year ended August 31, 2010
iShares MSCI Index Fund | iShares MSCI Hong Kong Index Fund | iShares MSCI Japan Small Cap Index Fund | iShares MSCI Index Fund | |||||||||||||
NET INVESTMENT INCOME | ||||||||||||||||
Dividends from unaffiliated issuersa | $ | 87,043,035 | $ | 58,593,633 | $ | 642,270 | $ | 15,837,082 | ||||||||
Interest from affiliated issuers (Note 2) | 1,339 | 1,064 | 17 | 227 | ||||||||||||
Securities lending income from affiliated issuers | 68,287 | 186,018 | 20,226 | – | ||||||||||||
Total investment income | 87,112,661 | 58,780,715 | 662,513 | 15,837,309 | ||||||||||||
EXPENSES | ||||||||||||||||
Investment advisory fees (Note 2) | 12,339,948 | 9,797,546 | 177,474 | 3,134,564 | ||||||||||||
Total expenses | 12,339,948 | 9,797,546 | 177,474 | 3,134,564 | ||||||||||||
Net investment income | 74,772,713 | 48,983,169 | 485,039 | 12,702,745 | ||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments in unaffiliated issuers | (63,947,206 | ) | (45,127,224 | ) | (246,150 | ) | 8,951,299 | |||||||||
In-kind redemptions | 208,901,342 | 100,048,033 | 954,731 | – | ||||||||||||
Foreign currency transactions | 1,615,830 | (42,616 | ) | 22,585 | 222,437 | |||||||||||
Net realized gain | 146,569,966 | 54,878,193 | 731,166 | 9,173,736 | ||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments | (209,593,141 | ) | 112,825,990 | (3,560,884 | ) | 157,412,064 | ||||||||||
Translation of assets and liabilities in foreign currencies | (281,599 | ) | (2,158 | ) | 1,658 | 1,292 | ||||||||||
Net change in unrealized appreciation (depreciation) | (209,874,740 | ) | 112,823,832 | (3,559,226 | ) | 157,413,356 | ||||||||||
Net realized and unrealized gain (loss) | (63,304,774 | ) | 167,702,025 | (2,828,060 | ) | 166,587,092 | ||||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 11,467,939 | $ | 216,685,194 | $ | (2,343,021 | ) | $ | 179,289,837 | |||||||
a | Net of foreign withholding tax of $1,081,457, $ –, $48,018 and $ –, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 63 |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2010
iShares MSCI Pacific ex-Japan Index Fund | iShares MSCI Index Fund | iShares MSCI South Korea Index Fund | iShares MSCI Index Fund | |||||||||||||
NET INVESTMENT INCOME | ||||||||||||||||
Dividends from unaffiliated issuersa | $ | 134,606,028 | $ | 47,106,309 | $ | 36,571,470 | $ | 84,129,567 | ||||||||
Interest from unaffiliated issuers | – | – | 4,633 | 114 | ||||||||||||
Interest from affiliated issuers (Note 2) | 1,699 | 851 | 4,244 | 4,873 | ||||||||||||
Securities lending income from affiliated issuers (Note 2) | 862,954 | 2,234,202 | 3,036,862 | – | ||||||||||||
Total investment income | 135,470,681 | 49,341,362 | 39,617,209 | 84,134,554 | ||||||||||||
EXPENSES | ||||||||||||||||
Investment advisory fees (Note 2) | 18,876,847 | 7,922,869 | 18,891,270 | 19,597,924 | ||||||||||||
Foreign taxes (Note 1) | – | – | 1,185 | 3,345,796 | ||||||||||||
Total expenses | 18,876,847 | 7,922,869 | 18,892,455 | 22,943,720 | ||||||||||||
Net investment income | 116,593,834 | 41,418,493 | 20,724,754 | 61,190,834 | ||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments in unaffiliated issuers | (70,765,402 | ) | (34,503,372 | ) | (74,994,575 | ) | (21,494,061 | ) | ||||||||
In-kind redemptions | 226,260,088 | 44,292,299 | – | – | ||||||||||||
Foreign currency transactions | 2,478,913 | 266,559 | 1,086,012 | 211,728 | ||||||||||||
Net realized gain (loss) | 157,973,599 | 10,055,486 | (73,908,563 | ) | (21,282,333 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments | 45,302,895 | 241,956,116 | 389,194,420 | 349,155,063 | ||||||||||||
Translation of assets and liabilities in foreign currencies | (429,971 | ) | (18,831 | ) | 53,253 | (42,413 | ) | |||||||||
Net change in unrealized appreciation (depreciation) | 44,872,924 | 241,937,285 | 389,247,673 | 349,112,650 | ||||||||||||
Net realized and unrealized gain | 202,846,523 | 251,992,771 | 315,339,110 | 327,830,317 | ||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 319,440,357 | $ | 293,411,264 | $ | 336,063,864 | $ | 389,021,151 | ||||||||
a | Net of foreign withholding tax of $1,441,692, $287,570, $6,746,541 and $20,945,383, respectively. |
See notes to financial statements.
64 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended August 31, 2010
iShares MSCI Thailand Investable Market Index Fund | ||||
NET INVESTMENT INCOME | ||||
Dividends from unaffiliated issuersa | $ | 9,619,494 | ||
Interest from affiliated issuers (Note 2) | 382 | |||
Total investment income | 9,619,876 | |||
EXPENSES | ||||
Investment advisory fees (Note 2) | 1,524,281 | |||
Foreign taxes (Note 1) | 25,260 | |||
Total expenses | 1,549,541 | |||
Net investment income | 8,070,335 | |||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments in unaffiliated issuers | (4,827,344 | ) | ||
In-kind redemptions | 28,566,667 | |||
Foreign currency transactions | (3,710 | ) | ||
Net realized gain | 23,735,613 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 63,087,900 | |||
Translation of assets and liabilities in foreign currencies | 18,958 | |||
Net change in unrealized appreciation (depreciation) | 63,106,858 | |||
Net realized and unrealized gain | 86,842,471 | |||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 94,912,806 | ||
a | Net of foreign withholding tax of $1,040,405. |
See notes to financial statements.
FINANCIAL STATEMENTS | 65 |
Table of Contents
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Australia Index Fund | iShares MSCI Hong Kong Index Fund | |||||||||||||||
Year ended August 31, 2010 | Year ended August 31, 2009 | Year ended August 31, 2010 | Year ended August 31, 2009 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 74,772,713 | $ | 38,798,339 | $ | 48,983,169 | $ | 60,124,298 | ||||||||
Net realized gain (loss) | 146,569,966 | (202,818,285 | ) | 54,878,193 | (134,562,987 | ) | ||||||||||
Net change in unrealized appreciation | (209,874,740 | ) | 205,661,326 | 112,823,832 | (10,347,626 | ) | ||||||||||
Net increase (decrease) in net assets resulting from operations | 11,467,939 | 41,641,380 | 216,685,194 | (84,786,315 | ) | |||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (86,675,542 | ) | (36,574,071 | ) | (51,090,437 | ) | (63,227,759 | ) | ||||||||
Total distributions to shareholders | (86,675,542 | ) | (36,574,071 | ) | (51,090,437 | ) | (63,227,759 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 1,343,260,266 | 845,682,054 | 906,802,573 | 788,711,422 | ||||||||||||
Cost of shares redeemed | (664,911,916 | ) | (316,165,212 | ) | (1,047,857,371 | ) | (364,104,881 | ) | ||||||||
Net increase (decrease) in net assets from capital | 678,348,350 | 529,516,842 | (141,054,798 | ) | 424,606,541 | |||||||||||
INCREASE IN NET ASSETS | 603,140,747 | 534,584,151 | 24,539,959 | 276,592,467 | ||||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 1,593,676,397 | 1,059,092,246 | 1,951,776,865 | 1,675,184,398 | ||||||||||||
End of year | $ | 2,196,817,144 | $ | 1,593,676,397 | $ | 1,976,316,824 | $ | 1,951,776,865 | ||||||||
Undistributed net investment income included in net assets at end of year | $ | 14,570,669 | $ | 12,740,394 | $ | 2,742,569 | $ | 4,275,742 | ||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 58,000,000 | 53,800,000 | 56,325,000 | 61,575,000 | ||||||||||||
Shares redeemed | (31,400,000 | ) | (19,600,000 | ) | (68,625,000 | ) | (31,425,000 | ) | ||||||||
Net increase (decrease) in shares outstanding | 26,600,000 | 34,200,000 | (12,300,000 | ) | 30,150,000 | |||||||||||
See notes to financial statements.
66 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® , INC.
iShares MSCI Japan Small Cap Index Fund | iShares MSCI Malaysia Index Fund | |||||||||||||||
Year ended August 31, 2010 | Year ended August 31, 2009 | Year ended August 31, 2010 | Year ended August 31, 2009 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 485,039 | $ | 433,446 | $ | 12,702,745 | $ | 12,513,392 | ||||||||
Net realized gain (loss) | 731,166 | (1,735,854 | ) | 9,173,736 | (15,953,708 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) | (3,559,226 | ) | 2,190,301 | 157,413,356 | 36,885,986 | |||||||||||
Net increase (decrease) in net assets resulting from | (2,343,021 | ) | 887,893 | 179,289,837 | 33,445,670 | |||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (721,861 | ) | (458,327 | ) | (12,611,955 | ) | (12,659,798 | ) | ||||||||
Total distributions to shareholders | (721,861 | ) | (458,327 | ) | (12,611,955 | ) | (12,659,798 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 8,487,461 | 14,997,836 | 215,972,540 | 162,777,082 | ||||||||||||
Cost of shares redeemed | (4,314,452 | ) | (14,465,148 | ) | (101,507,881 | ) | (143,654,071 | ) | ||||||||
Net increase in net assets from capital share transactions | 4,173,009 | 532,688 | 114,464,659 | 19,123,011 | ||||||||||||
INCREASE IN NET ASSETS | 1,108,127 | 962,254 | 281,142,541 | 39,908,883 | ||||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 35,556,186 | 34,593,932 | 512,999,649 | 473,090,766 | ||||||||||||
End of year | $ | 36,664,313 | $ | 35,556,186 | $ | 794,142,190 | $ | 512,999,649 | ||||||||
Undistributed (distributions in excess of) net investment | $ | (75,394 | ) | $ | 73,258 | $ | 2,529,953 | $ | 1,906,004 | |||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 200,000 | 400,000 | 18,150,000 | 19,725,000 | ||||||||||||
Shares redeemed | (100,000 | ) | (400,000 | ) | (9,375,000 | ) | (17,700,000 | ) | ||||||||
Net increase in shares outstanding | 100,000 | – | 8,775,000 | 2,025,000 | ||||||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 67 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® , INC.
iShares MSCI Pacific ex-Japan Index Fund | iShares MSCI Singapore Index Fund | |||||||||||||||
Year ended August 31, 2010 | Year ended August 31, 2009 | Year ended August 31, 2010 | Year ended August 31, 2009 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 116,593,834 | $ | 110,427,766 | $ | 41,418,493 | $ | 36,445,821 | ||||||||
Net realized gain (loss) | 157,973,599 | (219,258,973 | ) | 10,055,486 | (278,459,331 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) | 44,872,924 | (61,255,012 | ) | 241,937,285 | 61,395,602 | |||||||||||
Net increase (decrease) in net assets resulting from operations | 319,440,357 | (170,086,219 | ) | 293,411,264 | (180,617,908 | ) | ||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (128,810,457 | ) | (89,338,841 | ) | (48,264,119 | ) | (40,706,510 | ) | ||||||||
Total distributions to shareholders | (128,810,457 | ) | (89,338,841 | ) | (48,264,119 | ) | (40,706,510 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 357,007,662 | 606,264,055 | 360,350,218 | 368,595,441 | ||||||||||||
Cost of shares redeemed | (492,042,511 | ) | (228,256,529 | ) | (169,535,152 | ) | (330,200,942 | ) | ||||||||
Net increase (decrease) in net assets from capital | (135,034,849 | ) | 378,007,526 | 190,815,066 | 38,394,499 | |||||||||||
INCREASE (DECREASE) IN NET ASSETS | 55,595,051 | 118,582,466 | 435,962,211 | (182,929,919 | ) | |||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 3,382,553,619 | 3,263,971,153 | 1,294,038,572 | 1,476,968,491 | ||||||||||||
End of year | $ | 3,438,148,670 | $ | 3,382,553,619 | $ | 1,730,000,783 | $ | 1,294,038,572 | ||||||||
Undistributed net investment income included in net | $ | 10,259,102 | $ | 12,221,049 | $ | 8,927,555 | $ | 14,645,717 | ||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 8,700,000 | 20,400,000 | 30,800,000 | 41,900,000 | ||||||||||||
Shares redeemed | (12,900,000 | ) | (7,500,000 | ) | (15,000,000 | ) | (44,700,000 | ) | ||||||||
Net increase (decrease) in shares outstanding | (4,200,000 | ) | 12,900,000 | 15,800,000 | (2,800,000 | ) | ||||||||||
See notes to financial statements.
68 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® , INC.
iShares MSCI South Korea Index Fund | iShares MSCI Taiwan Index Fund | |||||||||||||||
Year ended August 31, 2010 | Year ended August 31, 2009 | Year ended August 31, 2010 | Year ended August 31, 2009 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 20,724,754 | $ | 14,014,065 | $ | 61,190,834 | $ | 62,277,852 | ||||||||
Net realized loss | (73,908,563 | ) | (687,272,279 | ) | (21,282,333 | ) | (681,314,758 | ) | ||||||||
Net change in unrealized appreciation (depreciation) | 389,247,673 | 558,333,098 | 349,112,650 | 179,235,336 | ||||||||||||
Net increase (decrease) in net assets resulting from | 336,063,864 | (114,925,116 | ) | 389,021,151 | (439,801,570 | ) | ||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (25,921,316 | ) | (19,134,761 | ) | (57,723,897 | ) | (105,890,576 | ) | ||||||||
Total distributions to shareholders | (25,921,316 | ) | (19,134,761 | ) | (57,723,897 | ) | (105,890,576 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 828,063,901 | 1,407,195,537 | 147,898,696 | 1,421,796,026 | ||||||||||||
Cost of shares redeemed | (281,588,841 | ) | (860,348,791 | ) | (793,088,733 | ) | (758,780,360 | ) | ||||||||
Net increase (decrease) in net assets from capital | 546,475,060 | 546,846,746 | (645,190,037 | ) | 663,015,666 | |||||||||||
INCREASE (DECREASE) IN NET ASSETS | 856,617,608 | 412,786,869 | (313,892,783 | ) | 117,323,520 | |||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 2,398,550,011 | 1,985,763,142 | 3,035,331,316 | 2,918,007,796 | ||||||||||||
End of year | $ | 3,255,167,619 | $ | 2,398,550,011 | $ | 2,721,438,533 | $ | 3,035,331,316 | ||||||||
Undistributed (distributions in excess of) net | $ | (5,138,651 | ) | $ | (1,028,101 | ) | $ | 59,235,519 | $ | 55,542,497 | ||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 17,150,000 | 43,400,000 | 12,000,000 | 140,800,000 | ||||||||||||
Shares redeemed | (6,100,000 | ) | (31,900,000 | ) | (66,200,000 | ) | (85,600,000 | ) | ||||||||
Net increase (decrease) in shares outstanding | 11,050,000 | 11,500,000 | (54,200,000 | ) | 55,200,000 | |||||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 69 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® , INC.
iShares MSCI Thailand Investable Market Index Fund | ||||||||
Year ended August 31, 2010 | Year ended August 31, 2009 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 8,070,335 | $ | 1,585,596 | ||||
Net realized gain (loss) | 23,735,613 | (18,721,813 | ) | |||||
Net change in unrealized appreciation (depreciation) | 63,106,858 | 20,815,615 | ||||||
Net increase in net assets resulting from operations | 94,912,806 | 3,679,398 | ||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (6,685,017 | ) | (1,466,522 | ) | ||||
Total distributions to shareholders | (6,685,017 | ) | (1,466,522 | ) | ||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 553,374,038 | 57,023,862 | ||||||
Cost of shares redeemed | (215,318,898 | ) | (23,464,139 | ) | ||||
Net increase in net assets from capital share transactions | 338,055,140 | 33,559,723 | ||||||
INCREASE IN NET ASSETS | 426,282,929 | 35,772,599 | ||||||
NET ASSETS | ||||||||
Beginning of year | 94,020,876 | 58,248,277 | ||||||
End of year | $ | 520,303,805 | $ | 94,020,876 | ||||
Undistributed net investment income included in net assets at end of year | $ | 1,923,968 | $ | 542,360 | ||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 11,950,000 | 1,900,000 | ||||||
Shares redeemed | (5,050,000 | ) | (850,000 | ) | ||||
Net increase in shares outstanding | 6,900,000 | 1,050,000 | ||||||
See notes to financial statements.
70 | 2010 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, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 20.33 | $ | 23.96 | $ | 27.62 | $ | 21.59 | $ | 18.28 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.72 | 0.78 | 0.96 | 0.89 | 0.75 | |||||||||||||||
Net realized and unrealized gain (loss)b | 0.69 | (3.47 | ) | (3.34 | ) | 6.24 | 3.23 | |||||||||||||
Total from investment operations | 1.41 | (2.69 | ) | (2.38 | ) | 7.13 | 3.98 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.82 | ) | (0.94 | ) | (1.28 | ) | (1.10 | ) | (0.67 | ) | ||||||||||
Total distributions | (0.82 | ) | (0.94 | ) | (1.28 | ) | (1.10 | ) | (0.67 | ) | ||||||||||
Net asset value, end of year | $ | 20.92 | $ | 20.33 | $ | 23.96 | $ | 27.62 | $ | 21.59 | ||||||||||
Total return | 6.86 | % | (8.91 | )% | (9.25 | )% | 33.97 | % | 22.35 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 2,196,817 | $ | 1,593,676 | $ | 1,059,092 | $ | 1,464,112 | $ | 686,407 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.55 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||
Ratio of net investment income to average net assets | 3.24 | % | 4.92 | % | 3.38 | % | 3.46 | % | 3.75 | % | ||||||||||
Portfolio turnover ratec | 8 | % | 14 | % | 10 | % | 10 | % | 7 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 71 |
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, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 14.39 | $ | 15.87 | $ | 18.30 | $ | 14.20 | $ | 13.01 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.42 | 0.52 | 0.45 | 0.47 | 0.38 | |||||||||||||||
Net realized and unrealized gain (loss)b | 1.69 | (1.46 | ) | (2.25 | ) | 3.94 | 1.17 | |||||||||||||
Total from investment operations | 2.11 | (0.94 | ) | (1.80 | ) | 4.41 | 1.55 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.48 | ) | (0.54 | ) | (0.63 | ) | (0.31 | ) | (0.36 | ) | ||||||||||
Total distributions | (0.48 | ) | (0.54 | ) | (0.63 | ) | (0.31 | ) | (0.36 | ) | ||||||||||
Net asset value, end of year | $ | 16.02 | $ | 14.39 | $ | 15.87 | $ | 18.30 | $ | 14.20 | ||||||||||
Total return | 14.85 | % | (4.77 | )% | (10.54 | )% | 31.44 | % | 12.20 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 1,976,317 | $ | 1,951,777 | $ | 1,675,184 | $ | 1,445,309 | $ | 882,712 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.55 | % | 0.52 | % | 0.52 | % | 0.54 | % | ||||||||||
Ratio of net investment income to average net assets | 2.67 | % | 4.29 | % | 2.34 | % | 2.92 | % | 2.87 | % | ||||||||||
Portfolio turnover ratec | 5 | % | 9 | % | 17 | % | 9 | % | 10 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
72 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Japan Small Cap Index Fund | ||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Period from Aug. 31, 2008 | ||||||||||
Net asset value, beginning of period | $ | 44.45 | $ | 43.24 | $ | 48.85 | ||||||
Income from investment operations: | ||||||||||||
Net investment incomeb | 0.61 | 0.60 | 0.29 | |||||||||
Net realized and unrealized gain (loss)c | (3.39 | ) | 1.29 | (5.74 | ) | |||||||
Total from investment operations | (2.78 | ) | 1.89 | (5.45 | ) | |||||||
Less distributions from: | ||||||||||||
Net investment income | (0.93 | ) | (0.68 | ) | (0.16 | ) | ||||||
Total distributions | (0.93 | ) | (0.68 | ) | (0.16 | ) | ||||||
Net asset value, end of period | $ | 40.74 | $ | 44.45 | $ | 43.24 | ||||||
Total return | (6.25 | )% | 4.62 | % | (11.19 | )%d | ||||||
Ratios/Supplemental data: | ||||||||||||
Net assets, end of period (000s) | $ | 36,664 | $ | 35,556 | $ | 34,594 | ||||||
Ratio of expenses to average net assetse | 0.53 | % | 0.56 | % | 0.53 | % | ||||||
Ratio of net investment income to average net assetse | 1.46 | % | 1.59 | % | 0.93 | % | ||||||
Portfolio turnover ratef | 7 | % | 7 | % | 7 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 73 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Malaysia Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 9.79 | $ | 9.39 | $ | 10.97 | $ | 7.75 | $ | 7.19 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.24 | 0.28 | 0.34 | 0.34 | 0.26 | |||||||||||||||
Net realized and unrealized gain (loss)b | 3.20 | 0.40 | (1.31 | ) | 3.08 | 0.59 | ||||||||||||||
Total from investment operations | 3.44 | 0.68 | (0.97 | ) | 3.42 | 0.85 | ||||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.25 | ) | (0.28 | ) | (0.61 | ) | (0.20 | ) | (0.29 | ) | ||||||||||
Total distributions | (0.25 | ) | (0.28 | ) | (0.61 | ) | (0.20 | ) | (0.29 | ) | ||||||||||
Net asset value, end of year | $ | 12.98 | $ | 9.79 | $ | 9.39 | $ | 10.97 | $ | 7.75 | ||||||||||
Total return | 35.76 | % | 8.00 | % | (9.86 | )% | 44.64 | % | 12.35 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 794,142 | $ | 513,000 | $ | 473,091 | $ | 741,440 | $ | 374,334 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.56 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||
Ratio of net investment income to average net assets | 2.17 | % | 3.45 | % | 2.84 | % | 3.21 | % | 3.46 | % | ||||||||||
Portfolio turnover ratec | 29 | % | 52 | % | 92 | % | 87 | % | 60 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | 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 years ended August 31, 2010, August 31, 2009, August 31, 2008, August 31, 2007 and August 31, 2006 would have been 10%, 12%, 16%, 3% and 9%, respectively. See Note 4. |
See notes to financial statements.
74 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Pacific ex-Japan Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008a | Year ended Aug. 31, 2007a | Year ended Aug. 31, 2006a | ||||||||||||||||
Net asset value, beginning of year | $ | 36.85 | $ | 41.37 | $ | 48.31 | $ | 37.34 | $ | 32.52 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomeb | 1.25 | 1.38 | 1.64 | 1.52 | 1.28 | |||||||||||||||
Net realized and unrealized gain (loss)c | 2.52 | (4.79 | ) | (6.01 | ) | 11.18 | 4.77 | |||||||||||||
Total from investment operations | 3.77 | (3.41 | ) | (4.37 | ) | 12.70 | 6.05 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (1.37 | ) | (1.11 | ) | (2.51 | ) | (1.73 | ) | (1.23 | ) | ||||||||||
Net realized gain | – | – | (0.06 | ) | – | – | ||||||||||||||
Total distributions | (1.37 | ) | (1.11 | ) | (2.57 | ) | (1.73 | ) | (1.23 | ) | ||||||||||
Net asset value, end of year | $ | 39.25 | $ | 36.85 | $ | 41.37 | $ | 48.31 | $ | 37.34 | ||||||||||
Total return | 10.27 | % | (7.23 | )% | (9.87 | )% | 34.86 | % | 19.17 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 3,438,149 | $ | 3,382,554 | $ | 3,263,971 | $ | 3,536,295 | $ | 2,094,931 | ||||||||||
Ratio of expenses to average net assets | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | ||||||||||
Ratio of net investment income to average net assets | 3.09 | % | 4.83 | % | 3.35 | % | 3.43 | % | 3.67 | % | ||||||||||
Portfolio turnover rated | 7 | % | 10 | % | 14 | % | 11 | % | 8 | % |
a | Per share amounts were adjusted to reflect a three-for-one stock split effective July 24, 2008. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 75 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Singapore Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 10.25 | $ | 11.44 | $ | 13.28 | $ | 9.11 | $ | 7.77 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.32 | 0.32 | 0.47 | 0.47 | 0.40 | |||||||||||||||
Net realized and unrealized gain (loss)b | 1.97 | (1.16 | ) | (1.67 | ) | 4.01 | 1.23 | |||||||||||||
Total from investment operations | 2.29 | (0.84 | ) | (1.20 | ) | 4.48 | 1.63 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.37 | ) | (0.35 | ) | (0.64 | ) | (0.31 | ) | (0.29 | ) | ||||||||||
Total distributions | (0.37 | ) | (0.35 | ) | (0.64 | ) | (0.31 | ) | (0.29 | ) | ||||||||||
Net asset value, end of year | $ | 12.17 | $ | 10.25 | $ | 11.44 | $ | 13.28 | $ | 9.11 | ||||||||||
Total return | 22.68 | % | (5.87 | )% | (9.55 | )% | 49.92 | % | 21.61 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 1,730,001 | $ | 1,294,039 | $ | 1,476,968 | $ | 1,669,210 | $ | 574,620 | ||||||||||
Ratio of expenses to average net assets | 0.53 | % | 0.55 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||
Ratio of net investment income to average | 2.80 | % | 3.97 | % | 3.56 | % | 3.80 | % | 4.74 | % | ||||||||||
Portfolio turnover ratec | 9 | % | 15 | % | 16 | % | 8 | % | 6 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
76 | 2010 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, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 42.01 | $ | 43.55 | $ | 63.60 | $ | 46.00 | $ | 34.75 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.32 | 0.30 | 0.80 | 0.51 | 0.31 | |||||||||||||||
Net realized and unrealized gain (loss)b | 5.82 | (1.45 | ) | (19.87 | ) | 17.42 | 11.20 | |||||||||||||
Total from investment operations | 6.14 | (1.15 | ) | (19.07 | ) | 17.93 | 11.51 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.39 | ) | (0.39 | ) | (0.98 | ) | (0.33 | ) | (0.26 | ) | ||||||||||
Total distributions | (0.39 | ) | (0.39 | ) | (0.98 | ) | (0.33 | ) | (0.26 | ) | ||||||||||
Net asset value, end of year | $ | 47.76 | $ | 42.01 | $ | 43.55 | $ | 63.60 | $ | 46.00 | ||||||||||
Total return | 14.65 | % | (2.31 | )% | (30.35 | )% | 39.18 | % | 33.16 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 3,255,168 | $ | 2,398,550 | $ | 1,985,763 | $ | 2,429,453 | $ | 1,621,334 | ||||||||||
Ratio of expenses to average net assets | 0.61 | % | 0.65 | % | 0.63 | % | 0.68 | % | 0.70 | % | ||||||||||
Ratio of expenses to average net assets exclusive of foreign taxes | 0.61 | % | 0.65 | % | 0.63 | % | 0.68 | % | 0.70 | % | ||||||||||
Ratio of net investment income to average | 0.67 | % | 0.91 | % | 1.35 | % | 0.96 | % | 0.71 | % | ||||||||||
Portfolio turnover ratec | 14 | % | 62 | % | 42 | % | 20 | % | 47 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | 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 years ended August 31, 2010, August 31, 2009, August 31, 2008, August 31, 2007 and August 31, 2006 would have been 6%, 8%, 15%, 6% and 14%, respectively. See Note 4. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 77 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Taiwan Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 10.94 | $ | 13.13 | $ | 15.99 | $ | 12.57 | $ | 11.57 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.23 | 0.30 | 0.54 | 0.38 | 0.34 | |||||||||||||||
Net realized and unrealized gain (loss)b | 1.23 | (1.89 | ) | (3.01 | ) | 3.34 | 0.80 | |||||||||||||
Total from investment operations | 1.46 | (1.59 | ) | (2.47 | ) | 3.72 | 1.14 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.21 | ) | (0.60 | ) | (0.39 | ) | (0.30 | ) | (0.14 | ) | ||||||||||
Total distributions | (0.21 | ) | (0.60 | ) | (0.39 | ) | (0.30 | ) | (0.14 | ) | ||||||||||
Net asset value, end of year | $ | 12.19 | $ | 10.94 | $ | 13.13 | $ | 15.99 | $ | 12.57 | ||||||||||
Total return | 13.30 | % | (9.67 | )% | (15.69 | )% | 29.91 | % | 9.84 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 2,721,439 | $ | 3,035,331 | $ | 2,918,008 | $ | 2,769,764 | $ | 1,893,751 | ||||||||||
Ratio of expenses to average net assets | 0.71 | % | 0.82 | % | 0.73 | % | 0.77 | % | 0.85 | % | ||||||||||
Ratio of expenses to average net assets exclusive of foreign taxes | 0.61 | % | 0.65 | % | 0.63 | % | 0.68 | % | 0.70 | % | ||||||||||
Ratio of net investment income to average | 1.90 | % | 3.18 | % | 3.54 | % | 2.61 | % | 2.74 | % | ||||||||||
Portfolio turnover ratec | 9 | % | 52 | % | 33 | % | 35 | % | 29 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | 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 years ended August 31, 2010, August 31, 2009, August 31, 2008, August 31, 2007 and August 31, 2006 would have been 4%, 14%, 11%, 12% and 10%, respectively. See Note 4. |
See notes to financial statements.
78 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Thailand Investable Market Index Fund | ||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Period from to Aug. 31, 2008 | ||||||||||
Net asset value, beginning of period | $ | 36.87 | $ | 38.83 | $ | 50.03 | ||||||
Income from investment operations: | ||||||||||||
Net investment incomeb | 1.44 | 1.17 | 0.32 | |||||||||
Net realized and unrealized gain (loss)c | 17.95 | (1.88 | ) | (11.52 | ) | |||||||
Total from investment operations | 19.39 | (0.71 | ) | (11.20 | ) | |||||||
Less distributions from: | ||||||||||||
Net investment income | (1.20 | ) | (1.25 | ) | – | |||||||
Total distributions | (1.20 | ) | (1.25 | ) | – | |||||||
Net asset value, end of period | $ | 55.06 | $ | 36.87 | $ | 38.83 | ||||||
Total return | 53.19 | % | (0.33 | )% | (22.39 | )%d | ||||||
Ratios/Supplemental data: | ||||||||||||
Net assets, end of period (000s) | $ | 520,304 | $ | 94,021 | $ | 58,248 | ||||||
Ratio of expenses to average net assetse | 0.62 | % | 0.65 | % | 0.63 | % | ||||||
Ratio of expenses to average net assets exclusive of foreign taxes | 0.61 | % | n/a | n/a | ||||||||
Ratio of net investment income to average net assetse | 3.22 | % | 4.00 | % | 1.68 | % | ||||||
Portfolio turnover ratef | 14 | % | 15 | % | 19 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 79 |
Table of Contents
iSHARES®, INC.
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.
These financial statements relate only to the iShares MSCI Australia, iShares MSCI Hong Kong, iShares MSCI Japan Small Cap, iShares MSCI Malaysia, iShares MSCI Pacific ex-Japan, iShares MSCI Singapore, iShares MSCI South Korea, iShares MSCI Taiwan and iShares MSCI Thailand Investable Market 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 a particular market, as measured by that market’s equity securities index compiled by MSCI Inc. 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 issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
Each Fund invests in the securities of non-U.S. issuers that may trade in non-U.S. markets. This may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets and the risk of war.
Pursuant to the Company’s organizational documents, the 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.
1. SIGNIFICANT ACCOUNTING POLICIES
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”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
SECURITY VALUATION
The securities and other assets of each Fund are valued pursuant to the pricing policy and procedures approved by the Board of Directors of the Company (the “Board”) using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or
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iSHARES® , INC.
liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
• | Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access at the measurement date (a “Level 1 Price”); |
• | Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (a “Level 2 Price”); |
• | Level 3 – Inputs that are unobservable for the asset or liability (a “Level 3 Price”). |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3 of the fair value hierarchy.
The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Funds’ perceived risk of that instrument.
Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 Prices, include active listed equities. The Funds do not adjust the quoted price for such instruments, even in situations where the Funds hold a large position and a sale could reasonably impact the quoted price.
Investments that trade in markets that are not considered to be active, but whose values are based on inputs such as quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified within Level 2. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.
Investments whose values are classified as Level 3 Prices have significant unobservable inputs, as they may trade infrequently or not at all. Investments whose values are classified as Level 3 Prices may include unlisted securities related to corporate actions, securities whose trading have been suspended or which have been de-listed from their primary trading exchange, less liquid corporate debt securities (including distressed debt instruments), collateralized debt obligations, and less liquid mortgage securities (backed by either commercial or residential real estate). When observable prices are not available for these securities, the Funds use one or more valuation techniques (e.g., the market approach or the income approach) for which sufficient and reliable data is available. Within Level 3 of the fair value hierarchy, the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.
NOTESTO FINANCIAL STATEMENTS | 81 |
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iSHARES® , INC.
The inputs used by the Funds in estimating the value of Level 3 Prices may include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 Prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Funds in the absence of market information. The fair value measurement of Level 3 Prices does not include transaction costs that may have been capitalized as part of the security’s cost basis. Assumptions used by the Funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Funds’ results of operations.
Fair value pricing could result in a difference between the prices used to calculate a Fund’s net asset value and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.
As of August 31, 2010, the value of each of the Funds’ investments was classified as a Level 1 Price. The breakdown of each Fund’s investments into major categories is disclosed in its respective Schedule of Investments.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source, and interest income is accrued daily. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. 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. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates 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
The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, capital gains on investments or currency repatriation. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign markets in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are disclosed in their Statements of Operations. Foreign taxes payable as of August 31, 2010, if any, are reflected in the Funds’ Statements of Assets and Liabilities.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income, if any, are generally declared and paid at least semi-annually by each Fund. Distributions of net realized capital gains, if any, generally are declared and paid once a year. Distributions are determined on a tax basis
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iSHARES® , INC.
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.
As of August 31, 2010, the tax year-end of the Funds, the components of net distributable earnings (accumulated losses) on a tax basis were as follows:
iShares MSCI Index Fund | Undistributed Ordinary Income | Unrealized Appreciation (Depreciation) | Capital and Other Losses | Net Distributable Earnings (Accumulated Losses) | ||||||||||||
Australia | $ | 25,319,510 | $ | (299,826,190 | ) | $ | (64,605,643 | ) | $ | (339,112,323 | ) | |||||
Hong Kong | 4,146,433 | (281,514,576 | ) | (185,134,846 | ) | (462,502,989 | ) | |||||||||
Japan Small Cap | 168,081 | (3,656,318 | ) | (837,176 | ) | (4,325,413 | ) | |||||||||
Malaysia | 3,495,301 | 322,587,656 | (56,746,972 | ) | 269,335,985 | |||||||||||
Pacific ex-Japan | 37,494,655 | 146,436,531 | (205,525,236 | ) | (21,594,050 | ) | ||||||||||
Singapore | 25,421,800 | 43,793,835 | (170,601,308 | ) | (101,385,673 | ) | ||||||||||
South Korea | 5,810,988 | 611,226,778 | (525,640,199 | ) | 91,397,567 | |||||||||||
Taiwan | 60,772,523 | 465,069,349 | (864,969,495 | ) | (339,127,623 | ) | ||||||||||
Thailand Investable Market | 1,923,968 | 60,940,362 | (4,092,947 | ) | 58,771,383 |
For the years ended August 31, 2010 and August 31, 2009, the tax characterization of distributions paid for each Fund represents ordinary income. 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 ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the year ended August 31, 2010.
From November 1, 2009 to August 31, 2010, 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, 2011, as follows:
iShares MSCI Index Fund | Deferred Net Realized Capital Losses | |||
Australia | $ | 15,083,594 | ||
Hong Kong | 28,882,559 | |||
Japan Small Cap | 164,136 | |||
Pacific ex-Japan | 34,517,905 |
iShares MSCI Index Fund | Deferred Net Realized Capital Losses | |||
Singapore | $ | 10,449,774 | ||
South Korea | 63,431,643 | |||
Taiwan | 32,529,931 | |||
Thailand Investable Market | 1,216,075 |
NOTESTO FINANCIAL STATEMENTS | 83 |
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iSHARES® , INC.
The Funds had tax basis net capital loss carryforwards as of August 31, 2010, the tax year-end of the Funds, as follows:
iShares MSCI Index Fund | Expiring 2011 | Expiring 2012 | Expiring 2013 | Expiring 2014 | Expiring 2015 | Expiring 2016 | Expiring 2017 | Expiring 2018 | Total | |||||||||||||||||||||||||||
Australia | $ | 650,082 | $ | 596,240 | $ | 384,424 | $ | – | $ | 7,066 | $ | 529,868 | $ | 24,006,125 | $ | 23,348,244 | $ | 49,522,049 | ||||||||||||||||||
Hong Kong | 2,870,602 | 2,330,414 | 468,716 | 425,440 | 2,899,247 | 3,185,408 | 29,235,556 | 114,836,904 | 156,252,287 | |||||||||||||||||||||||||||
Japan Small Cap | – | – | – | – | – | – | 131,718 | 541,322 | 673,040 | |||||||||||||||||||||||||||
Malaysia | 2,898,105 | 775,477 | 6,820,474 | 1,543,708 | 3,357,786 | 1,127,892 | 40,223,530 | – | 56,746,972 | |||||||||||||||||||||||||||
Pacific ex-Japan | – | – | – | – | – | – | 66,207,828 | 104,799,503 | 171,007,331 | |||||||||||||||||||||||||||
Singapore | 4,428,316 | 4,256,421 | 2,558,348 | – | – | 807,115 | 15,680,510 | 132,420,824 | 160,151,534 | |||||||||||||||||||||||||||
South Korea | 504,041 | 3,363,449 | 11,590,303 | 3,172,573 | 38,097,223 | – | 178,889,302 | 226,591,665 | 462,208,556 | |||||||||||||||||||||||||||
Taiwan | 8,689,663 | 9,129,874 | 12,022,719 | 14,435,986 | 64,999,586 | 16,734,578 | 343,375,145 | 363,052,013 | 832,439,564 | |||||||||||||||||||||||||||
Thailand Investable Market | – | – | – | – | – | – | 555,444 | 2,321,428 | 2,876,872 |
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 marked-to-market gains.
Each Fund reclassifies at the end of its tax year certain amounts to paid-in-capital from accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss), respectively, as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, realized foreign currency gains and losses and gains and losses on in-kind redemptions. These reclassifications have no effect on net assets or net asset values per share.
As of August 31, 2010, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:
iShares MSCI Index Fund | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
Australia | $ | 2,484,989,139 | $ | 36,666,279 | $ | (336,380,983 | ) | $ | (299,714,704 | ) | ||||||
Hong Kong | 2,316,790,007 | 54,258,216 | (335,770,840 | ) | (281,512,624 | ) | ||||||||||
Japan Small Cap | 40,726,621 | 2,195,849 | (5,855,892 | ) | (3,660,043 | ) | ||||||||||
Malaysia | 470,146,789 | 354,321,402 | (31,740,231 | ) | 322,581,171 | |||||||||||
Pacific ex-Japan | 3,315,129,976 | 591,848,473 | (445,265,586 | ) | 146,582,887 | |||||||||||
Singapore | 1,758,345,257 | 142,870,284 | (99,091,373 | ) | 43,778,911 | |||||||||||
South Korea | 3,012,699,594 | 1,215,604,269 | (604,430,608 | ) | 611,173,661 | |||||||||||
Taiwan | 2,238,627,338 | 741,309,597 | (276,143,947 | ) | 465,165,650 | |||||||||||
Thailand Investable Market | 457,038,836 | 65,077,882 | (4,156,866 | ) | 60,921,016 |
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Notes to Financial Statements (Continued)
iSHARES® , INC.
Management has reviewed the tax positions as of August 31, 2010, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Funds’ financial statements.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
On December 1, 2009, Barclays PLC (“Barclays”) completed the sale of its interest in BlackRock Institutional Trust Company, N.A. (“BTC”), formerly known as Barclays Global Investors, N.A., and certain affiliated companies to BlackRock, Inc. (“BlackRock,” and such sale, the “Transaction”). BTC is a wholly-owned subsidiary of BlackRock.
The PNC Financial Services Group, Inc. (“PNC”), Bank of America Corporation (“BAC”) and Barclays are the largest stockholders of BlackRock. Due to the ownership structure, PNC is an affiliate for 1940 Act purposes, but BAC and Barclays are not.
Under the 1940 Act, upon completion of the Transaction on December 1, 2009, each Fund’s investment advisory agreement with BlackRock Fund Advisors (“BFA”), formerly known as Barclays Global Fund Advisors, was automatically terminated. The Board and shareholders of the Funds approved a new investment advisory agreement with BFA. The investment advisory fee rates and expense arrangements for the Funds remained the same after the Transaction.
Pursuant to an Investment Advisory Agreement with the Company, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for all expenses (“Covered Expenses”) of the Company, 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 iShares MSCI Australia, iShares MSCI Hong Kong, iShares MSCI Japan Small Cap, iShares MSCI Malaysia and iShares MSCI Singapore Index Funds, BFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of these Funds and certain other iShares Funds as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | |
0.59% | First $7 billion | |
0.54 | Over $7 billion, up to and including $11 billion | |
0.49 | Over $11 billion, up to and including $24 billion | |
0.44 | Over $24 billion, up to and including $48 billion | |
0.40 | Over $48 billion |
For its investment advisory services to the iShares MSCI South Korea, iShares MSCI Taiwan and iShares MSCI Thailand Investable Market Index Funds, BFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of these Funds and certain other iShares Funds as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | |
0.74% | First $2 billion | |
0.69 | Over $2 billion, up to and including $4 billion | |
0.64 | Over $4 billion, up to and including $8 billion | |
0.57 | Over $8 billion, up to and including $16 billion | |
0.51 | Over $16 billion |
NOTESTO FINANCIAL STATEMENTS | 85 |
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Notes to Financial Statements (Continued)
iSHARES® , INC.
For its investment advisory services to the iShares MSCI Pacific ex-Japan Index Fund, BFA is entitled to an annual investment advisory fee of 0.50% of the average daily net assets of the Fund.
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BTC to serve as securities lending agent for the Funds, subject to applicable conditions. BTC is an affiliate of BFA, the Funds’ investment adviser. As securities lending agent, BTC 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, 2010, BTC earned securities lending agent fees from the Funds as follows:
iShares MSCI Index Fund | Securities Lending Agent Fees | |||
Australia | $ | 43,688 | ||
Hong Kong | 108,597 | |||
Japan Small Cap | 12,063 |
iShares MSCI Index Fund | Securities Lending Agent Fees | |||
Pacific ex-Japan | $ | 530,874 | ||
Singapore | 1,410,237 | |||
South Korea | 1,862,692 |
Cross trades for the year ended August 31, 2010, if any, were executed by the Funds pursuant to Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.
Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in interest from affiliated issuers in the Statements of Operations.
Certain directors and officers of the Company are also officers of BTC and/or BFA.
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2010 were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||||
Australia | $ | 170,237,500 | $ | 181,146,267 | ||||
Hong Kong | 88,224,792 | 93,434,783 | ||||||
Japan Small Cap | 2,433,082 | 2,666,541 | ||||||
Malaysia | 281,232,807 | 166,935,647 | ||||||
Pacific ex-Japan | 267,886,775 | 276,909,578 | ||||||
Singapore | 136,738,275 | 145,835,053 | ||||||
South Korea | 973,719,636 | 437,197,907 | ||||||
Taiwan | 275,661,643 | 923,630,016 | ||||||
Thailand Investable Market | 36,806,492 | 34,186,027 |
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Notes to Financial Statements (Continued)
iSHARES® , INC.
In-kind transactions (see Note 4) for the year ended August 31, 2010 were as follows:
iShares MSCI Index Fund | In-kind Purchases | In-kind Sales | ||||||
Australia | $ | 1,332,300,366 | $ | 661,124,387 | ||||
Hong Kong | 895,051,030 | 1,035,180,363 | ||||||
Japan Small Cap | 8,460,175 | 4,304,845 | ||||||
Pacific ex-Japan | 353,206,584 | 488,060,372 | ||||||
Singapore | 355,981,428 | 166,761,419 | ||||||
Thailand Investable Market | 548,545,263 | 213,925,965 |
4. CAPITAL SHARE TRANSACTIONS
The Company issues and redeems capital shares of each Fund only in aggregations of a specified number of shares (each, a “Creation Unit”) at net asset value. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Statements of Changes in Net Assets.
The consideration for the purchase of Creation Units of a Fund generally consists of the in-kind deposit of a designated portfolio of equity securities, which constitutes an optimized representation of the corresponding MSCI Index and an amount of cash (except for the 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). Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash pay an additional variable charge to compensate the relevant Fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities.
5. 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 current 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 value of the securities on loan. The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. Any securities lending cash collateral may be reinvested in certain short-term instruments either directly on behalf of a Fund or through one or more joint accounts or money market funds, including those managed by BFA or its affiliates; such reinvestments are subject to investment risk.
As of August 31, 2010, certain Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of the securities on loan as of August 31, 2010 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income, as disclosed in the Funds’ Statements of Operations, represents the income earned from the investment of the cash collateral, plus any fees paid by borrowers and less the fees paid to BTC as securities lending agent which are subject to adjustments pursuant to the securities lending agreement.
NOTESTO FINANCIAL STATEMENTS | 87 |
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Notes to Financial Statements (Continued)
iSHARES® , INC.
6. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.
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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 Hong Kong Index Fund, iShares MSCI Japan Small Cap Index Fund, iShares MSCI Malaysia Index Fund, iShares MSCI Pacific ex-Japan Index Fund, iShares MSCI Singapore Index Fund, iShares MSCI South Korea Index Fund, iShares MSCI Taiwan Index Fund and iShares MSCI Thailand Investable Market Index Fund, each a portfolio of the iShares MSCI Series (the “Funds”), at August 31, 2010, the results of each of their operations, the changes in each of their net assets and their 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, 2010 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 22, 2010
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 89 |
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iSHARES® , INC.
For the fiscal year ended August 31, 2010, certain 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 | $ | 88,124,492 | $ | 1,078,977 | ||||
Japan Small Cap | 690,288 | 47,704 | ||||||
Pacific ex-Japan | 136,047,720 | 1,437,287 | ||||||
Singapore | 47,393,879 | 286,983 | ||||||
South Korea | 43,318,011 | 6,725,608 | ||||||
Taiwan | 105,074,950 | 23,876,952 | ||||||
Thailand Investable Market | 10,659,899 | 1,029,787 |
Under Section 854(b)(2) of the Code, certain Funds hereby designate the following maximum amounts as qualified dividend income for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended August 31, 2010:
iShares MSCI Index Fund | Qualified Dividend Income | |||
Australia | $ | 85,760,016 | ||
Japan Small Cap | 635,363 | |||
Malaysia | 427,297 | |||
Pacific ex-Japan | 97,199,199 | |||
South Korea | 25,921,316 | |||
Thailand Investable Market | 6,685,017 |
In February 2011, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2010. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
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Supplemental Information (Unaudited)
iSHARES® , INC.
Premium/Discount Information
The tables that follow present information about the differences between the daily market price on secondary markets for shares of a 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 Fund generally is determined using the midpoint between the highest bid and the lowest offer on the primary 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 fair 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 Funds included in this report. The information shown for each Fund is for five calendar years (or for each full calendar quarter completed after the inception date of such Fund if less than five years) through the date of the most recent calendar quarter-end. 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 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.
SUPPLEMENTAL INFORMATION | 91 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Australia Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 5 | 0.36 | % | |||||
Greater than 4.5% and Less than 5.0% | 3 | 0.22 | ||||||
Greater than 4.0% and Less than 4.5% | 4 | 0.29 | ||||||
Greater than 3.5% and Less than 4.0% | 7 | 0.51 | ||||||
Greater than 3.0% and Less than 3.5% | 12 | 0.87 | ||||||
Greater than 2.5% and Less than 3.0% | 18 | 1.30 | ||||||
Greater than 2.0% and Less than 2.5% | 23 | 1.66 | ||||||
Greater than 1.5% and Less than 2.0% | 57 | 4.12 | ||||||
Greater than 1.0% and Less than 1.5% | 114 | 8.25 | ||||||
Greater than 0.5% and Less than 1.0% | 264 | 19.10 | ||||||
Between 0.5% and -0.5% | 546 | 39.53 | ||||||
Less than -0.5% and Greater than -1.0% | 120 | 8.68 | ||||||
Less than -1.0% and Greater than -1.5% | 85 | 6.15 | ||||||
Less than -1.5% and Greater than -2.0% | 39 | 2.82 | ||||||
Less than -2.0% and Greater than -2.5% | 30 | 2.17 | ||||||
Less than -2.5% and Greater than -3.0% | 23 | 1.66 | ||||||
Less than -3.0% and Greater than -3.5% | 9 | 0.65 | ||||||
Less than -3.5% and Greater than -4.0% | 7 | 0.51 | ||||||
Less than -4.0% and Greater than -4.5% | 1 | 0.07 | ||||||
Less than -4.5% and Greater than -5.0% | 3 | 0.22 | ||||||
Less than -5.0% and Greater than -5.5% | 5 | 0.36 | ||||||
Less than -5.5% and Greater than -6.0% | 2 | 0.14 | ||||||
Less than -6.0% | 5 | 0.36 | ||||||
1,382 | 100.00 | % | ||||||
92 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Hong Kong Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 7 | 0.51 | % | |||||
Greater than 4.5% and Less than 5.0% | 2 | 0.14 | ||||||
Greater than 4.0% and Less than 4.5% | 5 | 0.36 | ||||||
Greater than 3.5% and Less than 4.0% | 4 | 0.29 | ||||||
Greater than 3.0% and Less than 3.5% | 10 | 0.72 | ||||||
Greater than 2.5% and Less than 3.0% | 17 | 1.23 | ||||||
Greater than 2.0% and Less than 2.5% | 30 | 2.17 | ||||||
Greater than 1.5% and Less than 2.0% | 48 | 3.47 | ||||||
Greater than 1.0% and Less than 1.5% | 99 | 7.16 | ||||||
Greater than 0.5% and Less than 1.0% | 205 | 14.83 | ||||||
Between 0.5% and –0.5% | 592 | 42.85 | ||||||
Less than –0.5% and Greater than –1.0% | 138 | 9.99 | ||||||
Less than –1.0% and Greater than –1.5% | 83 | 6.01 | ||||||
Less than –1.5% and Greater than –2.0% | 57 | 4.12 | ||||||
Less than –2.0% and Greater than –2.5% | 33 | 2.39 | ||||||
Less than –2.5% and Greater than –3.0% | 19 | 1.37 | ||||||
Less than –3.0% and Greater than –3.5% | 12 | 0.87 | ||||||
Less than –3.5% and Greater than –4.0% | 3 | 0.22 | ||||||
Less than –4.0% and Greater than –4.5% | 4 | 0.29 | ||||||
Less than –4.5% and Greater than –5.0% | 5 | 0.36 | ||||||
Less than –5.0% and Greater than –5.5% | 3 | 0.22 | ||||||
Less than –5.5% and Greater than –6.0% | 1 | 0.07 | ||||||
Less than –6.0% | 5 | 0.36 | ||||||
1,382 | 100.00 | % | ||||||
SUPPLEMENTAL INFORMATION | 93 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Japan Small Cap Index Fund
Period Covered: January 1, 2008 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 9 | 1.43 | % | |||||
Greater than 4.5% and Less than 5.0% | 3 | 0.48 | ||||||
Greater than 4.0% and Less than 4.5% | 3 | 0.48 | ||||||
Greater than 3.5% and Less than 4.0% | 5 | 0.80 | ||||||
Greater than 3.0% and Less than 3.5% | 10 | 1.59 | ||||||
Greater than 2.5% and Less than 3.0% | 11 | 1.75 | ||||||
Greater than 2.0% and Less than 2.5% | 18 | 2.87 | ||||||
Greater than 1.5% and Less than 2.0% | 46 | 7.32 | ||||||
Greater than 1.0% and Less than 1.5% | 65 | 10.35 | ||||||
Greater than 0.5% and Less than 1.0% | 84 | 13.38 | ||||||
Between 0.5% and –0.5% | 201 | 31.99 | ||||||
Less than –0.5% and Greater than –1.0% | 52 | 8.28 | ||||||
Less than –1.0% and Greater than –1.5% | 33 | 5.25 | ||||||
Less than –1.5% and Greater than –2.0% | 29 | 4.62 | ||||||
Less than –2.0% and Greater than –2.5% | 18 | 2.87 | ||||||
Less than –2.5% and Greater than –3.0% | 11 | 1.75 | ||||||
Less than –3.0% and Greater than –3.5% | 12 | 1.91 | ||||||
Less than –3.5% and Greater than –4.0% | 5 | 0.80 | ||||||
Less than –4.0% and Greater than –4.5% | 2 | 0.32 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.32 | ||||||
Less than –5.0% and Greater than –5.5% | 3 | 0.48 | ||||||
Less than –5.5% and Greater than –6.0% | 3 | 0.48 | ||||||
Less than –6.0% | 3 | 0.48 | ||||||
628 | 100.00 | % | ||||||
94 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Malaysia Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 6.0% | 2 | 0.14 | % | |||||
Greater than 5.5% and Less than 6.0% | 2 | 0.14 | ||||||
Greater than 5.0% and Less than 5.5% | 3 | 0.22 | ||||||
Greater than 4.5% and Less than 5.0% | 1 | 0.07 | ||||||
Greater than 4.0% and Less than 4.5% | 1 | 0.07 | ||||||
Greater than 3.5% and Less than 4.0% | 1 | 0.07 | ||||||
Greater than 3.0% and Less than 3.5% | 6 | 0.43 | ||||||
Greater than 2.5% and Less than 3.0% | 4 | 0.29 | ||||||
Greater than 2.0% and Less than 2.5% | 19 | 1.37 | ||||||
Greater than 1.5% and Less than 2.0% | 43 | 3.11 | ||||||
Greater than 1.0% and Less than 1.5% | 112 | 8.10 | ||||||
Greater than 0.5% and Less than 1.0% | 220 | 15.92 | ||||||
Between 0.5% and –0.5% | 549 | 39.76 | ||||||
Less than –0.5% and Greater than –1.0% | 216 | 15.63 | ||||||
Less than –1.0% and Greater than –1.5% | 94 | 6.80 | ||||||
Less than –1.5% and Greater than –2.0% | 42 | 3.04 | ||||||
Less than –2.0% and Greater than –2.5% | 33 | 2.39 | ||||||
Less than –2.5% and Greater than –3.0% | 14 | 1.01 | ||||||
Less than –3.0% and Greater than –3.5% | 7 | 0.51 | ||||||
Less than –3.5% and Greater than –4.0% | 3 | 0.22 | ||||||
Less than –4.0% and Greater than –4.5% | 6 | 0.43 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.14 | ||||||
Less than –5.0% and Greater than –5.5% | 2 | 0.14 | ||||||
1,382 | 100.00 | % | ||||||
SUPPLEMENTAL INFORMATION | 95 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Pacific ex-Japan Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.5% | 7 | 0.51 | % | |||||
Greater than 4.0% and Less than 4.5% | 3 | 0.22 | ||||||
Greater than 3.5% and Less than 4.0% | 8 | 0.58 | ||||||
Greater than 3.0% and Less than 3.5% | 9 | 0.65 | ||||||
Greater than 2.5% and Less than 3.0% | 11 | 0.80 | ||||||
Greater than 2.0% and Less than 2.5% | 26 | 1.88 | ||||||
Greater than 1.5% and Less than 2.0% | 48 | 3.47 | ||||||
Greater than 1.0% and Less than 1.5% | 129 | 9.33 | ||||||
Greater than 0.5% and Less than 1.0% | 253 | 18.31 | ||||||
Between 0.5% and –0.5% | 575 | 41.60 | ||||||
Less than –0.5% and Greater than –1.0% | 109 | 7.89 | ||||||
Less than –1.0% and Greater than –1.5% | 81 | 5.86 | ||||||
Less than –1.5% and Greater than –2.0% | 46 | 3.33 | ||||||
Less than –2.0% and Greater than –2.5% | 22 | 1.59 | ||||||
Less than –2.5% and Greater than –3.0% | 21 | 1.52 | ||||||
Less than –3.0% and Greater than –3.5% | 11 | 0.80 | ||||||
Less than –3.5% and Greater than –4.0% | 6 | 0.43 | ||||||
Less than –4.0% and Greater than –4.5% | 4 | 0.29 | ||||||
Less than –4.5% and Greater than –5.0% | 3 | 0.22 | ||||||
Less than –5.0% and Greater than –5.5% | 3 | 0.22 | ||||||
Less than –5.5% and Greater than –6.0% | 2 | 0.14 | ||||||
Less than –6.0% | 5 | 0.36 | ||||||
1,382 | 100.00 | % | ||||||
96 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Singapore Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.5% | 6 | 0.43 | % | |||||
Greater than 4.0% and Less than 4.5% | 3 | 0.22 | ||||||
Greater than 3.5% and Less than 4.0% | 4 | 0.29 | ||||||
Greater than 3.0% and Less than 3.5% | 2 | 0.14 | ||||||
Greater than 2.5% and Less than 3.0% | 13 | 0.94 | ||||||
Greater than 2.0% and Less than 2.5% | 35 | 2.53 | ||||||
Greater than 1.5% and Less than 2.0% | 47 | 3.40 | ||||||
Greater than 1.0% and Less than 1.5% | 133 | 9.62 | ||||||
Greater than 0.5% and Less than 1.0% | 265 | 19.18 | ||||||
Between 0.5% and –0.5% | 554 | 40.11 | ||||||
Less than –0.5% and Greater than –1.0% | 129 | 9.33 | ||||||
Less than –1.0% and Greater than –1.5% | 81 | 5.86 | ||||||
Less than –1.5% and Greater than –2.0% | 42 | 3.04 | ||||||
Less than –2.0% and Greater than –2.5% | 31 | 2.24 | ||||||
Less than –2.5% and Greater than –3.0% | 12 | 0.87 | ||||||
Less than –3.0% and Greater than –3.5% | 8 | 0.58 | ||||||
Less than –3.5% and Greater than –4.0% | 4 | 0.29 | ||||||
Less than –4.0% and Greater than –4.5% | 6 | 0.43 | ||||||
Less than –4.5% and Greater than –5.0% | 3 | 0.22 | ||||||
Less than –5.0% and Greater than –5.5% | 2 | 0.14 | ||||||
Less than –5.5% | 2 | 0.14 | ||||||
1,382 | 100.00 | % | ||||||
SUPPLEMENTAL INFORMATION | 97 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI South Korea Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.5% | 9 | 0.65 | % | |||||
Greater than 5.0% and Less than 5.5% | 1 | 0.07 | ||||||
Greater than 4.5% and Less than 5.0% | 4 | 0.29 | ||||||
Greater than 4.0% and Less than 4.5% | 4 | 0.29 | ||||||
Greater than 3.5% and Less than 4.0% | 8 | 0.58 | ||||||
Greater than 3.0% and Less than 3.5% | 12 | 0.87 | ||||||
Greater than 2.5% and Less than 3.0% | 21 | 1.52 | ||||||
Greater than 2.0% and Less than 2.5% | 40 | 2.89 | ||||||
Greater than 1.5% and Less than 2.0% | 69 | 4.99 | ||||||
Greater than 1.0% and Less than 1.5% | 122 | 8.83 | ||||||
Greater than 0.5% and Less than 1.0% | 219 | 15.85 | ||||||
Between 0.5% and –0.5% | 451 | 32.63 | ||||||
Less than –0.5% and Greater than –1.0% | 149 | 10.78 | ||||||
Less than –1.0% and Greater than –1.5% | 99 | 7.16 | ||||||
Less than –1.5% and Greater than –2.0% | 54 | 3.91 | ||||||
Less than –2.0% and Greater than –2.5% | 34 | 2.46 | ||||||
Less than –2.5% and Greater than –3.0% | 30 | 2.17 | ||||||
Less than –3.0% and Greater than –3.5% | 16 | 1.16 | ||||||
Less than –3.5% and Greater than –4.0% | 11 | 0.80 | ||||||
Less than –4.0% and Greater than –4.5% | 6 | 0.43 | ||||||
Less than –4.5% and Greater than –5.0% | 4 | 0.29 | ||||||
Less than –5.0% and Greater than –5.5% | 3 | 0.22 | ||||||
Less than –5.5% and Greater than –6.0% | 5 | 0.36 | ||||||
Less than –6.0% | 11 | 0.80 | ||||||
1,382 | 100.00 | % | ||||||
98 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Taiwan Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 7 | 0.51 | % | |||||
Greater than 4.5% and Less than 5.0% | 9 | 0.65 | ||||||
Greater than 4.0% and Less than 4.5% | 5 | 0.36 | ||||||
Greater than 3.5% and Less than 4.0% | 10 | 0.72 | ||||||
Greater than 3.0% and Less than 3.5% | 14 | 1.01 | ||||||
Greater than 2.5% and Less than 3.0% | 17 | 1.23 | ||||||
Greater than 2.0% and Less than 2.5% | 30 | 2.17 | ||||||
Greater than 1.5% and Less than 2.0% | 63 | 4.56 | ||||||
Greater than 1.0% and Less than 1.5% | 108 | 7.81 | ||||||
Greater than 0.5% and Less than 1.0% | 213 | 15.41 | ||||||
Between 0.5% and –0.5% | 463 | 33.51 | ||||||
Less than –0.5% and Greater than –1.0% | 194 | 14.04 | ||||||
Less than –1.0% and Greater than –1.5% | 100 | 7.24 | ||||||
Less than –1.5% and Greater than –2.0% | 54 | 3.91 | ||||||
Less than –2.0% and Greater than –2.5% | 32 | 2.32 | ||||||
Less than –2.5% and Greater than –3.0% | 17 | 1.23 | ||||||
Less than –3.0% and Greater than –3.5% | 22 | 1.59 | ||||||
Less than –3.5% and Greater than –4.0% | 7 | 0.51 | ||||||
Less than –4.0% and Greater than –4.5% | 2 | 0.14 | ||||||
Less than –4.5% and Greater than –5.0% | 3 | 0.22 | ||||||
Less than –5.0% and Greater than –5.5% | 2 | 0.14 | ||||||
Less than –5.5% and Greater than –6.0% | 2 | 0.14 | ||||||
Less than –6.0% | 8 | 0.58 | ||||||
1,382 | 100.00 | % | ||||||
SUPPLEMENTAL INFORMATION | 99 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Thailand Investable Market Index Fund
Period Covered: April 1, 2008 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 1 | 0.18 | % | |||||
Greater than 4.5% and Less than 5.0% | 2 | 0.35 | ||||||
Greater than 4.0% and Less than 4.5% | 3 | 0.53 | ||||||
Greater than 3.5% and Less than 4.0% | 3 | 0.53 | ||||||
Greater than 3.0% and Less than 3.5% | 5 | 0.88 | ||||||
Greater than 2.5% and Less than 3.0% | 14 | 2.47 | ||||||
Greater than 2.0% and Less than 2.5% | 17 | 3.00 | ||||||
Greater than 1.5% and Less than 2.0% | 36 | 6.35 | ||||||
Greater than 1.0% and Less than 1.5% | 73 | 12.87 | ||||||
Greater than 0.5% and Less than 1.0% | 99 | 17.46 | ||||||
Between 0.5% and –0.5% | 152 | 26.79 | ||||||
Less than –0.5% and Greater than –1.0% | 50 | 8.82 | ||||||
Less than –1.0% and Greater than –1.5% | 37 | 6.53 | ||||||
Less than –1.5% and Greater than –2.0% | 27 | 4.76 | ||||||
Less than –2.0% and Greater than –2.5% | 15 | 2.65 | ||||||
Less than –2.5% and Greater than –3.0% | 9 | 1.59 | ||||||
Less than –3.0% and Greater than –3.5% | 9 | 1.59 | ||||||
Less than –3.5% and Greater than –4.0% | 2 | 0.35 | ||||||
Less than –4.0% and Greater than –4.5% | 2 | 0.35 | ||||||
Less than –4.5% and Greater than –5.0% | 3 | 0.53 | ||||||
Less than –5.0% and Greater than –5.5% | 3 | 0.53 | ||||||
Less than –5.5% and Greater than –6.0% | 1 | 0.18 | ||||||
Less than –6.0% | 4 | 0.71 | ||||||
567 | 100.00 | % | ||||||
100 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer 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 BFA and other service providers. Each Director serves until his or her successor is duly elected or appointed and qualified. Each Officer serves until he or she resigns, is removed, dies, retires or becomes disqualified.
iShares, Inc., iShares Trust, BlackRock Funds III (formerly, Barclays Global Investors Funds) and Master Investment Portfolio, each an open-end management investment company registered under the 1940 Act, are considered 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, as a result, oversees a total of 214 funds within the fund complex. With the exception of Robert S. Kapito, the address of each Director and Officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52nd Street, New York, NY 10055. The Board has designated George G.C. Parker as its Independent Chairman. Additional information about the Funds’ Directors and Officers may be found in the Funds’ combined Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-474-2737.
Interested Directors and Officers
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
Robert S. Kapitoa (53) | Director (since 2009). | President and Director, BlackRock, Inc. (since 2006 and 2007, respectively); Vice Chairman of BlackRock, Inc. and Head of BlackRock’s Portfolio Management Group (since its formation in 1998) and BlackRock’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); Chairman, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983). | Trustee of iShares Trust (since 2009); Director of BlackRock, Inc. (since 2007). | |||
Michael Lathamb (45) | Director (since 2010); President (since 2007). | Global Chief Executive Officer of iShares, BTC (since 2010); Managing Director, BTC (since 2009); Head of Americas iShares, Barclays Global Investors (“BGI”) (2007-2009); Director and Chief Financial Officer of Barclays Global Investors International, Inc. (2005-2009); Chief Operating Officer of the Intermediary Investor and Exchange Traded Products Business of BGI (2003-2007). | Trustee of iShares Trust (since 2010). |
a | Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. |
b | Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates. |
DIRECTORAND OFFICER INFORMATION | 101 |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES® , INC.
Independent Directors
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
George G.C. Parker (71) | Director (since 2000); Independent Chairman (since 2010). | Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University: Graduate School of Business (since 1994). | Trustee of iShares Trust (since 2002); Independent Chairman of iShares Trust (since 2010); Director of Continental Airlines Inc. (since 1996); Director of Community First Financial Group (since 1995); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of NETGEAR, Inc. (since 2007). | |||
Darrell Duffie (56) | Director (since 2008). | Professor, Stanford University: Graduate School of Business (since 1984). | Trustee of iShares Trust (since 2008); Director of Moody’s Corp. (since 2008). | |||
Cecilia H. Herbert (61) | Director (since 2005). | Director (since 1998) and President (since 2007) of the Board of Directors, Catholic Charities CYO; Trustee of Pacific Select Funds (2004-2005); Trustee (since 2005) and Chair of the Finance and Investment Committees (since 2006) of the Thacher School; Chair of Investment Committee, Archdiocese of San Francisco (1994-2005). | Trustee of iShares Trust (since 2005); Director, Forward Funds (34 portfolios) (since 2009). | |||
Charles A. Hurty (67) | Director (since 2005). | Retired; Partner, KPMG LLP (1968-2001). | Trustee of iShares Trust (since 2005); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002). | |||
John E. Kerrigan (55) | Director (since 2005). | Chief Investment Officer, Santa Clara University (since 2002). | Trustee of iShares Trust (since 2005). | |||
John E. Martinez (49) | Director (since 2003). | Director of Real Estate Equity Exchange (since 2005). | Trustee of iShares Trust (since 2003); Chairman, Independent Review Committee, Canadian iShares Funds (since 2007). |
102 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES® , INC.
Independent Directors (Continued)
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
Robert H. Silver (55) | Director (since 2007). | President and Co-Founder of The Bravitas Group, Inc. (since 2006); Member, Non-Investor Advisory Board of Russia Partners II, LP (since 2006); President and Chief Operating Officer (2003-2005) and Director (1999-2005) of UBS Financial Services, Inc.; President and Chief Executive Officer of UBS Services USA, LLC (1999-2005); Managing Director, UBS America, Inc. (2000-2005); Director and Vice Chairman of the YMCA of Greater NYC (since 2001); Broadway Producer (since 2006); Co-Founder and Vice President of Parentgiving Inc. (since 2008); Director and Member of the Audit and Compensation Committee of EPAM Systems, Inc. (2006-2009). | Trustee of iShares Trust (since 2007). |
DIRECTORAND OFFICER INFORMATION | 103 |
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Director and Officer Information (Unaudited) (Continued)
iSHARES® , INC.
Officers
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | ||
Geoffrey D. Flynn (53) | Executive Vice President and Chief Operating Officer (since 2008). | Managing Director, BTC (since 2009); Chief Operating Officer, U.S. iShares, BGI (2007-2009); President, Van Kampen Investors Services (2003-2007); Managing Director, Morgan Stanley (2002-2007); President, Morgan Stanley Trust, FSB (2002- 2007). | ||
Eilleen M. Clavere (58) | Secretary (since 2007). | Director, BTC (since 2009); Director of Legal Administration of Intermediary Investor Business of BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005). | ||
Jack Gee (51) | Treasurer and Chief Financial Officer | Managing Director, BTC (since 2009); Senior Director of Fund Administration of Intermediary Investor Business of BGI (2009); Director of Fund Administration of Intermediary Investor Business of BGI (2004-2009). | ||
Patrick O’Connor (43) | Vice President (since 2007). | Managing Director, BTC (since 2009); Head of iShares Portfolio Management, BGI (2006-2009); Senior Portfolio Manager, BGI (1999-2006). | ||
Amy Schioldager (48) | Executive Vice President (since 2007). | Managing Director, BTC (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006). | ||
Ira P. Shapiro (47) | Vice President and Chief Legal Officer (since 2007). | Managing Director, BTC (since 2009); Associate General Counsel, BGI (2004-2009). | ||
Lee Sterne (45) | Vice President (since 2007). | Managing Director, BTC (since 2009); Head of U.S. Fixed Income Index and iShares, BGI (2007-2009); Senior Portfolio Manager, BGI (2004-2007). | ||
Matt Tucker (38) | Vice President (since 2007). | Managing Director, BTC (since 2009); Director of Fixed Income Investment Strategy, BGI (2009); Head of U.S. Fixed Income Investment Solutions, BGI (2005-2008); Fixed Income Investment Strategist, BGI (2003-2005). |
104 | | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS | |
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Notes:
NOTES | 105 |
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Notes:
106 | | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS | |
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Notes:
NOTES | 107 |
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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 Russell Domestic Index Funds | Trading Symbol | |
iShares Russell 3000 | IWV | |
iShares Russell 3000 Growth | IWZ | |
iShares Russell 3000 Value | IWW | |
iShares Russell Top 200 | IWL | |
iShares Russell Top 200 Growth | IWY | |
iShares Russell Top 200 Value | IWX | |
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 S&P Domestic Index Funds | ||
iShares S&P 1500 | ISI | |
iShares S&P 100 | OEF | |
iShares S&P 500 | IVV | |
iShares S&P 500 Growth | IVW | |
iShares S&P 500 Value | IVE | |
iShares S&P MidCap 400 | IJH | |
iShares S&P MidCap 400 Growth | IJK | |
iShares S&P MidCap 400 Value | IJJ | |
iShares S&P SmallCap 600 | IJR | |
iShares S&P SmallCap 600 Growth | IJT | |
iShares S&P SmallCap 600 Value | IJS | |
iShares Morningstar Domestic 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 Dow Jones Domestic Index Fund | ||
iShares Dow Jones U.S. | IYY | |
iShares MSCI Domestic Index Fund | ||
iShares MSCI USA | EUSA | |
iShares MSCI Socially Responsible Index Funds | ||
iShares MSCI KLD 400 Social | DSI | |
iShares MSCI USA ESG Select Social | KLD | |
iShares NYSE Domestic Index Funds | ||
iShares NYSE Composite | NYC | |
iShares NYSE 100 | NY |
iShares Domestic Specialty Index Funds | Trading Symbol | |
iShares S&P U.S. Preferred Stock | PFF | |
iShares Dow Jones Select Dividend | DVY | |
iShares North American Sector/Subsector Index Funds | ||
iShares S&P North American Technology Sector | IGM | |
iShares S&P North American Technology-Multimedia | IGN | |
iShares S&P North American Technology- | IGW | |
iShares S&P North American Technology-Software | IGV | |
iShares S&P North American Natural Resources Sector | IGE | |
iShares Domestic Sector Index Funds | ||
iShares Dow Jones U.S. Basic Materials Sector | IYM | |
iShares Dow Jones U.S. Consumer Goods Sector | IYK | |
iShares Dow Jones U.S. Consumer Services Sector | IYC | |
iShares Dow Jones U.S. Energy Sector | IYE | |
iShares Dow Jones U.S. Financial Sector | IYF | |
iShares Dow Jones U.S. Healthcare Sector | IYH | |
iShares Dow Jones U.S. Industrial Sector | IYJ | |
iShares Dow Jones U.S. Technology Sector | IYW | |
iShares Dow Jones U.S. Telecommunications Sector | IYZ | |
iShares Dow Jones U.S. Utilities Sector | IDU | |
iShares Domestic Subsector Index Funds | ||
iShares Dow Jones Transportation Average | IYT | |
iShares Dow Jones U.S. Aerospace & Defense | ITA | |
iShares Dow Jones U.S. Broker-Dealers | IAI | |
iShares Dow Jones U.S. Financial Services | IYG | |
iShares Dow Jones U.S. Healthcare Providers | IHF | |
iShares Dow Jones U.S. Home Construction | ITB | |
iShares Dow Jones U.S. Insurance | IAK | |
iShares Dow Jones U.S. Medical Devices | IHI | |
iShares Dow Jones U.S. Oil & Gas Exploration & | IEO | |
iShares Dow Jones U.S. Oil Equipment & Services | IEZ | |
iShares Dow Jones U.S. Pharmaceuticals | IHE | |
iShares Dow Jones U.S. Regional Banks | IAT | |
iShares Nasdaq Biotechnology | IBB | |
iShares Domestic Real Estate Index Funds | ||
iShares Cohen & Steers Realty Majors | ICF | |
iShares Dow Jones U.S. Real Estate | IYR | |
iShares FTSE NAREIT Real Estate 50 | FTY | |
iShares FTSE NAREIT Industrial/Office Capped | FIO | |
iShares FTSE NAREIT Mortgage Plus Capped | REM | |
iShares FTSE NAREIT Residential Plus Capped | REZ | |
iShares FTSE NAREIT Retail Capped | RTL | |
iShares Target Risk Index Funds | ||
iShares S&P Conservative Allocation | AOK | |
iShares S&P Moderate Allocation | AOM | |
iShares S&P Growth Allocation | AOR | |
iShares S&P Aggressive Allocation | AOA |
108 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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The iShares® Family of Funds (Continued)
iShares International Country Index Funds | Trading Symbol | |
iShares FTSE China (HK Listed) | FCHI | |
iShares FTSE/Xinhua China 25 | FXI | |
iShares MSCI Australia | EWA | |
iShares MSCI Austria Investable Market | EWO | |
iShares MSCI Belgium Investable Market | EWK | |
iShares MSCI Brazil | EWZ | |
iShares MSCI Brazil Small Cap | EWZS | |
iShares MSCI Canada | EWC | |
iShares MSCI Chile Investable Market | ECH | |
iShares MSCI China Small Cap | ECNS | |
iShares MSCI France | EWQ | |
iShares MSCI Germany | EWG | |
iShares MSCI Hong Kong | EWH | |
iShares S&P India Nifty 50 | INDY | |
iShares MSCI Indonesia Investable Market | EIDO | |
iShares MSCI Ireland Capped Investable Market | EIRL | |
iShares MSCI Israel Capped Investable Market | EIS | |
iShares MSCI Italy | EWI | |
iShares MSCI Japan | EWJ | |
iShares MSCI Japan Small Cap | SCJ | |
iShares S&P/TOPIX 150 | ITF | |
iShares MSCI Malaysia | EWM | |
iShares MSCI Mexico Investable Market | EWW | |
iShares MSCI Netherlands Investable Market | EWN | |
iShares MSCI New Zealand Investable Market | ENZL | |
iShares MSCI All Peru Capped | EPU | |
iShares MSCI Philippines Investable Market | EPHE | |
iShares MSCI Poland Investable Market | EPOL | |
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 Thailand Investable Market | THD | |
iShares MSCI Turkey Investable Market | TUR | |
iShares MSCI United Kingdom | EWU | |
iShares International Index Funds | ||
iShares MSCI ACWI ex US | ACWX | |
iShares MSCI EAFE | EFA | |
iShares MSCI EAFE Growth | EFG | |
iShares MSCI EAFE Value | EFV | |
iShares MSCI EAFE Small Cap | SCZ | |
iShares FTSE Developed Small Cap ex-North America | IFSM | |
iShares MSCI Emerging Markets | EEM | |
iShares MSCI Emerging Markets Eastern Europe | ESR | |
iShares MSCI BRIC | BKF | |
iShares MSCI EMU | EZU | |
iShares MSCI All Country Asia ex Japan | AAXJ | |
iShares MSCI Pacific ex-Japan | EPP | |
iShares S&P Asia 50 | AIA | |
iShares S&P Europe 350 | IEV | |
iShares S&P Latin America 40 | ILF | |
iShares International/Global Real Estate Index Funds | ||
iShares S&P Developed ex-U.S. Property | WPS | |
iShares FTSE EPRA/NAREIT Developed | IFGL | |
iShares FTSE EPRA/NAREIT Developed Asia | IFAS | |
iShares FTSE EPRA/NAREIT Developed Europe | IFEU | |
iShares FTSE EPRA/NAREIT North America | IFNA |
iShares Target Date Index Funds | Trading Symbol | |
iShares S&P Target Date Retirement Income | TGR | |
iShares S&P Target Date 2010 | TZD | |
iShares S&P Target Date 2015 | TZE | |
iShares S&P Target Date 2020 | TZG | |
iShares S&P Target Date 2025 | TZI | |
iShares S&P Target Date 2030 | TZL | |
iShares S&P Target Date 2035 | TZO | |
iShares S&P Target Date 2040 | TZV | |
iShares Global Index Funds | ||
iShares MSCI ACWI | ACWI | |
iShares S&P Global 100 | IOO | |
iShares MSCI Kokusai | TOK | |
iShares International/Global Sector Index Funds | ||
iShares MSCI ACWI ex US Consumer Discretionary Sector | AXDI | |
iShares MSCI ACWI ex US Consumer Staples Sector | AXSL | |
iShares MSCI ACWI ex US Energy Sector | AXEN | |
iShares MSCI ACWI ex US Financials Sector | AXFN | |
iShares MSCI ACWI ex US Health Care Sector | AXHE | |
iShares MSCI ACWI ex US Industrials Sector | AXID | |
iShares MSCI ACWI ex US Information Technology | AXIT | |
iShares MSCI ACWI ex US Materials Sector | AXMT | |
iShares MSCI ACWI ex US Telecommunication Services | AXTE | |
iShares MSCI ACWI ex US Utilities Sector | AXUT | |
iShares MSCI Emerging Markets Financials Sector | EMFN | |
iShares MSCI Emerging Markets Materials Sector | EMMT | |
iShares MSCI Europe Financials Sector | EUFN | |
iShares MSCI Far East Financials Sector | FEFN | |
iShares S&P Global Consumer Discretionary Sector | RXI | |
iShares S&P Global Consumer Staples Sector | KXI | |
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 Industrials Sector | EXI | |
iShares S&P Global Materials Sector | MXI | |
iShares S&P Global Technology Sector | IXN | |
iShares S&P Global Telecommunications Sector | IXP | |
iShares S&P Global Utilities Sector | JXI | |
iShares International/Global Theme Based and Specialty Index Funds | ||
iShares Dow Jones International Select Dividend | IDV | |
iShares S&P Emerging Markets Infrastructure | EMIF | |
iShares S&P Global Clean Energy | ICLN | |
iShares S&P Global Infrastructure | IGF | |
iShares S&P Global Nuclear Energy | NUCL | |
iShares S&P Global Timber & Forestry | WOOD | |
iShares U.S. Multisector Bond Funds | ||
iShares Barclays Aggregate | AGG | |
iShares Barclays Government/Credit | GBF | |
iShares Barclays Intermediate Government/Credit | GVI | |
iShares 10+ Year Government/Credit | GLJ | |
iShares U.S. Government Bond Funds | ||
iShares Barclays Short Treasury | SHV | |
iShares Barclays 1-3 Year Treasury | SHY | |
iShares Barclays 3-7 Year Treasury | IEI | |
iShares Barclays 7-10 Year Treasury | IEF | |
iShares Barclays 10-20 Year Treasury | TLH | |
iShares Barclays 20+ Year Treasury | TLT | |
iShares Barclays TIPS | TIP | |
iShares Barclays Agency | AGZ |
THE iSHARES FAMILYOF FUNDS | 109 |
Table of Contents
The iShares® Family of Funds (Continued)
iShares U.S. Credit Bond Funds | Trading Symbol | |
iShares Barclays Credit | CFT | |
iShares Barclays 1-3 Year Credit | CSJ | |
iShares Barclays Intermediate Credit | CIU | |
iShares iBoxx $ Investment Grade Corporate | LQD | |
iShares 10+ Year Credit | CLY | |
iShares iBoxx $ High Yield Corporate | HYG |
iShares AMT-Free Municipal Bond Funds | Trading Symbol | |
iShares S&P National AMT-Free Municipal | MUB | |
iShares S&P Short Term National AMT-Free Municipal | SUB | |
iShares S&P California AMT-Free Municipal | CMF | |
iShares S&P New York AMT-Free Municipal | NYF | |
iShares 2012 S&P AMT-Free Municipal Series | MUAA | |
iShares 2013 S&P AMT-Free Municipal Series | MUAB | |
iShares 2014 S&P AMT-Free Municipal Series | MUAC | |
iShares 2015 S&P AMT-Free Municipal Series | MUAD | |
iShares 2016 S&P AMT-Free Municipal Series | MUAE | |
iShares 2017 S&P AMT-Free Municipal Series | MUAF | |
iShares U.S. Securitized Bond Fund | ||
iShares Barclays MBS | MBB | |
iShares International Bond Funds | ||
iShares JPMorgan USD Emerging Markets | EMB | |
iShares S&P/Citigroup International Treasury | IGOV | |
iShares S&P/Citigroup 1-3 Year International Treasury | ISHG |
The iShares Funds that are registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 as iShares, Inc. and iShares Trust (“Funds”) are distributed in the U.S. by SEI Investments Distribution Co. (“SEI”). iSHARES® is a registered trademark of BlackRock Institutional Trust Company, N.A. The Funds are not sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., European Public Real Estate Association (“EPRA®”), FTSE International Limited (“FTSE”), FTSE/Xinhua Index Limited (“FXI”), iBoxx®, JPMorgan Chase & Co., MSCI Inc., Morningstar Inc., The NASDAQ OMX Group, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), New York Stock Exchange, Inc., Russell Investment Group or Standard & Poor’s, nor are they sponsored, endorsed or issued by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the companies listed above. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50/Residential/Retail/Mortgage or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Developed Real Estate ex-US/North America/Europe/Asia Index; all rights vest in FTSE, NAREIT and EPRA. All rights in the FTSE Developed Small Cap ex-North America Index vest in FTSE. “FTSE” is a trade- and servicemark of London Stock Exchange and The Financial Times Limited; “Xinhua” is a trade- and servicemark of Xinhua Financial Network Limited.
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 2010 Annual Report.
iS-3594-1010
110 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on your iShares holdings. In addition, it’s a way we can all care for our environment. To that end, we are pleased to offer shareholder reports and prospectuses online.
Once you have enrolled, you will no longer receive shareholder reports and prospectuses in the mail. Instead, you will receive e-mail notifications announcing that the shareholder report or prospectus has been posted on the iShares website at www.iShares.com and is available to be viewed or downloaded.
To sign up for electronic delivery, please follow these simple steps:
1. Go to www.icsdelivery.com.
2. From the main page, select the first letter of your brokerage firm’s name.
3. Select your brokerage institution from the list that follows. If your brokerage firm is not listed, electronic delivery may not be available. Please contact your brokerage firm or financial adviser.
4. Fill out the appropriate information and provide the e-mail address where you would like your notifications sent.
Your information and e-mail address will be kept confidential and only used to deliver documents to you. If at any time you are not satisfied, you can cancel electronic delivery at www.icsdelivery.com and once again receive physical delivery of your materials. If you have any questions, please contact your brokerage firm or financial adviser. |
Table of Contents
For more information:
WWW.iSHARES.COM
1-800-iShares (1-800-474-2737)
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.
Investing involves risk, including possible loss of principal.
The iShares Funds are distributed by SEI Investments Distribution Co. (SEI).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the company listed above.
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 ending June 30 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 U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.
The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a monthly basis on the Funds’ website.
Certain financial information required by regulations or listing exchange rules in jurisdictions outside the U.S. in which iShares Funds are cross-listed may be publicly filed in those jurisdictions. This information is available upon request by calling 1-800-474-2737.
©2010 BlackRock Institutional Trust Company, N.A. All rights reserved. iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A. All other trademarks, servicemarks, or registered trademarks are the property of their respective owners.
iS-AR-83-0810
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Table of Contents
2010 ANNUAL REPORT TO SHAREHOLDERS
iSHARES® MSCI SERIES
AUGUST 31, 2010
» Would you prefer to receive materials like this electronically?
See inside back cover for details.
iShares MSCI Japan Index Fund | EWJ | NYSE Arca
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Management’s Discussion of Fund Performance
iSHARES® MSCI JAPAN INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(6.41)% | (6.45)% | (5.92)% | (1.92)% | (2.30)% | (1.44)% | (3.17)% | (3.27)% | (2.72)% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Ten Years Ended 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
(6.41)% | (6.45)% | (5.92)% | (9.23)% | (11.00)% | (7.02)% | (27.51)% | (28.29)% | (24.12)% |
“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
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 8/31/10 | ||||
Sector | Percentage of Net Assets | |||
Consumer Cyclical | 25.38 | % | ||
Industrial | 21.78 | |||
Financial | 17.01 | |||
Consumer Non-Cyclical | 10.76 | |||
Basic Materials | 6.53 | |||
Utilities | 6.52 | |||
Communications | 5.57 | |||
Technology | 4.96 | |||
Energy | 1.42 | |||
Short-Term and Other Net Assets | 0.07 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Toyota Motor Corp. | 4.46 | % | ||
Mitsubishi UFJ Financial | 2.90 | |||
Honda Motor Co. Ltd. | 2.57 | |||
Canon Inc. | 2.24 | |||
Sumitomo Mitsui Financial | 1.89 | |||
Tokyo Electric Power Co. | 1.70 | |||
Takeda Pharmaceutical Co. Ltd. | 1.62 | |||
Nintendo Co. Ltd. | 1.48 | |||
Mizuho Financial Group Inc. | 1.47 | |||
Mitsubishi Corp. | 1.36 | |||
TOTAL | 21.69 | % | ||
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 Japanese market, as measured by the MSCI Japan IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was (6.41)%, while the total return for the Index was (5.92)%.
The Japanese broad equity market performed poorly in comparison to other Asian markets for the reporting period. Japan’s economy slowed sharply as the reporting period came to a close. GDP rose just 0.4% in the most recent quarter against the year-ago period, down from growth of 4.4% in the quarter ended March 31. In many ways, 2010 echoed back to 2009: weak consumer spending, concerns of deflation, soaring federal debt and weak demand for Japanese exports. Consumer spending, which accounts for 60% of Japan’s economy, was flat during the first half of 2010. Persistent deflation created a drag on economic growth, as consumers waited for prices to drop before buying goods and services. Inflation was a negative 1.9% in the most recent quarter, a slight improvement over the prior quarter, when prices fell 2.8%. Japan’s federal debt is nearly 200% of annual GDP, and the International Monetary Fund recently warned that Japan was reaching a point at which markets become concerned about the threat of default.
Despite these concerns, Japan’s currency continued to strengthen, reaching a 15-year high against the U.S. dollar, dampening demand for Japanese exports. In response, as the reporting period came to a close, the Japanese government was considering options to weaken the yen by intervening in the market. Still, the strong yen has had its advantages, elevating Japan’s buying power in other countries. Through August 2010, Japanese corporations have already spent more money acquiring foreign companies than in all of 2009 with major acquisitions having taken place in telecommunications, convenience stores and e-commerce.
However, the Japanese government, which last intervened in 2004, faced resistance from the U.S. and Europe, because a weaker Japanese currency translates into a stronger dollar and euro, which in turn could dampen U.S. and European exports. Political resistance was also felt from within Japan. The Democratic Party of Japan (DPJ), which took power from the long-ruling Liberal Democratic Party, announced plans to cut Japan’s top corporate tax rate, the highest in the industrialized world, from 40% to 25%. However, political concerns make such a move difficult to accomplish. Already, Prime Minister Naoto Kan has had to fend off a challenge to his power from within his own party.
2 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI JAPAN INDEX FUND
In this environment, six of the Fund’s top ten holdings as of August 31, 2010 recorded gains, led by Takeda Pharmaceutical Co. Ltd. and The Tokyo Electric Power Co. Inc., both of which posted double-digit gains for the reporting period. Financial companies Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mitsubishi UFJ Financial Group Inc. posted double-digit losses, as did Toyota Motor Corp.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 3 |
Table of Contents
Shareholder Expenses (Unaudited)
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, 2010 to August 31, 2010.
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 (3/1/10) | Ending Account Value (8/31/10) | Annualized Expense Ratio | Expenses Paid During Perioda (3/1/10 to 8/31/10) | |||||||||||||
Actual | $1,000.00 | $953.60 | 0.53 | % | $2.61 | |||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.50 | 0.53 | 2.70 |
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). |
4 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 99.93% |
| |||||||
ADVERTISING – 0.22% | ||||||||
Dentsu Inc. | 278,800 | $ | 6,358,247 | |||||
Hakuhodo DY Holdings Inc. | 48,790 | 2,280,585 | ||||||
8,638,832 | ||||||||
AGRICULTURE – 0.66% |
| |||||||
Japan Tobacco Inc. | 8,364 | 25,967,545 | ||||||
25,967,545 | ||||||||
AIRLINES – 0.13% | ||||||||
All Nippon Airways | 1,396,000 | 5,053,995 | ||||||
5,053,995 | ||||||||
APPAREL – 0.17% | ||||||||
ASICS Corp. | 697,000 | 6,549,160 | ||||||
6,549,160 | ||||||||
AUTO MANUFACTURERS – 9.09% |
| |||||||
Fuji Heavy Industries Ltd.a | 1,394,000 | 7,835,751 | ||||||
Hino Motors Ltd. | 697,000 | 3,071,216 | ||||||
Honda Motor Co. Ltd. | 3,066,800 | 101,496,215 | ||||||
Isuzu Motors Ltd. | 2,091,000 | 6,947,588 | ||||||
Mazda Motor Corp. | 2,788,000 | 6,242,039 | ||||||
Mitsubishi Motors Corp.a | 6,970,000 | 8,881,624 | ||||||
Nissan Motor Co. Ltd.a | 4,669,900 | 35,704,130 | ||||||
Suzuki Motor Corp. | 627,300 | 12,445,895 | ||||||
Toyota Motor Corp. | 5,157,800 | 175,673,550 | ||||||
358,298,008 | ||||||||
AUTO PARTS & EQUIPMENT – 2.23% |
| |||||||
Aisin Seiki Co. Ltd. | 348,700 | 9,027,912 | ||||||
Bridgestone Corp. | 1,184,900 | 20,573,826 | ||||||
Denso Corp. | 906,100 | 24,581,348 | ||||||
JTEKT Corp. | 348,500 | 2,859,551 | ||||||
NGK Spark Plug Co. Ltd. | 428,000 | 5,010,408 | ||||||
NHK Spring Co. Ltd. | 697,000 | 5,785,507 | ||||||
NOK Corp. | 209,100 | 3,155,052 | ||||||
Sumitomo Rubber | 348,500 | 3,162,522 | ||||||
Toyoda Gosei Co. Ltd. | 139,400 | 2,852,081 | ||||||
Toyota Boshoku Corp. | 139,400 | 2,028,663 | ||||||
Toyota Industries Corp. | 348,500 | 8,761,266 | ||||||
87,798,136 |
Security | Shares | Value | ||||||
BANKS – 9.45% | ||||||||
77 Bank Ltd. (The) | 697,000 | $ | 3,469,644 | |||||
Aozora Bank Ltd. | 1,394,000 | 1,875,932 | ||||||
Bank of Kyoto Ltd. (The) | 697,000 | 5,553,090 | ||||||
Bank of Yokohama | 2,091,000 | 9,089,139 | ||||||
Chiba Bank Ltd. (The) | 1,394,000 | 7,852,352 | ||||||
Chuo Mitsui Trust | 2,091,000 | 7,420,722 | ||||||
Fukuoka Financial | 1,400,000 | 5,602,001 | ||||||
Gunma Bank Ltd. (The) | 697,000 | 3,602,453 | ||||||
Hachijuni Bank Ltd. (The) | 697,000 | 3,785,066 | ||||||
Hiroshima Bank Ltd. (The) | 697,000 | 2,788,996 | ||||||
Hokuhoku Financial | 2,793,000 | 4,889,496 | ||||||
Iyo Bank Ltd. (The) | 697,000 | 5,910,015 | ||||||
Joyo Bank Ltd. (The) | 1,394,000 | 5,677,599 | ||||||
Mitsubishi UFJ Financial | 23,907,180 | 114,169,098 | ||||||
Mizuho Financial | 37,707,700 | 57,928,943 | ||||||
Mizuho Trust & | 2,788,000 | 2,257,759 | ||||||
Nishi-Nippon City Bank | 1,394,000 | 3,917,876 | ||||||
Resona Holdings Inc. | 1,115,200 | 11,049,737 | ||||||
Sapporo Hokuyo | 627,300 | 2,958,328 | ||||||
Senshu Ikeda | 1,184,900 | 1,679,208 | ||||||
Seven Bank Ltd. | 1,394 | 2,652,866 | ||||||
Shinsei Bank Ltd.a,b | 1,394,000 | 1,062,475 | ||||||
Shizuoka Bank Ltd. (The) | 1,394,000 | 11,670,621 | ||||||
Sumitomo Mitsui Financial | 2,509,200 | 74,735,134 | ||||||
Sumitomo Trust and | 2,788,000 | 14,841,444 | ||||||
Suruga Bank Ltd. | 697,000 | 6,092,628 | ||||||
372,532,622 | ||||||||
BEVERAGES – 1.02% | ||||||||
Asahi Breweries Ltd. | 697,000 | 13,156,425 | ||||||
Coca-Cola West Co. Ltd. | 139,400 | 2,364,006 | ||||||
ITO EN Ltd. | 139,400 | 2,284,320 | ||||||
Kirin Holdings Co. Ltd. | 1,394,000 | 19,290,556 | ||||||
Sapporo Holdings Ltd. | 697,000 | 3,262,129 | ||||||
40,357,436 |
SCHEDULEOF INVESTMENTS | 5 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
BUILDING MATERIALS – 1.57% |
| |||||||
Asahi Glass Co. Ltd. | 2,091,000 | $ | 20,419,436 | |||||
Daikin Industries Ltd. | 418,200 | 14,253,762 | ||||||
JS Group Corp. | 487,900 | 9,331,516 | ||||||
Nippon Sheet Glass | 1,394,000 | 3,054,615 | ||||||
Panasonic Electric Works | 697,000 | 9,155,543 | ||||||
Rinnai Corp. | 69,700 | 4,166,893 | ||||||
Taiheiyo Cement Corp.a | 1,394,000 | 1,560,510 | ||||||
61,942,275 | ||||||||
CHEMICALS – 3.17% |
| |||||||
Asahi Kasei Corp. | 2,091,000 | 10,334,227 | ||||||
Daicel Chemical | 697,000 | 4,274,801 | ||||||
Denki Kagaku Kogyo K.K. | 697,000 | 2,805,597 | ||||||
Hitachi Chemical Co. Ltd. | 209,100 | 3,628,185 | ||||||
JSR Corp. | 348,500 | 5,138,061 | ||||||
Kaneka Corp. | 697,000 | 4,166,893 | ||||||
Mitsubishi Chemical | 2,439,500 | 11,562,713 | ||||||
Mitsubishi Gas Chemical | 697,000 | 3,768,465 | ||||||
Mitsui Chemicals Inc. | 1,394,000 | 3,569,251 | ||||||
Nitto Denko Corp. | 278,800 | 8,944,709 | ||||||
Shin-Etsu Chemical | 766,700 | 35,518,197 | ||||||
Showa Denko K.K. | 2,788,000 | 4,947,148 | ||||||
Sumitomo Chemical | 2,788,000 | 11,454,805 | ||||||
Taiyo Nippon Sanso Corp. | 697,000 | 5,519,889 | ||||||
Tokuyama Corp. | 697,000 | 3,378,338 | ||||||
Tosoh Corp. | 697,000 | 1,743,123 | ||||||
Ube Industries Ltd. | 2,091,000 | 4,432,511 | ||||||
125,186,913 | ||||||||
COMMERCIAL SERVICES – 1.01% |
| |||||||
Benesse Holdings Inc. | 139,400 | 6,283,541 | ||||||
Dai Nippon Printing | 1,394,000 | 16,219,340 | ||||||
Kamigumi Co. Ltd. | 697,000 | 5,055,055 | ||||||
Nissha Printing Co. Ltd.b | 69,700 | 1,538,098 | ||||||
Toppan Printing Co. Ltd. | 1,396,000 | 10,639,991 | ||||||
39,736,025 | ||||||||
COMPUTERS – 0.98% |
| |||||||
Fujitsu Ltd. | 3,485,000 | 24,154,698 | ||||||
Itochu Techno- | 69,700 | 2,272,700 |
Security | Shares | Value | ||||||
OBIC Co. Ltd. | 6,970 | $ | 1,312,322 | |||||
TDK Corp. | 209,100 | 10,956,770 | ||||||
38,696,490 | ||||||||
COSMETICS & PERSONAL CARE – 1.19% |
| |||||||
Kao Corp. | 1,045,500 | 24,316,560 | ||||||
Shiseido Co. Ltd. | 627,300 | 14,104,351 | ||||||
Unicharm Corp. | 69,700 | 8,508,098 | ||||||
46,929,009 | ||||||||
DISTRIBUTION & WHOLESALE – 4.28% |
| |||||||
Canon Marketing | 69,700 | 894,803 | ||||||
Hitachi High- | 139,400 | 2,262,739 | ||||||
ITOCHU Corp. | 2,788,000 | 22,776,801 | ||||||
Marubeni Corp. | 2,788,000 | 14,376,611 | ||||||
Mitsubishi Corp. | 2,509,200 | 53,787,781 | ||||||
Mitsui & Co. Ltd. | 3,275,900 | 42,640,928 | ||||||
Sojitz Corp. | 2,021,300 | 3,249,678 | ||||||
Sumitomo Corp. | 2,091,000 | 23,980,386 | ||||||
Toyota Tsusho Corp. | 348,500 | 4,988,651 | ||||||
168,958,378 | ||||||||
DIVERSIFIED FINANCIAL SERVICES – 2.02% |
| |||||||
Acom Co. Ltd. | 83,648 | 1,263,136 | ||||||
AEON Credit Service | 139,470 | 1,473,263 | ||||||
Credit Saison Co. Ltd. | 278,800 | 3,542,689 | ||||||
Daiwa Securities | 2,788,000 | 11,321,996 | ||||||
Mitsubishi UFJ Lease & | 111,520 | 3,970,999 | ||||||
Mizuho Securities Co. Ltd. | 697,000 | 1,560,510 | ||||||
Nomura Holdings Inc. | 6,621,500 | 37,298,672 | ||||||
ORIX Corp. | 195,160 | 14,688,713 | ||||||
SBI Holdings Inc. | 36,244 | 4,501,905 | ||||||
79,621,883 | ||||||||
ELECTRIC – 5.52% | ||||||||
Chubu Electric Power | 1,254,600 | 33,064,544 | ||||||
Chugoku Electric Power Co. | 557,600 | 12,198,538 | ||||||
Electric Power Development | 209,100 | 6,733,433 | ||||||
Hokkaido Electric Power | 348,500 | 7,848,202 | ||||||
Hokuriku Electric | 348,500 | 8,342,086 | ||||||
Kansai Electric Power Co. | 1,394,000 | 35,758,914 |
6 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Kyushu Electric Power | 697,000 | $ | 16,584,566 | |||||
Shikoku Electric Power | 348,500 | 10,803,209 | ||||||
Tohoku Electric Power | 836,400 | 19,403,444 | ||||||
Tokyo Electric Power Co. | 2,300,100 | 67,000,650 | ||||||
217,737,586 | ||||||||
ELECTRICAL COMPONENTS & |
| |||||||
Brother Industries Ltd. | 418,200 | 4,492,276 | ||||||
Casio Computer Co. Ltd. | 418,200 | 2,779,035 | ||||||
Furukawa Electric Co. Ltd. | 1,394,000 | 5,063,356 | ||||||
GS Yuasa Corp.b | 697,000 | 4,108,789 | ||||||
Hitachi Ltd.a | 8,364,000 | 33,866,381 | ||||||
Mitsubishi Electric Corp. | 3,485,000 | 27,806,955 | ||||||
SANYO Electric Co. Ltd.a,b | 3,488,000 | 5,690,794 | ||||||
Sharp Corp. | 2,091,000 | 20,021,007 | ||||||
Stanley Electric Co. Ltd. | 280,000 | 4,321,543 | ||||||
Sumitomo Electric | 1,394,000 | 14,990,854 | ||||||
Toshiba Corp.a | 7,667,000 | 36,066,035 | ||||||
Ushio Inc. | 209,100 | 3,536,049 | ||||||
162,743,074 | ||||||||
ELECTRONICS – 5.12% |
| |||||||
Advantest Corp. | 278,800 | 5,292,452 | ||||||
Fanuc Ltd. | 348,500 | 37,435,632 | ||||||
Hirose Electric Co. Ltd. | 69,700 | 6,740,074 | ||||||
Hoya Corp. | 836,400 | 18,447,217 | ||||||
IBIDEN Co. Ltd. | 209,100 | 5,040,114 | ||||||
Keyence Corp. | 69,751 | 14,461,890 | ||||||
Kyocera Corp. | 278,800 | 23,706,466 | ||||||
Mabuchi Motor Co. Ltd. | 69,700 | 3,282,881 | ||||||
Minebea Co. Ltd. | 697,000 | 3,212,326 | ||||||
Mitsumi Electric Co. Ltd. | 139,400 | 1,955,617 | ||||||
Murata Manufacturing | 348,500 | 16,559,664 | ||||||
NEC Corp. | 5,831,000 | 14,860,474 | ||||||
NGK Insulators Ltd. | 697,000 | 10,566,643 | ||||||
Nippon Electric Glass | 697,500 | 7,816,452 | ||||||
Omron Corp. | 348,500 | 7,416,571 | ||||||
Secom Co. Ltd. | 418,200 | 18,203,180 | ||||||
Yaskawa Electric Corp. | 697,000 | 4,830,940 | ||||||
Yokogawa Electric Corp. | 348,500 | 2,170,603 | ||||||
201,999,196 |
Security | Shares | Value | ||||||
ENGINEERING & CONSTRUCTION – 0.72% |
| |||||||
JGC Corp. | 697,000 | $ | 10,674,550 | |||||
Kajima Corp. | 1,394,000 | 3,270,430 | ||||||
Obayashi Corp. | 1,394,000 | 5,312,374 | ||||||
Shimizu Corp. | 1,394,000 | 4,947,148 | ||||||
Taisei Corp. | 2,091,000 | 4,133,691 | ||||||
28,338,193 | ||||||||
ENTERTAINMENT – 0.24% |
| |||||||
Oriental Land Co. Ltd. | 69,700 | 6,183,935 | ||||||
Toho Co. Ltd. | 209,100 | 3,396,599 | ||||||
9,580,534 | ||||||||
ENVIRONMENTAL CONTROL – 0.14% |
| |||||||
Kurita Water Industries Ltd. | 209,100 | 5,510,758 | ||||||
5,510,758 | ||||||||
FOOD – 1.25% | ||||||||
Ajinomoto Co. Inc. | 1,394,000 | 13,679,362 | ||||||
Kikkoman Corp. | 697,000 | 7,096,999 | ||||||
Meiji Holdings Co. Ltd. | 139,428 | 6,500,662 | ||||||
Nippon Meat Packers Inc. | 697,000 | 8,375,289 | ||||||
Nisshin Seifun Group Inc. | 350,500 | 4,482,994 | ||||||
Nissin Foods Holdings | 139,400 | 4,965,409 | ||||||
Yakult Honsha Co. Ltd. | 139,400 | 4,166,893 | ||||||
49,267,608 | ||||||||
FOREST PRODUCTS & PAPER – 0.31% |
| |||||||
Nippon Paper Group Inc. | 210,000 | 5,456,949 | ||||||
Oji Paper Co. Ltd. | 1,394,000 | 6,607,264 | ||||||
12,064,213 | ||||||||
GAS – 1.00% | ||||||||
Osaka Gas Co. Ltd. | 3,485,000 | 13,156,425 | ||||||
Toho Gas Co. Ltd. | 697,000 | 3,610,754 | ||||||
Tokyo Gas Co. Ltd. | 4,879,000 | 22,776,801 | ||||||
39,543,980 | ||||||||
HAND & MACHINE TOOLS – 1.18% |
| |||||||
Fuji Electric Holdings | 697,000 | 1,726,521 | ||||||
Makita Corp. | 209,100 | 5,949,028 | ||||||
Nidec Corp. | 209,100 | 18,377,492 | ||||||
SMC Corp. | 139,400 | 17,198,809 | ||||||
THK Co. Ltd. | 209,700 | 3,456,291 | ||||||
46,708,141 |
SCHEDULEOF INVESTMENTS | 7 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
HEALTH CARE - PRODUCTS – 0.55% |
| |||||||
Sysmex Corp. | 69,700 | $ | 4,407,610 | |||||
Terumo Corp. | 348,500 | 17,265,214 | ||||||
21,672,824 | ||||||||
HOME BUILDERS – 0.26% |
| |||||||
Sekisui Chemical Co. Ltd. | 697,000 | 4,092,188 | ||||||
Sekisui House Ltd. | 697,000 | 6,042,825 | ||||||
10,135,013 | ||||||||
HOME FURNISHINGS – 2.61% |
| |||||||
Panasonic Corp. | 3,694,115 | 46,984,814 | ||||||
Sony Corp. | 1,881,900 | 53,070,611 | ||||||
Yamaha Corp. | 278,800 | 2,862,041 | ||||||
102,917,466 | ||||||||
HOUSEWARES – 0.11% |
| |||||||
TOTO Ltd. | 697,000 | 4,424,211 | ||||||
4,424,211 | ||||||||
INSURANCE – 2.71% | ||||||||
Dai-ichi Life Insurance Co. | 14,742 | 17,433,376 | ||||||
MS&AD Insurance Group | 976,740 | 21,891,446 | ||||||
NKSJ Holdings Inc.a | 2,800,800 | 15,676,742 | ||||||
Sony Financial | 1,394 | 4,565,321 | ||||||
T&D Holdings Inc. | 522,750 | 9,948,249 | ||||||
Tokio Marine | 1,394,000 | 37,419,031 | ||||||
106,934,165 | ||||||||
INTERNET – 1.91% | ||||||||
Dena Co. Ltd. | 139,400 | 4,180,174 | ||||||
Matsui Securities Co. Ltd. | 209,100 | 1,195,284 | ||||||
Rakuten Inc. | 13,940 | 10,558,342 | ||||||
SoftBank Corp. | 1,533,400 | 44,027,955 | ||||||
Trend Micro Inc. | 209,100 | 5,675,109 | ||||||
Yahoo! Japan Corp. | 27,183 | 9,792,613 | ||||||
75,429,477 | ||||||||
IRON & STEEL – 2.31% | ||||||||
Daido Steel Co. Ltd. | 697,000 | 3,303,632 | ||||||
JFE Holdings Inc. | 836,450 | 24,713,975 | ||||||
Kobe Steel Ltd. | 4,879,000 | 10,110,111 | ||||||
Nippon Steel Corp. | 9,758,000 | 32,189,663 | ||||||
Nisshin Steel Co. Ltd. | 1,394,000 | 2,241,157 | ||||||
Sumitomo Metal | 6,273,000 | 14,716,935 |
Security | Shares | Value | ||||||
Tokyo Steel Manufacturing | 209,100 | $ | 2,285,981 | |||||
Yamato Kogyo Co. Ltd. | 69,700 | 1,576,281 | ||||||
91,137,735 | ||||||||
LEISURE TIME – 0.73% | ||||||||
Namco Bandai Holdings Inc. | 348,598 | 3,312,864 | ||||||
Sankyo Co. Ltd. | 139,400 | 7,055,496 | ||||||
Sega Sammy Holdings Inc. | 348,500 | 5,175,414 | ||||||
Shimano Inc. | 139,400 | 6,839,681 | ||||||
Yamaha Motor Co. Ltd.a | 487,900 | 6,559,951 | ||||||
28,943,406 | ||||||||
MACHINERY – 0.23% | ||||||||
Hitachi Construction | 139,400 | 2,770,735 | ||||||
Japan Steel Works Ltd. (The) | 697,000 | 6,175,634 | ||||||
8,946,369 | ||||||||
MACHINERY - CONSTRUCTION & |
| |||||||
Komatsu Ltd. | 1,742,500 | 35,381,237 | ||||||
35,381,237 | ||||||||
MACHINERY - DIVERSIFIED – 0.61% |
| |||||||
Amada Co. Ltd. | 697,000 | 4,141,991 | ||||||
Kubota Corp. | 2,091,000 | 16,783,780 | ||||||
Sumitomo Heavy | 697,000 | 3,228,927 | ||||||
24,154,698 | ||||||||
MANUFACTURING – 2.19% |
| |||||||
FUJIFILM Holdings Corp. | 836,400 | 25,399,786 | ||||||
IHI Corp. | 2,091,000 | 3,710,361 | ||||||
Kawasaki Heavy | 2,788,000 | 7,437,323 | ||||||
Konica Minolta | 1,045,500 | 9,138,943 | ||||||
Mitsubishi Heavy | 5,576,000 | 20,120,615 | ||||||
Nikon Corp. | 627,300 | 10,436,323 | ||||||
Olympus Corp. | 418,200 | 9,990,582 | ||||||
86,233,933 | ||||||||
MEDIA – 0.16% | ||||||||
Fuji Media Holdings Inc. | 853 | 1,157,041 | ||||||
Jupiter Telecommunications | 4,879 | 5,200,315 | ||||||
6,357,356 |
8 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
METAL FABRICATE & HARDWARE – 0.21% |
| |||||||
Maruichi Steel Tube Ltd. | 69,700 | $ | 1,328,093 | |||||
NSK Ltd. | 697,000 | 4,158,592 | ||||||
NTN Corp. | 697,000 | 2,639,586 | ||||||
8,126,271 | ||||||||
MINING – 0.74% | ||||||||
Dowa Holdings Co. Ltd. | 729,200 | 3,768,879 | ||||||
Mitsubishi | 2,091,000 | 5,528,189 | ||||||
Mitsui Mining & Smelting | 1,394,000 | 3,751,863 | ||||||
Sumitomo Metal Mining | 1,271,000 | 16,271,585 | ||||||
29,320,516 | ||||||||
OFFICE & BUSINESS EQUIPMENT – 2.76% |
| |||||||
Canon Inc. | 2,160,750 | 88,133,485 | ||||||
Ricoh Co. Ltd. | 1,394,000 | 17,829,653 | ||||||
Seiko Epson Corp. | 209,100 | 2,681,919 | ||||||
108,645,057 | ||||||||
OIL & GAS – 1.42% | ||||||||
Cosmo Oil Co. Ltd. | 1,394,000 | 3,336,835 | ||||||
Idemitsu Kosan Co. Ltd. | 69,700 | 5,494,986 | ||||||
INPEX Corp. | 3,485 | 15,771,109 | ||||||
Japan Petroleum | 69,700 | 2,515,077 | ||||||
JX Holdings Inc.a | 4,042,695 | 20,413,275 | ||||||
Showa Shell Sekiyu K.K. | 278,800 | 2,018,702 | ||||||
TonenGeneral Sekiyu K.K. | 697,000 | 6,300,143 | ||||||
55,850,127 | ||||||||
PACKAGING & CONTAINERS – 0.11% |
| |||||||
Toyo Seikan Kaisha Ltd. | 278,800 | 4,439,152 | ||||||
4,439,152 | ||||||||
PHARMACEUTICALS – 5.08% |
| |||||||
Alfresa Holdings Corp. | 69,700 | 3,108,569 | ||||||
Astellas Pharma Inc. | 836,430 | 28,916,950 | ||||||
Chugai Pharmaceutical | 418,200 | 7,141,822 | ||||||
Daiichi Sankyo Co. Ltd. | 1,254,669 | 25,087,403 | ||||||
Dainippon Sumitomo | 278,800 | 2,314,203 | ||||||
Eisai Co. Ltd. | 487,900 | 17,605,538 | ||||||
Hisamitsu Pharmaceutical | 69,700 | 2,880,302 | ||||||
Kyowa Hakko Kirin | 697,000 | 6,823,080 |
Security | Shares | Value | ||||||
Medipal Holdings Corp. | 278,800 | $ | 3,472,964 | |||||
Mitsubishi Tanabe | 697,000 | 10,923,568 | ||||||
Ono Pharmaceutical | 139,400 | 6,125,831 | ||||||
Santen Pharmaceutical | 139,400 | 4,996,951 | ||||||
Shionogi & Co. Ltd. | 557,600 | 9,734,924 | ||||||
Suzuken Co. Ltd. | 139,400 | 4,839,240 | ||||||
Takeda Pharmaceutical | 1,394,000 | 64,080,505 | ||||||
Tsumura & Co. | 70,500 | 2,198,035 | ||||||
200,249,885 | ||||||||
REAL ESTATE – 2.50% |
| |||||||
AEON Mall Co. Ltd. | 209,100 | 4,796,077 | ||||||
Daito Trust Construction | 139,400 | 8,001,763 | ||||||
Daiwa House Industry | 697,000 | 6,540,860 | ||||||
Mitsubishi Estate Co. Ltd. | 2,091,000 | 31,450,911 | ||||||
Mitsui Fudosan Co. Ltd. | 1,500,000 | 24,347,982 | ||||||
Nomura Real Estate | 209,100 | 2,769,075 | ||||||
NTT Urban | 2,788 | 2,174,753 | ||||||
Sumitomo Realty & | 697,000 | 13,305,835 | ||||||
Tokyo Tatemono Co. Ltd. | 697,000 | 2,440,372 | ||||||
Tokyu Land Corp. | 697,000 | 2,755,794 | ||||||
98,583,422 | ||||||||
REAL ESTATE INVESTMENT TRUSTS – 0.57% |
| |||||||
Japan Prime Realty | 1,394 | 3,109,399 | ||||||
Japan Real Estate | 697 | 6,192,236 | ||||||
Japan Retail Fund | 2,788 | 3,738,583 | ||||||
Nippon Building Fund Inc. | 697 | 5,910,016 | ||||||
Nomura Real Estate Office | 697 | 3,461,343 | ||||||
22,411,577 | ||||||||
RETAIL – 3.07% |
| |||||||
ABC-Mart Inc. | 69,700 | 2,093,407 | ||||||
AEON Co. Ltd. | 1,115,200 | 11,912,998 | ||||||
Citizen Holdings Co. Ltd. | 418,200 | 2,146,531 | ||||||
FamilyMart Co. Ltd. | 139,400 | 5,046,755 | ||||||
Fast Retailing Co. Ltd. | 69,700 | 9,612,076 | ||||||
Isetan Mitsukoshi | 697,060 | 7,346,649 |
SCHEDULEOF INVESTMENTS | 9 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
J. Front Retailing Co. Ltd. | 697,000 | $ | 3,353,436 | |||||
Lawson Inc. | 139,400 | 6,358,247 | ||||||
Marui Group Co. Ltd. | 418,200 | 2,808,917 | ||||||
McDonald’s Holdings Co. | 139,400 | 3,328,534 | ||||||
Nitori Holdings Co. Ltd. | 69,700 | 6,076,027 | ||||||
Seven & I Holdings | 1,463,780 | 33,469,782 | ||||||
Shimamura Co. Ltd. | 69,700 | 6,349,946 | ||||||
Takashimaya Co. Ltd. | 697,000 | 5,279,171 | ||||||
UNY Co. Ltd. | 348,500 | 2,560,730 | ||||||
USS Co. Ltd. | 48,790 | 3,602,453 | ||||||
Yamada Denki Co. Ltd. | 153,340 | 9,550,651 | ||||||
120,896,310 | ||||||||
SEMICONDUCTORS – 0.97% |
| |||||||
Elpida Memory Inc.a | 348,500 | 4,187,644 | ||||||
Rohm Co. Ltd. | 209,500 | 12,649,339 | ||||||
Shinko Electric Industries | 139,400 | 1,528,967 | ||||||
Sumco Corp.a | 209,100 | 3,558,460 | ||||||
Tokyo Electron Ltd. | 348,552 | 16,354,590 | ||||||
38,279,000 | ||||||||
SHIPBUILDING – 0.08% |
| |||||||
Mitsui Engineering & | 1,394,000 | 2,971,609 | ||||||
2,971,609 | ||||||||
SOFTWARE – 0.25% |
| |||||||
Konami Corp. | 139,400 | 2,244,478 | ||||||
Nomura Research | 139,400 | 2,710,971 | ||||||
Oracle Corp. Japan | 69,700 | 3,577,552 | ||||||
Square Enix Holdings | 69,700 | 1,439,321 | ||||||
9,972,322 | ||||||||
STORAGE & WAREHOUSING – 0.09% |
| |||||||
Mitsubishi Logistics Corp. | 319,000 | 3,521,651 | ||||||
3,521,651 | ||||||||
TELECOMMUNICATIONS – 3.17% |
| |||||||
KDDI Corp. | 5,576 | 26,893,891 | ||||||
Nippon Telegraph and | 975,800 | 42,125,462 | ||||||
NTT Data Corp. | 2,091 | 6,544,180 | ||||||
NTT DoCoMo Inc. | 29,274 | 49,574,405 | ||||||
125,137,938 |
Security | Shares | Value | ||||||
TEXTILES – 0.72% |
| |||||||
Kuraray Co. Ltd. | 627,300 | $ | 7,104,469 | |||||
Teijin Ltd. | 2,091,000 | 6,424,652 | ||||||
Toray Industries Inc. | 2,788,000 | 14,741,836 | ||||||
28,270,957 | ||||||||
TOYS, GAMES & HOBBIES – 1.48% |
| |||||||
Nintendo Co. Ltd. | 209,100 | 58,220,293 | ||||||
58,220,293 | ||||||||
TRANSPORTATION – 4.59% |
| |||||||
Central Japan | 2,788 | 22,511,183 | ||||||
East Japan | 627,300 | 40,639,657 | ||||||
Hankyu Hanshin Holdings Inc. | 2,096,800 | 9,638,738 | ||||||
Kawasaki Kisen | 1,394,000 | 5,196,165 | ||||||
Keihin Electric Express Railway | 701,000 | 7,112,683 | ||||||
Keio Corp. | 1,394,000 | 9,578,873 | ||||||
Kintetsu Corp.b | 3,489,000 | 11,675,706 | ||||||
Mitsui O.S.K. | 2,091,000 | 13,148,124 | ||||||
Nippon Express | 1,394,000 | 4,880,743 | ||||||
Nippon Yusen K.K. | 2,788,000 | 10,757,556 | ||||||
Odakyu Electric Railway Co. Ltd. | 697,000 | 6,441,253 | ||||||
Tobu Railway Co. Ltd. | 1,394,000 | 7,968,560 | ||||||
Tokyu Corp. | 2,091,000 | 9,562,273 | ||||||
West Japan | 3,485 | 12,948,910 | ||||||
Yamato Holdings | 766,700 | 9,021,074 | ||||||
181,081,498 | ||||||||
VENTURE CAPITAL – 0.04% |
| |||||||
JAFCO Co. Ltd. | 69,700 | 1,549,719 | ||||||
1,549,719 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $5,498,884,784) |
| 3,939,955,184 | ||||||
SHORT-TERM INVESTMENTS – 0.63% |
| |||||||
MONEY MARKET FUNDS – 0.63% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
0.31%c,d,e | 20,623,233 | 20,623,233 | ||||||
BlackRock Cash Funds: Prime, | ||||||||
0.30%c,d,e | 4,007,516 | 4,007,516 |
10 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI JAPAN INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
0.13%c,d | 284,986 | $ | 284,986 | |||||
24,915,735 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $24,915,735) |
| 24,915,735 | ||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $5,523,800,519) |
| 3,964,870,919 | ||||||
Other Assets, Less |
| (22,102,248) | ||||||
NET ASSETS – 100.00% |
| $ | 3,942,768,671 | |||||
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | Affiliated issuer. See Note 2. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULEOF INVESTMENTS | 11 |
Table of Contents
Statement of Assets and Liabilities
iSHARES® , INC.
August 31, 2010
iShares MSCI Japan Index Fund | ||||
ASSETS | ||||
Investments, at cost: | ||||
Unaffiliated issuers | $ | 5,498,884,784 | ||
Affiliated issuers (Note 2) | 24,915,735 | |||
Total cost of investments | $ | 5,523,800,519 | ||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||
Unaffiliated issuers | $ | 3,939,955,184 | ||
Affiliated issuers (Note 2) | 24,915,735 | |||
Total fair value of investments | 3,964,870,919 | |||
Foreign currency, at valueb | 2,935,551 | |||
Receivables: | ||||
Dividends and interest | 3,032,317 | |||
Total Assets | 3,970,838,787 | |||
LIABILITIES | ||||
Payables: | ||||
Collateral for securities on loan (Note 5) | 24,630,749 | |||
Capital shares redeemed | 1,479,571 | |||
Investment advisory fees (Note 2) | 1,959,796 | |||
Total Liabilities | 28,070,116 | |||
NET ASSETS | $ | 3,942,768,671 | ||
Net assets consist of: | ||||
Paid-in capital | $ | 6,129,100,268 | ||
Undistributed net investment income | 3,270,048 | |||
Accumulated net realized loss | (630,836,522 | ) | ||
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies | (1,558,765,123 | ) | ||
NET ASSETS | $ | 3,942,768,671 | ||
Shares outstandingc | 418,200,000 | |||
Net asset value per share | $ | 9.43 | ||
a | Securities on loan with a value of $23,514,317. See Note 5. |
b | Cost of foreign currency: $2,900,257. |
c | $0.001 par value, number of shares authorized: 2,124,600,000. |
See notes to financial statements.
12 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statement of Operations
iSHARES®, INC.
Year ended August 31, 2010
iShares MSCI Japan Index Fund | ||||
NET INVESTMENT INCOME | ||||
Dividends from unaffiliated issuersa | $ | 87,827,993 | ||
Interest from affiliated issuers (Note 2) | 1,740 | |||
Securities lending income from affiliated issuers (Note 2) | 616,643 | |||
Total investment income | 88,446,376 | |||
EXPENSES | ||||
Investment advisory fees (Note 2) | 27,202,065 | |||
Total expenses | 27,202,065 | |||
Net investment income | 61,244,311 | |||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments in unaffiliated issuers | (210,579,340 | ) | ||
In-kind redemptions | 159,125,973 | |||
Foreign currency transactions | 3,027,167 | |||
Net realized loss | (48,426,200 | ) | ||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | (368,909,528 | ) | ||
Translation of assets and liabilities in foreign currencies | 1,361 | |||
Net change in unrealized appreciation (depreciation) | (368,908,167 | ) | ||
Net realized and unrealized loss | (417,334,367 | ) | ||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (356,090,056 | ) | |
a | Net of foreign withholding tax of $6,589,966. |
See notes to financial statements.
FINANCIAL STATEMENTS | 13 |
Table of Contents
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Japan Index Fund | ||||||||
Year ended August 31, 2010 | Year ended August 31, 2009 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 61,244,311 | $ | 78,031,066 | ||||
Net realized loss | (48,426,200 | ) | (471,304,985 | ) | ||||
Net change in unrealized appreciation (depreciation) | (368,908,167 | ) | (579,533,927 | ) | ||||
Net decrease in net assets resulting from operations | (356,090,056 | ) | (972,807,846 | ) | ||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (77,025,449 | ) | (73,264,843 | ) | ||||
Total distributions to shareholders | (77,025,449 | ) | (73,264,843 | ) | ||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 1,380,264,536 | 2,197,765,511 | ||||||
Cost of shares redeemed | (3,168,550,601 | ) | (2,487,058,899 | ) | ||||
Net decrease in net assets from capital share transactions | (1,788,286,065 | ) | (289,293,388 | ) | ||||
DECREASE IN NET ASSETS | (2,221,401,570 | ) | (1,335,366,077 | ) | ||||
NET ASSETS | ||||||||
Beginning of year | 6,164,170,241 | 7,499,536,318 | ||||||
End of year | $ | 3,942,768,671 | $ | 6,164,170,241 | ||||
Undistributed net investment income included in net assets at end of year | $ | 3,270,048 | $ | 11,285,164 | ||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 137,400,000 | 239,400,000 | ||||||
Shares redeemed | (321,000,000 | ) | (283,200,000 | ) | ||||
Net decrease in shares outstanding | (183,600,000 | ) | (43,800,000 | ) | ||||
See notes to financial statements.
14 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® , INC.
(For a share outstanding throughout each period)
iShares MSCI Japan Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008 | Year ended Aug. 31, 2007 | Year ended Aug. 31, 2006 | ||||||||||||||||
Net asset value, beginning of year | $ | 10.24 | $ | 11.62 | $ | 14.07 | $ | 13.80 | $ | 10.99 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 0.12 | 0.13 | 0.14 | 0.10 | 0.06 | |||||||||||||||
Net realized and unrealized gain (loss)b | (0.77 | ) | (1.39 | ) | (2.39 | ) | 0.27 | 2.81 | ||||||||||||
Total from investment operations | (0.65 | ) | (1.26 | ) | (2.25 | ) | 0.37 | 2.87 | ||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.16 | ) | (0.12 | ) | (0.20 | ) | (0.10 | ) | (0.06 | ) | ||||||||||
Total distributions | (0.16 | ) | (0.12 | ) | (0.20 | ) | (0.10 | ) | (0.06 | ) | ||||||||||
Net asset value, end of year | $ | 9.43 | $ | 10.24 | $ | 11.62 | $ | 14.07 | $ | 13.80 | ||||||||||
Total return | (6.41 | )% | (10.68 | )% | (16.13 | )% | 2.68 | % | 26.10 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 3,942,769 | $ | 6,164,170 | $ | 7,499,536 | $ | 11,780,006 | $ | 13,724,590 | ||||||||||
Ratio of expenses to average net assets | 0.54 | % | 0.56 | % | 0.52 | % | 0.52 | % | 0.54 | % | ||||||||||
Ratio of net investment income to average net | 1.20 | % | 1.46 | % | 1.11 | % | 0.68 | % | 0.48 | % | ||||||||||
Portfolio turnover ratec | 5 | % | 4 | % | 4 | % | 3 | % | 8 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 15 |
Table of Contents
iSHARES® , INC.
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.
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 Japanese equity market, as measured by the MSCI Japan Index compiled by MSCI Inc. 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 issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
The Fund invests in the securities of non-U.S. issuers of a single country. This may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets and the risk of war.
Pursuant to the Company’s organizational documents, the Fund’s officers and directors are indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
1. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are consistently followed by the Company in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
SECURITY VALUATION
The securities and other assets of the Fund are valued pursuant to the pricing policy and procedures approved by the Board of Directors of the Company (the “Board”) using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
• | Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access at the measurement date (a “Level 1 Price”); |
16 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® , INC.
• | Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (a “Level 2 Price”); |
• | Level 3 – Inputs that are unobservable for the asset or liability (a “Level 3 Price”). |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3 of the fair value hierarchy.
The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Fund’s perceived risk of that instrument.
Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 Prices, include active listed equities. The Fund does not adjust the quoted price for such instruments, even in situations where the Fund holds a large position and a sale could reasonably impact the quoted price.
Investments that trade in markets that are not considered to be active, but whose values are based on inputs such as quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified within Level 2. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.
Investments whose values are classified as Level 3 Prices have significant unobservable inputs, as they may trade infrequently or not at all. Investments whose values are classified as Level 3 Prices may include unlisted securities related to corporate actions, securities whose trading have been suspended or which have been de-listed from their primary trading exchange, less liquid corporate debt securities (including distressed debt instruments), collateralized debt obligations, and less liquid mortgage securities (backed by either commercial or residential real estate). When observable prices are not available for these securities, the Fund uses one or more valuation techniques (e.g., the market approach or the income approach) for which sufficient and reliable data is available. Within Level 3 of the fair value hierarchy, the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.
The inputs used by the Fund in estimating the value of Level 3 Prices may include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 Prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Fund in the absence of market information. The fair value measurement of Level 3 Prices does
NOTESTO FINANCIAL STATEMENTS | 17 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® , INC.
not include transaction costs that may have been capitalized as part of the security’s cost basis. Assumptions used by the Fund due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Fund’s results of operations.
Fair value pricing could result in a difference between the prices used to calculate the Fund’s net asset value and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.
As of August 31, 2010, the value of each of the Fund’s investments was classified as a Level 1 Price. The breakdown of the Fund’s investments into major categories is disclosed in the Schedule of Investments.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source, and interest income is accrued daily. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Fund may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. 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. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.
The Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Fund as a component of realized and unrealized gains and losses from investments for financial reporting purposes.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income, if any, generally are declared and paid at least semi-annually by the Fund. Distributions of net realized capital gains, if any, generally are declared and paid 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, 2010, the tax year-end of the Fund, the components of net accumulated losses on a tax basis consisted of undistributed ordinary income of $3,436,133, unrealized depreciation of $1,610,956,895, and capital and other losses of $578,810,835, for net accumulated losses of $2,186,331,597.
For the years ended August 31, 2010 and August 31, 2009, the tax characterization of distributions paid for the Fund represents ordinary income. 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.
18 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Financial Statements (Continued)
iSHARES® , INC.
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 ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the year ended August 31, 2010.
From November 1, 2009 to August 31, 2010, the Fund incurred net realized capital losses of $130,604,505. As permitted by tax regulations, the Fund has elected to defer those losses and treat them as arising in the year ending August 31, 2011.
As of August 31, 2010, the tax year-end of the Fund, the Fund had tax basis net capital loss carryforwards of $3,621,148, $5,594,562, $8,733,802, $68,122,871, $27,817,841, $44,443,527, $116,295,478 and $173,577,101 expiring in 2011, 2012, 2013, 2014, 2015, 2016, 2017 and 2018, respectively. Such losses may be applied against any net realized taxable gains in each succeeding year or until their respective expiration dates, whichever occurs first.
The Fund may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Fund may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.
The Fund reclassifies at the end of its tax year 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, 2010, the cost of investments for federal income tax purposes was $5,575,992,291. Net unrealized depreciation was $1,611,121,372, of which $63,042,191 represented gross unrealized appreciation on securities and $1,674,163,563 represented gross unrealized depreciation on securities.
Management has reviewed the tax positions as of August 31, 2010, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Fund’s financial statements.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
On December 1, 2009, Barclays PLC (“Barclays”) completed the sale of its interest in BlackRock Institutional Trust Company, N.A. (“BTC”), formerly known as Barclays Global Investors, N.A., and certain affiliated companies to BlackRock, Inc. (“BlackRock,” and such sale, the “Transaction”). BTC is a wholly-owned subsidiary of BlackRock.
The PNC Financial Services Group, Inc. (“PNC”), Bank of America Corporation (“BAC”) and Barclays are the largest stockholders of BlackRock. Due to the ownership structure, PNC is an affiliate for 1940 Act purposes, but BAC and Barclays are not.
Under the 1940 Act, upon completion of the Transaction on December 1, 2009, the Fund’s investment advisory agreement with BlackRock Fund Advisors (“BFA”), formerly known as Barclays Global Fund Advisors, was automatically terminated. The Board and shareholders of the Fund approved a new investment advisory agreement with BFA. The investment advisory fee rates and expense arrangements for the Fund remained the same after the Transaction.
NOTESTO FINANCIAL STATEMENTS | 19 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® , INC.
Pursuant to an Investment Advisory Agreement with the Company, BFA manages the investment of the Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for all expenses (“Covered Expenses”) of the Company, 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, BFA is entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares Funds as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | |
0.59% | First $7 billion | |
0.54 | Over $7 billion, up to and including $11 billion | |
0.49 | Over $11 billion, up to and including $24 billion | |
0.44 | Over $24 billion, up to and including $48 billion | |
0.40 | Over $48 billion |
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BTC to serve as securities lending agent for the Fund, subject to applicable conditions. BTC is an affiliate of BFA, the Fund’s investment adviser. As securities lending agent, BTC 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, 2010, BTC earned securities lending agent fees from the Fund of $404,958.
The Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in interest from affiliated issuers in the Statement of Operations.
Certain directors and officers of the Company are also officers of BTC and/or BFA.
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2010 aggregated $272,995,182 and $304,640,625, respectively.
In-kind purchases and sales (see Note 4) for the year ended August 31, 2010 aggregated $1,365,072,841 and $3,129,948,959, respectively.
4. CAPITAL SHARE TRANSACTIONS
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, which constitutes an optimized representation of the securities involved in the Fund’s underlying index and an amount of cash. Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.
20 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Financial Statements (Continued)
iSHARES® , INC.
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 102% of the current 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 value of the securities on loan. The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. Any securities lending cash collateral may be reinvested in certain short-term instruments either directly on behalf of the Fund or through one or more joint accounts or money market funds, including those managed by BFA or its affiliates; such reinvestments are subject to investment risk.
As of August 31, 2010, the Fund had loaned securities which were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of the securities on loan as of August 31, 2010 and the value of the related collateral are disclosed in the Statement of Assets and Liabilities. Securities lending income, as disclosed in the Fund’s Statement of Operations, represents the income earned from the investment of the cash collateral, plus any fees paid by borrowers and less the fees paid to BTC as securities lending agent which are subject to adjustments pursuant to the securities lending agreement.
6. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Fund through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.
NOTESTO FINANCIAL STATEMENTS | 21 |
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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, 2010, the results of its operations, the changes in its net assets and its 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 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit 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, 2010 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 22, 2010
22 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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iSHARES® , INC.
For the fiscal year ended August 31, 2010, the Fund earned foreign source income of $94,417,959 and paid foreign taxes of $6,486,978 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 $77,025,449 as qualified dividend income for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended August 31, 2010.
In February 2011, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2010. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
TAX INFORMATION | 23 |
Table of Contents
Supplemental Information (Unaudited)
iSHARES® , INC.
Premium/Discount Information
The table that follows presents information about the differences between the daily market price on secondary markets for shares of 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 generally 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 fair 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. The information shown for the Fund is for five calendar years through 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.
24 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® , INC.
iShares MSCI Japan Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 6.0% | 2 | 0.14 | % | |||||
Greater than 5.5% and Less than 6.0% | 1 | 0.07 | ||||||
Greater than 5.0% and Less than 5.5% | 2 | 0.14 | ||||||
Greater than 4.5% and Less than 5.0% | 3 | 0.22 | ||||||
Greater than 4.0% and Less than 4.5% | 4 | 0.29 | ||||||
Greater than 3.5% and Less than 4.0% | 8 | 0.58 | ||||||
Greater than 3.0% and Less than 3.5% | 5 | 0.36 | ||||||
Greater than 2.5% and Less than 3.0% | 14 | 1.01 | ||||||
Greater than 2.0% and Less than 2.5% | 19 | 1.37 | ||||||
Greater than 1.5% and Less than 2.0% | 45 | 3.26 | ||||||
Greater than 1.0% and Less than 1.5% | 99 | 7.16 | ||||||
Greater than 0.5% and Less than 1.0% | 225 | 16.28 | ||||||
Between 0.5% and –0.5% | 591 | 42.79 | ||||||
Less than –0.5% and Greater than –1.0% | 146 | 10.56 | ||||||
Less than –1.0% and Greater than –1.5% | 87 | 6.30 | ||||||
Less than –1.5% and Greater than –2.0% | 54 | 3.91 | ||||||
Less than –2.0% and Greater than –2.5% | 26 | 1.88 | ||||||
Less than –2.5% and Greater than –3.0% | 17 | 1.23 | ||||||
Less than –3.0% and Greater than –3.5% | 11 | 0.80 | ||||||
Less than –3.5% and Greater than –4.0% | 6 | 0.43 | ||||||
Less than –4.0% and Greater than –4.5% | 6 | 0.43 | ||||||
Less than –4.5% and Greater than –5.0% | 2 | 0.14 | ||||||
Less than –5.0% and Greater than –5.5% | 4 | 0.29 | ||||||
Less than –5.5% | 5 | 0.36 | ||||||
1,382 | 100.00 | % | ||||||
SUPPLEMENTAL INFORMATION | 25 |
Table of Contents
Director and Officer 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 BFA and other service providers. Each Director serves until his or her successor is duly elected or appointed and qualified. Each Officer serves until he or she resigns, is removed, dies, retires or becomes disqualified.
iShares, Inc., iShares Trust, BlackRock Funds III (formerly, Barclays Global Investors Funds) and Master Investment Portfolio, each an open-end management investment company registered under the 1940 Act, are considered 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, as a result, oversees a total of 214 funds within the fund complex. With the exception of Robert S. Kapito, the address of each Director and Officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52nd Street, New York, NY 10055. The Board has designated George G.C. Parker as its Independent Chairman. Additional information about the Funds’ Directors and Officers may be found in the Funds’ combined Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-474-2737.
Interested Directors and Officers
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
Robert S. Kapitoa (53) | Director (since 2009). | President and Director, BlackRock, Inc. (since 2006 and 2007, respectively); Vice Chairman of BlackRock, Inc. and Head of BlackRock’s Portfolio Management Group (since its formation in 1998) and BlackRock’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); Chairman, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983). | Trustee of iShares Trust (since 2009); Director of BlackRock, Inc. (since 2007). | |||
Michael Lathamb (45) | Director (since 2010); President (since 2007). | Global Chief Executive Officer of iShares, BTC (since 2010); Managing Director, BTC (since 2009); Head of Americas iShares, Barclays Global Investors (“BGI”) (2007-2009); Director and Chief Financial Officer of Barclays Global Investors International, Inc. (2005-2009); Chief Operating Officer of the Intermediary Investor and Exchange Traded Products Business of BGI (2003-2007). | Trustee of iShares Trust (since 2010). |
a | Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. |
b | Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates. |
26 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Director and Officer Information (Unaudited) (Continued)
iSHARES® , INC.
Independent Directors
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
George G.C. Parker (71) | Director (since 2000); Independent Chairman (since 2010). | Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University: Graduate School of Business (since 1994). | Trustee of iShares Trust (since 2002); Independent Chairman of iShares Trust (since 2010); Director of Continental Airlines Inc. (since 1996); Director of Community First Financial Group (since 1995); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of NETGEAR, Inc. (since 2007). | |||
Darrell Duffie (56) | Director (since 2008). | Professor, Stanford University: Graduate School of Business (since 1984). | Trustee of iShares Trust (since 2008); Director of Moody’s Corp. (since 2008). | |||
Cecilia H. Herbert (61) | Director (since 2005). | Director (since 1998) and President (since 2007) of the Board of Directors, Catholic Charities CYO; Trustee of Pacific Select Funds (2004-2005); Trustee (since 2005) and Chair of the Finance and Investment Committees (since 2006) of the Thacher School; Chair of Investment Committee, Archdiocese of San Francisco (1994-2005). | Trustee of iShares Trust (since 2005); Director, Forward Funds (34 portfolios) (since 2009). | |||
Charles A. Hurty (67) | Director (since 2005). | Retired; Partner, KPMG LLP (1968-2001). | Trustee of iShares Trust (since 2005); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002). | |||
John E. Kerrigan (55) | Director (since 2005). | Chief Investment Officer, Santa Clara University (since 2002). | Trustee of iShares Trust (since 2005). | |||
John E. Martinez (49) | Director (since 2003). | Director of Real Estate Equity Exchange (since 2005). | Trustee of iShares Trust (since 2003); Chairman, Independent Review Committee, Canadian iShares Funds (since 2007). |
DIRECTORAND OFFICER INFORMATION | 27 |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES® , INC.
Independent Directors (Continued)
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
Robert H. Silver (55) | Director (since 2007). | President and Co-Founder of The Bravitas Group, Inc. (since 2006); Member, Non-Investor Advisory Board of Russia Partners II, LP (since 2006); President and Chief Operating Officer (2003-2005) and Director (1999-2005) of UBS Financial Services, Inc.; President and Chief Executive Officer of UBS Services USA, LLC (1999-2005); Managing Director, UBS America, Inc. (2000-2005); Director and Vice Chairman of the YMCA of Greater NYC (since 2001); Broadway Producer (since 2006); Co-Founder and Vice President of Parentgiving Inc. (since 2008); Director and Member of the Audit and Compensation Committee of EPAM Systems, Inc. (2006-2009). | Trustee of iShares Trust (since 2007). |
28 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Director and Officer Information (Unaudited) (Continued)
iSHARES® , INC.
Officers
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | ||
Geoffrey D. Flynn (53) | Executive Vice President and Chief Operating Officer (since 2008). | Managing Director, BTC (since 2009); Chief Operating Officer, U.S. iShares, BGI (2007-2009); President, Van Kampen Investors Services (2003-2007); Managing Director, Morgan Stanley (2002-2007); President, Morgan Stanley Trust, FSB (2002-2007). | ||
Eilleen M. Clavere (58) | Secretary (since 2007). | Director, BTC (since 2009); Director of Legal Administration of Intermediary Investor Business of BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005). | ||
Jack Gee (51) | Treasurer and Chief Financial Officer (since 2008). | Managing Director, BTC (since 2009); Senior Director of Fund Administration of Intermediary Investor Business of BGI (2009); Director of Fund Administration of Intermediary Investor Business of BGI (2004-2009). | ||
Patrick O’Connor (43) | Vice President (since 2007). | Managing Director, BTC (since 2009); Head of iShares Portfolio Management, BGI (2006-2009); Senior Portfolio Manager, BGI (1999-2006). | ||
Amy Schioldager (48) | Executive Vice President (since 2007). | Managing Director, BTC (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006). | ||
Ira P. Shapiro (47) | Vice President and Chief Legal Officer (since 2007). | Managing Director, BTC (since 2009); Associate General Counsel, BGI (2004-2009). | ||
Lee Sterne (45) | Vice President (since 2007). | Managing Director, BTC (since 2009); Head of U.S. Fixed Income Index and iShares, BGI (2007-2009); Senior Portfolio Manager, BGI (2004-2007). | ||
Matt Tucker (38) | Vice President (since 2007). | Managing Director, BTC (since 2009); Director of Fixed Income Investment Strategy, BGI (2009); Head of U.S. Fixed Income Investment Solutions, BGI (2005-2008); Fixed Income Investment Strategist, BGI (2003-2005). |
DIRECTORAND OFFICER INFORMATION | 29 |
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Notes:
30 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes:
NOTES | 31 |
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 Russell Domestic Index Funds | Trading Symbol | |
iShares Russell 3000 | IWV | |
iShares Russell 3000 Growth | IWZ | |
iShares Russell 3000 Value | IWW | |
iShares Russell Top 200 | IWL | |
iShares Russell Top 200 Growth | IWY | |
iShares Russell Top 200 Value | IWX | |
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 S&P Domestic Index Funds | ||
iShares S&P 1500 | ISI | |
iShares S&P 100 | OEF | |
iShares S&P 500 | IVV | |
iShares S&P 500 Growth | IVW | |
iShares S&P 500 Value | IVE | |
iShares S&P MidCap 400 | IJH | |
iShares S&P MidCap 400 Growth | IJK | |
iShares S&P MidCap 400 Value | IJJ | |
iShares S&P SmallCap 600 | IJR | |
iShares S&P SmallCap 600 Growth | IJT | |
iShares S&P SmallCap 600 Value | IJS | |
iShares Morningstar Domestic 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 Dow Jones Domestic Index Fund | ||
iShares Dow Jones U.S. | IYY | |
iShares MSCI Domestic Index Fund | ||
iShares MSCI USA | EUSA | |
iShares MSCI Socially Responsible Index Funds | ||
iShares MSCI KLD 400 Social | DSI | |
iShares MSCI USA ESG Select Social | KLD | |
iShares NYSE Domestic Index Funds | ||
iShares NYSE Composite | NYC | |
iShares NYSE 100 | NY |
iShares Domestic Specialty Index Funds | Trading Symbol | |
iShares S&P U.S. Preferred Stock | PFF | |
iShares Dow Jones Select Dividend | DVY | |
iShares North American Sector/Subsector Index Funds | ||
iShares S&P North American Technology Sector | IGM | |
iShares S&P North American Technology-Multimedia Networking | IGN | |
iShares S&P North American Technology- | IGW | |
iShares S&P North American Technology-Software | IGV | |
iShares S&P North American Natural Resources Sector | IGE | |
iShares Domestic Sector Index Funds | ||
iShares Dow Jones U.S. Basic Materials Sector | IYM | |
iShares Dow Jones U.S. Consumer Goods Sector | IYK | |
iShares Dow Jones U.S. Consumer Services Sector | IYC | |
iShares Dow Jones U.S. Energy Sector | IYE | |
iShares Dow Jones U.S. Financial Sector | IYF | |
iShares Dow Jones U.S. Healthcare Sector | IYH | |
iShares Dow Jones U.S. Industrial Sector | IYJ | |
iShares Dow Jones U.S. Technology Sector | IYW | |
iShares Dow Jones U.S. Telecommunications Sector | IYZ | |
iShares Dow Jones U.S. Utilities Sector | IDU | |
iShares Domestic Subsector Index Funds | ||
iShares Dow Jones Transportation Average | IYT | |
iShares Dow Jones U.S. Aerospace & Defense | ITA | |
iShares Dow Jones U.S. Broker-Dealers | IAI | |
iShares Dow Jones U.S. Financial Services | IYG | |
iShares Dow Jones U.S. Healthcare Providers | IHF | |
iShares Dow Jones U.S. Home Construction | ITB | |
iShares Dow Jones U.S. Insurance | IAK | |
iShares Dow Jones U.S. Medical Devices | IHI | |
iShares Dow Jones U.S. Oil & Gas Exploration & | IEO | |
iShares Dow Jones U.S. Oil Equipment & Services | IEZ | |
iShares Dow Jones U.S. Pharmaceuticals | IHE | |
iShares Dow Jones U.S. Regional Banks | IAT | |
iShares Nasdaq Biotechnology | IBB | |
iShares Domestic Real Estate Index Funds | ||
iShares Cohen & Steers Realty Majors | ICF | |
iShares Dow Jones U.S. Real Estate | IYR | |
iShares FTSE NAREIT Real Estate 50 | FTY | |
iShares FTSE NAREIT Industrial/Office Capped | FIO | |
iShares FTSE NAREIT Mortgage Plus Capped | REM | |
iShares FTSE NAREIT Residential Plus Capped | REZ | |
iShares FTSE NAREIT Retail Capped | RTL | |
iShares Target Risk Index Funds | ||
iShares S&P Conservative Allocation | AOK | |
iShares S&P Moderate Allocation | AOM | |
iShares S&P Growth Allocation | AOR | |
iShares S&P Aggressive Allocation | AOA |
32 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
The iShares® Family of Funds (Continued)
iShares International Country Index Funds | Trading Symbol | |
iShares FTSE China (HK Listed) | FCHI | |
iShares FTSE/Xinhua China 25 | FXI | |
iShares MSCI Australia | EWA | |
iShares MSCI Austria Investable Market | EWO | |
iShares MSCI Belgium Investable Market | EWK | |
iShares MSCI Brazil | EWZ | |
iShares MSCI Brazil Small Cap | EWZS | |
iShares MSCI Canada | EWC | |
iShares MSCI Chile Investable Market | ECH | |
iShares MSCI China Small Cap | ECNS | |
iShares MSCI France | EWQ | |
iShares MSCI Germany | EWG | |
iShares MSCI Hong Kong | EWH | |
iShares S&P India Nifty 50 | INDY | |
iShares MSCI Indonesia Investable Market | EIDO | |
iShares MSCI Ireland Capped Investable Market | EIRL | |
iShares MSCI Israel Capped Investable Market | EIS | |
iShares MSCI Italy | EWI | |
iShares MSCI Japan | EWJ | |
iShares MSCI Japan Small Cap | SCJ | |
iShares S&P/TOPIX 150 | ITF | |
iShares MSCI Malaysia | EWM | |
iShares MSCI Mexico Investable Market | EWW | |
iShares MSCI Netherlands Investable Market | EWN | |
iShares MSCI New Zealand Investable Market | ENZL | |
iShares MSCI All Peru Capped | EPU | |
iShares MSCI Philippines Investable Market | EPHE | |
iShares MSCI Poland Investable Market | EPOL | |
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 Thailand Investable Market | THD | |
iShares MSCI Turkey Investable Market | TUR | |
iShares MSCI United Kingdom | EWU | |
iShares International Index Funds | ||
iShares MSCI ACWI ex US | ACWX | |
iShares MSCI EAFE | EFA | |
iShares MSCI EAFE Growth | EFG | |
iShares MSCI EAFE Value | EFV | |
iShares MSCI EAFE Small Cap | SCZ | |
iShares FTSE Developed Small Cap ex-North America | IFSM | |
iShares MSCI Emerging Markets | EEM | |
iShares MSCI Emerging Markets Eastern Europe | ESR | |
iShares MSCI BRIC | BKF | |
iShares MSCI EMU | EZU | |
iShares MSCI All Country Asia ex Japan | AAXJ | |
iShares MSCI Pacific ex-Japan | EPP | |
iShares S&P Asia 50 | AIA | |
iShares S&P Europe 350 | IEV | |
iShares S&P Latin America 40 | ILF | |
iShares International/Global Real Estate Index Funds | ||
iShares S&P Developed ex-U.S. Property | WPS | |
iShares FTSE EPRA/NAREIT Developed | IFGL | |
iShares FTSE EPRA/NAREIT Developed Asia | IFAS | |
iShares FTSE EPRA/NAREIT Developed Europe | IFEU | |
iShares FTSE EPRA/NAREIT North America | IFNA |
iShares Target Date Index Funds | Trading Symbol | |
iShares S&P Target Date Retirement Income | TGR | |
iShares S&P Target Date 2010 | TZD | |
iShares S&P Target Date 2015 | TZE | |
iShares S&P Target Date 2020 | TZG | |
iShares S&P Target Date 2025 | TZI | |
iShares S&P Target Date 2030 | TZL | |
iShares S&P Target Date 2035 | TZO | |
iShares S&P Target Date 2040 | TZV | |
iShares Global Index Funds | ||
iShares MSCI ACWI | ACWI | |
iShares S&P Global 100 | IOO | |
iShares MSCI Kokusai | TOK | |
iShares International/Global Sector Index Funds | ||
iShares MSCI ACWI ex US Consumer Discretionary Sector | AXDI | |
iShares MSCI ACWI ex US Consumer Staples Sector | AXSL | |
iShares MSCI ACWI ex US Energy Sector | AXEN | |
iShares MSCI ACWI ex US Financials Sector | AXFN | |
iShares MSCI ACWI ex US Health Care Sector | AXHE | |
iShares MSCI ACWI ex US Industrials Sector | AXID | |
iShares MSCI ACWI ex US Information Technology | AXIT | |
iShares MSCI ACWI ex US Materials Sector | AXMT | |
iShares MSCI ACWI ex US Telecommunication Services | AXTE | |
iShares MSCI ACWI ex US Utilities Sector | AXUT | |
iShares MSCI Emerging Markets Financials Sector | EMFN | |
iShares MSCI Emerging Markets Materials Sector | EMMT | |
iShares MSCI Europe Financials Sector | EUFN | |
iShares MSCI Far East Financials Sector | FEFN | |
iShares S&P Global Consumer Discretionary Sector | RXI | |
iShares S&P Global Consumer Staples Sector | KXI | |
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 Industrials Sector | EXI | |
iShares S&P Global Materials Sector | MXI | |
iShares S&P Global Technology Sector | IXN | |
iShares S&P Global Telecommunications Sector | IXP | |
iShares S&P Global Utilities Sector | JXI | |
iShares International/Global Theme Based and Specialty Index Funds | ||
iShares Dow Jones International Select Dividend | IDV | |
iShares S&P Emerging Markets Infrastructure | EMIF | |
iShares S&P Global Clean Energy | ICLN | |
iShares S&P Global Infrastructure | IGF | |
iShares S&P Global Nuclear Energy | NUCL | |
iShares S&P Global Timber & Forestry | WOOD | |
iShares U.S. Multisector Bond Funds | ||
iShares Barclays Aggregate | AGG | |
iShares Barclays Government/Credit | GBF | |
iShares Barclays Intermediate Government/Credit | GVI | |
iShares 10+ Year Government/Credit | GLJ | |
iShares U.S. Government Bond Funds | ||
iShares Barclays Short Treasury | SHV | |
iShares Barclays 1-3 Year Treasury | SHY | |
iShares Barclays 3-7 Year Treasury | IEI | |
iShares Barclays 7-10 Year Treasury | IEF | |
iShares Barclays 10-20 Year Treasury | TLH | |
iShares Barclays 20+ Year Treasury | TLT | |
iShares Barclays TIPS | TIP | |
iShares Barclays Agency | AGZ |
THE iSHARES FAMILYOF FUNDS | 33 |
Table of Contents
The iShares® Family of Funds (Continued)
iShares U.S. Credit Bond Funds | Trading Symbol | |
iShares Barclays Credit | CFT | |
iShares Barclays 1-3 Year Credit | CSJ | |
iShares Barclays Intermediate Credit | CIU | |
iShares iBoxx $ Investment Grade Corporate | LQD | |
iShares 10+ Year Credit | CLY | |
iShares iBoxx $ High Yield Corporate | HYG |
iShares AMT-Free Municipal Bond Funds | Trading Symbol | |
iShares S&P National AMT-Free Municipal | MUB | |
iShares S&P Short Term National AMT-Free Municipal | SUB | |
iShares S&P California AMT-Free Municipal | CMF | |
iShares S&P New York AMT-Free Municipal | NYF | |
iShares 2012 S&P AMT-Free Municipal Series | MUAA | |
iShares 2013 S&P AMT-Free Municipal Series | MUAB | |
iShares 2014 S&P AMT-Free Municipal Series | MUAC | |
iShares 2015 S&P AMT-Free Municipal Series | MUAD | |
iShares 2016 S&P AMT-Free Municipal Series | MUAE | |
iShares 2017 S&P AMT-Free Municipal Series | MUAF | |
iShares U.S. Securitized Bond Fund | ||
iShares Barclays MBS | MBB | |
iShares International Bond Funds | ||
iShares JPMorgan USD Emerging Markets | EMB | |
iShares S&P/Citigroup International Treasury | IGOV | |
iShares S&P/Citigroup 1-3 Year International Treasury | ISHG |
The iShares Funds that are registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 as iShares, Inc. and iShares Trust (“Funds”) are distributed in the U.S. by SEI Investments Distribution Co. (“SEI”). iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A. The Funds are not sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., European Public Real Estate Association (“EPRA®”), FTSE International Limited (“FTSE”), FTSE/Xinhua Index Limited (“FXI”), iBoxx®, JPMorgan Chase & Co., MSCI Inc., Morningstar Inc., The NASDAQ OMX Group, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), New York Stock Exchange, Inc., Russell Investment Group or Standard & Poor’s, nor are they sponsored, endorsed or issued by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the companies listed above. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50/Residential/Retail/Mortgage or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Developed Real Estate ex-US/North America/Europe/Asia Index; all rights vest in FTSE, NAREIT and EPRA. All rights in the FTSE Developed Small Cap ex-North America Index vest in FTSE. “FTSE” is a trade- and servicemark of London Stock Exchange and The Financial Times Limited; “Xinhua” is a trade- and servicemark of Xinhua Financial Network Limited.
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 2010 Annual Report.
iS-3594-1010
34 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on your iShares holdings. In addition, it’s a way we can all care for our environment. To that end, we are pleased to offer shareholder reports and prospectuses online.
Once you have enrolled, you will no longer receive shareholder reports and prospectuses in the mail. Instead, you will receive e-mail notifications announcing that the shareholder report or prospectus has been posted on the iShares website at www.iShares.com and is available to be viewed or downloaded.
To sign up for electronic delivery, please follow these simple steps:
1. Go to www.icsdelivery.com.
2. From the main page, select the first letter of your brokerage firm’s name.
3. Select your brokerage institution from the list that follows. If your brokerage firm is not listed, electronic delivery may not be available. Please contact your brokerage firm or financial adviser.
4. Fill out the appropriate information and provide the e-mail address where you would like your notifications sent.
Your information and e-mail address will be kept confidential and only used to deliver documents to you. If at any time you are not satisfied, you can cancel electronic delivery at www.icsdelivery.com and once again receive physical delivery of your materials. If you have any questions, please contact your brokerage firm or financial adviser. |
Table of Contents
For more information:
WWW.iSHARES.COM
1-800-iShares (1-800-474-2737)
This report is intended for the Fund’s shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
Investing involves risk, including possible loss of principal.
The iShares Funds are distributed by SEI Investments Distribution Co. (SEI).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the company listed above.
A description of the policies that the Fund uses to determine how to vote proxies relating to portfolio securities and information about how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Fund’s website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Fund also discloses its complete schedule of portfolio holdings on a monthly basis on the Fund’s website.
Certain financial information required by regulations or listing exchange rules in jurisdictions outside the U.S. in which iShares Funds are cross-listed may be publicly filed in those jurisdictions. This information is available upon request by calling 1-800-474-2737.
©2010 BlackRock Institutional Trust Company, N.A. All rights reserved. iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A. All other trademarks, servicemarks, or registered trademarks are the property of their respective owners.
iS-AR-81-0810
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Table of Contents
2010 ANNUAL REPORT TO SHAREHOLDERS
iSHARES® MSCI SERIES
AUGUST 31, 2010
» Would you prefer to receive materials like this electronically?
See inside back cover for details.
iShares MSCI Emerging Markets Index Fund | EEM | NYSE Arca
Table of Contents
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Table of Contents
Management’s Discussion of Fund Performance
iSHARES® MSCI EMERGING MARKETS INDEX FUND
Performance as of August 31, 2010
Average Annual Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Inception to 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
14.97% | 15.05% | 18.02% | 11.02% | 10.87% | 12.38% | 20.44% | 20.37% | 20.76% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 8/31/10 | Five Years Ended 8/31/10 | Inception to 8/31/10 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
14.97% | 15.05% | 18.02% | 68.66% | 67.51% | 79.22% | 296.14% | 294.59% | 303.73% |
Total returns for the period 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 period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (4/11/03), the NAV of the Fund is used as a proxy for the Market Price to calculated market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 1 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
PORTFOLIO ALLOCATION As of 8/31/10 | ||||
Sector/Investment Type | Percentage of Net Assets | |||
Financial | 24.70 | % | ||
Energy | 13.39 | |||
Basic Materials | 12.67 | |||
Communications | 10.67 | |||
Technology | 8.99 | |||
Industrial | 8.25 | |||
Consumer Cyclical | 7.40 | |||
Consumer Non-Cyclical | 6.72 | |||
Utilities | 3.51 | |||
Diversified | 2.77 | |||
Exchange-Traded Funds | 0.44 | |||
Short-Term and Other Net Assets | 0.49 | |||
TOTAL | 100.00 | % | ||
TEN LARGEST FUND HOLDINGS As of 8/31/10 | ||||
Security | Percentage of Net Assets | |||
Samsung Electronics Co. Ltd. | 2.39 | % | ||
China Mobile Ltd. (China) | 1.87 | |||
OAO Gazprom SP ADR (Russia) | 1.65 | |||
Petroleo Brasileiro SA Preferred SP | 1.59 | |||
Itau Unibanco Holding SA SP | 1.51 | |||
Taiwan Semiconductor | 1.50 | |||
Vale SA Class A Preferred SP | 1.50 | |||
HDFC Bank Ltd. SP ADR (India) | 1.43 | |||
Banco Bradesco SA Preferred SP | 1.39 | |||
Infosys Technologies Ltd. SP | 1.33 | |||
TOTAL | 16.16 | % | ||
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 IndexSM (the “Index”). The Index is designed to measure equity market performance in the global emerging markets. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2010 (the “reporting period”), the total return for the Fund was 14.97%, while the total return for the Index was 18.02%.
Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. However, as the reporting period progressed, stock markets reversed course. Emerging market economies performed well in comparison to their developed market counterparts. While many emerging market economies posted GDP growth approaching – and sometimes exceeding – 10%, developed economies such as the U.S., Europe and Japan struggled to reach 3%.
Taiwan posted 13.7% and 12.5% GDP growth in the first and second quarters of 2010, respectively, versus the year ago periods. China also reached double-digit GDP growth, while South Korea’s economy saw GDP advance between 7% and 8% during the first half of 2010, as government officials declared that the country’s economy had recovered to pre-recession levels. Reflecting this economic buoyancy, Asia currencies generally strengthened against the U.S. dollar. For example, the yuan, controlled by the People’s Bank of China, has continued to increase in value since the central bank ended fixed exchange rates in June. Meanwhile, China has strengthened its commercial ties to South Africa, signing trade agreements in mining, finance and nuclear energy during the reporting period. China’s booming demand for natural resources has elevated South Africa’s economy.
In contrast, India, among the earliest countries to emerge from the global economic downturn, posted 8.8% economic growth in the second quarter of 2010, its best performance in more than two years. However, the Reserve Bank of India raised interest rates four times
2 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
in an attempt to control inflation, which hovered around 10% during the period. Another country that has struggled with inflation is Russia, particularly due to a summer heat wave that sparked wildfires which destroyed crops and led to food shortages. Russia’s central bank left interest rates at 7.75% for the third month in a row, after being reduced 14 times to aid Russia’s economy. Brazil, Latin America’s largest economy, posted an 8.8% growth in GDP during the second quarter of 2010 versus the year ago period. However, the central bank kept short-term interest rates at 10.75% to fight rising prices.
In this environment, nine of the Fund’s top ten holdings as of August 31, 2010 recorded gains for the reporting period, led by Brazilian mining company Vale SA, technology service firm Infosys Technologies Ltd. and HDFC Bank Ltd., both of which are based in India. Only one top ten holding, global energy firm Petroleo Brasileiro SA from Brazil, posted a loss.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 3 |
Table of Contents
Shareholder Expenses (Unaudited)
iSHARES® MSCI EMERGING MARKETS 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, 2010 to August 31, 2010.
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 (3/1/10) | Ending Account Value (8/31/10) | Annualized Expense Ratio | Expenses Paid During Perioda (3/1/10 to 8/31/10) | |||||||||||||
Actual | $ | 1,000.00 | $ | 1,037.80 | 0.70 | % | $ | 3.60 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.70 | 0.70 | 3.57 |
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). |
4 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
COMMON STOCKS – 91.38% |
| |||||||
BRAZIL – 8.28% | ||||||||
ALL – America Latina | 4,428,500 | $ | 40,877,685 | |||||
B2W Companhia Global | 482,500 | 7,702,614 | ||||||
Banco do Brasil SA | 7,076,474 | 114,905,202 | ||||||
Banco Santander | 732,900 | 9,318,207 | ||||||
Banco Santander (Brasil) | 6,098,131 | 76,714,488 | ||||||
BM&F Bovespa SA | 23,647,100 | 172,572,126 | ||||||
BR Malls Participacoes SA | 956,300 | 14,993,728 | ||||||
BRF – Brasil Foods SA | 2,681,700 | 36,006,748 | ||||||
BRF – Brasil Foods SA | 3,030,386 | 40,879,907 | ||||||
Brookfield | 1,636,200 | 8,451,764 | ||||||
Centrais Eletricas | 680,600 | 8,292,381 | ||||||
Centrais Eletricas | 1,246,589 | 15,407,840 | ||||||
Cielo SA | 4,554,300 | 38,948,944 | ||||||
Companhia de | 1,495,200 | 34,354,776 | ||||||
Companhia de | 756,045 | 28,729,710 | ||||||
Companhia Siderurgica | 10,515,986 | 162,471,984 | ||||||
Cosan SA Industria | 693,200 | 9,046,636 | ||||||
CPFL Energia SA | 63,600 | 1,470,384 | ||||||
CPFL Energia SA SP ADRa | 383,955 | 27,368,312 | ||||||
Cyrela Brazil Realty SA | 3,311,300 | 41,213,078 | ||||||
Duratex SA | 1,182,600 | 12,001,642 | ||||||
EDP Energias do Brasil SA | 297,800 | 6,365,359 | ||||||
Empresa Brasileira de | 4,400,122 | 109,079,024 | ||||||
Fibria Celulose SA | 4,481,265 | 68,384,104 |
Security | Shares | Value | ||||||
Gafisa SA SP ADRa | 2,433,046 | $ | 33,503,043 | |||||
Hypermarcas SAb | 2,012,000 | 26,533,003 | ||||||
Itau Unibanco Holding SA | 27,855,122 | 600,834,982 | ||||||
JBS SA | 6,351,965 | 26,980,324 | ||||||
LLX Logistica SAb | 1,599,300 | 8,115,266 | ||||||
Localiza Rent A Car SA | 408,100 | 5,700,533 | ||||||
Lojas Renner SA | 1,242,000 | 40,150,175 | ||||||
Marfrig Alimentos SA | 838,800 | 8,129,992 | ||||||
MMX Mineracao e | 1,983,500 | 14,192,494 | ||||||
MRV Engenharia e | 2,150,200 | 17,959,708 | ||||||
Multiplan | 196,900 | 3,738,288 | ||||||
Natura Cosmeticos SA | 1,117,100 | 26,941,093 | ||||||
OGX Petroleo e Gas | 16,095,100 | 191,605,056 | ||||||
PDG Realty SA Empreendimentos | 5,650,300 | 58,115,346 | ||||||
Petroleo Brasileiro SA | 15,569,961 | 519,258,199 | ||||||
Porto Seguro SA | 268,600 | 3,277,197 | ||||||
Redecard SA | 2,558,400 | 35,007,611 | ||||||
Rossi Residencial SA | 1,489,300 | 12,872,538 | ||||||
Souza Cruz SA | 315,800 | 14,575,108 | ||||||
SulAmerica SA | 264,200 | 2,583,329 | ||||||
TAM SA SP ADRa | 1,222,513 | 24,107,956 | ||||||
Tele Norte Leste | 266,300 | 4,623,185 | ||||||
TIM Participacoes SA | 285,106 | 8,151,181 | ||||||
Tractebel Energia SA | 455,100 | 6,027,522 | ||||||
Usinas Siderurgicas de | 578,100 | 15,207,693 | ||||||
Vale SA SP ADR | 17,706,203 | 473,640,930 | ||||||
Vivo Participacoes SA | 985,106 | 23,642,544 | ||||||
3,291,030,939 |
SCHEDULEOF INVESTMENTS | 5 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
CHILE – 1.94% | ||||||||
AES Gener SA | 1,091,034 | $ | 603,417 | |||||
Banco Santander (Chile) | 2,874,974 | 248,167,756 | ||||||
CAP SA | 35,280 | 1,396,741 | ||||||
Cencosud SA | 561,267 | 3,366,597 | ||||||
Colbun SA | 2,720,480 | 757,177 | ||||||
Compania Cervecerias | 49,588 | 577,121 | ||||||
Empresa Nacional de | 1,099,521 | 1,892,143 | ||||||
Empresa Nacional de | 52,463 | 2,692,926 | ||||||
Empresa Nacional de | 49,473 | 795,269 | ||||||
Empresas CMPC SA | 13,635 | 624,120 | ||||||
Empresas Copec SA | 101,504 | 1,766,955 | ||||||
Enersis SA SP ADR | 8,795,957 | 193,511,054 | ||||||
LAN Airlines SA SP ADRa | 4,624,407 | 123,656,643 | ||||||
S.A.C.I. Falabella SA | 264,600 | 2,202,841 | ||||||
Sociedad Quimica y | 4,456,610 | 190,074,416 | ||||||
Vina Concha y Toro SA | 134,064 | 312,083 | ||||||
772,397,259 | ||||||||
CHINA – 18.45% | ||||||||
Agile Property | 44,160,000 | 51,605,631 | ||||||
Agricultural Bank of China | 164,494,000 | 74,438,373 | ||||||
Air China Ltd. Class Hb | 49,862,000 | 53,204,936 | ||||||
Alibaba.com Ltd.a | 13,843,000 | 27,015,072 | ||||||
Aluminum Corp. of China | 45,974,000 | 36,526,235 | ||||||
Angang New Steel Co. | 28,389,320 | 40,146,882 | ||||||
Anhui Conch Cement Co. | 8,424,000 | 29,944,540 | ||||||
Anta Sports | 11,196,402 | 22,944,096 | ||||||
Bank of China Ltd. | 683,665,000 | 343,656,252 |
Security | Shares | Value | ||||||
Bank of Communications | 94,858,000 | $ | 100,607,894 | |||||
BBMG Corp. Class H | 10,153,000 | 13,052,645 | ||||||
Beijing Capital | 30,646,000 | 14,813,777 | ||||||
Beijing Enterprises | 8,010,000 | 56,533,907 | ||||||
Belle International | 41,147,000 | 71,835,992 | ||||||
BYD Co. Ltd. Class Ha | 4,988,500 | 28,731,092 | ||||||
Chaoda Modern | 14,643,942 | 10,919,183 | ||||||
China Agri-Industries | 28,390,000 | 34,527,145 | ||||||
China BlueChemical Ltd. | 4,722,000 | 3,071,713 | ||||||
China CITIC Bank Class H | 27,501,000 | 17,854,348 | ||||||
China Coal Energy Co. | 44,176,000 | 62,244,515 | ||||||
China Communications | 53,788,000 | 47,574,910 | ||||||
China Communications | 828,000 | 413,015 | ||||||
China Construction | 539,907,000 | 445,613,284 | ||||||
China COSCO | 44,140,000 | 45,907,643 | ||||||
China Dongxiang (Group) | 36,411,000 | 19,192,016 | ||||||
China Everbright Ltd. | 39,206,000 | 86,491,606 | ||||||
China High Speed | 12,159,000 | 27,105,105 | ||||||
China Life | 8,494,726 | 6,894,639 | ||||||
China Life Insurance Co. | 95,526,000 | 364,738,986 |
6 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
China Longyuan Power | 10,012,000 | $ | 10,104,030 | |||||
China Mengniu Dairy | 16,095,000 | 44,487,047 | ||||||
China Merchants Bank | 45,324,542 | 116,829,346 | ||||||
China Merchants Holdings | 15,482,000 | 52,246,899 | ||||||
China Minsheng Banking | 23,994,200 | 21,808,703 | ||||||
China Mobile Ltd. | 73,119,500 | 744,026,281 | ||||||
China National Building | 24,320,000 | 44,459,780 | ||||||
China Oilfield Services | 6,898,000 | 8,823,693 | ||||||
China Overseas Land & | 55,718,960 | 118,909,139 | ||||||
China Pacific Insurance | 2,474,200 | 8,890,389 | ||||||
China Petroleum & | 238,098,000 | 188,556,106 | ||||||
China Railway | 22,443,500 | 28,622,423 | ||||||
China Railway Group Ltd. | 39,349,000 | 28,632,171 | ||||||
China Resources | 26,864,000 | 111,897,358 | ||||||
China Resources | 52,820,000 | 101,042,823 | ||||||
China Resources Power | 21,954,999 | 48,434,503 | ||||||
China Shenhua Energy Co. | 40,611,500 | 148,015,173 | ||||||
China Shineway | 2,425,000 | 6,359,838 | ||||||
China Shipping Container | 98,184,000 | 33,828,260 |
Security | Shares | Value | ||||||
China Shipping | 34,504,000 | $ | 45,688,912 | |||||
China Taiping Insurance | 3,619,200 | 11,236,573 | ||||||
China Telecom Corp. Ltd. | 106,182,000 | 51,326,647 | ||||||
China Travel International | 172,716,951 | 37,525,442 | ||||||
China Unicom (Hong | 55,108,000 | 75,947,517 | ||||||
China Yurun Food | 13,846,000 | 50,285,981 | ||||||
China Zhongwang | 676,800 | 400,242 | ||||||
CITIC Pacific Ltd. | 26,853,000 | 54,890,108 | ||||||
CNOOC Ltd. | 220,839,000 | 381,574,361 | ||||||
CNPC (Hong Kong) Ltd. | 22,790,000 | 28,214,656 | ||||||
COSCO Pacific Ltd. | 11,854,000 | 15,605,189 | ||||||
Country Garden Holdings | 13,690,000 | 4,100,752 | ||||||
CSR Corp. Ltd. | 12,381,000 | 10,425,603 | ||||||
Datang International | 30,658,000 | 12,139,441 | ||||||
Dongfang Electric Corp. | 15,588,000 | 56,812,985 | ||||||
Dongfeng Motor Group | 40,464,000 | 62,840,537 | ||||||
Fosun International Ltd. | 12,937,500 | 9,879,636 | ||||||
Franshion Properties | 14,444,000 | 4,159,486 | ||||||
Fushan International | 8,522,000 | 4,459,027 | ||||||
Geely Automobile | 51,960,000 | 17,033,875 | ||||||
Golden Eagle Retail | 8,187,000 | 21,576,589 | ||||||
GOME Electrical | 102,913,200 | 31,223,906 |
SCHEDULEOF INVESTMENTS | 7 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Greentown China | 9,331,000 | $ | 10,004,569 | |||||
Guangdong | 29,852,110 | 14,545,156 | ||||||
Guangzhou Automobile | 36,212,742 | 42,458,084 | ||||||
Guangzhou R&F | 19,960,800 | 28,946,175 | ||||||
Hengan International | 9,008,000 | 79,848,506 | ||||||
Hidili Industry | 1,470,000 | 1,203,818 | ||||||
Hopson Development | 838,000 | 978,214 | ||||||
Huabao International | 13,703,000 | 20,012,352 | ||||||
Huaneng Power | 42,334,000 | 25,416,183 | ||||||
Industrial and Commercial | 626,104,000 | 454,777,603 | ||||||
Jiangsu Expressway Co. | 11,644,000 | 11,361,826 | ||||||
Jiangxi Copper Co. Ltd. | 41,922,000 | 90,974,270 | ||||||
Kingboard Chemical | 3,468,000 | 16,384,779 | ||||||
Lee & Man Paper | 4,276,000 | 2,968,490 | ||||||
Lenovo Group Ltd.a | 96,044,000 | 55,069,260 | ||||||
Li Ning Co. Ltd.a | 8,510,000 | 27,405,734 | ||||||
Longfor Properties | 14,637,500 | 16,371,569 | ||||||
Maanshan Iron & Steel | 60,178,000 | 30,713,719 | ||||||
Metallurgical Corp. of | 3,765,000 | 1,636,010 | ||||||
Nine Dragons Paper | 20,310,000 | 27,885,942 |
Security | Shares | Value | ||||||
Parkson Retail Group Ltd.a | 9,331,000 | $ | 15,498,685 | |||||
PetroChina Co. Ltd. | 252,992,000 | 274,506,971 | ||||||
PICC Property and | 26,706,000 | 30,556,457 | ||||||
Ping An Insurance (Group) | 20,547,000 | 169,981,288 | ||||||
Poly (Hong Kong) | 22,556,458 | 24,068,728 | ||||||
Renhe Commercial | 126,758,000 | 25,095,754 | ||||||
Semiconductor | 10,815,000 | 688,234 | ||||||
Shandong Weigao Group | 2,176,000 | 10,854,124 | ||||||
Shanghai Electric Group | 1,330,000 | 589,895 | ||||||
Shanghai Industrial | 8,193,000 | 39,919,612 | ||||||
Shimao Property | 30,142,000 | 48,903,007 | ||||||
Shui On Land Ltd.a | 62,803,450 | 27,613,010 | ||||||
Sinofert Holdings Ltd.a,b | 63,064,000 | 32,835,277 | ||||||
Sino-Ocean Land | 62,165,000 | 43,555,859 | ||||||
Sinopec Shanghai | 46,042,000 | 17,875,791 | ||||||
Sinopharm Group Co. Ltd. | 11,396,400 | 43,440,671 | ||||||
Sinotruk (Hong | 3,519,500 | 3,325,619 | ||||||
Skyworth Digital | 4,894,000 | 2,541,847 | ||||||
Soho China Ltd.a | 20,221,500 | 12,946,335 | ||||||
Tencent Holdings Ltd. | 11,310,400 | 206,912,634 | ||||||
Tingyi (Cayman Islands) | 20,890,000 | 52,799,049 |
8 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Tsingtao Brewery Co. Ltd. | 3,782,000 | $ | 19,886,071 | |||||
Want Want China | 62,712,000 | 50,711,382 | ||||||
Weichai Power Co. Ltd. | 444,000 | 3,693,103 | ||||||
Wumart Stores Inc. | 1,259,000 | 2,628,548 | ||||||
XinAo Gas Holdings Ltd. | 8,882,000 | 23,807,894 | ||||||
Yanzhou Coal Mining Co. | 42,174,800 | 86,534,654 | ||||||
Zhejiang Expressway Co. | 42,174,000 | 37,465,108 | ||||||
Zijin Mining Group Co. | 90,208,000 | 62,392,369 | ||||||
ZTE Corp. Class Ha | 4,277,200 | 15,891,378 | ||||||
7,337,408,472 | ||||||||
COLOMBIA – 0.55% | ||||||||
Bancolombia SA SP ADR | 3,388,156 | 217,621,260 | ||||||
217,621,260 | ||||||||
CZECH REPUBLIC – 0.81% |
| |||||||
Central European Media | 23,000 | 489,892 | ||||||
CEZ AS | 5,312,039 | 223,289,995 | ||||||
Komercni Banka AS | 508,200 | 98,333,188 | ||||||
Telefonica O2 Czech | 76,499 | 1,723,239 | ||||||
323,836,314 | ||||||||
EGYPT – 0.45% | ||||||||
Orascom Construction | 2,830,732 | 123,702,988 | ||||||
Orascom Telecom Holding | 11,907,609 | 55,132,230 | ||||||
178,835,218 | ||||||||
HUNGARY – 0.84% | ||||||||
Magyar Telekom | 4,679,031 | 14,240,891 | ||||||
MOL Hungarian Oil and | 1,021,061 | 94,855,776 | ||||||
OTP Bank Nyrta,b | 4,223,452 | 89,494,403 |
Security | Shares | Value | ||||||
Richter Gedeon Nyrt | 657,282 | $ | 136,369,542 | |||||
334,960,612 | ||||||||
INDIA – 6.93% | ||||||||
Axis Bank Ltd. SP GDRd | 1,424,039 | 40,869,919 | ||||||
Dr. Reddy’s Laboratories | 2,754,086 | 79,345,218 | ||||||
HDFC Bank Ltd. SP ADRa | 3,560,024 | 568,891,835 | ||||||
ICICI Bank Ltd. SP ADR | 9,548,928 | 394,466,216 | ||||||
Infosys Technologies Ltd. | 9,263,755 | 530,720,524 | ||||||
Larsen & Toubro Ltd. | 2,530,292 | 97,416,242 | ||||||
Mahanagar Telephone | 1,649,115 | 4,337,172 | ||||||
Reliance Industries Ltd. | 11,579,754 | 452,652,584 | ||||||
Satyam Computer | 4,486,828 | 20,280,463 | ||||||
Sterlite Industries (India) | 8,650,023 | 111,412,296 | ||||||
Tata Communications Ltd. | 6,596,019 | 93,003,868 | ||||||
Tata Motors Ltd. SP ADRa | 5,785,644 | 123,870,638 | ||||||
Wipro Ltd. SP ADRa | 18,619,863 | 238,892,842 | ||||||
2,756,159,817 | ||||||||
INDONESIA – 2.58% | ||||||||
PT Adaro Energy Tbk | 116,035,000 | 24,401,383 | ||||||
PT Aneka Tambang Tbk | 237,124,000 | 54,458,472 | ||||||
PT Astra Agro Lestari Tbk | 4,884,500 | 10,623,179 | ||||||
PT Astra International Tbk | 30,303,500 | 159,650,979 | ||||||
PT Bank Central Asia Tbk | 171,729,500 | 110,241,406 | ||||||
PT Bank Danamon | 39,409,487 | 23,336,000 | ||||||
PT Bank Mandiri Tbk | 102,972,500 | 67,242,695 | ||||||
PT Bank Negara Indonesia | 47,379,000 | 18,222,692 | ||||||
PT Bank Rakyat | 87,324,061 | 89,885,309 | ||||||
PT Bumi Resources Tbk | 331,970,500 | 60,992,920 | ||||||
PT Gudang Garam Tbk | 7,101,500 | 30,968,356 | ||||||
PT Indo Tambangraya | 4,178,500 | 18,129,186 |
SCHEDULEOF INVESTMENTS | 9 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
PT Indocement Tunggal | 2,650,000 | $ | 5,176,812 | |||||
PT Indofood Sukses | 54,478,000 | 27,434,964 | ||||||
PT Indosat Tbk | 2,655,560 | 1,293,245 | ||||||
PT International Nickel | 17,405,500 | 8,235,585 | ||||||
PT Perusahaan Gas | 179,926,500 | 79,657,553 | ||||||
PT Semen Gresik | 21,199,500 | 20,413,465 | ||||||
PT Tambang Batubara | 4,842,500 | 9,379,496 | ||||||
PT Telekomunikasi | 121,970,000 | 116,772,607 | ||||||
PT Unilever Indonesia Tbk | 3,256,000 | 5,802,059 | ||||||
PT United Tractors Tbk | 40,584,150 | 82,650,621 | ||||||
1,024,968,984 | ||||||||
MALAYSIA – 2.87% | ||||||||
AirAsia Bhdb | 24,609,700 | 13,174,735 | ||||||
Alliance Financial | 6,443,600 | 6,303,667 | ||||||
AMMB Holdings Bhd | 30,144,875 | 54,369,610 | ||||||
Axiata Group Bhdb | 29,119,500 | 41,477,993 | ||||||
Berjaya Corp. Bhd | 10,881,600 | 3,294,145 | ||||||
Berjaya Sports Toto Bhd | 15,075,100 | 19,887,805 | ||||||
British American Tobacco | 1,449,600 | 20,832,962 | ||||||
Bursa Malaysia Bhd | 6,694,600 | 15,295,726 | ||||||
CIMB Group Holdings Bhd | 34,488,700 | 85,723,072 | ||||||
DiGi.Com Bhd | 1,927,800 | 15,198,054 | ||||||
Gamuda Bhd | 38,679,500 | 42,646,486 | ||||||
Genting Bhd | 29,956,800 | 90,209,761 | ||||||
Genting Malaysia Bhd | 54,256,600 | 52,213,862 | ||||||
Genting Plantations Bhd | 3,981,900 | 9,250,052 | ||||||
Hong Leong Bank Bhd | 1,096,400 | 3,088,500 | ||||||
Hong Leong Financial | 578,900 | 1,603,059 | ||||||
IJM Corp. Bhd | 21,525,020 | 34,227,124 | ||||||
IOI Corp. Bhd | 43,686,720 | 73,086,143 | ||||||
Kuala Lumpur Kepong Bhd | 5,279,300 | 28,531,755 |
Security | Shares | Value | ||||||
Lafarge Malayan | 3,130,100 | $ | 7,460,812 | |||||
Malayan Banking Bhd | 24,853,300 | 66,446,533 | ||||||
Malaysian Airline | 9,862,500 | 6,756,967 | ||||||
Maxis | 15,895,800 | 27,251,535 | ||||||
MISC Bhd | 6,638,100 | 18,593,407 | ||||||
MMC Corp. Bhd | 12,016,600 | 9,687,873 | ||||||
Parkson Holdings Bhd | 7,486,159 | 13,120,429 | ||||||
Petronas Dagangan Bhd | 1,104,000 | 3,785,364 | ||||||
Petronas Gas Bhd | 2,321,000 | 7,765,881 | ||||||
PLUS Expressways Bhd | 29,601,320 | 39,617,464 | ||||||
PPB Group Bhd | 5,129,100 | 27,916,138 | ||||||
Public Bank Bhd Foreign | 3,616,400 | 14,036,216 | ||||||
RHB Capital Bhd | 3,054,900 | 6,473,586 | ||||||
Sime Darby Bhd | 35,807,673 | 95,277,176 | ||||||
SP Setia Bhd | 11,931,100 | 16,462,458 | ||||||
Tanjong PLC | 2,660,500 | 18,074,936 | ||||||
Telekom Malaysia Bhd | 15,241,100 | 17,144,204 | ||||||
Tenaga Nasional Bhd | 27,990,300 | 79,025,559 | ||||||
UMW Holdings Bhd | 8,219,500 | 17,286,841 | ||||||
YTL Corp. Bhd | 6,996,508 | 16,409,126 | ||||||
YTL Power | 30,248,460 | 21,687,630 | ||||||
1,140,694,646 | ||||||||
MEXICO – 4.26% | ||||||||
Alfa SAB de CV Series A | 7,592,000 | 52,312,474 | ||||||
America Movil SAB de CV | 216,119,300 | 506,076,124 | ||||||
Cemex SAB de CV CPOa,b | 96,783,169 | 75,593,180 | ||||||
Coca-Cola FEMSA SAB de | 24,400 | 184,405 | ||||||
Desarrolladora Homex | 1,850,000 | 8,544,635 | ||||||
Fomento Economico | 33,936,800 | 166,671,713 | ||||||
Grupo Aeroportuario del | 100,300 | 279,220 |
10 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Grupo Bimbo SAB de CV | 635,900 | $ | 4,375,371 | |||||
Grupo Carso SAB de CV | 1,849,441 | 8,209,027 | ||||||
Grupo Elektra SA de CV | 41,890 | 1,344,418 | ||||||
Grupo Financiero Banorte | 19,932,156 | 71,919,409 | ||||||
Grupo Financiero Inbursa | 294,000 | 1,089,629 | ||||||
Grupo Mexico SAB de CV | 55,969,063 | 143,902,405 | ||||||
Grupo Modelo SAB de CV | 18,601,898 | 99,103,462 | ||||||
Grupo Televisa SA CPO | 36,448,600 | 135,585,087 | ||||||
Industrias Penoles SAB | 1,879,188 | 39,772,112 | ||||||
Kimberly-Clark de Mexico | 13,204,300 | 76,647,572 | ||||||
Mexichem SAB de CV | 337,900 | 872,371 | ||||||
Telefonos de Mexico SAB | 81,253,400 | 56,734,433 | ||||||
Urbi Desarrollos Urbanos | 6,511,300 | 12,278,891 | ||||||
Wal-Mart de Mexico SAB | 103,398,100 | 231,830,958 | ||||||
1,693,326,896 | ||||||||
PERU – 0.83% | ||||||||
Compania de Minas | 4,999,413 | 206,675,733 | ||||||
Credicorp Ltd. | 403,544 | 42,473,006 | ||||||
Southern Copper Corp. | 2,705,152 | 81,803,796 | ||||||
330,952,535 | ||||||||
PHILIPPINE ISLANDS – 1.17% |
| |||||||
Ayala Corp. | 7,413,503 | 56,385,770 | ||||||
Ayala Land Inc. | 63,244,800 | 22,866,286 | ||||||
Banco de Oro | 257,000 | 294,338 | ||||||
Bank of the | 51,804,414 | 54,819,486 | ||||||
Energy | 3,670,000 | 377,033 |
Security | Shares | Value | ||||||
Globe Telecom Inc. | 842,360 | $ | 14,856,437 | |||||
Jollibee Foods Corp.f | 61,761,000 | 106,202,778 | ||||||
Manila Electric Co. | 15,715,362 | 62,016,089 | ||||||
Metropolitan Bank & | 920,140 | 1,302,315 | ||||||
Philippine Long Distance | 965,920 | 52,001,249 | ||||||
SM Investments Corp. | 3,513,031 | 36,632,797 | ||||||
SM Prime Holdings Inc. | 236,372,820 | 56,904,568 | ||||||
464,659,146 | ||||||||
POLAND – 1.35% | ||||||||
Asseco Poland SA | 602,752 | 10,562,500 | ||||||
Bank Handlowy w | 326,040 | 8,070,323 | ||||||
Bank Millennium SAb | 4,178,407 | 5,868,344 | ||||||
Bank Pekao SA | 1,399,057 | 68,326,918 | ||||||
Bank Zachodni WBK SA | 221,405 | 13,218,944 | ||||||
BRE Bank SAb | 143,512 | 11,582,558 | ||||||
Cyfrowy Polsat SA | 2,743,170 | 12,351,086 | ||||||
Getin Holding SAa,b | 3,206,263 | 9,780,317 | ||||||
Globe Trade Centre SAb | 1,205,424 | 8,709,894 | ||||||
Grupa Lotos SAb | 658,222 | 6,234,720 | ||||||
ING Bank Slaski SAb | 31,971 | 8,203,162 | ||||||
Kernel Holding SAb | 442,314 | 8,671,583 | ||||||
KGHM Polska Miedz SA | 1,658,862 | 56,346,964 | ||||||
PBG SA | 114,220 | 8,238,546 | ||||||
Polska Grupa | 2,654,234 | 19,271,165 | ||||||
Polski Koncern Naftowy | 3,764,150 | 46,514,400 | ||||||
Polskie Gornictwo | 18,559,182 | 20,757,930 | ||||||
Powszechna Kasa | 7,481,110 | 90,567,749 | ||||||
Powszechny Zaklad | 453,397 | 54,399,284 | ||||||
Tauron Polska Energia SAb | 11,029,736 | 18,820,102 | ||||||
Telekomunikacja | 8,012,481 | 43,637,553 |
SCHEDULEOF INVESTMENTS | 11 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
TVN SA | 1,356,770 | $ | 7,406,482 | |||||
537,540,524 | ||||||||
RUSSIA – 5.95% | ||||||||
JSC MMC Norilsk Nickel | 8,186,099 | 138,754,378 | ||||||
JSC Polymetal SP GDRb,d | 463,885 | 5,506,315 | ||||||
LUKOIL SP ADR | 5,581,441 | 297,490,805 | ||||||
Magnit OJSC SP GDRd | 3,395,510 | 72,324,363 | ||||||
Mechel OAO SP ADR | 3,564,266 | 81,087,051 | ||||||
Mobile TeleSystems | 5,673,958 | 118,358,764 | ||||||
Novolipetsk Steel | 2,089,519 | 60,805,003 | ||||||
OAO Gazprom SP ADR | 31,663,765 | 655,439,936 | ||||||
OAO NovaTek SP GDRd | 1,284,061 | 94,250,077 | ||||||
OAO Tatneft SP ADR | 4,310,506 | 128,797,919 | ||||||
OAO TMK SP GDRb,d | 792,793 | 12,351,715 | ||||||
OJSC Comstar United | 2,046,893 | 13,243,398 | ||||||
OJSC Rosneft Oil Co. | 16,585,700 | 105,153,338 | ||||||
Polyus Gold SP ADR | 1,061,599 | 26,062,255 | ||||||
Rushydro SP ADRb | 13,350,238 | 69,421,238 | ||||||
Sberbank GDRd | 765,409 | 218,879,228 | ||||||
Sistema JSFC SP GDRd | 1,140,371 | 29,364,553 | ||||||
Surgutneftegaz SP ADR | 6,600,773 | 62,047,266 | ||||||
Uralkali SP GDRd | 2,568,602 | 59,463,136 | ||||||
VTB Bank OJSC SP GDRd | 16,123,013 | 83,194,747 | ||||||
Wimm-Bill-Dann Foods | 1,944,712 | 35,646,571 | ||||||
2,367,642,056 | ||||||||
SOUTH AFRICA – 7.75% |
| |||||||
Absa Group Ltd. | 1,007,410 | 16,833,987 | ||||||
African Bank | 18,749,717 | 82,363,262 | ||||||
African Rainbow | 523,729 | 10,954,941 | ||||||
Anglo Platinum Ltd.b | 635,821 | 52,627,695 | ||||||
AngloGold Ashanti Ltd. | 3,417,648 | 146,607,982 | ||||||
ArcelorMittal South | 5,114,258 | 57,135,188 |
Security | Shares | Value | ||||||
Aspen Pharmacare | 149,937 | $ | 1,709,616 | |||||
Aveng Ltd. | 2,879,216 | 14,833,774 | ||||||
Bidvest Group Ltd. | 4,238,890 | 78,274,998 | ||||||
Discovery Holdings Ltd. | 101,419 | 481,674 | ||||||
Exxaro Resources Ltd. | 2,717,139 | 42,158,341 | ||||||
FirstRand Ltd. | 47,892,077 | 125,513,181 | ||||||
Foschini Ltd. | 8,787,678 | 84,591,416 | ||||||
Gold Fields Ltd. | 7,431,781 | 106,805,245 | ||||||
Growthpoint | 704,627 | 1,609,730 | ||||||
Harmony Gold Mining | 4,465,629 | 46,292,512 | ||||||
Impala Platinum | 6,029,732 | 142,246,330 | ||||||
Imperial Holdings Ltd. | 5,079,361 | 70,311,868 | ||||||
Investec Ltd. | 6,383,676 | 47,974,397 | ||||||
Kumba Iron Ore Ltd. | 714,021 | 32,456,336 | ||||||
Liberty Holdings Ltd. | 1,373,646 | 13,036,670 | ||||||
Massmart Holdings Ltd. | 811,899 | 13,480,006 | ||||||
MTN Group Ltd. | 18,050,491 | 294,896,677 | ||||||
Murray & Roberts | 3,623,749 | 20,389,192 | ||||||
Naspers Ltd. Class N | 5,877,802 | 237,303,580 | ||||||
Nedbank Group Ltd. | 5,163,897 | 98,268,594 | ||||||
Netcare Ltd.b | 29,734,694 | 53,335,593 | ||||||
Northam Platinum Ltd.a | 491,573 | 2,682,549 | ||||||
Pick’n Pay Stores Ltd. | 8,514,314 | 51,230,757 | ||||||
Pretoria Portland Cement | 6,465,255 | 26,322,965 | ||||||
Redefine Properties Ltd. | 718,936 | 778,809 | ||||||
Remgro Ltd. | 1,808,926 | 24,402,690 | ||||||
Reunert Ltd. | 2,655,518 | 20,698,333 | ||||||
RMB Holdings Ltd. | 509,836 | 2,303,879 | ||||||
Sanlam Ltd. | 30,300,995 | 95,638,703 | ||||||
Sappi Ltd.b | 1,743,697 | 8,262,510 | ||||||
Sasol Ltd. | 7,569,443 | 288,225,342 | ||||||
Shoprite Holdings Ltd. | 15,061,973 | 184,605,275 | ||||||
Standard Bank Group Ltd. | 14,479,342 | 205,202,944 | ||||||
Steinhoff International | 3,355,619 | 8,553,115 | ||||||
Telkom South Africa Ltd. | 179,376 | 817,142 | ||||||
Tiger Brands Ltd. | 3,215,181 | 78,791,169 |
12 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Truworths | 14,984,875 | $ | 118,952,572 | |||||
Vodacom Group | 285,432 | 2,387,323 | ||||||
Woolworths Holdings Ltd. | 20,597,674 | 68,698,475 | ||||||
3,081,047,337 | ||||||||
SOUTH KOREA – 12.80% |
| |||||||
AmorePacific Corp.a | 36,050 | 33,076,153 | ||||||
Busan Bank | 174,940 | 1,860,443 | ||||||
Celltrion Inc.a,b | 997,646 | 17,183,577 | ||||||
Cheil Industries Inc. | 417,368 | 36,379,144 | ||||||
CJ CheilJedang Corp. | 77,100 | 14,308,741 | ||||||
Daegu Bank | 143,400 | 1,668,555 | ||||||
Daelim Industrial Co. Ltd. | 172,914 | 10,874,732 | ||||||
Daewoo Engineering & | 115,000 | 947,702 | ||||||
Daewoo | 156,096 | 4,342,148 | ||||||
Daewoo Securities | 636,610 | 11,708,441 | ||||||
Daewoo Shipbuilding & | 971,470 | 18,880,016 | ||||||
Dongbu Insurance Co. Ltd. | 53,730 | 1,512,543 | ||||||
Dongkuk Steel Mill | 346,920 | 6,944,766 | ||||||
Doosan Corp.a | 304,560 | 30,483,944 | ||||||
Doosan Heavy | 389,966 | 22,378,564 | ||||||
Doosan Infracore | 873,480 | 14,061,360 | ||||||
GLOVIS Co. Ltd. | 66,500 | 9,096,672 | ||||||
GS Engineering & | 304,501 | 21,741,001 | ||||||
GS Holdings Corp. | 235,940 | 9,682,416 | ||||||
Hana Financial Group Inc. | 1,541,690 | 39,670,645 | ||||||
Hanjin Heavy Industries & | 856,070 | 20,528,829 | ||||||
Hankook Tire Co. Ltd. | 1,018,760 | 22,135,873 | ||||||
Hanwha Chemical Corp.a | 425,090 | 9,520,116 | ||||||
Hanwha Corp. | 334,230 | 12,419,673 |
Security | Shares | Value | ||||||
Hite Brewery Co. Ltd.a | 49,868 | $ | 5,407,323 | |||||
Honam | 57,850 | 9,023,230 | ||||||
Hynix | 4,925,780 | 86,691,099 | ||||||
Hyosung Corp. | 206,618 | 18,440,342 | ||||||
Hyundai Department | 51,990 | 5,203,770 | ||||||
Hyundai Development Co. | 268,550 | 6,159,917 | ||||||
Hyundai Engineering & | 763,253 | 40,744,176 | ||||||
Hyundai Heavy Industries | 406,510 | 89,514,255 | ||||||
Hyundai Mipo Dockyard | 132,220 | 17,700,651 | ||||||
Hyundai Mobis Co. Ltd. | 843,320 | 152,640,287 | ||||||
Hyundai Motor Co. Ltd. | 1,825,318 | 215,432,894 | ||||||
Hyundai Securities | 184,970 | 2,213,962 | ||||||
Hyundai Steel Co.a | 568,300 | 51,193,928 | ||||||
Industrial Bank of Korea | 270,910 | 3,276,499 | ||||||
Kangwon Land Inc. | 125,500 | 2,297,710 | ||||||
KB Financial Group Inc. | 6,529,111 | 265,995,982 | ||||||
KCC Corp. | 6,970 | 1,732,471 | ||||||
Kia Motors Corp. | 2,763,300 | 70,989,774 | ||||||
Korea Electric Power | 20,870,470 | 256,915,486 | ||||||
Korea Exchange Bank | 678,450 | 7,158,556 | ||||||
Korea Gas Corp. | 88,280 | 3,180,996 | ||||||
Korea Investment | 137,560 | 3,608,526 | ||||||
Korea Life Insurance | 1,835,490 | 12,263,137 | ||||||
Korea Zinc Co. Ltd.a | 60,610 | 13,472,821 | ||||||
Korean Air Lines Co. Ltd.b | 387,460 | 23,559,791 | ||||||
KT Corp. SP ADRa | 11,093,294 | 207,111,799 | ||||||
KT&G Corp.a | 1,386,350 | 70,537,451 | ||||||
LG Chem Ltd.a | 494,400 | 142,270,415 | ||||||
LG Corp.a | 1,025,711 | 73,576,734 | ||||||
LG Display Co. Ltd. | 10,834,706 | 152,552,660 | ||||||
LG Electronics Inc.a | 1,002,700 | 80,624,139 |
SCHEDULEOF INVESTMENTS | 13 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
LG Household & Health | 92,080 | $ | 30,875,102 | |||||
LG Innotek Co. Ltd.a | 117,150 | 12,898,323 | ||||||
LG Uplus Corp. | 990,950 | 6,190,855 | ||||||
Lotte Confectionery | 2,300 | 2,365,418 | ||||||
Lotte Shopping Co. Ltd. | 54,530 | 17,670,285 | ||||||
LS Corp. | 84,860 | 8,316,832 | ||||||
LS Industrial Systems | 127,280 | 10,255,441 | ||||||
Mirae Asset Securities | 132,360 | 6,270,788 | ||||||
NCsoft Corp.a | 301,635 | 57,866,419 | ||||||
NHN Corp.b | 443,035 | 72,613,544 | ||||||
OCI Co. Ltd.a | 128,730 | 39,942,914 | ||||||
POSCO SP ADRa | 4,324,338 | 436,585,164 | ||||||
S1 Corp. | 109,590 | 5,301,710 | ||||||
Samsung C&T Corp.a | 1,386,440 | 65,222,467 | ||||||
Samsung Card Co. Ltd. | 66,780 | 2,980,007 | ||||||
Samsung Electro- | 779,671 | 74,136,704 | ||||||
Samsung Electronics Co. | 3,026,333 | 951,781,729 | ||||||
Samsung Engineering | 241,254 | 26,562,289 | ||||||
Samsung Fire & Marine | 291,530 | 46,566,015 | ||||||
Samsung Heavy Industries | 2,036,070 | 45,259,209 | ||||||
Samsung Life Insurance | 559,030 | 50,825,148 | ||||||
Samsung SDI Co. Ltd.a | 322,010 | 45,122,763 | ||||||
Samsung Securities | 219,230 | 10,605,839 | ||||||
Samsung Techwin Co. Ltd. | 565,987 | 52,165,788 | ||||||
Seoul Semiconductor | 90,003 | 2,740,103 | ||||||
Shinhan Financial Group | 2,610,940 | 99,960,085 | ||||||
Shinhan Financial Group | 702,105 | 53,809,327 | ||||||
Shinsegae Co. Ltd. | 125,440 | 60,371,074 | ||||||
SK Broadband Co. Ltd.b | 230,670 | 1,019,727 |
Security | Shares | Value | ||||||
SK C&C Co. Ltd. | 53,700 | $ | 4,093,903 | |||||
SK Energy Co. Ltd.a | 516,890 | 54,969,952 | ||||||
SK Holdings Co. Ltd. | 154,450 | 11,852,031 | ||||||
SK Networks Co. Ltd. | 304,280 | 2,504,999 | ||||||
SK Telecom Co. Ltd. | 11,141,005 | 178,478,900 | ||||||
S-Oil Corp.a | 107,240 | 5,170,133 | ||||||
STX Pan Ocean Co. Ltd.a | 2,279,800 | 21,773,050 | ||||||
Tong Yang Securities Inc. | 669,960 | 5,459,596 | ||||||
Woongjin Coway Co. Ltd.a | 613,750 | 20,502,700 | ||||||
Woori Finance Holdings | 1,129,620 | 12,672,774 | ||||||
Woori Investment & | 286,320 | 4,191,272 | ||||||
Yuhan Corp. | 70,601 | 10,482,090 | ||||||
5,091,329,304 | ||||||||
TAIWAN – 10.24% | ||||||||
Acer Inc. | 25,974,053 | 60,893,157 | ||||||
Advanced Semiconductor | 18,032,645 | 12,412,431 | ||||||
Advantech Co. Ltd. | 1,410,000 | 3,195,542 | ||||||
Asia Cement Corp. | 13,834,753 | 12,438,062 | ||||||
ASUSTeK Computer Inc. | 4,379,400 | 29,187,797 | ||||||
AU Optronics Corp. | 21,090,040 | 181,585,244 | ||||||
Capital Securities Corp. | 21,678,914 | 9,474,458 | ||||||
Catcher Technology | 3,873,210 | 8,560,382 | ||||||
Cathay Financial Holding | 54,109,350 | 77,868,547 | ||||||
Chang Hwa Commercial | 4,627,000 | 2,628,813 | ||||||
Cheng Shin Rubber | 21,180,893 | 43,044,145 | ||||||
Cheng Uei Precision | 3,111,260 | 5,031,007 | ||||||
Chicony Electronics | 6,575,600 | 11,802,991 | ||||||
Chimei Innolux Corp. | 36,402,487 | 37,613,858 | ||||||
China Airlines Ltd.b | 19,775,000 | 11,790,675 | ||||||
China Development | 999,900 | 273,744 |
14 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
China Steel Corp. | 119,400,412 | $ | 112,937,269 | |||||
Chinatrust Financial | 61,557,720 | 34,493,385 | ||||||
Chinese Gamer | 913,000 | 7,239,246 | ||||||
Chunghwa Picture | 1,999,199 | 308,923 | ||||||
Chunghwa Telecom Co. | 18,093,769 | 372,188,828 | ||||||
Clevo Co. | 7,792,000 | 16,175,564 | ||||||
CMC Magnetics Corp.b | 24,861,000 | 6,084,480 | ||||||
Compal | 7,538,750 | 5,895,164 | ||||||
Compal Electronics Inc. | 35,210,908 | 39,460,311 | ||||||
Coretronic Corp. | 6,819,000 | 9,132,019 | ||||||
Delta Electronics Inc. | 21,252,000 | 80,605,544 | ||||||
E.Sun Financial Holding | 1,246,000 | 558,160 | ||||||
Epistar Corp. | 4,388,345 | 11,315,393 | ||||||
Eternal Chemical Co. Ltd. | 3,737,800 | 3,652,155 | ||||||
EVA Airways Corp.b | 11,351,000 | 8,061,286 | ||||||
Evergreen International | 7,904,000 | 6,094,425 | ||||||
Evergreen Marine | 15,981,000 | 10,601,119 | ||||||
Everlight Electronics | 2,067,000 | 5,310,423 | ||||||
Far Eastern Department | 13,945,125 | 13,799,727 | ||||||
Far Eastern New | 26,693,842 | 31,165,315 | ||||||
Far EasTone | 11,376,000 | 14,737,591 | ||||||
Farglory Land | 15,066,000 | 32,545,645 | ||||||
Feng Hsin Iron & Steel | 5,762,000 | 8,849,672 | ||||||
First Financial Holding | 12,306,350 | 7,107,057 | ||||||
Formosa Chemicals & | 23,414,000 | 52,040,857 |
Security | Shares | Value | ||||||
Formosa International | 212,300 | $ | 3,406,449 | |||||
Formosa | 6,564,000 | 14,732,834 | ||||||
Formosa Plastics Corp. | 45,456,000 | 100,748,455 | ||||||
Formosa Taffeta Co. Ltd. | 8,762,000 | 6,550,849 | ||||||
Foxconn Technology | 1,778,710 | 5,097,258 | ||||||
Fubon Financial Holding | 45,236,121 | 52,742,996 | ||||||
Giant Manufacturing | 4,597,000 | 16,646,438 | ||||||
HannStar Display Corp.b | 16,360,963 | 2,998,029 | ||||||
Hon Hai Precision | 96,624,373 | 340,842,672 | ||||||
HTC Corp. | 10,088,389 | 184,232,614 | ||||||
Hua Nan Financial | 1,204,489 | 706,886 | ||||||
Inventec Co. Ltd. | 13,326,050 | 6,551,954 | ||||||
KGI Securities Co. Ltd. | 51,309,000 | 21,382,754 | ||||||
Largan Precision Co. Ltd. | 1,199,000 | 21,633,951 | ||||||
Lite-On Technology Corp. | 14,480,114 | 16,679,659 | ||||||
Macronix International | 42,943,275 | 22,856,429 | ||||||
MediaTek Inc. | 9,877,176 | 134,587,854 | ||||||
Mega Financial Holding | 21,957,000 | 13,263,031 | ||||||
Micro-Star International | 3,464,000 | 1,697,721 | ||||||
MiTAC International Corp. | 7,403,728 | 2,750,339 | ||||||
Motech Industries Inc. | 3,952,123 | 15,359,909 | ||||||
Nan Ya Plastics Corp. | 43,773,000 | 84,446,881 | ||||||
Nan Ya Printed Circuit | 916,000 | 2,945,246 | ||||||
Novatek Microelectronics | 607,000 | 1,447,674 | ||||||
Pegatron Corp.b | 7,562,414 | 9,466,592 | ||||||
Phison Electronics Corp. | 1,419,535 | 5,694,270 | ||||||
Pixart Imaging Inc. | 61,000 | 282,778 | ||||||
Polaris Securities Co. Ltd. | 39,894,000 | 17,746,441 | ||||||
Pou Chen Corp. | 28,594,220 | 23,074,252 | ||||||
Powertech | 483,000 | 1,432,384 |
SCHEDULEOF INVESTMENTS | 15 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
President Chain | 6,493,000 | $ | 24,018,871 | |||||
Prime View International | 8,656,000 | 12,821,602 | ||||||
Qisda Corp.b | 12,286,000 | 6,941,893 | ||||||
Quanta Computer Inc. | 19,167,000 | 29,078,985 | ||||||
Realtek | 648,420 | 1,281,294 | ||||||
Richtek Technology Corp. | 482,150 | 3,281,161 | ||||||
Ruentex Development | 9,899,000 | 15,945,196 | ||||||
Ruentex Industries Ltd. | 9,281,000 | 27,407,835 | ||||||
Shin Kong Financial | 16,067,345 | 5,341,738 | ||||||
Siliconware Precision | 25,847,866 | 115,539,961 | ||||||
Simplo Technology | 2,872,200 | 14,031,944 | ||||||
SinoPac Financial | 1,614,000 | 566,820 | ||||||
Synnex Technology | 14,230,985 | 29,231,404 | ||||||
Taishin Financial Holdings | 1,472,970 | 602,357 | ||||||
Taiwan Business | 16,416,000 | 4,765,836 | ||||||
Taiwan Cement Corp. | 29,239,190 | 26,880,632 | ||||||
Taiwan Cooperative Bank | 13,013,000 | 8,124,493 | ||||||
Taiwan Fertilizer Co. Ltd. | 6,481,000 | 19,826,996 | ||||||
Taiwan Glass | 3,505,060 | 3,391,923 | ||||||
Taiwan Mobile Co. Ltd. | 21,376,000 | 42,039,333 | ||||||
Taiwan Semiconductor | 63,589,025 | 598,372,725 | ||||||
Tatung Co. Ltd.b | 63,875,000 | 10,687,707 | ||||||
Teco Electric and | 32,413,000 | 15,632,792 | ||||||
Transcend Information Inc. | 101,000 | 260,114 | ||||||
Tripod Technology Corp. | 2,373,000 | 8,148,530 | ||||||
TSRC Corp. | 7,170,000 | 10,463,804 |
Security | Shares | Value | ||||||
Tung Ho Steel | 10,688,000 | $ | 9,241,980 | |||||
U-Ming Marine | 5,007,000 | 9,675,136 | ||||||
Unimicron | 8,985,000 | 14,220,500 | ||||||
Uni-President | 52,656,513 | 60,901,661 | ||||||
United Microelectronics | 94,905,857 | 243,908,053 | ||||||
Walsin Lihwa Corp.b | 19,204,000 | 9,052,269 | ||||||
Wan Hai Lines Ltd.b | 2,387,000 | 1,527,549 | ||||||
Winbond | 1,584,000 | 399,041 | ||||||
Wintek Corp.b | 14,572,000 | 18,104,689 | ||||||
Wistron Corp. | 14,454,059 | 22,605,618 | ||||||
WPG Holdings Co. Ltd. | 9,643,966 | 17,882,612 | ||||||
Yang Ming Marine | 30,031,978 | 17,812,561 | ||||||
Young Fast | 1,339,000 | 14,128,176 | ||||||
Yuanta Financial Holding | 38,829,000 | 22,060,554 | ||||||
Yulon Motor Co. Ltd. | 32,452,000 | 47,309,371 | ||||||
4,073,681,726 | ||||||||
THAILAND – 1.68% | ||||||||
Advanced Information | 1,137,900 | 3,354,251 | ||||||
Advanced Information | 1,665,200 | 4,908,602 | ||||||
Bangkok Bank | 9,493,400 | 46,412,852 | ||||||
Banpu PCL Foreign | 2,711,200 | 53,019,793 | ||||||
BEC World PCL Foreign | 322,200 | 326,884 | ||||||
BEC World PCL NVDR | 1,139,600 | 1,156,169 | ||||||
Charoen Pokphand Foods | 8,690,400 | 7,081,170 | ||||||
Charoen Pokphand Foods | 33,339,900 | 27,166,239 | ||||||
CP All PCL Foreign | 3,120,900 | 3,964,077 | ||||||
CP All PCL NVDR | 11,538,600 | 14,655,995 | ||||||
Glow Energy PCL Foreign | 137,400 | 193,181 |
16 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Glow Energy PCL NVDR | 2,009,600 | $ | 2,825,448 | |||||
IRPC PCL Foreign | 138,979,600 | 17,852,627 | ||||||
Kasikornbank PCL Foreign | 17,516,200 | 63,807,215 | ||||||
Krung Thai Bank | 66,825,500 | 30,321,843 | ||||||
PTT Aromatics & Refining | 39,556,386 | 29,577,231 | ||||||
PTT Chemical PCL Foreign | 12,166,468 | 41,209,318 | ||||||
PTT Exploration and | 29,268,500 | 134,207,693 | ||||||
PTT PCL Foreign | 17,016,700 | 144,094,121 | ||||||
Siam Cement PCL Foreign | 2,752,600 | 27,266,528 | ||||||
Siam Commercial Bank | 2,713,400 | 8,258,551 | ||||||
Thai Oil PCL NVDR | 3,677,700 | 5,170,756 | ||||||
666,830,544 | ||||||||
TURKEY – 1.65% | ||||||||
Akbank TAS | 11,607,160 | 61,736,159 | ||||||
Anadolu Efes Biracilik ve | 1,193,525 | 16,066,231 | ||||||
Arcelik AS | 174,218 | 829,392 | ||||||
Asya Katilim Bankasi AS | 20,642,407 | 45,814,785 | ||||||
BIM Birlesik | 833,830 | 22,859,283 | ||||||
Coca-Cola Icecek AS | 77,113 | 810,170 | ||||||
Dogan Sirketler Grubu | 19,387,008 | 12,730,322 | ||||||
Enka Insaat ve Sanayi AS | 781,156 | 2,846,814 | ||||||
Eregli Demir ve Celik | 10,327,555 | 29,974,254 | ||||||
Haci Omer Sabanci | 2,485,414 | 11,260,987 | ||||||
KOC Holding AS | 4,561,801 | 17,823,045 | ||||||
Migros TAS | 1 | 12 | ||||||
Turk Hava Yollari | 6,070,983 | 19,135,018 | ||||||
Turk Telekomunikasyon AS | 3,198,265 | 13,230,724 | ||||||
Turkcell Iletisim | 6,309,417 | 39,980,218 | ||||||
Turkiye Garanti | 27,426,901 | 133,271,435 | ||||||
Turkiye Halk Bankasi AS | 1,872,140 | 15,243,638 |
Security | Shares | Value | ||||||
Turkiye Is Bankasi AS | 12,499,018 | $ | 45,961,324 | |||||
Turkiye Petrol | 1,468,027 | 33,015,907 | ||||||
Turkiye Vakiflar | 28,218,621 | 76,712,254 | ||||||
Yapi ve Kredi Bankasi ASb | 18,496,827 | 55,384,813 | ||||||
654,686,785 | ||||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $36,620,889,104) |
| 36,339,610,374 | ||||||
PREFERRED STOCKS – 7.69% |
| |||||||
BRAZIL – 7.60% | ||||||||
AES Tiete SA | 401,200 | 4,876,755 | ||||||
Banco Bradesco SA | 31,373,944 | 553,122,633 | ||||||
Banco do Estado do Rio | 475,600 | 4,197,547 | ||||||
Bradespar SA | 1,516,500 | 31,645,087 | ||||||
Brasil Telecom SA | 1,610,890 | 30,977,415 | ||||||
Braskem SA Class A | 829,900 | 7,324,526 | ||||||
Centrais Eletricas | 579,200 | 8,374,533 | ||||||
Centrais Eletricas | 310,574 | 4,549,909 | ||||||
Companhia Brasileira de | 18,200 | 642,310 | ||||||
Companhia Brasileira de | 1,270,108 | 89,441,005 | ||||||
Companhia de Bebidas | 2,932,683 | 324,618,681 | ||||||
Companhia de | 119,900 | 3,404,327 | ||||||
Companhia Energetica de | 704,700 | 11,249,808 | ||||||
Companhia Energetica de | 4,004,322 | 66,151,399 |
SCHEDULEOF INVESTMENTS | 17 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2010
Security | Shares | Value | ||||||
Companhia Energetica de | 677,300 | $ | 9,858,587 | |||||
Companhia Paranaense | 395,800 | 8,676,707 | ||||||
Companhia Paranaense | 591,078 | 13,145,575 | ||||||
Eletropaulo Metropolitana | 530,600 | 9,983,067 | ||||||
Fertilizantes | 233,600 | 2,254,824 | ||||||
Gerdau SA SP ADR | 9,781,077 | 131,262,053 | ||||||
Gol Linhas Aereas | 1,906,578 | 25,014,303 | ||||||
Itausa – Investimentos | 28,108,972 | 197,120,987 | ||||||
Klabin SA | 868,400 | 2,426,044 | ||||||
Lojas Americanas SA | 2,271,300 | 19,152,500 | ||||||
Metalurgica Gerdau SA | 1,533,800 | 24,634,195 | ||||||
Net Servicos de | 3,079,827 | 39,206,198 | ||||||
Petroleo Brasileiro SA | 21,444,036 | 633,885,704 | ||||||
Suzano Bahia Sul Papel e | 988,700 | 8,996,637 | ||||||
Tele Norte Leste | 3,414,621 | 46,302,261 | ||||||
Telemar Norte Leste SA | 90,600 | 2,299,157 | ||||||
TIM Participacoes SA | 2,017,500 | 5,705,294 | ||||||
Ultrapar Participacoes SA | 365,900 | 20,131,332 | ||||||
Usinas Siderurgicas de | 2,819,500 | 70,778,862 | ||||||
Vale SA Class A SP ADR | 25,313,800 | 597,911,956 | ||||||
Vivo Participacoes SA | 469,000 | 11,284,130 | ||||||
3,020,606,308 | ||||||||
SOUTH KOREA – 0.09% |
| |||||||
Hyundai Motor Co. Ltd. | 8,310 | 336,171 |
Security | Shares | Value | ||||||
Hyundai Motor Co. Ltd. | 168,080 | $ | 7,079,856 | |||||
LG Electronics Inc. | 7,470 | 259,198 | ||||||
Samsung Electronics | 68,200 | 30,319,957 | ||||||
37,995,182 | ||||||||
TOTAL PREFERRED STOCKS |
| |||||||
(Cost: $2,937,856,766) |
| 3,058,601,490 | ||||||
RIGHTS – 0.00% | ||||||||
BRAZIL – 0.00% | ||||||||
Marfrig Alimentos SAb | 396 | 147 | ||||||
147 | ||||||||
TOTAL RIGHTS | ||||||||
(Cost: $0) | 147 | |||||||
EXCHANGE-TRADED FUNDS – 0.44% |
| |||||||
iShares MSCI Malaysia | 1,314,976 | 16,936,891 | ||||||
iShares MSCI South Korea | 1,623,064 | 77,566,228 | ||||||
iShares MSCI Taiwan | 6,577,720 | 79,919,298 | ||||||
TOTAL EXCHANGE-TRADED FUNDS |
| |||||||
(Cost: $176,008,202) |
| 174,422,417 | ||||||
SHORT-TERM INVESTMENTS – 4.45% |
| |||||||
MONEY MARKET FUNDS – 4.45% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
SL Agency Shares 0.31%f,g,h | 1,385,091,326 | 1,385,091,326 | ||||||
BlackRock Cash Funds: Prime, |
| |||||||
SL Agency Shares 0.30%f,g,h | 269,151,577 | 269,151,577 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
SL Agency Shares 0.13%f,g | 113,419,152 | 113,419,152 | ||||||
1,767,662,055 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $1,767,662,055) |
| 1,767,662,055 | ||||||
18 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
August 31, 2010
Value | ||||
TOTAL INVESTMENTS | ||||
(Cost: $41,502,416,127) | $ | 41,340,296,483 | ||
Other Assets, Less Liabilities – (3.96)% | (1,573,341,619) | |||
NET ASSETS – 100.00% | $ | 39,766,954,864 | ||
CPO – Certificates of Participation (Ordinary)
GDR – Global Depositary Receipts
NVDR – Non-Voting Depositary Receipts
SP ADR – Sponsored American Depositary Receipts
SP GDR – Sponsored Global Depositary Receipts
a | All or a portion of this security represents a security on loan. See Note 5. |
b | Non-income earning security. |
c | Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1. |
d | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
e | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
f | Affiliated issuer. See Note 2. |
g | The rate quoted is the annualized seven-day yield of the fund at period end. |
h | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULEOF INVESTMENTS | 19 |
Table of Contents
Statement of Assets and Liabilities
iSHARES® , INC.
August 31, 2010
iShares MSCI Emerging Markets Index Fund | ||||
ASSETS | ||||
Investments, at cost: | ||||
Unaffiliated issuers | $ | 39,490,061,141 | ||
Affiliated issuers (Note 2) | 2,012,354,986 | |||
Total cost of investments | $ | 41,502,416,127 | ||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||
Unaffiliated issuers | $ | 39,292,009,233 | ||
Affiliated issuers (Note 2) | 2,048,287,250 | |||
Total fair value of investments | 41,340,296,483 | |||
Foreign currencies, at valueb | 17,248,560 | |||
Receivables: | ||||
Investment securities sold | 79,833,103 | |||
Due from custodian (Note 4) | 1,048,890 | |||
Dividends and interest | 90,859,331 | |||
Total Assets | 41,529,286,367 | |||
LIABILITIES | ||||
Payables: | ||||
Investment securities purchased | 82,786,239 | |||
Collateral for securities on loan (Note 5) | 1,654,242,903 | |||
Foreign taxes (Note 1) | 2,299,952 | |||
Investment advisory fees (Note 2) | 23,002,409 | |||
Total Liabilities | 1,762,331,503 | |||
NET ASSETS | $ | 39,766,954,864 | ||
Net assets consist of: | ||||
Paid-in capital | $ | 42,492,928,130 | ||
Undistributed net investment income | 129,955,696 | |||
Accumulated net realized loss | (2,693,731,778 | ) | ||
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies | (162,197,184 | ) | ||
NET ASSETS | $ | 39,766,954,864 | ||
Shares outstandingc | 989,550,000 | |||
Net asset value per share | $ | 40.19 | ||
a | Securities on loan with a value of $1,582,543,186. See Note 5. |
b | Cost of foreign currencies: $17,306,224. |
c | $0.001 par value, number of shares authorized: 2,000,000,000. |
See notes to financial statements.
20 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statement of Operations
iSHARES®, INC.
Year ended August 31, 2010
iShares MSCI Emerging Markets Index Fund | ||||
NET INVESTMENT INCOME | ||||
Dividends from unaffiliated issuersa | $ | 749,980,468 | ||
Dividends from affiliated issuers (Note 2)b | 5,194,102 | |||
Interest from unaffiliated issuers | 1,410 | |||
Interest from affiliated issuers (Note 2) | 75,839 | |||
Securities lending income from affiliated issuers (Note 2) | 13,414,244 | |||
Total investment income | 768,666,063 | |||
EXPENSES | ||||
Investment advisory fees (Note 2) | 246,844,312 | |||
Foreign taxes (Note 1) | 2,747,338 | |||
Total expenses | 249,591,650 | |||
Less investment advisory fees waived (Note 2) | (1,176,450 | ) | ||
Net expenses | 248,415,200 | |||
Net investment income | 520,250,863 | |||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments in unaffiliated issuers | (995,851,472 | ) | ||
Investments in affiliated issuers (Note 2) | 12,385,889 | |||
In-kind redemptions | 2,320,507,709 | |||
Foreign currency transactions | (37,560,037 | ) | ||
Net realized gain | 1,299,482,089 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 2,361,839,545 | |||
Translation of assets and liabilities in foreign currencies | (303,340 | ) | ||
Net change in unrealized appreciation (depreciation) | 2,361,536,205 | |||
Net realized and unrealized gain | 3,661,018,294 | |||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 4,181,269,157 | ||
a | Net of foreign withholding tax of $103,972,802. |
b | Net of foreign withholding tax of $685,632. |
See notes to financial statements.
FINANCIAL STATEMENTS | 21 |
Table of Contents
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Emerging Markets Index Fund | ||||||||
Year ended August 31, 2010 | Year ended August 31, 2009 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 520,250,863 | $ | 516,988,234 | ||||
Net realized gain (loss) | 1,299,482,089 | (496,335,831 | ) | |||||
Net change in unrealized appreciation (depreciation) | 2,361,536,205 | 807,907,449 | ||||||
Net increase in net assets resulting from operations | 4,181,269,157 | 828,559,852 | ||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (551,986,882 | ) | (487,478,088 | ) | ||||
Total distributions to shareholders | (551,986,882 | ) | (487,478,088 | ) | ||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 13,614,469,565 | 18,716,077,957 | ||||||
Cost of shares redeemed | (7,744,918,384 | ) | (9,091,794,756 | ) | ||||
Net increase in net assets from capital share transactions | 5,869,551,181 | 9,624,283,201 | ||||||
INCREASE IN NET ASSETS | 9,498,833,456 | 9,965,364,965 | ||||||
NET ASSETS | ||||||||
Beginning of year | 30,268,121,408 | 20,302,756,443 | ||||||
End of year | $ | 39,766,954,864 | $ | 30,268,121,408 | ||||
Undistributed net investment income included in net assets at end of year | $ | 129,955,696 | $ | 199,251,752 | ||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 337,050,000 | 691,200,000 | ||||||
Shares redeemed | (200,700,000 | ) | (344,700,000 | ) | ||||
Net increase in shares outstanding | 136,350,000 | 346,500,000 | ||||||
See notes to financial statements.
22 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Emerging Markets Index Fund | ||||||||||||||||||||
Year ended Aug. 31, 2010 | Year ended Aug. 31, 2009 | Year ended Aug. 31, 2008a | Year ended Aug. 31, 2007a | Year ended Aug. 31, 2006a | ||||||||||||||||
Net asset value, beginning of year | $ | 35.48 | $ | 40.07 | $ | 44.78 | $ | 32.48 | $ | 25.97 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment incomeb | 0.58 | 0.66 | 1.10 | 0.63 | 0.55 | |||||||||||||||
Net realized and unrealized gain (loss)c | 4.73 | (4.66 | ) | (4.64 | ) | 12.19 | 6.29 | |||||||||||||
Total from investment operations | 5.31 | (4.00 | ) | (3.54 | ) | 12.82 | 6.84 | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (0.60 | ) | (0.59 | ) | (1.17 | ) | (0.52 | ) | (0.33 | ) | ||||||||||
Total distributions | (0.60 | ) | (0.59 | ) | (1.17 | ) | (0.52 | ) | (0.33 | ) | ||||||||||
Net asset value, end of year | $ | 40.19 | $ | 35.48 | $ | 40.07 | $ | 44.78 | $ | 32.48 | ||||||||||
Total return | 14.97 | % | (9.47 | )% | (8.36 | )% | 39.86 | % | 26.44 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 39,766,955 | $ | 30,268,121 | $ | 20,302,756 | $ | 18,198,371 | $ | 11,969,380 | ||||||||||
Ratio of expenses to average net assets prior to | 0.69 | % | 0.72 | % | 0.72 | % | 0.74 | % | 0.77 | % | ||||||||||
Ratio of expenses to average net assets after | 0.69 | % | 0.72 | % | 0.72 | % | 0.74 | % | 0.77 | % | ||||||||||
Ratio of expenses to average net assets after | 0.68 | % | 0.72 | % | 0.72 | % | 0.74 | % | 0.75 | % | ||||||||||
Ratio of net investment income to average net | 1.45 | % | 2.32 | % | 2.32 | % | 1.63 | % | 1.77 | % | ||||||||||
Portfolio turnover rated | 14 | % | 5 | % | 11 | % | 5 | % | 12 | % |
a | Per share amounts were adjusted to reflect a three-for-one stock split effective July 24, 2008. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 23 |
Table of Contents
iSHARES® , INC.
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.
These financial statements relate only to the iShares MSCI Emerging Markets 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 global emerging markets, as measured by the MSCI Emerging Markets Index compiled by MSCI Inc. 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 issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
The Fund invests in the securities of non-U.S. issuers that may trade in non-U.S. markets. This may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Fund; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets and the risk of war.
Pursuant to the Company’s organizational documents, the Fund’s officers and directors are indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
1. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are consistently followed by the Company in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
SECURITY VALUATION
The securities and other assets of the Fund are valued pursuant to the pricing policy and procedures approved by the Board of Directors of the Company (the “Board”) using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
• | Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access at the measurement date (a “Level 1 Price”); |
24 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® , INC.
• | Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (a “Level 2 Price”); |
• | Level 3 – Inputs that are unobservable for the asset or liability (a “Level 3 Price”). |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3 of the fair value hierarchy.
The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Fund’s perceived risk of that instrument.
Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 Prices, include active listed equities. The Fund does not adjust the quoted price for such instruments, even in situations where the Fund holds a large position and a sale could reasonably impact the quoted price.
Investments that trade in markets that are not considered to be active, but whose values are based on inputs such as quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified within Level 2. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.
Investments whose values are classified as Level 3 Prices have significant unobservable inputs, as they may trade infrequently or not at all. Investments whose values are classified as Level 3 Prices may include unlisted securities related to corporate actions, securities whose trading have been suspended or which have been de-listed from their primary trading exchange, less liquid corporate debt securities (including distressed debt instruments), collateralized debt obligations, and less liquid mortgage securities (backed by either commercial or residential real estate). When observable prices are not available for these securities, the Fund uses one or more valuation techniques (e.g., the market approach or the income approach) for which sufficient and reliable data is available. Within Level 3 of the fair value hierarchy, the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.
The inputs used by the Fund in estimating the value of Level 3 Prices may include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 Prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Fund in the absence of market information. The fair value measurement of Level 3 Prices does
NOTESTO FINANCIAL STATEMENTS | 25 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® , INC.
not include transaction costs that may have been capitalized as part of the security’s cost basis. Assumptions used by the Fund due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Fund’s results of operations.
Fair value pricing could result in a difference between the prices used to calculate the Fund’s net asset value and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.
As of August 31, 2010, the value of each of the Fund’s investments was classified as a Level 1 Price. The breakdown of the Fund’s investments into major categories is disclosed in the Schedule of Investments.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source, and interest income is accrued daily. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Fund may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. 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. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.
The Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Fund as a component of realized and unrealized gains and losses from investments for financial reporting purposes.
FOREIGN TAXES
The Fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, capital gains on investments or currency repatriation. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign markets in which the Fund invests. These foreign taxes, if any, are paid by the Fund and are disclosed in the Statement of Operations. Foreign taxes payable as of August 31, 2010, if any, are reflected in the Fund’s Statement of Assets and Liabilities.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income, if any, are generally declared and paid semi-annually by the Fund. Distributions of net realized capital gains, if any, generally are declared and paid 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.
26 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® , INC.
As of August 31, 2010, the tax year-end of the Fund, the components of net accumulated losses on a tax basis consisted of undistributed ordinary income of $186,082,382, unrealized depreciation of $632,158,250, and capital and other losses of $2,279,897,398, for net accumulated losses of $2,725,973,266.
For the years ended August 31, 2010 and August 31, 2009, the tax characterization of distributions paid for the Fund represents ordinary income. 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 ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the year ended August 31, 2010.
From November 1, 2009 to August 31, 2010, the Fund incurred net realized capital losses of $774,139,567. As permitted by tax regulations, the Fund has elected to defer those losses and treat them as arising in the year ending August 31, 2011.
As of August 31, 2010, the tax year-end of the Fund, the Fund had tax basis net capital loss carryforwards of $840,778, $20,296,564, $11,239,258, $29,973,301, $13,844,901, $228,196,854 and $1,201,366,175 expiring in 2012, 2013, 2014, 2015, 2016, 2017 and 2018, respectively. Such losses may be applied against any net realized taxable gains in each succeeding year or until their respective expiration dates, whichever occurs first.
The Fund may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Fund may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.
The Fund reclassifies at the end of its tax year 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, 2010, the cost of investments for federal income tax purposes was $41,972,377,193. Net unrealized depreciation was $632,080,710, of which $3,883,149,246 represented gross unrealized appreciation on securities and $4,515,229,956 represented gross unrealized depreciation on securities.
Management has reviewed the tax positions as of August 31, 2010, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Fund’s financial statements.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
On December 1, 2009, Barclays PLC (“Barclays”) completed the sale of its interest in BlackRock Institutional Trust Company, N.A. (“BTC”), formerly known as Barclays Global Investors, N.A., and certain affiliated companies to BlackRock, Inc. (“BlackRock,” and such sale, the “Transaction”). BTC is a wholly-owned subsidiary of BlackRock.
NOTESTO FINANCIAL STATEMENTS | 27 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® , INC.
The PNC Financial Services Group, Inc. (“PNC”), Bank of America Corporation (“BAC”) and Barclays are the largest stockholders of BlackRock. Due to the ownership structure, PNC is an affiliate for 1940 Act purposes, but BAC and Barclays are not.
Under the 1940 Act, upon completion of the Transaction on December 1, 2009, the Fund’s investment advisory agreement with BlackRock Fund Advisors (“BFA”), formerly known as Barclays Global Fund Advisors, was automatically terminated. The Board and shareholders of the Fund approved a new investment advisory agreement with BFA. The investment advisory fee rates and expense arrangements for the Fund remained the same after the Transaction.
Pursuant to an Investment Advisory Agreement with the Company, BFA manages the investment of the Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for all expenses (“Covered Expenses”) of the Company, 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, BFA is entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares Funds as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | |
0.75% | First $14 billion | |
0.68 | Over $14 billion, up to and including $28 billion | |
0.61 | Over $28 billion |
BFA has contractually agreed to waive a portion of its investment advisory fees for the Fund through June 30, 2012 in an amount equal to the investment advisory fees payable on the amount of the Fund’s investment in other iShares Funds.
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BTC to serve as securities lending agent for the Fund, subject to applicable conditions. BTC is an affiliate of BFA, the Fund’s investment adviser. As securities lending agent, BTC 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, 2010, BTC earned securities lending agent fees from the Fund of $8,171,633.
The Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in interest from affiliated issuers in the Statement of Operations.
The 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 underlying index. As of August 31, 2010, the Fund held shares of the iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds.
28 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Financial Statements (Continued)
iSHARES® , INC.
Investments in issuers considered to be an affiliate of the Fund (excluding short-term investments) during the year ended August 31, 2010, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
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 Income | Net Realized | |||||||||||||||||||||
iShares MSCI Malaysia | 1,159 | 439 | (283 | ) | 1,315 | $ | 16,936,891 | $ | 329,052 | $ | 1,238,113 | |||||||||||||||||
iShares MSCI South Korea | 1,318 | 648 | (343 | ) | 1,623 | 77,566,228 | 613,344 | 3,892,695 | ||||||||||||||||||||
iShares MSCI Taiwan Index | 6,426 | 1,684 | (1,532 | ) | 6,578 | 79,919,298 | 1,509,178 | 2,555,820 | ||||||||||||||||||||
Jollibee Foods Corp. | 68,446 | 12,706 | (19,391 | ) | 61,761 | 106,202,778 | 2,742,528 | a | 4,699,261 | |||||||||||||||||||
$ | 280,625,195 | $ | 5,194,102 | $ | 12,385,889 | |||||||||||||||||||||||
a | Net of foreign withholding tax of $685,632. |
Certain directors and officers of the Company are also officers of BTC and/or BFA.
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2010 aggregated $10,781,294,306 and $5,111,736,289, respectively.
In-kind purchases and sales (see Note 4) for the year ended August 31, 2010 aggregated $7,241,238,259 and $7,103,391,939, respectively.
4. CAPITAL SHARE TRANSACTIONS
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, which constitutes an optimized representation of the securities involved in the Fund’s underlying index and an amount of cash. Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.
From time to time, settlement of securities related to in-kind contributions or in-kind redemptions may be delayed. In such cases, securities related to in-kind contributions are reflected as “Due from custodian” and securities related to in-kind redemptions are reflected as “Securities related to in-kind transactions” in the Statement of Assets and Liabilities.
NOTESTO FINANCIAL STATEMENTS | 29 |
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Notes to Financial Statements (Continued)
iSHARES® , INC.
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 102% of the current 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 value of the securities on loan. The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. Any securities lending cash collateral may be reinvested in certain short-term instruments either directly on behalf of the Fund or through one or more joint accounts or money market funds, including those managed by BFA or its affiliates; such reinvestments are subject to investment risk.
As of August 31, 2010, the Fund had loaned securities which were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of the securities on loan as of August 31, 2010 and the value of the related collateral are disclosed in the Statement of Assets and Liabilities. Securities lending income, as disclosed in the Fund’s Statement of Operations, represents the income earned from the investment of the cash collateral, plus any fees paid by borrowers and less the fees paid to BTC as securities lending agent which are subject to adjustments pursuant to the securities lending agreement.
6. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Fund through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.
30 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
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 Emerging Markets Index Fund, a portfolio of the iShares MSCI Series (the “Fund”), at August 31, 2010, the results of its operations, the changes in its net assets and its 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 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit 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, 2010 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
October 22, 2010
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 31 |
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iSHARES® , INC.
For corporate shareholders, 0.78% of the income dividends paid by the Fund during the fiscal year ended August 31, 2010 qualified for the dividends-received deduction.
For the fiscal year ended August 31, 2010, the Fund earned foreign source income of $852,899,239 and paid foreign taxes of $107,681,891 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 $551,986,882 as qualified dividend income for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended August 31, 2010.
In February 2011, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2010. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.
32 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited)
iSHARES® , INC.
Premium/Discount Information
The table that follows presents information about the differences between the daily market price on secondary markets for shares of 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 generally 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 fair 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. The information shown for the Fund is for five calendar years through 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 Emerging Markets Index Fund
Period Covered: January 1, 2005 through June 30, 2010
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.0% | 4 | 0.29 | % | |||||
Greater than 3.5% and Less than 4.0% | 3 | 0.22 | ||||||
Greater than 3.0% and Less than 3.5% | 1 | 0.07 | ||||||
Greater than 2.5% and Less than 3.0% | 8 | 0.58 | ||||||
Greater than 2.0% and Less than 2.5% | 10 | 0.72 | ||||||
Greater than 1.5% and Less than 2.0% | 27 | 1.95 | ||||||
Greater than 1.0% and Less than 1.5% | 63 | 4.56 | ||||||
Greater than 0.5% and Less than 1.0% | 262 | 18.96 | ||||||
Between 0.5% and -0.5% | 695 | 50.29 | ||||||
Less than -0.5% and Greater than -1.0% | 164 | 11.87 | ||||||
Less than -1.0% and Greater than -1.5% | 82 | 5.93 | ||||||
Less than -1.5% and Greater than -2.0% | 36 | 2.60 | ||||||
Less than -2.0% and Greater than -2.5% | 12 | 0.87 | ||||||
Less than -2.5% and Greater than -3.0% | 3 | 0.22 | ||||||
Less than -3.0% and Greater than -3.5% | 4 | 0.29 | ||||||
Less than -3.5% and Greater than -4.0% | 1 | 0.07 | ||||||
Less than -4.0% and Greater than -4.5% | 4 | 0.29 | ||||||
Less than -4.5% | 3 | 0.22 | ||||||
1,382 | 100.00 | % | ||||||
SUPPLEMENTAL INFORMATION | 33 |
Table of Contents
Director and Officer 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 BFA and other service providers. Each Director serves until his or her successor is duly elected or appointed and qualified. Each Officer serves until he or she resigns, is removed, dies, retires or becomes disqualified.
iShares, Inc., iShares Trust, BlackRock Funds III (formerly, Barclays Global Investors Funds) and Master Investment Portfolio, each an open-end management investment company registered under the 1940 Act, are considered 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, as a result, oversees a total of 214 funds within the fund complex. With the exception of Robert S. Kapito, the address of each Director and Officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52nd Street, New York, NY 10055. The Board has designated George G.C. Parker as its Independent Chairman. Additional information about the Funds’ Directors and Officers may be found in the Funds’ combined Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-474-2737.
Interested Directors and Officers
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
Robert S. Kapitoa (53) | Director (since 2009). | President and Director, BlackRock, Inc. (since 2006 and 2007, respectively); Vice Chairman of BlackRock, Inc. and Head of BlackRock’s Portfolio Management Group (since its formation in 1998) and BlackRock’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); Chairman, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983). | Trustee of iShares Trust (since 2009); Director of BlackRock, Inc. (since 2007). | |||
Michael Lathamb (45) | Director (since 2010); President (since 2007). | Global Chief Executive Officer of iShares, BTC (since 2010); Managing Director, BTC (since 2009); Head of Americas iShares, Barclays Global Investors (“BGI”) (2007-2009); Director and Chief Financial Officer of Barclays Global Investors International, Inc. (2005-2009); Chief Operating Officer of the Intermediary Investor and Exchange Traded Products Business of BGI (2003-2007). | Trustee of iShares Trust (since 2010). |
a | Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. |
b | Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates. |
34 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Director and Officer Information (Unaudited) (Continued)
iSHARES® , INC.
Independent Directors
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
George G.C. Parker (71) | Director (since 2000); Independent Chairman (since 2010). | Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University: Graduate School of Business (since 1994). | Trustee of iShares Trust (since 2002); Independent Chairman of iShares Trust (since 2010); Director of Continental Airlines Inc. (since 1996); Director of Community First Financial Group (since 1995); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of NETGEAR, Inc. (since 2007). | |||
Darrell Duffie (56) | Director (since 2008). | Professor, Stanford University: Graduate School of Business (since 1984). | Trustee of iShares Trust (since 2008); Director of Moody’s Corp. (since 2008). | |||
Cecilia H. Herbert (61) | Director (since 2005). | Director (since 1998) and President (since 2007) of the Board of Directors, Catholic Charities CYO; Trustee of Pacific Select Funds (2004-2005); Trustee (since 2005) and Chair of the Finance and Investment Committees (since 2006) of the Thacher School; Chair of Investment Committee, Archdiocese of San Francisco (1994-2005). | Trustee of iShares Trust (since 2005); Director, Forward Funds (34 portfolios) (since 2009). | |||
Charles A. Hurty (67) | Director (since 2005). | Retired; Partner, KPMG LLP (1968-2001). | Trustee of iShares Trust (since 2005); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002). | |||
John E. Kerrigan (55) | Director (since 2005). | Chief Investment Officer, Santa Clara University (since 2002). | Trustee of iShares Trust (since 2005). | |||
John E. Martinez (49) | Director (since 2003). | Director of Real Estate Equity Exchange (since 2005). | Trustee of iShares Trust (since 2003); Chairman, Independent Review Committee, Canadian iShares Funds (since 2007). |
DIRECTORAND OFFICER INFORMATION | 35 |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES® , INC.
Independent Directors (Continued)
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
Robert H. Silver (55) | Director (since 2007). | President and Co-Founder of The Bravitas Group, Inc. (since 2006); Member, Non-Investor Advisory Board of Russia Partners II, LP (since 2006); President and Chief Operating Officer (2003-2005) and Director (1999-2005) of UBS Financial Services, Inc.; President and Chief Executive Officer of UBS Services USA, LLC (1999-2005); Managing Director, UBS America, Inc. (2000-2005); Director and Vice Chairman of the YMCA of Greater NYC (since 2001); Broadway Producer (since 2006); Co-Founder and Vice President of Parentgiving Inc. (since 2008); Director and Member of the Audit and Compensation Committee of EPAM Systems, Inc. (2006-2009). | Trustee of iShares Trust (since 2007). |
36 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES® , INC.
Officers
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | ||
Geoffrey D. Flynn (53) | Executive Vice President and Chief Operating Officer (since 2008). | Managing Director, BTC (since 2009); Chief Operating Officer, U.S. iShares, BGI (2007-2009); President, Van Kampen Investors Services (2003-2007); Managing Director, Morgan Stanley (2002-2007); President, Morgan Stanley Trust, FSB (2002-2007). | ||
Eilleen M. Clavere (58) | Secretary (since 2007). | Director, BTC (since 2009); Director of Legal Administration of Intermediary Investor Business of BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005). | ||
Jack Gee (51) | Treasurer and Chief Financial Officer (since 2008). | Managing Director, BTC (since 2009); Senior Director of Fund Administration of Intermediary Investor Business of BGI (2009); Director of Fund Administration of Intermediary Investor Business of BGI (2004-2009). | ||
Patrick O’Connor (43) | Vice President (since 2007). | Managing Director, BTC (since 2009); Head of iShares Portfolio Management, BGI (2006-2009); Senior Portfolio Manager, BGI (1999-2006). | ||
Amy Schioldager (48) | Executive Vice President (since 2007). | Managing Director, BTC (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006). | ||
Ira P. Shapiro (47) | Vice President and Chief Legal Officer (since 2007). | Managing Director, BTC (since 2009); Associate General Counsel, BGI (2004-2009). | ||
Lee Sterne (45) | Vice President (since 2007). | Managing Director, BTC (since 2009); Head of U.S. Fixed Income Index and iShares, BGI (2007-2009); Senior Portfolio Manager, BGI (2004-2007). | ||
Matt Tucker (38) | Vice President (since 2007). | Managing Director, BTC (since 2009); Director of Fixed Income Investment Strategy, BGI (2009); Head of U.S. Fixed Income Investment Solutions, BGI (2005-2008); Fixed Income Investment Strategist, BGI (2003-2005). |
DIRECTORAND OFFICER INFORMATION | 37 |
Table of Contents
Notes:
38 | 2010 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes:
NOTES | 39 |
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 Russell Domestic Index Funds | Trading Symbol | |
iShares Russell 3000 | IWV | |
iShares Russell 3000 Growth | IWZ | |
iShares Russell 3000 Value | IWW | |
iShares Russell Top 200 | IWL | |
iShares Russell Top 200 Growth | IWY | |
iShares Russell Top 200 Value | IWX | |
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 S&P Domestic Index Funds | ||
iShares S&P 1500 | ISI | |
iShares S&P 100 | OEF | |
iShares S&P 500 | IVV | |
iShares S&P 500 Growth | IVW | |
iShares S&P 500 Value | IVE | |
iShares S&P MidCap 400 | IJH | |
iShares S&P MidCap 400 Growth | IJK | |
iShares S&P MidCap 400 Value | IJJ | |
iShares S&P SmallCap 600 | IJR | |
iShares S&P SmallCap 600 Growth | IJT | |
iShares S&P SmallCap 600 Value | IJS | |
iShares Morningstar Domestic 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 Dow Jones Domestic Index Fund | ||
iShares Dow Jones U.S. | IYY | |
iShares MSCI Domestic Index Fund | ||
iShares MSCI USA | EUSA | |
iShares MSCI Socially Responsible Index Funds | ||
iShares MSCI KLD 400 Social | DSI | |
iShares MSCI USA ESG Select Social | KLD | |
iShares NYSE Domestic Index Funds | ||
iShares NYSE Composite | NYC | |
iShares NYSE 100 | NY |
iShares Domestic Specialty Index Funds | Trading Symbol | |
iShares S&P U.S. Preferred Stock | PFF | |
iShares Dow Jones Select Dividend | DVY | |
iShares North American Sector/Subsector Index Funds | ||
iShares S&P North American Technology Sector | IGM | |
iShares S&P North American Technology-Multimedia Networking | IGN | |
iShares S&P North American Technology- | IGW | |
iShares S&P North American Technology-Software | IGV | |
iShares S&P North American Natural Resources Sector | IGE | |
iShares Domestic Sector Index Funds | ||
iShares Dow Jones U.S. Basic Materials Sector | IYM | |
iShares Dow Jones U.S. Consumer Goods Sector | IYK | |
iShares Dow Jones U.S. Consumer Services Sector | IYC | |
iShares Dow Jones U.S. Energy Sector | IYE | |
iShares Dow Jones U.S. Financial Sector | IYF | |
iShares Dow Jones U.S. Healthcare Sector | IYH | |
iShares Dow Jones U.S. Industrial Sector | IYJ | |
iShares Dow Jones U.S. Technology Sector | IYW | |
iShares Dow Jones U.S. Telecommunications Sector | IYZ | |
iShares Dow Jones U.S. Utilities Sector | IDU | |
iShares Domestic Subsector Index Funds | ||
iShares Dow Jones Transportation Average | IYT | |
iShares Dow Jones U.S. Aerospace & Defense | ITA | |
iShares Dow Jones U.S. Broker-Dealers | IAI | |
iShares Dow Jones U.S. Financial Services | IYG | |
iShares Dow Jones U.S. Healthcare Providers | IHF | |
iShares Dow Jones U.S. Home Construction | ITB | |
iShares Dow Jones U.S. Insurance | IAK | |
iShares Dow Jones U.S. Medical Devices | IHI | |
iShares Dow Jones U.S. Oil & Gas Exploration & | IEO | |
iShares Dow Jones U.S. Oil Equipment & Services | IEZ | |
iShares Dow Jones U.S. Pharmaceuticals | IHE | |
iShares Dow Jones U.S. Regional Banks | IAT | |
iShares Nasdaq Biotechnology | IBB | |
iShares Domestic Real Estate Index Funds | ||
iShares Cohen & Steers Realty Majors | ICF | |
iShares Dow Jones U.S. Real Estate | IYR | |
iShares FTSE NAREIT Real Estate 50 | FTY | |
iShares FTSE NAREIT Industrial/Office Capped | FIO | |
iShares FTSE NAREIT Mortgage Plus Capped | REM | |
iShares FTSE NAREIT Residential Plus Capped | REZ | |
iShares FTSE NAREIT Retail Capped | RTL | |
iShares Target Risk Index Funds | ||
iShares S&P Conservative Allocation | AOK | |
iShares S&P Moderate Allocation | AOM | |
iShares S&P Growth Allocation | AOR | |
iShares S&P Aggressive Allocation | AOA |
40 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
Table of Contents
The iShares® Family of Funds (Continued)
iShares International Country Index Funds | Trading Symbol | |
iShares FTSE China (HK Listed) | FCHI | |
iShares FTSE/Xinhua China 25 | FXI | |
iShares MSCI Australia | EWA | |
iShares MSCI Austria Investable Market | EWO | |
iShares MSCI Belgium Investable Market | EWK | |
iShares MSCI Brazil | EWZ | |
iShares MSCI Brazil Small Cap | EWZS | |
iShares MSCI Canada | EWC | |
iShares MSCI Chile Investable Market | ECH | |
iShares MSCI China Small Cap | ECNS | |
iShares MSCI France | EWQ | |
iShares MSCI Germany | EWG | |
iShares MSCI Hong Kong | EWH | |
iShares S&P India Nifty 50 | INDY | |
iShares MSCI Indonesia Investable Market | EIDO | |
iShares MSCI Ireland Capped Investable Market | EIRL | |
iShares MSCI Israel Capped Investable Market | EIS | |
iShares MSCI Italy | EWI | |
iShares MSCI Japan | EWJ | |
iShares MSCI Japan Small Cap | SCJ | |
iShares S&P/TOPIX 150 | ITF | |
iShares MSCI Malaysia | EWM | |
iShares MSCI Mexico Investable Market | EWW | |
iShares MSCI Netherlands Investable Market | EWN | |
iShares MSCI New Zealand Investable Market | ENZL | |
iShares MSCI All Peru Capped | EPU | |
iShares MSCI Philippines Investable Market | EPHE | |
iShares MSCI Poland Investable Market | EPOL | |
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 Thailand Investable Market | THD | |
iShares MSCI Turkey Investable Market | TUR | |
iShares MSCI United Kingdom | EWU | |
iShares International Index Funds | ||
iShares MSCI ACWI ex US | ACWX | |
iShares MSCI EAFE | EFA | |
iShares MSCI EAFE Growth | EFG | |
iShares MSCI EAFE Value | EFV | |
iShares MSCI EAFE Small Cap | SCZ | |
iShares FTSE Developed Small Cap ex-North America | IFSM | |
iShares MSCI Emerging Markets | EEM | |
iShares MSCI Emerging Markets Eastern Europe | ESR | |
iShares MSCI BRIC | BKF | |
iShares MSCI EMU | EZU | |
iShares MSCI All Country Asia ex Japan | AAXJ | |
iShares MSCI Pacific ex-Japan | EPP | |
iShares S&P Asia 50 | AIA | |
iShares S&P Europe 350 | IEV | |
iShares S&P Latin America 40 | ILF | |
iShares International/Global Real Estate Index Funds | ||
iShares S&P Developed ex-U.S. Property | WPS | |
iShares FTSE EPRA/NAREIT Developed | IFGL | |
iShares FTSE EPRA/NAREIT Developed Asia | IFAS | |
iShares FTSE EPRA/NAREIT Developed Europe | IFEU | |
iShares FTSE EPRA/NAREIT North America | IFNA |
iShares Target Date Index Funds | Trading Symbol | |
iShares S&P Target Date Retirement Income | TGR | |
iShares S&P Target Date 2010 | TZD | |
iShares S&P Target Date 2015 | TZE | |
iShares S&P Target Date 2020 | TZG | |
iShares S&P Target Date 2025 | TZI | |
iShares S&P Target Date 2030 | TZL | |
iShares S&P Target Date 2035 | TZO | |
iShares S&P Target Date 2040 | TZV | |
iShares Global Index Funds | ||
iShares MSCI ACWI | ACWI | |
iShares S&P Global 100 | IOO | |
iShares MSCI Kokusai | TOK | |
iShares International/Global Sector Index Funds | ||
iShares MSCI ACWI ex US Consumer Discretionary Sector | AXDI | |
iShares MSCI ACWI ex US Consumer Staples Sector | AXSL | |
iShares MSCI ACWI ex US Energy Sector | AXEN | |
iShares MSCI ACWI ex US Financials Sector | AXFN | |
iShares MSCI ACWI ex US Health Care Sector | AXHE | |
iShares MSCI ACWI ex US Industrials Sector | AXID | |
iShares MSCI ACWI ex US Information Technology | AXIT | |
iShares MSCI ACWI ex US Materials Sector | AXMT | |
iShares MSCI ACWI ex US Telecommunication Services | AXTE | |
iShares MSCI ACWI ex US Utilities Sector | AXUT | |
iShares MSCI Emerging Markets Financials Sector | EMFN | |
iShares MSCI Emerging Markets Materials Sector | EMMT | |
iShares MSCI Europe Financials Sector | EUFN | |
iShares MSCI Far East Financials Sector | FEFN | |
iShares S&P Global Consumer Discretionary Sector | RXI | |
iShares S&P Global Consumer Staples Sector | KXI | |
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 Industrials Sector | EXI | |
iShares S&P Global Materials Sector | MXI | |
iShares S&P Global Technology Sector | IXN | |
iShares S&P Global Telecommunications Sector | IXP | |
iShares S&P Global Utilities Sector | JXI | |
iShares International/Global Theme Based and Specialty Index Funds | ||
iShares Dow Jones International Select Dividend | IDV | |
iShares S&P Emerging Markets Infrastructure | EMIF | |
iShares S&P Global Clean Energy | ICLN | |
iShares S&P Global Infrastructure | IGF | |
iShares S&P Global Nuclear Energy | NUCL | |
iShares S&P Global Timber & Forestry | WOOD | |
iShares U.S. Multisector Bond Funds | ||
iShares Barclays Aggregate | AGG | |
iShares Barclays Government/Credit | GBF | |
iShares Barclays Intermediate Government/Credit | GVI | |
iShares 10+ Year Government/Credit | GLJ | |
iShares U.S. Government Bond Funds | ||
iShares Barclays Short Treasury | SHV | |
iShares Barclays 1-3 Year Treasury | SHY | |
iShares Barclays 3-7 Year Treasury | IEI | |
iShares Barclays 7-10 Year Treasury | IEF | |
iShares Barclays 10-20 Year Treasury | TLH | |
iShares Barclays 20+ Year Treasury | TLT | |
iShares Barclays TIPS | TIP | |
iShares Barclays Agency | AGZ |
THE iSHARES FAMILYOF FUNDS | 41 |
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The iShares® Family of Funds (Continued)
iShares U.S. Credit Bond Funds | Trading Symbol | |
iShares Barclays Credit | CFT | |
iShares Barclays 1-3 Year Credit | CSJ | |
iShares Barclays Intermediate Credit | CIU | |
iShares iBoxx $ Investment Grade Corporate | LQD | |
iShares 10+ Year Credit | CLY | |
iShares iBoxx $ High Yield Corporate | HYG |
iShares AMT-Free Municipal Bond Funds | Trading Symbol | |
iShares S&P National AMT-Free Municipal | MUB | |
iShares S&P Short Term National AMT-Free Municipal | SUB | |
iShares S&P California AMT-Free Municipal | CMF | |
iShares S&P New York AMT-Free Municipal | NYF | |
iShares 2012 S&P AMT-Free Municipal Series | MUAA | |
iShares 2013 S&P AMT-Free Municipal Series | MUAB | |
iShares 2014 S&P AMT-Free Municipal Series | MUAC | |
iShares 2015 S&P AMT-Free Municipal Series | MUAD | |
iShares 2016 S&P AMT-Free Municipal Series | MUAE | |
iShares 2017 S&P AMT-Free Municipal Series | MUAF | |
iShares U.S. Securitized Bond Fund | ||
iShares Barclays MBS | MBB | |
iShares International Bond Funds | ||
iShares JPMorgan USD Emerging Markets | EMB | |
iShares S&P/Citigroup International Treasury | IGOV | |
iShares S&P/Citigroup 1-3 Year International Treasury | ISHG |
The iShares Funds that are registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 as iShares, Inc. and iShares Trust (“Funds”) are distributed in the U.S. by SEI Investments Distribution Co. (“SEI”). iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A. The Funds are not sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., European Public Real Estate Association (“EPRA®”), FTSE International Limited (“FTSE”), FTSE/Xinhua Index Limited (“FXI”), iBoxx®, JPMorgan Chase & Co., MSCI Inc., Morningstar Inc., The NASDAQ OMX Group, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), New York Stock Exchange, Inc., Russell Investment Group or Standard & Poor’s, nor are they sponsored, endorsed or issued by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the companies listed above. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50/Residential/Retail/Mortgage or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Developed Real Estate ex-US/North America/Europe/Asia Index; all rights vest in FTSE, NAREIT and EPRA. All rights in the FTSE Developed Small Cap ex-North America Index vest in FTSE. “FTSE” is a trade- and servicemark of London Stock Exchange and The Financial Times Limited; “Xinhua” is a trade- and servicemark of Xinhua Financial Network Limited.
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 2010 Annual Report.
iS-3594-1010
42 | 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS |
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Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on your iShares holdings. In addition, it’s a way we can all care for our environment. To that end, we are pleased to offer shareholder reports and prospectuses online.
Once you have enrolled, you will no longer receive shareholder reports and prospectuses in the mail. Instead, you will receive e-mail notifications announcing that the shareholder report or prospectus has been posted on the iShares website at www.iShares.com and is available to be viewed or downloaded.
To sign up for electronic delivery, please follow these simple steps:
1. Go to www.icsdelivery.com.
2. From the main page, select the first letter of your brokerage firm’s name.
3. Select your brokerage institution from the list that follows. If your brokerage firm is not listed, electronic delivery may not be available. Please contact your brokerage firm or financial adviser.
4. Fill out the appropriate information and provide the e-mail address where you would like your notifications sent.
Your information and e-mail address will be kept confidential and only used to deliver documents to you. If at any time you are not satisfied, you can cancel electronic delivery at www.icsdelivery.com and once again receive physical delivery of your materials. If you have any questions, please contact your brokerage firm or financial adviser. |
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For more information:
WWW.iSHARES.COM
1-800-iShares (1-800-474-2737)
This report is intended for the Fund’s shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
Investing involves risk, including possible loss of principal.
The iShares Funds are distributed by SEI Investments Distribution Co. (SEI).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the company listed above.
A description of the policies that the Fund uses to determine how to vote proxies relating to portfolio securities and information about how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Fund’s website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Fund also discloses its complete schedule of portfolio holdings on a monthly basis on the Fund’s website.
Certain financial information required by regulations or listing exchange rules in jurisdictions outside the U.S. in which iShares Funds are cross-listed may be publicly filed in those jurisdictions. This information is available upon request by calling 1-800-474-2737.
©2010 BlackRock Institutional Trust Company, N.A. All rights reserved. iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A. All other trademarks, servicemarks, or registered trademarks are the property of their respective owners.
iS-AR-85-0810
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Item 2. | Code of Ethics. |
iShares, Inc. (the “Registrant”) has adopted a code of ethics that applies to persons appointed by the Registrant’s Board of Directors as the President and/or Chief Financial Officer, and any persons performing similar functions. For the fiscal year ended August 31, 2010, 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 Charles A. Hurty, John E. Kerrigan, George G.C. Parker and Robert H. Silver, all of whom are independent, as that term is defined under Item 3(a)(2).
Item 4. | Principal Accountant Fees and Services. |
(a) | Audit Fees – The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the Registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years, were $471,552 for the fiscal year ended August 31, 2009 and $483,283 for the fiscal year ended August 31, 2010. |
(b) | Audit-Related Fees – There were no fees billed for the fiscal years ended August 31, 2009 and August 31, 2010 for assurance and related services by the principal accountant that were reasonably related to the performance of the audit of the Registrant’s financial statements and are not reported under (a) of this Item. |
(c) | Tax Fees – The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for the review of the Registrant’s tax returns and excise tax calculations, were $136,950 for the fiscal year ended August 31, 2009 and $146,080 for the fiscal year ended August 31, 2010. |
(d) | All Other Fees – There were no other fees billed for the fiscal years ended August 31, 2009 and August 31, 2010 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, 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 ongoing 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 Registrant’s financial statements for the fiscal year ended August 31, 2010 were attributable to work performed by persons other than the principal accountant’s full-time, permanent employees. |
(g) | The aggregate non-audit fees billed by the Registrant’s principal accountant for services rendered to the Registrant’s, and rendered to the Registrant’s investment adviser, and any Adviser Affiliate that provides ongoing services to the Registrant for the last two fiscal years, were $3,697,425 for the fiscal year ended August 31, 2009 and $4,199,105 for the fiscal year ended August 31, 2010. |
(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 George G.C. Parker, Cecilia H. Herbert, Charles A. Hurty, John E. Kerrigan, Robert H. Silver and Darrell Duffie.
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Item 6. | Schedule of Investments. |
(a) | Schedules of investments are included as part of the reports to shareholders filed under Item 1 of this Form. |
(b) | Not applicable. |
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable to the Registrant.
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable to the Registrant.
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable to the Registrant.
Item 10. | Submission of Matters to a Vote of Security Holders. |
There were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Directors.
Item 11. | Controls and Procedures. |
(a) The President (the Registrant’s Principal Executive Officer) and Chief Financial Officer (the Registrant’s Principal Financial Officer) have concluded that, based on their evaluation as of a date within 90 days of the filing date of this report, the disclosure controls and procedures of the Registrant (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are reasonably designed to achieve the purposes described in Section 4(a) of the attached certification.
(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the 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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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
iShares, Inc. | ||
By: | /s/ Michael Latham | |
Michael Latham, President (Principal Executive Officer) | ||
Date: October 21, 2010 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: | /s/ Michael Latham | |
Michael Latham, President (Principal Executive Officer) | ||
Date: October 21, 2010 | ||
By: | /s/ Jack Gee | |
Jack Gee, Treasurer and Chief Financial Officer (Principal Financial Officer) | ||
Date: October 21, 2010 |